<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended March 31, 1995 Commission File No. 0-16992
-------------- -------
CONCORDE CAREER COLLEGES, INC.
- --------------------------------------------------------------------------------
(exact name of registrant as specified in its charter)
Delaware 43-1440321
- ------------------------------- ---------------------------------
(State of other jurisdiction of (I. R. S. Employer Identification
Incorporation or Organization) Number)
4th Floor, City Center Square
12th & Baltimore, P. O. Box 26610
Kansas City, Missouri 64196
- --------------------------------------------------------------------------------
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (816) 474-8002
---------------
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.10 Par Value
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
(1) Yes X No (2) Yes X No
--------- --------- --------- ---------
As of May 4, 1995, Concorde Career Colleges, Inc. had 6,952,176 shares of Common
Stock outstanding, with a market value of $3,045,000.
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
CONCORDE CAREER COLLEGES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 1995 AND DECEMBER 31, 1994
ASSETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
---------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents........................................ $ 2,984,000 $ 1,182,000
Refundable income taxes.......................................... 151,000
Net receivables --
Accounts receivable.............................................. 20,016,000 20,412,000
Notes receivable for student tuition............................. 3,381,000 2,117,000
Allowance for uncollectible accounts............................. (2,618,000) (2,491,000)
----------- -----------
20,779,000 20,038,000
Supplies and prepaid expenses.................................... 1,151,000 1,194,000
----------- -----------
Total current assets.......................................... 24,914,000 22,565,000
PROPERTY and EQUIPMENT, at cost:
Furniture and equipment.......................................... 9,133,000 9,013,000
Leasehold improvements........................................... 2,396,000 2,305,000
Building and land................................................ 506,000 488,000
----------- -----------
12,035,000 11,806,000
Less--Accumulated depreciation and amortization.................. 8,364,000 8,136,000
----------- -----------
Net property and equipment.................................... 3,671,000 3,670,000
COST IN EXCESS OF NET TANGIBLE ASSETS OF BUSINESSES
ACQUIRED, less accumulated amortization of $3,224,000
at March 31, 1995 and $3,160,000 at December 31, 1994
respectively..................................................... 2,135,000 2,199,000
OTHER ASSETS:
Long-term notes receivable for student tuition less allowance
for uncollectible accounts of $301,000 at March 31, 1995 and
$383,000 at December 31, 1994, respectively................... 1,817,000 1,935,000
Other............................................................ 84,000 108,000
----------- -----------
Total other assets.......................................... 1,901,000 2,043,000
----------- -----------
$32,621,000 $30,477,000
=========== ===========
</TABLE>
1
<PAGE>
CONCORDE CAREER COLLEGES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 1995 AND DECEMBER 31, 1994
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
------------ ------------
<S> <C> <C>
CURRENT LIABILITIES:
Deferred student tuition.......................... $16,073,000 $14,349,000
Current debt maturities........................... 3,723,000 3,150,000
Accounts payable.................................. 817,000 717,000
Accrued income taxes.............................. 32,000
Accrued salaries and wages........................ 729,000 600,000
Accrued interest.................................. 558,000 526,000
Current deferred income taxes..................... 424,000 424,000
Other accrued liabilities......................... 1,411,000 886,000
----------- -----------
Total current liabilities.................... 23,767,000 20,652,000
LONG TERM DEBT...................................... 1,343,000
OTHER LONG-TERM LIABILITIES......................... 209,000 57,000
DEFERRED INCOME TAXES............................... 589,000 739,000
SUBORDINATED DEBT DUE TO RELATED PARTY.............. 2,680,000 2,611,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.10 par value, 600,000 shares
authorized, 300,000 shares issued and
outstanding..................................... 30,000 30,000
Common stock, $.10 par value, 19,400,000 shares
authorized, 6,978,976 shares issued and 6,952,176
shares outstanding............................... 698,000 698,000
Capital in excess of par.......................... 8,128,000 8,128,000
Accumulated deficit............................... (3,419,000) (3,720,000)
Less-treasury stock, 26,800 shares, at cost....... (61,000) (61,000)
------------ -----------
Total stockholders' equity..................... 5,376,000 5,075,000
----------- -----------
$32,621,000 $30,477,000
=========== ===========
</TABLE>
2
<PAGE>
CONCORDE CAREER COLLEGES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
STUDENT TUITION AND OTHER REVENUE $9,889,000 $8,813,000
---------- ----------
OPERATING EXPENSES:
Payroll costs 4,359,000 3,903,000
Occupancy 1,391,000 1,549,000
Instructional materials and supplies 998,000 836,000
Advertising 647,000 710,000
Other general and administrative 1,508,000 1,143,000
Provision for uncollectible accounts 463,000 340,000
---------- ----------
9,366,000 8,481,000
---------- ----------
OPERATING INCOME 523,000 332,000
INTEREST EXPENSE 190,000 270,000
---------- ----------
INCOME BEFORE INCOME TAXES 333,000 62,000
---------- ----------
PROVISION FOR INCOME TAXES 33,000 25,000
NET INCOME $ 300,000 $ 37,000
========== ==========
WEIGHTED AVERAGE COMMON AND COMMON
SHARE EQUIVALENTS OUTSTANDING 7,388,289 6,952,176
========== ==========
EARNINGS PER WEIGHTED AVERAGE COMMON
AND COMMON SHARE EQUIVALENT $ 0.04 $ 0.01
========== ==========
</TABLE>
3
<PAGE>
CONCORDE CAREER COLLEGES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
----------- ----------
<S> <C> <C>
CASH FLOWS -- OPERATING ACTIVITIES:
Net income......................................... $ 300,000 $ 37,000
Adjustments to reconcile net income to net
cash provided by operating activities -
Depreciation and amortization.................... 305,000 375,000
Provision for losses on accounts receivable...... 463,000 340,000
Change in assets and liabilities, net
Decrease (increase) in receivables............ (1,084,000) 70,000
Increase in deferred student tuition.......... 1,723,000 757,000
Increase (decrease) in deferred income taxes.. (150,000) 25,000
Increase in accrued income taxes.............. 32,000
Other changes in assets and liabilities,net... 1,212,000 270,000
----------- ----------
Total adjustments................................ 2,501,000 1,837,000
----------- ----------
Net.............................................. 2,801,000 1,874,000
CASH FLOWS -- INVESTING ACTIVITIES:
Capital expenditures............................... (229,000) (61,000)
----------- ----------
Net............................................... (229,000) (61,000)
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt............... (770,000) (289,000)
----------- ----------
Net.............................................. (770,000) (289,000)
----------- ----------
NET................................................. 1,802,000 1,524,000
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD............................. 1,182,000 1,663,000
----------- ----------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD................................... $ 2,984,000 $3,187,000
=========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest......................................... $ 104,000 $ 119,000
Cash received during the period for:
Interest......................................... 84,000 136,000
</TABLE>
4
<PAGE>
CONCORDE CAREER COLLEGES, INC., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
The condensed interim financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared according to
generally accepted accounting principles have been condensed or omitted pursuant
to such rules and regulations although the Company believes that the disclosures
are adequate to make the information presented not misleading. It is suggested
that these condensed financial statements be read in conjunction with the
financial statements and the notes thereto included in the Company's latest Form
10-K Annual Report for 1994 that was filed by the Company on March 31, 1995.
The information included in these interim financial statements reflects all
normal recurring adjustments that are, in the opinion of management, necessary
to fairly state the results of the periods presented.
Due to the inherent seasonal nature of the career training business,
annualization of amounts in these interim financial statements may not
necessarily be indicative of the actual operating results for the full year.
(The remainder of this page was left intentionally blank.)
5
<PAGE>
ITEM 2.) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
The Company owns and operates proprietary postsecondary schools which offer
career training, primarily in the allied health field (the "Health Vocational
Schools.") In addition, the Company previously operated schools with career
training in other fields (together the "Schools.") The Company also owns
Person/Wolinsky Associates, which offers review courses for the CPA exam (the
"CPA Review Courses.") The following table presents the revenue for each
category of School and the CPA Review Courses for the periods indicated.
Amounts are in thousands.
<TABLE>
<CAPTION>
Year Ended Three Months
December 31, Ended March 31,
--------------------------- ---------------
1994 1993 1992 1995 1994
------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C>
Health Vocational &
Computer Schools $31,169 $30,564 $37,824 $8,675 $7,208
Travel Service School 291 841 1,062 191
Paralegal Courses 545
CPA Review Courses 3,572 3,376 3,217 1,214 1,414
------- ------- ------- ------ ------
Total $35,032 $34,781 $42,648 $9,889 $8,813
======= ======= ======= ====== ======
</TABLE>
The following table presents the relative percentage of revenues derived
from each category of School and the CPA Review Courses and certain consolidated
statement of earning items as a percentage of total revenue for periods
indicated.
<TABLE>
<CAPTION>
Year Ended Three Months
December 31, Ended March 31,
----------------------------- -----------------
1994 1993 1992 1995 1994
------ ------ ------- -------- -------
<S> <C> <C> <C> <C> <C>
Health Vocational &
Computer Schools 89.0% 87.9% 88.7% 87.7% 81.8%
Travel Service School 0.8 2.4 2.5 2.2
Paralegal Courses 1.3
CPA Review Courses 10.2 9.7 7.5 12.3 16.0
----- ----- ------ ----- -----
Total 100.0 100.0 100.0 100.0 100.0
===== ===== ====== ===== =====
Operating expenses:
Payroll 45.0 45.7 41.7 44.1 44.2
Occupancy 15.5 12.7 17.8 14.1 17.6
Materials and supplies 9.4 7.4 10.7 10.1 9.5
Advertising 7.4 8.2 8.4 6.5 8.0
Other general &
administrative 15.0 11.2 17.2 15.2 13.0
Provision for uncollect-
ible accounts 5.2 9.9 30.9 4.7 3.9
----- ----- ------ ----- -----
Total 97.5 95.1 126.7 94.7 96.2
Operating income (loss) 2.5 4.9 (26.7) 5.3 3.8
Interest expense 3.1 3.3 3.8 1.9 3.1
----- ----- ------ ----- -----
Income (loss) before
income taxes (0.6) 1.6 (30.5) 3.4 0.7
Provision (benefit) for
income taxes (0.6) 0.4 (7.9) 0.4 0.3
----- ----- ------ ----- -----
Net income (loss) (0.0)% 1.2% (22.6)% 3.0% 0.4%
===== ===== ====== ===== =====
</TABLE>
6
<PAGE>
RESULTS OF OPERATIONS
QUARTER ENDED MARCH 31, 1995 COMPARED TO
QUARTER ENDED MARCH 31, 1994
Total revenue increased $1,076,000 from $8,813,000 to $9,889,000 during the
first quarter of 1995 compared to the same period in 1994. Revenues for CPA
Review Courses were down 14%, from $1,414,000 in 1994 to $1,214,000 in 1995.
Revenues at the Resident Schools increased by 20% from $7,208,000 in 1994 to
$8,675,000 in 1995. During the second quarter of 1994, the Company closed its
Health Vocational School at Van Nuys, California and sold the assets of the
Travel Operations School. The Company closed its Health Vocational School in
Minneapolis, Minnesota in the fourth quarter of 1994. Revenue at the Travel
Operations School was $191,000 in the first quarter of 1994.
The consolidated profit in 1995, as in 1994, received a substantial benefit
from the CPA Review Courses. The 1995 results of the CPA Review Courses are
comparable to the 1993 results. However, due to an usually high number of
enrollments in the Spring 1994 Session, revenues were down 17% and profit down
39% in 1995 compared to 1994. Because the CPA examination is administered twice
each year, the operations of the CPA review courses are seasonal, impacting the
results of the Company during the quarters ending March 31 and September 30.
Payroll expenses increased 11.7% or $456,000, to $4,359,000 for the three
months ended March 31, 1995 compared to $3,903,000 for the same period in 1994.
Decreases in payroll expense from the closing of two schools and the sale of a
third school in 1994 were offset by increased salaries at existing schools. The
Company has continued to upgrade the quality of the School's staff and faculty.
Occupancy expense decreased 10.2% or $158,000 to $1,391,000 in 1995
compared to $1,549,000 in 1994. This decrease is primarily due to the closing
or sale of three schools in 1994.
Instructional materials and supplies expense increased 19.4% or $162,000 to
$998,000 in 1995 compared to $836,000 in 1994. Textbook expense has increased
as curriculum has been updated and improved. Also uniform expense increased due
to additional uniforms being provided to students.
Other general and administrative expenses increased 31.9% or $365,000 to
$1,508,000 in 1995 compared to $1,143,000 in 1994. A provision of $282,000 was
established in 1995 when the Company was informed that it's Lauderdale Lakes,
Florida school will be required to refund Title IV funds to Government Agencies.
Those funds had been previously disbursed to the School's students.
Provision for uncollectible accounts increased 36.2% or $123,000 to
$463,000 in 1995 from $340,000. This increase is primarily due to the increase
in student accounts and notes receivable in 1995.
Interest expense decreased 29.6% or $80,000, to $190,000 in 1995 from
$270,000 in 1994. This decrease is due to reduced bank debt and reduced
subordinated debenture as discussed in "Liquidity and Resources."
In 1995, a tax provision of $33,000 or 10% was recorded compared to $25,000
or 40.3% in 1994. This provision is a result of evaluating the Company's needs
as it relates to provision for assessment of taxes. Future evaluation of the
provision for assessment of taxes may increase or decrease the overall provision
for income taxes.
(The remainder of this page was left blank intentionally.)
7
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Effective October 30, 1992, the Company and CenCor, Inc. ("CenCor") entered
into a Restructuring, Security and Guaranty Agreement pursuant to which the
Company was released from its obligations relating to assumed subordinated
indebtedness issued by CenCor. As consideration for the release, the Company
issued to CenCor a Junior Secured Debenture (the "Debenture") in the principal
amount of $5,422,307, representing the full principal amount of the assumed
subordinated debt and accrued interest through October 30, 1992. Although
interest on the Debenture accrues from October 30, 1992, no principal or
interest is to be paid until June 30, 1996. The entire balance of the Debenture
is due July 31, 1997. In addition to compounded quarterly interest, initially
at 1% over the effective rate charged by the Company's bank lender, CenCor is
entitled to an amount equal to 25% of the market value of the Company's
outstanding common stock in excess of $3,500,000 at July 31, 1997. Other terms
of the Agreement are substantially equivalent to the terms of the Company's
secured bank debt agreement. Pursuant to a December 1993 amendment, the Company
assigned to CenCor approximately $8,400,000 of accounts and notes receivable,
all of which had been charged off by the Company in the normal course of
business, and thereby discharged all interest accrued on the Debenture through
December 31, 1993. CenCor has the right to make limited substitutions of
additional accounts in the event collections on the accounts originally conveyed
to CenCor are not equal to the accrued interest as of December 31, 1993, but may
only require the Company to convey accounts which have been charged off in the
normal course of business.
Effective November 15, 1994 CenCor exchanged $3,000,000 face value of the
Debenture for 300,000 shares of Cumulative Preferred Stock ("the Preferred
Stock"). The Preferred Stock, $.10 par value, has a per share liquidation
preference of $10.00. Cumulative quarterly dividends accrue at a rate equal to
73% of the then current interest rate on the Debenture. The dividends cumulate
until such time as the Debenture has been repaid in full which is currently
scheduled for July 31, 1997. At such time, the accumulated quarterly dividends
will be paid ratably over the ensuing 12 fiscal quarters. The Preferred Stock
has no mandatory redemption date but the Company may redeem the Preferred Stock,
in whole or in part, at any time, at liquidation value plus accrued cumulative
dividends. The exchange reduced long-term debt and increased the equity of the
Company by $3,000,000. By virtue of the reduced debt, interest will be reduced
in future periods which will improve income before taxes, but the Company will
incur non-deductible dividends on the preferred shares. In addition, the
Company assigned to CenCor additional accounts and notes receivable with a face
value of approximately $15,000,000 that had been charged-off by the Company in
the normal course of business. This assignment was on terms and conditions
similar to those set forth in the December 31, 1993 amendment, and discharged
approximately $495,000 of interest, which represents the amount of interest that
accrued on the Debenture through December 31, 1994. Management believes that
the amount of receivables assigned to CenCor in 1994 and 1993 were reflective of
the estimated collectibility of the related receivables.
Additionally, the Company negotiated a restructuring of its secured bank
debt as of April 30, 1993. This debt was due on March 1, 1993 in the amount of
$8,892,000. The restructured agreement converted the debt to a term loan due on
January 3, 1996, with stipulated monthly payment amounts. Additional payments
were tied to income tax refunds already received and future sales of specific
assets. A portion of the 1993 maturities on the Company's bank term loan were
funded from income tax refunds which were not available in 1994. In 1994,
$2,059,000 of payments were made on the bank term loan. These payments were
funded by using approximately $481,000 of the December 31, 1993 cash balance and
by using $1,578,000 of cash flows from operating activities. In 1995, debt
payments of approximately $3,150,000 are due. The Company anticipates the loan
payments will be made from cash flows from operating activities generated in
1995 as the Company continues to collect its accounts receivable more
effectively and has eliminated negative cash flows relating to the three schools
closed or sold in 1994. The balance of this bank debt was $4,493,000 at
December 31, 1994 and $3,723,000 at March 31, 1995. Effective September 1, 1994
the Company negotiated a modification of the payment schedule of its secured
bank debt without extending its maturity.
Net cash provided by operating activities increased $927,000 to $2,801,000
for the three months ended March 31, 1995 as compared to the same period in
1994. Depreciation and amortization decreased $70,000 to $305,000 in 1995 as
compared to $375,000 in 1994. This decrease is a result of fully amortized or
depreciated assets. Provision for uncollectible accounts increased as the
related receivables increased. Deferred student tuition increased in 1995 by
$1,723,000 compared to a $757,000 increase in 1994. Other changes in assets and
liabilities increased $1,212,000 in 1995. This increase was attributable to
increases in accrued expenses and other liabilities.
Capital expenditures in 1995 were $229,000 compared to $61,000 in 1994.
For both years, expenditures were primarily for additional classroom equipment.
Certain debt agreements limit annual capital expenditures to $500,000.
Financing activities consumed $770,000 in 1995 compared to $289,000 in 1994.
All financing activities were for payment of outstanding debt.
8
<PAGE>
The Company generally relies on the availability of various federal and
state student financial aid programs to provide funding for the students
attending the Company's Schools. The Company also relies on the availability of
lending institutions willing to participate in these programs and to grant loans
to these students. If the Company's Schools would be limited, suspended or
terminated from participation in the federal or state student financial aid
programs, or if lending institutions withdrew access to student loans, the
Company's continuing operations would be in doubt. Management does not
anticipate any material change in liquidity based on the Company's Schools'
participation in these programs.
INFLATION AND GENERAL ECONOMIC CONDITIONS
Inflation has not been a significant factor to the Company due to the
moderate levels of inflation over the past several years. The Company does not
foresee any detrimental effects from inflation as long as the inflation rate
remains at a normal level. If the rate of inflation increases above the current
level, the Company believes it will be able to pass along higher costs through
increased tuition rates.
(The remainder of this page was left intentionally blank.)
9
<PAGE>
PART II OTHER INFORMATION
-------------------------
ITEM 1. CONTINGENCIES AND LITIGATION:
Southern Career Institute
On May 31, 1990, the Company, through a wholly-owned subsidiary, Concorde
Career Institute, Inc., a Florida corporation, acquired substantially all the
assets of Southern Career Institute, Inc., a proprietary, postsecondary
vocational home-study school specializing in paralegal education, for a total
investment of $5,383,000. The acquisition was accounted for as a purchase and
after the acquisition the school was operated as Southern Career Institute
(SCI).
In 1991, an accrediting commission failed to reaffirm accreditation of SCI
under the ownership of Concorde Career Institute, Inc. Also in 1991, SCI
received notice from the Department of Education (DOE) alleging that commencing
June 1, 1990 SCI was ineligible to participate in federal student financial
assistance programs. The DOE gave notice that it intends to require SCI to
repay all student financial assistance funds disbursed from June 1, 1990 to
November 7, 1990, the effective date upon which the DOE discontinued disbursing
student financial assistance funds. The amount being claimed by DOE is not
determinable, but the total of the amounts shown on six separate notices dated
January 13, 1994 is approximately $2.7 million. By letter dated February 24,
1994, counsel for SCI provided certain information to the collection agency for
DOE and offered to settle all claims of DOE for the $9,828 on deposit in the SCI
bank account. As of May 5, 1995, neither SCI nor its counsel has received a
response to the settlement offer.
Because management of SCI had determined in late 1991 to wind down SCI's
operations and discontinue its business, SCI entered into a transaction with an
entity created by the former owner of Southern Career Institute, Inc. as the
purchaser. The purchaser acquired SCI's tuition receivables and agreed to
"teach-out" the then enrolled students, but did not assume any obligations to
DOE. The purchaser also agreed to pay SCI a portion of amounts it realized on
collections of the tuition receivables in excess of its operating costs. As of
March 21, 1995, SCI had received payments totaling approximately $30,000
pursuant to that agreement.
In light of applicable corporate law which limits the liability of
stockholders and the manner in which SCI was operated by Concorde Career
Institute, Inc. as a subsidiary of the Company, it is the opinion of management
of the Company that the Company will not be liable for debts of SCI. Therefore,
if SCI is required to pay the DOE's claims it is the opinion of management it
will not have a material adverse impact on the Company's financial condition and
its results of operations.
Department of Education Matters
On May 1, 1995 the Company received notification from the DOE of a
clarification in refund calculations for students that have withdrawn or dropped
from school. Portions of the Department's refund regulation have been
challenged in court by other schools. The court has prohibited the DOE from
enforcing certain provisions of the refund regulation for those schools filing
suit. The DOE has stated that it will apply this relief from the date of the
injunction, November 28, 1994 to all institutions until the lawsuits have been
settled. The Company has established an escrow account for the portion of the
refund calculation in question. This pertains to refunds made prior to
November 28, 1994. In the event that the DOE loses the lawsuit the Company will
release the money in the escrow account for use in operations and will benefit
from a decrease in provision for bad debt expense. If the lawsuits are settled
in favor of the DOE the Company will realize no material impact to its financial
statements.
10
<PAGE>
Other
During July 1993, nine former students of the Jacksonville, Florida school
filed individual lawsuits against the school, alleging deceptive trade
practices, breach of contract, and fraud and misrepresentation. These suits
have since been dismissed, and these and additional former students have been
added to another complaint which was filed in the Circuit Court, Fourth Judicial
District, Duval County, Florida (Case 93-04005-CA). The latter case was served
on August 26, 1993, and has since been amended and now comprises 69 plaintiffs.
The Company filed various objections and motions, including Motions to Dismiss
and Motions to Strike. After hearings, the trial court dismissed the lawsuit,
but allowed the lawsuit to be amended on behalf of one plaintiff, and authorized
the remaining plaintiffs to file individual suits if they so desired. The order
of dismissal was appealed and reversed. During the appeal process, two
additional suits making essentially the same claims have been filed. The matter
is still in discovery. The Company believes these suits are without merit and
plans to defend against them vigorously.
The Company has litigation pending which arose in the ordinary course of
business. Litigation is subject to many uncertainties and the outcome of the
individual matters is not presently determinable. It is management's opinion
that this litigation will not result in liabilities that would have a material
adverse effect on the Company's financial position or results of operations.
ITEM 2. CHANGE IN SECURITIES -- NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES -- NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -- NONE
ITEM 5. OTHER MATERIALLY IMPORTANT EVENTS -- NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -- NONE
(The remainder of this page was left intentionally blank.)
11
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CONCORDE CAREER COLLEGES, INC.
DATED: MAY 10, 1995
BY: /S/ JACK L. BROZMAN
-------------------------------------------
JACK L. BROZMAN, PRESIDENT
BY: /S/ GREGG GIMLIN
-------------------------------------------
GREGG GIMLIN, CHIEF FINANCIAL OFFICER
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
Form 10-Q March 31, 1995 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 2,984,000
<SECURITIES> 0
<RECEIVABLES> 23,397,000
<ALLOWANCES> 2,618,000
<INVENTORY> 0
<CURRENT-ASSETS> 24,914,000
<PP&E> 12,035,000
<DEPRECIATION> 8,364,000
<TOTAL-ASSETS> 32,621,000
<CURRENT-LIABILITIES> 23,767,000
<BONDS> 2,680,000
<COMMON> 698,000
0
30,000
<OTHER-SE> 4,648,000
<TOTAL-LIABILITY-AND-EQUITY> 32,621,000
<SALES> 9,889,000
<TOTAL-REVENUES> 9,889,000
<CGS> 0
<TOTAL-COSTS> 8,903,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 463,000
<INTEREST-EXPENSE> 190,000
<INCOME-PRETAX> 333,000
<INCOME-TAX> 33,000
<INCOME-CONTINUING> 300,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 300,000
<EPS-PRIMARY> .04
<EPS-DILUTED> 0
</TABLE>
