<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
[X] Annual Report pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934 for the fiscal year ended December 31, 1995
-----------------
or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from __________ to _________
Commission File Number 0-22844
----------------------
SYLVAN LEARNING SYSTEMS, INC.
-----------------------------
(Exact name of registrant as specified in its charter)
Maryland 52-1492296
- ------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9135 Guilford Road, Columbia, Maryland 21046
- --------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410)880-0889
------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
--------------------------- ------------------------
Common Stock, Par Value $.01 NASDAQ
Securities registered pursuant to the Section 12(g) of the Act: None
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. Yes [X]. No [_].
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [_]
The aggregate market value of voting Common Stock held by non-affiliates of the
registrant was approximately $281,974,000 as of March 19, 1996.
The registrant had 15,344,726 shares of Common Stock outstanding as of March 19,
1996.
<PAGE>
Item 14(a)(1) of the Registrant's Form 10-K is hereby amended to read as
- ------------------------------------------------------------------------
follows:
- -------
Item 14(a)(1)
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page Reference
From Form 10-K
---------------
The Company:
<S> <C>
Report of Independent Auditors................................... 29
Consolidated Balance Sheets as of December 31, 1994 and
December 31, 1995............................................... 30
Consolidated Statements of Operations for the years ended
December 31, 1993, 1994 and 1995................................ 32
Consolidated Statements of Stockholders' Equity for the years
ended December 31, 1993, 1994 and 1995.......................... 33
Consolidated Statements of Cash Flows for the years ended
December 31, 1993, 1994 and 1995................................ 34
Notes to Consolidated Financial Statements....................... 35
Audited Financial Statements of Sylvan Learning Systems, Inc.
401(k) Retirement Savings Plan
for the years ended December 31, 1995 and 1994.................. 59
Item 14 (a) 2 - Financial Statement Schedule:
Schedule II - Valuation and Qualifying Accounts................... 58
</TABLE>
2
<PAGE>
Report of Independent Auditors
Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan
Baltimore, Maryland
We have audited the accompanying statements of net assets available for benefits
of the Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan as of
December 31, 1995 and 1994, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Sylvan
Learning Systems, Inc. 401(k) Retirement Savings Plan as of December 31, 1995
and 1994, and the changes in its net assets available for benefits for the years
then ended, in conformity with generally accepted accounting principles.
June 14 , 1996
<PAGE>
Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan
Statements of Net Assets Available for Benefits
<TABLE>
<CAPTION>
December 31
1995 1994
-----------------------
<S> <C> <C>
Assets
Investments, at fair value:
Sylvan Learning Systems, Inc. common stock $ 339,626 $ 56,463
Mutual funds:
MFS Emerging Growth Fund 207,753 -
Euro Pacific Growth Fund 117,220 -
Fidelity Advisor Equity Portfolio Growth Fund 216,837 32,423
Fidelity Advisor Growth Opportunities Portfolio 225,190 -
American Balanced Fund 165,791 36,027
Alex Brown Cash Reserve Fund 59,668 -
Growth Fund of America - 55,870
Investment Company of America - 128,904
U.S. Treasury Money Fund of America - 19,224
Participant loans 28,315 14,171
----------------------
1,360,400 343,082
Unallocated insurance contract, at contract value:
First Colony Group Deposit Administration Contract 142,688 151,549
----------------------
Total investments 1,503,088 494,631
Contributions receivable from employees 77,849 35,576
----------------------
Net assets available for benefits $1,580,937 $ 530,207
======================
</TABLE>
See accompanying notes.
<PAGE>
Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan
Statements of Changes in Net Assets Available for Benefits
<TABLE>
<CAPTION>
Year ended December 31
1995 1994
----------------------
<S> <C> <C>
Investment income:
Interest $ 31,246 $ 10,299
Dividends 14,335 11,510
----------------------
45,581 21,809
Employee salary deferral
contributions 536,825 189,585
Employee rollover contributions 236,385 22,281
----------------------
Total additions 818,791 233,675
Withdrawals (13,251) (47,515)
Net realized gain on sale of investments 9,575 1,800
Net unrealized appreciation (depreciation) in
aggregate fair value of investments 235,615 (1,914)
----------------------
Net increase 1,050,730 186,046
Net assets available for benefits at beginning
of year 530,207 344,161
----------------------
Net assets available for benefits at end of year $1,580,937 $ 530,207
======================
</TABLE>
See accompanying notes.
<PAGE>
Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan
Notes to Financial Statements
1. Significant Accounting Policies
Basis of Accounting
The financial statements of the Sylvan Learning Systems, Inc. (the "Company")
401(k) Retirement Savings Plan (the "Plan") are prepared using the accrual
method of accounting.
Benefits are recorded when paid. Amounts allocated to terminated participants
at December 31, 1995 and 1994 were $25,264 and $11,991, respectively.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of increases and decreases in net assets during the period.
Actual results could differ from those estimates.
Certain 1994 amounts have been reclassified to conform to 1995 presentation.
Investment Valuation
Investments are stated at fair value except for the unallocated insurance
contract which is valued at contract value. Sylvan Learning Systems, Inc. common
stock, is valued at the last reported sales price on the last business day of
the plan year. Mutual Funds are reported at current redemption value.
Participant loans are valued at cost which approximates fair value.
The unallocated insurance contract with First Colony Group Deposit
Administration is valued at contract value as estimated by the insurance
company. Contract value represents contributions made under contract, plus
interest at the contract rate, less funds used to pay withdrawals and to pay for
the insurance company's administrative expenses.
The change in the difference between cost and fair value is reflected in the
statements of changes in net assets available for benefits as net unrealized
appreciation (depreciation) in aggregate fair value of investments. The
realized gain or loss on investments is the difference between the proceeds
received and the average cost of investments sold.
Administration Expenses
All costs and expenses incurred in connection with the administration of the
Plan are paid by the Company.
<PAGE>
Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
2. Plan Description
The following description of the Plan provides only general information.
Participants should refer to the Summary Plan Description for a more complete
------------------------
description of the Plan's provisions. Copies of this summary are available from
the Company's Human Resources Department.
General
The Plan is a defined contribution plan covering substantially all employees who
are age twenty-one or older and have completed one year of service. It is
subject to the provisions of Employee Retirement Income Security Act of 1974
(ERISA).
Plan Mergers
In connection with the Company's acquisition of Remedial Education Diagnostic
Corporation, Inc., the Remedial Education Diagnostic Corporation Retirement Plan
(the "READS Plan") was merged into the Plan effective October 1, 1995. The
READS Plan's net assets of $804,381 were transferred to the Plan on February 1,
1996.
In connection with the Company's acquisition of The PACE Group, Inc., The PACE
Group, Inc. 401(k) Plan (the "PACE Plan") was merged into the Plan effective
December 31, 1995. The PACE Plan's net assets have not been transferred to
the Plan as of the date of this report.
Contributions
Employees contribute to the Plan through payroll deduction, subject to certain
annual limitations defined in the Internal Revenue Code. In addition, employees
may deposit distributions received from other plans ("rollovers"). The Company
may make contributions at its own discretion. During 1995 and 1994, the Company
elected not to make any discretionary contributions to the Plan. Contributions
to the Plan are invested in the available investment options as determined by
the participant.
Each participant account is credited with the participant's contribution and an
allocation of (a) the Company's contribution, (b) Plan earnings, and (c)
forfeitures of terminated participants' nonvested accounts. Allocations are
based on participant earnings or account balances, as defined.
<PAGE>
Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
2. Plan Description (continued)
Vesting
Participants are immediately vested in their contributions plus earnings
thereon. Vesting in the Company's discretionary contributions, if any, plus
earnings thereon is based on years of continuous service at a rate of 25 percent
per year in years two through five. A participant is 100 percent vested after
five years of credited service.
Investments
Upon enrollment in the Plan, a participant may direct employee contributions in
any of the available investment options. At December 31, 1995, the following
investment options were available: Sylvan Learning Systems, Inc. common stock,
MFS Emerging Growth Fund, Euro Pacific Growth Fund, Fidelity Advisor Equity
Portfolio Growth Fund, Fidelity Advisor Growth Opportunities Portfolio, American
Balanced Fund, Alex Brown Cash Reserve Fund, and First Colony Group Deposit
Administration Contract. Participants have the opportunity to change their
investment options quarterly.
Participant Loans
Participants may borrow from their account balances a minimum of $1,000 up to a
maximum of $50,000 or 50% of their vested account balance. Principal and
interest are repaid ratably through payroll deductions over loan terms which
generally do not exceed five years. Hardship distributions are also permitted
from a participant's account.
Payment of Benefits
On termination of service, a participant may receive a lump sum amount equal to
the vested value of his or her account, or upon death, disability, or
retirement, elect to receive periodic installments in accordance with plan
provisions.
Plan Termination
Although it has not expressed any intent to do so, the Company has the right to
discontinue its contributions at any time and to terminate the Plan subject to
the provisions of ERISA.
<PAGE>
Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
3. Investments
The fair value of individual investments that represent 5% or more of the Plan's
net assets available for benefits are as follows:
<TABLE>
<CAPTION>
December 31
1995 1994
---------------------
<S> <C> <C>
Investments, at fair value:
Sylvan Learning Systems, Inc. common stock $ 339,626 $ 56,463
Mutual funds:
MFS Emerging Growth 207,753 -
Euro Pacific Growth Fund 117,220 -
Fidelity Advisor Equity Portfolio Growth Fund 216,837 32,423
Fidelity Advisor Growth Opportunities Portfolio 225,190 -
American Balanced Fund 165,791 36,027
Growth Fund of America - 55,870
Investment Company of America - 128,904
Unallocated insurance contract, at contract value:
First Colony Group Deposit Administration Contract 142,688 151,549
</TABLE>
During 1995 and 1994 the Plan's investments (including investments bought, sold
and held during the year) appreciated (depreciated) in fair value by $245,190
and $(114), respectively, as follows:
<TABLE>
<CAPTION>
Year Ended December 31, 1995
---------------------------------
Net Appreciation End of Year
in Fair Value at
During Year End of Year
---------------------------------
<S> <C> <C>
Fair value as determined by quoted market price:
Sylvan Learning Systems, Inc. common stock $108,695 $ 339,626
Mutual funds:
MFS Emerging Growth 39,512 207,753
Euro Pacific Growth Fund 8,043 117,220
Fidelity Advisor Equity Portfolio Growth Fund 30,471 216,837
Fidelity Advisor Growth Opportunities Portfolio 32,927 225,190
American Balanced Fund 17,287 165,791
Alex Brown Cash Reserve Fund 59,668
Growth Fund of America 3,564 -
Investment Company of America 4,691 -
Fair Value as estimated by Plan Administrator:
Participant loans - 28,315
Contract value as determined by insurance company:
First Colony Group Deposit Administration Contract - 142,688
---------------------------------
$245,190 $1,503,088
=================================
</TABLE>
<PAGE>
Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
3. Investments (continued)
<TABLE>
<CAPTION>
Year Ended December 31, 1995
---------------------------------
Net Appreciation
Depreciation Fair Value
in Fair Value at
During Year End of Year
---------------------------------
<S> <C> <C>
Fair value as determined by quoted market price:
Sylvan Learning Systems, Inc. common stock $ 13,199 $ 56,463
Mutual funds:
Growth Fund of America (3,149) 55,870
Investment Company of America (8,029) 128,904
American Balanced Fund (1,756) 36,027
U.S. Treasury Money Fund of America - 19,224
Fidelity Advisor Equity Portfolio Growth Fund (379) 32,423
Fair Value as estimated by Plan Administrator:
Participant loans - 14,171
Contract value as determined by insurance company:
First Colony Group Deposit Administration Contract 151,549
---------------------------------
$(114) $494,631
=================================
</TABLE>
4. Contract with Insurance Company
In August 1992, the Company entered into a Group Deposit Administration contract
with First Colony. For investment purposes, the premiums paid by the Plan are
commingled with other assets of First Colony in the Deposit Administration Fund.
The Deposit Administration Fund guarantees a 4% interest rate, compounded
annually. The crediting interest rate is adjusted periodically as determined by
First Colony based on market rates. Actual interest earned for 1995 ranged from
5.4% to 6.65% and for 1994 from 5.25% to 6.65%. If the Plan withdraws moneys
from the Deposit Administration Fund, First Colony may make a market value
adjustment. Such an adjustment will be made if in any 12 month period the
Deposit Administration Fund is reduced by an amount equal to at least 20% of the
highest balance in the Fund.
5. Tax Status
The Internal Revenue Service has determined and informed the Plan by a letter
dated March 7, 1995 that the Plan and related trust are designed in accordance
with applicable sections of the Internal Revenue Code (IRC), and is therefore
not subject to tax under present income tax laws. The Plan management believes
that the Plan continues to qualify and to operate as designed.
<PAGE>
Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
Note 6: Allocation of Net Assets Available for Benefits to Investment Programs
<TABLE>
<CAPTION>
December 31, 1995
--------------------------------------------------------------------------------------------
Sylvan Fidelity Fidelity
Learning MFS Advisor Advisor
Systems, Inc. Emerging Euro Pacific Equity Growth American
Common Growth Growth Portfolio Opportunities Balanced
Stock Fund Fund Growth Fund Portfolio Fund
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments, at fair value $339,626 $207,753 $117,220 $216,837 $225,190 $165,791
Unallocated insurance contract, at
contract value
Contributions receivable from employees 20,848 13,226 6,119 12,666 11,777 8,411
--------------------------------------------------------------------------------------------
Net assets available for benefits $360,474 $220,979 $123,339 $229,503 $236,967 $174,202
============================================================================================
<CAPTION>
December 31, 1995
--------------------------------------------------------------------------------------------
Alex Brown U. S. First Colony
Cash Growth Investment Treasury Group Deposit
Reserve Fund Company of Money Fund Participant Administration
Fund of America America of America loans Contract
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments, at fair value $59,668 $28,315
Unallocated insurance contract, at
contract value $142,688
Contributions receivable from employees 1,802 3,000
--------------------------------------------------------------------------------------------
Net assets available for benefits $61,470 $0 $0 $0 $28,315 $145,688
============================================================================================
<CAPTION>
December 31, 1995
-----------------
Total
-----------------
<S> <C>
Assets
Investments, at fair value $1,360,400
Unallocated insurance contract, at
contract value 142,688
Contributions receivable from employees 77,849
-----------------
Net assets available for benefits $1,580,937
=================
</TABLE>
<TABLE>
<CAPTION>
December 31, 1994
---------------------------------------------------------------------
Fidelity
Sylvan Advisor
Learning Equity American
Systems, Inc. Portfolio Balanced Growth Fund
common stock Growth Fund Fund of America
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Investments, at fair value $56,463 $32,423 $36,027 $55,870
Unallocated insurance contract, at
contract value
Contributions receivable from employees 15,937 9,792 4,484 1,787
---------------------------------------------------------------------
Net assets available for benefits $72,400 $42,215 $40,511 $57,657
=====================================================================
</TABLE>
<TABLE>
<CAPTION>
December 31, 1994
---------------------------------------------------------------------
U. S. First Colony
Investment Treasury Group Deposit
Company of Money Fund Participant Administration
America of America loans Contract Total
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Investments, at fair value $128,904 $19,224 $14,171 $343,082
Unallocated insurance contract, at
contract value $151,549 151,549
Contributions receivable from employees 2,386 295 895 35,576
---------------------------------------------------------------------
Net assets available for benefits $131,290 $19,519 $14,171 $152,444 $530,207
=====================================================================
</TABLE>
<PAGE>
Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
Note 7: Allocation of Changes in Net Assets Available for Benefits to
Investment Programs
<TABLE>
<CAPTION>
Year ended December 31, 1995
---------------------------------------------------------------------------------------
Sylvan Fidelity Fidelity
Learning MFS Advisor Advisor Alex Brown
Systems, Inc. Emerging Euro Pacific Equity Growth American Cash
Common Growth Growth Portfolio Opportunities Balanced Reserve
Stock Fund Fund Growth Fund Portfolio Fund Fund
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Interest $2,134 $721 $10,331 $2,694 $5,157
Dividends 0 $0 2,415 330 2,761 4,917 $3,013
---------------------------------------------------------------------------------------
2,134 0 3,136 10,661 5,455 10,074 3,013
Employee salary deferral contributions 114,578 74,631 50,345 88,679 89,833 64,978 15,060
Employee rollover contributions 34,701 46,015 11,813 31,298 50,756 32,235 7,473
---------------------------------------------------------------------------------------
Total additions 151,413 120,646 65,294 130,638 146,044 107,287 25,546
Withdrawals (1,498) (152) (270) (1,975) (145) (1,714) (3,908)
Net realized gain on sale of investments 980 96 60 99 43 42 0
Net unrealized appreciation in fair value
of investments 107,715 39,416 7,983 30,372 32,884 17,245 0
Interfund transfers 29,464 60,973 50,272 28,154 58,141 10,831 39,832
---------------------------------------------------------------------------------------
Net increase (decrease) 288,074 220,979 123,339 187,288 236,967 133,691 61,470
Net assets available for benefits at
beginning of year 72,400 0 0 42,215 0 40,511 0
---------------------------------------------------------------------------------------
Net assets available for benefits at end
of year $360,474 $220,979 $123,339 $229,503 $236,967 $174,202 $61,470
=======================================================================================
<CAPTION>
Year ended December 31, 1995
-----------------------------------------------------------------------------
U.S. First Colony
Growth Investment Treasury Group Deposit
Fund Company of Money fund Participant Administration
of America America of America Loans Contract Total
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest $68 $1,216 $8,925 31,246
Dividends 11 $888 $0 0 0 14,335
-----------------------------------------------------------------------------
79 888 0 1,216 8,925 45,581
Employee salary deferral contributions 0 0 0 0 38,721 536,825
Employee rollover contributions 0 0 0 0 22,094 236,385
-----------------------------------------------------------------------------
Total additions 79 888 0 1,216 69,740 818,791
Withdrawals (1,196) (726) 0 0 (1,667) (13,251)
Net realized gain on sale of investments 3,564 4,691 0 0 0 9,575
Net unrealized appreciation in fair value
of investments 0 0 0 0 0 235,615
Interfund transfers (60,104) (136,143) (19,519) 12,928 (74,829) 0
-----------------------------------------------------------------------------
Net increase (decrease) (57,657) (131,290) (19,519) 14,144 (6,756) 1,050,730
Net assets available for benefits at
beginning of year 57,657 131,290 19,519 14,171 152,444 530,207
-----------------------------------------------------------------------------
Net assets available for benefits at end
of year $0 $0 $0 $28,315 $145,688 $1,580,937
=============================================================================
</TABLE>
<PAGE>
Sylvan Learning Systems, Inc. 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
Note 7: Allocation of Changes in Net Assets Available for Benefits to
Investment Programs (continued)
<TABLE>
<CAPTION>
Year ended December 31, 1994
---------------------------------------------------------------------------------------
Sylvan Fidelity
Learning Advisor
Systems, Inc. Equity American Growth Investment
Common Portfolio Balanced Fund Company of
Stock Growth Fund Fund of America America
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net investment income:
Interest $427
Dividends 0 $315 $1,463 $2,452 $7,280
---------------------------------------------------------------------------------------
Net investment income 427 315 1,463 2,452 7,280
Employee salary deferral contributions 22,497 31,017 16,836 33,854 55,001
Employee rollover contributions 5,306 9,179 4,230 1,738 914
---------------------------------------------------------------------------------------
Total Additions 28,230 40,511 22,529 38,044 63,195
Withdrawals (2,058) (209) (4,196) (14,182) (19,949)
Net realized gain(loss) on sale of
investments 0 (10) (318) 1,368 760
Net unrealized appreciation
(depreciation) in fair value of
investments 13,199 (369) (1,438) (4,517) (8,789)
Interfund transfers 16,967 (159) (418) (15,542) (29,430)
---------------------------------------------------------------------------------------
Net increase 56,338 39,764 16,159 5,171 5,787
Net assets available for benefits at
beginning of year 16,062 2,451 24,352 52,486 125,503
---------------------------------------------------------------------------------------
Net assets available for benefits at end
of year $72,400 $42,215 $40,511 $57,657 $131,290
=======================================================================================
<CAPTION>
Year ended December 31, 1994
-----------------------------------------------------------------------------
U.S. First Colony
Treasury Group Deposit
Money Fund Participant Administration
of America Loans Contract Total
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income:
Interest $147 $840 $8,885 $10,299
Dividends 0 0 0 11,510
-----------------------------------------------------------------------------
Net investment income 147 840 8,885 21,809
Employee salary deferral contributions 4,316 0 26,064 189,585
Employee rollover contributions 0 0 914 22,281
-----------------------------------------------------------------------------
Total Additions 4,463 840 35,863 233,675
Withdrawals 0 0 (6,921) (47,515)
Net realized gain(loss) on sale of investments 0 0 0 1,800
Net unrealized appreciation
(depreciation) in fair value
of investments 0 0 0 (1,914)
Interfund transfers 15,013 13,331 238 0
-----------------------------------------------------------------------------
Net increase 19,476 14,171 29,180 186,046
Net assets available for benefits at
beginning of year 43 0 123,264 344,161
-----------------------------------------------------------------------------
Net assets available for benefits at end
of year $19,519 $14,171 $152,444 $530,207
=============================================================================
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Sylvan Learning Systems, Inc.
By /s/ B. Lee McGee
--------------------------------------
B. Lee McGee, Chief Financial Officer
Date June 27, 1996
------------------------------------
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit No. Description Numbered Page
- ----------- ----------- -------------
23.01 Consent of Independent Auditors
<PAGE>
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the following Registration
Statements on Form S-8 of Sylvan Learning Systems, Inc. of our report dated June
14, 1996, with respect to the financial statements of Sylvan Learning Systems,
Inc. 401(k) Retirement Savings Plan, amending Sylvan Learning Systems, Inc.
Annual Report (Form 10-K) for the year ended December 31, 1995.
<TABLE>
<CAPTION>
Name Registration Number Date Filed
- ----------------------------------------------------------------------------
<S> <C> <C>
1987-1991 Employee Stock
Option Plan 33-77384 April 6, 1994
1993 Director Stock Option
Plan 33-77386 April 6, 1994
1993 Employee Stock Option
Plan 33-77390 April 6, 1994
1993 Management Stock
Option Plan 33-77388 April 6, 1994
</TABLE>
Baltimore, Maryland
June 24, 1996
