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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 28, 1997
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SYLVAN LEARNING SYSTEMS, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
0-22844
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Commission File Number
Maryland 52-1492296
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 Lancaster Street
Baltimore, Maryland 21202
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (410) 843-8000
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The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report on Form 8-K/A dated
April 4, 1997 as set forth below.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) PRO FORMA FINANCIAL INFORMATION.
Unaudited pro forma consolidated statement of operations for the
year ended December 31, 1996.
Notes to unaudited pro forma consolidated financial statement.
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PRO FORMA FINANCIAL INFORMATION
Effective December 1, 1996, the Company acquired substantially all of the
operating assets and assumed certain liabilities of Wall Street Institute
International, B.V. and its commonly controlled affiliates (collectively,
"WSI"). The Company and the sellers signed a definitive purchase agreement in
December 1996 that provided for an effective date of the sale of December 1,
1996. The Company's control of the operations of WSI commenced at the effective
date, and the Company recorded the acquisition using the purchase method of
accounting on December 1, 1996. WSI is a European-based franchisor and operator
of learning centers that teach the English language through a combination of
computer-based and live instruction. WSI has a network of more than 170
franchised centers in operation throughout Europe and Latin America.
On April 4, 1997, the Company filed a Current Report on Form 8-K/A to present
the pro forma effects of the acquisition of WSI on the consolidated results of
operations of the Company for the year ended December 31, 1995 and for the nine
months ended September 30, 1996. The Company is filing this Current Report on
Form 8-K/A to update the pro forma information for the year ended December 31,
1996. In presenting this pro forma consolidated statement of operations, the
Company used the audited combined statement of income of WSI for the year ended
August 31, 1996 to prepare the pro forma consolidated statement of operations of
the Company for the year ended December 31, 1996. Information subsequent to
August 31, 1996 through the effective date of the acquisition of December 1,
1996 was not available or practical to obtain. The Company believes that the use
of this fiscal year to prepare the 1996 pro forma consolidated statement of
operations does not result in the presentation of pro forma consolidated
statement of operations data that is materially different than the pro forma
information that would result from the use of 1996 calendar year information of
WSI. This pro forma information should be read in conjunction with the notes
thereto.
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PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Wall Street Institute
Sylvan Learning International, B.V. Sylvan/WSI Pro Forma
Systems, Inc. for the and affiliates Consolidated for the
year ended for the year ended Pro Forma year ended
December 31, 1996 August 31, 1996 Adjustments December 31, 1996
---------------------- ---------------------- ----------- --------------------
(in thousands except per share data)
<S> <C> <C> <C> <C>
REVENUES:
Franchise royalties $ 11,160 $ 11,160
Franchise sales fees 3,184 3,184
Company-owned learning center services 18,528 18,528
Product sales 3,927 3,927
Contract learning center services 33,366 33,366
Testing services 86,951 $14,330 $(1,669)(3) 99,612
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Total revenues 157,116 14,330 (1,669) 169,777
COST AND EXPENSES:
Franchise services 6,532 6,532
Company-owned learning center operating
expenses 16,073 16,073
Cost of product sales 2,952 2,952
Contract learning center operating expenses 29,071 29,071
Testing services expenses 71,518 10,115 794 (1)
(510)(3) 81,917
General and administrative expenses 8,755 8,755
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Total expenses 134,901 10,115 284 145,300
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Operating income 22,215 4,215 (1,953) 24,477
Other income (expense) 1,378 52 169 (3) 1,599
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Income from continuing operations before
income taxes 23,593 4,267 (1,784) 26,076
Income taxes (8,850) (321) (9,171)
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Net income $ 14,743 $ 3,946 $(1,784) $ 16,905
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PER COMMON AND COMMON EQUIVALENT SHARE (2)
Net income $0.60 $0.67
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PER COMMON SHARE, ASSUMING FULL DILUTION (2)
Net income $0.60 $0.67
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COMMON AND COMMON EQUIVALENT SHARES USED IN
CALCULATION OF EARNINGS PER SHARE:
Primary 23,440 24,155
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Fully diluted 23,582 24,297
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</TABLE>
See notes to unaudited pro forma consolidated financial statement.
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NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENT
(1) Adjustment to record goodwill amortization based on the estimated useful
life of 25 years.
(2) Effective February 1995, the company purchased The Pace Group ("PACE").
Additional contingent consideration is payable in the amount of 6.5 times
PACE's earnings before interest and income taxes ("EBIT") in 1997. The
earnings per share calculation for the year ended December 31, 1996 assumes
additional goodwill amortization of $630,000 based on the contingent
consideration which would have been paid relating to PACE's operating
results for that period.
(3) Adjustment to eliminate operating results for the one month period ended
December 31, 1996 included in the Company's historical consolidated
statement of operations for the year ended December 31, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf by the undersigned
thereunto duly authorized.
Sylvan Learning System, Inc.
(Registrant)
Date: April 10, 1997 /s/ B. Lee McGee
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B. Lee McGee, Senior Vice President
and Chief Financial Officer
