UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
AMENDMENT NO. 1
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): APRIL 16, 1998
ITT EDUCATIONAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-13144 36-2061311
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
5975 CASTLE CREEK PARKWAY N. DRIVE
P.O. BOX 50466
INDIANAPOLIS, INDIANA 46250-0466
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (317) 594-9499
<PAGE>
The Registrant's Current Report on Form 8-K, dated April 16,
1998, is being amended to correct the Statements of Income
included in Exhibit 99.1. Specifically, the column headings on
the Statements of Income should read Three Months Ended March 31,
1998 and 1997. No other parts of the Current Report are being
amended.
ITEM 5. OTHER EVENTS
The Press Release issued by the Company dated April 16,
1998, reporting the Company's financial results for the quarter
ended March 31, 1998, is incorporated herein by reference and
filed with this report as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
The list of exhibits set forth in the Index to
Exhibits on page S-2 is incorporated herein by
reference.
-2-
<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.
ITT Educational Services, Inc.
Date: April 17, 1998
By: /S/ CLARK D. ELWOOD
Clark D. Elwood, Senior Vice
President, General Counsel &
Secretary
S-1
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
99.1 Text of Press Release issued by the Company
dated April 16, 1998.
S-2
EXHIBIT 99.1
FOR FURTHER INFORMATION CONTACT:
AT THE COMPANY:
Edward Hartigan
Senior Vice President
(317) 594-9499 x207
AT THE FINANCIAL RELATIONS BOARD:
George Zagoudis Janine Warell Darcy Bretz
General Information Analyst Contact Media Contact
(312) 640-6663 (312) 640-6775 (312) 640-6756
FOR IMMEDIATE RELEASE
THURSDAY, APRIL 16, 1998
ITT EDUCATIONAL SERVICES, INC. REPORTS
RECORD FIRST QUARTER RESULTS
INDIANAPOLIS, IN, APRIL 16, 1998 - ITT EDUCATIONAL SERVICES, INC.
(NYSE:ESI), a leading proprietary provider of technology-oriented
postsecondary degree programs, today reported record first
quarter operating income of $11.0 million, a gain of 22 percent
over the $9.0 million for the first quarter of 1997. Operating
margins for the quarter increased to 15.2 percent compared with
13.9 percent a year ago. The Company attributed its strong
results to continued gains in total student enrollment over its
increasing college base.
Net income in the first quarter increased to $7.3 million, a gain
of 18 percent over the $6.2 million for the first quarter of
1997. Fully diluted earnings per share for the quarter rose to
27 cents compared with 23 cents in the prior year period.
Revenues increased 12 percent to $72.3 million from $64.5 million
in the first quarter of 1997.
"We are pleased that our strong momentum has continued in 1998
despite incurring pre-tax expenses of approximately $550,000 in
the first quarter relating to our change in control caused by the
merger of Starwood Hotels & Resorts with ITT Corporation," said
Rene R. Champagne, chairman, president and chief executive
officer. "These expenses represent approximately $0.01 per share
after tax," said Champagne. "Excluding these expenses, operating
income for the quarter would have increased 27.4%."
According to Champagne, "ESI has obtained all required prior
approvals of the proposed underwritten public offering of
11,000,000 shares together with a potential over-allotment of
1,650,000 shares of ESI common stock held by ITT Corporation (the
"Offering") from the Company's education regulators before the
offering occurs."
"We see significant long-term opportunities to further capitalize
on the rising demand for technology-oriented programs of study,"
said Champagne. "Our 63rd college opened in the first quarter in
Burr Ridge (Chicago), Illinois. We intend to open five
additional colleges in 1998 in Albany and Liverpool (Syracuse),
New York, Richmond, Virginia, Richardson, Texas, and St. Rose
(New Orleans), Louisiana. In addition, we continue to plan the
introduction of additional curricula in our colleges this year,
including the rescheduled September introduction of our new
curriculum in Computer Network Systems Technology."
ESI has filed a registration statement with the Securities and
Exchange Commission, which is not yet effective, relating to the
proposed Offering. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration
statement becomes effective. This announcement shall not
constitute an offer to sell or the solicitation of an offer to
buy, nor shall there be any sale of these securities in any State
in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any
such State.
When it becomes available, a copy of the written prospectus
relating to the Offering may be obtained from the Prospectus
Department -- Credit Suisse First Boston, 11 Madison Avenue, New
York, NY 10010.
ITT Educational Services, Inc. operates 63 ITT Technical
Institutes in 27 states which provide career-focused
postsecondary programs of study in fields of technology to
approximately 24,000 students.
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE
MATTERS DISCUSSED IN THIS PRESS RELEASE ARE FORWARD LOOKING
STATEMENTS THAT INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES.
AMONG THE FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY ARE THE FOLLOWING: BUSINESS CONDITIONS AND GROWTH IN
THE POSTSECONDARY EDUCATION INDUSTRY AND IN THE GENERAL ECONOMY;
CHANGES IN FEDERAL AND STATE GOVERNMENTAL REGULATIONS WITH
RESPECT TO EDUCATION AND ACCREDITATION STANDARDS, OR THE
INTERPRETATION OR ENFORCEMENT THEREOF, INCLUDING, BUT NOT LIMITED
TO, THE LEVEL OF GOVERNMENT FUNDING FOR, AND THE COMPANY'S
ELIGIBILITY TO PARTICIPATE IN, STUDENT FINANCIAL AID PROGRAMS
UTILIZED BY THE COMPANY'S STUDENTS; THE RESULTS OF THE COMPANY'S
APPEAL IN ELDREDGE, ET AL, V. ITT EDUCATIONAL SERVICES, INC., ET
AL. AND THE RESULTS OF ANY RELATED LITIGATION; EFFECTS OF ANY
CHANGE IN OWNERSHIP OF THE COMPANY RESULTING IN A CHANGE IN
CONTROL OF THE COMPANY, INCLUDING, BUT NOT LIMITED TO, THE
CONSEQUENCES OF SUCH CHANGES ON THE ACCREDITATION AND FEDERAL AND
STATE REGULATION OF THE INSTITUTES; RECEPTIVITY OF STUDENTS AND
EMPLOYERS TO THE COMPANY'S EXISTING PROGRAM OFFERINGS AND NEW
CURRICULA; LOSS OF LENDER ACCESS TO THE COMPANY'S STUDENTS FOR
STUDENT LOANS; A SUBSTANTIAL INCREASE IN THE SHARES OF COMMON
STOCK AVAILABLE FOR SALE IN THE MARKET IF SOME OR ALL OF ITT
CORPORATION'S COMMON STOCK HOLDINGS ARE DIVESTED; AND OTHER RISKS
AND UNCERTAINTIES DETAILED FROM TIME TO TIME IN THE COMPANY'S
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
<PAGE>
ITT EDUCATIONAL SERVICES, INC.
STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,
1998 1997
REVENUES
Tuition $62,587 $55,746
Other educational 9,700 8,730
Total revenue 72,287 64,476
COSTS AND EXPENSES
Cost of educational services 41,438 37,984
Student services and 19,436 17,536
administrative expenses
Change of control expenses 443 ---
Total costs and 61,317 55,520
expenses
Operating income 10,970 8,956
Interest income, net 1,244 1,380
Income before income taxes 12,214 10,336
Income taxes 4,886 4,134
Net Income $7,328 $6,202
Earnings per common share (basic $0.27 $0.23
and diluted)
SUPPLEMENTAL DATA:
Cost of educational services 57.3% 58.9%
Student services and 26.9% 27.2%
administrative expenses
Change of control expenses 0.6% ---
Operating margin 15.2% 13.9%
Operating losses from new $636 $578
institutes (after-tax)
Student enrollment at end of 23,879 22,172
period
Technical institutes at end of 63 59
period
<PAGE>
ITT EDUCATIONAL SERVICES, INC.
BALANCE SHEETS
(IN THOUSANDS EXCEPT PER SHARE DATA)
March 31, December 31, March 31,
1998 1997 1997
(unaudited) (unaudited)
ASSETS
Current assets
Cash and cash equivalents $90,217 $29 $62
Restricted cash 6,689 3,860 844
Cash invested with --- 94,800 85,936
ITT Corporation
Accounts receivable, net 12,770 9,680 9,797
Deferred income tax 1,843 2,019 1,217
Prepaids and other 3,939 2,570 4,248
current assets
Total current assets $115,458 $112,958 $102,104
Property and equipment, 22,937 22,886 21,429
net
Direct marketing costs 7,054 6,882 5,969
Other assets 3,338 3,188 1,946
Total assets 148,787 145,914 131,448
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities
Accounts payable $11,639 $14,974 $14,039
Accrued compensation and 5,054 3,245 3,481
benefits
Other accrued liabilities 11,729 6,877 6,617
Deferred tuition revenue 23,041 30,850 30,800
Total current 51,463 55,946 54,937
liabilities
Other liabilities 2,181 2,153 1,617
Total liabilities 53,644 58,099 56,554
Shareholders' equity
Preferred stock, $.01 par --- --- ---
value, 5,000,000
shares authorized, none
issued or outstanding
Common stock, $0.1 par 270 270 270
value, 50,000,000 shares
authorized, 26,999,952
issued and
outstanding
Capital surplus 32,513 32,513 32,513
Retained earnings 62,360 55,032 42,111
Total shareholders' 95,143 87,815 74,894
equity
Total liabilities and $148,787 $145,914 $131,448
shareholders' equity
For more information on ITT Educational Services, Inc.
via facsimile at no cost, simply dial
1-800-PRO-INFO and enter the company code ESI.
