Back to GetFilings.com

FORM 10-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

(Mark One)

[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
	For the fiscal year ended           December 31, 2000           OR
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from           Not Applicable           to ________________________

Commission file number           0-17840          

NEW HORIZONS WORLDWIDE, INC.
(Exact name of Registrant as specified in its charter)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

          Common Stock, $.01 Par Value          
Title of Class

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 the Common Stock held by non-affiliates of the Registrant as of March 23, 2001 was approximately $110,541,102 computed on the basis of the last reported sales price per share ($15.50) of such stock on The Nasdaq Stock Market.

The number of shares of the Registrant’s Common Stock outstanding as of March 23, 2001 was 9,960,397.

DOCUMENTS OR PARTS THEREOF INCORPORATED BY REFERENCE

NEW HORIZONS WORLDWIDE, INC.
INDEX TO ANNUAL REPORT
ON FORM 10K

PART I

PART I

ITEM 1.  BUSINESS

This Annual Report on Form 10-K contains forward-looking statements which involve risks and uncertainties. The Company’s actual results may differ significantly from the results discussed in the forward-looking statements. Factors that may cause such a difference include, but are not limited to, those discussed throughout this document and under the caption “Information About Forward-Looking Statements.”

New Horizons Worldwide, Inc., (the “Company” or “New Horizons”) formerly Handex Corporation, through various subsidiaries, both owns and franchises computer training centers. The Company sold its environmental business segment and changed its name to New Horizons in late 1996, in order to concentrate its resources on the technology training market. The Company’s common stock trades on The Nasdaq Stock Market under the symbol “NEWH”.

GENERAL

New Horizons’ 2000 system-wide revenues of $530 million makes it the largest independent provider in the fragmented PC software applications and technical certification training industry. Through various subsidiaries, the Company both owns and franchises computer training centers. Through these training centers the Company offers a variety of flexible training choices including instructor-led training, Internet-based training, often referred to as eLearning, computer-based training via CD-ROM, computer labs, certification exam preparation tools, and 24-hours, seven-days-a-week, free help desk support. The goal of the training is to deliver to the student information and skills which have immediate and practical value in the workplace.

The New Horizons worldwide network delivered over 2.8 million student-days of information technology training in 2000, generating system-wide revenues, which include both the results of company-owned and franchised operations, of $530 million, up 21.8% from $435 million in 1999. The network has over 2000 classrooms, 2,700 instructors and 2,100 account executives.

New Horizons specializes in instructor-led training which is the industry’s dominant delivery method for information technology training. The Company has become a leader in the industry by developing the processes for delivering quality training for the largest technology training segments: PC software applications and technical certification training. The network’s training centers offer a broad range of courses for several of the major software vendors, including Microsoft, Novell, Lotus, Cisco, Linux, Adobe, Aldus, Apple Computer, Corel, Symantec, Sun Microsystems, and Unix. New Horizons has the largest network of Microsoft Certified Technical Education Centers and Novell Authorized Education Centers in the world. Additionally, with certification testing becoming increasingly important, New Horizons also has established the largest number of Authorized Prometric Testing Centers in the world. Classes can be held at New Horizons locations or on-site at the client’s facility. Curriculum can be tailored to the client’s specific needs. The Company can also provide training and courseware for the customer’s proprietary software. Additionally, using its courseware as the source material, the Company has entered into an arrangement with a company to develop its own line of computer-based products, entitled Masterware, which became available to franchisees for sale in the third quarter of 1997. The Company also has a reseller agreement with a company that has an extensive offering of computer-based training courses that will prepare customers for certification exams.

New Horizons owns and operates 26 computer training facilities located in Santa Ana, Burbank, Los Angeles, Long Beach, Sacramento, Stockton, Modesto and Redding, California; Albuquerque, New Mexico; Charlotte, North Carolina; San Antonio, Texas; and Denver, Englewood, Broomfield, Loveland and Colorado Springs, Colorado; two in Chicago, Illinois; Cleveland and Akron, Ohio; two in New York City, New York; Memphis, Jackson and Nashville, Tennessee; and Hartford, Connecticut. On January 31, 2001, the Company also purchased the business conducted by its franchisee in Indianapolis, Indiana.

As of December 31, 2000, the Company’s franchisees operated 138 locations in the United States and Canada and 116 locations in 42 other countries around the world. An additional 25 franchises had been sold as of that date and are scheduled for future openings.

Page 1

The Company was incorporated in Delaware on December 15, 1988, and its principal executive offices are located 1231 East Dyer Road, Suite 140, Santa Ana, California 92705. The Company maintains a website at http://www.newhorizons.com.

THE INFORMATION TECHNOLOGY EDUCATION AND TRAINING MARKET

The rapidly growing role of information technology in business organizations and the emergence of the Internet are creating significant and increasing demand for information technology training. A 2000 International Data Corporation (“IDC”) study estimated that in 1999 the worldwide market for information technology education and training was about $19.4 billion and is expected to grow at a pace of 12% per year to over $34 billion in the year 2004.

The growing need for technology training is driven by several developments including: (i) increased use of computers in the workplace requiring employees to acquire and apply information technology skills; (ii) rapid and complex technological changes in operating systems, new software development, and technical training; (iii) continuing emphasis by industry on productivity, increasing the number of functions being automated throughout organizations; (iv) greater focus by organizations on core competencies with a shifting emphasis to outsourcing of non-core activities; (v) corporate downsizing requiring remaining personnel to develop a greater variety of skills; (vi) increasing interest in information technology certification from both a company’s and an employee’s perspective; and (vii) development of the Internet.

Although a significant portion of technology training is provided by in-house training departments, IDC, in its study, identified a decided shift towards outsourcing to external training professionals. This outsourcing is motivated by several factors, including: (i) the lack of internal trainers experienced in the latest software; (ii) the cost of maintaining an in-house staff of trainers; and (iii) the cost of developing and maintaining internal courseware.

Organizations are searching out and selecting outside technology training services that can provide the following: (i) cost effective delivery of high quality instruction; (ii) qualified, technically expert instructors; (iii) flexibility to deliver a consistent training product at geographically dispersed facilities; (iv) ability to tailor the training products to specific customers’ needs; (v) definitive, current courseware; (vi) testing and certification of technical competency; (vii) effective training methods delivering knowledge and skills with immediate practical value in the workplace; (viii) a depth and breadth of curriculum; and (ix) flexible and convenient scheduling of classes.

Instructor-led classroom training is the dominant delivery method for technology training in the U.S. with 71% of the information technology education market according to the 2000 IDC report. IDC projects that instructor-led training will continue to maintain a significant share of the market because trainees value the personalized attention, interaction with classmates and instructors, and insulation from workplace interruptions. While IDC projects instructor-led training will continue to be the leading delivery method in the market through 2002, the role of technology-based training, primarily consisting of eLearning and computer-based training, is gaining greater acceptance. IDC estimates that technology-based training will have 51% of the information technology education market by 2004 while instructor-led classroom training will have 40%.

THE NEW HORIZONS BUSINESS MODEL

New Horizons’ company-owned and franchised operations both provide an instructor-led training delivery system to customers that is executed by certified employee instructors primarily in fully equipped classrooms maintained by New Horizons or its franchises. Approximately 10% of classes are given on site at the customer’s location. New Horizons often supplies the computer hardware for these on-site classes.

Curriculum is centered on technical certification programs (approximately 54%) and software applications (approximately 46%). Classes are concise, generally ranging from one to five days, and are designed to be intensive skill-building experiences. The Company offers a broad array of information technology courses covering the most popular software applications and technical certification programs. The Company also provides customized training for customers’ proprietary software applications. The Company believes it offers more classes more often than any other company in the industry.

Page 2

In addition to certified instructors and broad curriculum, the New Horizons business model is designed to provide its customers significant training value by featuring: (i) guaranteed training through the Company’s free, six-month repeat privileges; (ii) skills assessment for both standard or proprietary software; (iii) professional certification training; (iv) the largest network of authorized training centers in the industry; (v) free, 24 hours-a-day, seven-days-a-week help desk service for a full sixty-day period after a class has been completed; (vi) on-site training at customers’ facilities; (vii) customized courseware from a library of over 1,400 titles in 14 languages; (viii) club memberships providing a series of classes for one platform at one low price; (ix) flexible scheduling including evening and weekend classes; (x) the CES program which coordinates a national/international referral system and delivery network of training for major clients which have training requirements in multiple locations; and (xi) its integrated eLearning program which allows customers to integrate the delivery methodology between instructor-led training and technology-based training.

Realizing the impact of the Internet and growing customer demand for eLearning, New Horizons is introducing an Internet learning program consisting of two components: New Horizons Online LIVE Learning and New Horizons Online Learning. Online LIVE Learning is synchronous, interactive “classrooms on the Web” featuring instructor-facilitated classes delivered over the Internet. Online Learning is asynchronous instruction, identical in content to our classroom instruction, but self-paced and available to those students who prefer a more independent learning method.

The Company has historically grown through the sale of franchises, the opening of new company-owned facilities, the buyback of franchises in certain markets, and revenue growth from the existing training centers. Revenues at locations open more than twelve months grew approximately 17%, up from 15% in 1999. The Company believes a mix of franchised and company-owned centers will enable it to combine the accelerated expansion opportunities provided by franchising while maintaining ownership of a significant number of training centers. The Company plans to continue to grow through (i) improvement of revenues and profits at both current company-owned and franchised operating locations; (ii) the sale of additional franchises; (iii) the selective buyback of existing franchises in the United States which have demonstrated the ability to achieve above average profitability while increasing market share, and (iv) the potential acquisition of companies in similar or complementary businesses.

Company-Owned Training Centers

At the end of 2000 the Company owned and operated 26 training centers that generated $111.3 million in revenue up from $86.5 million in 1999. No new locations were acquired or opened in 2000 and the locations open at the end of 2000 were as follows:

The acquisitions were a result of the Company’s strategy to acquire well performing franchises in select United States markets. The selling shareholders, other than the former owners of the Albuquerque, Sacramento and Stockton franchises, have continued to manage the acquired training centers, and will receive additional consideration if certain performance criteria are met. The acquisitions have been recorded using the purchase method of accounting and the operating results have been included in the Company’s financial statements from the date of acquisition. On January 31, 2001 the Company also purchased the business conducted by its franchisee in Indianapolis, Indiana.

Franchising

At the end of 2000 the Company supported a worldwide network of independent franchises which provide information technology training at 254 locations in 44 countries. There were an additional 25 franchised locations which had been sold and which are scheduled to open at various times during 2001. The franchisee is given a non-exclusive license and franchise to participate in and use the business model and sales system developed and refined by the Company. The Company initially offered franchises for sale in 1991 and sold its first franchise in 1992. The Company had 194 franchised locations operating at the end of 1998; 204 at the end of 1999; and 254 at the end of 2000, of which 138 were in the United States and Canada and 116 were abroad.

Page 3

The offer and sale of franchises are subject to regulation by the United States Federal Trade Commission and certain foreign countries. There also exist numerous state laws that regulate the offer and sale of franchises and business opportunities, as well as the ongoing relationship between franchisors and franchisees, including the termination, transfer, and renewal of franchise rights. The failure to comply with these laws could adversely affect the Company’s operations.

New Horizons estimates the initial investment required to acquire and start a franchise operation, including the initial franchise fee, ranges from approximately $250,000 to $450,000.

United States and Canada

Franchise Fees

A franchisee in the United States and Canada is charged an initial franchise fee and ongoing monthly royalties, which become effective a specified period of time after the center begins operation. The initial franchise fee is based on the size of the territory granted as defined in the Franchise Agreement. In the United States and Canada, the size of a territory is measured by the number of personal computers (“PC’s”) in the territory. The initial franchise fee for a start-up center for a Type 1 territory (150,000 or more PC’s) is $75,000; for a Type 2 territory (75,000 to 149,999 PC’s) is $50,000; and a Type 3 territory (50,000 to 75,000 PC’s) is $25,000. Entrepreneurs converting an existing training center to a New Horizons center receive a 20% reduction in the initial fee as a conversion allowance. Based on information furnished by IDC concerning the number of PC’s in various geographic areas, as of December 31, 2000, the Company has identified 25 Type 1 territories, 23 Type 2 territories, and 16 Type 3 territories as the remaining territories currently available for sale as franchises in the United States and Canada.

The initial franchise fee is payable upon execution of the Franchise Agreement and is not refundable under any circumstances. The territory is a “limited exclusive” territory in that New Horizons agrees not to own or franchise any other New Horizons Computer Learning Center provided the franchisee operates in compliance with the terms of its franchise agreement. The geographic boundaries of a territory are typically determined by United States Postal Service zip codes. Unless the Franchise Agreement terminates or is amended by mutual agreement, a territory will not be altered. Franchises are expected to market their business to customers located within the defined territory and not to customers within territories of other New Horizons franchises or affiliates. Franchisees generally have six months from the date of the execution of the Franchise Agreement to open a center.

Royalties

In addition to the initial franchise fee, franchisees pay the following fees to New Horizons: (i) a monthly continuing royalty fee, consisting of the greater of 3% to 6% of monthly gross revenues or a minimum flat fee of $1,500 for a Type 1 territory or $1,000 for a Type 2 and Type 3 territory; (ii) a monthly marketing and advertising fee of 1% of gross revenues; and (iii) a course materials and proprietary computer-based training products surcharge of 9% of the gross revenues from course materials and proprietary computer-based training products sold to third parties. Each franchisee also pays a $50 per month maintenance fee for customized software developed and maintained by New Horizons. The 6% royalty fee rate was effective for franchises sold during September 1996 or later.

Franchise Agreement

The Franchise Agreement runs for an initial term of ten years and is renewable for additional five-year terms. The franchise is exclusive within the specific defined territory and is subject to a number of limitations and conditions. These limitations and conditions include, but are not limited to: (i) staffing requirements, including a General Manager plus a minimum number of account executives based on the territory type; (ii) a minimum number of classrooms depending on the territory type; (iii) full-time and continuous operations; (iv) a pre-defined minimum required curriculum; (v) computer equipment and system requirements; (vi) signage and display material requirements; (vii) minimum insurance requirements; and (viii) record keeping requirements. The agreement also contains non-competition restrictions which bar: (i) competing with New Horizons during the term of the Franchise Agreement and for one year after termination of the franchise within a 25 mile radius of any New Horizons center; (ii) diverting or attempting to divert any customer or business of the franchise business to any competitor; (iii) performing any act that is injurious or prejudicial to the goodwill associated with the New Horizons service marks or operating system; and (iv) soliciting any person who is at that time employed by the franchisor or any of its affiliated corporations to leave his or her employment. In addition, there are certain restrictions on the franchisees’ rights to transfer the franchise license. New Horizons also maintains a “right of first refusal” if a transfer effects a change of control. The agreement also contains default and termination remedies.

Page 4

International

Franchise Fees

Initial franchisee fees and territories for international franchises are market/country specific. While the Company does have some unit franchises internationally, the Company has predominantly entered into Master Franchise Agreements providing franchisees with the right to award subfranchises to other parties within a particular region. The Master Franchisee pays an initial master franchise fee that is based upon the expected number of subfranchises to be sold. The master franchise fee is then earned ratably over the opening of the subfranchises. Under the terms of these Master Franchise Agreements, the franchisee commits to open or cause to be opened a specified number of locations within a specified time frame. The Master Franchisee is responsible for the pre-opening and ongoing support of the subfranchises. The Company shares with the Master Franchisee in the proceeds of subsequent sales of individual franchises and also receives a percentage of the royalties received by the Master Franchisee. In 2000 the Company entered into Master Franchise Agreements for the development of China, Ecuador, Israel, and Central America. Approximately 18% of the Company’s system-wide revenues were generated by international locations in 2000. In addition to those markets currently served by its franchisees, the Company has identified over 90 additional international markets that may support a training center.

The initial franchise fee is payable upon execution of the Franchise Agreement and is not refundable under any circumstances. The territory is a “limited exclusive” territory in that New Horizons agrees not to own or franchise any other New Horizons Computer Learning Center provided the franchisee operates in compliance with the terms of its Franchise Agreement. Unless the Franchise Agreement terminates or is amended by mutual agreement, a territory will not be altered. Franchises are expected to market their business to customers located within the defined territory and not to customers within territories of other New Horizons franchises or affiliates. Franchisees generally have six months from the date of the execution of the Franchise Agreement to open a center.

Royalties

In addition to the initial franchise fee, franchisees pay the following fees to New Horizons: (i) Unit Franchisees: a monthly continuing royalty fee, ranging from 3% to 6% of monthly gross revenues with minimum royalties ranging from $350 to $3,000, depending on the marketplace; (ii) Master Franchisees: 40% of the royalties received from their Subfanchisees with those royalties ranging from 3% to 6% with the aforementioned minimums; and (iii) a course materials and proprietary computer-based training products surcharge of 9% of the gross revenues from course materials and proprietary computer-based training products sold to third parties. Each franchisee also pays a $50 per month maintenance fee for customized software developed and maintained by New Horizons. The 6% royalty fee rate was effective for franchises sold during September 1996 or later.

Master Franchise Agreement

A Master Franchisee receives a territory which is typically a country or a region encompassing multiple countries. Under the Master Franchise Agreement the Master Franchisee shall: (i) license and service third party Unit Subfranchises operated by persons other than the Master Franchisee and (ii) own and operate at least one New Horizons location under a separate Unit Franchise Agreement. The Master Franchise Agreement runs for an initial term of ten years and is renewable for additional ten-year terms. The Master Franchisee is expected to: (i) grant unit franchises in a form of Unit Franchise Agreement as prescribed by New Horizons; (ii) perform and enforce against each Unit Subfranchise the terms of any Unit Subfranchise Agreement it enters into; (iii) provide the initial training in the New Horizons system to each Unit Subfranchise; and (iv) provide ongoing support, consulting and assistance to each Unit Subfranchise after the initial training. For these obligations the Master Franchisee retains 60% of the initial franchise fees and the ongoing royalties received from the Unit Subfranchises.

Page 5

Unit Franchise Agreement

The Franchise Agreement runs for an initial term of ten years and is renewable for additional five-year terms. The franchise is exclusive within the specific defined territory, typically a city, and is subject to a number of limitations and conditions. These limitations and conditions include, but are not limited to: (i) staffing requirements, including a General Manager plus a minimum number of account executives based on the territory; (ii) a minimum number of classrooms depending on the territory; (iii) full-time and continuous operations; (iv) a pre-defined minimum required curriculum; (v) computer equipment and system requirements; (vi) signage and display material requirements; (vii) minimum insurance requirements; and (viii) record keeping requirements. The agreement also contains non-competition restrictions which bar: (i) competing with New Horizons during the term of the Franchise Agreement; (ii) diverting or attempting to divert any customer or business of the franchise business to any competitor; (iii) performing any act that is injurious or prejudicial to the goodwill associated with the New Horizons service marks or operating system; and (iv) soliciting any person who is at that time employed by the franchisor or any of its affiliated corporations to leave his or her employment. In addition, there are certain restrictions on the franchisees’ rights to transfer the franchise license. New Horizons also maintains a “right of first refusal” if a transfer effects a change of control. The agreement also contains default and termination remedies.

Franchise Support

In return for the initial franchise fee and the other monthly fees, the Company provides franchisees with the following services, products, and managerial support: (i) two weeks of initial franchise training at the Company’s operating headquarters in Santa Ana, California, and one week of field training at the franchisee’s location; (ii) franchise and sales system information contained in the Company’s Confidential Operations Manual and other training manuals; (iii) ongoing operating support via on-site visits from Regional Franchise Support Managers, access to troubleshooting and business planning assistance; (iv) current applications courseware at printing cost only (over 1,400 titles in fourteen languages); (v) access to the CES program which coordinates a national/international referral system and delivery network of training for major clients which have training requirements in multiple locations; (vi) site selection assistance; (vii) periodic regional and international meetings and conferences; and (viii) advisory councils and monthly communications.

CUSTOMERS

Customers for the training provided at New Horizons company-owned and franchised training centers are predominantly employer-sponsored individuals from a wide range of public and private corporations, service organizations, government agencies and municipalities. Little, if any, of the Company’s revenues are generated from Title IV entitlement programs.

No single customer accounted for more than 10% of New Horizons revenues in 2000.

The New Horizons system delivered over 2.8 million student-days of technology training in 2000.

SALES AND MARKETING

New Horizons markets its services primarily through account executives who utilize telesales to target and contact potential customers. The New Horizons sales system is organized and disciplined. After undergoing a formal initial training program, account executives are expected to generate their own database of customers through telephone sales, make a minimum number of calls per day, and invoice and collect a minimum amount of revenue each month. These minimums escalate over the first eight months an account executive is selling and are designed to move the account executive from being compensated with a non-recoverable draw against commission to a full commission compensation program. Account executives’ target sales areas are local and regional. Sales opportunities that involve national and international accounts and involve delivery of training at multiple locations are turned over to the Company’s CES program.

The CES program is designed to market computer training services to large organizations which have facilities and training needs throughout the world. This program provides New Horizons’ national and international customers with a single point of contact to the entire New Horizons network of training and support services. During 2000 New Horizons competed for and won national and international contracts with Charles Schwab, Cigna Insurance, Lockheed Martin, Nextel, Philip Morris, Seibel Systems, Thompson Corporation, and Wells Fargo Bank amongst others.

The Company maintains a web site for marketing its products over the Internet (http://www.newhorizons.com). The Company believes that the Internet will become an increasingly important tool in its marketing program.

Page 6

TRAINING AUTHORIZATIONS

New Horizons is authorized to provide certified training by more than 30 software publishers, including Microsoft, Novell, Apple, and Sun Microsystems. Many of the industry’s major software vendors do not offer training, but support their products through independent training companies using a system of standards and performance criteria. In support of these vendors, the Company has 166 Microsoft (CTEC), 98 Novell (NAEC), 86 SAIR Linux ACE, 83 Corel CTP, and 22 Lotus (LAEC) authorized centers worldwide. The authorization agreements are typically annual in length and are renewable at the option of the publishers. While New Horizons believes that its relationships with software publishers are good, the loss of any one of these agreements could have a material adverse impact on its business. In In 2000 New Horizons became the largest Certified Internet Webmaster (CIW) Authorized Training Partner (ATP) network with 230 CIW ATP’s worldwide. Additionally, with certification testing becoming increasingly important, New Horizons has grown its number of Authorized Prometric Testing Centers to 172.

COMPETITION

The information technology training market is highly competitive, highly fragmented, has low barriers to entry, and has no single competitor which accounts for a dominant share of the market. The Company’s competitors are primarily in-house training departments and independent education and training organizations. Computer retailers, computer resellers, and others also compete with the Company. Periodically, some of these competitors offer instruction and course titles similar to those offered by New Horizons at lower prices. In addition, some of these competitors may have greater financial strength and resources than New Horizons.

New Horizons believes that competition in the industry is based on a combination of pricing, breadth of offering, quality of training, and flexibility and convenience of service.

The Company recognizes that the emergence of technology-based training, primarily consisting of eLearning and computer-based training, are important and growing competitive developments in the industry.

In-House Training Departments

In-house training departments provide companies with the highest degree of control over the delivery and content of information technology training, allowing for customized instruction tailored to specific needs. However, according to IDC, the demand for outsourced training is expected to grow as more companies switch to outside training organizations. By outsourcing, companies can choose to spend based on real-time training needs while alleviating the overhead costs for in-house instructors’ salaries and benefits.

Independent Education and Training Organizations

Although the majority of independent training organizations are relatively small and focus on local or regional markets, the Company competes directly on a national level with several firms providing similar curriculum. Executrain, Productivity Point, Global Knowledge Network, and Learning Tree target the same customer base and operate in some of the same markets as New Horizons. The Company believes that the combination of its market presence, the depth and breadth of its course offerings, its flexible customer service approach, its centralized control of delivery to national customers, its status as the world’s largest network of Microsoft Certified Technical Education Centers and Novell Authorized Education Centers, and its organized and disciplined sales system distinguishes it from these competitors.

Technology-Based Training

Instructor-led training has historically been the dominant delivery method for information technology training. Technology–based training, consisting of CD-ROM’s, eLearning, videotape, and satellite video broadcast, has become a significant delivery modality. According to IDC, technology-based training, which was 24% of the U.S. information technology training market in 1999, is expected to grow at a faster rate than instructor-led training through the year 2004. The IDC study estimates that by 2004 technology-based training will have a 57% share of the U.S. information technology training market while instructor-led training will have a 40% share. Within technology-based training the dominant growth modality, according to IDC, will be eLearning with an increase in market share from 3% in 1999 to 47% in 2004.

Page 7

The Company recognizes that its future success depends on, among other factors, the market’s continued acceptance of instructor-led training as a delivery method for information technology training, the Company’s ability to continue to market competitive instructor-led course offerings, and the Company’s ability to successfully capitalize on the potential of technology-based training delivery methods, in particular, eLearning. The Company is currently developing its eLearning product offering with the expectation that the synchronous offering, OnLine LIVE Learning, will commence on a pilot basis near the end of the first quarter of 2001 and the asynchronous offering, OnLine Learning, will debut in the third quarter of the year. The competitors to the Company in the eLearning environment will include SmartForce, DigitalThink, Knowledgenet, NETg and others.

Using its courseware as the source material, the Company has entered into an arrangement with a company to develop its own line of CD-ROM products, entitled Masterware, which became available to franchisees for sale in the third quarter of 1997. As of December 31, 2000 there were 70 Masterware titles available for sale. IDC’s 1998 research found that information technology professionals use 2.8 methods of study and preparation when preparing for certification exams. The Company has a reseller agreement with a company that has an extensive offering of CD-ROM courses that will prepare customers for certification exams.

Information technology training can be broken into three segments: Segment 1 includes the most sophisticated levels of training for programmers and software developers; Segment 2 includes certification for engineers (Microsoft, Novell); and Segment 3 includes the end users of standard application software. While the Company does very little training of programmers and software developers, it does compete in Segments 2 and 3, with an estimated 54% of revenues from Segment 2 and 46% from Segment 3.

In instructor-led training, the Company competes with Executrain, IKON, and Productivity Point in Segments 2 and 3. The Company competes with Learning Tree and Global Knowledge Network in Segment 2.

INFORMATION ABOUT FORWARD-LOOKING STATEMENTS

The statements made in this Annual Report on Form 10-K that are not historical facts are forward-looking statements. Such statements are based on current expectations but involve risks, uncertainties, and other factors which may cause actual results to differ materially from those contemplated by such forward-looking statements. Important factors which may result in variations from results contemplated by such forward-looking statements include, but are by no means limited to: (i) the Company’s ability to respond effectively to potential changes in the manner in which computer training is delivered, including the increasing acceptance of technology-based training, including through the Internet, which could have more favorable economics with respect to timing and delivery costs and the emergence of just-in-time interactive training; (ii) the Company’s ability to attract and retain qualified instructors and management employees; (iii) the rate at which new software applications are introduced by manufacturers and the Company’s ability to keep up with new applications and enhancements to existing applications; (iv) the level of expenditures devoted to upgrading information systems and computer software by customers; (v) the Company’s ability to compete effectively with low cost training providers who may not be authorized by software manufacturers; and (vi) the Company’s ability to manage the growth of its business.

The Company’s strategy focuses on enhancing revenues and profits at current locations, and also includes the possible opening of new company-owned locations, the sale of additional franchises, the selective acquisition of existing franchises in the United States which have demonstrated the ability to achieve above average profitability while increasing market share, and the acquisition of companies in similar or complementary businesses. The Company’s growth strategy is premised on a number of assumptions concerning trends in the information technology training industry. These include the continuation of growth in the market for information technology training and the trends toward outsourcing and eLearning. To the extent that the Company’s assumptions with respect to any of these matters are inaccurate, its results of operations and financial condition could be adversely affected.

REGULATIONS

The offer and sale of franchises and business opportunities are subject to regulation by the United States Federal Trade Commission, as well as many states and foreign jurisdictions. There also exist numerous laws that regulate the ongoing relationship between franchisors and franchisees, including the termination, transfer and renewal of franchise rights. The failure to comply with any such laws could have an adverse effect on the Company.

INSURANCE

The Company maintains liability insurance in amounts it believes to be adequate based on the nature of its business. While the Company believes that it operates its business safely and prudently, there can be no assurance that liabilities incurred with respect to a particular claim will be covered by insurance or, if covered, that the dollar amount of such liabilities will not exceed coverage limits.

Page 8

TRADEMARKS

The Company has issued trademark registrations and pending trademark applications for the word mark “NEW HORIZONS” and for other trademarks incorporating the words “NEW HORIZONS.” The Company believes that the New Horizons name and trademarks are important to its business. The Company is not aware of any pending or threatened claims of infringement or challenges to the Company’s right to use the New Horizons name and trademarks in its business. However, the Company has been advised that it cannot register the word mark “NEW HORIZONS” in certain foreign countries and that it cannot register or use any of the New Horizons trademarks in Australia and the Dominican Republic. The Company has applications filed with the Australian trademark office to protect Skill Master as its trademark in Australia, and its franchises there are using that name and trademark. Additionally, the Company has applications filed with the Dominican Republic trademark office to protect Skill Master as its trademark in the Dominican Republic. The Company believes that the inability to register certain of its trademarks in certain foreign countries will have a material adverse effect on its financial condition or results of operations.

EMPLOYEES

As of February 29, 2001, the Company employed a total of 1,288 individuals in its corporate operations and company-owned facilities. Of these employees, 390 are instructors, 361 are account executives, and 537 are administrative and executive personnel. New Horizons also utilizes the services of outside contract instructors to teach some of its curriculum, primarily technical certification programs which require instructors who are certified by Microsoft, Novell, and Lotus.

None of New Horizons’ employees is represented by a labor organization. New Horizons considers relations with its employees to be good.

ITEM 2.  PROPERTIES

The Company’s corporate headquarters and its flagship training center are located in Santa Ana, California, pursuant to a lease, which expires in 2002. The Company has signed a lease to relocate its corporate headquarters and the Santa Ana training facility to Anaheim, California in 2001. The lease provides for reimbursement of its Santa Ana lease costs through its expiration.

In 1998 the Company purchased 8.3 acres of undeveloped land in Santa Ana, California for approximately $5.1 million. The Company had intended to construct a building on the land that would serve as the world headquarters and training facility. The land is currently in escrow and is expected to close in 2001 generating before tax proceeds of approximately $6 million.

As of December 31, 2000, New Horizons operated training centers at 25 other leased facilities in California, Illinois, Ohio, Connecticut, New Mexico, North Carolina, Texas, Tennessee and New York with leases that expire from 2001 to 2014.

The Company believes that its facilities are well maintained and are adequate to meet current requirements and that suitable additional or substitute space will be available as needed to accommodate any expansion of operations and for additional offices, if necessary.

ITEM 3.   LEGAL PROCEEDINGS

The Company is involved in several lawsuits incidental to the ordinary conduct of its business. Under the terms of the sale of the Company’s environmental business, the Company is also required to indemnify the purchaser against liabilities arising out of pending litigation and from claims relating to the performance of services prior to the sale. The Company does not believe that the outcome of any or all these claims will have a material adverse effect upon its business or financial condition or results of operations.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth quarter of the year ended December 31, 2000.

Page 9

     2000                                                      HIGH       LOW
     --------------------------------------------------        -----     -----
     1st Quarter ........     (January 1 - March 31)           17.75     11.19
     2nd Quarter ........     (April 1 - June 30)              23.23     16.00
     3rd Quarter ........     (July 1 - September 30)          24.00     11.69
     4th Quarter ........     (October 1 - December 31)        16.75     12.63


     1999                                                      HIGH       LOW
     --------------------------------------------------        -----     -----
     1st Quarter ........     (January 1 - March 31)           18.30     15.00
     2nd Quarter ........     (April 1 - June 30)              19.75     14.30
     3rd Quarter ........     (July 1 - September 30)          19.75     15.38
     4th Quarter ........     (October 1 - December 31)        15.88     11.38

Assets                                                    2000           1999
                                                       ---------      ---------
Current assets:
     Cash and cash equivalents ...................     $   5,515      $   2,868
     Accounts receivable, less allowance for
        doubtful accounts of $717 in 2000
        and $943 in 1999 (Note 2) ................        21,671         20,991
     Inventories .................................         1,362          1,226
     Prepaid expenses ............................         1,932          1,438
     Deferred income tax assets (Note 6) .........         2,796          2,526
     Other current assets ........................           469            791
                                                       ---------      ---------
         Total current assets ....................        33,745         29,840

Property, plant and equipment, net (Note 4) ......        18,193         14,797

Excess of cost over net assets of acquired
        companies, net of accumulated
        amortization of $5,830 in 2000 and
        $3,420 in 1999 (Note 12) .................        67,234         55,718
Cash surrender value of life insurance ...........         1,100          1,070
Other assets (Note 7) ............................         2,796          3,659
                                                       ---------      ---------

Total Assets .....................................     $ 123,068      $ 105,084
                                                       =========      =========

Liabilities & Stockholders' Equity
Current liabilities:
     Current portion of long-term obligations
        (Note 3) .................................     $     103      $     189
     Accounts payable ............................         3,215          2,155
      Deferred revenue ...........................        10,120          8,318
     Income taxes payable (Note 6) ...............         1,600            918
     Other current liabilities (Note 8) ..........        17,724         12,250
                                                       ---------      ---------
         Total current liabilities ...............        32,762         23,830

Long-term obligations, excluding current
         portion (Note 3) ........................          --            6,730
Deferred income tax liability (Note 6) ...........           849            835
Deferred rent (Note 11) ..........................           833            885
Other long-term liabilities ......................             3            127
                                                       ---------      ---------
         Total liabilities .......................        34,447         32,407
                                                       ---------      ---------
Commitments and contingencies (Note 11) ..........          --             --

Stockholders' equity (Note 10):
     Preferred stock without par value,
         2,000,000 shares authorized, no
         shares issued ...........................          --             --
     Common stock, $.01 par value,
        15,000,000 shares authorized; issued
        and outstanding 10,083,038 shares in
        2000 and 9,788,583 shares in 1999 ........           101             97
     Additional paid-in capital ..................        42,069         37,098
     Retained earnings ...........................        47,749         36,780
     Treasury stock at cost - 185,000 shares
        in 2000 and 1999 .........................        (1,298)        (1,298)
                                                       ---------      ---------
         Total stockholders' equity ..............        88,621         72,677
                                                       ---------      ---------

Total Liabilities & Stockholders' Equity .........     $ 123,068      $ 105,084
                                                       =========      =========

                                                 2000        1999        1998
                                               --------    --------    --------
Revenues
     Franchising
         Franchise fees ..................     $  2,191    $  2,606    $  1,704
         Royalties .......................       23,609      19,532      16,189
         Other ...........................        5,579       2,818       2,191
                                               --------    --------    --------
         Total franchising revenues ......       31,379      24,956      20,084
     Company-owned training centers ......      111,319      86,520      52,545
                                               --------    --------    --------
         Total revenues ..................      142,698     111,476      72,629

Cost of revenues .........................       65,850      50,301      32,749

Selling, general and administrative expenses     58,752      46,407      31,354

Write-off of management system (Note 5) ..         --         3,338        --

Settlement of franchise arbitration (Note 5)       --           303        --
                                               --------    --------    --------

Operating income .........................       18,096      11,127       8,526

Interest income ..........................          503         643       1,424

Interest expense
                                                   (318)       (354)       (255)
                                               --------    --------    --------

Income before income taxes ...............       18,281      11,416       9,695

Provision for income taxes (Note 6) ......        7,312       4,153       3,813
                                               --------    --------    --------

Net income ...............................     $ 10,969    $  7,263    $  5,882
                                               ========    ========    ========

Basic Earnings Per Share .................     $   1.12    $   0.76    $   0.64
                                               ========    ========    ========

Diluted Earnings Per Share ...............     $   1.06    $   0.72    $   0.61
                                               ========    ========    ========

                                                 2000        1999        1998
                                               --------    --------    --------
Net income ...............................     $ 10,969    $  7,263    $  5,882

Other comprehensive income:
     Unrealized holding gains on available
       for sale securities arising during
       the year ..........................           --          --          53

       Reclassification adjustment for
          gains included in net income ...           --         (53)         --
                                               --------    --------    --------

Comprehensive income .....................     $ 10,969    $  7,210    $  5,935
                                               =========   ========    ========

                                                 2000        1999        1998
                                               --------    --------    --------
Cash flows from operating activities
   Net income ..............................   $ 10,969    $  7,263    $  5,882
Adjustments to reconcile net income to net
  cash provided by operating activities:
     Depreciation and amortization .........      7,711       6,074       4,006
     Write-off of management system (Note 5)       --         2,860        --
     Deferred income taxes .................       (256)       (470)       (355)
     Stock-based compensation ..............       --           138         547
     Cash provided (used) from the change
      in (net of effects of acquisitions):
       Accounts receivable .................       (680)     (1,689)     (3,270)
       Inventories .........................       (136)       (113)        133
       Prepaid expenses and other current
          assets ...........................       (172)       (198)       (192)
       Other assets ........................        863        (723)       (195)
       Accounts payable ....................      1,060        (590)       (477)
       Deferred revenue ....................      1,802       1,523       1,085
       Other current liabilities ...........      5,474      (1,885)      3,776
       Income taxes payable ................      1,226         582        (515)
       Deferred rent .......................        (52)        121          60
                                               --------    --------    --------
          Net cash provided by operating
             activities ....................     27,809      12,893      10,485
                                               --------    --------    --------

Cash flows from investing activities
   Purchase of marketable securities .......       --          (279)    (21,810)
   Redemption of marketable securities .....       --        16,100      29,100
   Cash surrender value of life insurance ..        (30)       (207)       (105)
   Additions to property, plant and equipment    (8,697)     (6,748)     (8,359)
   Cash paid for acquired companies,
     net of cash acquired (Note 12) ........       --       (26,034)     (3,773)
   Cash paid for previous acquisitions
      (Note 12)                                 (11,074)     (2,336)       --
                                               --------    --------    --------
       Net cash used by investing activities    (19,801)    (19,504)     (4,947)
                                               --------    --------    --------

Cash flows from financing activities
   Proceeds from issuance of common stock ..      1,579          75         397
   Proceeds from debt obligations ..........      4,480      12,906         181
   Principal payments on debt obligations ..    (11,420)    (10,375)     (2,372)
                                               --------    --------    --------
       Net cash (used) provided by financing
          activities .......................     (5,361)      2,606      (1,794)
                                               --------    --------    --------

Net increase (decrease) in cash and  cash
   equivalents .............................      2,647      (4,005)      3,744

Cash and cash equivalents at beginning of year    2,868       6,873       3,129
                                               --------    --------    --------
Cash and cash equivalents at end of  year ..   $  5,515    $  2,868    $  6,873
                                               ========    ========    ========

Supplemental disclosure of cash flow information
     Cash was paid for:
         Interest ..........................   $    282    $    339    $    180
                                               ========    ========    ========

         Income taxes ......................   $  5,589    $  4,091    $  4,303
                                               ========    ========    ========

                                                   2000       1999       1998
                                                 --------   --------   --------
Non-cash investing and financing activities:
     Income tax benefit from exercise of stock
       options ...............................   $    544   $     18   $    180
                                                 ========   ========   ========

     Unrealized gain on investments ..........   $   --     $   --     $     53
                                                 ========   ========   ========

                                                           1999          1998
                                                         --------      --------
Fair value of assets acquired ......................     $ 34,076      $ 14,833

Short-term debt and other obligations incurred .....         (921)       (3,559)

Value of stock issued ..............................       (2,983)       (5,454)

Cash paid, net of cash acquired ....................      (26,034)       (3,773)
                                                         --------      --------

Liabilities assumed ................................     $  4,138      $  2,047
                                                         ========      ========

                                              2000         1999         1998
                                           ---------    ---------    ---------
              Balance, beginning of year   $     943    $     927    $   1,693

              Provisions ...............         203          169          156

              Deductions ...............        (429)        (153)        (922)
                                           ---------    ---------    ---------
              Balance, end of year .....   $     717    $     943    $     927
                                           =========    =========    =========

                                                        2000             1999
                                                      --------         --------
Amount  outstanding  on line of credit with bank,
  bearing interest at LIBOR (6.1% at December 31,
  1999) plus 1.75%, interest payable monthly;
  repaid in 2000                                       $    --         $  6,700

Amounts due under capital leases with effective
  interest rates ranging from 8.5% to 14.6% per
  annum (Note 11)                                          103              219
                                                        ------          -------
                                                           103            6,919

Less: Current portion of notes payable and long-term
  obligations                                             (103)            (189)
                                                       -------         --------
                                                       $    --         $  6,730
                                                       =======         ========
  

                                                         2000            1999
                                                      --------        --------
    Land ..........................................   $  5,099        $  5,099
    Leasehold improvements ........................      2,857           2,720
    Equipment and software ........................     21,953          17,917
    Furniture and fixtures ........................      4,914           4,220
    Construction in progress ......................      3,474              --
                                                      --------        --------
                                                        38,297          29,956
    Less accumulated depreciation and amortization     (20,104)        (15,159)
                                                      --------        --------
                                                      $ 18,193        $ 14,797
                                                      ========        ========

                                                 2000        1999        1998
                                               -------     -------     -------
Computed "expected" tax expense ............   $ 6,398     $ 3,996     $ 3,393
Amortization of excess of cost over net
     assets acquired .......................        72          63          15
State and local tax expense, net of federal
     income tax effect .....................     1,016         494         578
Interest income from tax-free investments ..      --           (48)       (319)
Other ......................................      (174)       (352)        146
                                               -------     -------     -------
Income tax expense .........................   $ 7,312     $ 4,153     $ 3,813
                                               =======     =======     =======

Effective rates ............................      40.0%       36.4%       39.3%

Income tax expense consists of:
     Federal:
       Current .............................   $ 5,388     $ 3,258     $ 2,843
       Deferred ............................      (256)       (389)       (332)
     State and local:
       Current .............................     1,563         783         952
       Deferred ............................      --           (81)        (23)
     Foreign ...............................       617         582         373
                                               -------     -------     -------
Income Tax Expense .........................   $ 7,312     $ 4,153     $ 3,813
                                               =======     =======     =======

                                                                  2000     1999
                                                                 ------   ------
Deferred tax assets:
     Accounts receivable, principally due to allowance for
          doubtful accounts ..................................   $  897   $  340
     Reserve for uninsured losses and litigation .............      280      163
     Accrued expenses ........................................    1,383    1,106
     Property, plant and equipment, principally due to
          differences in depreciation ........................    1,292    1,147
     Foreign Tax Credit carryforward .........................     --        157
     Deferred revenue ........................................      359      464
     Other ...................................................       65       64
                                                                 ------   ------
                                                                  4,276    3,441
                                                                 ------   ------

Deferred tax liabilities:
     Excess of cost over net assets of acquired companies ....    2,206    1,611
     Loss on joint venture ...................................     --        139
     Other ...................................................      123     --
                                                                 ------   ------
                                                                  2,329    1,750
                                                                 ------   ------

Net deferred income taxes ....................................   $1,947   $1,691
                                                                 ======   ======

                                                         2000             1999
                                                       -------          -------
Notes receivable from ECB, Inc. ..............         $ 2,933          $ 3,681
Notes receivable from officers ...............           1,385            1,385
Other ........................................           1,438            1,553
Valuation reserves ...........................          (2,960)          (2,960)
                                                       -------          -------
                                                       $ 2,796          $ 3,659
                                                       =======          =======

                                                         2000             1999
                                                       -------          -------
Accounts payable to franchisees ....................   $ 5,788          $ 3,882
Salaries, wages and commissions payable ............     4,356            3,266
Unexpended advertising fund ........................       783              509
Payable to former franchisees pursuant to
    franchise acquisitions .........................     3,975              294
Accrued franchise arbitration expenses .............      --                279
Accrued expenses in connection with the disposition
    of the environmental segment ...................       188              667
Accrued operating expenses and other liabilities ...     2,634            3,353
                                                       -------          -------
                                                       $17,724          $12,250
                                                       =======          =======

                                               2000         1999         1998
                                             --------     --------     --------
Net income ..................  As reported   $ 10,969     $  7,263     $  5,882
                               Pro forma       10,194        6,803        5,581

Basic earnings per share ....  As reported   $   1.12     $   0.76     $   0.64
                               Pro forma         1.04         0.71         0.61

Diluted earnings per share ..  As reported   $   1.06     $   0.72     $   0.61
                               Pro forma         0.99         0.68         0.58

                                                         Capital       Operating
                                                          Leases         Leases
                                                        ---------      ---------
     Year ending December 31
          2001 ....................................     $     113      $   7,497
          2002 ....................................          --            8,941
          2003 ....................................          --            8,735
          2004 ....................................          --            8,263
          2005 ....................................          --            7,045
          2006 & after ............................          --           31,839
                                                        ---------      ---------
      Total future minimum lease payment ..........           113      $  72,320
                                                                       =========
     Less: Amount representing interest ...........           (10)
                                                        ---------
                                                              103
     Less: Current portion ........................          (103)
                                                        ---------
                                                        $    --
                                                        =========

                                                                         1999
                                                                     -----------
           Revenue ........................................          $   123,114

           Net Income .....................................                7,020

           Basic Earnings Per Share .......................                 0.72

           Diluted Earnings Per Share .....................                 0.69

                                        First     Second      Third      Fourth
                                       Quarter    Quarter    Quarter    Quarter
                                       -------    -------    -------    -------
Year ended December 31, 2000
Revenues ...........................   $34,025    $36,649    $35,970    $36,054
Operating income ...................     4,546      5,265      4,533      3,752
Net income .........................     2,704      3,169      2,752      2,344
Basic earnings per share ...........      0.28       0.33       0.28       0.24
Diluted earnings per share .........      0.27       0.31       0.26       0.23

                                        First     Second      Third      Fourth
                                       Quarter    Quarter    Quarter    Quarter
                                       -------    -------    -------    -------
Year ended December 31, 1999
Revenues ...........................   $22,102    $27,900    $30,581    $30,893
Operating income ...................     2,410      3,922      4,712         83
Net income .........................     1,619      2,474      3,011        159
Basic earnings per share ...........      0.17       0.26       0.32       0.02
Diluted earnings per share .........      0.16       0.25       0.30       0.02

                                      Company-
                                       owned                Executive   Consol-
                                      Centers  Franchising   Office     idated
                                      --------   --------   --------   ---------
For the year ended December 31, 2000
- ------------------------------------
Revenues from external customers .... $111,319   $ 31,379   $   --     $142,698
Interest income .....................      314        189       --          503
Interest expense ....................     (259)       (59)      --         (318)
Depreciation and amortization expense    6,879        832       --        7,711
Income tax expense ..................    2,798      4,514       --        7,312
Net income ..........................    4,124      6,845       --       10,969
Net deferred tax asset ..............      900      1,047       --        1,947
Total assets ........................   96,554     21,268      5,246    123,068
Additions to property, plant and
     equipment ......................    4,798      3,899       --        8,697

For the year ended December 31, 1999
- ------------------------------------
Revenues from external customers .... $ 86,520   $ 24,956   $   --     $111,476
Interest income .....................      453        190       --          643
Interest expense ....................     (331)       (23)      --         (354)
Depreciation and amortization expense    5,183        891       --        6,074
Write-off of management system ......     --        3,338       --        3,338
Income tax expense ..................    2,853      1,300       --        4,153
Net income ..........................    5,027      2,236       --        7,263
Net deferred tax asset ..............      (80)     1,771       --        1,691
Total assets ........................   85,537     16,294      3,253    105,084
Additions to property, plant and
     equipment ......................    4,840      1,922        (14)     6,748

For the year ended December 31, 1998
- ------------------------------------
Revenues from external customers .... $ 52,545   $ 20,084   $   --     $ 72,629
Interest income .....................      971        453       --        1,424
Interest expense ....................     (229)       (26)      --         (255)
Depreciation and amortization expense    3,456        550       --        4,006
Income tax expense ..................    1,308      2,505       --        3,813
Net income ..........................    2,526      3,356       --        5,882
Net deferred tax asset ..............      249        972       --        1,221
Total assets ........................   45,194     21,631     19,921     86,746
Additions to property, plant and
     equipment ......................    2,445      5,914       --        8,359

NAME                       AGE    POSITION
- ----                       ---    --------

Curtis Lee Smith, Jr ....   73    Chairman of the Board

Thomas J. Bresnan .......   48    President and Chief Executive Officer

Stuart O. Smith .........   67    Vice Chairman of the Board and Secretary

Robert S. McMillan ......   49    Vice President, Treasurer and Chief Financial
                                  Officer

Kenneth M. Hagerstrom ...   42    President - Company-owned Center Division
                                  Executive Vice President - New Horizons
                                  Computer Learning Centers, Inc.

Signature                     Title                                Date
- ---------                     -----                                ----

/s/Curtis Lee Smith, Jr.     Chairman,                      )
- ------------------------     (Principal Executive Officer)  )
Curtis Lee Smith, Jr.                                       )
                                                            )
                                                            )
                                                            )
/s/Robert S. McMillan        Vice President, Treasurer and  )
- ---------------------        Chief Financial Officer        )
Robert S. McMillan           (Principal Financial and       )
                             Accounting Officer)            )
                                                            )
                                                            )
/s/Stuart O. Smith           Director                       )
- ------------------                                          )
Stuart O. Smith                                             )
                                                            )
                                                            )   March 30, 2000
/s/Thomas J. Bresnan         Director                       )
- --------------------                                        )
Thomas J. Bresnan                                           )
                                                            )
                                                            )
/s/David A. Goldfinger       Director                       )
- ----------------------                                      )
David A. Goldfinger                                         )
                                                            )
                                                            )
/s/Richard L. Osborne        Director                       )
- ---------------------                                       )
Richard L. Osborne                                          )
                                                            )
                                                            )
/s/Scott R. Wilson           Director                       )
- ------------------                                          )
Scott R. Wilson                                             )
                                                            )
                                                            )
/s/William H. Heller         Director                       )
- --------------------                                        )
William H. Heller                                           )
                                                            )