UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
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Quarterly Report pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 |
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for the quarter ended September 30, 2003 |
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or |
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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for the transition period from to . |
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Commission File Number 0-22844 |
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SYLVAN LEARNING SYSTEMS, INC. |
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(Exact name of registrant as specified in its charter) |
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Maryland |
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52-1492296 |
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(State or other jurisdiction of |
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(I.R.S. Employer |
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1001 Fleet Street, Baltimore, Maryland |
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21202 |
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(Address of principal executive offices) |
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(Zip Code) |
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Registrant’s telephone number, including area code: (410) 843-8000 |
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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 ý. No o.
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes ý. No o.
The registrant had 43,573,319 shares of Common Stock outstanding as of November 3, 2003.
SYLVAN LEARNING SYSTEMS, INC.
INDEX
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PART I. - FINANCIAL INFORMATION |
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Item 1. |
Financial Statements (Unaudited) |
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Consolidated Balance Sheets – September 30, 2003 and |
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Consolidated Statements of Operations -
Three months ended |
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Consolidated Statements of Operations –
Nine months ended |
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Consolidated Statements of Cash Flows -
Nine months ended |
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Notes to Consolidated Financial Statements – September 30, 2003 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 4. |
Submission of Matters to a Vote of Security Holders |
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SYLVAN LEARNING SYSTEMS, INC. AND SUBSIDIARIES
(Dollar and share amounts in thousands, except per share data)
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September 30, |
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December 31, |
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(Unaudited) |
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(Restated, |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
87,027 |
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$ |
94,068 |
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Available-for-sale securities |
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42,044 |
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22,282 |
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Receivables: |
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Accounts receivable |
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44,168 |
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42,965 |
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Notes receivable |
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39,077 |
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11,342 |
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Other receivables |
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3,460 |
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2,862 |
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86,705 |
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57,169 |
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Allowance for doubtful accounts |
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(14,513 |
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(5,939 |
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72,192 |
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51,230 |
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Inventory |
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4,054 |
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2,475 |
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Deferred income taxes |
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2,537 |
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1,363 |
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Prepaid expenses and other current assets |
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21,150 |
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21,186 |
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Current assets of discontinued operations |
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75,566 |
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173,929 |
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Total current assets |
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304,570 |
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366,533 |
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Notes receivable, less current portion, net of unamortized discount of $13,228 at September 30, 2003 |
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52,929 |
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7,941 |
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Property and equipment: |
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Land |
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65,274 |
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38,028 |
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Buildings |
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168,278 |
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157,834 |
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Construction-in-progress |
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25,091 |
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14,496 |
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Furniture, computer equipment and software |
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97,781 |
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76,133 |
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Leasehold improvements |
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37,586 |
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28,747 |
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394,010 |
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315,238 |
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Accumulated depreciation |
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(55,467 |
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(42,002 |
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338,543 |
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273,236 |
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Intangible assets: |
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Goodwill |
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223,630 |
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176,190 |
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Other intangible assets, net of accumulated amortization of $3,516 and $2,480 at September 30, 2003 and December 31, 2002, respectively |
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67,268 |
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36,457 |
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290,898 |
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212,647 |
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Investments in and advances to affiliates |
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470 |
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8,730 |
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Other investments |
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3,288 |
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10,885 |
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Deferred income taxes |
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34,119 |
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9,857 |
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Deferred costs, net of accumulated amortization of $6,198 and $4,417 at September 30, 2003 and December 31, 2002, respectively |
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9,664 |
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6,600 |
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Other assets |
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16,052 |
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13,946 |
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Long-term assets of discontinued operations |
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— |
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55,000 |
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Total assets |
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$ |
1,050,533 |
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$ |
965,375 |
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See accompanying notes to consolidated financial statements.
1
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September 30, |
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December 31, |
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(Unaudited) |
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(Restated, |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
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$ |
33,513 |
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$ |
28,310 |
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Accrued expenses |
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70,994 |
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55,176 |
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Income taxes payable |
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35,532 |
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12,680 |
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Current portion of long-term debt |
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20,158 |
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11,194 |
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Due to shareholders of acquired companies |
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5,164 |
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8,802 |
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Deferred revenue |
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100,573 |
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76,773 |
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Other current liabilities |
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4,218 |
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1,672 |
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Net current liabilities of discontinued operations |
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30,648 |
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Total current liabilities |
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270,152 |
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225,255 |
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Long-term debt, less current portion |
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86,989 |
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153,543 |
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Due to shareholders of acquired companies, less current portion |
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30,929 |
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9,538 |
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Other long-term liabilities |
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17,517 |
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17,098 |
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Total liabilities |
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405,587 |
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405,434 |
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Commitments and contingent liabilities |
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— |
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— |
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Minority interest |
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38,942 |
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74,017 |
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Stockholders’ equity: |
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Preferred stock, par value $0.01 per share — authorized 10,000 shares, no shares issued and outstanding as of September 30, 2003 and December 31, 2002 |
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— |
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