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Devry Education Group Inc. – ‘8-K’ for 8/22/96

As of: Friday, 8/23/96 · For: 8/22/96 · Accession #: 730464-96-8 · File #: 1-13988

  As Of                Filer                Filing    For·On·As Docs:Size

 8/23/96  Devry Education Group Inc.        8-K:5       8/22/96    3:40K

Current Report — Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         8-K Text                                              20     75K 
 2: EX-23       Consent of Experts or Counsel                          1      4K 
 3: EX-27       Financial Data Schedule (Pre-XBRL)                     1      5K

8-K — 8-K Text
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Other Events Other Events Index
1	1st Page - Filing Submission
2	Item 5 -. Other Events
"	Item 5 -. Other Events Index

8-K 1st Page of 20 TOC ↑Top Previous Next ↓Bottom Just 1st
 

  SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C.  20549

Form 8-K

Current Report
Pursuant to Section 13 or 15(d) of
 the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  August 22, 1996

  DeVRY INC.
------------------------------
(Exact name of registrant as specified in its charter)

DELAWARE                      0-12751                 36-3150143  
-------------                  -----------              ------------    
(State or other          (Commission File Number)      (I.R.S. Employer 
jurisdiction of                                        Indentification
incorporation)                                         No.)           

One Tower Lane                                                
Oakbrook Terrace, Illinois                                60181         
--------------------------                              --------        
(Address of principal                                  (Zip Code)       
executive offices)                                                    

(630) 571-7700  
-------------------   
(Registrant's telephone 
number, including area
code)                 

Exhibit Index is on Page 20                Total Number of Pages is 22  

8-K 2nd Page of 20 TOC 1st Previous Next ↓Bottom Just 2nd
ITEM  5 - OTHER  EVENTS                                                         
-----------------------                                                         
The Company's independent accountants have completed an audit of the            
Company's consolidated financial statements for the year ended                  
June 30, 1996 and have issued an unqualified opinion dated August 6, 1996       
on the above mentioned financial statements.  These consolidated financial      
statements are included herein.                                                 

ITEM  5 - OTHER  EVENTS INDEX                                                   
-----------------------------                                                   
The following documents are filed as part of this report:                       

The following financial statements of DeVry Inc. and                  
its subsidiaries are included on pages 3 through 18 of                
this report:                                                          
                                                8K
                                                 Report Page
                                                 -----------
Report of Independent Accountants                          3          

Consolidated Balance Sheets at June 30, 1996 and 1995    4 - 5        

Consolidated Statements of Income for the years ended                 
June 30, 1996, 1995 and 1994                               6          

Consolidated Statements of Cash Flows for the years                   
ended June 30, 1996, 1995 and 1994                         7          

Consolidated Statements of Shareholders' Equity for                   
the years ended June 30, 1996, 1995 and 1994               8          

Notes to Consolidated Financial Statements               9 - 18       

SIGNATURES                                                     19               

EXHIBIT INDEX                                                  20               

8-K 3rd Page of 20 TOC 1st Previous Next ↓Bottom Just 3rd
Report of Independent Accountants   
---------------------------------   

To the Board of Directors                                                       
and Shareholders of DeVry Inc.                                                  

We have audited the accompanying consolidated balance sheets of DeVry           
Inc. and its subsidiaries as of June 30, 1996 and 1995, and the                 
related consolidated statements of income, of shareholders' equity and          
of cash flows for each of the three years in the period ended June 30,          
1996.  These financial statements are the responsibility of the                 
Company's management.  Our responsibility is to express an opinion on           
these financial statements based on our audits.                                 

We conducted our audits in accordance with generally accepted auditing          
standards.  Those standards require that we plan and perform the audit          
to obtain reasonable assurance about whether the financial statements           
are free of material misstatement.  An audit includes examining, on a           
test basis, evidence supporting the amounts and disclosures in the              
financial statements.  An audit also includes assessing the accounting          
principles used and significant estimates made by management, as well           
as evaluating the overall financial statement presentation.  We                 
believe that our audits provide a reasonable basis for our opinion.             

In our opinion, the consolidated financial statements audited by us             
present fairly, in all material respects, the financial position of             
DeVry Inc. and its subsidiaries at June 30, 1996 and 1995, and the              
results of their operations and their cash flows for each of the three          
years in the period ended June 30, 1996, in conformity with generally           
accepted accounting principles.                                                 

Price Waterhouse LLP                                                            
Chicago, Illinois                                                               
August 6, 1996                                                                  

8-K 4th Page of 20 TOC 1st Previous Next ↓Bottom Just 4th

                                                                [Download Table]
                              DEVRY INC.                                
                     CONSOLIDATED BALANCE SHEETS                        
                       (Dollars in Thousands)                           


                                                         June 30,       
                                                     1996        1995   
                                                     ----        ----   
                                                                        
ASSETS                                                                  

   Current Assets                                                       

      Cash and Cash Equivalents                    $ 29,948    $ 26,252 
      Restricted Cash                                16,590      20,179 
      Accounts Receivable, Net                        9,684       6,189 
      Inventories                                     3,290       3,553 
      Prepaid Expenses and Other                      2,055       1,846 
                                                   --------    -------- 
         Total Current Assets                        61,567      58,019 
                                                   --------    -------- 
   Land, Buildings and Equipment                                        

      Land                                           18,956      18,952 
      Buildings                                      50,570      39,399 
      Equipment                                      51,198      43,390 
      Construction In Progress                            -       1,337 
                                                   --------    -------- 
                                                    120,724     103,078 

      Accumulated Depreciation                      (49,283)    (42,820)
                                                   --------    -------- 
         Land, Buildings and Equipment, Net          71,441      60,258 
                                                   --------    -------- 
   Other Assets                                                         

      Intangible Assets, Net                         37,709       2,022 
      Perkins Program Fund, Net                       5,483       4,522 
      Other Assets                                    1,889       1,850 
                                                   --------    -------- 
         Total Other Assets                          45,081       8,394 
                                                   --------    -------- 
   TOTAL ASSETS                                    $178,089    $126,671 
                                                   ========    ======== 

The accompanying notes are an integral part of these consolidated       
financial statements.                                                   

8-K 5th Page of 20 TOC 1st Previous Next ↓Bottom Just 5th

                                                                [Download Table]
                              DEVRY INC.                               
                     CONSOLIDATED BALANCE SHEETS                       
                       (Dollars in Thousands)                          


                                                         June 30,      
                                                     1996        1995  
                                                     ----        ----  
                                                                       
LIABILITIES                                                            

   Current Liabilities                                                 

      Accounts Payable                             $ 18,859    $ 14,957
      Accrued Salaries, Wages & Benefits             14,735      12,369
      Accrued Expenses                                7,640       3,671
      Advance Tuition Payments                        7,617      13,982
      Deferred Tuition Revenue                        3,609       3,768
                                                   --------    --------
         Total Current Liabilities                   52,460      48,747
                                                   --------    --------
   Other Liabilities                                                   

      Revolving Loan                                 61,500      33,029
      Deferred Income Tax Liability                   2,207       2,318
      Deferred Rent and Other                         4,635       4,609
                                                   --------    --------
         Total Other Liabilities                     68,342      39,956
                                                   --------    --------
   TOTAL LIABILITIES                                120,802      88,703
                                                   --------    --------

COMMITMENTS AND CONTINGENCIES  (Note 8)                                

SHAREHOLDERS' EQUITY                                                   

   Common Stock, $0.01 par value, 20,000,000                           
      Shares Authorized;16,621,852 and                                 
      16,613,492 Shares Issued and Outstanding                         
      at June 30, 1996 and 1995, Respectively           166         166
   Additional Paid-in Capital                        36,694      36,610
   Retained Earnings                                 19,987         742
   Foreign Currency Translation Adjustment              440         450
                                                   --------    --------
   TOTAL SHAREHOLDERS' EQUITY                        57,287      37,968
                                                   --------    --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY         $178,089    $126,671
                                                   ========    ========

The accompanying notes are an integral part of these consolidated       
financial statements.                                                   

8-K 6th Page of 20 TOC 1st Previous Next ↓Bottom Just 6th

                                                                [Download Table]
                              DEVRY INC.                               
                 CONSOLIDATED  STATEMENTS  OF  INCOME                  
         (Dollars in Thousands Except for Per Share Amounts)           


                                           For The Year Ended June 30, 

                                          1996        1995        1994 
                                          ----        ----        ---- 
                                                                       
REVENUES:                                                              

   Tuition                             $236,607    $207,530    $191,205
   Other Educational                     22,341      19,887      19,681
   Interest                               1,059       1,176         551
                                       --------    --------    --------
      Total Revenues                    260,007     228,593     211,437
                                       --------    --------    --------
COSTS AND EXPENSES:                                                    

   Cost of Educational Services         155,254     136,721     127,673
   Student Services and                                                
    Administrative Expense               70,992      63,043      58,146
   Interest Expense                       1,063       3,070       4,615
                                       --------    --------    --------
      Total Costs and Expenses          227,309     202,834     190,434
                                       --------    --------    --------
Income Before Income Taxes               32,698      25,759      21,003

Income Tax Provision                     13,453      10,863       8,778
                                       --------    --------    --------
NET INCOME                             $ 19,245    $ 14,896    $ 12,225
                                       ========    ========    ========

EARNINGS PER COMMON SHARE                 $1.14       $0.89       $0.73
                                          =====       =====       =====

The accompanying notes are an integral part of these consolidated       
financial statements.                                                   

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                                                                [Download Table]
                              DEVRY INC.                                
                CONSOLIDATED STATEMENTS OF CASH FLOWS                   
                       (Dollars in Thousands)                           


                                             For The Year Ended June 30,
                                               1996     1995     1994   
                                               ----     ----     ----   
                                                                        
CASH FLOWS FROM OPERATING ACTIVITIES                                    
  Net Income                                 $19,245  $14,896   $12,225 
  Adjustments to Reconcile Net Income to Net                            
    Cash Provided by Operating Activities:                              

     Depreciation                              7,516    6,157     6,981 
     Amortization                                 63       63       346 
     Provision for Refunds and                                          
      Uncollectible Accounts                  16,130   12,810    14,101 
     Deferred Income Tax (Provision) Benefit    (456)   5,480     2,419 
     Loss (Gain)on Disposals of Land,                                   
      Buildings and Equipment                     19       (7)      338 
     Changes in Assets and Liabilities:                                 
         Restricted Cash                       3,589   (9,130)   (1,447)
         Accounts Receivable                 (18,645) (11,746)  (14,125)
         Inventories                             263     (629)       34 
         Prepaid Expenses And Other             (118)    (128)      266 
         Perkins Program Fund Contribution                              
          and Other                           (1,188)  (1,649)    1,717 
         Accounts Payable                      3,210    3,136     1,380 
         Accrued Salaries, Wages,                                       
          Expenses and Benefits                6,239      667     3,601 
         Advance Tuition Payments             (7,340)   7,943     1,010 
         Deferred Tuition Revenue               (159)     337      (441)
                                             -------  -------   ------- 
  NET CASH PROVIDED BY OPERATING ACTIVITIES   28,368   28,200    28,405 
                                             -------  -------   ------- 
CASH FLOWS FROM INVESTING ACTIVITIES                                    
  Capital Expenditures                       (18,352) (14,551)   (6,288)
  Acquisition of Net Assets (Note 2):                                   
     Payment for Purchase of Operating                                  
      Assets, Net of Cash Acquired           (16,930)       -         - 
     Payment for Purchase of                                            
      Intellectual Property                  (17,935)       -         - 
                                             -------  -------   ------- 
  NET CASH USED IN INVESTING ACTIVITIES      (53,217) (14,551)   (6,288)

CASH FLOWS FROM FINANCING ACTIVITIES                                    
  Proceeds From Exercise of Stock Options         84       47         6 
  Proceeds From Revolving Credit Facility     46,500   22,000    35,029 
  Repayments Under Revolving Credit Facility (18,029) (20,000)   (4,000)
  Repayments of Debt                               -  (12,195)  (43,517)
                                             -------  -------   ------- 
  NET CASH PROVIDED BY (USED IN)                                        
   FINANCING ACTIVITIES                       28,555  (10,148)  (12,482)
                                             -------  -------   ------- 
Effects of Exchange Rate Differences             (10)      47      (275)
                                             -------  -------   ------- 
NET INCREASE IN CASH AND CASH EQUIVALENTS      3,696    3,548     9,360 

Cash and Cash Equivalents at Beginning                                  
 of Year                                      26,252   22,704    13,344 
                                             -------  -------   ------- 
Cash and Cash Equivalents at End of Year     $29,948  $26,252   $22,704 
                                             =======  =======   ======= 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                        
  Interest Paid During the Year              $ 1,429   $3,367    $4,606 
  Income Taxes Paid During the Year           13,902    7,080     4,607 

The accompanying notes are an integral part of these consolidated       
financial statements.                                                   

8-K 8th Page of 20 TOC 1st Previous Next ↓Bottom Just 8th

                                                                [Download Table]
                              DEVRY INC.                                 
           CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY               
                       (Dollars in Thousands)                            


                                              For The Year Ended June 30,

                                                1996     1995     1994   
                                                ----     ----     ----   
                                                                         
Common Stock                                                             

   Beginning of year                          $   166  $    83  $    83  
   Two-for-one stock split in the form of a                              
    stock dividend                                  -       83        -  
                                              -------  -------  -------  
   End of year                                    166       83       83  
                                              =======  =======  =======  
Additional Paid-In Capital                                               

   Beginning of year                           36,610   36,563   36,557  
   Shares issued for exercise of stock options     84       47        6  
                                              -------  -------  -------  
   End of year                                 36,694   36,610   36,563  
                                              =======  =======  =======  
Retained Earnings (Accumulated Deficit)                                  

   Beginning of year                              742  (14,071) (26,296) 
   Net income per accompanying statement       19,245   14,896   12,225  
   Two-for-one stock split in the form of a                              
    stock dividend                                  -      (83)       -  
                                              -------  -------  -------  
   End of year                                 19,987      742  (14,071) 
                                              =======  =======  =======  
Foreign Currency Translation Adjustment                                  

   Beginning of year                              450      403      678  
   Translation Adjustment                         (10)      47     (275) 
                                              -------  -------  -------  
   End of year                                    440      450      403  
                                              =======  =======  =======  
TOTAL SHAREHOLDERS' EQUITY, END OF YEAR       $57,287  $37,885  $22,978  
                                              =======  =======  =======  

The accompanying notes are an integral part of these consolidated       
financial statements.                                                   

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DEVRY INC.  
Notes to Consolidated Financial Statements
June 30, 1996   

NOTE  1:  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES                

Nature of Operations                                                    
DeVry Inc. (the Company) is a holding company which, through its        
wholly owned subsidiaries, operates a national system of degree-        
granting, career-oriented higher-education schools and a leading        
international training firm.  Keller Graduate School of Management,     
Inc. (KGSM), is  one of the largest regionally accredited higher-       
education systems in North America.  Its DeVry Institutes award         
associate and bachelor's degrees in electronics, computer information   
systems, business operations, accounting, technical management and      
telecommunications management.  The DeVry Institutes are located on 10  
campuses in the United States and four campuses in Canada.  Keller      
Graduate School (Keller) awards master's degrees in business            
administration, human resource management and project management.       
Keller classes are offered at 18 locations in Illinois, Wisconsin,      
Missouri, Georgia, Arizona, California and Virginia.  The Corporate     
Educational Services division offers on-site management and             
technical training programs for larger employers and government         
agencies.   Becker CPA Review (Becker CPA), acquired June 19, 1996      
(Note 2), is the leading  international training firm preparing         
students to pass the Certified Public Accountant (CPA) examination .    
Currently, the CPA exam review course is offered at approximately 135   
locations in the United States and at eight international locations.    
Becker CPA also offers  a Certified Management Accountant (CMA)         
examination review course in the United States.                         

Principles of Consolidation                                             
The consolidated financial statements include the accounts of the       
Company and its wholly owned subsidiaries.  All intercompany balances   
and transactions have been eliminated in consolidation.  Becker CPA     
accounts are consolidated based upon an April 30  fiscal year end,      
which is its natural year end based on its business cycle.  There       
were no events ocurring during the intervening period  before June 30,  
that materially effected the financial position or results of           
operations of the Company.  Unless indicated, or the context requires   

otherwise, references to years refer to the Company's fiscal years      
then ended.                                                             

Cash and Cash Equivalents                                               
Cash and cash equivalents include time deposits, commercial paper,      
municipal bonds and bankers acceptances with maturities of three        
months or less or that are highly liquid and readily convertible to a   
known amount of cash.  These investments are stated at cost, which      
approximates market, due to their short duration or liquid nature. The  
Company limits the amount of credit exposure with any one investment    
instrument or with any one financial institution.  The Company          
evaluates the creditworthiness of the security issuers and financial    
institutions with which it invests.                                     

Financial Aid and Restricted Cash                                       
The financial aid and assistance programs, in which most of the         
Company's students participate, are subject to political and budgetary  
considerations.  There is no assurance that such funding will be        
maintained at current levels.  Extensive and complex regulations in     
the U.S. and Canada govern all of the government financial assistance   
programs in which the Company's students participate.  The Company's    
administration of these programs is periodically reviewed by various    
regulatory agencies.  Any regulatory violation could be the basis for   
the initiation of a suspension, limitation or termination proceeding    
against the Company.                                                    

A significant portion of revenues is provided by students who           
participate in government financial aid and assistance programs.        
Restricted cash represents amounts received from the U.S. government    
under various student aid grant and loan programs.  The cash is held    
in separate bank accounts and does not become available for general     
use by the Company until the financial aid is credited to the accounts  
of students and the cash is transferred to an operating cash account.   

8-K 10th Page of 20 TOC 1st Previous Next ↓Bottom Just 10th
NOTE  1:  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES (continued)    

Revenue Recognition                                                     
Tuition revenue and provisions for refunds and uncollectible accounts   
are recognized ratably over each of the academic terms in a fiscal      
year. The provisions for refunds and uncollectible accounts are         
included in the cost of educational services in the Consolidated        
Statements of Income.  Related reserves are $6,603,000 and $5,368,000   
at June 30, 1996 and 1995, respectively.  Textbook sales and other      
educational revenues are recognized when they occur.  Revenue from      
training services is recognized when the training is provided.          

Inventories                                                             
Inventories consist mainly of textbooks, electronics kits and supplies  
held for sale to students enrolled in KGSM's educational programs.      
Inventories are valued at the lower of cost (first-in, first-out) or    
market.                                                                 

Land, Buildings and Equipment                                           
Land, buildings and equipment are recorded at cost. Cost includes       
additions and those improvements that increase the capacity or          
lengthen the useful lives of the assets.  Repairs and maintenance       
costs are expensed as incurred.  Interest is capitalized as a           
component of cost on major projects during the construction period.     
The amount of interest capitalized for the years ended June 30, 1996    
and 1995, was $314,000 and $101,000, respectively. Assets under         
construction are reflected in construction in progress until they are   
ready for their intended use.                                           

Depreciation is computed using the straight line method over            
estimated service lives ranging from three to 31 years.                 

Intangible Assets                                                       
Intangible assets relate to the acquired business operations of the     
DeVry Institutes and Becker CPA  (Note 2).  These assets consist of     
the purchase prices allocated to the estimated fair value of certain    
assets acquired (Note 3).  Accumulated amortization is computed using   
the straight line method over the assets' estimated useful lives of 25  
to 40 years.                                                            

The Company expenses all marketing and new school opening costs as      
incurred.                                                               

Perkins Program Fund                                                    
The Company makes contributions to the Perkins Student Loan Fund at a   
rate equal to 33% of that contributed by the federal government.  As    
previous borrowers repay their Perkins loans, their payments are used   
to fund new loans thus creating a permanent revolving loan fund.  The   
Company carries its investment in such contributions at original        
values net of allowances for losses on loan collections of $1,547,000   
and $1,275,000 at June 30, 1996 and 1995, respectively.                 

Fair Value of Financial Instruments                                     
The carrying amount reported in the Consolidated Balance Sheets for     
cash and cash equivalents, restricted cash, accounts receivable,        
accounts payable, accrued expenses  and advanced and deferred tuition   
payments approximate fair value because of the immediate or short-term  
maturity of these financial instruments.  The carrying amount reported  
for borrowings under the revolving loan agreement approximates fair     
value because the underlying instruments are variable-rate notes.       

8-K 11th Page of 20 TOC 1st Previous Next ↓Bottom Just 11th
NOTE  1:  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES (continued)    

Foreign Currency Translation                                            
The financial position and results of operations of KGSM's Canadian     
subsidiary are measured using the local currency as the functional      
currency.  Assets and liabilities of the foreign subsidiary are         
translated to U.S. dollars using exchange rates in effect at the        
balance sheet dates.  Income and expense items are translated at        
monthly average rates of exchange prevailing during the year.  The      
resultant translation adjustments are included in the component of      
shareholders' equity designated as Foreign Currency Translation         
Adjustment.  Transaction gains or losses during the years ended June    
30, 1996, 1995 and 1994, were insignificant.                            

Income Taxes                                                            
Income taxes are provided by applying statutory rates to income         
recognized for financial statement purposes. Deferred income taxes are  
provided for revenue and expense items that are recognized in           
different accounting periods for financial reporting purposes than for  
income tax purposes.  Effects of statutory rate changes are recognized  
for financial reporting purposes in the year in which enacted by law.   

Stock Split                                                             
On May 17, 1995, the Company's board of directors authorized a          
two-for-one stock split in the form of a 100% stock dividend payable    
on June 21, 1995, to shareholders of record on June 1, 1995.  The par   
value of the additional shares arising from the split has been          
reclassified from retained earnings to common stock. In addition, all   
references in the financial statements to the number of shares          
outstanding, per share amounts, stock option data and market prices of  
the Company's common stock have been restated to reflect the stock      
split.                                                                  

Earnings Per Common Share                                               
Earnings per common share are determined by dividing net earnings by    
the weighted average  number of common and common share equivalents     
outstanding during the year after giving retroactive effect to the      
stock split.  Incentive stock options are included as common stock      
equivalents using the treasury stock method.  The number of shares      
used in computing the net earnings per share was 16,830,000,            
16,727,000 and 16,694,000 in 1996, 1995 and 1994, respectively.         

Use of Estimates                                                        
The preparation of financial statements in conformity with generally    
accepted accounting principles requires management to make estimates    
and assumptions that affect the reported amounts of assets and          
liabilities and disclosure of contingent assets and liabilities at the  
date of the financial statements and the amounts of revenues            
and expenses during the reported period.  Actual results could differ   
from those estimates.                                                   

8-K 12th Page of 20 TOC 1st Previous Next ↓Bottom Just 12th
NOTE  2:  ACQUISITION                                                   

On June 19, 1996, a newly formed, wholly owned subsidiary of the        
Company acquired substantially all of the tangible operating assets     
and trademarks and assumed certain liabilities of Becker CPA for        
$18,458,000 in cash.   On this same date, another newly formed, wholly  
owned subsidiary of the Company acquired  certain copyrights, other     
intellectual property and publicity rights of Becker CPA for            
$17,935,000 in cash.  Becker CPA is the leading  international          
training firm preparing students to pass the nationally administered    
and centrally graded CPA exam, and it also offers a CMA exam review     
course.  Funding for the acquisitions was obtained through borrowings   
under the Company's revolving credit facility (Note 5).                 

The acquisitions have been accounted for under the purchase method of   
accounting.  Accordingly, the purchase prices were allocated to the     
tangible and identifiable intangible  assets acquired and liabilities   
assumed based on their estimated fair values. The intangible assets     
are being amortized using the straight line method over a 25-year       
period for financial reporting purposes and are being deducted for tax  
reporting purposes over shorter statutory lives.                        

The following unaudited pro forma financial information presents the    
results of operations of the Company and the acquired Becker CPA        
business as if the acquisitions had ocurred at the beginning of         
each fiscal year.  The pro forma information is based on historical     
results of operations  and does not necessarily reflect the actual      
results that would have ocurred, nor is it necessarily indicitive of    
future results of operations of the combined  enterprises (dollars in   
thousands except for per share amounts):                                

                               1996             1995
                               (Unaudited)       (Unaudited)
                               -----------       -----------
 Net Sales                       $279,938         $248,386
 Net Income                        19,375           15,035
 Earnings Per Common Share          $1.15            $0.90

NOTE  3:  INTANGIBLE  ASSETS                                            

Intangible assets that were not fully amortized at June 30 consist of   
the following:                                                          

                                                                [Download Table]

                                 1996             1995    
                             -----------       ---------- 
                                                          
Trademarks                   $ 2,521,000       $2,521,000 
Tradenames                    17,465,000                - 
Intellectual Property         17,425,000                - 
Other                            860,000                - 
                             -----------       ---------- 
                              38,271,000        2,521,000 
Accumulated Amortization        (562,000)        (499,000)
                             -----------       ---------- 
                             $37,709,000       $2,022,000 
                             ===========       ========== 

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NOTE  4:  INCOME TAXES                                                  

The components of income (loss) before income taxes are as follows:     

                                                                [Download Table]

                      For the Year Ended June 30,          
                 1996              1995             1994   
             -----------       -----------      -----------
                                                           
U.S.         $35,645,000       $23,323,000      $18,220,000
Foreign       (2,947,000)        2,436,000        2,783,000
             -----------       -----------      -----------
Total        $32,698,000       $25,759,000      $21,003,000
             ===========       ===========      ===========

The net income tax provisions (benefits) related to the above results   
are as follows:                                                         

                                                                [Download Table]

                            For the Year Ended June 30,             
                          1996              1995             1994   
                      -----------      ------------       ----------
                                                                    
Current Tax Provision:                                              
  U.S. Federal        $11,373,000       $ 3,141,000       $4,237,000
  State and Local       2,400,000           897,000          596,000
  Foreign                (776,000)        1,345,000        1,526,000
                      -----------       -----------       ----------
     Total Current     12,997,000         5,383,000        6,359,000

Deferred Tax Provision:                                             
  U.S. Federal            381,000         4,578,000        2,039,000
  State and Local         273,000           838,000          268,000
  Foreign                (198,000)           64,000          112,000
                      -----------       -----------       ----------
    Total Deferred        456,000         5,480,000        2,419,000
                      -----------       -----------       ----------
Net Income Tax                                                      
 Provision            $13,453,000       $10,863,000       $8,778,000
                      ===========       ===========       ==========

The income tax provisions differ from those computed using the          
statutory rate as a result of the following items:                      

                                                                [Download Table]

                               For the Year Ended June 30,             
                         1996              1995             1994       
                   ----------------- ----------------- ----------------
                                                                       
Expected Provision $11,444,000 35.0% $ 9,016,000 35.0% $7,351,000 35.0%
Higher Rates on       (312,000)(1.0%)    323,000  1.3%    308,000  1.5%
 Foreign Operations                                                    
State Income Taxes   1,767,000  5.4%   1,123,000  4.4%    875,000  4.1%
Other                  554,000  1.7%     401,000  1.5%    244,000  1.2%
                   -----------       -----------       ----------      
Income Tax                                                             
 Provision         $13,453,000 41.1% $10,863,000 42.2% $8,778,000 41.8%
                   ===========       ===========       ==========      

8-K 14th Page of 20 TOC 1st Previous Next ↓Bottom Just 14th
NOTE  4:  INCOME TAXES (continued)                                      

Deferred income tax assets (liabilities) result primarily from the      
recognition of the tax benefits of net operating loss carryforwards     
and from temporary differences in the recognition of various expenses   
for tax and financial statement purposes.  These assets and             
liabilities are composed of the following:                              

                                                                [Download Table]

                               For the Year Ended June 30,        
                       1996              1995             1994    
                    ----------        ----------       ---------- 
                                                                  
Loss Carryforwards  $        -        $  829,000       $5,038,000 
Employee Benefits    1,207,000         1,187,000        1,027,000 
Tax Credits                  -            47,000           92,000 
Rental and                                                        
 Occupancy             762,000           787,000          609,000 
Receivable Reserves                                               
 and Other           2,953,000         1,608,000        1,943,000 
                    ----------        ----------       ---------- 
  Gross Deferred                                                  
   Tax Assets        4,922,000         4,458,000        8,709,000 

Depreciation and                                                  
 Other              (4,837,000)       (5,014,000)      (3,970,000)
Amortization        (1,176,000)         (991,000)        (806,000)
                    ----------        ----------       ---------- 
  Gross Deferred Tax                                              
   Liabilities      (6,013,000)       (6,005,000)      (4,776,000)
                    ----------        ----------       ---------- 
Net Deferred Taxes ($1,091,000)      ($1,547,000)      $3,933,000 
                    ==========        ==========       ========== 

Based on the Company's history of operating earnings and its            
expectations for the future, management believes that operating income  
will more than likely be sufficient to recognize fully all deferred     
tax assets.                                                             

Deferred income tax provisions (benefits) result primarily from         
temporary differences in the recognition of various expenses for tax    
and financial statement purposes.  The sources and tax effects of       
these differences are as follows:                                       

                                                                [Download Table]

                                   For the Year Ended June 30,    
                                  1996        1995        1994    
                               --------   ----------   ---------- 
                                                                  
Realization of Operating Loss                                     
  Carryforwards                $829,000   $4,220,000   $4,497,000 
Excess (Tax) Book Depreciation                                    
  and Amortization             (266,000)      87,000     (339,000)
Excess of Amounts Expensed for                                    
  (Book) Tax Purposes Over                                        
  Amounts Deductible for Book                                     
  (Tax) Purposes               (159,000)     973,000   (1,739,000)
Other, Net                       52,000      200,000            - 
                               --------   ----------   ---------- 
Deferred Tax Provision         $456,000   $5,480,000   $2,419,000 
                               ========   ==========   ========== 

8-K 15th Page of 20 TOC 1st Previous Next ↓Bottom Just 15th
NOTE  5:  REVOLVING  LOAN  AGREEMENT                                    

All of the Company's borrowings and letters of credit under its         
revolving loan agreement are through its operating subsidiary, KGSM.    
This agreement consists of a revolving credit and letter of credit      
facility, which is available to KGSM in an aggregate amount not to      
exceed $85,000,000.  This agreement was amended in June 1996 to permit  
the acquisition of Becker CPA (Note 2), increase the borrowing limits,  
extend its term and provide for reduced interest rates upon the         
achievement of certain financial ratios. All borrowings and letters of  
credit under the revolving loan agreement now mature in August 1999,    
and there are no required installment payments. Outstanding borrowings  
under the revolving loan agreeement are $61,500,000 and $33,029,000 at  
June 30, 1996 and 1995, respectively.  There is also a $1,460,000       
letter of credit outstanding under this agreement at June 30, 1996.     
Outstanding borrowings under the revolving loan agreement bear          
interest, payable quarterly, at either the prime rate or a Eurodollar   
rate plus 0.75%, at the option of KGSM.  Upon achieving certain         
financial ratios included in the June 1996 amendment, the interest      
rate can be reduced to a Eurodollar rate plus 0.35%. The effective      
interest rate on outstanding borrowings at June 30, 1996, was 6.84%.    
Outstanding letters of credit under the revolving loan agreement are    
charged an annual fee equal to 0.75% of the undrawn face amount of the  
letter of credit , payable quarterly.                                   

The bank financing agreement contains certain covenants that, among     
other things, limit capital expenditure to $25,000,000 annually and     
require maintenance of certain financial ratios as defined in the       
agreement.  None of these covenants negatively impacts the Company's    
liquidity or capital resources.                                         

In June 1995, the Company voluntarily prepaid the entire $7,870,000     
remaining balance of its senior subordinated notes.   On December 1,    
1994 , in conjuntion with the scheduled principal payment on this       
date, the Company made a voluntary prepayment of $775,000  These        
senior subordinated notes bore interest at a rate of 13% per annum and  
were subordinate to the revolving credit facility.                      

NOTE  6:  EMPLOYEE  BENEFIT  PLANS                                      

Profit Sharing Retirement Plan                                          
All employees who meet certain eligibility requirements can             
participate in KGSM's 401(k) Profit Sharing Retirement Plan.   KGSM     
contributes to the plan an amount equal to 1.5% of the total eligible   
compensation of employees who make contributions under the plan.        
KGSM's matching contributions under the plan were approximately         
$765,000, $636,000 and $608,000 in 1996, 1995 and 1994, respectively.   
In addition, the Company's board of directors may also make             
discretionary contributions for the benefit of all eligible employees.  
Provisions for discretionary contributions under the plan were          
approximately $1,924,000, $1,566,000 and $1,413,000 in 1996, 1995 and   
1994,  respectively.                                                    

Employee Stock Purchase Plan                                            
Effective August 1, 1993, the Company established the DeVry Inc.        
Employee Stock Purchase Plan.  The Plan stipulates that any eligible    
employee may authorize the Company to withhold up to $25,000 of annual  
earnings to purchase common stock of the Company on the open market at  
100% of the prevailing market price.  The Company pays all brokerage    
commissions and administrative fees associated with the Plan.  These    
expenses were insignificant for the years ended June 30, 1996, 1995     
and 1994.                                                               

8-K 16th Page of 20 TOC 1st Previous Next ↓Bottom Just 16th
NOTE  7:  STOCK  OPTION  PLANS                                          

The Company maintains three stock option plans: the Amended and         
Restated Stock Incentive Plan, established in 1988, the 1991 Stock      
Incentive Plan and the 1994 Stock Incentive Plan.  Under these Plans,   
directors, key executives and managerial employees are eligible to      
receive incentive stock or nonqualified options to purchase shares of   
the Company's common stock.  The Amended and Restated Stock Incentive   
Plan and the 1994 Stock Incentive Plan are administered by a Plan       
Committee of the board of directors.  Plan Committee members will be    
granted automatic, nondiscretionary annual options.  The 1991 Stock     
Incentive Plan is administered by the board of directors.  Options      
under all three Plans are granted for terms of up to ten years and      
vest over periods of one to five years.  The option price under the     
Plans is the fair market value of the shares on the date of the grant.  

Share status of each of these plans at June 30, 1996, was as follows:   

                                                                [Download Table]

                                        Reserved for   Available for
                            Authorized    Issuance     Future Grant 
                            ----------   ----------    -----------  
                                                                    
Stock Incentive Plan           200,000     184,600         3,400    
1991 Stock Incentive Plan      200,000     199,040        61,100    
1994 Stock Incentive Plan      400,000     398,000       358,000    

Activity during the three years ended June 30, 1996, with respect to    
options under these plans, was as follows:                              

                                                                [Download Table]

                                  Shares      Option Prices
                                 -------      -------------
                                                           
Under Option at June 30, 1993    122,000      $1.57 - 10.18
        Options Exercised         (1,800)          3.50    
        Options Canceled          (2,000)         13.13    
        Options Granted           65,400      13.13 - 13.88
                                 -------      -------------
Under Option at June 30, 1994    183,600       1.57 - 13.88
        Options Exercised         (7,000)      3.50 - 13.13
        Options Canceled          (7,600)      3.50 - 13.13
        Options Granted          142,500      12.94 - 14.75
                                 -------      -------------
Under Option at June 30, 1995    311,500       1.57 - 14.75
        Options Exercised         (8,360)      3.50 - 14.75
        Options Canceled         (10,550)     12.94 - 21.75
        Options Granted           66,550      21.75 - 25.13
                                 -------      -------------
Under Option at June 30, 1996    359,140       1.57 - 25.13
                                 -------      -------------
Exercisable at June 30, 1996     151,040      $1.57 - 14.75
                                 -------      -------------

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NOTE  8:  COMMITTMENTS  AND  CONTINGENCIES                              

KGSM and Becker CPA lease certain equipment and facilities under        
non-cancelable operating leases, some of which contain renewal          
options, escalation clauses and requirements to pay taxes,              
insurance and maintenance costs.  Future minimum rental commitments     
for all non-cancelable operating leases having a remaining term in      
excess of one year at June 30, 1996, are as follows:                    

Year Ended June 30,             Amount                  
------------------           -----------                
1997                        $12,410,000               
1998                         11,740,000               
1999                         10,580,000               
2000                          9,480,000               
2001                          9,360,000               
Thereafter                  $56,170,000               

The Company recognizes rent expense on a straight-line basis over the   
term of the lease, although the lease may include escalation clauses    
that provide for lower rent payments at the start of the lease term     
and higher lease payments at the end of the lease term.                 

Rent expenses for the years ended June 30, 1996, 1995 and 1994, were    
$13,879,000, $12,553,000 and $9,611,000, respectively.                  

The Company is subject to occasional lawsuits, investigations and       
claims arising out of the normal conduct of its business.   Neither     
the Company nor any of its subsidiaries is currently a party to any     
material legal action except those described below.                     

In July 1996,  the Company entered into an out-of-court settlement      
agreement with the Internal Revenue Service (IRS) relative to the       
Statutory Notice of Deficiency  issued by the IRS against the Company   
for tax years 1988 through 1991.  The claimed deficiencies related to   
the amortization of intangible assets purchased during the acquisition  
of the DeVry Institutes  in 1987 (Notes 1 and 3).  All of these issues  
have been resolved as a result of the settlement.  The settlement       
amount is immaterial  to the Company's financial position, results of   
operations and liquidity.                                               

During 1996, the Ontario Ministry of Education and Training             
temporarily suspended and conditionally reinstated the processing of    
financial aid applications for students attending the Company's         
Toronto-area schools.  Full unconditional reinstatement is subject to   
the Ministry's completion of certain procedures regarding verification  
of the Company's compliance with financial aid processing regulations.  

In July 1996, the Company was served with a class action lawsuit in     
Canada alleging misrepresentation about the quality of the DeVry        
Institutes' educational programs.   The Company believes that the claims
in the lawsuit are frivolous and without merit.  In response to the     
lawsuit, the Company has filed a Statement of Defense and intends to    
vigorously contest the allegations.  Although the outcome cannot be     
predicted with certainty, the Company believes the resolution of this   
 matter will not have material effect on the Company's financial position,
results of operations or liquidity.                                     

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NOTE  9:  OPERATIONS  BY  GEOGRAPHIC  AREA                              

The Company operates in a single industry segment as a provider of      
educational services.  The Company conducts its educational operations  
in the United States and Canada.  Revenues, income before interest and  
taxes, and identifiable assets by geographic area are as follows:       

                                                                [Download Table]

                               For the Year Ended June 30,            
                          1996              1995             1994     
                      ------------      ------------      ------------
                                                                      
Revenues:                                                             
        U.S.          $234,180,000      $205,424,000      $192,842,000
        Foreign         25,827,000        23,169,000        18,595,000

Income Before Interest                                                
  and Taxes:                                                          
        U.S.            36,708,000        26,393,000        22,835,000
        Foreign         (2,947,000)        2,436,000         2,783,000

Identifiable Assets:                                                  
        U.S.           170,828,000       119,160,000       100,080,000
        Foreign          7,261,000         7,511,000         6,718,000

NOTE  10:  QUARTERLY  FINANCIAL  DATA  (UNAUDITED)                      

Summarized unaudited quarterly data for the years ended June 30, 1996   
and 1995, are as follows (dollars in thousands, except for per share    
amounts):                                                               

                                                                [Download Table]

1996                              Quarter                         
--------------------------------------------------------   Total  
                      First    Second   Third    Fourth     Year  
                      --------------------------------------------
                                                                  
Revenues              $59,839  $66,940  $68,412  $64,816  $260,007
Income Before                                                     
 Interest and Taxes     7,382    9,336    8,822    8,221    33,761
Net Income              4,031    5,385    5,062    4,767    19,245
Earnings Per Common                                               
 Share                   0.24     0.32     0.30     0.28      1.14
                                                                [Download Table]

1995                              Quarter                         
-------------------------------------------------------    Total  
                      First    Second   Third    Fourth     Year  
                      --------------------------------------------
                                                                  
Revenues              $51,955  $59,299  $59,739  $57,600  $228,593
Income Before                                                     
 Interest and Taxes     5,770    8,198    7,652    7,209    28,829
Net Income              2,932    4,343    4,098    3,523    14,896
Earnings Per Common                                               
 Share                   0.18     0.26     0.24     0.21      0.89

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Signatures

Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf   
by the undersigned thereunto duly authorized.                           

                                  DeVRY INC.
                                 -----------
                                  (Registrant)

Date:  August 22, 1996                       By:  /s/Norman M. Levine   
                                               -------------------
                                            Norman M. Levine
                                              Vice President and
                                                   Chief Operating Officer

Date:  August 22, 1996                        By:  /s/Ronald L. Taylor  
                                                 -------------------
                                              Ronald L. Taylor
                                                     Chief Operating Officer

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EXHIBIT INDEX   

                                                      Sequentially
Exhibit #                   Item                         Numbered Page  
---------          --------------------------------     --------------  
23              Consent of Price Waterhouse, LLP,          21     
independent accountants           

27              Financial Data Schedule                    22

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘8-K’ Filing	Date	First	Last	Other Filings

Filed on:	8/23/96
For Period End:	8/22/96	1	19
	8/6/96	2	3
	6/30/96	2	18	10-K
	6/19/96	9	12	8-K
	6/30/95	2	18
	6/21/95	11
	6/1/95	11
	5/17/95	11
	12/1/94	15
	6/30/94	2	17
	8/1/93	15
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Filing Submission 0000730464-96-000008 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Devry Education Group Inc. – ‘8-K’ for 8/22/96

As of: Friday, 8/23/96 · For: 8/22/96 · Accession #: 730464-96-8 · File #: 1-13988

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