Current Report Filing (8-k)

UNITED STATES

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):  October 8, 2014 (October 2, 2014)

Education Management Corporation

(Exact name of registrant as specified in its charter)

Pennsylvania		001-34466		25-1119571
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

210 Sixth Avenue, Pittsburgh, Pennsylvania		15222
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: [phone]

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8−K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o	Soliciting material pursuant to Rule 14a−12 under the Exchange Act (17 CFR 240.14a−12)

o	Pre-commencement communications pursuant to Rule 14d−2(b) under the Exchange Act (17 CFR 240.14d−2(b))

o	Pre-commencement communications pursuant to Rule 13e−4(c) under the Exchange Act (17 CFR 240.13e−4(c))

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Item 3.01 - Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On October 2, 2014, Education Management Corporation (the “Company”) received a notice (the “Notice”) from The NASDAQ Stock Market LLC (“NASDAQ”), indicating that the Company was no longer in compliance with the NASDAQ Listing Rule 5250(c)(1) due to the Company’s failure to timely file its Annual Report on Form 10-K for the fiscal year ended June 30, 2014 (the “Annual Report”) with the Securities and Exchange Commission (the “SEC”).

On September 16, 2014, the Company filed a notification of late filing with the SEC pursuant to Rule 12b-25 under the Securities Exchange Act of 1934, as amended. As disclosed in the filed Form 12b-25, the Company has not filed the Annual Report because of unresolved comments from the Division of Corporation Finance of the SEC related to the Company’s revenue recognition and related bad debt reserve recorded upon student withdrawals from school.

The Notice advises the Company that it must submit a plan to regain compliance with NASDAQ’s listing rules to NASDAQ within 60 days. The Company will submit a plan to NASDAQ prior to such date in the event that it does not file the Annual Report with the SEC prior to the expiration of the 60-day period.

In addition, as previously disclosed in its Form 8-K filed October 2, 2014, the Company’s directors and management are exploring voluntarily delisting the Company’s common stock from NASDAQ and suspending its reporting obligations under the Securities Exchange Act of 1934. The Company’s Board of Directors has not formally approved the voluntary delisting.

A copy of the Company’s press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 8.01 Other Events.

On October 6, 2014, the Company issued a press release announcing an amendment to its private offer to exchange (the “Exchange Offer”) all eligible holders’ outstanding Senior Cash Pay/PIK Notes due 2018 and Senior PIK Toggle Notes due 2018 for a combination of mandatory convertible preferred stock and warrants.

A copy of this press release is attached hereto as Exhibit 99.2 and is incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

The following exhibit is filed as part of this report:

99.1	Press Release, dated October 8, 2014, issued by Education Management Corporation, announcing receipt of NASDAQ Notice.

99.2	Press Release, dated October 6, 2014, issued by Education Management Corporation, announcing an amendment to the exchange offer

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SIGNATURE

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

  

EDUCATION MANAGEMENT CORPORATION

By:    /s/ J. Devitt Kramer

Name:    J. Devitt Kramer

Title:    Senior Vice President, General Counsel & Secretary

Dated:  October 8, 2014

Exhibit 99.1

Education Management Corporation Receives Expected NASDAQ Notice Related to Delay in 10-K Filing

Pittsburgh, Oct. 8, 2014 - Education Management Corporation (NASDAQ: EDMC), one of the largest providers of post-secondary education in North America, today announced that the company received a standard notice from NASDAQ stating that the company is not in compliance with NASDAQ Listing Rule 5250(c)(1), which requires timely filing of reports with the U.S. Securities and Exchange Commission. The Oct. 2, 2014 letter was sent as a result of the company’s delay in filing its Form 10-K for the fiscal year ended June 30, 2014, which the company announced on Sept. 16, 2014.

The NASDAQ notice has no immediate effect on the listing or trading of the company’s common stock on the NASDAQ Global Select Market. Under the NASDAQ rules, the company has 60 days to submit a plan to regain compliance. The company is resolving comments raised by the Division of Corporation Finance of the Securities and Exchange Commission and will file the Form 10-K upon resolution of the comments. If necessary, the company will submit a plan to NASDAQ in the event that it does not file its Form 10-K prior to the expiration of the 60-day period.

As previously disclosed in the company’s Form 8-K filed Oct. 2, 2014, the company’s directors and management are exploring voluntarily delisting the company’s common stock from NASDAQ and suspending its reporting obligations under the Securities Exchange Act of 1934. The company’s board of directors has not formally approved the voluntary delisting.

About Education Management Corporation

Education Management Corporation (www.edmc.edu), with approximately 119,500 students of the three month period ended March 31, 2014, is among the largest providers of post-secondary education in North America, based on student enrollment and revenue, with a total of 110 locations in 32 U.S. states and Canada. The company offers academic programs to students through campus-based and online instruction, or through a combination of both. The company is committed to offering quality academic programs and strives to improve the learning experience for its students. Its educational institutions offer students the opportunity to earn undergraduate and graduate degrees and certain specialized non-degree diplomas in a

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broad range of disciplines, including media arts, health sciences, design, psychology and behavioral sciences, culinary, business, fashion, legal, education and information technology.

Cautionary Statements

This press release includes information that could constitute forward-looking statements with the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which are based on information currently available to management, concern the company’s strategy, plans, intentions or expectations and typically contain words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “will,” “should,” “seeks,” “approximately,” “plans,” “projects,” or similar words, although the absence of such words does not mean that any particular statement is not forward-looking. Actual results may differ materially from those projected, expressed or implied in the forward-looking statements as a result of various factors including, without limitation, the possibility that the company will fail to consummate a restructuring plan due to the failure to obtain regulatory or shareholder approval or otherwise, and the factors set forth in our filings with the Securities and Exchange Commission including, without limitation, our annual report on Form 10-K for the fiscal year ended June 30, 2013 and Exhibit 99.1 to Form 8-K filed on October 2, 2014 under the caption “Risk Factors” and “Certain Risk Factors”, respectively. In connection with the restructuring transaction, the company may deregister the common stock with the Securities and Exchange Commission and delist it from trading on Nasdaq. Any forward-looking statements contained in this release speak only as of the date of such release, and we caution existing and prospective investors not to place undue reliance on such statements. Such forward-looking statements do not purport to be predictions of future events or circumstances, and therefore, there can be no assurance that any forward-looking statement contained our releases will prove to be accurate. The company undertakes no obligation to update or revise any forward-looking statements.

Investor Contact:

John Iannone

Director of Investor Relations

[phone]

Media Contact:

Chris Hardman

VP of Communications

[phone]

Exhibit 99.2

Education Management Corporation Amends Exchange Offer

Pittsburgh, October 6, 2014 - Education Management Corporation (“EDMC” and together with its consolidated subsidiaries, the “Company”) (NASDAQ: EDMC) announced today that it has amended (the “Amendment”) its private offer to exchange (the “Exchange Offer”) all outstanding Senior Cash Pay/PIK Notes due 2018 (the “Cash Pay/PIK Notes”) and Senior PIK Toggle Notes due 2018 (the “PIK Notes” and together with the Cash Pay/PIK Notes, the “Notes”), each co-issued by its indirect wholly owned subsidiaries Education Management LLC and Education Management Finance Corp., for a combination of mandatory convertible preferred stock of EDMC (the “Preferred A-2 Shares”) and warrants (the “Class A Warrants”) to purchase common stock of EDMC.

The Preferred A-2 Shares and Class A Warrants are being offered only to (i) accredited investors in reliance on Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), and (ii) outside the United States, non-U.S. investors pursuant to Regulation S under the Securities Act, in each case, who have completed and returned an eligibility certification (such investors, collectively, “Eligible Holders”). The Exchange Offer is being made to Eligible Holders in accordance with the terms and subject to the conditions stated in the Offering Circular, dated October 1, 2014 and as amended as set forth in this press release (the “Offering Circular”), and the documents related thereto, including a letter of transmittal (as amended as set forth in this press release, the “Letter of Transmittal” and together with the Offering Circular, the “Exchange Offer Documents”). The Exchange Offer will expire at 11:59 p.m., New York City time, on October 29, 2014 (such time and date, as they may be extended by the Company, the “Expiration Date”).

Prior to the Amendment, the Exchange Offer Documents contemplated that Notes may only be tendered in the Exchange Offer in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. Pursuant to the Amendment, Eligible Holders may tender Notes in minimum denominations of $2,000 and increments of $1 in excess thereof. Each reference, prior to the Amendment, in the Offering Circular and Letter of Transmittal to a requirement that Notes be tendered in multiples of $1,000 in order to be accepted for payment is hereby amended, pursuant to the Amendment, to state that Notes tendered in an amount not less than $2,000 and in any multiple of $1 in excess thereof may be accepted for payment.

The Company reserves the right, subject to applicable law, in its sole discretion, to waive or amend any of the conditions of the Exchange Offer (other than the condition that the previously disclosed proposed restructuring be consummated concurrently with the Exchange Offer), at any time and from time to time.

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The Company also reserves the right, subject to applicable law, to terminate, withdraw, amend or extend the Exchange Offer at any time and from time to time, as described in the Offering Circular.

The Company’s obligations with respect to the Exchange Offer are set forth solely in the Exchange Offer Documents. This press release is neither an offer to purchase nor a solicitation of an offer to sell any securities. The Exchange Offer is being made only by, and pursuant to the terms of, the Exchange Offer Documents. The Exchange Offer is not being made in any jurisdiction in which the making thereof would not be in compliance with the applicable laws of such jurisdiction.

Holders of Notes who desire a copy of the eligibility certification for the Exchange Offer should visit the website for this purpose at http://main.dfking.com/edmc/ or request instructions by sending an email to [e-mail] or by calling D.F. King & Co., Inc., as Information Agent for the Exchange Offer, at [phone].

About the Company

Education Management Corporation (www.edmc.edu), with approximately 119,500 students as of the three month period ended March 31, 2014, is among the largest providers of post-secondary education in North America, based on student enrollment and revenue, with a total of 110 locations in 32 U.S. states and Canada. The Company offers academic programs to students through campus-based and online instruction, or through a combination of both. The Company is committed to offering quality academic programs and strives to improve the learning experience for its students. Its educational institutions offer students the opportunity to earn undergraduate and graduate degrees and certain specialized non-degree diplomas in a broad range of disciplines, including media arts, health sciences, design, psychology and behavioral sciences, culinary, business, fashion, legal, education and information technology.

Cautionary Statements

This press release includes information that could constitute forward-looking statements with the meaning of the Private Securities Litigation Reform Act of 1995. These statements typically contain words such as “anticipates,” “believes,” “estimates,” “expects,” “intends” or similar words indicating that future outcomes are not known with certainty and are subject to risk factors that could cause these outcomes to differ significantly from those projected. Forward-looking statements include, but are not limited to, statements about the benefits and timing of the Exchange Offer and the proposed restructuring; the principal amount of Notes that will be tendered in the Exchange Offer; the implementation of a management incentive plan in connection with the proposed restructuring; and the satisfaction or waiver of certain conditions to the

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Exchange Offer. Any such forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from any future results encompassed within the forward-looking statements. Some of the factors that could cause actual results to differ materially include, but are not limited to: risks associated with the ability to consummate the proposed restructuring and the Exchange Offer and the timing of the proposed restructuring and the Exchange Offer; the ability to realize the anticipated benefits of the proposed restructuring and the Exchange Offer; changes in the overall U.S. or global economy; changes in enrollment or student mix; student retention; the Company’s ability to maintain eligibility to participate in Title IV programs; changes in government spending; increased or unanticipated legal and regulatory costs; success of cost-cutting initiatives and growth strategies; changes in accreditation standards; the implementation of new operating procedures for the Company’s fully online programs; government and regulatory changes including revised interpretations of regulatory requirements that affect the postsecondary education industry; new programs and operational changes implemented in response to the “gainful employment” financial metrics; the potential impact of the draft “gainful employment” regulation expected to be issued by the U.S. Department of Education; and other factors discussed in the Company’s filings with the Securities and Exchange Commission, including those identified in the “Risk Factors” section of the Company’s Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q. Past results of the Company are not necessarily indicative of its future results. The Company does not undertake any obligation to update any forward-looking statements, except as required by securities laws.

Investor Contact:

John Iannone

Director of Investor Relations

[phone]

Media Contact:

Chris Hardman

VP of Communications

[phone]