<PAGE>   1
 
=============================================================================== 
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                            ------------------------
 
                                   FORM 10-Q

                            ------------------------
 
<TABLE>
<S>  <C>                                                           <C>
(MARK ONE)
 X         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
---                 OF THE SECURITIES ACT OF 1934
             FOR THE QUARTERLY PERIOD ENDED JULY 31, 1998
                                  OR
---       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
              OF THE SECURITIES AND EXCHANGE ACT OF 1934
       FOR THE TRANSITION PERIOD FROM __________ TO __________.
</TABLE>
 
                        COMMISSION FILE NUMBER: 0-26040
 
                            ------------------------
 
                        COMPUTER LEARNING CENTERS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                                     <C>
               DELAWARE                               36-3501869
   (STATE OR OTHER JURISDICTION OF                 (I.R.S. EMPLOYER
    INCORPORATION OR ORGANIZATION)               IDENTIFICATION NO.)

  11350 RANDOM HILLS ROAD, SUITE 240
          FAIRFAX, VIRGINIA                             22030
   (ADDRESS OF PRINCIPAL EXECUTIVE                    (ZIP CODE)
               OFFICES)
</TABLE>
 
                                 (703) 359-9333
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
 
                            ------------------------
 
     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
                          Yes   X                No 
                              -----                 -----

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
 
<TABLE>
<S>                                     <C>
                CLASS                     OUTSTANDING AT SEPTEMBER 10, 1998
     Common Stock, $.01 par value                     17,416,637
</TABLE>

=============================================================================== 
<PAGE>   2
 
                        COMPUTER LEARNING CENTERS, INC.
 
                                     INDEX
 
<TABLE>
<CAPTION>
                                                               PAGE
                                                              NUMBER
                                                              ------
<S>                                                           <C>
PART I -- FINANCIAL INFORMATION
Item 1.  Financial Statements
  Consolidated Statements of Operations.....................     3
  Consolidated Balance Sheets...............................     4
  Consolidated Statements of Cash Flows.....................     5
  Notes to Consolidated Financial Statements................     6
Item 2.  Management's Discussion and Analysis of Financial
  Condition and Results of Operations.......................    11
Item 3.  Quantitative and Qualitative Disclosures about
  Market Risks..............................................    19
 
PART II -- OTHER INFORMATION
Item 1.  Legal Proceedings..................................    20
Item 2.  Changes in Securities..............................    21
Item 3.  Defaults Upon Senior Securities....................    21
Item 4.  Submission of Matters to a Vote of Security
  Holders...................................................    21
Item 5.  Other Information..................................    21
Item 6.  Exhibits and Reports on Form 8-K...................    21
SIGNATURES..................................................    22
</TABLE>
 
                                        2
<PAGE>   3
 
                        PART I -- FINANCIAL INFORMATION
 
ITEM 1.  FINANCIAL STATEMENTS
 
                        COMPUTER LEARNING CENTERS, INC.
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
            (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                          FOR THE THREE-MONTH    FOR THE SIX-MONTH
                                                             PERIOD ENDED          PERIOD ENDED
                                                               JULY 31,              JULY 31,
                                                          -------------------   -------------------
                                                            1998       1997       1998       1997
                                                          --------   --------   --------   --------
<S>                                                       <C>        <C>        <C>        <C>
Revenues................................................  $35,273    $22,138    $71,329    $42,968
Costs and expenses:
     Costs of instruction and services..................   23,433     12,307     43,844     23,527
     Selling and promotional............................    5,309      3,762     10,470      7,014
     General and administrative.........................    3,221      1,618      6,764      3,511
     Provision for doubtful accounts....................    1,919      1,139      4,015      1,993
     Amortization of intangibles........................      143         91        275        181
                                                          -------    -------    -------    -------
                                                           34,025     18,917     65,368     36,226
Income from operations..................................    1,248      3,221      5,961      6,742
Interest income, net....................................      135        367        419        713
Gain on sale of investment securities...................       --         --        279         --
                                                          -------    -------    -------    -------
Income before income taxes..............................    1,383      3,588      6,659      7,455
Provision for income taxes..............................      521      1,510      2,654      3,134
                                                          -------    -------    -------    -------
     Net income.........................................  $   862    $ 2,078    $ 4,005    $ 4,321
                                                          =======    =======    =======    =======
Earnings per share of common stock:
     Basic..............................................  $  0.05    $  0.13    $  0.23    $  0.27
                                                          =======    =======    =======    =======
     Diluted............................................  $  0.05    $  0.12    $  0.22    $  0.25
                                                          =======    =======    =======    =======
</TABLE>
 
  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        3
<PAGE>   4
 
                        COMPUTER LEARNING CENTERS, INC.
 
                          CONSOLIDATED BALANCE SHEETS
            (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
<TABLE>
<CAPTION>
                                                               JULY 31,     JANUARY 31,    JULY 31,
                                                                 1998          1998          1997
                                                              -----------   -----------   -----------
                                                              (UNAUDITED)                 (UNAUDITED)
<S>                                                           <C>           <C>           <C>
ASSETS
Current assets:
     Cash and cash equivalents..............................   $  7,922      $ 24,377       $25,094
     Accounts receivable, net...............................     55,144        48,114        33,754
     Prepaid expenses and other current assets..............      8,479         5,719         5,566
                                                               --------      --------       -------
          Total current assets..............................     71,545        78,210        64,414
                                                               --------      --------       -------
Fixed assets, net...........................................     35,715        25,199        16,955
Long-term accounts receivable, net..........................      9,239         7,330         5,627
Other long-term assets......................................      4,771         4,532         4,156
                                                               --------      --------       -------
          Total assets......................................   $121,270      $115,271       $91,152
                                                               ========      ========       =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Trade accounts payable.................................   $  2,915      $  1,574       $ 3,149
     Accrued employee expenses..............................      1,730         3,025         2,481
     Accrued other expenses.................................      4,747         6,519         2,244
     Deferred revenues......................................     51,418        48,231        34,633
                                                               --------      --------       -------
          Total current liabilities.........................     60,810        59,349        42,507
                                                               --------      --------       -------
Long-term deferred revenues.................................      4,198         3,713         2,381
Other long-term liabilities.................................      2,369         1,454           641
                                                               --------      --------       -------
          Total liabilities.................................     67,377        64,516        45,529
                                                               --------      --------       -------
Stockholders' equity:
     Preferred stock, $.01 par value, 1,000,000 authorized
       shares, no shares issued or outstanding..............         --            --            --
     Common stock, $.01 par value, 35,000,000 authorized
       shares; 17,380,025, 16,239,236 and 15,985,788 shares
       issued and outstanding, respectively.................        174           162           160
     Additional paid-in capital.............................     35,401        34,525        33,587
     Net unrealized gain on securities available for sale...         --           160           135
     Cumulative translation adjustments.....................         (2)           --            --
     Retained earnings......................................     18,320        15,908        11,741
                                                               --------      --------       -------
          Total stockholders' equity........................     53,893        50,755        45,623
                                                               --------      --------       -------
          Total liabilities and stockholders' equity........   $121,270      $115,271       $91,152
                                                               ========      ========       =======
</TABLE>
 
  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        4
<PAGE>   5
 
                        COMPUTER LEARNING CENTERS, INC.
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                         (DOLLAR AMOUNTS IN THOUSANDS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                FOR THE SIX-MONTH
                                                              PERIOD ENDED JULY 31,
                                                              ----------------------
                                                                 1998        1997
                                                              ----------   ---------
<S>                                                           <C>          <C>
Cash flows from operating activities:
     Net income.............................................   $  4,005     $ 4,321
     Adjustments to reconcile net income to cash provided by
      operating activities:
          Provision for doubtful accounts...................      4,015       1,993
          Depreciation......................................      3,318       1,699
          Amortization of intangible assets.................        275         181
     Changes in net assets and liabilities:
          Accounts receivable...............................     (8,527)     (7,473)
          Prepaid expenses and other current assets.........     (2,892)     (1,963)
          Long-term accounts receivable.....................     (2,251)     (2,553)
          Other long-term assets............................       (369)        (60)
          Trade accounts payable............................        552       1,370
          Accrued employee expenses.........................     (1,388)        347
          Accrued other expenses............................     (2,770)        627
          Deferred revenues.................................       (561)      6,108
          Long-term deferred revenues.......................        485       1,039
          Other long-term liabilities.......................      1,296         898
                                                               --------     -------
               Cash (used for) provided by operating
                activities..................................     (4,812)      6,534
                                                               --------     -------
Cash flows from investing activities:
     Capital expenditures...................................    (12,275)     (9,083)
     Cash from acquired companies...........................        932          --
                                                               --------     -------
               Cash used for investing activities...........    (11,343)     (9,083)
                                                               --------     -------
Cash flows from financing activities:
     Repayments of long-term debt...........................       (518)         --
     Exercise of stock options..............................        218         693
                                                               --------     -------
               Cash (used for) provided by financing
                activities..................................       (300)        693
                                                               --------     -------
Net (decrease) increase in cash and cash equivalents........    (16,455)     (1,856)
                                                               --------     -------
Cash and cash equivalents, beginning of period..............     24,377      26,950
                                                               --------     -------
Cash and cash equivalents, end of period....................   $  7,922     $25,094
                                                               ========     =======
</TABLE>
 
  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        5
<PAGE>   6
 
                        COMPUTER LEARNING CENTERS, INC.
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, UNLESS OTHERWISE STATED, EXCEPT PER SHARE AMOUNTS)
                                  (UNAUDITED)
 
     1.  The interim consolidated financial statements of Computer Learning
Centers, Inc. (the "Company" or "CLC") as of and for the three and six months
ended July 31, 1998 and 1997 have not been audited. However, the financial
information reflects all adjustments, consisting only of normal recurring
adjustments that are, in the opinion of management, necessary for a fair
statement of results for the interim periods presented.
 
     2.  These financial statements should be read together with the fiscal year
1998 audited financial statements set forth in the Company's Annual Report on
Form 10-K filed with the Securities and Exchange Commission.
 
     3.  On February 17, 1998, the Company acquired Markerdowne Corporation
("Markerdowne") d/b/a Computer Learning Centers Paramus ("CLC Paramus"), a
privately-held provider of information technology education and training based
in Paramus, New Jersey. The acquisition, which qualified as a tax free
reorganization, was accounted for as a pooling of interests in accordance with
Accounting Principles Board Opinion No. 16, "Business Combinations" ("APB 16").
The acquisition was completed by issuing 510,287 shares of CLC Common Stock in
exchange for substantially all of the rights, title and interests in the assets
and assumption of substantially all of the liabilities of CLC Paramus. CLC
Paramus had calendar 1997 annual revenues of approximately $6.7 million and
served approximately 800 students. Current and prior years' financial statements
were not restated due to the immateriality of Markerdowne to the Company. In
connection with this acquisition, the Company incurred $292 of pooling expenses
related to certain legal and accounting fees which are reflected in the fiscal
1999 results of operations.
 
     On February 20, 1998, the Company acquired Delta College, a Montreal,
Quebec-based, privately-held provider of information technology education and
training. The acquisition was accounted for as a pooling of interests in
accordance with APB 16, and was completed by means of an exchange of all
outstanding shares of Delta College for 548,408 shares of CLC Common Stock.
Delta College reported revenues of approximately $6.7 million for its fiscal
year ended June 30, 1997 and served approximately 800 students at three
locations: Montreal, Laval and Brossard. Current and prior years' financial
statements were not restated due to the immateriality of Delta College to the
Company. In connection with this acquisition, the Company incurred $175 of
pooling expenses related to certain legal and accounting fees which are
reflected in the fiscal 1999 results of operations.
 
     4.  Student accounts receivable are initially established for the balance
of course tuition at the time a student enrolls in the Learning Center and
consist of financial aid, third party and self-pay receivable balances.
Financial aid receivables are student receivable balances expected to be paid
through Title IV program funds. Third party student receivable balances are
those expected to be paid by employer companies or various non-Title IV federal
and state agencies. Self-pay student receivables consist of those amounts to be
paid by the student. The Company makes available to qualifying students
alternative financing arrangements ("CLC financing") which help fund their
education. Dependent upon the credit worthiness of the individual, CLC financing
may be offered to assist students with meeting their financial obligations
related to attending CLC. The Company requires students receiving CLC financing
to make regular monthly payments. Depending on the level of financing extended
to students, payment plans offered generally range from six months to three
years. All amounts due to the Company in periods beyond one year are classified
as long-term receivables.
 
     When a student withdraws, tuition paid in excess of earned tuition revenues
is refunded based on the applicable refund policy and tuition revenues earned in
excess of tuition paid remains as an accounts receivable. Based on comparison to
historical levels, the Company provides for estimated student withdrawals, as
reductions to accounts receivable and related deferred revenue balances, thus
stating these amounts at estimated net realizable value.
 
                                        6
<PAGE>   7
                        COMPUTER LEARNING CENTERS, INC.
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS, UNLESS OTHERWISE STATED, EXCEPT PER SHARE AMOUNTS)
                                  (UNAUDITED)
 
     Accounts receivable balances are reviewed no less frequently than quarterly
for the purposes of determining appropriate levels of allowance for doubtful
accounts. The Company establishes the allowance for doubtful accounts using an
objective model which applies various expected loss percentages to aging
categories based on historical bad debt experience. The Company charges-off
accounts receivable balances deemed to be uncollectible usually after they are
delinquent 120 days. All charge-offs are recorded as reductions in the allowance
for doubtful accounts, with any recoveries of previously written off accounts
receivable recorded as increases to the allowance for doubtful accounts.
 
     As of July 31, 1998 and 1997, net accounts receivable consisted of the
following:
 
<TABLE>
<CAPTION>
                                                                 JULY 31, 1998
                                                        -------------------------------
                                                        CURRENT    LONG TERM    TOTAL
                                                        --------   ---------   --------
<S>                                                     <C>        <C>         <C>
Accounts receivable...................................  $ 71,923    $12,647    $ 84,570
Student withdrawal allowance..........................   (12,179)    (1,843)    (14,022)
Allowance for doubtful accounts.......................    (4,600)    (1,565)     (6,165)
                                                        --------    -------    --------
                                                        $ 55,144    $ 9,239    $ 64,383
                                                        ========    =======    ========
</TABLE>
 
<TABLE>
<CAPTION>
                                                                  JULY 31, 1997
                                                          -----------------------------
                                                          CURRENT   LONG TERM    TOTAL
                                                          -------   ---------   -------
<S>                                                       <C>       <C>         <C>
Accounts receivable.....................................  $43,906    $ 7,449    $51,355
Student withdrawal allowance............................   (7,750)    (1,100)    (8,850)
Allowance for doubtful accounts.........................   (2,402)      (722)    (3,124)
                                                          -------    -------    -------
                                                          $33,754    $ 5,627    $39,381
                                                          =======    =======    =======
</TABLE>
 
                                        7
<PAGE>   8
                        COMPUTER LEARNING CENTERS, INC.
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS, UNLESS OTHERWISE STATED, EXCEPT PER SHARE AMOUNTS)
                                  (UNAUDITED)
 
     5.  Earnings per share data has been calculated to reflect the provisions
of SFAS No. 128. The details of the earnings per share calculations for the
three and six months ended July 31, 1998 and 1997 follow:
 
<TABLE>
<CAPTION>
                                                                                     PER SHARE
                                                              INCOME     SHARES       AMOUNT
                                                              ------   -----------   ---------
<S>                                                           <C>      <C>           <C>
QUARTER ENDED JULY 31, 1998
Earnings per share of common stock -- basic.................   $862     17,316,398     $0.05
Dilutive securities:
     Stock options..........................................     --      1,017,590        --
                                                               ----    -----------     -----
Earnings per share of common stock -- diluted...............   $862     18,333,988     $0.05
                                                               ----    -----------     -----
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                     PER SHARE
                                                              INCOME     SHARES       AMOUNT
                                                              ------   -----------   ---------
<S>                                                           <C>      <C>           <C>
QUARTER ENDED JULY 31, 1997
Earnings per share of common stock -- basic.................  $2,078    15,803,130     $0.13
Dilutive securities:
     Stock options..........................................      --     1,225,958        --
                                                              ------   -----------     -----
Earnings per share of common stock -- diluted...............  $2,078    17,029,088     $0.12
                                                              ------   -----------     -----
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                     PER SHARE
                                                              INCOME     SHARES       AMOUNT
                                                              ------   -----------   ---------
<S>                                                           <C>      <C>           <C>
SIX MONTHS ENDED JULY 31, 1998
Earnings per share of common stock -- basic.................  $4,005   $17,212,195     $0.23
Dilutive securities:
     Stock options..........................................      --     1,008,953        --
                                                              ------   -----------     -----
Earnings per share of common stock -- diluted...............  $4,005    18,221,148     $0.22
                                                              ------   -----------     -----
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                     PER SHARE
                                                              INCOME     SHARES       AMOUNT
                                                              ------   -----------   ---------
<S>                                                           <C>      <C>           <C>
SIX MONTHS ENDED JULY 31, 1997
Earnings per share of common stock -- basic.................  $4,321    15,727,588     $0.27
Dilutive securities:
     Stock options..........................................      --     1,273,848        --
                                                              ------   -----------     -----
Earnings per share of common stock -- diluted...............  $4,321    17,001,436     $0.25
                                                              ------   -----------     -----
</TABLE>
 
     6.  On March 10, 1998, the Attorney General of Illinois filed a complaint
against the Company in Circuit Court in Cook County, Illinois, asserting that
the Company had violated the Illinois Private Business and Vocational Schools
Act and the Illinois Consumer Fraud and Deceptive Business Practices Act (the
"Acts") at its Schaumburg Learning Center. The complaint alleged that the
Company, at the Schaumburg Learning Center, failed to provide certain
educational services and resources and misrepresented certain information
respecting services, resources, occupational opportunities and student outcomes.
The complaint sought suspension of the Schaumburg Center's charter to operate
within Illinois, restitution to persons alleged to have been injured by the
conduct of the Schaumburg Learning Center, costs, civil penalties totaling $100
for violations of the Acts and an additional civil penalty of $50 for each
alleged violation of each of the Acts, committed with intent to defraud. On June
4, 1998, the Company timely filed an answer denying all of the material
allegations set forth in the complaint.
 
                                        8
<PAGE>   9
                        COMPUTER LEARNING CENTERS, INC.
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS, UNLESS OTHERWISE STATED, EXCEPT PER SHARE AMOUNTS)
                                  (UNAUDITED)
 
     On June 8, 1998, the Company and the Attorney General of Illinois reached
an agreement settling the litigation filed on March 10, 1998. As a result of the
settlement, which was approved by the Circuit Court in Cook County, Illinois,
the Company agreed to make a voluntary contribution of $90 to the Attorney
General's consumer education fund, establish a four-year program to annually
provide $95 worth of computer hardware and software to schools, programs,
community sites and other non-profit or public institutions in the Chicago area
and $10 worth of training in computer skills annually at the Company's
Schaumburg and Chicago Learning Centers for teachers and other community-based
personnel to enable them to make the most effective use of the computer
equipment. The Company has established an Ombudsman program to provide for the
prompt investigation and impartial resolution of student complaints. The Company
does not believe that the settlement will have a material adverse effect on the
Company.
 
     On March 13, 1998, a class action lawsuit was filed against the Company in
the United States District Court for the Central District of California on
behalf of all purchasers of Company Common Stock from April 30, 1997 through
March 10, 1998. Over the following two months, eight additional similar cases
were filed in United States District Courts: two in the Central District of
California; five in the Northern District of Illinois; and one in the Eastern
District of Virginia. The complaints allege violations of the Securities
Exchange Act of 1934, including allegations that the Company was experiencing
"operations difficulties" and failed to disclose the alleged difficulties. The
complaints also allege that Company insiders realized profits by trading their
shares of Company stock while in possession of material adverse information. All
of the complaints were filed on behalf of classes of shareholders of Company
Common Stock beginning as early as March 11, 1997 and ending as late as April 7,
1998. All of these shareholder lawsuits have been consolidated and transferred
to the United States District Court for the Eastern District of Virginia,
however, discovery has not yet commenced. The Company is unable to estimate the
outcome of the matter or any potential liability.
 
     On May 5, 1998, a class action lawsuit was filed against the Company in the
Superior Court of New Jersey in Bergen County, New Jersey, on behalf of all
students who attended a Learning Center in New Jersey within six years of May 5,
1998. The complaint alleges that the Company, at its New Jersey Learning
Centers, failed to provide certain educational services and resources,
misrepresented certain information respecting services, resources, occupational
opportunities and student outcomes, and violated the New Jersey Consumer Fraud
Act. The Company is unable to estimate the outcome of the matter or any
potential liability.
 
     On May 19, 1998, a lawsuit was filed against the Company in the District
Court of Harris County, Texas, on behalf of six former students of the Houston
Learning Center. Subsequently, the complaint was amended to seek certification
as a class action lawsuit and removed to the U.S. District Court for the
Southern District of Texas, Houston Division. The complaint alleges, among other
things, that the Company, at its Houston Learning Center, failed to provide
certain educational services and resources, misrepresented certain information
respecting services, resources, occupational opportunities and student outcomes,
and violated the Texas Deceptive Trade Practices Act. The Company is unable to
estimate the outcome of the matter or any potential liability.
 
     The Company intends to defend itself vigorously in the above class action
lawsuits; however, there can be no assurance that the Company will be successful
in defending itself in any of these proceedings. Even if the Company prevails on
the merits in such litigation, the Company expects to incur legal and other
defense costs as a result of such proceedings. These proceedings could involve
substantial diversion of the time of some members of management, and an adverse
determination in, or settlement of, such litigation could involve the payment of
significant amounts, or could include terms in addition to such payments, which
could have a severe impact on the Company's business, financial condition and
results of operations.
 
     7.  Under a separate standard of financial responsibility, if based upon
the annual financial aid review, an institution has made late refunds to 5% or
more of its students in either of the two most recent fiscal years, the
                                        9
<PAGE>   10
                        COMPUTER LEARNING CENTERS, INC.
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS, UNLESS OTHERWISE STATED, EXCEPT PER SHARE AMOUNTS)
                                  (UNAUDITED)
 
institution is required to post a letter of credit in favor of the DOE in an
amount equal to 25% of the total Title IV Program refunds paid by the
institution in its prior fiscal year. Based on this standard, on August 31,
1998, the Company posted a $1.5 million letter of credit with respect to all
Learning Centers except Delta College, and the Boston and Paramus Learning
Centers.
 
     8.  Certain reclassifications have been made to prior period amounts to
conform with the current period presentation.
 
                                       10
<PAGE>   11
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
 
     This report on Form 10-Q contains forward-looking statements. For this
purpose, any statements contained herein that are not statements of historical
fact may be deemed to be forward-looking statements. Without limiting the
foregoing, the words "believes," "anticipates," "plans," "expects" and similar
expressions are intended to identify forward-looking statements. There are a
number of important factors that could cause the Company's actual results to
differ materially from those indicated by such forward-looking statements. These
factors include, without limitation, those set forth below under the caption
"Certain Factors That May Affect Future Results" and "Part II, Item 1 -- Legal
Proceedings."
 
RESULTS OF OPERATIONS
 
     The following table sets forth statement of operations data of the Company
expressed as a percentage of revenues for the periods indicated:
 
<TABLE>
<CAPTION>
                                                    FOR THE THREE-MONTH            FOR THE SIX-MONTH
                                                   PERIOD ENDED JULY 31,         PERIOD ENDED JULY 31,
                                                   ---------------------         ---------------------
                                                    1998           1997           1998           1997
                                                   ------         ------         ------         ------
<S>                                                <C>            <C>            <C>            <C>
Revenues..................................         100.0%         100.0%         100.0%         100.0%
Costs and expenses:
     Costs of instruction and services....          66.4           55.6           61.5           54.8
     Selling and promotional..............          15.1           17.0           14.7           16.3
     General and administrative...........           9.1            7.4            9.5            8.2
     Provision for doubtful accounts......           5.4            5.1            5.6            4.6
     Amortization of intangible assets....           0.4            0.4            0.4            0.4
                                                   -----          -----          -----          -----
                                                    96.4           85.5           91.7           84.3
                                                   -----          -----          -----          -----
Income from operations....................           3.6           14.5            8.3           15.7
Interest income...........................           0.4            1.7            0.6            1.7
Gain on sale of investment securities.....            --             --            0.4             --
                                                   -----          -----          -----          -----
Income before income taxes................           4.0           16.2            9.3           17.4
Provision for income taxes................           1.5            6.8            3.7            7.3
                                                   -----          -----          -----          -----
Net income................................           2.5%           9.4%           5.6%          10.1%
                                                   =====          =====          =====          =====
</TABLE>
 
THREE MONTHS ENDED JULY 31, 1998 ("SECOND QUARTER OF 1998") COMPARED WITH THE
THREE MONTHS ENDED JULY 31, 1997 ("SECOND QUARTER OF 1997").
 
     Revenues increased 60% to $35.3 million in the second quarter of 1998 from
$22.1 million in the second quarter of 1997 primarily due to an increase in
enrollments at the Company's existing Learning Centers, the opening of six new
Learning Centers since the second quarter of 1997 and the growing popularity of
the Company's longer programs, including associate degree programs. In addition
to the opening of the six new Learning Centers, the Company acquired Boston
Education Corporation ("BEC") on December 23, 1997, Markerdowne on February 17,
1998, and Delta College on February 20, 1998, which added six Learning Centers.
In the second quarter of 1998, the twelve new Learning Centers collectively
contributed 69% of the total revenue growth.
 
     The number of students attending Learning Center programs as of the end of
the quarter increased 50% to 11,153 in the second quarter of 1998 from 7,446 in
the second quarter of 1997. In the second quarter of 1998, enrollments at
Learning Centers opened more than two fiscal years decreased by 610 or 21% from
the comparable period of the prior year while enrollments at Learning Centers
opened during the last two fiscal years, including acquisitions, increased by
1,011 from the comparable period of the prior year. Collectively, enrollments
increased by 401 or 13% for the second quarter of 1998 versus the second quarter
of 1997. The twelve new Learning Centers contributed 88% of the population
growth, including students attending the acquired Centers at the time of
acquisition currently enrolled as of July 31, 1998. When evaluating the sources
 
                                       11
<PAGE>   12
 
of growth, the Company views all Learning Centers opened during the last two
fiscal years as new in order to account for the start up period inherent in new
center openings.
 
     Accounts receivable (both long and short-term) net of reserves increased
64% as compared to the revenue increase of 60%. The larger percentage increase
in accounts receivable as compared to revenues can be attributed to the
following:
 
     When students enroll in CLC, accounts receivable are established for the
balance of course tuition with a corresponding amount recorded as deferred
revenue. While the accounts receivable balance may be paid at any time during
the course, deferred revenue is recognized ratably as tuition revenue over the
period of instruction, regardless of when accounts receivable are paid.
 
     Since accounts receivable balances increase immediately by the full unpaid
tuition amount when students enroll, while tuition revenues are earned ratably
over the period of instruction, there will not be a direct correlation between
the percentage increases in tuition revenues (and correspondingly, deferred
revenues) and in accounts receivable balances. This "lag" effect of revenues to
receivables, is further pronounced during the initial operations of a new
Learning Center since tuition revenues will be minimal when compared to
corresponding accounts receivable balances. The lag effect is not as evident for
established Learning Centers which provide a more consistent tuition revenue
stream. Additionally, Learning Centers in their second year of operations (those
opened in fiscal 1998) contribute significantly to the lag effect due to the
large levels of growth occurring in year two versus year one of operations.
Conversely, in periods of declining enrollments of the larger and more
established Learning Centers, the relative percentage of accounts receivable
growth will decline faster than the relative percentage of revenue growth. The
following summarizes the actual Learning Center openings and acquisitions for
the last two fiscal years.
 
<TABLE>
<CAPTION>
                                                              FISCAL   FISCAL
           LEARNING CENTER OPENINGS/ACQUISITIONS               1999     1998
           -------------------------------------              ------   ------
<S>                                                           <C>      <C>
First Quarter...............................................    5       --
Second Quarter..............................................    1        2
                                                                --
Third Quarter...............................................             1
Fourth Quarter..............................................             3
                                                                         --
          Total.............................................    6        6
                                                                ==       ==
</TABLE>
 
     Costs of instruction and services increased 90% to $23.4 million in the
second quarter of 1998 from $12.3 million in the second quarter of 1997 due
primarily to the direct costs necessary to support the increase in student
population. These direct costs consist primarily of faculty and staff
compensation and related benefits, and facility costs (including rent and
depreciation). Instruction costs and services as a percentage of revenues
increased to 66.4% in the second quarter of 1998 from 55.6% in the second
quarter of 1997. This increase in cost of instruction and services as a
percentage of revenue is primarily attributable to the start up of three
Learning Centers, lower enrollments during the second quarter at several of the
Company's more established Learning Centers and increased expense profiles of
U.S. based acquisitions with respect to revenues generated at these Centers. Due
to the start up period inherent in new Learning Center openings, the ratio of
cost of instruction and services with respect to revenues generated at those new
Centers typically is very high as fixed costs typically exceed revenues during
the start up period. Due to lower enrollments at some of our more established
Learning Centers, revenues that would have been generated from these enrollments
were not available to offset instructional expenses, creating a higher ratio of
cost of instruction. The U.S. based acquisitions are currently changing
curriculum to match the offerings of a traditional Learning Center. Until
complete, this transition will cause less efficient use of facilities and
teaching resources.
 
     Selling and promotional expenses increased 39% to $5.3 million in the
second quarter of 1998 from $3.8 million in the second quarter of 1997 due
primarily to increased marketing and advertising necessary to support the growth
in student enrollments. Selling and promotional expenses as a percentage of
revenues decreased to 15.1% in the second quarter of 1998 from 17.0% in the
second quarter of 1997 primarily due to
 
                                       12
<PAGE>   13
 
increased efficiencies associated with the Company's marketing efforts,
particularly those realized by the opening of new Learning Centers within
established Learning Center markets.
 
     General and administrative expenses increased 100% to $3.2 million in the
second quarter of 1998 from $1.6 million in the second quarter of 1997,
primarily as a result of the settlement with the Illinois Attorney General along
with legal expenses associated with the settlement and other related matters.
Collectively, these expenses amounted to approximately $1.4 million or 88% of
the $1.6 million increase in general and administrative expenses incurred during
the second quarter of 1998 versus the comparable period of the prior year.
General and administrative expenses as a percentage of revenues increased to
9.1% in the second quarter of 1998 from 7.4% in the second quarter of 1997.
 
     Provision for doubtful accounts increased 73% to $1.9 million in the second
quarter 1998 from $1.1 million in the second quarter of 1997, primarily due to
the increase in revenues of 60% and related accounts receivable balances.
Provision for doubtful accounts as a percentage of revenues increased to 5.4% in
the second quarter of 1998 from 5.1% in the second quarter of 1997.
 
     Amortization of intangibles equaled $143,000 in the second quarter of 1998
versus $91,000 in the second quarter of 1997. The increase in expense relates to
a non-compete agreement associated with the acquisition of Markerdowne.
 
     The Company realized net interest income of $135,000 in the second quarter
1998, compared to net interest income of $367,000 in the second quarter 1997.
This decrease can be attributed to a decrease in interest generated from smaller
average invested cash balances.
 
SIX MONTHS ENDED JULY 31, 1998 COMPARED WITH THE SIX MONTHS ENDED JULY 31, 1997
 
     Revenues increased 66% to $71.3 million for the six months ended July 31,
1998 from $43.0 million for the comparable period of the prior year primarily
due to an increase in enrollments at the Company's existing Learning Centers and
the opening of six new Learning Centers. In addition to the opening of the six
new Learning Centers, the Company acquired Boston Education Corporation ("BEC")
on December 23, 1997, Markerdowne on February 17, 1998, and Delta College on
February 20, 1998, which added six Learning Centers. For the six months ended
July 31,1998, the twelve new Learning Centers, opened or acquired, collectively
contributed 60% of the total revenue growth.
 
     For the six months ended July 31, 1998, enrollments at Learning Centers
opened more than two fiscal years decreased by 564 or 10% from the six months
ended July 31, 1997 while enrollments at Learning Centers opened during the last
two fiscal years increased by 1,825, collectively contributing a 22% increase in
student enrollments for the six months ended July 31, 1998 versus the comparable
period from the prior year. The number of students attending Learning Center
programs as of July 31, 1998 increased 50% to 11,153 from 7,446 from the
comparable period of the prior year. The twelve new Learning Centers contributed
88% of the population growth, including students attending the acquired Centers
at the time of acquisition who are still enrolled as of July 31, 1998. When
evaluating the sources of growth, the Company views all Learning Centers opened
during the last two fiscal years as new in order to account for the start up
period inherent in new center openings.
 
     Costs of instruction and services increased 86% to $43.8 million for the
six months ended July 31, 1998 from $23.5 million for the comparable period of
the prior year due primarily to the direct costs necessary to support the
increase in student population. These direct costs consist primarily of faculty
and staff compensation and related benefits, and facility costs (including rent
and depreciation). Instruction costs and services as a percentage of revenues
increased to 61.5% for the six months ended July 31, 1998 from 54.8% for the
comparable period of the prior year. This increase in cost of instruction and
services as a percentage of revenue is primarily attributable to the start up of
three Learning Centers, lower enrollments during the second quarter at several
of the Company's more established Learning Centers and increased expense
profiles of U.S. based acquisitions with respect to revenues generated at these
Centers.
 
     Selling and promotional expenses increased 50% to $10.5 million for the six
months ended July 31, 1998 from $7.0 million for the comparable period of the
prior year primarily to increased marketing and advertising
                                       13
<PAGE>   14
 
necessary to support the growth in student enrollments. Selling and promotional
expenses as a percentage of revenues decreased to 14.7% for the six months ended
July 31, 1998 from 16.3% for the comparable period of the prior year primarily
due to increased efficiencies associated with the Company's marketing efforts,
particularly those realized by the opening of new Learning Centers within
established Learning Center markets.
 
     General and administrative expenses increased 94% to $6.8 million for the
six months ended July 31, 1998 from $3.5 million for the comparable period of
the prior year primarily as a result of increased legal and professional fees
related to the settlement with the Illinois Attorney General, the Illinois State
Board of Education 30-day suspension of marketing and student enrollment
activities, as well as expenses related to the acquisitions of Markerdowne and
Delta College. Collectively, these expenses amount to approximately $2.4 million
or 73% of the $3.3 million increase in general and administrative expenses
incurred during the six months ended July 31, 1998 versus the comparable period
from the prior year. General and administrative expenses as a percentage of
revenues increased to 9.5% for the six months ended July 31, 1998 from 8.2% for
the comparable period of the prior year.
 
     Provision for doubtful accounts increased 100% to $4.0 million for the six
months ended July 31, 1998 from $2.0 million for the comparable period of the
prior year primarily due to the increase in revenues of 66% and related accounts
receivable balances. Provision for doubtful accounts as a percentage of revenues
increased to 5.6% for the six months ended July 31, 1998 from 4.6% for the
comparable period of the prior year.
 
     Amortization of intangibles equaled $275,000 for the six months ended July
31, 1998 versus $181,000 for the comparable period of the prior year. This
increase relates to a non-compete agreement associated with the acquisition of
Markerdowne.
 
     The Company realized net interest income of $419,000 for the six months
ended July 31, 1998 versus $713,000 for the comparable period of the prior year
primarily due to a decrease in interest generated from smaller average invested
cash balances.
 
     The Company realized a gain of $279,000 from the sale of investment
securities. The securities were obtained in November 1995 pursuant to a
demutualization of the Company's health insurance carrier.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     The Company's cash and cash equivalent decreased by approximately $16.5
million for the six-month period ended July 31, 1998. Cash generated from
operations for the six months ended July 31, 1998 compared to the prior year
period decreased by approximately $11.3 million primarily due to the increase in
accounts receivable. Capital expenditures increased to $12.3 million in 1998
from $9.1 million in 1997 primarily as a result of funding leasehold
improvements for new Learning Centers, coupled with purchasing necessary capital
equipment to support the growth of the business.
 
     The Company believes its available cash on hand, cash provided by operating
activities and existing lines of credit under the credit facility will be
sufficient to meet the Company's cash requirements for at least the next twelve
months. Thereafter, the Company will continue to evaluate all sources of capital
available to it, including bank financing and additional equity or debt
offerings, to satisfy ongoing working capital and capital expenditure
requirements.
 
STUDENT LOAN DEFAULTS
 
     Under Title IV ("Title IV") of the Higher Education Act of 1965, as
amended, ("HEA"), an educational institution may lose its eligibility to
participate in some or all of the federal student financial aid programs
authorized by Title IV ("Title IV Programs") if defaults on the repayment of
student loans guaranteed or provided by the federal government exceed certain
rates. Any institution that is determined to have cohort default rates ("CDR")
equal to or exceeding 25% for three consecutive federal fiscal years is subject
to immediate loss of eligibility to participate in the Federal Family Education
Loan ("FFEL") and Federal Direct Loan ("FDL") programs for the remainder of the
federal fiscal year in which the U.S.
                                       14
<PAGE>   15
 
Department of Education ("DOE") makes such determination and the subsequent two
federal fiscal years. Furthermore, an institution whose CDR on FFEL or FDL loans
for any federal fiscal year exceeds 40% may have its eligibility to participate
in all of the Title IV Programs limited, suspended or terminated.
 
     In May 1998, the DOE notified the Company of the Learning Centers' 1996
Draft CDRs for the FFEL and FDL programs. The 1996 Draft CDRs are calculated on
the basis of the number of students who entered repayment on their federal
student loans during the federal fiscal year ("FFY") ended September 30, 1996
and defaulted on those loans by September 30, 1997. None of the Company's
Learning Centers received a 1996 Draft CDR of 25% or more and the weighted
average 1996 Draft CDR for the Company's U.S.-based Learning Centers was 14.5%.
 
     An institution also has the right to appeal the accuracy of the DOE's
calculations of its CDRs following their publication. Draft CDRs are subject to
correction before they are published. Management does not believe such
corrections will result in material changes to the Learning Centers' 1996 Draft
CDRs. All Learning Centers, regardless of their cohort default and FDL rates,
have adopted default management plans.
 
STATE AUTHORIZATION AND ACCREDITATION
 
     The Company is dependent on the authorization of the applicable agency or
agencies of each state within which a Learning Center is located to allow it to
operate and to grant degrees or diplomas to students. State authorization is
also required in order for an institution to become and remain eligible to
participate in the Title IV Programs. The Company is subject to extensive and
varying regulation in each of the states in which the Learning Centers currently
operate. State laws and regulations affect the Company's operations and may
limit the ability of the Company to introduce degree programs or to initiate new
programs of study, or to obtain authorization to operate in certain additional
states. State regulatory requirements may overlap or exceed federal
requirements.
 
     By letter dated April 3, 1998, from the State Superintendent of Education
of the State of Illinois, to the Schaumburg Learning Center (the "Letter"), the
Illinois State Board of Education ("ISBE"), the agency of the State of Illinois
that authorizes the Schaumburg Learning Center, notified the Schaumburg Learning
Center that ISBE had determined that certain activities and procedures of the
Schaumburg Learning Center were not in compliance with the Illinois Private
Business and Vocational Schools Act ("Schools Act"). The Letter directed the
Company to report by April 21,1998 on actions taken to correct the deficiencies
cited in the Letter and to demonstrate by May 6, 1998 that the deficiencies have
been corrected. The Letter further notified the Company that the Superintendent
would proceed to a hearing on the issue of whether the license of the Schaumburg
Learning Center should be placed on probation, suspended or revoked for a period
of one year if the violations of the Schools Act were not corrected. The Letter
also directed that the Schaumburg Learning Center cease and desist from all
marketing and student enrollment activities until May 6, 1998.
 
     On April 21, 1998, the Company timely submitted its initial response to the
ISBE and, in part on the basis of such response, on May 7, 1998, the ISBE
removed the cease and desist order thereby allowing the Company to resume normal
marketing and student enrollment activities at the Schaumburg Learning Center.
While this review remains open and additional information has been provided to
ISBE, the Company believes that it will be able to satisfy the ISBE that the
Schaumburg Learning Center is operated in substantial compliance with the
Schools Act and that the review will be concluded with no material adverse
effect on the Company.
 
     The loss of state authorization by an existing Learning Center or the
failure of a new or newly acquired Learning Center to obtain state authorization
would render the affected Learning Center ineligible to participate in the Title
IV Programs, could affect its accreditation and would have a material adverse
effect on the Company.
 
     Accreditation by an accrediting agency recognized by the DOE is required in
order for an institution to become and remain eligible to participate in the
Title IV Programs. In addition, most states require institutions operating
therein to become and continue to be accredited as a condition of continuing
state authorization, particularly with regard to the issuance of degrees. All of
the Company's Learning Centers are
 
                                       15
<PAGE>   16
 
accredited by the Accrediting Council for Independent Colleges and Schools
("ACICS"), which is an accrediting agency recognized by the DOE. Two of the
twenty-two Learning Centers are due for renewal of accreditation during fiscal
1999. The loss of accreditation by an existing Learning Center or the failure of
a new or newly acquired Learning Center to obtain accreditation would render the
affected Learning Center ineligible to participate in the Title IV Programs,
could affect its state authorization and would have a material adverse effect on
the Company.
 
HEIGHTENED CASH MONITORING
 
     On April 6, 1998, the Company was notified by the DOE that, based upon
DOE's monitoring of recent litigation involving the Company and certain student
complaints lodged against the Company, it placed all Learning Centers on a
"heightened cash monitoring status." This status allows all Learning Centers to
continue to receive federal student financial assistance funds so long as the
funds requested are drawn after they have been credited to student accounts and
CLC subsequently provides evidence of such credit and other supporting
information to DOE. The DOE does not consider "heightened cash monitoring
status" to represent either an adverse or punitive action. This action by DOE
should not have any effect on the availability or timing of financial assistance
to the Company's students, nor should it have a material effect on the Company's
cash flow or operating results.
 
OTHER
 
     Under a separate standard of financial responsibility, if based upon the
annual financial aid review, an institution has made late refunds to 5% or more
of its students in either of the two most recent fiscal years, the institution
is required to post a letter of credit in favor of the DOE in an amount equal to
25% of the total Title IV Program refunds paid by the institution in its prior
fiscal year. Based on this standard, on August 31, 1998, the Company posted a
$1.5 million letter of credit with respect to all Learning Centers except Delta
College, and the Boston and Paramus Learning Centers.
 
CANADIAN REGULATION
 
     Students who are residents of the province of Quebec are eligible to
receive loans and bursaries ("grants") from the Quebec Loans and Bursaries
Program ("QLBP"). Under the QLBP, student financial assistance is initially
provided in the form of a loan. Delta College (the "Company"), is subject to the
Act Respecting Private Education ("ARPE") in Quebec. In accordance with ARPE, in
order to operate a private educational institution, the Company must hold a
permit issued by the Quebec Minister of Education (the "QME") for the
institution itself and for the educational services to be provided. The QME will
issue the permit after consulting with the Commission Consultative de
l'Enseignement Prive (the "Commission") concerning the particular institution
and the educational services to determine if such institution and services meet
certain qualifying conditions. Permits cannot be transferred without the written
authorization of the QME, and any entity holding a permit must advise the QME of
any consolidation, sale or transfer affecting such entity. Prior to any action,
the QME, after consultation with the Commission, has the authority to modify or
revoke a permit where the holder of the permit, among other things: does not
comply with the conditions, restrictions or prohibitions relating to the
institution or, is about to become, insolvent. Prior to any action, the QME must
provide the institution with an opportunity to present its views before revoking
a permit. Given that the QME periodically revises its regulations and other
requirements and changes its interpretations of existing laws and regulations,
there can be no assurance that the QME will agree with the Company's
understanding of each requirement of the QME.
 
     The Company does not believe that the QME's requirements will create
significant obstacles to its plans to acquire additional institutions, or open
new branches in Quebec or that the QME's requirements will create significant
obstacles to its plans to add new educational programs at Delta College, in
Quebec. In addition, the Company does not believe that there will be any
impediment to renewal of the permit issued to Delta College, in Quebec, under
the ARPE.
 
                                       16
<PAGE>   17
 
     The legislative, regulatory and other requirements relating to student
financial assistance programs in Quebec are currently in the process of being
changed by applicable governments due to political and budgetary pressures and
any such change may affect the eligibility for student financial assistance of
the students attending Delta College which, in turn, could materially adversely
affect Delta College's business, results of operations and financial condition.
 
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
 
     The following factors, among others, could cause actual results to differ
materially from those contained in forward looking statements made in this
Report on Form 10-Q and presented elsewhere by management from time to time.
 
POTENTIAL ADVERSE EFFECTS OF REGULATION
 
     The Company is dependent on the authorization of the applicable agency or
agencies of each state within which a Learning Center is located to allow it to
operate and to grant degrees or diplomas to students. State authorization is
also required in order for an institution to become and remain eligible to
participate in the Title IV Programs. The Company is subject to extensive and
varying regulation in each of the states in which the Learning Centers currently
operate.
 
     The loss of state authorization by an existing Learning Center or the
failure of a new or newly acquired Learning Center to obtain state authorization
would render the affected Learning Center ineligible to participate in the Title
IV Programs, could affect its accreditation and would have a material adverse
effect on the Company.
 
     As educational institutions that participate in various federal and state
financial aid programs, the Company and the Learning Centers are subject to
extensive governmental regulation. In particular, the HEA, and the regulations
promulgated thereunder, subject the Company, the Learning Centers and all other
higher education institutions eligible to participate in the various Title IV
Programs to significant regulatory scrutiny. The termination or material
limitation of the ability of the Company or any of the Learning Centers to
participate in the Title IV Programs would have a material adverse effect on the
Company.
 
     Because certain statutory and regulatory provisions impose significant
requirements on the Company and the Learning Centers and because the agencies
administering these regulations have not in all instances fully developed
administrative interpretations of certain of the statutory and regulatory
provisions, it is not clear how the requirements imposed by statute and
regulations will be applied and interpreted. In addition, changes in or new
interpretations of the HEA, its implementing regulations or other applicable
laws, rules or regulations could have a material adverse effect on the
accreditation, authorization to operate in various states, permissible
activities or costs of doing business of the Company or one or more of the
Learning Centers. The failure to maintain or renew any required regulatory
approvals, accreditations or authorizations by the Company or any of the
Learning Centers would have a material adverse effect on the Company.
 
CONTROL BY GENERAL ATLANTIC ENTITIES; POTENTIAL ADVERSE REGULATORY EFFECTS OF
CHANGE OF CONTROL
 
     General Atlantic Corporation ("GAC"), General Atlantic Partners II, L.P.
("GAP") and GAP-CLC Partners, L.P. ("GAP-CLC") (collectively, the "General
Atlantic Entities") beneficially own approximately 17.0% of the outstanding
shares of Common Stock. Consequently, the General Atlantic Entities, and GAC in
particular, will continue to have significant influence over the policies and
affairs of the Company and may be in a position to determine the outcome of
corporate actions requiring stockholder approval, including the election of
directors, the adoption of amendments to the Company's Certificate of
Incorporation and the approval of mergers and sales of the Company's assets.
 
     Because of the control position of the General Atlantic Entities, any
disposition of CLC's Common Stock by the General Atlantic Entities or issuance
of stock by the Company that results in a loss of control by the General
Atlantic Entities may have material adverse consequences for the Company under
applicable federal and state regulations and accrediting agency requirements,
including potential loss of eligibility to participate
 
                                       17
<PAGE>   18
 
in the Title IV Programs. Upon a change of ownership resulting in a change in
control of the Company, as defined in the HEA and the DOE's regulations, each
Learning Center would lose its eligibility to participate in the Title IV
Programs for an indeterminate period of time while it applies to regain
eligibility, with the likely loss of a portion, or all, of its Title IV funding
during the reapproval period. A change of control also would have significant
regulatory consequences for the Company at the state level and could affect the
accreditation of the Learning Centers.
 
     The HEA and the DOE's regulations include the sale of a controlling
interest of common stock of an institution or its parent corporation in the
definition of a change of control. For a publicly traded corporation, DOE
regulations specify that a change of control occurs at the same time that a
report on Form 8-K is required to be filed with the Securities and Exchange
Commission reporting a change of control. Most states and accrediting agencies
have similar requirements, but they do not uniformly define a change of control.
A change of control of the Company that exceeds the threshold set by the DOE
would have a material adverse effect on the Company.
 
COMPETITION
 
     The post-secondary adult education and training market is highly
fragmented, with no single institution or company holding a dominant market
share. The Company competes for students with vocational and technical training
schools, degree-granting colleges and universities, continuing education
programs and commercial training programs. Certain public and private colleges
may offer programs similar to those of the Learning Centers at a lower tuition
cost due in part to substantial government subsidies, foundation grants,
tax-deductible contributions or other financial resources not available to
proprietary institutions.
 
DEPENDENCE ON NEW PROGRAMS; RISKS ASSOCIATED WITH CHANGES IN TECHNOLOGY AND
GROWTH
 
     The market for the Company's programs and services is characterized by
rapidly-changing requirements and characteristics, and the Company's ability to
develop and offer new programs and services and to open new locations is subject
to extensive state and federal regulation and accrediting agency requirements.
If the Company is unable, for financial, regulatory or other reasons, to develop
and offer new programs and services in a timely manner in response to changes in
the industry, or if programs and services offered by the Company fail to gain or
maintain widespread commercial acceptance, the Company's business may be
materially and adversely affected.
 
     The Company offers training programs and services for rapidly-changing
information technology. The introduction of information products embodying new
technologies and the emergence of new information system standards or services
may adversely affect the Company's ability to market its programs and services.
This may require the Company to make substantial expenditures in order to
develop new programs and services and to acquire new faculty, equipment and
facilities. If the Company is unable, for financial, regulatory or other
reasons, to make those expenditures or acquisitions, the Company's business may
be materially and adversely affected.
 
     The Company's ability to meet its future operating and financial goals will
depend upon the Company's ability to successfully implement its growth strategy
which will include the introduction of new locations, as well as the potential
acquisition of assets and programs complementary to the Company's operations.
The Company's success in this area will depend on its ability to successfully
integrate such new locations, assets and businesses. There can be no assurance
that the Company will be able to implement or manage expansion effectively.
 
DEPENDENCE UPON KEY EMPLOYEES
 
     The Company's success depends to a significant extent upon the continued
service of its executive officers and other key personnel. None of the Company's
executive officers or key employees, other than the President and Chief
Executive Officer, the Chief Financial Officer and the Chief Operating Officer
are subject to an employment or non-competition agreement. The loss of the
services of any of its executive officers or other key employees could have a
material adverse effect on the Company. The Company's future success will depend
in
                                       18
<PAGE>   19
 
part upon its continuing ability to attract and retain highly qualified
personnel. There can be no assurance that the Company will be successful in
attracting and retaining such personnel.
 
GENERAL
 
     Because of these and other factors, past financial performance should not
be considered an indicator of future performance. Investors should not use
historical trends to anticipate future results and should be aware that the
trading price of the Company's Common Stock may be subject to wide fluctuations
in response to quarter-to-quarter variations in operating results, general
conditions in the education and training industry, changes in earnings estimates
and recommendations by analysts or other events.
 
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS.
 
     Not Applicable.
 
                                       19
<PAGE>   20
 
                           PART II. OTHER INFORMATION
 
ITEM 1.  LEGAL PROCEEDINGS.
 
     On March 10, 1998, the Attorney General of Illinois filed a complaint
against the Company in Circuit Court in Cook County, Illinois, asserting that
the Company had violated the Illinois Private Business and Vocational Schools
Act and the Illinois Consumer Fraud and Deceptive Business Practices Act (the
"Acts") at its Schaumburg Learning Center. The complaint alleged that the
Company, at the Schaumburg Learning Center, failed to provide certain
educational services and resources and misrepresented certain information
respecting services, resources, occupational opportunities and student outcomes.
The complaint sought suspension of the Schaumburg Center's charter to operate
within Illinois, restitution to persons alleged to have been injured by the
conduct of the Schaumburg Learning Center, costs, civil penalties totaling
$100,000 for violations of the Acts and an additional civil penalty of $50,000
for each alleged violation of each of the Acts, committed with intent to
defraud. On June 4, 1998, the Company timely filed an answer denying all of the
material allegations set forth in the complaint.
 
     On June 8, 1998, the Company and the Attorney General of Illinois reached
an agreement settling the litigation filed on March 10, 1998. As a result of the
settlement, which was approved by the Circuit Court in Cook County, Illinois,
the Company agreed to make a voluntary contribution of $90,000 to the Attorney
General's consumer education fund, establish a four-year program to annually
provide $95,000 worth of computer hardware and software annually to schools,
programs, community sites and other non-profit or public institutions in the
Chicago area and $10,000 worth of training in computer skills annually at the
Company's Schaumburg and Chicago Learning Centers for teachers and other
community-based personnel to enable them to make the most effective use of the
computer equipment. The Company has established an Ombudsman program to provide
for the prompt investigation and impartial resolution of student complaints. The
Company does not believe that the settlement will have a material adverse effect
on the Company.
 
     On March 13, 1998, a class action lawsuit was filed against the Company in
the United States District Court for the Central District of California on
behalf of all purchasers of Company Common Stock from April 30, 1997 through
March 10, 1998. Over the following two months, eight additional similar cases
were filed in United States District Courts: two in the Central District of
California; five in the Northern District of Illinois; and one in the Eastern
District of Virginia. The complaints allege violations of the Securities
Exchange Act of 1934, including allegations that the Company is experiencing
"operations difficulties" and failed to disclose the alleged difficulties. The
complaints also allege that Company insiders realized profits by trading their
shares of Company stock while in possession of material adverse information. All
of the complaints were filed on behalf of classes of shareholders of Company
Common Stock beginning as early as March 11, 1997 and ending as late as April 7,
1998. All of these shareholder lawsuits have been consolidated and transferred
to the United States District Court for the Eastern District of Virginia,
however, discovery has not yet commenced. The Company is unable to estimate the
outcome of the matter or any potential liability.
 
     On May 5, 1998, a class action lawsuit was filed against the Company in the
Superior Court of New Jersey in Bergen County, New Jersey, on behalf of all
students who attended a Learning Center in New Jersey within six years of May 5,
1998. The complaint alleges that the Company, at its New Jersey Learning
Centers, failed to provide certain educational services and resources,
misrepresented certain information respecting services, resources, occupational
opportunities and student outcomes, and violated the New Jersey Consumer Fraud
Act. The Company is unable to estimate the outcome of the matter or any
potential liability.
 
     On May 19, 1998, a lawsuit was filed against the Company in the District
Court of Harris County, Texas, on behalf of six former students of the Houston
Learning Center. Subsequently, the complaint was amended to seek certification
as a class action lawsuit and removed to the U.S. District Court for the
Southern District of Texas, Houston Division. The complaint alleges, among other
things, that the Company, at its Houston Learning Center, failed to provide
certain educational services and resources, misrepresented certain information
respecting services, resources, occupational opportunities and student outcomes,
and violated the Texas Deceptive Trade Practices Act. The Company is unable to
estimate the outcome of the matter or any potential liability.
 
                                       20
<PAGE>   21
 
     The Company intends to defend itself vigorously in the above class action
lawsuits; however, there can be no assurance that the Company will be successful
in defending itself in any of these proceedings. Even if the Company prevails on
the merits in such litigation, the Company expects to incur legal and other
defense costs as a result of such proceedings. These proceedings could involve
substantial diversion of the time of some members of management, and an adverse
determination in, or settlement of, such litigation could involve the payment of
significant amounts, or could include terms in addition to such payments, which
could have a severe impact on the Company's business, financial condition and
results of operations.
 
     There can be no assurance that additional legal proceedings will not be
filed or that adverse action will not be initiated against the Company, either
by attorneys general of various states, federal or state regulators, an
accrediting organization, or other parties. Any such legal proceedings or
adverse action could have a severe impact on the Company's business, financial
condition and results of operations.
 
ITEM 2.  CHANGES IN SECURITIES.
 
       Not applicable.
 
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.
 
       Not applicable.
 
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
 
     The Company's 1998 Annual Meeting of Stockholders was held on August 25,
1998. Represented, in person or by proxy were 14,568,868 shares, or
approximately 83% of total shares outstanding. The following actions were taken:
 
     1. Election of two Class III Directors to serve until 2001 Annual Meeting
        of Stockholders. The two nominees, John L. Corse and Ralph W. Clark were
        elected by the following vote:
 
<TABLE>
<CAPTION>
          NOMINEES            FOR        AGAINST    NON-VOTE
          --------         ----------   ---------   ---------
    <S>                    <C>          <C>         <C>
    Mr. Corse              14,534,208    34,660         0
    Mr. Clark              14,534,208    34,660         0
</TABLE>
 
     2. To approve the Company's 1998 Stock Incentive Plan.
 
<TABLE>
<CAPTION>
                              FOR        AGAINST    NON-VOTE
                           ----------   ---------   ---------
    <S>                    <C>          <C>         <C>
                           9,957,098    1,948,231   2,663,539
</TABLE>
 
     3. Ratification of the selection by the Board of Directors of
        PriceWaterhouseCoopers, LLP as independent accountants for the current
        fiscal year.
 
<TABLE>
<CAPTION>
                              FOR       AGAINST   NON-VOTE
                           ----------   -------   --------
    <S>                    <C>          <C>       <C>
                           14,541,615   14,030    13,223
</TABLE>
 
ITEM 5.  OTHER INFORMATION.
 
     Not applicable.
 
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.
 
     (a) EXHIBITS
 
     A list of exhibits required to be filed as part of this report is set forth
in the Index to exhibits, which immediately precedes such exhibits and is
incorporated herein by reference.
 
     (b) REPORTS ON FORM 8-K
 
<TABLE>
<CAPTION>
      REPORT DATE                                                        EVENT REPORTED
      -----------                                                        --------------
<S>                                             <C>
June 19, 1998                                   The Company reached agreement with the Attorney General of
                                                Illinois settling the litigation filed of March 10, 1998.
</TABLE>
 
                                       21
<PAGE>   22
 
                                   SIGNATURES
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
 
Date: September 14, 1998
                                          COMPUTER LEARNING CENTERS, INC.
 
                                          By: /s/ CHARLES L. COSGROVE
                                            ------------------------------------
                                            Charles L. Cosgrove
                                            Vice President and Chief Financial
                                              Officer
                                            (Principal Financial Officer)
 
                                       22
<PAGE>   23
 
                               INDEX TO EXHIBITS
 
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                   DESCRIPTION                          PAGE NO. IN THIS FILING
-------                  -----------                          -----------------------
<C>       <S>                                        <C>
   3.1    Second Amended and Restated Certificate    Incorporated by reference to Exhibit 3.1
          of Incorporation of the Registrant, as     of the Registrant's report on Form 10-Q
          amended                                    for the quarter ended July 31, 1997 filed
                                                     September 9, 1997
   3.2    Amended and Restated Bylaws of the         Incorporated by reference to Exhibit 3.4
          Registrant                                 of the Registrant's Form S-1 Registration
                                                     Statement as amended, filed March 29,
                                                     1995 (No. 33-90716)(the "Form S-1")
   4.1    Form of Certificate for Shares of the      Incorporated by reference to Exhibit 4.1
          Registrant's Common Stock                  of the Form S-1
  10.1    Severance Agreement with Susan Luster      Page
  11.1    Statement re: Computation of Per Share     Page
          Earnings
  27      Financial Data Schedule                    Page
</TABLE>
 
                                       23