“Though much work remains over the next few months, we now have more visibility into our fourth quarter, with the marketing efforts for our summer program being substantially complete. As we expected, we will see significant growth in our summer school revenues. If we continue to execute on the cost side of our business, we are confident of a net income in the $11 million range for the period,” said Chris Whittle, the company’s CEO and Founder. “This would be a very important event for the Edison team and a dramatic turn around from a $48.9 million loss in the same period last year.”

In addition, after completing its first six months of the fiscal year, the company said that it remains on-course to achieve its guidance of $26 million in EBITDA (excluding non-cash stock compensation charges) for the year ending June 30, 2003. This would be the first year the company has posted positive annual EBITDA (excluding non-cash stock compensation charges) and would represent a significant improvement over last fiscal year’s performance which was an EBITDA loss of $52.7 million, excluding effects of non-cash stock compensation.

The company said it would report detailed financial results for the second quarter later today, February 13, and that it will post positive EBITDA (excluding non-cash stock compensation charges) for that quarter of approximately $2.9 million, up about three-fold from approximately $900,000 in the same period last year. The company said its net loss for the second quarter was approximately $9.1 million, an improvement of 22% over the same period last year.

Edison also provided, for the first time, specific quarterly guidance for the third and fourth quarters of this year. It expects to produce positive EBITDA (excluding non-cash stock compensation charges) of approximately $6 million and $27 million, respectively, in the third and fourth quarters. The approximately $3 million increase in EBITDA between the second and third quarters will partially result from the signing of three previously unsigned contracts (which deferred GSC of approximately $1 million); a $1 million reduction in central spend versus the second quarter; and school pre-opening and re-engineering costs of approximately $1 million that occurred in the second quarter but will not reoccur in the third quarter. The significant increase in EBITDA from the third to the fourth quarter will be due primarily to the operations of Edison’s summer school program.

Given the above positive trends in its business, Edison announced that during the third quarter it is planning to refinance certain of its debt facilities to achieve lower overall financing costs. This may result in certain non-cash charges caused by accelerating the amortization of fees associated with prior financing arrangements.

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