“We are pleased to announce the completion of another step towards achieving our financial goals for the year. While there is still much work to be done over the next two quarters, we are pleased with the results of our re-engineering process and the significant improvement in our operating picture,” said Chris Whittle, the company’s CEO and Founder.

Net revenues for the quarter were approximately 5% lower than the prior year, due primarily to the ending of certain unprofitable contracts and the deferral of revenue for certain unsigned contracts, which was partially offset by revenue from the opening of new schools and expansion of existing schools. Revenues were $109.6 million, versus $115.6 million the same period a year ago. The company’s Gross Site Contribution rose 11.2% versus last year to $21.9 million from $19.7 million a year ago. Edison reported an improvement in its EBITDA, excluding non-cash stock based compensation charges, from $948,000 in the same period last year to $2.9 million this period. The company’s net loss for the period was $9.1 million, which improved from a net loss of $11.7 million for the same period last year. The company’s loss per share was 17 cents, an improvement from 22 cents for the same period a year ago.

The company said it expects to generate approximately $33 million in EBITDA, excluding stock based compensation charges, during the next two quarters, $6 million and $27 million for the third and fourth quarters, respectively. Edison said it is making improvements in the timing of its receivables collection with managed schools receivables having been reduced by $8.5 million since year-end. Management believes these accelerated account collections should reduce receivables from managed school clients by approximately $20 million by year-end. In addition to a successful refinancing of approximately $7 million in the second quarter, management believes that a minimum of $23 million of refinancings on its charter notes will close in the next two quarters.

The combination of improved EBITDA, cash on the balance sheet, refinancing of the notes receivable and better receivables timing will place the Company in a strong financial position at year end.

Management continues to be comfortable with the company’s liquidity position. The company’s cash balance improved from $31.5 million on September 30, 2002 to $37 million on December 31, 2002. The company expects to end the fiscal year with cash on the balance sheet of approximately $25 million. This amount would be after a material reduction in the company’s debt level and substantial investment in FY04 new business.

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 a substantial amount of non-cash charges being written off during the third quarter caused by accelerating the amortization of fees associated with prior financing arrangements.

The company’s balance sheet remains strong with shareholder equity of approximately $209 million or $3.86 per share. Shareholders should take note of a number of important items on the company’s balance sheet including $37 million in cash, approximately $80 million in notes due to us, and over $70 million in receivables.

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