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 Edison Schools Reports Significant Improvements in Net Loss and in EBITDA for its Third Quarter Wednesday, May 14, 2003 Edison announced today that it improved its loss per share in the third quarter by 50% from a loss of 24 cents per share last year to a loss of 12 cents per share this year. Net loss for the quarter improved to a loss of $6.4 million versus a loss of $12.8 million in the prior quarter. The company also reported a significant turn-around in its EBITDA, net of non-cash stock compensation (see attached financial statement for reconciliation of this number), producing $5.8 million in EBITDA for this third quarter up from an EBITDA loss of $.6 million in the same period last year. (The $.6 million loss from last years third quarter excludes a $6.8 million write-down taken in its investment in Apex Online Learning. With this included, the improvement in EBITDA production would be even more significant.) We are very pleased with the performance of the company through the first three quarters of our year. We believe Edison has executed a dramatic financial turnaround, which will culminate with the achievement of our first ever net income in the current quarter, said Chris Whittle, the companys founder and CEO. Our performance in the 4th quarter will determine whether we achieve our goal of $26 million of EBITDA for the full fiscal period, which would be up from a negative EBITDA of $52 million last year. As always, there are upsides and downsides that we are managing, but, with three quarters behind us, we now believe those are within a narrow range of roughly $2-3 million. Net revenues for the quarter were approximately 11% lower than the prior year, due primarily to the ending of certain unprofitable contracts, the deferral of revenue for a certain unsigned contract and a change in three management contracts from a gross or net accounting basis to a fixed fee basis. Net revenues were $108.4 million, versus $121.9 million the same period a year ago. The companys Gross Site Contribution (see attached financial statement for reconciliation of this number) rose 5.5% versus last year to $22.9 million from $21.7 million a year ago. For the third quarter in a row, the companys cash balance was over $30 million. Its cash position is $32.7 million compared with $31.5 million on September 30, 2002 and $37.0 million on December 31, 2002. The companys balance sheet remains strong with shareholder equity of approximately $202 million or $3.82 per share. ã
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