“In order to manage our own schools, Edison built a variety of state-of-the-art-systems. Over the past two years many districts have approached us interested in purchasing certain of these systems, rather than incurring the costs of building their own,” said Jim Howland, Edison Chief Development Officer. “In response, we conducted research on which of our various capabilities would be of most interest to districts. One particular cluster of systems, which we call Achievement Management Solutions, registered very high marks. This is the first service we are making available through our Affiliates division.”

“Specifically, Edison has developed three strengths in Achievement Management,” said John Chubb, Edison Chief Education Officer. “ First, we have created an electronic capability called Benchmark Assessments which provide teachers and administrators with a monthly analysis of how individual students are progressing against end-of-year state specific standards. Second, we have developed a series of training/professional development programs designed to help teachers and staff use this data, with particular emphasis on how teachers can alter instructional strategies to maximize student achievement growth . Finally, Edison has created a position called Achievement Advisor, based on the 14 full-time “achievement coaches” who currently serve our 150 partnership schools. Edison is now offering these three strengths (our electronic systems, our training, and our coaching system) to districts throughout the country.”

The company expects its Achievement Management Solutions to become a “4th channel” of business with the other three being Contract Schools, Charter Schools and Summer School/After School/Supplemental Services. “We believe this is going to emerge as a very important channel within Edison,” said Howland. “There are 15,000 school districts in the United States serving nearly 50 million children and each and every school system is now responding to increased accountability demands. We’ve spent millions developing achievement systems for our own schools. Districts immediately realize how powerful these are. Most important, the districts understand that we are offering much more than our software. We’re also providing a wrap-around of know-how that only comes through our experience of actually running schools.”

Edison has launched the program with a 1,900 student school district in Colorado this past summer. The company will estimate its revenues for this new channel next spring when most contracts for FY04 will be complete.

Edison recently raised its EBITDA estimates for the total company in the current fiscal year by 30 percent, saying it expects to generate annual EBITDA of $26 million. The company also said that it expects to post positive net income in the fourth quarter of this fiscal year, the first quarterly net income in the company's 10-year history.

In addition, Edison announced that it expects to generate approximately $50 to $70 million in incremental cash flow during the next three quarters from refinancing of a portion of its notes receivable from charter schools (approximately $30-$50 million), and improvements in the collection of receivables from its managed schools customers (approximately $20 million).

The company’s balance sheet remains strong with shareholder equity of $219 million or $4.07 per share, including $31.5 million of cash on hand at September 30, 2002. The company expects to end the year with cash on the balance sheet of approximately $25 million. This amount would be after material reduction in the company’s debt level and substantial investment in FY04 new business.

The company also recently announced that it was entering the After-School and Supplemental Services businesses, as well as substantially expanding its Summer School business.

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