Net loss improved by 50%, and Company Posts Positive EBITDA of $5.8 million
vs. $.6 million EBITDA Loss in Same FY02 Period
Company's Cash Position Remains Strong at $32.7 Million
NEW YORK, May 14 /PRNewswire-FirstCall/ --
Edison Schools Inc. (Nasdaq: EDSN), the nation's leading private manager of
public schools, 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 year's 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 company's
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 company's 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 company's 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 company's balance sheet remains strong with shareholder equity of
approximately $202 million or $3.82 per share.
ABOUT EDISON SCHOOLS
Founded in 1992, Edison partners with school districts and charter boards
to raise student achievement through its research-based school design, aligned
assessment systems, interactive professional development, integrated use of
technology and other proven program features. Edison students are achieving
annual academic gains well above national norms. Edison Schools now serves
more than 110,000 public school students in over 20 states through four
different business channels: (1) the management of schools for school
districts, (2) charter schools, (3) summer and after-school programs, and (4)
achievement management solutions for school systems. The company operates 149
full-year schools and 178 summer schools.
Between 1992 and 1995 and in on-going efforts, Edison's team of leading
educators and scholars has conducted intensive research to develop its school
design and support systems. Edison opened its first four schools in August
1995, and has grown rapidly in every subsequent year. For more information,
please visit http://www.edisonschools.com.
Any statements in this press release and any other press release issued by
Edison on or about the date hereof about future expectations, plans and
prospects for Edison, including statements containing the words "believes,"
"anticipates," "plans," "expects," "will," and similar expressions, constitute
forward-looking statements within the meaning of The Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from
those indicated by such forward-looking statements as a result of various
important factors, including the risk factors discussed in our most recent
annual report on form 10-K/A filed with the SEC. The forward-looking
statements included in this press release represent Edison's estimates as of
May 14, 2003. Edison anticipates that subsequent events and developments will
cause its estimates to change. While Edison may elect to update these
forward-looking statements at some point in the future, Edison specifically
disclaims any obligation to do so. These forward-looking statements should not
be relied upon as representing Edison's estimates or views as of any date
subsequent to May 14, 2003.
Edison Schools Inc.
For the Three and Nine Months Ending March 31, 2003
(Dollars in 000's, except loss per share data)
Three Months Nine Months
Ended Ended
Mar. Mar. Mar. Mar.
2003 2002 2003 2002
Gross student funding $115,399 $131,165 $311,052 $361,774
Net revenue $108,382 $121,904 $291,054 $327,286
Education and operating expenses:
Direct site expenses
Company paid 47,579 50,161 131,253 142,043
Client paid 37,846 49,994 106,439 134,395
Curriculum, administration and
development 17,030 18,075 51,125 50,048
Depreciation and amortization 9,027 9,453 26,092 27,014
Preopening expenses 432 402 3,422 5,608
Total education and
operating expenses 111,914 128,085 318,331 359,108
Loss from operations (3,532) (6,181) (27,277) (31,822)
Other income (expense)
Interest income 2,214 2,434 6,465 7,061
Interest expense (4,868) (1,769) (14,194) (4,788)
Other 18 (6,753) 360 (6,732)
Total other (2,636) (6,088) (7,369) (4,459)
Loss before provision for
state and local taxes (6,168) (12,269) (34,646) (36,281)
Provision for state and local
taxes (197) (514) (540) (835)
Net loss $(6,365) $(12,783) $(35,186) $(37,116)
Per share data
Basic and diluted net loss per
share $(0.12) $(0.24) $(0.66) $(0.69)
Weighted average shares of
common stock 52,655 53,771 53,529 53,477
outstanding used in
computing basic and
diluted net loss per share
Gross Site Contribution
Net revenue $108,382 $121,904 $291,054 $327,286
Less: Direct site expenses -
Company paid (47,579) (50,161) (131,253) (142,043)
Less: Direct site expenses -
Client paid (37,846) (49,994) (106,439) (134,395)
Gross Site Contribution $22,957 $21,749 $53,362 $50,848
EBITDA
Net loss $(6,365) $(12,783) $(35,186) $(37,116)
Add : Depreciation and
amortization 9,027 9,453 26,092 27,014
Less: Interest income (2,214) (2,434) (6,465) (7,061)
Add: Interest expense 4,868 1,769 14,194 4,788
Add: Provision for state and
local taxes 197 514 540 835
EBITDA $5,513 $(3,481) $(825) $(11,540)
Stock-based non cash
charges 340 (3,928) 589 (5,727)
EBITDA, net of stock-based
non cash charges $5,853 $(7,409) $(236) $(17,267)
Operating information
Enrollment - students * 80,000 74,000 80,000 74,000
Gross site contribution 22,957 21,749 53,362 50,848
EBITDA, net of stock-based
non cash charges 5,853 (7,409) (236) (17,267)
EBITDA, net of stock-based
non cash charges,
per student 73 (100) (3) (233)
* Does not include students enrolled in our summer school program
SOURCE Edison Schools Inc.
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Related links:
http://www.edisonschools.com
CONTACT:
Chris Scarlata, Chief Financial Officer,
+1-212-419-1645, or Adam Tucker, VP, Communications,
+1-212-419-1602, both of Edison Schools
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