Full-Year EBITDA of $23.2 Million, Excluding Non-Cash Stock Compensation
Expense of $882,000 and $888,000 of Going-Private Costs
NEW YORK, Sept. 12 /PRNewswire-FirstCall/ -- Edison Schools Inc.
(Nasdaq: EDSN), the nation's leading private manager of public schools,
announced today that it posted its first quarterly net income in the Company's
history. The Company reported for the quarter ending June 30, 2003 net income
of $10.2 million compared to a net loss of $48.9 million for the same period a
year ago.
Excluding non-cash stock compensation charges and going-private costs, the
Company posted full-year EBITDA (see attached financial statement for
reconciliation of this number) of $23.2 million compared to a negative $64.2
million in the same period last year. The Company's net loss for the year was
$25 million compared to a net loss of $86 million in fiscal year 2002.
Regarding other fiscal 2003 financial goals, the Company ended the year
with approximately $26 million in cash versus a stated goal in December 2003
of $25 million. The Company also reduced its debt from a peak of
approximately $100 million in September 2002 to approximately $73 million at
year-end.
On August 1, 2003, Edison closed the sale of a non-income producing
property in Harlem for approximately $8.9 million, substantially all of which
was used to reduce the Company's debt. In addition, the Company expects to
reduce its debt even further through the repayment of a $17 million note
receivable from a charter school client from a bond offering that is scheduled
to price and close by October 2003. After this refinancing, the Company will
have generated $33 million in proceeds from refinancings versus its goal of
$30 million.
On July 14, 2003 Edison announced that it had signed a definitive merger
agreement with a company formed by Chris Whittle and an affiliate of Liberty
Partners, a private equity firm based in New York City. Edison's Board of
Directors, based upon the unanimous recommendation of a Special Committee of
disinterested directors, has approved the merger agreement, which provides for
each outstanding share of Edison Class A and Class B Common stock to be
acquired for $1.76 per share in cash. The Company plans to complete this
transaction, subject to shareholder approval, this fall.
The Company also announced in July 2003 that it had extended its $55.0
million revolving credit facility to November 15, 2003 with the goal of
bridging the time period between the previous maturity of this facility and
the closing of the above transaction. Should the announced merger not be
consummated by this date, the Company will need to refinance this facility.
Non-GAAP Financial Measure
EBITDA is a non-GAAP financial measure. EBITDA is defined as net income
(loss) before income tax expense (benefit), interest expense, interest income,
depreciation and amortization. The most directly comparable GAAP financial
measure to EBITDA is net income (loss). A reconciliation of EBITDA to net
income (loss) is presented in a table attached to this press release.
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 132,000 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 130
full-year schools and 200 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 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
quarterly report filed with the SEC. The forward-looking statements included
in this press release represent Edison's estimates as of September 12, 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
September 12, 2003.
LEGEND
Edison Schools Inc. has filed a preliminary a proxy statement, and
Shakespeare Acquisition LLC has filed other relevant documents, with the SEC
concerning the proposed merger of a wholly-owned subsidiary of Shakespeare
Acquisition LLC with and into Edison Schools Inc. INVESTORS ARE URGED TO READ
THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS
FILED WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. You will
be able to obtain the documents filed with the SEC by Edison Schools Inc. free
of charge on the SEC's website or by requesting them in writing from Edison
Schools Inc. at 521 5th Avenue, 11th Floor, New York, NY 10175, Attention:
Investor Relations, or by telephone at 212-419-1600. You may obtain documents
filed by Shakespeare Acquisition LLC free of charge on the SEC's website or by
requesting them in writing from Shakespeare Acquisition LLC c/o Liberty
Partners, 1370 Avenue of the Americas, 34th Floor, New York, NY 10019,
Attention: Investor Relations, or by telephone at 212-541-7676.
Edison Schools Inc. and Shakespeare Acquisition LLC, and their respective
directors and executive officers, may be deemed to be participants in the
solicitation of proxies from the stockholders of Edison Schools Inc. in
connection with the merger. Information about the directors and executive
officers of Edison Schools Inc. and their ownership of Edison Schools Inc.
stock will be set forth in the proxy statement when it becomes available.
Investors may obtain additional information regarding the interests of such
participants by reading the proxy statement when it becomes available.
Edison Schools Inc.
Fiscal Year Ending June 30, 2003
(Dollars in 000's, except loss per share data)
Three Months Ended Year Ended
June, June, June, June,
2003 2002 2003 2002
Net revenue $139,790 $137,772 $430,844 $465,058
Education and operating expenses:
Direct site expenses
Company paid 60,179 69,395 191,432 211,438
Client paid 37,229 44,307 143,669 178,702
Administration, curriculum
and development * 19,474 33,577 70,010 89,352
Preopening expenses 330 545 3,752 6,153
Stock-based compensation 293 (7,611) 882 (13,338)
Impairment charges -- 36,878 -- 36,878
Depreciation and amortization 8,759 10,382 34,850 37,396
Total education and
operating expenses 126,264 187,473 444,595 546,581
Income (loss) from operations 13,526 (49,701) (13,751) (81,523)
Other income (expense)
Interest income 1,941 2,374 8,406 9,435
Interest expense (4,951) (1,412) (19,145) (6,200)
Other 17 20 377 (6,712)
Total other (2,993) 982 (10,362) (3,477)
Income (loss) before provision
for state and local taxes 10,533 (48,719) (24,113) (85,000)
Provision for state and local taxes (375) (205) (915) (1,040)
Net income (loss) $10,158 $(48,924) $(25,028) $(86,040)
Per share data
Basic and diluted net income
(loss) per share $0.19 $(0.91) $(0.47) $(1.61)
Weighted average shares of
common stock 52,864 53,820 53,364 53,564
outstanding used in computing
basic and diluted net income
(loss) per share
Operating information
Enrollment - students ** 80,000 74,000 80,000 74,000
EBITDA 22,302 (39,299) 21,476 (50,839)
Non-GAAP financial measure
Reconciliation of net income
(loss) to EBITDA
Net income (loss) $10,158 $(48,924) $(25,028) $(86,040)
Interest expense 4,951 1,412 19,145 6,200
Interest income (1,941) (2,374) (8,406) (9,435)
Depreciation and amortization 8,759 10,382 34,850 37,396
Taxes 375 205 915 1,040
EBITDA 22,302 (39,299) 21,476 (50,839)
Stock-based compensation 293 (7,611) 882 (13,338)
Going private costs 888 -- 888 --
EBITDA, as adjusted $23,483 $(46,910) $23,246 $(64,177)
* Include gain (loss) on sale of fixed assets
**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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