Increase Due to Multiple Positive Factors
Including Strong Re-engineering Results
Forecast is Dramatic Improvement Over Prior Year
NEW YORK, Nov. 12 /PRNewswire-FirstCall/ --
Edison Schools Inc. (Nasdaq: EDSN), the nation's leading private manager of
public schools, announced today that it is increasing its EBITDA (net of
non-cash stock compensation charges) guidance by 30% to $26 million, up from
prior guidance of $20.0 million. This would represent a dramatic improvement
over last fiscal year's performance that was an EBITDA loss of $6.3 million,
net of non-cash stock compensation, one-time and specific event related
charges. In addition, the company reiterated its guidance of achieving its
first quarterly net income in the 4th quarter of this fiscal year.
The company pointed to multiple positive factors contributing to the
improved guidance including: new schools and expansions (including the
addition of 20 new schools in Philadelphia), continued growth in its summer
and after school businesses, the ending of a handful of relationships that
were not profitable, and the effects of a re-engineering effort.
Edison will release its first quarter earnings this Thursday, November 14,
2002. While first quarter results historically reflect lower gross site
contribution than the following three quarters due to schools being out of
session in July and significant pre-opening costs for new contracts, the
Company says gross site contribution and EBITDA are heading in the right
direction. Edison says the substantial improvements in the company's operating
results will be highly discernable in the second through fourth quarters,
while less obvious in the first quarter for the reasons noted above.
"We're developing a leaner and more focused organization, and we're
confident that the Company will see major improvement in its operating
profitability this calendar year. The improved financial results represent a
change in mindset - we are placing more emphasis on customer service and
profitability versus growth. This improvement will be the result of a
successful five-month re-engineering effort on the part of Edison's staff.
The Company has always focused on academic achievement -- and will continue to
do so. We will achieve these improved financial results without compromising
our student achievement goals," said Chip Delaney, the Company's Vice
Chairman.
The EBITDA improvement can be summarized with approximated numbers as
follows:
FY02 EBITDA ($6mm)
Projected Reductions in Central Spending: $10mm
(Estimated on current run rates, budget projections
and newly instituted expense control procedures.)
Site Contribution Improvements:
Ending Unprofitable Relationships: $5mm
(Includes renegotiations at one account)
Projected Growth in Summer and After School
Businesses: $6mm
New Schools and Net Improvements in
Existing Schools: $16mm
Less One-Time Re-engineering Expenses: ($5mm)
PROJECTED FY03 EBITDA $26mm
"We are extremely pleased with the results of this re-engineering process.
We are confident that our resulting EBITDA goal of approximately $26 million,
once obtained, will be a meaningful step in demonstrating the profit potential
of Edison," said Delaney.
ABOUT EDISON SCHOOLS
Edison is the nation's largest private manager of public schools. Edison
educates approximately 110,000 students in 150 full year schools and 175
summer schools. Through contracts with local school districts, states, and
public charter school boards, Edison assumes educational and operational
responsibility for individual schools in return for funding that is generally
comparable to that spent on other public schools in the area. Over the course
of three years of intensive research, Edison's team of leading educators and
scholars developed an innovative curriculum and school design. Edison opened
its first four schools in August 1995, and has grown rapidly in every
subsequent year.
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
November 12, 2002. 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 November 12, 2002.
SOURCE Edison Schools Inc.
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Related links:
http://www.edisonschools.com
CONTACT:
Adam Tucker, VP Communications,
+1-212-419-1602, or Chris Scarlata, Chief Financial Officer,
+1-212-419-1645, both of Edison Schools
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