Partnerships with Private Companies Promoted By
No-Child-Left-Behind Legislation
Significant Alignment with Edison's Four Business Channels
NEW YORK, Nov. 25 /PRNewswire-FirstCall/ -- Edison Schools (Nasdaq: EDSN),
the nation's largest private manager of public schools, said today that it
will place significant focus in its business development efforts on helping
states and districts comply with the No Child Left Behind Act (NCLB). The
company believes the Act will have a significant positive impact on its
business prospects. Signed into law in January 2002, NCLB represents a
substantial expansion of the federal government's role in education as well as
a substantial increase in federal funding.
With FY 2002 appropriations totaling approximately $22 billion, the Act
establishes programs and requirements in areas such as accountability,
assessment, professional development, and technology -- all areas of Edison
expertise. Further, the Act expressly promotes the option for states,
districts, and schools to partner with private companies to improve
educational outcomes. NCLB's programs and requirements are directly aligned
with Edison's four "business channels": Contract Schools; Charter Schools;
Affiliates; and Summer School/After School/Supplemental Services.
NCLB greatly enhances school accountability by requiring every school to
show "adequate yearly progress" (AYP) in raising student achievement and
closing achievement gaps. The goal of NCLB is to have 100 percent of students
reaching proficiency in reading and math by the 2013 - 2014 school year. It
requires states to establish assessments in reading and mathematics and to
test all students in grades 3-8 to measure whether they are making progress
against state standards.
NCLB allocates nearly $3 billion (Title II) for teacher quality programs.
Specifically, the Act requires that districts and schools that fail to meet
AYP spend a minimum of 10% of their Title I funds on teacher professional
development. Additionally, these districts and schools may be required to
secure technical assistance as a strategy for improving educational outcomes.
According to NCLB, technical assistance may be provided by the district or
other entities, including private companies. Edison expects to leverage its
Affiliates Division to help states, districts, and schools respond to NCLB's
assessment and teacher quality requirements.
"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," said Jim Howland, Edison's Chief Development Officer. "Second, we
have developed a series of 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 provide technical
assistance to our 150 partnership schools. Edison can be a valuable resource
to states, districts, and schools searching for solutions related to NCLB."
Additionally, NCLB expands the 21st Century Community Learning Centers
program to support before- and after-school programs, as well as summer school
programs, with FY 2002 funding totaling $1 billon. The Act also requires that
schools and districts failing to meet AYP provide supplemental educational
services during non-school hours. The Act requires that these districts and
schools spend 5-15% of their Title I funds on supplemental services. NCLB's
summer school, after school, and supplemental services are directly aligned
with Edison's expanding Summer School, After-School and Supplemental Services
businesses. "Edison's summer school program has been highly successful in
improving student achievement. Our objective is to expand this business
channel and generate $100 million in combined revenues of Summer School,
After-School, and Supplemental Services within three years," said Howland.
Lastly, NCLB imposes escalating consequences and actions for schools that
fail to make AYP for several consecutive years. For these schools, the Act
expressly requires districts to take one of several enumerated actions,
including the possibility of contracting with a private management company to
manage the school. Additionally, NCLB reauthorizes and increases funding for
the federal charter schools program to support the planning, design and
initial implementation of charter schools. Edison plans to leverage its
Contract School and Charter School business channels to assist districts and
schools addressing this NCLB requirement.
"Over the past seven years, Edison has been able to grow its managed
school business successfully with no federal imperatives. With No Child Left
Behind, we see tremendous opportunity for Edison to leverage its experience
and expertise on behalf of districts and states seeking solutions. Already,
the Department of Education estimates that, under NCLB, 8,600 schools are in
need of improvement," said Howland.
Edison recently raised its EBITDA estimates for the total company in the
current fiscal year by 30%, 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.
About Edison
Edison is the nation's largest private manager of public schools. Edison
educates approximately 110,000 students in 150 full year schools and
178 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. 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
November 25, 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 25, 2002.
SOURCE Edison Schools
 back to top
Related links:
http://www.edisonschools.com
CONTACT:
Adam Tucker, VP Communications of Edison
Schools, +1-212-419-1602
|
