$7 Million Financing of Kansas City Site
Is Successfully Closed With Bank of America
Company Says This is an Important and Positive Step Towards Goal of
$30-$50 Million Refinancing Program This Fiscal Year
NEW YORK, Dec. 12 /PRNewswire-FirstCall/ --
Edison Schools Inc. (Nasdaq: EDSN), the nation's largest private manager of
public schools, announced today that it has closed on the first in a series of
planned re-financings of its charter school facilities. The Company said it
had successfully completed the financing of the facility for Derrick Thomas
Academy in Kansas City, Missouri, a school that opened this fall with
approximately 550 students. Under the terms of the arrangement, Bank of
America will lend approximately $7 million to the non-profit charter board of
Derrick Thomas. The charter board will use these proceeds primarily to repay
to Edison amounts under a loan which the company provided to the school.
"This re-financing of our bridge loan is the first closing in a series of
re-financings that the Company is planning for this fiscal year," said Chip
Delaney, the Company's vice-chairman. "We continue to believe that this
series of debt repayments to Edison will generate a minimum of $30 million in
gross cash proceeds before June 30, 2003. We will use these funds to reduce
debt, invest in our FY04 growth, and maintain a healthy level of cash
balances."
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 to the minimum
$30 million from repayment of charter school loans that it expects from the
above re-financings, the Company expects improvements in the collection of
receivables from its managed schools customers of 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 on
September 30, 2002. The Company expects to end the fiscal year with cash on
the balance sheet of approximately $25 million. This amount would be after
reduction in the company's debt level and investing in FY04 new business.
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
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.
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
October 30, 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 December 12, 2002.
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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 Inc.
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