Education Management Corporation Reports Fiscal 2002 Fourth Quarter and Twelve Month Financial Results; Fourth Quarter Revenue Up 41.1%; Quarterly Net Income Increases 61.2%

Pittsburgh, Pennsylvania, UNITED STATES


PITTSBURGH, Aug. 6, 2002 (PRIMEZONE) -- Education Management Corporation (Nasdaq:EDMC) today reported its financial results for the fourth quarter and twelve months ended June 30, 2002.

Net revenues for the fourth quarter of fiscal 2002 increased by 41.1% to $133.5 million, compared with $94.6 million in the fourth quarter of fiscal 2001. For the twelve months ended June 30, 2002, net revenues rose 35.0% to $500.6 million, compared with $370.7 million, for the comparable twelve-month period last year.

Revenue growth in the fourth quarter resulted from a 39.2% increase in student enrollment and an approximately 6% increase in average tuition rates. Total student enrollment at the start of the fourth quarter of fiscal 2002 was 35,790 as compared to 25,711 last year. Argosy contributed 6,196 students to the fourth quarter enrollment.

Net income for the quarter grew 61.2% to $6.1 million, or $.17 per diluted share, as compared to $3.8 million, or $.12 per diluted share, in the fourth quarter last year. For fiscal 2002, net income increased 46.0% to $42.3 million, or $1.23 per diluted share, as compared to $29.0 million, or $.93 per diluted share last year. Net income for both the fourth quarter and fiscal year includes a goodwill impairment charge of approximately $.9 million related to the teach-out of ITI programs in Halifax.

At the start of the current summer quarter (first quarter of fiscal 2003), total enrollment at EDMC's schools was 32,814. The Art Institutes' enrollment increased 14.3% to 28,054 from 24,550 as of the comparable point last year. At the 20 Art Institutes operated by EDMC for two or more years, enrollment grew 9.5% to 25,976 students, as compared to 23,732 students at the start of the same period last year. Total enrollment in The Art Institutes' bachelor's degree programs was 12,929, a 49.6% increase from the prior year.

Argosy's enrollment for the beginning of the current summer quarter (first quarter of fiscal 2003) was 4,760, a 27.5% increase as compared to 3,733 students enrolled at the start of the same period last year. Argosy was acquired on December 21, 2001 by EDMC. On a same school basis, Argosy's enrollment increased 26.3% to 4,533 from 3,589 students last year.

The Company's quarterly revenues and income fluctuate with student enrollment patterns. Student enrollment has typically increased in the fall (fiscal year second quarter), when the largest number of new high school graduates traditionally begin post-secondary education. The Company's quarterly costs and expenses, however, do not fluctuate as significantly as revenues.

Robert Knutson, EDMC's Chairman and Chief Executive Officer, commented: "We are pleased to report strong year end results and look forward to good growth opportunities in fiscal 2003. Our enrollment trends remain solid and we are encouraged by the volume of inquiries, especially from referrals and over the Internet."

Education Management Corporation (www.edumgt.com) is among the largest providers of private post-secondary education in North America, based on student enrollment and revenue, with 40 primary campus locations in 26 major cities, and with approximately 39,000 students as of fall 2001. EDMC's Art Institutes (www.artinstitutes.edu) offer master's, bachelor's, associate's and non-degree programs in the areas of design, media arts, fashion and culinary arts. EDMC's Argosy Education Group provides graduate and undergraduate degree programs in various fields including psychology, education, business, legal studies and the health sciences. EDMC has provided career-oriented education for 40 years, and its education institutions have more than 135,000 alumni.

This press release may include information that could constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements may involve risk and uncertainties that could cause actual results to differ materially from any future results encompassed within the forward-looking statements. Factors that could cause or contribute to such differences include those matters disclosed in the Company's Securities and Exchange Commission filings. Past results of EDMC are not necessarily indicative of its future results. EDMC does not undertake any obligation to update any forward-looking statements.


                  Education Management Corporation
              Summary Consolidated Statements of Income
              (In thousands, except earnings per share)


                             Three Months          Twelve Months
                             ended June 30,        ended June 30,
                              (unaudited)
                            2002       2001        2002       2001
                          --------   --------   ---------  ---------
 Net revenues            $ 133,502   $ 94,642   $ 500,576  $ 370,681


 Costs and expenses:
  Educational services      92,318     67,113     325,027    242,313
  General and
   Administrative           29,380     20,417     102,486     76,716
   Amortization of
    Intangibles              1,879        596       4,096      1,977
                          --------   --------   ---------  ---------
                           123,577     88,126     431,609    321,006
                          --------   --------   ---------  ---------
 Income before interest
  and taxes (EBIT)           9,925      6,516      68,967     49,675
 Interest expense, net         247        398       1,552      2,275
                          --------   --------   ---------  ---------
 Income before income
  Taxes                      9,678      6,118      67,415     47,400
 Provision for income
  Taxes                      3,564      2,325      25,101     18,422
                          --------   --------   ---------  ---------
 Net income                $ 6,114    $ 3,793    $ 42,314   $ 28,978
                          --------   --------   ---------  ---------
                          --------   --------   ---------  ---------

 Diluted earnings
  per share                  $ .17      $ .12      $ 1.23      $ .93
                          --------   --------   ---------  ---------
                          --------   --------   ---------  ---------
 Weighted average
  number of diluted
   shares outstanding
 (000's):                   36,626     31,659      34,479     31,016


 Selected Consolidated Balance Sheet Data

                                           As of June 30
                                        2002          2001
                                       ------        ------
 Cash and cash equivalents           $ 86,233      $ 47,290
 Receivables, net                      30,378        22,539
 Current assets                       140,042        83,175
 Total assets                         492,655       287,540
 Current liabilities                  139,632        73,897
 Long-term debt (including
  current portion)                     28,576        53,660
 Shareholders' investment             346,577       159,949


        

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