Press Releases

FINANCIAL NEWS, EARNINGS RELEASES

PRESS RELEASE   For Immediate Release

Date: February 17, 1999

Contacts: James Peoples, 201-712-0090
               John Bergstrom, 651-227-9758

Peoples Educational Holdings, Inc. Posts Record Earnings

MAYWOOD, NJ, FEBRUARY 17, 1999 -- Peoples Educational Holdings, Inc. (PEH) today announced preliminary unaudited year-end financial results for The Peoples Publishing Group (PPG), its wholly owned subsidiary. For the fiscal year ended December 31, 1998, preliminary net sales were $6,186,000, an increase of 37% compared to the prior fiscal year, and preliminary after-tax net income was $330,000, an increase of 89% compared to the prior fiscal year.

"We are all very pleased with these results, because they exceeded our expectations," said James Peoples, CEO of Peoples Educational Holdings. He noted that PPG had increased sales in two of the company's product segments. Instructional titles, led by a large sale to the Detroit Board of Education, grew 60% over the 1997 level. Test preparation books, introduced late in 1997, grew three and a half times over the 1997 sales level.

"Increased school enrollments and spending supported strong 1998 industry sales," Peoples explained. "The company benefited from the emphasis on higher standards, remedial instruction, and the national demand for improved student performance."

PEH will report final audited financial results on a consolidated basis with PPG on or prior to March 31, 1999. PPG represents substantially all of the operations of PEH. Final audited results may differ from the preliminary results reported above.

The Peoples Publishing Group, located in Maywood, NJ, was incorporated in 1989 and began operations in 1990 with the acquisition of a small supplemental product line in the student-at-risk area. In 1998, PPG was merged into a subsidiary of Concourse Corporation, which was later renamed Peoples Educational Holdings, Inc. As a result of the merger transaction, PPG became a wholly owned subsidiary of Peoples Educational Holdings, and at present, PPG is the only operating company within PEH.

PPG is a niche school publisher and distributor of supplemental materials for pre-K-12 education. PPG focuses its efforts in three market areas:

• instructional products (for the student-at-risk and multicultural markets)
• test preparation (materials to prepare students for state and city standardized tests and assessment)
• distribution of Advanced Placement materials (for the academically rigorous senior high and college prep markets)

PPG's proprietary products are supplemental in nature, meaning that they are predominately soft-cover, high gross profit margin titles that can be sold efficiently through niche catalogs, direct mail, telemarketing, and independent commission sales representatives. Products are developed through a combination of internal development capabilities with royalty-based contracts and freelance production and creative talent.

This news release contains forward-looking statements regarding the expected performance of PEH and PPG. The achievement of results referred to in such statements is subject to certain risks and uncertainties, including the success of its sales and marketing efforts, its ability to attract new customers and compete effectively and changes in state and local levels of educational spending. Readers are cautioned not to place undue reliance upon forward-looking statements which reflect management's analysis only as of today's date. PEH does not intend to update any forward-looking statements.