Press Releases

FINANCIAL NEWS, EARNINGS RELEASES

Date: September 16, 2000

Contacts: James Peoples, President & CEO, 201-712-0090
               Mike DeMarco, VP-Finance & Administration, 201-712-0090

Peoples Educational Holdings, Inc. Announces Record Sales and Profits

SADDLE BROOK, NJ, SEPTEMBER 16, 2000 - Peoples Educational Holdings, Inc. today announced its financial results for its third quarter ending September 30, 2000. For the quarter, net sales were $6,937,155, an increase of 30% from $5,329,228 recorded in the prior year third quarter. Net income for the third quarter was $773,943, an increase of 40% from $554,762 in the same quarter of 1999. For the nine months year-to-date, net sales were $10,748,893 (up 36% from $7,909,736 in 1999) and net income was $569,683 (up 24% from $459,848 in 1999).

James Peoples, President & CEO of Peoples Educational Holdings, reported that sales increased during the third quarter for all three product lines, Instruction, Test Preparation, and Advanced Placement. "We are particularly pleased with results in our test preparation area where sales increased 135% for the third quarter compared to prior year," said Mr. Peoples. The Company's test preparation materials are now being sold in New Jersey, New York, Pennsylvania, Ohio, and Illinois with additional states in development for product release in the next fiscal year.

Mr. Peoples also reported that sales in Advanced Placement were very strong as sales of distributed college-level materials increased by 21% from the prior year. "We continue to be very pleased with sales results from our Advanced Placement division, which consists primarily of distributed products. We also note the significance of the optimistically rapid growth of our proprietary product lines, particularly test preparation, and that the balance of proprietary versus distributed products has significantly improved," said Mr. Peoples.

The Company noted that these third quarter financial results cannot be viewed independently or extrapolated to full year results as the Company's business is substantially seasonal, corresponding to the K-12 school purchase cycle. The Company receives and fills orders throughout the year, but the largest revenues and profits are typically recorded in the third fiscal quarter. Based on historical results, an average of 51-55% of sales for the full fiscal year typically occurs in the third calendar quarter.

The Peoples Publishing Group (PPG), located in Saddle Brook, 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. (PEH). 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 that are standards-based for pre-K-12 education.

PPG focuses its efforts in three market areas:

• Test Preparation (materials to prepare students for high-stakes state tests)



• Distribution of Advanced Placement materials (for advanced level high school programs)



• Instruction products (for the student-at-risk, multicultural, and supplementary 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 commissioned sales representatives. Products are developed through a combination of internal development capabilities with royalty-based contracts, freelance development on a fee basis, 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: 1) the success of its sales and marketing efforts, 2) its ability to attract new customers and compete effectively, and 3) 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.