No dollars or sense.

• Author: Snell, Lisa
• Position: Edison's Bad Math - Edison Schools Inc. - Company Profile

WHEN CHRIS WHITTLE started Edison Schools Inc. a decade ago, he envisioned a "National Schooling Company" that would provide a high-quality education while securing profits through "economies of scale" made possible by operating hundreds of schools nationwide.

Fast forward to this September, when Edison declared a $49 million net loss for the four quarter, bringing the company's total loss for 2002 to $86 million. Edison has shelved plans to build a $125 million, 15-story headquarters in East Harlem. NASDAQ has threatened to delist Edison's stock if it doesn't rise above $1 per share by November 25. Whittle himself owes Edison schools SIO million secured by the low-performing stock-20 percent of the company's current market capitalization.

The company has lost at least six major contracts in recent months and is barely holding on to others. Last spring Edison was expecting to manage 45 Philadelphia schools this term and play the role of central manager for the city's entire school system. Since then, the Philadelphia Inquirer has reported that truckloads of Edison's school supplies have been repossessed. Though the company denies that allegation, it is now contracted to run only 20 schools.

Behold Edison's grim, dispiriting bottom line: The company has spent more money than it has taken in. It has nothing to do with the education industry or public education, and everything to do with too many top level executives making six-figure salaries.

On top of that, Edison has a lousy business plan. Instead of...