MAXIDIGM INVESTMENT CLUB

1. MAXIDIGM INVESTMENT CLUB STOCK ANALYSIS Learning

2. SECTOR • Pure E-Learning • Traditional Education – Higher Learning • Others

3. What is E-Learning • Vs. Traditional training • By third-party vendor on training department • Time-consuming • Costly (travel, accommodation – 2/3 of total costs) • Computer based training (CBT) • Web-based • Deployed to mass users • Cost advantage • Anywhere, anytime, anything!

4. Industry Outlook Corporate Training • Total corporate training market $66 billion • Traditional training still account for about 80-90% • $3.5 billion spent in 2000, growing to $25 billion in 2003 • Constantly evolving • Highly competitive and fragmented • Competition from publisher, software vendor • Acceptance and effectiveness of training

5. Traditional Education – higher Learning • U.S. Dept of Education estimated $200 billion • Growth in enrollment to continue • 25 years and older, part-timers, female • Demand from changing Technology

6. Stock Selection

7. Impact of slowdown… • Reduction in training budget? • Higher demand for skills improvement?

8. SmartForce PLC - SMTF • Incorporated in Ireland 1989 • Largest and only profitable company • Comprehensive offerings – more than 1300 courses • IT, business skills, project management, core competencies Customers • Fortune 3000 and major international companies • Alcatel, Lucent, MCI, British Airways, Chase Manhattan … (2500) Revenue Stream • Prior to 2000, license software • 2000 – internet rental model (ASP) ; hence income has been deferred • No single customer account for 5 %

9. SMTF

10. SMTF

11. Saba Software - SABA • Founded in 1997 • Tool to ‘manage’ learning • Launched B2B SABA Learning exchange in 1999 • Leading provider of “human capital development” & mgt solutions Customers • Large businesses, governments and Learning providers • Cisco, 3Com, Continental Airlines, Lucent, P & G Revenue Stream • Mostly from license fees, implementation and consulting • Transaction-based revenue from B2B marketplace still insignificant • No single customer account for 10 % • Profitability 2002?

12. SABA

13. SABA

14. Digital Think - DTHK • Founded in 1996, revenue 1999 • Focus is custom-tailored courses (62%) • More than 350 courses • Partnership with EDS Customers • 260 • Adobe, Siebel, Deutsche Bank, KPMG, Schwab Revenue Stream • Software licenses, development fees • Profit sharing with customers from “Extended Enterprise” • 50% of 2000 revenue from 6 customers! • Profitability 2002?

15. DTHK

16. DTHK

17. SkillSoft Corp - SKIL • Leading provider of critical business skills (professional development) • 380 courses • World’s largest e-learning library for Project Management • First company to be certified by PMI (PM Institute) • Reseller arrangements with other learning agencies • Main customer is GTE (25% of revenue)

18. SKIL

19. SKIL

20. Apollo Group - APOL • Largest private institution for higher learning, around for 25 years • University of Phoenix, Western International University, Institute of Professional Development, Financial Planning Inst. • Launched online Learning via U. of Phoenix • More than 50 campuses and 100 learning centres • 100,000 enrollments • 90 % job placement rate • 55% rentention rate • 6% student-loan default rate • 40% revenue from Europe – exposed to currency exchange risk

21. APOL

22. APOL

23. DeVry - DV • One of the largest publicly held higher education institute • Founded 70 years ago • DeVry University, Denver Technical College, Keller Institute of Management, Becker Conviser Review (CPA, CMA, CFA) • 300 locations • 80,000 enrollments • Recently partnered with eCollege to develop e-learning • Fiscal 2001 is 10th consecutive year of annual earnings growth >= 20%

24. DV

25. DV

26. Learning Tree - LTRE • Worldwide provider of training for IT professionals • Corporate clients and governments • Broad base of instructor-led courses • Custom-designed courses for larger clients • CBT offerings on CD-Rom up until 1999 (wrote off $1.2 mil in 1999) • Shifting to e-learning in 2000

27. LTRE

28. LTRE

29. Edison Schools - EDSN • Largest private operator of public schools for K – 12 in U.S. • Contract with school boards; fund by pupil count • Assume operational and educational responsibilities • First 4 schools in 1995; now 113 in 21 states • Private schools principle – dramatic results Risks • Private, for-profit public school – new area • Acceptance • Success depends on academic achievements • Lengthy sales cycle • Profitability 2004?

30. EDSN

31. EDSN

32. Scholastic Corp – SCHL • Global children’s publishing and media company • Children Books & magazines publishing (biggest chunk) • Educational publishing • Multimedia licensing and advertising • Website is most visited by teachers and schools • American rights to Pokemon, Harry Potter series Risks • Changes in publishing industry • Changes in purchasing patterns • Competition from media, entertainment and publisher

33. SCHL

34. SCHL

35. ASI Solution - ASIS • Provide HR outsourcing for large corporations (Fortune 500) • Performance improvement • Employment Process outsourcing • Compensation & Market Share studies • Founded in 1978, public in 1997 • 1996 to 2000: revenue growth at a compounded rate of 55% from 10.6 mil to 79.1 mil

36. ASIS

37. ASIS

38. Quantitative Analysis What the numbers say…

39. Technical Analysis What the charts say…