The Aristotle Corporation Announces 2005 Second Quarter and First Six Months Results

The Aristotle Corporation (NASDAQ: ARTL; ARTLP)
announced today its results of operations for the second quarter and
six months ended June 30, 2005.
   For the three months ended June 30, 2005, net sales increased
12.5% to $50.2 million from $44.6 million in the second quarter of
2004. Earnings before income taxes increased 27.2% to $7.8 million
from $6.1 million in the 2004 second quarter, and net earnings
increased 27.6% to $4.8 million compared to $3.8 million in the 2004
quarter. Net earnings applicable to common stockholders in the second
quarter of 2005 was $2.6 million, or $.15 per diluted common share. In
the 2004 second quarter, net earnings applicable to common
stockholders was $1.6 million, or $.09 per diluted common share. Net
earnings applicable to common stockholders in both the 2005 and 2004
periods include the accretion of $2.2 million relating to the
dividends on Aristotle's Series I and Series J preferred stocks.
   For the six months ended June 30, 2005, net sales increased 9.9%
to $91.9 million from $83.6 million in the first six months of 2004.
Earnings before income taxes for year-to-date 2005 increased 17.2% to
$13.0 million from $11.1 million in 2004, and net earnings increased
17.3% to $8.0 million from $6.8 million. Net earnings applicable to
common stockholders for year-to-date 2005 was $3.7 million, or $.21
per diluted common share, compared to $2.5 million or $.14 per diluted
common share for year-to-date 2004. Net earnings applicable to common
stockholders in both the 2005 and 2004 periods includes the accretion
of $4.3 million relating to Aristotle's preferred stock dividends.
   The reported net earnings are shown after deduction for Federal,
state and foreign income tax provisions. The utilization of the
Company's Federal net operating tax loss carryforwards ("NOL's")
resulted in the reporting of approximately $2.2 million and $1.8
million in income tax provisions in the 2005 and 2004 second quarters,
respectively, for the reduction in their previously recorded deferred
tax asset. For the year-to-date periods of 2005 and 2004,
respectively, $3.8 million and $3.3 million of the reported tax
provisions relate to NOL utilization. The NOL utilization for the
reported quarters and year-to-date periods substantially eliminated
Aristotle's current Federal tax liability and allowed Aristotle to
retain for other business purposes the cash that would have been used
for tax payments. Except for Federal alternative minimum tax
obligations arising from limitations on the NOL's in future years,
Aristotle anticipates that the utilization of available NOL's will
offset its Federal taxable income through 2006. At June 30, 2005, the
Condensed Consolidated Balance Sheet contains a net deferred tax asset
of $16.6 million, of which $13.0 million relates to the NOL's.
   Steven B. Lapin, Aristotle's President and Chief Operating
Officer, stated, "I am pleased to report 2005 second quarter earnings
of $.15 per diluted common share, which were driven primarily by
increased revenues. While the results of acquisitions completed in the
third quarter of 2004 certainly contributed, your Company's organic
revenue growth was an impressive 9.2%."
   Mr. Lapin added, "We are particularly encouraged to see that
revenue improvement was significantly achieved in the Educational
segment throughout the first six months of 2005. Restrictions in state
education funding over the past several years significantly hampered
Aristotle's sales growth; your Company used that time wisely, however,
to concentrate on increasing its comprehensive product offerings and
customer service levels. Now that monies appear to be moving once
again into school budgets, Aristotle is reaping the benefits of its
employees' diligent efforts. At the same time, business in your
Company's health training sector continues to thrive, and its
Commercial segment remains on steady ground."
   Dean T. Johnson, Aristotle's Chief Financial Officer, noted, "The
revenue growth has yielded an increase in 2005 second quarter EBITDA
of nearly 25% to $8.5 million. For the first six months of this year,
EBITDA has increased 14.4% to $14.4 million from 2004. Throughout your
Company, management continually demonstrates prudent control of
operating costs, limiting the increase in selling and administrative
expenses to 7.2% and 7.4% in the 2005 second quarter and first six
months as compared to the prior year periods, respectively, versus
substantially higher revenue growth."
   Mr. Johnson continued, "Primarily as a result of earnings and
related benefit of the NOL utilization, the Company generated cash
from operations of $8.1 million in the second quarter of 2005,
compared to $5.9 million in the same period last year. With the
revenue growth realized in the second quarter, trade accounts
receivable are $2.2 million greater at June 30, 2005 than one year
ago. As these receivables are collected in the normal course of
business in the third quarter, cash provided by operations for the
remaining portion of 2005 should exceed 2004 levels. The $3.0 million
increase in inventory compared to levels at June 30, 2004 is
attributed to approximately $1.4 million of additional inventory to
service the business from the CPR Prompt and Ginsberg Scientific
acquisitions completed in the third quarter of 2004, with the
remaining inventory growth related to accelerated purchasing efforts
to stock favorably priced inventory for the anticipated 2005 summer
peak season."
   In providing EBITDA information, Aristotle offers a non-GAAP
financial measure to complement its condensed consolidated financial
statements presented in accordance with GAAP. This non-GAAP financial
measure is intended to supplement the reader's overall understanding
of Aristotle's current financial performance. However, this non-GAAP
financial measure is not intended to supercede or replace Aristotle's
GAAP results. A reconciliation of the non-GAAP results to the GAAP
results is provided in the "Reconciliation of GAAP Net Earnings to
EBITDA" schedule below. EBITDA is defined as earnings before interest
expense, other income and expense, income taxes, depreciation and
amortization.

   About Aristotle

   The Aristotle Corporation, founded in 1986, and headquartered in
Stamford, CT, is a leading manufacturer and global distributor of
educational, health, medical technology and agricultural products. A
selection of over 80,000 items is offered, primarily through more than
45 separate catalogs carrying the brand of Nasco (founded in 1941), as
well as those bearing the brands of Life/Form(R), Whirl-Pak(R),
Simulaids, Triarco, Spectrum Educational Supplies, Hubbard Scientific,
Scott Resources, Haan Crafts, To-Sew, CPR Prompt(R), Ginsberg
Scientific and Summit Learning. Products include educational materials
and supplies for substantially all K-12 curricula, molded plastics,
biological materials, medical simulators and items for the
agricultural, senior care and food industries. Aristotle has
approximately 800 employees at its operations in Fort Atkinson, WI,
Modesto, CA, Fort Collins, CO, Plymouth, MN, Woodstock, NY, Chippewa
Falls, WI, Otterbein, IN and Newmarket, Ontario, Canada.
   There are approximately 17.2 million shares outstanding of
Aristotle common stock (NASDAQ: ARTL) and approximately 1.1 million
shares outstanding of 11%, cumulative, convertible, voting, Series I
preferred stock (NASDAQ: ARTLP); there are also approximately 11.0
million privately-held shares outstanding of 12%, cumulative,
non-convertible, non-voting shares of Series J preferred stock.
Aristotle has about 4,000 stockholders of record.
   Further information about Aristotle can be obtained on its
website, at www.aristotlecorp.net.

   Safe Harbor under the Private Securities Litigation Reform Act of
1995

   To the extent that any of the statements contained in this release
are forward-looking, such statements are based on current expectations
that involve a number of uncertainties and risks that could cause
actual results to differ materially from those projected or suggested
in such forward-looking statements. Aristotle cautions investors that
there can be no assurance that actual results or business conditions
will not differ materially from those projected or suggested in such
forward-looking statements as a result of various factors, including,
but not limited to, the following: (i) the ability of Aristotle to
obtain financing and additional capital to fund its business strategy
on acceptable terms, if at all; (ii) the ability of Aristotle on a
timely basis to find, prudently negotiate and consummate additional
acquisitions; (iii) the ability of Aristotle to manage any to-be
acquired businesses; (iv) there is not an active trading market for
the Company's securities and the stock prices thereof are highly
volatile, due in part to the relatively small percentage of the
Company's securities which is not held by the Company's majority
stockholder and members of the Company's Board of Directors and/or
management; (v) the ability of Aristotle to retain and utilize its
Federal net operating tax loss carryforward position; and (vi) other
factors identified in Item 7, Management's Discussion and Analysis of
Financial Condition and Results of Operations, "Forward-Looking
Statements," contained in the Company's Annual Report on Form 10-K for
the year ended December 31, 2004. As a result, Aristotle's future
development efforts involve a high degree of risk. For further
information, please see Aristotle's filings with the Securities and
Exchange Commission, including its Forms 10-K, 10-Q and 8-K.

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THE ARISTOTLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS     
(In thousands, except share and per share data) 
(Unaudited

                      Three Months Ended         Six Months Ended
                           June 30,                  June 30,
                   ------------------------- -------------------------
                       2005         2004         2005         2004
                   ------------ ------------ ------------ ------------

Net sales         $     50,185       44,612       91,933       83,632
Cost of sales           30,938       27,781       56,623       51,612
                   ------------ ------------ ------------ ------------
   Gross profit         19,247       16,831       35,310       32,020

Selling and
 administrative
 expense                11,155       10,409       21,788       20,285
                   ------------ ------------ ------------ ------------
   Earnings from
    operations           8,092        6,422       13,522       11,735

Other expense
 (income):
 Interest expense          362          289          653          602
 Interest income           (12)          (1)         (12)          (1)
 Other, net                (73)          (8)        (143)          22
                   ------------ ------------ ------------ ------------
                           277          280          498          623
                   ------------ ------------ ------------ ------------
   Earnings
    before income
    taxes                7,815        6,142       13,024       11,112

Income taxes:
 Current                   757          578        1,222        1,034
 Deferred                2,263        1,806        3,819        3,275
                   ------------ ------------ ------------ ------------
                         3,020        2,384        5,041        4,309
                   ------------ ------------ ------------ ------------
    Net earnings         4,795        3,758        7,983        6,803

Preferred
 dividends               2,158        2,158        4,316        4,321
                   ------------ ------------ ------------ ------------
   Net earnings
    applicable to
    common
    stockholders  $      2,637        1,600        3,667        2,482
                   ============ ============ ============ ============

Earnings per
 common share:
 Basic            $        .15          .09          .21          .15
 Diluted          $        .15          .09          .21          .14

Weighted average
 common shares
 outstanding:
 Basic              17,154,032   17,111,607   17,149,538   17,105,304
 Diluted            17,394,146   17,289,123   17,399,309   17,284,349


             RECONCILIATION OF GAAP NET EARNINGS TO EBITDA
                            (in thousands)
                              (unaudited)

                                  Three Months Ended Six Months Ended
                                       June 30,          June 30,
                                  ------------------ -----------------
                                     2005     2004     2005     2004
                                  --------- -------- -------- --------

Net earnings                     $   4,795    3,758    7,983    6,803
Add:
  Income taxes                       3,020    2,384    5,041    4,309
  Interest expense                     362      289      653      602
  Other expense (income)               (85)      (9)    (155)      21
  Depreciation and amortization        461      444      890      860
                                  --------- -------- -------- --------
EBITDA                           $   8,553    6,866   14,412   12,595
                                  ========= ======== ======== ========


              THE ARISTOTLE CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                            (in thousands)

                                  June 30,   December 31,   June 30,
            Assets                  2005         2004         2004
                                ------------ ------------ ------------
                                (unaudited)               (unaudited)
Current assets:
   Cash and cash equivalents          2,169        2,143        4,477
   Investments                 $      5,919        4,058            -
   Accounts receivable, net          19,857       12,592       17,651
   Inventories                       39,281       33,356       36,241
   Prepaid expenses and other         4,231        6,665        3,889
   Refundable income taxes                -           49            -
   Deferred income taxes              9,825        9,825        8,184
                                ------------ ------------ ------------
        Total current assets         81,282       68,688       70,442

Property, plant and equipment,
 net                                 18,343       17,405       17,065

Goodwill                             13,634       13,707       11,393
Deferred income taxes                 6,793       10,594       11,806
Other assets                            439          511          409
                                ------------ ------------ ------------
        Total assets           $    120,491      110,905      111,115
                                ============ ============ ============

        Liabilities and Stockholders' Equity

Current liabilities:
   Current installments of
    long-term debt             $        115          114        3,548
   Trade accounts payable            11,015        7,192       11,048
   Accrued expenses                   5,736        5,833        5,067
   Accrued dividends payable          2,158        2,158        2,158
   Income taxes                         124            -           16
                                ------------ ------------ ------------
        Total current
         liabilities                 19,148       15,297       21,837

Long-term debt, less current
 installments                        26,855       24,948       26,799

Stockholders' equity:
   Preferred stock, Series I          6,580        6,580        6,580
   Preferred stock, Series J         65,760       65,760       65,760
   Common stock                         172          171          171
   Additional paid-in capital         2,655        2,310        1,184
   Accumulated deficit                 (664)      (4,331)     (10,775)
   Accumulated other
    comprehensive earnings
    (loss)                              (15)         170         (441)
                                ------------ ------------ ------------
        Total stockholders'
         equity                      74,488       70,660       62,479
                                ------------ ------------ ------------
        Total liabilities and
         stockholders' equity  $    120,491      110,905      111,115
                                ============ ============ ============

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