The Aristotle Corporation Announces 2007 First Quarter Results and Sets Date of Annual Meeting

Share Name	Share Symbol	Market	Type
The Aristotle (MM)	NASDAQ:ARTLP	NASDAQ	Common Stock

The Aristotle (MM) (NASDAQ:ARTLP)
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The Aristotle Corporation (NASDAQ: ARTL; ARTLP) announced today its results of operations for the quarter ended March 31, 2007, and set the date for its 2007 Annual Meeting of Stockholders. First Quarter 2007 Results For the quarter ended March 31, 2007, net sales increased 4.5% to $48.2 million from $46.2 million for the quarter ended March 31, 2006. Earnings before income taxes increased 13.7% to $7.4 million for the quarter ended March 31, 2007 from $6.5 million for the quarter ended March 31, 2006, and net earnings increased 14.1% to $4.5 million for the quarter ended March 31, 2007 from $4.0 million from the quarter ended March 31, 2006. Net earnings applicable to common stockholders for the quarter ended March 31, 2007 were $2.4 million, or $.13 per diluted common share, compared to $1.8 million, or $.10 per diluted common share, for the quarter ended March 31, 2006. The reported net earnings are shown after deduction for Federal, state and foreign income tax expenses. Approximately $1.3 million and $1.9 million of the income tax provision for the quarters ended March 31, 2007 and 2006, respectively, relate to the non-cash charge for utilization of Federal net operating tax loss carryforwards (�NOL�s�). The utilization of NOL�s for the reported quarters reduced Aristotle�s current Federal tax liability, thereby conserving cash. In the quarter ended March 31, 2007, the remaining balance of NOL�s available as of December 31, 2006, approximately $3.6 million, was utilized by Federal taxable income generated by the Company. Steven B. Lapin, Aristotle�s President and Chief Operating Officer, stated, �I am delighted to report the increase in quarterly earnings per share, on a fully diluted basis, to $.13 per common share compared to $.10 per common share in the same quarter of last year. Although the first calendar quarter is historically one of the lower revenue quarters of the year, the Company�s ability to yield improved earnings in the 2007 first quarter is an indication that management continues to effectively control the Company�s operating expenses.� �Additionally, gross profit margins improved in the 2007 first quarter to 39.3% of net sales, compared to 38.1% in the 2006 first quarter. Each business unit applies corporately-coordinated procurement practices that effectively consolidate purchasing leverage to attain the best available merchandise pricing from vendors. The Company continues to nurture mutually-beneficial business relationships with vendors so as to expand the value of its product offerings to all customers.� Dean Johnson, Aristotle�s Chief Financial Officer, commented, �At December 31, 2006, the Company had approximately $3.6 million of NOL�s available that could be utilized to offset future Federal income tax obligations. In the first quarter of 2007, the Company generated taxable income in excess of the $3.6 million balance of NOL�s. Utilization of this remaining balance of NOL�s provided the Company a Federal tax benefit of approximately $1.3 million in the first quarter of 2007. In future quarters, the Company will utilize cash to pay its Federal income tax obligations.� 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 net earnings before income taxes, interest expense, other income and expense, and depreciation and amortization. 2007 Annual Meeting Aristotle also announced today that it will hold its 2007 Annual Meeting of Stockholders on August 8, 2007. Stockholders of record on June 29, 2007 will be entitled to vote at the meeting. Any stockholder wishing to submit a proposal to be considered for inclusion in Aristotle�s proxy statement and proxy for the Annual Meeting must deliver the proposal by May 25, 2007, addressed to Aristotle�s Secretary at 96 Cummings Point Road, Stamford, Connecticut 06902. 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�, Whirl-Pak�, Simulaids, Triarco, Spectrum Educational Supplies, Hubbard Scientific, Scott Resources, Haan Crafts, To-Sew, CPR Prompt�, Ginsberg Scientific, and Summit Learning. Products include educational materials and supplies for substantially all K-12 curricula, molded plastics, biological materials, medical simulators, health care products and items for the agricultural, senior care and food industries. Aristotle has approximately 850 full-time employees at its operations in Fort Atkinson, WI, Modesto, CA, Fort Collins, CO, Plymouth, MN, Saugerties, NY, Chippewa Falls, WI, Otterbein, IN and Newmarket, Ontario, Canada. There are approximately 17.3 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 management; (v) the ability of Aristotle to retain its Federal net operating tax loss carryforward position and other deferred tax positions; and (vi) other factors identified in Item 1A, Risk Factors, contained in the Company�s Annual Report on Form 10-K for the year ended December 31, 2006. 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-K/A, 10-Q and 8-K. THE ARISTOTLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) (Unaudited) � Three Months Ended March 31, 2007� 2006� � Net sales $ 48,224� 46,164� Cost of sales 29,261� 28,565� Gross profit 18,963� 17,599� � Selling and administrative expense 11,627� 11,082� Earnings from operations 7,336� 6,517� � Other income (expense): Interest expense (326) (447) Other, net 351� 405� 25� (42) Earnings before income taxes 7,361� 6,475� � Income taxes: Current 1,523� 722� Deferred 1,319� 1,792� 2,842� 2,514� Net earnings 4,519� 3,961� � Preferred dividends 2,159� 2,159� Net earnings applicable to common stockholders $ 2,360� 1,802� � Earnings per common share: Basic $ .14� .10� Diluted $ .13� .10� � Weighted average common shares outstanding: Basic 17,266,573� 17,249,302� Diluted 17,536,665� 17,494,518� RECONCILIATION OF GAAP NET EARNINGS TO EBITDA (in thousands) (unaudited) � Three Months Ended March 31, 2007� 2006� � Net earnings $ 4,519� 3,961� Add: Income taxes 2,842� 2,514� Interest expense 326� 447� Other, net (351) (405) Depreciation and amortization 441� 435� EBITDA $ 7,777� 6,952� THE ARISTOTLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) � Assets March 31, 2007 December 31, 2006 March 31, 2006 (unaudited) (unaudited) Current assets: Cash and cash equivalents $ 2,013� 5,814� 1,999� Investments 14,958� 14,586� 13,258� Accounts receivable, net 19,557� 15,458� 19,381� Inventories 39,609� 37,487� 38,222� Prepaid expenses and other 6,581� 8,123� 7,013� Deferred income taxes 2,774� 4,051� 9,501� Total current assets 85,492� 85,519� 89,374� � Property, plant and equipment, net 26,357� 25,426� 23,045� � Goodwill 13,890� 13,860� 13,872� Deferred income taxes 8,188� 8,188� 2,712� Other assets 311� 328� 373� Total assets $ 134,238� 133,321� 129,376� � Liabilities and Stockholders' Equity Current liabilities: Current installments of long-term debt $ 288� 287� 589� Trade accounts payable 8,495� 9,440� 9,704� Accrued expenses 6,434� 8,207� 4,630� Accrued dividends payable -� 2,159� -� Total current liabilities 15,217� 20,093� 14,923� � Long-term debt, less current installments 14,913� 11,985� 31,268� Long-term pension obligations 4,653� 4,469� 858� Other long-term accruals 2,397� 2,383� -� � Stockholders' equity: Preferred stock, Series I 6,601� 6,601� 6,601� Preferred stock, Series J 65,760� 65,760� 65,760� Common stock 173� 172� 173� Additional paid-in capital 3,294� 3,106� 3,219� Retained earnings 22,417� 20,057� 6,693� Accumulated other comprehensive loss (1,187) (1,305) (119) Total stockholders' equity 97,058� 94,391� 82,327� Total liabilities and stockholders' equity $ 134,238� 133,321� 129,376�

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ARTLP The Aristotle (MM)