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Six analysts and top management from twelve sector firms examine the education sector in this special 85-page Education Industry issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info465.htm.

TWST: Jeffrey, what are the most important issues then to factor into the outlook for corporate training, and are there any stocks in this sector that you would have investors look at right now?

Mr. Silber: I think the most important thing today is just the economic environment, and when enough uncertainty is erased from the picture, to get corporations to start spending again. But nobody really has a crystal ball out there. We’ve talked about which companies may lead in that respect, but I just want to focus in on the stocks, and not necessarily the companies. And again, going back to my experience with the staffing companies, the staffing sector is in the toilet right now, but the stocks are trading at outrageously high valuations because investors seem to be looking past the valley. I don’t think that mentality has caught on in the corporate training sector just yet, but I think it might happen fairly soon, sooner than most people might expect. Unfortunately, I don’t cover nearly as many companies in this sector and space as Peter does, but I’ll give you the company that we like the most, and that would be SkillSoft (Nasdaq:SKIL). In the current environment, if you could somehow figure out how to sell your product as a way for companies to either increase their return on investment and/or as a cost-saving tool, that’s probably a story that will ring well in the corporate purchasing department and you’ll be able to get deals done quicker. SkillSoft has actually been selling their product like that for a while. And, because they recently did a secondary offering and have a ton of cash on their books, they’re in much better shape than most out there. A lot of their competitors are privately held companies that are running out of capital pretty quickly. We talked about consolidation earlier and I think SkillSoft is in the very enviable position of consolidating the content side of the market, probably focusing mostly on the soft skills market, which are companies that focus on the non-IT side such as finance and sales. But in a transaction they announced just last week, they’ve already put their toe in the water by buying an IT content provider, so we might see other similar transactions in that space as well. The stock has had a great run over the past two or three days — up about 35% — so I would probably wait a little bit before pounding the table. However, this group is pretty volatile, so I’m sure we’ll have an opportunity to buy it a little cheaper.

TWST: Are there any particular risks that investors should be alerted to beyond the group volatility, Jeffrey?

Mr. Silber: Besides the economic risk, there are still risks in the execution for all of these companies. Even though the SkillSoft management team has been involved in this industry for a long period of time, the company itself is only about three years old, and they plan on turning profitable for the first time in the current quarter. Hopefully they’ll continue profitability thereafter, but the jury is still out. They haven’t done it yet, and who knows if they’ll continue to do it from here on in. We have a lot of confidence that they will, but obviously there’s a risk there.

1) Education Industry - In an in-depth (11,600 words) Analyst Roundtable, Peter L. Martin, Senior Vice President at Jefferies & Company, Inc., Gerald R. Odening, Managing Director at J.P. Morgan H&Q and Jeffrey M. Silber, Senior Vice President at Gerard Klauer Mattison & Company, Inc. examine the outlook for the sector including enrollments in higher education, regulatory issues and share specific stock recommendations.

2) Educational Publishing & Service Companies - In an in-depth (4,700 words) Analyst Interview, Peter Appert, Managing Director at Deutsche Banc Alex. Brown, Inc., examines the outlook for the sector and shares specific stock recommendations.

3) Outlook for Education Stocks - In an in-depth (4,000 words) Analyst Interview, Greg W. Cappelli, Managing Director at Credit Suisse First Boston, examines the outlook for the sector and shares specific stock recommendations.

4) Knowledge Technologies - In an in-depth (4,700 words) Analyst Interview, George Sutton, Managing Director at RBC Capital Markets, examines the outlook for the sector and shares specific stock recommendations.

5) The TWST confidential Off-The-Record survey of management performance at eighteen sector firms asked market insiders about the ability of management teams to create shareholder value.

6) CEO interviews (average 2,500 words). Top management of twelve sector firms examine the outlook for their firm and the sector.