Apollo Group Inc. Reports Revenues and Earnings for Third Quarter and Nine Months Ended May 31, 1998.

PHOENIX--(BUSINESS WIRE)--June 22, 1998--Apollo Group Inc. (NASDAQ:APOL) Monday reported financial results for the third quarter of fiscal 1998.

Total revenues for the third quarter of fiscal 1998 increased by 37.2% to $106.8 million, compared with $77.8 million in the third quarter of fiscal 1997. Net income for the three months increased by 34.3% to $15.5 million, or $.20 per share, as compared to $11.6 million, or $.15 per share, for the same period last year.

Total revenues for the nine months ended May 31, 1998 increased by 36.8% to $282.4 million, compared with $206.5 million for the same period last year. Net income for the nine months increased by 41.5% to $33.9 million, or $.43 per share, as compared to $23.9 million, or $.31 per share, for the same period last year.

Revenue growth in the third quarter resulted primarily from increases in average degree enrollments for the University of Phoenix (UOP) of 31.0%, the Institute for Professional Development (IPD) of 15.4%, and Western International University (WIU) of 15.1% and net revenue from the newly acquired College for Financial Planning. Consolidated ending degree enrollments increased by 29.2% to 66,800 students at May 31, 1998 from 51,700 students at May 31, 1997.

Dr. John G. Sperling, chairman and chief executive officer, said, "We continue to be pleased with the company's growth and success. During the third quarter of 1998, the company opened a new UOP campus in Jacksonville, Florida and received NCA approval to open new locations in British Columbia and Oklahoma. UOP also received approval for three new degree programs that will be offered as early as this summer.

"IPD opened a new learning center in Merrillville, Indiana and extended its contracts with William Penn College and Albertus Magnus College. Student enrollments were up compared to last year at every UOP campus, at WIU and at most IPD campuses. UOP's Online Campus enrollment increased 60.0% to 4,360 students."

Historically, the third quarter of each fiscal year is the highest in terms of operating profits and net income. The company has experienced a seasonal increase in new enrollments in August of each year.

Instructional costs and services and selling and promotional costs in the fourth quarter of each year have also increased as a percentage of net revenues due to increased costs in preparation for the August peak enrollments. The company expects these seasonal trends to continue.

Apollo Group Inc., through its subsidiaries the University of Phoenix Inc., the Institute for Professional Development, the College for Financial Planning and Western International University Inc., is one of the largest providers of higher education programs for working adults in the United States, with total degree-seeking enrollment of approximately 66,800 students.

Educational programs and services are currently offered at 112 campuses and learning centers in 32 states, Puerto Rico and London.

For more information about Apollo Group Inc. and its subsidiaries, call 800/990-APOL or visit Apollo on the World Wide Web at http://www.apollogrp.com.

The address and phone number for the accrediting body referred to above is as follows:

North Central Association of Colleges and Schools

Commission on Institutions of Higher Education

30 North LaSalle Street, Suite 2400

Chicago, Illinois 60602-2504

312/263-0456 -0-

                   Apollo Group Inc. and Subsidiaries
                 Selected Financial and Operating Data
           (Dollars in thousands, except per share amounts)

                            Three Months Ended      Nine Months Ended
                           May 31,      May 31,    May 31,     May 31,
                            1998         1997       1998        1997
                                (Unaudited)            (Unaudited)

Revenues:
Tuition and other,
 net                      $105,201     $76,633    $278,154    $203,422
Interest income              1,582       1,209       4,293       3,055

Total net revenues         106,783      77,842     282,447     206,477

Costs and expenses:
Instruction costs
 and services               61,093      43,572     168,496     121,269
Selling and
 promotional                11,504       8,492      32,840      25,463
General and
 administrative              8,479       6,522      25,041      19,856

Total costs and
 expenses                   81,076      58,586     226,377     166,588

Income before income
 taxes                      25,707      19,256      56,070      39,889
Less provision for
 income taxes               10,185       7,702      22,209      15,954

Net income                 $15,522     $11,554     $33,861     $23,935

Diluted net income
 per share                    $.20        $.15        $.43        $.31

Diluted weighted
 average shares
 outstanding            79,250,000  77,733,000  78,991,000  77,618,000


OPERATING DATA:                        May 31, 1998      May 31, 1997

Students enrolled in degree programs      66,800            51,700

Number of locations                         112               93

Note to Editors: This press release includes statements which may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. This information may involve risk and uncertainties that could cause actual results to differ materially from the forward-looking statements.

CONTACT: Apollo Group Inc., Phoenix

Todd S. Nelson, 800/990-APOL

email: [e-mail]

Janess Pasinski, 800/990-APOL (Investors)

email: [e-mail]

www.apollogrp.edu

www.uophx.edu

www.ipd.org

www.fp.edu

www.wintu.edu

or

Morgen-Walke Associates Inc.

Donna N. Stein, 212/850-5600

Carol Lehrman or Sheryl Seapy, 415/296-7383 (Media)