We continue to build on Scantron’s universal name recognition in the education industry and to focus on using technology to enhance our products and services in each of Scantron’s three businesses: Testing and Assessment, Data Collection and Scantron Service Group.

In 2004, this strategy enabled us to attract new customers in all three businesses, introduce a major new testing and assessment product and maintain or increase our high customer satisfaction levels.

Testing and Assessment
Our Testing and Assessment business is designed to help teachers and administrators improve the quality of education. This business grew 4.6% in 2004, with growth coming from both newer technology products and our traditional testing forms. More than 80% of all elementary and high schools in the United States use at least one Scranton product. Our goal is to become the de facto standard for testing and assessment in the K-12 market.

There continues to be an emphasis at both the state and federal levels on educational standards, and many of our testing and assessment solutions are designed to measure student performance against those standards.

Because educational budgets are still tight and not every school can invest in new technology, we have concentrated on developing a complete suite of testing and assessment solutions. We are now able to help schools and school districts migrate from paper and pencil to electronic and online solutions – and do so at their own pace.

We launched Achievement Series(sm), a Web-based, content-neutral testing platform in 2004 and subsequently announced a number of strategic alliances with other industry leaders such as Microsoft®, Intel®, Kaplan®, SchoolNet and TetraData. We have been encouraged by Achievement Series’ reception in the market and believe our strategic alliances should expand market penetration in 2005.

Performance Series(sm) is another of our technology products that is improving the quality of education. Performance Series is a computer-adaptive assessment tool that helps teachers evaluate students’ grade-level proficiency in a number of subjects.

Data Collection
In our Data Collection business, we are one of a select few companies that offer a complete end-to-end data collection solution. We collect information and turn it into actionable data for companies in a variety of industries.

Data Collection sales were essentially flat compared with 2003, but our new technology products comprise a larger share of those sales than in previous years. We won a number of major new contracts for survey services in 2004 with well-known companies.

Scantron Service Group
Scantron Service Group provides maintenance services for scanners, computer systems and peripherals sold by Scantron, Harland Financial Solutions and other companies. Our customers benefit from having a nationwide network of technicians who provide a consistently high level of service.

It has been 10 years since Scantron Service Group became part of Harland. The group marked the occasion by posting a 5% increase in sales. We won large accounts from a number of Fortune 1000 companies. This is particularly noteworthy given that it came at a time when the overall service market was either flat or declining. Scantron Service Group’s growth can be attributed to
a clear focus on customer service and satisfaction.