[PLATO LEARNING LOGO]

_______________________________________________________For Immediate Release

Contact: John Murray, President & CEO
Greg Melsen, CFO
Steve Schuster, VP & Treasurer
952.832.1000

PLATO Learning, Inc. Reports
Third Quarter Fiscal Year 2003 Results

Revenues Grow 21.4%

MINNEAPOLIS, MN — September 3, 2003 — PLATO Learning, Inc. (NASDAQ: TUTR), a leading provider of K-Adult computer-based and e-learning solutions, today announced revenues for its third quarter ended July 31, 2003 totaling $23.8 million, a $4.2 million or a 21.4% increase versus the $19.6 million reported for the comparable period of fiscal 2002. The net earnings for the third quarter of 2003 were $285,000, or $0.02 per diluted share as compared to a net loss of $200,000 or $0.01 per diluted share, for the same period of 2002. Earnings before income taxes were $1.9 million for the third quarter of 2003 as compared to a loss before income tax benefit of $550,000 in the third quarter of 2002. Due to losses in the U.K. and application of interim period income tax accounting standards, our effective tax rate in third quarter was an abnormally high 85%. Our effective tax rate in the fourth quarter is expected to be significantly lower and is not expected to have an adverse impact on fourth quarter earnings.

Revenues for the nine months ended July 31, 2003 totaled $54.7 million, a $3.8 million or a 7.6% increase over the comparable period of fiscal year 2002. Our 2002 strategic acquisitions accounted for approximately 50% of this growth. The net loss for the first three quarters of fiscal year 2003 was $4.9 million or $0.30 per diluted share compared to a loss of $1.3 million, or $0.08 per diluted share for the same period of fiscal year 2002. As previously announced, the strategic NetSchools acquisition had a planned dilutive effect on the company’s operating results during the first half of its fiscal year 2003.

John Murray, President and Chief Executive Officer, said, “Our key financial metrics showed solid improvement this quarter. Our revenue growth was propelled by a steadily improving federal funding situation and our ability to consummate deals of significant size. This revenue growth was accompanied by a 70% increase in deferred revenues at July 31, 2003 as compared to a year ago as we continue to adapt our core business to include more subscription and services revenues.”

Mr. Murray added, “Our improved profitability shows the power of our business model. While revenues grew 21% this quarter as compared to the third quarter of last year, our total operating expenses increased only 3%. Sequentially, revenues were $6.3 million or 36% higher in the third quarter while third quarter operating expenses, excluding severance charges, increased only $522,000 or 3% versus the prior quarter.”

Mr. Murray continued, “While there has been improvement in the flow of federal funds to education and better understanding by educators regarding how to access these funds, the severity of state budget deficits remains a concern. Despite these challenges we are seeing increasing interest in our entire suite of products and services and customers committing to long-term relationships with PLATO Learning. Most notably, through a combination of our core and acquired products and services, specifically NetSchools’ Orion platform, we are gaining more visibility to multi-million dollar opportunities. We remain excited about our strategic direction and competitive advantages and expect to see continued revenue growth and improving profitability in future quarters.”

PLATO Learning Inc.
10801 Nesbitt Avenue South, Bloomington, Minnesota 55437
www.plato.com

Mr. Murray highlighted additional key financial information:

• Subscription based orders in Q3 2003 totaled $2.5 million as compared to $1.8 million in the third quarter of last fiscal year.

• Deferred revenue was $25.1 million at July 31, 2003 versus $14.7 million at July 31, 2002 and $19.5 million at April 30, 2003.

The Company’s balance sheet remains strong:

• Cash was $26.9 million at July 31, 2003, with no bank borrowings outstanding.

• Stockholders’ equity was $106.6 million at July 31, 2003.

Quarterly Conference Call
A conference call to discuss this announcement is scheduled for today at 3:45 PM (CDT). The dial-in number for this call is 1-877-775-1746. Please call about ten minutes prior and inform the operator you are participating in PLATO Learning, Inc.’s call. Should you be unable to attend the live conference call, a recording will be available to you from 6:00 p.m. on September 3, 2003 through midnight September 10, 2003. To access the recording call: 1-800-642-1687. At the prompt, enter pass code number 1802400.

About PLATO Learning
PLATO Learning, Inc. is a leading provider of computer-based and e-learning instruction for Kindergarten through adult learners, offering curricula in reading, writing, math, science, social studies, and life and job skills. The company also offers innovative online assessment and accountability solutions and standards-based professional development services. With over 4,000 hours of objective-based, problem-solving courseware, plus assessment, alignment and curriculum management tools, we create standards-based curricula that facilitate learning and school improvement.

With trailing 12-month revenues of about $78 million, PLATO Learning, Inc. is a publicly held company traded as TUTR on the NASDAQ-NMS. PLATO® Learning educational software is marketed to K-12 schools, colleges, job training programs, correctional institutions, military education programs, corporations and individuals and delivered via networks, CD-ROM, the Internet and private intranets. It is available for immediate purchase and electronic download on the Company’s Web site.

PLATO Learning is headquartered at 10801 Nesbitt Avenue South, Bloomington, Minnesota 55437, (952) 832-1000 or (800) 869-2000. The Company has domestic offices throughout the United States and international offices in the United Kingdom and Canada. International distributors are located in Puerto Rico, Singapore, South Africa and the United Arab Emirates. The Company’s Web address is http://www.plato.com.

This announcement includes forward-looking statements. PLATO Learning has based these forward-looking statements on its current expectations and projections about future events. Although PLATO Learning believes that its assumptions made in connection with the forward-looking statements are reasonable, no assurances can be given that its assumptions and expectations will prove to have been correct. These forward-looking statements are subject to various risks, uncertainties and assumptions. PLATO Learning undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Any forward looking statements made are subject to the risks and uncertainties as those described in the Company’s Annual Report on Form 10-K for the year ended October 31, 2002. Actual results may differ materially from anticipated results.

® PLATO is a registered trademark of PLATO Learning, Inc.

PLATO Learning Inc.
10801 Nesbitt Avenue South, Bloomington, Minnesota 55437
www.plato.com

PLATO Learning, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited, in thousands, except per share amounts)

				Three Months Ended						Nine Months Ended
				July 31,						July 31,
				2003			2002			2003			2002
Revenues:
	License fees			$	18,106		$	15,509		$	38,694		$	39,509
	Services				3,918			2,880			11,597			8,067
	Other				1,769			1,217			4,426			3,289
		Total revenues			23,793			19,606			54,717			50,865
Cost of revenues:
	License fees				1,196			854			2,603			2,637
	Services				533			481			1,908			1,058
	Other				1,649			954			3,951			2,717
		Total cost of revenues			3,378			2,289			8,462			6,412
			Gross profit		20,415			17,317			46,255			44,453
Operating expenses:
	Sales and marketing				11,364			10,281			33,008			29,175
	General and administrative				2,950			3,091			8,754			7,673
	Product development and customer support				3,379			3,899			9,713			9,257
	Amortization of intangibles				450			343			1,270			705
	Restructuring charge				422			—			802			—
	Purchased in-process research and development				—			360			—			360
		Total operating expenses			18,565			17,974			53,547			47,170
			Operating earnings (loss)		1,850			(657	)		(7,292	)		(2,717	)
Interest income					83			171			295			728
Interest expense					(34	)		(34	)		(88	)		(107	)
Other expense, net					(14	)		(30	)		(43	)		(139	)
	Earnings (loss) before income taxes				1,885			(550	)		(7,128	)		(2,235	)
Income tax expense (benefit)					1,600			(350	)		(2,185	)		(975	)
	Net earnings (loss)			$	285		$	(200	)	$	(4,943	)	$	(1,260	)
Earnings (loss) per share:
	Basic and diluted			$	0.02		$	(0.01	)	$	(0.30	)	$	(0.08	)
Weighted average common shares outstanding:
	Basic				16,363			16,676			16,558			16,512
	Diluted				16,420			16,676			16,558			16,512

PLATO Learning, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except per share amounts)

					July 31,			October 31,
					2003			2002
					(Unaudited)			(See Note)
				Assets
Current assets:
	Cash and cash equivalents				$	26,916		$	30,390
	Accounts receivable, net					33,613			33,034
	Prepaid expenses and other current assets					4,392			4,870
	Deferred income taxes					5,523			3,338
		Total current assets				70,444			71,632
Equipment and leasehold improvements, net of accumulated depreciation and amortization of $7,064 and $5,437, respectively						5,068			5,210
Product development costs, net of accumulated amortization of $10,295 and $6,083, respectively						14,252			13,545
Deferred income taxes						11			11
Goodwill						39,201			38,331
Identified intangible assets, net						13,879			15,374
Other assets						1,669			1,552
	Total assets				$	144,524		$	145,655
				Liabilities and Stockholders’ Equity
Current liabilities:
	Accounts payable				$	2,227		$	888
	Accrued employee salaries and benefits					6,905			6,979
	Accrued liabilities					3,378			4,786
	Deferred revenue					20,263			14,891
		Total current liabilities				32,773			27,544
	Deferred revenue					4,801			3,946
	Other liabilities					377			582
		Total liabilities				37,951			32,072
Stockholders’ equity:
	Common stock, $.01 par value, 50,000 shares authorized; 18,089 shares issued and 16,365 shares outstanding at July 31, 2003; 18,078 shares issued and 16,812 shares outstanding at October 31, 2002					164			168
	Paid in capital					129,853			129,802
	Treasury stock at cost, 1,724 and 1,266 shares, respectively					(18,401	)		(16,244	)
	Retained earnings (accumulated deficit)					(4,298	)		645
	Accumulated other comprehensive loss					(745	)		(788	)
		Total stockholders’ equity				106,573			113,583
			Total liabilities and stockholders’ equity		$	144,524		$	145,655

Note: The balance sheet at October 31, 2002 has been derived from our audited financial statements at that date.

PLATO Learning, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited, in thousands)

					Nine Months Ended
					July 31,
					2003			2002
Operating activities:
Net loss					$	(4,943	)	$	(1,260	)
Adjustments to reconcile net loss to net cash provided by operating activities:
	Deferred income taxes					(2,185	)		(975	)
	Amortization of capitalized product development costs					4,202			3,006
	Amortization of identified intangible assets					1,495			930
	Depreciation of equipment and leasehold improvements					1,635			1,183
	Provision for doubtful accounts					1,607			1,501
	Purchased in-process research and development					—			360
	Stock-based compensation					—			45
	Loss on disposal of equipment					59			100
	Changes in assets and liabilities, net of effects of acquisitions:
		Accounts receivable				(2,220	)		(2,655	)
		Prepaid expenses and other current and noncurrent assets				395			58
		Accounts payable				1,339			(2,578	)
		Accrued liabilities, accrued employee salaries and benefits and other liabilities				(1,484	)		109
		Deferred revenue				5,350			624
			Total adjustments			10,193			1,708
				Net cash provided by operating activities		5,250			448
Investing activities:
Capitalization of product development costs						(4,893	)		(5,014	)
Capital expenditures						(1,542	)		(2,592	)
Acquisitions, net of cash acquired $153 in 2002						—			(9,310	)
	Net cash used in investing activities					(6,435	)		(16,916	)
Financing activities:
Repurchase of common stock						(2,161	)		(11,089	)
Net proceeds from issuance of common stock						51			1,277
Repayments of capital lease obligations						(196	)		(233	)
Repayments of bank debt						—			(2,366	)
	Net cash used in financing activities					(2,306	)		(12,411	)
Effect of foreign currency on cash						17			138
Net decrease in cash and cash equivalents						(3,474	)		(28,741	)
Cash and cash equivalents at beginning of period						30,390			61,568
Cash and cash equivalents at end of period					$	26,916		$	32,827