Proquest financial developments

[Ann Okerson <ann.okerson@yale.edu>]

Of possible interest to readers.

UPDATE 1-ProQuest to restate earnings lower, eyes segment sale
Fri Apr 28, 2006 11:04 AM ET

April 28 (Reuters) - Shares of ProQuest Co. (PQE.N: Quote, 
Profile, Research) lost nearly a quarter on Friday after the 
company said it would restate lower certain results due to 
accounting irregularities and was looking at the sale of its 
business solutions segment.

The company also said it was discussing with its lenders and note 
holders to temporarily waive its existing default.

The Ann Arbor, Michigan-based company said it has initiated steps 
to address the financial issues arising from the restatement. 
These include reduction of staff, capital expenditures and 
operating expenses, and the potential sale of its business 
solutions segment.

ProQuest expects the restatement to reduce previously reported 
pre-tax earnings by $35 million to $45 million for the first 
three quarters of 2005 and by $45 million to $55 million for the 
full year 2004.

It also expects to restate earnings for fiscal years 2000 through 
2003, but sees the aggregate reduction for these four years to be 
materially less that for 2004 and 2005.

ProQuest sees annualized pre-tax savings of about $10 million to 
$20 million a year starting in 2007 and beyond because of these 
measures.

The potential sale of its business solutions division is a part 
its move to explore strategic alternatives to reduce debt and 
enhance value, ProQuest, an electronic publisher for education 
and automotive markets, said.

Chief Executive Officer Alan Aldworth said, "Given ProQuest's 
current financial circumstances we believe the sale of Business 
Solutions may be in the best interests of the company."

The company expects full year 2006 revenue for the business 
solutions segment of $185 million to $195 million, and earnings 
before interest and tax (EBIT) of $50 million to $55 million.

Shares of the company fell over 24 percent to $16.50 in morning 
trade on the Nasdaq. (Reporting by Saumyadeb Chakrabarty in 
Bangalore)

http://today.reuters.com/investing/financeArticle.aspx?type=mergersNews&storyID=2006-04-28T150529Z_01_BNG26363_RTRIDST_0_SERVICES-PROQUEST-UPDATE-1.XML

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