Mr. Aldworth: ProQuest was formerly the Bell & Howell company. Over the years, Bell & Howell became a mini conglomerate. While it had some very valuable assets ' growing businesses in the content area ' electronic publishing ' it also had some traditional equipment businesses that were slower growth businesses. With this combination of businesses, it was difficult to get the attention of institutional investors, and with little support from the investment community, the company was undervalued. In 1989, Bell & Howell was taken private in a leveraged buyout transaction. Seven years later, in 1995 the company reemerged as a public company and was listed on the NYSE. In 2001, the company ' now under new management ' changed its name to ProQuest Company, and relisted on the New York Stock Exchange under the symbol PQE. The new management of the company made the decision to divest the traditional equipment businesses and focus on the growing subscription-based electronic content businesses. In January of 2001, the first of the major divestitures occurred where the imaging business was sold to Kodak. Later in the year, the international part of the mail processing equipment business was sold to Pitney Bowes and then in September 2001, the remaining discontinued operations were sold to a financial buyer in Chicago. The proceeds from the sales were mainly used to pay down the corporate debt, and ProQuest went from more than $507 million in debt at the end of 2000, to $251 million at year end 2001, a reduction of 51% in a single year. As we enter 2002, ProQuest Company is a leader in e- learning and e-publishing. For its customers in the academic, library, automotive, and powersports industries, the company provides access to a body of content that is unmatched in breadth and depth. We operate through two business divisions ' Information and Learning ' serving libraries and educational institutions, and business solutions ' and Publishing Services ' a provider of technical electronic publishing serving principally the transportation industry, automotive companies and dealers, motorcycle dealers, power sports dealers and their manufacturers. We still have a $100 million microfilm publishing business that has been a very steady business, but the electronic business has grown to be much larger than that on the education side. And on the Publishing Services side, the revenues are almost exclusively from electronic publishing under long-term (five-year) subscriptions. The company has a veteran leadership team. The Chairman of the company, Jim Roemer, the Chairman and CEO, was responsible for the growth of the electronic publishing business at Lexis Nexis. He ran all of the divisions there as well as the combined entity before leaving to join Bell & Howell about 10 years ago. He ran each of the two divisions before becoming corporate CEO. He's one of the real veterans in electronic publishing. I joined the company 15 months ago from Tribune Company where I had spent almost two decades in various parts of Tribune Company in financial and general management. We recently reported that for the fourth quarter ended December 29, 2001, revenues were $106.4 million, up 7% over the $99.7 million recorded during the fourth quarter of 2000. Earnings before interest and income taxes (EBIT) from continuing operations excluding one-time transactions, were $22.2 million, an 80% increase over the $12.3 million reported during the same period last year. Net earnings from continuing operations for the fourth quarter were $9.8 million or $.40 per diluted share compared to $3.6 million or $.15 per fully diluted share for the same quarter in 2000. For the 12 months ended December 29, 2001, revenues were $401.6 million compared to $374.3 million one year ago ' an increase of 7%. EBIT for the year was $68.7 million, an increase of 62% over the $42.4 million reported in 2000. Net earnings from continuing operations for the year increased to $27.1 million or $1.13 per diluted share compared to $8.4 million or $.36 per fully diluted share one year ago. In the news release, we also shared growth guidance for 2002. For the first quarter of 2002, ProQuest projects revenue growth of about 7% with EBIT growth of 23% to 26%. For the full year 2002, the company expects revenues of approximately $440 to $455 million representing growth of approximately 9% to 13%. EBIT growth is expected to be in the range of 22% to 26%. The company anticipates earnings per share for 2002 of between $1.45 and $1.50, before any impact from the implementation of FASB 142. Capital expenditures, including continuing investments in digitizing electronic information and in technology that streamlines delivery of this information to its customers, are expected to be approximately $50 to $55 million. From Information and Learning, ProQuest anticipates year- over-year top-line growth of 10% to 13% in 2002, with revenues of approximately $260 to $270 million for the year. Year-over-year EBIT growth for Information and Learning is expected to be in the range of 22% to 26%. Of the revenue generated by Information & Learning, more than 60% is anticipated to come from electronic products in 2002. While the company expects its nonelectronic business will have minimal growth, it projects that the electronic business including XanEdu and content developed from the Digital Vault Initiative, will grow approximately 20%. From XanEdu, the company anticipates revenues to grow to more than $12 million for 2002, as compared to $4.3 million in its start up year of 2001. From its Publishing Services division, the company expects year over year revenue growth of 7% to 9%. EBIT growth is anticipated to be between 22% and 26%. Publishing Services also projects growth for 2002 of 5% in new electronic part catalog installations at auto dealers, and growth of 10% in sales of electronic content and related services.
Tickers included in this excerpt: PQE
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