On October 29, ProQuest Co. announced a change in management and a reorganization that creates a new business unit within the company. The changes came 1 week after ProQuest reported this year's third quarter earnings and lowered expectations for the fourth quarter. In the announcement, ProQuest said that "Joe Reynolds, formerly president of the company's Information and Learning segment, has left the company to pursue other interests."
As part of a "strategy for growth in the education market," ProQuest also announcedthat it would form ProQuest Education, a new unit within its Information and Learning segment that will serve educators and further publishing partnerships worldwide. ProQuest Education will be directed by Alan Aldworth, ProQuest's president and chief operating officer. XanEdu, which launched in July 2000 and had reported to Reynolds, will be a core business within this new education unit.
Aldworth said: "We appreciate Joe's contributions to ProQuest and to the Ann Arbor community over the past 4 years. We respect his personal career choices and wish him well in his future endeavors."
The announcement stated that while the company would not "directly replace Joe Reynolds as the head of the Information and Learning segment, it anticipates appointing leaders for both of the internal units—ProQuest Education and ProQuest Information and Learning—in 2003. Both internal and external candidates will be considered for these new positions."
Reynolds was named president and CEO of UMI in April 1998 and continued as president of the Information and Learning unit when the company became ProQuest. He was previously CEO of the ITP School and Career Education Group, a unit of International Thomson Corp. During his 15 years with Thomson, Reynolds held a number of senior management positions and built a significant track record in the education market. Under his leadership, the Information and Learning unit re-branded as ProQuest, developed the ProQuest service, and launched the Digital Vault digitization project.
On October 22, the company reported fairly strong third-quarter results. Revenues increased 8 percent to $106.4 million, compared to $98.6 million for the third quarter of 2001. In the Information and Learning segment, revenues increased 8 percent to $61.7 million in the third quarter, compared to $57.4 million for the same period last year. The company attributed the growth to increased sales of electronic products and XanEdu CoursePacks. Mark Trinske, ProQuest's vice president of investor relations, stressed that 8-percent growth in the current economy should be considered quite good.
However, the company lowered its previously announced 9 to 13 percent revenue growth projection for the fourth quarter to 8 percent. In a conference call with analysts, ProQuest representatives indicated that the tough economy in general (resulting in lower sales by ProQuest's resellers) and the loss of consortial contracts for its electronic products in particular were responsible for the lowered growth projection. One spokesperson noted that the company's competitors had recently won some three key consortia contracts worth $4 million by offering lower prices, but said, "we will not give our products away."
In a phone interview, Trinske said that ProQuest had eight consortia contracts up for renewal in 2002. It won back five of them and lost three to EBSCO. He said the company would work aggressively to renew contracts coming up in 2003 and to win new customers. One of the three (and the largest) lost contracts was with OhioLINK. When I checked with Tom Sanville, OhioLINK's executive director, he indicated that the consortium had made its vendor choice based on the value proposition offered. He said, "It was a combination of price and content, and we found the best value in EBSCO."
ProQuest will continue to sell value-added products, such as its historical newspapers, reference database products, and specialized databases, to individual libraries. XanEdu is not yet profitable, but the company expects it to be so by the end of 2003.
In addition to the Information and Learning side of the company, ProQuest also has a Business Solutions segment that delivers comprehensive parts information, in electronic form, to the automotive market.