More ProQuest budget woes
May 23, 2006
Remember those accounting problems at ProQuest, where they overstated revenues by $80 million over a span of only five years? Well, now there are questions about whether or not the company will continue to exist. The company is planning to sell its Business Solutions division to raise some cash as the SEC continues its investigation. Despite ProQuest’s endeavors to reassure customers and stockholders, this is scary news for libraries with ProQuest online resources like HeritageQuest, Ancestry Library Edition, National Newspapers, Newsstand, Historical Newspapers, PsycINFO, ABI/INFORM, Factiva, and Safari Tech Books.
May 24th, 2006 at 9:59 am
After hearing about the concern posted here, I thought it might be helpful to provide some additional information.
First, you will find a copy of a Letter to the Editor of the Ann Arbor News, from our President, David “Skip” Prichard. Additionally, I am including a copy of an update letter that we have emailed to customers. This letter is also posted on our web site. Taken together, these letters convey the confidence, pride, and commitment that all of us at ProQuest feel.
We value your business and look forward to a long and productive future of service to libraries.
Best regards,
Lynda James-Gilboe
Vice President, Marketing & Customer Support
ProQuest Information and Learning
789 E. Eisenhower Parkway
Ann Arbor, Michigan 48106
lynda.james-gilboe@il.proquest.com
734-761-4700, ext. 2521 or 800-521-0600, ext. 2521
Letter to the Editor of the Ann Arbor News from ProQuest Information & Learning President:
May 10, 2006
Editor
Ann Arbor News
340 E. Huron St.
P.O. Box 1147
Ann Arbor, MI 48106-1147
Your 5/7 “analysis” of ProQuest ignores our company’s considerable strengths and importance to the Ann Arbor community — facts we believe your readers should know. While ProQuest has been open about its challenges, we are fully engaged in addressing our issues and have confidence in our future. Any fair analysis needs to recognize that we are part of the larger ProQuest Company that continues to be a profitable global business, and we have a deep heritage and a team of committed, hardworking people who care about our customers, our products and our community.
ProQuest’s Information and Learning division has been a leader in the information industry since 1938 when its founder began microfilming precious books threatened by WWII. Today, ProQuest is a leader in library advocacy. Thousands of schools and libraries count on us for superior, value-based information products. They award us with industry leading customer satisfaction ratings and we work tirelessly to introduce new products that will advance learning. This is our passion and we plan on continuing to do it for a long time.
As one of the largest employers in Washtenaw County, we are proud of our active role in the community. We donate to Ann Arbor schools and actively support numerous local causes including the March of Dimes, United Way, Hospice, Michigan Theater, Ann Arbor Art Center, Ann Arbor Symphony, and Washtenaw Literacy. We believe in our responsibility to the community and are 100 percent focused on achieving a solid business result that will have a positive, lasting impact on our company, our employees and Ann Arbor.
I am proud to lead this business.
David “Skip” Prichard
President, ProQuest Information and Learning
Ann Arbor, MI 48106
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In late April I used a number of different venues to speak directly and openly to ProQuest Information & Learning customers about the preliminary results of ProQuest Company’s financial restatement and the strategic initiatives we are taking to strengthen ProQuest overall. Since then, we have celebrated a number of great successes as well as endured a few published reports that may have misled customers by characterizing ProQuest I&L inaccurately. I am writing again to share our continued good news and to set the record straight.
First, for those whom I might not have reached with my earlier messages, I will repeat that ProQuest is working through internal accounting and reporting issues, which while important to our historical balance sheets, do not impact our ongoing operational performance for you and your end-users, and do not affect our partners. Our customers’ billings are correct, and our publishers, distributors and other vendors have all been properly paid. The root cause has been addressed and we have taken the appropriate steps to ensure that it does not happen again. This has been a difficult experience for us, but it certainly does not define us.
For nearly 70 years, ProQuest I&L has been providing libraries with superior, value-based information. Our number one priority remains service to our customers. Please take a look at the facts with me in the context of some of the unfounded concerns I have heard:
Concern:
ProQuest I&L may not be able to provide the services my library has subscribed to or purchased from it.
Fact:
ProQuest is solid and moving forward. After alerting all of the appropriate parties about the accounting issue, the I&L team went right back to work on your products. In 2006 to date, every scheduled launch of a new online product and every shipment of microfilm has occurred on time. ProQuest Company is moving to meet all of its reporting obligations to the investment community and regulators, and it expects to complete our Board of Directors’ independent investigation of the accounting irregularities within weeks. As announced just three weeks ago, our division’s revenue outlook for 2006 exceeds $235 million; the revenue outlook for ProQuest company as a whole was announced as far exceeding half a billion dollars. We remain a strong company focused on publishing solutions for you and your patrons.
Concern:
ProQuest I&L may be sold causing libraries’ service to end abruptly.
Fact:
Libraries’ I&L services are secure. There has been some confusion about ProQuest Company’s openness to sell ProQuest Business Solutions (PBS). PBS is a completely separate division from I&L and operates independently out of its own headquarters in Richfield, OH and other locations. PBS is the automotive market’s global leader in the development and deployment of parts and service information products and dealer performance applications. PBS has no relationship to ProQuest I&L library business products such as ABI/INFORM and CBCA, or our distribution arrangement with Factiva.
Concern:
ProQuest I&L will reduce its investment in new development projects.
Fact:
ProQuest is on track to invest more than $50 million in I&L product capital this year. New products have already launched and will continue to be launched on their pre-announced schedule all year long. 2007 is already well into its planning stage.
Concern:
ProQuest’s arrangements with its lenders are a risk for customers of the business.
Fact:
Like millions of other businesses and individuals, ProQuest modified its credit arrangements this year. While this was in large part because we are restating our audited financial reports, it is a non-event for customers of the business. We have essentially the same total credit we had before the change, and the payments terms fit well within the company’s existing business plan. Our creditors are not threatening the business — indeed, our lenders have such confidence that some actually increased their share of our overall credit facility.
In conclusion, I believe these points are particularly important and I want to take the opportunity to underscore…
· ProQuest remains a leader in the library and information space. Other providers might wish they didn’t have to compete with our products and service, but ProQuest is not going anywhere.
· Our products and services still boast the same high quality you have come to trust from brands such as ProQuest, UMI, Chadwyck-Healey, SIRS, and Serials Solutions. You will be working with the same team and will continue to have the same experience.
· Importantly, as part of ProQuest Company, I&L enjoys the benefit of a strong parent with a strong, diverse portfolio.
When I became President of I&L at the end of 2005, I saw a company with a meaningful heritage; a clear strategy and strong sales; valued relationships with content partners; and most importantly, loyal customers around the globe. I was deeply disappointed to learn about the accounting irregularities, but my Executive Leadership Team and I took immediate action and all I&L associates are completely engaged in moving the business forward. We are continuing to serve our customers, develop new and innovative products and looking for other ways to improve how we do business and we plan to continue to do this well into the future.
As always, we will be the best partner we can and we invite your input, as usual, on how we can serve you better. Please don’t hesitate to contact me directly with any questions you may have. I look forward to a long and productive relationship.
Sincerely,
Skip
David “Skip” Prichard
President