Here are the bullets from the management discussion section of their Nov 9th earnings announcement:
The following section summarizes our results of operations for the three months ended September 30, 2012 compared to the three months ended September 30, 2011:In the company's PowerPoint overview of the results the company outlines their plan of action in dealing with the current situation and this section of the presentation was delivered by CEO Michael Hansen who has only been there since the summer. Action points include, a key performance measures program tied to compensation, development of a channel management team, improved selling focus on print and digital and a longer team focus on better digital solutions.
• Revenues decreased by $153.6 million, or 22.2%, to $538.3 million. The revenue decline was primarily in the Domestic segment due to lower sales across all markets. Revenues decreased in the International segment primarily due to lower sales in the higher education market, as well as the unfavorable impact of foreign currency translation.
• Operating income decreased by $116.7 million, or 48.7%, to $122.7 million reflecting lower revenues, partially offset by lower employee-related costs.
• Adjusted EBITDA decreased by $115.7 million, or 33.2%, to $233.1 million, reflecting lower revenues, partially offset by lower employee-related costs.
• Net cash provided by operating activities decreased by $57.7 million, or 40.4%, to $85.2 million, primarily due to lower net income, partially offset by favorable working capital movements and lower debt payments in lieu of interest.
• Unlevered Free Cash Flow decreased by $88.0 million, or 32.8%, to $180.4 million, primarily due to lower net income, partially offset by favorable working capital movements.
• In July 2012, we completed a privately-negotiated exchange (the “July 2012 Debt Exchange”) whereby we exchanged $710.0 million aggregate principal amount of 10.50% Senior Unsecured Notes due 2015 (the “Senior Unsecured Notes”) for $710.0 million aggregate principal amount of newly issued 12.00% Senior Secured Second Lien Notes due 2019 (“Senior Secured Second Lien Notes”). In connection with this transaction, we purchased approximately $28.7 million aggregate principal amount of Senior Unsecured Notes at a discount to par. These transactions resulted in a net loss of $2.2 million during the three months ended September 30, 2012.
• In addition to the Senior Unsecured Notes purchased in connection with the July 2012 Debt Exchange, we purchased $73.1 million of Senior Unsecured Notes, $29.2 million of the 13.25% Senior Subordinated Discount Notes due 2015 (the “Senior Subordinated Discount Notes”) and $7.1 million of the 13.75% Senior PIK Notes due 2015 (the “Senior PIK Notes”), resulting in a net gain of $28.8 million. During the three months ended September 30, 2011, we purchased $174.1 million of the Senior Subordinated Discount Notes and $14.1 million of the Senior PIK Notes resulting in a gain of $42.2 million. See Note 5 “Debt” to our Financial Statements for further information.
• Also in July 2012, we made mandatory principal redemptions of $72.1 million pursuant to the terms of our Senior Subordinated Discount Notes and Senior PIK Notes. These payments were calculated in accordance with the applicable high yield discount obligation (“AHYDO”) regulations issued by the Internal Revenue Services of the United States (“IRS”).