Although there were few specifics, a conference call with top executives at Advanced Marketing Services answered a few questions about the state of the company.

Bruce Myers, who will take over as CEO November 12, said the company has substantially completed its long-delayed quarterly filings, including a draft of the 10-k for the fiscal year ended March 31, 2004, and is working with its auditors to file completed statements with the SEC "as soon as possible." He said all personnel actions related to its internal review of its advertising policies have been taken, although, Myers added, the company will investigate any new facts that may be uncovered by its regular evaluation process. He said the company continues to cooperate with the ongoing Securities & Exchange Commission and U.S. Attorney investigations.

Because of SEC regulations, Myers said little about AMS's financial condition. Myers said the company was profitable in fiscal 2004, although he said he was not satisfied with margins. Late this summer, AMS cut its earnings per share estimate for fiscal 2004 to 10 cents—15 cents, down from 30 cents—40 cents. The company's business will continue to focus on wholesaling, distribution and publishing, and Myers said AMS continues as the primary supplier of books to warehouse clubs. Regarding distribution, Myers said, PGW's worldwide marketing initiatives have attracted new small publishers, adding that in the "normal evolution of distribution, new small publishers replace outgoing publishers."

Myers said he and the board of directors are working on a long-term vision for the company, which he hopes to be able to announce within six months.

Outgoing CEO Charlie Tillinghast said he was retiring because the task of finding a new CEO has been accomplished. He explained that his top priority as CEO has been to focus on customer service, and he told analysts it was improved customer service that has allowed AMS to "weather the storms of the past several months" as the company sorts through its advertising issues.

According to documents actually filed with the SEC, Myers has signed a two-year contract with AMS that expires April 11, 2006. Myers will earn a base salary of $450,000 and be eligible for a bonus worth up to 50% of his salary. Myers had earned $216,000 for the six months he spent consulting for AMS before becoming CFO in April.