The supplementary educational publisher WRC Media has instituted a headcount freeze for the remainder of 2003 to cope with what company CEO Martin Kenny called a "challenging" funding environment. In addition to the freeze, WRC has consolidated its New York City offices by subletting two of the four floors it had occupied. Other restructuring initiatives are underway, Kenny said.

For the third quarter ended September 30, total sales at the company declined 1.6%, to $55.3 million, and net income dropped 21.7%, to $3.6 million. In its quarterly filing with the SEC, WRC said it expects state and local budget cuts to negatively affect sales for the remainder of 2003 and possibly into 2004. The company's World Almanac unit was especially hurt by the funding cutbacks, and sales fell 12.4% in the quarter, to $11.3 million. Sales in the CompassLearning unit also fell, dropping 7.6%, to $9.7 million. Sales at Weekly Reader rose 4.3%, to $12.2 million, and revenue at American Guidance Systems rose 4%, to $20.6 million.

For the nine-month period, sales slipped to $145.8 million from $146.8 million, but WRC trimmed its loss, before an accounting change, to $5.5 million, from $15.5 million.

In response to the soft market, WRC has realigned its management structure and created a new operating unit.

The new unit, WRC Consumer and Sponsored Publishing, will be headed by Peter Esposito and will be charged with growing the company's consumer business by finding alternative outlets and forging new alliances. WRC's primary markets are schools and libraries. Kenney said the new unit "will allow us to adapt and focus on our many brand and market opportunities."

In addition to Esposito's new appointment, other management changes include the naming of Emily Swenson as president of Weekly Reader. She had been with Children's Television Workshop. WRC has also appointed two new advisers. Robert Evanson, who stepped down as CEO of McGraw-Hill Education and Professional Publishing this spring, will advise WRC on financial, reporting, investments and infrastructure issues. Michael Carroll, who held executive spots at Simon & Schuster, Disney and Rodale, will work with the company on human resource matters.

Resigning from WRC was Robert Lynch, who had been executive v-p and COO as well as a director.