I don't think they did. One of the band members posted a blog a while ago that made it sound like the band broke up, but I think they just left Drive-Thru. Because bands that break up don't usually post new music.
they did have a whole album (+) worth of demos recorded prior to that blog, though.
i think for general intents and purposes they're "broken up" (won't be releasing an album on a label, won't be touring, etc) but it's not a full break up, they're just not a full time band anymore (see: day at the fair). i'm not really sure though, but that's the idea i get.