John Wiley & Sons, Inc. (NYSE:JWA)(NYSE:JWB), a global research and
education company, today announced results for the fourth quarter and
fiscal year ended April 30, 2018.
FOURTH QUARTER 2018 HIGHLIGHTS
-
Reported results (GAAP) reflected growth in Revenue (+6%), Operating
Income (+18%) and EPS (+16%), driven by strong operational performance
and favorable impacts from foreign currency.
-
At constant currency, growth in Revenue (+1%), Adjusted Operating
Income (+15%) and Adjusted EPS (+6%) resulted from strong performance
in Research, growth in Solutions, and broader operating efficiencies.
-
A signature milestone was achieved with the launching of Wiley Online
Library, one of the largest and most authoritative collections of online research
journals, books, and resources, on Wiley’s industry-leading Atypon
Literatum platform.
FISCAL YEAR 2018 HIGHLIGHTS
-
Reported results (GAAP) reflected growth in Revenue (+5%), Operating
Income (+16%) and EPS (+70%), driven by strong operational
performance, benefits from foreign currency, and a one-time benefit
from US tax reform.
-
At constant currency, growth in Revenue (+1%), Adjusted Operating
Income (+7%) and Adjusted EPS (+3%) resulted from strong performance
in Research, growth in Solutions, and broader operating efficiencies,
partially offset by higher taxes.
-
Cash Provided by Operating Activities (+19% to $374 million) and Free
Cash Flow less Product Development Spending (+35% to $224 million)
grew as a result of earnings performance and working capital
improvements.
-
The Company’s transformation to digital continues with revenue from
digital products now 73% of total revenue, up from 68% in prior year.
MANAGEMENT COMMENTARY
“We are pleased with our team’s performance this year, which landed us
ahead of guidance, and we are energized about the future,” said Brian
Napack, President and CEO. “Wiley’s strong brands, publishing assets,
technology platforms, market relationships and capacity to invest
position us well to benefit from the ongoing transformations in research
and education. We will continue to invest in the success of our
customers in critical areas such as open access publishing, researcher
and student productivity, classroom-to-career pathways and workforce
reskilling and upskilling. We are also investing in business
optimization and operational excellence across the organization, which
will result in improved speed, agility, and effectiveness.”
FINANCIAL SUMMARY
Wiley provides non-GAAP financial measures such as “Adjusted EPS,”
“Adjusted Operating Income,” “Adjusted CTP,” “Free Cash Flow less
Product Development Spending,” and results on a Constant Currency basis
to assess underlying business performance and trends. Management
believes non-GAAP financial measures, which exclude the impact of
restructuring charges and credits and certain other items, provide for a
more comparable basis to analyze operating results and earnings. See the
reconciliations of non-GAAP financials and explanations of the uses of
non-GAAP measures in the supplementary information accompanying this
press release.
Fourth Quarter Results
|
GAAP Measures
Unaudited ($millions except for EPS)
|
|
Q4 2018
|
|
Q4 2017
|
|
Change
|
|
Change
Constant Currency
|
|
Revenue
|
|
$477.3
|
|
$452.2
|
|
6%
|
|
1%
|
|
Operating Income
|
|
$74.8
|
|
$63.4
|
|
18%
|
|
|
|
Diluted EPS
|
|
$0.93
|
|
$0.81
|
|
16%
|
|
|
|
Non-GAAP Measures
|
|
Q4 2018
|
|
Q4 2017
|
|
|
|
Change
Constant Currency
|
|
Adjusted Operating Income
|
|
$76.9
|
|
$61.7
|
|
|
|
15%
|
|
Adjusted EPS
|
|
$0.94
|
|
$0.82
|
|
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
Wiley recorded favorable foreign currency variances in the quarter of
approximately $21 million in revenue, $6 million in operating income,
and $0.07 in EPS due to changes in exchange rates and functional
currency gains related to calendar year 2017 journal subscriptions in
the UK.
-
Revenue increased due to growth in Research (+10% reported, +5%
constant currency) and Solutions (+6% reported, +2% constant
currency), which more than offset a decline in Publishing (-2%
reported, -5% constant currency).
-
Research growth was driven by Open Access (+59%
reported, +51% constant currency) and Journal Subscriptions (+7%
reported, +2% constant currency).
-
Publishing performance reflected a decline in STM and
Professional Publishing (-5% reported, -10% constant currency),
which more than offset growth in Educational Publishing (+5%
reported, +2% constant currency) and Course Workflow/WileyPLUS
(+13% reported, +12% constant currency).
-
Solutions businesses all exhibited growth with increases in
Education Services (+1% reported and constant currency),
Professional Assessment (+5% reported, +4% constant currency), and
Corporate Learning (+15% reported, +2% at constant currency).
-
GAAP Operating Income performance reflected favorable foreign
exchange (+$6 million), which offset the impact of a $2.0 million
restructuring charge and a $1.7 million restructuring credit in the
prior year. Adjusted Operating Income growth was mainly due to
savings from efficiency gains and higher revenue.
-
Research Contribution to Profit (CTP) grew +6% on a
reported basis, but declined -2% adjusted at constant currency.
Revenue growth was offset by higher royalty costs in licensed
society publishing.
-
Publishing CTP declined -10% on a reported basis, -19%
adjusted at constant currency due to lower revenue.
-
Solutions CTP grew +81% on a reported basis, 80% adjusted
at constant currency due to higher revenue and increased operating
efficiency.
-
Corporate Expenses reduced by 10% on a reported basis and
22% on an adjusted basis at constant currency largely due to the
timing of charges in the prior year.
-
GAAP EPS growth primarily reflected the fourth quarter impact
of favorable foreign exchange (+$0.07 per share), which offset the
impact of restructuring charges in 2018 and credits in 2017 (+0.04 per
share). Adjusted EPS growth was due to higher adjusted
operating income.
Full Year Results
|
GAAP Measures
Unaudited ($millions except for EPS)
|
|
FY 2018
|
|
FY 2017
|
|
Change
|
|
Change
Constant Currency
|
|
Revenue
|
|
$1,796.1
|
|
$1,718.5
|
|
5%
|
|
1%
|
|
Operating Income
|
|
$239.5
|
|
$206.2
|
|
16%
|
|
|
|
Diluted EPS
|
|
$3.32
|
|
$1.95
|
|
70%
|
|
|
|
Cash Provided by Operating Activities
|
|
$373.8
|
|
$314.9
|
|
19%
|
|
|
|
Non-GAAP Measures
|
|
FY 2018
|
|
FY 2017
|
|
|
|
Change
Constant Currency
|
|
Adjusted Operating Income
|
|
$271.7
|
|
$228.4
|
|
|
|
7%
|
|
Adjusted EPS
|
|
$3.43
|
|
$3.01
|
|
|
|
3%
|
|
Free Cash Flow less Product Development Spending
|
|
$223.9
|
|
$166.2
|
|
|
|
35%
|
|
|
|
|
|
|
|
|
|
|
Wiley recorded favorable foreign currency variances in the fiscal
year of approximately $60 million in revenue, $28 million in operating
income, and $0.34 in EPS due to changes in exchange rates and functional
currency gains related to calendar year 2017 journal subscriptions in
the UK.
-
Revenue growth was driven primarily by Research (+9% reported,
+4% constant currency) and Solutions (+5% reported, +3% constant
currency), which more than offset a decline in Publishing (-2%
reported, -4% constant currency).
-
Research growth primarily reflected increases for Open
Access (+37% reported, +34% constant currency) and Journal
Subscriptions (+6% reported, flat constant currency), as well as
the full-year results of Atypon, which was acquired in October
2016 (+73%, including $14 million due to full year contribution).
-
Publishing revenue performance mainly reflected market
conditions, with STM and Professional Publishing down 1% on a
reported basis and 3% at constant currency, and Educational
Publishing down 5% on a reported basis and 6% at constant currency.
-
Solutions growth reflected increases in Education Services
(+7% reported and constant currency) and Professional Assessment
(+2% reported and constant currency). Corporate Learning rose 6%
on a reported basis but declined 1% at constant currency.
-
GAAP Operating Income growth was mainly due to higher revenue,
as well as favorable foreign exchange (+$28 million). Adjusted
Operating Income growth was primarily a result of savings from
efficiency initiatives and restructuring actions, as well as higher
revenue.
-
Research CTP increased 9% on a reported basis, but
was flat on an adjusted constant currency basis. Revenue growth
was largely offset by higher royalty costs in licensed society
publishing.
-
Publishing CTP declined 1% on a reported basis but
increased 2% on an adjusted constant currency basis. The
improvement mainly reflected savings from efficiency initiatives
and restructuring actions, which more than offset the revenue
decline.
-
Solutions CTP grew 49% on a reported basis and 56% on an
adjusted constant currency basis, driven by increased operating
efficiencies.
-
Corporate Expenses reduced by 2% on a reported basis and on
an adjusted basis at constant currency, driven by efficiency
initiatives and restructuring actions.
-
GAAP EPS growth primarily reflected the current year impact of
the U.S. Tax Act (+$0.43 per share) and favorable foreign exchange
(+$0.34 per share), as well as other net charges in the prior year,
including an unfavorable ruling in a Germany income tax dispute ($0.85
per share) and a pension settlement ($0.09 per share). These offset
higher restructuring charges and foreign exchange losses associated
with intercompany transactions in the current fiscal year. Adjusted
EPS growth was due to higher adjusted operating income and lower
interest expense, which more than offset favorable tax credits in the
prior year of $0.12 per share.
-
Cash Provided by Operating Activities increased 19% to $374
million due to earnings performance and working capital improvements. Free
Cash Flow less Product Development Spending growth (+35%) was
primarily attributable to the increase in Cash Provided by Operating
Activities. Capital expenditures, including Technology, Property, and
Equipment and Product development spending, rose $1 million to $150
million.
-
Shareholder Return: In June, Wiley raised its annual dividend
for the 24th consecutive year. The Company utilized $74
million of cash for dividends and $40 million for share repurchases
with an average per share cost of $55.65. In the prior year, the
Company utilized $72 million and $50 million for dividends and share
repurchases, respectively.
FISCAL YEAR 2019 OUTLOOK
|
Metric ($M, except EPS)
|
|
FY18 Actual
|
|
FY19 Expectation
Constant Currency
|
|
Revenue
|
|
$1,796.1
|
|
Even with prior year
|
|
Adjusted EPS
|
|
$3.43
|
|
Mid-single digit decline
|
|
Cash Provided by Operating Activities
|
|
$373.8
|
|
High-single digit decline
|
|
Capital Expenditures
|
|
$149.9
|
|
Modestly lower
|
|
|
|
|
|
|
-
Wiley anticipates low-single digit Revenue growth in Research and
Solutions offset by a low-single digit Revenue decline in Publishing.
-
Adjusted EPS is expected to decline primarily due to increased
investment in revenue growth initiatives, particularly in Research and
Education Services.
-
Cash Provided by Operating Activities reflects the impact of growth
investments and substantially lower gains in working capital.
-
Capital Expenditures are expected to decline modestly with the
completion of the Company’s headquarters transformation. Increased
investment is expected in areas of product development and business
optimization.
EARNINGS CONFERENCE CALL
Scheduled for today, June 12 at 10:00 a.m. (ET). Access the webcast on
Wiley.com, at https://www.wiley.com/en-us/investors.
U.S. callers, please dial (888) 224-1005 and enter the participant code
8850169#. International callers, please dial (323) 994-2093 and enter
the participant code 8850169#.
ABOUT WILEY
Wiley, a global research and education company, helps people and
organizations develop the skills and knowledge they need to succeed. Our
online scientific, technical, medical, and scholarly journals, combined
with our digital learning, assessment and certification solutions help
universities, academic societies, businesses, governments and
individuals increase the academic and professional impact of their work.
For more than 200 years, we have delivered consistent performance to our
stakeholders. The Company's website can be accessed at www.wiley.com.
FORWARD-LOOKING STATEMENTS
This release contains certain forward-looking statements concerning the
Company's Fiscal Year 2019 Outlook, operations, performance, and
financial condition. Reliance should not be placed on forward-looking
statements, as actual results may differ materially from those in any
forward-looking statements. Any such forward-looking statements are
based upon a number of assumptions and estimates that are inherently
subject to uncertainties and contingencies, many of which are beyond the
control of the Company, and are subject to change based on many
important factors. Such factors include, but are not limited to (i) the
level of investment in new technologies and products; (ii) subscriber
renewal rates for the Company's journals; (iii) the financial stability
and liquidity of journal subscription agents; (iv) the consolidation of
book wholesalers and retail accounts; (v) the market position and
financial stability of key online retailers; (vi) the seasonal nature of
the Company's educational business and the impact of the used book
market; (vii) worldwide economic and political conditions; (viii) the
Company's ability to protect its copyrights and other intellectual
property worldwide (ix) the ability of the Company to successfully
integrate acquired operations and realize expected opportunities and (x)
other factors detailed from time to time in the Company's filings with
the Securities and Exchange Commission. The Company undertakes no
obligation to update or revise any such forward-looking statements to
reflect subsequent events or circumstances.
|
|
|
JOHN WILEY & SONS, INC.
|
|
SUPPLEMENTARY INFORMATION (1)(2)
|
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
|
(in thousands, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
|
April 30,
|
|
April 30,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
477,253
|
|
$
|
452,201
|
|
$
|
1,796,103
|
|
$
|
1,718,530
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
125,440
|
|
|
119,299
|
|
|
485,220
|
|
|
460,756
|
|
Operating and administrative expenses
|
|
|
262,680
|
|
|
258,822
|
|
|
994,552
|
|
|
988,597
|
|
Restructuring and related charges (credits)
|
|
|
2,035
|
|
|
(1,690)
|
|
|
28,566
|
|
|
13,355
|
|
Amortization of intangibles
|
|
|
12,265
|
|
|
12,348
|
|
|
48,230
|
|
|
49,669
|
|
Total Costs and Expenses
|
|
|
402,420
|
|
|
388,779
|
|
|
1,556,568
|
|
|
1,512,377
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
74,833
|
|
|
63,422
|
|
|
239,535
|
|
|
206,153
|
|
As a % of revenue
|
|
|
15.7%
|
|
|
14.0%
|
|
|
13.3%
|
|
|
12.0%
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(3,251)
|
|
|
(3,576)
|
|
|
(13,274)
|
|
|
(16,938)
|
|
Foreign exchange transaction (losses) gains
|
|
|
(1,235)
|
|
|
(1,558)
|
|
|
(12,819)
|
|
|
421
|
|
Interest income and other (expense) income
|
|
|
(255)
|
|
|
115
|
|
|
489
|
|
|
1,480
|
|
Income Before Taxes
|
|
|
70,092
|
|
|
58,403
|
|
|
213,931
|
|
|
191,116
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
16,032
|
|
|
11,728
|
|
|
21,745
|
|
|
77,473
|
|
Effective tax rate
|
|
|
22.9%
|
|
|
20.1%
|
|
|
10.2%
|
|
|
40.5%
|
|
Net Income
|
|
$
|
54,060
|
|
$
|
46,675
|
|
$
|
192,186
|
|
$
|
113,643
|
|
As a % of revenue
|
|
|
11.3%
|
|
|
10.3%
|
|
|
10.7%
|
|
|
6.6%
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Shares - Diluted
|
|
|
58,090
|
|
|
57,943
|
|
|
57,888
|
|
|
58,199
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - Diluted
|
|
$
|
0.93
|
|
$
|
0.81
|
|
$
|
3.32
|
|
$
|
1.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The supplementary information included in this press release for
2018 is preliminary and subject to change prior to the filing of our
upcoming Annual Report on Form 10-K with the Securities and Exchange
Commission.
|
|
(2) All amounts are approximate due to rounding.
|
|
|
|
|
|
JOHN WILEY & SONS, INC.
|
|
SUPPLEMENTARY INFORMATION (1)
|
|
RECONCILIATION OF GAAP EPS to NON-GAAP ADJUSTED EPS - DILUTED
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
|
April 30,
|
|
April 30,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Earnings Per Share - Diluted
|
|
$
|
0.93
|
|
$
|
0.81
|
|
$
|
3.32
|
|
$
|
1.95
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring and related charges (credits) (A)
|
|
|
0.02
|
|
|
(0.02)
|
|
|
0.39
|
|
|
0.15
|
|
Foreign exchange (gains) losses on intercompany transactions (B)
|
|
|
(0.01)
|
|
|
-
|
|
|
0.15
|
|
|
0.01
|
|
Estimated impact of Tax Cuts and Jobs Act (C)
|
|
|
-
|
|
|
-
|
|
|
(0.43)
|
|
|
-
|
|
Pension settlement (D)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
0.09
|
|
Unfavorable tax settlement (E)
|
|
|
-
|
|
|
0.03
|
|
|
-
|
|
|
0.85
|
|
Deferred income tax benefit on UK tax rate change (F)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(0.04)
|
|
Non-GAAP Adjusted Earnings Per Share - Diluted
|
|
$
|
0.94
|
|
$
|
0.82
|
|
$
|
3.43
|
|
$
|
3.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
(A)
|
|
Adjusted results exclude restructuring charges (credits) and other
related charges associated with the Company's Restructuring and
Reinvestment Program. For the three months ended April 30, 2018 and
2017, there were charges of $2.0 million, or $0.02 per share and
credits of $1.7 million, or $(0.02) per share, respectively. For the
years ended April 30, 2018 and 2017, there were charges of $28.6
million, or $0.39 per share, and charges of $13.4 million, or $0.15
per share, respectively.
|
|
|
|
|
|
(B)
|
|
In 2017, we adjusted results to exclude foreign exchange gains and
losses associated with intercompany transactions. The prior year
adjusted earnings per share amounts have been recasted to conform to
current year presentation. For the three months ended April 30, 2018
and 2017, there were gains of $0.9 million or $(0.01) per share and
losses of $0.4 million, respectively. For the years ended April 30,
2018 and 2017, there were losses of $10.7 million, or $0.15 per
share, and losses of $1.0 million, or $0.01 per share, respectively.
|
|
|
|
|
|
(C)
|
|
In connection with the Tax Cuts and Jobs Act enacted on December 22,
2017, for the three months and year ended April 30, 2018, the
Company recorded an estimated income tax provision of $0.1 million
and $25.1 million, or $(0.43) per share, respectively. Given the
significant complexity of the Act, anticipated guidance from the
U.S. Treasury, and potential additional guidance from the SEC or the
Financial Accounting Standards Board, these estimates may be
adjusted within 12 months of the enactment date.
|
|
|
|
|
|
(D)
|
|
As previously disclosed and as reported in the Company's SEC
filings, the Company announced a voluntary, limited-time opportunity
for terminated vested employees who were participants in the U.S.
defined benefit retirement plan to elect a single lump sum payment
of accumulated benefits. The election period closed on August 29,
2016. The total charge including a prorata portion of the
unamortized net actuarial loss was included in operating and
administrative expenses and was $8.8 million, or $0.09 per share.
The aggregate amount of payments under this one time election was
$28.3 million, which was paid from pension plan assets in October
2016.
|
|
|
|
|
|
(E)
|
|
As previously disclosed in the Company's SEC filings, the Company
was appealing an unfavorable tax ruling in Germany related to tax
benefits obtained through an increase in the tax deductible basis of
certain merged German subsidiaries. In September 2016, the German
Federal Fiscal Court issued an unfavorable final judgement in
Wiley's longstanding tax appeal. As a consequence, the Company
reported a $49.1 million charge, or $0.85 per share, in fiscal year
2017.
|
|
|
|
|
|
(F)
|
|
As previously disclosed in the Company's SEC filings, the adjusted
results for the year ended April 30, 2017 exclude deferred tax
benefits of $2.6 million, or $0.04 per share, associated with tax
legislation enacted in the second quarter of fiscal year 2017 in the
United Kingdom that reduced the U.K. corporate income tax rates by 1
percentage point in 2020. The benefits reflect the remeasurement of
the Company's deferred tax balances from 18% to the new income tax
rate of 17% effective April 1, 2020 and had no current cash tax
impact.
|
|
|
|
(1) See Explanation of Usage of Non-GAAP performance measures
included in this supplementary information for additional details on
the reasons why management believes presentation of each non-GAAP
performance measure provides useful information to investors. The
Reconciliation of US GAAP to Adjusted EPS - Diluted table may not
foot due to rounding. The supplementary information included in this
press release for 2018 is preliminary and subject to change prior to
the filing of our upcoming Annual Report on Form 10-K with the
Securities and Exchange Commission.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JOHN WILEY & SONS, INC.
|
|
SUPPLEMENTARY INFORMATION (1)
|
|
SEGMENT RESULTS
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended April 30,
|
|
% Change
|
|
|
|
2018
|
|
2017
|
|
Reported
|
|
Constant
Currency
|
|
Research:
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
Journal Subscriptions
|
|
$
|
178,910
|
|
$
|
167,319
|
|
7%
|
|
2%
|
|
Open Access
|
|
|
13,939
|
|
|
8,782
|
|
59%
|
|
51%
|
|
Licensing, Reprints, Backfiles and Other
|
|
|
57,212
|
|
|
49,775
|
|
15%
|
|
8%
|
|
Total Journal Revenue
|
|
|
250,061
|
|
|
225,876
|
|
11%
|
|
5%
|
|
Publishing Technology Services (Atypon)
|
|
|
8,348
|
|
|
8,626
|
|
-3%
|
|
-3%
|
|
Total Revenue
|
|
$
|
258,409
|
|
$
|
234,502
|
|
10%
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
Contribution to Profit
|
|
$
|
83,557
|
|
$
|
78,993
|
|
6%
|
|
-1%
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring charges
|
|
|
119
|
|
|
1,272
|
|
|
|
|
|
Non-GAAP Adjusted Contribution to Profit
|
|
$
|
83,676
|
|
$
|
80,265
|
|
4%
|
|
-2%
|
|
|
|
|
|
|
|
|
|
|
|
Publishing:
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
STM and Professional Publishing
|
|
|
71,480
|
|
|
75,521
|
|
-5%
|
|
-10%
|
|
Education Publishing
|
|
|
35,285
|
|
|
33,674
|
|
5%
|
|
2%
|
|
Course Workflow (WileyPLUS)
|
|
|
20,549
|
|
|
18,178
|
|
13%
|
|
12%
|
|
Test Preparation and Certification
|
|
|
8,367
|
|
|
10,024
|
|
-17%
|
|
-18%
|
|
Licensing, Distribution, Advertising and Other
|
|
|
15,460
|
|
|
16,351
|
|
-5%
|
|
-10%
|
|
Total Revenue
|
|
$
|
151,141
|
|
$
|
153,748
|
|
-2%
|
|
-5%
|
|
|
|
|
|
|
|
|
|
|
|
Contribution to Profit
|
|
$
|
27,960
|
|
$
|
31,064
|
|
-10%
|
|
-17%
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring credits
|
|
|
(490)
|
|
|
-
|
|
|
|
|
|
Non-GAAP Adjusted Contribution to Profit
|
|
$
|
27,470
|
|
$
|
31,064
|
|
-12%
|
|
-19%
|
|
|
|
|
|
|
|
|
|
|
|
Solutions:
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
Education Services (OPM)
|
|
|
30,815
|
|
|
30,443
|
|
1%
|
|
1%
|
|
Professional Assessment
|
|
|
17,158
|
|
|
16,417
|
|
5%
|
|
4%
|
|
Corporate Learning
|
|
|
19,730
|
|
|
17,091
|
|
15%
|
|
2%
|
|
Total Revenue
|
|
$
|
67,703
|
|
$
|
63,951
|
|
6%
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
Contribution to Profit
|
|
$
|
10,355
|
|
$
|
5,725
|
|
81%
|
|
81%
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring charges
|
|
|
248
|
|
|
168
|
|
|
|
|
|
Non-GAAP Adjusted Contribution to Profit
|
|
$
|
10,603
|
|
$
|
5,893
|
|
80%
|
|
80%
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Expenses:
|
|
$
|
(47,039)
|
|
$
|
(52,360)
|
|
-10%
|
|
-13%
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring charges (credits)
|
|
|
2,158
|
|
|
(3,130)
|
|
|
|
|
|
Non-GAAP Adjusted Corporate Expenses
|
|
$
|
(44,881)
|
|
$
|
(55,490)
|
|
-19%
|
|
-22%
|
|
|
|
|
|
|
|
|
|
|
|
Total Consolidated Revenue
|
|
$
|
477,253
|
|
$
|
452,201
|
|
6%
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Operating Income
|
|
$
|
74,833
|
|
$
|
63,422
|
|
18%
|
|
9%
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring charges (credits)
|
|
$
|
2,035
|
|
$
|
(1,690)
|
|
|
|
|
|
Non-GAAP Adjusted Operating Income
|
|
$
|
76,868
|
|
$
|
61,732
|
|
25%
|
|
15%
|
|
As a % of revenue
|
|
|
16.1%
|
|
|
13.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The supplementary information included in this press release for
2018 is preliminary and subject to change prior to the filing of our
upcoming Annual Report on Form 10-K with the Securities and Exchange
Commission.
|
|
|
|
|
|
JOHN WILEY & SONS, INC.
|
|
SUPPLEMENTARY INFORMATION (1)
|
|
SEGMENT RESULTS
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended April 30,
|
|
% Change
|
|
|
|
2018
|
|
2017
|
|
Reported
|
|
Constant
Currency
|
|
Research:
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
Journal Subscriptions
|
|
$
|
677,685
|
|
$
|
639,720
|
|
6%
|
|
0%
|
|
Open Access
|
|
|
41,997
|
|
|
30,633
|
|
37%
|
|
34%
|
|
Licensing, Reprints, Backfiles and Other
|
|
|
181,806
|
|
|
164,070
|
|
11%
|
|
8%
|
|
Total Journal Revenue
|
|
|
901,488
|
|
|
834,423
|
|
8%
|
|
3%
|
|
Publishing Technology Services (Atypon)
|
|
|
32,907
|
|
|
19,066
|
|
73%
|
|
73%
|
|
Total Revenue
|
|
$
|
934,395
|
|
$
|
853,489
|
|
9%
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
Contribution to Profit
|
|
$
|
275,480
|
|
$
|
252,228
|
|
9%
|
|
-1%
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring charges
|
|
|
5,257
|
|
|
1,949
|
|
|
|
|
|
Non-GAAP Adjusted Contribution to Profit
|
|
$
|
280,737
|
|
$
|
254,177
|
|
10%
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
Publishing:
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
STM and Professional Publishing
|
|
$
|
287,315
|
|
$
|
291,255
|
|
-1%
|
|
-3%
|
|
Education Publishing
|
|
|
187,178
|
|
|
196,343
|
|
-5%
|
|
-6%
|
|
Course Workflow (WileyPLUS)
|
|
|
59,475
|
|
|
62,348
|
|
-5%
|
|
-5%
|
|
Test Preparation and Certification
|
|
|
35,534
|
|
|
35,609
|
|
0%
|
|
0%
|
|
Licensing, Distribution, Advertising and Other
|
|
|
48,146
|
|
|
47,894
|
|
1%
|
|
-2%
|
|
Total Revenue
|
|
$
|
617,648
|
|
$
|
633,449
|
|
-2%
|
|
-4%
|
|
|
|
|
|
|
|
|
|
|
|
Contribution to Profit
|
|
$
|
123,917
|
|
$
|
125,703
|
|
-1%
|
|
-5%
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring charges
|
|
|
6,443
|
|
|
1,596
|
|
|
|
|
|
Publishing brand impairment charge
|
|
|
3,600
|
|
|
-
|
|
|
|
|
|
Non-GAAP Adjusted Contribution to Profit
|
|
$
|
133,960
|
|
$
|
127,299
|
|
5%
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
Solutions:
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
Education Services (OPM)
|
|
$
|
119,131
|
|
$
|
111,638
|
|
7%
|
|
7%
|
|
Professional Assessment
|
|
|
61,094
|
|
|
59,868
|
|
2%
|
|
2%
|
|
Corporate Learning
|
|
|
63,835
|
|
|
60,086
|
|
6%
|
|
-1%
|
|
Total Revenue
|
|
$
|
244,060
|
|
$
|
231,592
|
|
5%
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
Contribution to Profit
|
|
$
|
22,099
|
|
$
|
14,822
|
|
49%
|
|
50%
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring charges
|
|
$
|
3,695
|
|
$
|
1,787
|
|
|
|
|
|
Non-GAAP Adjusted Contribution to Profit
|
|
$
|
25,794
|
|
$
|
16,609
|
|
55%
|
|
56%
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Expenses:
|
|
$
|
(181,961)
|
|
$
|
(186,600)
|
|
-2%
|
|
-4%
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring charges
|
|
|
13,171
|
|
|
8,023
|
|
|
|
|
|
Pension settlement
|
|
|
-
|
|
|
8,842
|
|
|
|
|
|
Non-GAAP Adjusted Corporate Expenses
|
|
$
|
(168,789)
|
|
$
|
(169,735)
|
|
-1%
|
|
-2%
|
|
|
|
|
|
|
|
|
|
|
|
Total Consolidated Revenue
|
|
$
|
1,796,103
|
|
$
|
1,718,530
|
|
5%
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Operating Income
|
|
$
|
239,535
|
|
$
|
206,153
|
|
16%
|
|
2%
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring charges
|
|
|
28,566
|
|
|
13,355
|
|
|
|
|
|
Publishing brand impairment charge
|
|
|
3,600
|
|
|
-
|
|
|
|
|
|
Pension settlement
|
|
|
-
|
|
|
8,842
|
|
|
|
|
|
Non-GAAP Adjusted Operating Income
|
|
$
|
271,701
|
|
$
|
228,350
|
|
19%
|
|
7%
|
|
As a % of revenue
|
|
|
15.1%
|
|
|
13.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The supplementary information included in this press release for
2018 is preliminary and subject to change prior to the filing of our
upcoming Annual Report on Form 10-K with the Securities and Exchange
Commission.
|
|
|
|
|
|
JOHN WILEY & SONS, INC.
|
|
SUPPLEMENTARY INFORMATION (1)
|
|
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
April 30,
|
|
April 30,
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
169,773
|
|
$
|
58,516
|
|
Accounts receivable
|
|
|
212,377
|
|
|
188,679
|
|
Inventories
|
|
|
39,489
|
|
|
47,852
|
|
Prepaid and other current assets
|
|
|
58,332
|
|
|
64,688
|
|
Total Current Assets
|
|
|
479,971
|
|
|
359,735
|
|
Product Development Assets
|
|
|
78,814
|
|
|
80,385
|
|
Royalty Advances
|
|
|
37,058
|
|
|
28,320
|
|
Technology, Property and Equipment
|
|
|
289,934
|
|
|
243,058
|
|
Intangible Assets
|
|
|
848,071
|
|
|
828,099
|
|
Goodwill
|
|
|
1,019,801
|
|
|
982,101
|
|
Other Non-Current Assets
|
|
|
85,802
|
|
|
84,519
|
|
Total Assets
|
|
$
|
2,839,451
|
|
$
|
2,606,217
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
Accounts payable
|
|
$
|
90,097
|
|
$
|
76,335
|
|
Royalties payable
|
|
|
73,007
|
|
|
62,871
|
|
Deferred revenue
|
|
|
486,353
|
|
|
436,235
|
|
Accrued employment costs
|
|
|
116,179
|
|
|
98,185
|
|
Accrued income taxes
|
|
|
13,927
|
|
|
22,222
|
|
Accrued pension liability
|
|
|
5,598
|
|
|
5,776
|
|
Other accrued liabilities
|
|
|
89,150
|
|
|
86,232
|
|
Total Current Liabilities
|
|
|
874,311
|
|
|
787,856
|
|
Long-Term Debt
|
|
|
360,000
|
|
|
365,000
|
|
Accrued Pension Liability
|
|
|
190,301
|
|
|
214,597
|
|
Deferred Income Tax Liabilities
|
|
|
143,518
|
|
|
160,491
|
|
Other Long-Term Liabilities
|
|
|
80,764
|
|
|
75,136
|
|
Total Liabilities
|
|
|
1,648,894
|
|
|
1,603,080
|
|
Shareholders' Equity
|
|
|
1,190,557
|
|
|
1,003,137
|
|
Total Liabilities & Shareholders' Equity
|
|
$
|
2,839,451
|
|
$
|
2,606,217
|
|
|
|
|
|
|
|
|
|
(1) The supplementary information included in this press release for
2018 is preliminary and subject to change prior to the filing of our
upcoming Annual Report on Form 10-K with the Securities and Exchange
Commission.
|
|
|
|
|
|
JOHN WILEY & SONS, INC.
|
|
SUPPLEMENTARY INFORMATION (1)
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
April 30,
|
|
|
|
2018
|
|
2017
|
|
Operating Activities:
|
|
|
|
|
|
Net income
|
|
$
|
192,186
|
|
$
|
113,643
|
|
Amortization of intangibles
|
|
|
48,230
|
|
|
49,669
|
|
Amortization of product development spending
|
|
|
41,432
|
|
|
40,209
|
|
Depreciation of technology, property and equipment
|
|
|
64,327
|
|
|
66,683
|
|
Non-cash charges and credits
|
|
|
27,696
|
|
|
94,364
|
|
Net change in operating assets and liabilities
|
|
|
(96)
|
|
|
(49,665)
|
|
Net Cash Provided by Operating Activities
|
|
|
373,775
|
|
|
314,903
|
|
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
|
Additions to technology, property and equipment
|
|
|
(114,225)
|
|
|
(105,058)
|
|
Product development spending
|
|
|
(35,654)
|
|
|
(43,603)
|
|
Acquisition of publication rights
|
|
|
(26,683)
|
|
|
(28,842)
|
|
Businesses acquired in purchase transactions, net of cash acquired
|
|
|
-
|
|
|
(125,924)
|
|
Proceeds from settlement of foreign exchange forward contracts
|
|
|
-
|
|
|
60,417
|
|
Net Cash Used in Investing Activities
|
|
|
(176,562)
|
|
|
(243,010)
|
|
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
|
Net debt repayments
|
|
|
(1,397)
|
|
|
(240,007)
|
|
Cash dividends
|
|
|
(73,542)
|
|
|
(71,545)
|
|
Purchase of treasury shares
|
|
|
(39,688)
|
|
|
(50,326)
|
|
Other
|
|
|
25,010
|
|
|
15,706
|
|
Net Cash Used In Financing Activities
|
|
|
(89,617)
|
|
|
(346,172)
|
|
|
|
|
|
|
|
Effects of Exchange Rate Changes on Cash
|
|
|
3,661
|
|
|
(31,011)
|
|
|
|
|
|
|
|
Change in Cash and Cash Equivalents for Period
|
|
|
111,257
|
|
|
(305,290)
|
|
|
|
|
|
|
|
Cash and Cash Equivalents - Beginning
|
|
|
58,516
|
|
|
363,806
|
|
Cash and Cash Equivalents - Ending
|
|
$
|
169,773
|
|
$
|
58,516
|
|
|
|
|
|
|
|
|
|
|
|
CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT DEVELOPMENT
SPENDING
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
April 30,
|
|
|
|
2018
|
|
2017
|
|
Net Cash Provided by Operating Activities
|
|
$
|
373,775
|
|
$
|
314,903
|
|
Less: Additions to technology, property and equipment
|
|
|
(114,225)
|
|
|
(105,058)
|
|
Less: Product development spending
|
|
|
(35,654)
|
|
|
(43,603)
|
|
Free Cash Flow less Product Development Spending
|
|
$
|
223,896
|
|
$
|
166,242
|
|
|
|
|
|
|
|
|
|
See Explanation of Usage of Non-GAAP Measures included in this
supplemental information.
|
|
|
|
(1) The supplementary information included in this press release for
2018 is preliminary and subject to change prior to the filing of our
upcoming Annual Report on Form 10-K with the Securities and Exchange
Commission.
|
|
|
JOHN WILEY & SONS, INC.
Explanation of Usage of
NON-GAAP Performance Measures
|
|
|
In this earnings release and supplemental information, management
presents the following non-GAAP performance measures:
|
|
• Adjusted Earnings Per Share (“Adjusted EPS”);
|
|
• Free Cash Flow less product development spending;
|
|
• Adjusted Operating Income and margin;
|
|
• Adjusted Contribution to Profit ("CTP") and margin; and
|
|
• Results on a constant currency basis.
|
|
|
|
Management uses these non-GAAP performance measures as supplemental
indicators of our operating performance and financial position as
well for internal reporting and forecasting purposes, when publicly
providing its outlook, to evaluate the Company's performance and to
evaluate and calculate incentive compensation. Non-GAAP performance
measures do not have standardized meanings prescribed by US GAAP and
therefore may not be comparable to the calculation of similar
measures used by other companies, and should not be viewed as
alternatives to measures of financial results under US GAAP.
|
|
|
|
The Company presents these non-GAAP performance measures in addition
to GAAP financial results because it believes that these non-GAAP
performance measures provide useful information to certain investors
and financial analysts for operational trends and comparisons across
accounting periods. The use of these non-GAAP performance measures
provides a consistent basis to evaluate operating profitability and
performance trends by excluding items that we do not consider to be
controllable activities for this purpose. For example:
|
|
|
|
• Adjusted EPS, Adjusted Operating Profit, Adjusted Contribution
to Profit provide a more comparable basis to analyze operating
results and earnings and are measures commonly used by
shareholders to measure our performance.
|
|
|
|
• Free Cash Flow less product development spending helps assess
our ability, over the long term, to create value for our
shareholders as it represents cash available to repay debt, pay
common dividends and fund share repurchases and new acquisitions.
|
|
|
|
• Results on a constant currency basis removes distortion from the
effects of foreign currency movements to provide better
comparability of our business trends from period to period. We
measure our performance before the impact of foreign currency (or
at “constant currency”), which means that we apply the same
foreign currency exchange rates for the current and equivalent
prior period.
|
|
|
|
In addition, the Company has historically provided these or similar
non-GAAP performance measures and understands that some investors
and financial analysts find this information helpful in analyzing
the Company's operating margins, and net income and comparing the
Company's financial performance to that of its peer companies and
competitors. Based on interactions with investors, we also believe
that our non-GAAP performance measures are regarded as useful to our
investors as supplemental to our GAAP financial results, and that
there is no confusion regarding the adjustments or our operating
performance to our investors due to the comprehensive nature of our
disclosures.
|
|
|
John Wiley & Sons, Inc.
Brian Campbell, 201-748-6874
Investor Relations
brian.campbell@wiley.com