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Share Name | Share Symbol | Market | Type |
---|---|---|---|
John Wiley & Sons, Inc.(CL B) | NYSE:JWB | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0 | - |
John Wiley & Sons, Inc. (NYSE: JW-A and JW-B), a global leader in research and education, today announced results for the first quarter ended July 31, 2020.
SUMMARY
MANAGEMENT COMMENTARY
“Wiley’s core strategies in open research and online education are paying off with unprecedented gains in Research article output and content consumption, strong online enrollment growth, and record new adoption of digital courseware,” said Brian Napack, President and CEO. “The Wiley team is executing well through the pandemic as we continue to take advantage of market-driven growth trends in Research and Education, while driving further efficiency gains across our business.”
FIRST QUARTER PERFORMANCE
GAAP Measures
Unaudited ($millions except for EPS)
Q1 2021
Q1 2020
Change
Revenue
$431.3
$423.5
2%
Diluted EPS
$0.29
$0.06
$0.23
Non-GAAP Measures
Q1 2021
Q1 2020
Change
Constant Currency
Revenue
$431.3
$423.5
2%
Adjusted EBITDA
$81.8
$57.5
42%
Adjusted EPS
$0.42
$0.21
124%
Excluding acquisitions and currency impact, revenue declined 1% for the quarter. Wiley recorded an unfavorable FX variance of $2.4 million in revenue, $0.05 in Adjusted EPS, and favorable FX variance of $0.1 million in Adjusted EBITDA.
Revenue
Adjusted EBITDA
EPS
Balance Sheet and Liquidity
Cash Flow and Return to Shareholders
FISCAL YEAR 2021 OUTLOOK
Wiley cannot confidently project the forward-looking impact of the pandemic on its operating results and is therefore not providing a financial outlook for fiscal year 2021 at this time.
EARNINGS CONFERENCE CALL
Scheduled for today, September 3 at 10:00 a.m. (ET). Access the webcast on Wiley.com, at https://www.wiley.com/en-us/investors or directly at https://edge.media-server.com/mmc/p/wimivu3k. U.S. callers, please dial (844) 231-0103 and enter the participant code 8168499#. International callers, please dial (216) 562-0402 and enter the participant code 8168499#.
ABOUT WILEY
Wiley drives the world forward with research and education. Through publishing, platforms and services, we help researchers, professionals, students, universities, and corporations to achieve their goals in an ever-changing world. And for more than 200 years, we have delivered consistent performance to all our stakeholders. The Company's website can be accessed at www.wiley.com.
NON-GAAP FINANCIAL MEASURES
Wiley provides non-GAAP financial measures and performance results such as “Adjusted EPS,” “Adjusted Revenue,” “Adjusted Operating Income,” “Adjusted EBITDA,” “Adjusted CTP,” “Free Cash Flow less Product Development Spending,” “organic revenue,” 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, and the impact of acquisitions provide a useful comparable basis to analyze operating results and earnings. See the reconciliations of non-GAAP financial measures and explanations of the uses of non-GAAP measures in the supplementary information.
FORWARD-LOOKING STATEMENTS
This release contains certain forward-looking statements concerning the Company's 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; (x) the Company’s ability to realize operating savings over time and in fiscal year 2021 in connection with our multi-year Business Optimization Program; (xi) the impact of COVID-19 on our operations, performance, and financial condition; and (xii) 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
July 31,
2020
2019
Revenue, net
$ 431,326
$ 423,530
Costs and expenses:
Cost of sales
144,809
143,096
Operating and administrative expenses
237,369
250,170
Restructuring and related charges
2,218
10,735
Amortization of intangibles
16,891
14,970
Total Costs and Expenses
401,287
418,971
Operating Income
30,039
4,559
As a % of revenue
7.0%
1.1%
Interest expense
(4,614)
(6,077)
Foreign exchange transaction (losses) gains
(82)
2,652
Interest and other income
4,391
2,833
Income Before Taxes
29,734
3,967
Provision for income taxes
13,400
343
Effective tax rate
45.1%
8.6%
Net Income
$ 16,334
$ 3,624
As a % of revenue
3.8%
0.9%
Weighed Average Number of Common Shares Outstanding
Basic
55,912
56,536
Diluted
56,193
56,905
Earnings Per Share
Basic
$ 0.29
$ 0.06
Diluted
$ 0.29
$ 0.06
Notes:
(1) The supplementary information included in this press release for the three months ended July 31, 2020 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q 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
July 31,
2020
2019
GAAP Earnings Per Share - Diluted
$ 0.29
$ 0.06
Adjustments:
Restructuring and related charges (A)
0.03
0.14
Foreign exchange (gains) losses on intercompany transactions (A)
(0.02)
0.01
Impact of increase in U.K. statutory rate on deferred tax balances in fiscal year 2021 (B)
0.12
-
Non-GAAP Adjusted Earnings Per Share - Diluted
$ 0.42
$ 0.21
Notes:
(A)
The table below shows the net of tax impact of our adjustments to GAAP Earnings Per Share noted above.
Three Months Ended
July 31,
(amounts in millions)
2020
2019
Net of tax, charges related to the Business Optimization Program
$ 1.5
$ 8.1
Net of tax, credits related to the Restructuring and Reinvestment Program
$ (0.0)
$ (0.1)
Net of tax, foreign exchange transaction (gains) losses
$ (1.0)
$ 0.3
(B)
During the first quarter of fiscal 2021, the U.K. officially enacted legislation that increased its statutory rate from 17% to 19%. This resulted in a $6.7 million non-cash deferred tax expense from the re-measurement of the Company’s applicable U.K. net deferred tax liabilities.
(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 supplementary information included in this press release for the three months ended July 31, 2020 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
RECONCILIATION OF GAAP NET INCOME to NON-GAAP EBITDA AND ADJUSTED EBITDA
(unaudited)
Three Months Ended
July 31,
2020
2019
Net Income
$ 16,334
$ 3,624
Interest expense
4,614
6,077
Provision for income taxes
13,400
343
Depreciation and amortization
49,507
42,219
Non-GAAP EBITDA
83,855
52,263
Restructuring and related charges
2,218
10,735
Foreign exchange transaction losses (gains)
82
(2,652)
Interest and other income
(4,391)
(2,833)
Non-GAAP Adjusted EBITDA
$ 81,764
$ 57,513
Adjusted EBITDA Margin
19.0%
13.6%
Notes:
(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 supplementary information included in this press release for the three months ended July 31, 2020 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1) SEGMENT RESULTS (in thousands) (unaudited) Three Months Ended July 31, % Change Favorable (Unfavorable)2020
2019
Reported Constant Currency Research Publishing & Platforms: Revenue, net Research Publishing$ 230,464
$ 219,927
5%
5%
Research Platforms10,346
9,448
10%
10%
Total Revenue, net$ 240,810
$ 229,375
5%
6%
Contribution to Profit$ 69,818
#$ 55,646
25%
26%
Adjustments: Restructuring (credits) charges(197)
2,620
Non-GAAP Adjusted Contribution to Profit$ 69,621
$ 58,266
19%
20%
Depreciation and amortization19,701
17,153
Non-GAAP Adjusted EBITDA$ 89,322
$ 75,419
18%
19%
Adjusted EBITDA margin37.1%
32.9%
Academic & Professional Learning: Revenue, net Education Publishing$ 64,084
$ 65,523
-2%
-2%
Professional Learning62,829
79,335
-21%
-20%
Total Revenue, net126,913
144,858
-12%
-12%
Contribution to Profit$ (380)
$ 4,911
# # Adjustments: Restructuring charges33
2,805
Non-GAAP Adjusted Contribution to Profit$ (347)
$ 7,716
# # Depreciation and amortization18,804
16,524
Non-GAAP Adjusted EBITDA$ 18,457
$ 24,240
-24%
-23%
Adjusted EBITDA margin14.5%
16.7%
Education Services: Revenue, net Education Services (2)$ 50,262
$ 48,156
4%
4%
mthree (2)13,341
1,141
# # Total Revenue, net63,603
49,297
29%
29%
Contribution to Profit$ 558
$ (7,199)
# # Adjustments: Restructuring charges139
2,089
Non-GAAP Adjusted Contribution to Profit$ 697
$ (5,110)
# # Depreciation and amortization7,279
5,498
Non-GAAP Adjusted EBITDA$ 7,976
$ 388
# # Adjusted EBITDA margin12.5%
0.8%
Corporate Expenses:$ (39,957)
$ (48,799)
18%
17%
Adjustments: Restructuring charges2,243
3,221
Non-GAAP Adjusted Corporate Expenses$ (37,714)
$ (45,578)
17%
16%
Depreciation and amortization3,723
3,044
Non-GAAP Adjusted EBITDA$ (33,991)
$ (42,534)
20%
19%
Consolidated Results: Revenue, net$ 431,326
$ 423,530
2%
2%
Operating Income$ 30,039
$ 4,559
# # Adjustments: Restructuring charges2,218
10,735
Non-GAAP Adjusted Operating Income$ 32,257
$ 15,294
# # Depreciation and amortization49,507
42,219
Non-GAAP Adjusted EBITDA$ 81,764
$ 57,513
42%
42%
Adjusted EBITDA margin19.0%
13.6%
(1) The supplementary information included in this press release for the three months ended July 31, 2020 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission. (2) In May 2020, we moved the IT bootcamp business acquired as part of The Learning House acquisition from Education Services to mthree. As a result, the prior period revenue related to the IT bootcamp business has been included in mthree. There were no changes to our total Education Services or our consolidated financial results. The inorganic revenue from mthree in the three months ended July 31, 2020 was $12.4 million.JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1) CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in thousands) (unaudited) July 31, April 30,2020
2020
Assets: Current Assets Cash and cash equivalents$ 101,385
$ 202,464
Accounts receivable, net282,412
309,384
Inventories, net45,051
43,614
Prepaid expenses and other current assets59,155
59,465
Total Current Assets488,003
614,927
Product Development Assets, net52,088
53,643
Royalty Advances, net28,682
36,710
Technology, Property and Equipment, net295,457
298,005
Intangible Assets, net829,231
807,405
Goodwill1,133,610
1,116,790
Operating Lease Right-of-Use Assets139,798
142,716
Other Non-Current Assets102,077
98,598
Total Assets$ 3,068,946
$ 3,168,794
Liabilities and Shareholders' Equity: Current Liabilities Accounts payable$ 52,556
$ 93,691
Accrued royalties82,691
87,408
Short-term portion of long-term debt10,938
9,375
Contract liabilities408,954
520,214
Accrued employment costs70,211
108,448
Accrued income taxes181
13,728
Short-term portion of operating lease liabilities20,647
21,810
Other accrued liabilities69,958
72,595
Total Current Liabilities716,136
927,269
Long-Term Debt835,763
765,650
Accrued Pension Liability183,284
187,969
Deferred Income Tax Liabilities124,184
119,127
Operating Lease Liabilities156,644
159,782
Other Long-Term Liabilities79,190
75,373
Total Liabilities2,095,201
2,235,170
Shareholders' Equity973,745
933,624
Total Liabilities and Shareholders' Equity$ 3,068,946
$ 3,168,794
(1) The supplementary information included in this press release for July 31, 2020 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (in thousands) (unaudited) Three Months Ended July 31,2020
2019
Operating Activities: Net income$ 16,334
$ 3,624
Amortization of intangibles16,891
14,970
Amortization of product development assets9,148
8,714
Depreciation and amortization of technology, property, and equipment23,468
18,535
Other non-cash charges and credits37,105
26,477
Net change in operating assets and liabilities(223,729)
(166,488)
Net Cash Used In Operating Activities(120,783)
(94,168)
Investing Activities: Additions to technology, property, and equipment(18,964)
(24,202)
Product development spending(5,325)
(6,211)
Businesses acquired in purchase transactions, net of cash acquired(136)
(73,209)
Acquisitions of publication rights and other(3,855)
(2,270)
Net Cash Used in Investing Activities(28,280)
(105,892)
Financing Activities: Net debt borrowings67,356
253,848
Cash dividends(19,261)
(19,252)
Purchase of treasury shares-
(10,000)
Other(4,611)
(11,263)
Net Cash Provided By Financing Activities43,484
213,333
Effects of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash4,500
(2,138)
Change in Cash, Cash Equivalents and Restricted Cash for Period(101,079)
11,135
Cash, Cash Equivalents and Restricted Cash - Beginning203,047
93,548
Cash, Cash Equivalents and Restricted Cash - Ending$ 101,968
104,683
CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT DEVELOPMENT SPENDING Three Months Ended July 31,2020
2019
Net Cash Used In Operating Activities$ (120,783)
$ (94,168)
Less: Additions to technology, property, and equipment(18,964)
(24,202)
Less: Product development spending(5,325)
(6,211)
Free Cash Flow less Product Development Spending$ (145,072)
$ (124,581)
See Explanation of Usage of Non-GAAP Measures included in this supplemental information. (1) The supplementary information included in this press release for the three months ended July 31, 2020 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q 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 may present the following non-GAAP performance measures:
View source version on businesswire.com: https://www.businesswire.com/news/home/20200903005297/en/
Investor: Brian Campbell 201.748.6874 brian.campbell@wiley.com Media: Katie Roberts 602.373.7233 karoberts@wiley.com
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