Wiley Reports Third Quarter Fiscal 2022 Results
March 8, 2022 - Hoboken, NJ – Wiley (NYSE: JW-A and JW-B), a global leader in scientific research and
career-connected education, today announced results for the third quarter ended January 31, 2022.
THIRD QUARTER SUMMARY
|
•
|
GAAP Results: Revenue of $516 million (+7%),
Operating Income of $46 million (+34%), and EPS of $0.63 (+62%)
|
|
•
|
NINE MONTHS SUMMARY
|
•
|
GAAP Results: Revenue of $1,537 million
(+9%), Operating Income of $161 million (+20%), EPS of $1.86 (-2%), Cash Provided by Operating Activities of $158 million (+2%)
|
|
•
|
Adjusted Results (at constant currency): Revenue of $1,537 million (+8%), Adjusted EBITDA of $322 million (+4%), Adjusted EPS of $3.09 (+4%), Free Cash Flow of $77 million (-3%)
|
“Wiley’s strategy to meet the world’s acute need for scientific research
and career-connected education is allowing us to drive solid year-to-date performance and significant social impact,” said Brian Napack, President and CEO. “We continue to benefit from strong competitive advantages, robust cash generation, and
favorable long-term growth trends that benefit from the steadily rising demand to publish peer-reviewed research, the continued migration to digital, career-focused
learning, and the need for employers to fill critical skill and talent gaps.”
THIRD QUARTER PERFORMANCE
|
GAAP Measures
Unaudited ($millions except for EPS)
|
Q3 2022
|
Q3 2021
|
Change
|
|||||||||||||
|
Revenue
|
$
|
515.9
|
$
|
482.9
|
+7
|
%
|
||||||||||
|
Operating Income
|
$
|
46.0
|
$
|
34.3
|
+34
|
%
|
||||||||||
|
Diluted EPS
|
$
|
0.63
|
$
|
0.39
|
+62
|
%
|
||||||||||
|
Non-GAAP Measures
|
Q3 2022
|
Q3 2021
|
Change
|
Change
Constant Currency
|
||||||||||||
|
Revenue
|
$
|
515.9
|
$
|
482.9
|
+7
|
%
|
+7
|
%
|
||||||||
|
Adjusted EBITDA
|
$
|
99.8
|
$
|
104.3
|
(4
|
%)
|
(5
|
%)
|
||||||||
|
Adjusted EPS*
|
$
|
0.95
|
$
|
0.95
|
0
|
%
|
(9
|
%)
|
||||||||
Excluding acquisitions and currency impact, revenue rose 4% for the quarter.
Wiley recorded an unfavorable FX variance of $2 million in Revenue and favorable FX variances of $0.7 million in Adjusted EBITDA
and $0.09 in Adjusted EPS.
*Adjusted EPS: In September 2021, Wiley changed how it reported Adjusted EPS metric to exclude the impact of certain non-cash items directly related to acquisitions, most notably the amortization of acquired intangible assets. The Company does not consider these non-cash items to be indicative of its ongoing operating performance.
Revenue
|
•
|
Research Publishing & Platforms rose 10%
as reported and at constant currency or 5% excluding acquisitions, driven by growth in publishing, corporate solutions, and platforms.
|
|
•
|
|
•
|
Education Services increased 18% as reported
and at constant currency, driven by a doubling of revenue for Talent Development (formerly mthree) offsetting a 3% decline in University
Services (formerly OPM) mainly from lower US student enrollment.
|
Adjusted EBITDA
|
•
|
Research
Publishing & Platforms rose 4% at constant currency, primarily driven by revenue growth partially offset by investments in growth initiatives. Q3 Adjusted EBITDA margin of 33%.
|
|
•
|
Academic & Professional Learning rose 4%
at constant currency, with cost savings offsetting lower revenue. Q3 Adjusted EBITDA margin of 30%.
|
|
•
|
Education Services declined 14% at constant
currency mainly due to investments to further accelerate growth in Talent Development. Q3 Adjusted EBITDA margin of 13%.
|
|
•
|
Adjusted Corporate Expenses were 22% higher mainly due to higher technology and employee costs.
|
EPS
|
•
|
GAAP EPS
was $0.63 as compared to $0.39 in the prior year period. The favorable variance was mainly driven by a prior year restructuring charge of $21 million, or $0.28 per share.
|
|
•
|
Adjusted EPS was down 9% at constant
currency mainly driven by higher operating expenses and employee-related costs.
|
Cash Flow, Balance Sheet, and Capital Allocation
|
•
|
Net Cash
Provided by Operating Activities (nine months) was $158 million compared to $155 million in the prior year period due to favorable changes in working capital.
|
|
•
|
Free Cash Flow
less Product Development Spending (nine months) was $77 million as compared to $80 million in the prior year driven by higher capex.
|
|
•
|
Net Debt-to-EBITDA ratio (trailing twelve
months) at quarter-end was 1.9 compared to 2.2 in the prior year period.
|
|
•
|
Acquisitions:
During the quarter, Wiley acquired student acquisition company, XYZ Media, and open research service provider, eJournal Press.
|
|
•
|
Share
Repurchases: During the quarter, the Company utilized approximately $7.5 million to repurchase approximately 135,000 shares at
an average cost per share of $55.40.
|
FISCAL YEAR 2022 OUTLOOK
Given its year-to-date performance and leading indicators, the Company is reaffirming its full year outlook.
|
Metric ($millions,
except EPS)
|
Fiscal 2020
|
Fiscal 2021
|
Fiscal 2022 Outlook
|
|||||||||
|
Revenue
|
$
|
1,831
|
$
|
1,942
|
$
|
2,070 to $2,100
|
||||||
|
Adjusted EBITDA
|
$
|
356
|
$
|
419
|
$
|
415 to $435
|
||||||
|
Adjusted EPS
|
$
|
3.30
|
$
|
4.00
|
$
|
4.00 to $4.25
|
||||||
|
Free Cash Flow
|
$
|
173
|
$
|
257
|
$
|
200 to $220
|
||||||
EARNINGS CONFERENCE CALL
Scheduled for today, March 8 at 10:00 am (ET). Access webcast at investors.wiley.com, or directly at http://event.on24.com/wcc/r/3574356/B31C9ADF91B6B0ECEB3B1EE2286E98AF. US callers, please dial (888) 210-3346 and enter the participant code 2521217#. International callers, please dial (646) 960-0253 and enter the participant code 2521217#.
ABOUT WILEY
Wiley is a global leader in research and education, unlocking human potential by enabling discovery, powering education, and shaping workforces. For over 200
years, Wiley has fueled the world’s knowledge ecosystem. Today, our high-impact content, platforms, and services help researchers, learners, institutions, and corporations achieve their goals in an ever-changing world. Visit us at Wiley.com, Like us on Facebook and Follow us on Twitter and LinkedIn.
NON-GAAP FINANCIAL MEASURES
Wiley provides non-GAAP financial measures and
performance results such as “Adjusted EPS,” “EBITDA”, “Adjusted EBITDA,” “Adjusted Contribution to Profit,” “Adjusted Income before Taxes,” “Adjusted Income Tax Provision,” “Adjusted Effective Tax Rate,” “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. We have not provided our 2022 outlook for the most directly comparable US GAAP financial measures, as they are not available without unreasonable effort due to the
high variability, complexity, and low visibility with respect to certain items, including restructuring charges and credits, gains and losses on foreign currency, and other gains and losses. These items are uncertain, depend on various factors,
and could be material to our consolidated results computed in accordance with US GAAP.
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 by Wiley 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 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 2022 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 circumstances.
CATEGORY: ALL CORPORATE NEWS
CATEGORY: EARNINGS RELEASES
|
JOHN WILEY & SONS, INC.
|
||||||||||||||||
|
SUPPLEMENTARY INFORMATION (1)(2)
|
||||||||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME
|
||||||||||||||||
|
(Dollars in thousands, except per share information)
|
||||||||||||||||
|
(unaudited)
|
||||||||||||||||
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
January 31,
|
January 31,
|
|||||||||||||||
|
2022
|
2021
|
2022
|
2021
|
|||||||||||||
|
Revenue, net
|
$
|
515,884
|
$
|
482,912
|
$
|
1,537,275
|
$
|
1,405,249
|
||||||||
|
Costs and expenses:
|
||||||||||||||||
|
Cost of sales
|
172,916
|
157,636
|
513,654
|
457,298
|
||||||||||||
|
Operating and administrative expenses
|
275,475
|
251,242
|
800,254
|
735,778
|
||||||||||||
|
Restructuring and related charges (credits)
|
448
|
20,675
|
(1,161
|
)
|
24,813
|
|||||||||||
|
Amortization of intangible assets
|
21,056
|
19,032
|
63,683
|
53,089
|
||||||||||||
|
Total costs and expenses
|
469,895
|
448,585
|
1,376,430
|
1,270,978
|
||||||||||||
|
Operating income
|
45,989
|
34,327
|
160,845
|
134,271
|
||||||||||||
|
As a % of revenue
|
8.9
|
%
|
7.1
|
%
|
10.5
|
%
|
9.6
|
%
|
||||||||
|
Interest expense
|
(5,103
|
)
|
(4,853
|
)
|
(14,739
|
)
|
(13,928
|
)
|
||||||||
|
Foreign exchange transaction losses
|
(488
|
)
|
(5,694
|
)
|
(1,488
|
)
|
(6,473
|
)
|
||||||||
|
Gain on sale of certain assets
|
-
|
-
|
3,694
|
-
|
||||||||||||
|
Other income, net
|
2,821
|
3,612
|
9,524
|
11,769
|
||||||||||||
|
Income before taxes
|
43,219
|
27,392
|
157,836
|
125,639
|
||||||||||||
|
Provision for income taxes
|
7,853
|
5,231
|
52,673
|
18,712
|
||||||||||||
|
Effective tax rate
|
18.2
|
%
|
19.1
|
%
|
33.4
|
%
|
14.9
|
%
|
||||||||
|
Net income
|
$
|
35,366
|
$
|
22,161
|
$
|
105,163
|
$
|
106,927
|
||||||||
|
As a % of revenue
|
6.9
|
%
|
4.6
|
%
|
6.8
|
%
|
7.6
|
%
|
||||||||
|
Earnings per share
|
||||||||||||||||
|
Basic
|
$
|
0.63
|
$
|
0.40
|
$
|
1.89
|
$
|
1.91
|
||||||||
|
Diluted
|
$
|
0.63
|
$
|
0.39
|
$
|
1.86
|
$
|
1.90
|
||||||||
|
Weighted average number of common shares outstanding
|
||||||||||||||||
|
Basic
|
55,701
|
55,984
|
55,789
|
55,967
|
||||||||||||
|
Diluted
|
56,389
|
56,332
|
56,481
|
56,230
|
||||||||||||
|
Notes:
|
||||||||||||||||
|
(1) The supplementary information included in this press release for the three and nine months ended January 31, 2022 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.
In the three months ended January 31, 2022, we completed the acquisition of certain assets of XYZ Media Inc.(Education Services segment), the assets
of the eJournalPress business (Research Publishing & Platforms segment), and one immaterial business in our Research Publishing & Platforms segment. In the nine months ended January 31, 2022, we also acquired certain assets of J&J
Editorial Services, LLC. (Research Publishing & Platforms segment) and the acquisition of one immaterial business included in our Education Services segment.
|
||||||||||||||||
|
(2) All amounts are approximate due to rounding.
|
||||||||||||||||
|
JOHN WILEY & SONS, INC.
|
||||||||||||||||||
|
SUPPLEMENTARY INFORMATION (1) (2)
|
||||||||||||||||||
|
RECONCILIATION OF US GAAP MEASURES to NON-GAAP MEASURES
|
||||||||||||||||||
|
(unaudited)
|
||||||||||||||||||
|
Reconciliation of US GAAP EPS to Non-GAAP Adjusted EPS
|
||||||||||||||||||
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||
|
January 31,
|
January 31,
|
|||||||||||||||||
|
2022
|
2021
|
2022
|
2021
|
|||||||||||||||
|
US GAAP Earnings Per Share - Diluted
|
$
|
0.63
|
$
|
0.39
|
$
|
1.86
|
$
|
1.90
|
||||||||||
|
Adjustments:
|
||||||||||||||||||
|
Restructuring and related charges (credits)
|
0.01
|
0.28
|
(0.02
|
)
|
0.33
|
|||||||||||||
|
Foreign exchange losses (gains) on intercompany transactions
|
0.01
|
0.01
|
-
|
(0.01
|
)
|
|||||||||||||
|
Amortization of acquired intangible assets (3)
|
0.30
|
0.27
|
0.93
|
0.77
|
||||||||||||||
|
Gain on sale of certain assets (4)
|
-
|
-
|
(0.05
|
)
|
-
|
|||||||||||||
|
Income tax adjustments (5) (6)
|
-
|
-
|
0.37
|
(0.13
|
)
|
|||||||||||||
|
Non-GAAP Adjusted Earnings Per Share - Diluted
|
$
|
0.95
|
$
|
0.95
|
$
|
3.09
|
$
|
2.86
|
||||||||||
|
Reconciliation of US GAAP Income Before Taxes to Non-GAAP Adjusted Income Before Taxes
|
||||||||||||||||||
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||||
|
(amounts in thousands)
|
January 31,
|
January 31,
|
||||||||||||||||
|
2022
|
2021
|
2022
|
2021
|
|||||||||||||||
|
US GAAP Income Before Taxes
|
$
|
43,219
|
$
|
27,392
|
$
|
157,836
|
$
|
125,639
|
||||||||||
|
Pretax Impact of Adjustments:
|
||||||||||||||||||
|
Restructuring and related charges (credits)
|
448
|
20,675
|
(1,161
|
)
|
24,813
|
|||||||||||||
|
Foreign exchange losses (gains) on intercompany transactions
|
722
|
267
|
494
|
(1,071
|
)
|
|||||||||||||
|
Amortization of acquired intangible assets
|
22,189
|
20,163
|
67,081
|
56,693
|
||||||||||||||
|
Gain on sale of certain assets (4)
|
-
|
-
|
(3,694
|
)
|
-
|
|||||||||||||
|
Non-GAAP Adjusted Income Before Taxes
|
$
|
66,578
|
$
|
68,497
|
$
|
220,556
|
$
|
206,074
|
||||||||||
|
Reconciliation of US GAAP Income Tax Provision to Non-GAAP Adjusted Income Tax Provision, including our US GAAP Effective Tax
Rate and our Non-GAAP Adjusted Effective Tax Rate
|
||||||||||||||||||
|
US GAAP Income Tax Provision
|
$
|
7,853
|
$
|
5,231
|
$
|
52,673
|
$
|
18,712
|
||||||||||
|
Income Tax Impact of Adjustments (7)
|
||||||||||||||||||
|
Restructuring and related charges (credits)
|
114
|
4,965
|
(118
|
)
|
6,362
|
|||||||||||||
|
Foreign exchange losses (gains) on intercompany transactions
|
239
|
87
|
258
|
(403
|
)
|
|||||||||||||
|
Amortization of acquired intangible assets
|
4,834
|
4,691
|
15,097
|
13,324
|
||||||||||||||
|
Gain on sale of certain assets (4)
|
-
|
-
|
(922
|
)
|
-
|
|||||||||||||
|
Income Tax Adjustments:
|
||||||||||||||||||
|
Impact of increase in UK statutory rate on deferred tax balances (5)
|
-
|
-
|
(20,726
|
)
|
(6,772
|
)
|
||||||||||||
|
Impact of US CARES Act (6)
|
-
|
-
|
-
|
13,998
|
||||||||||||||
|
Non-GAAP Adjusted Income Tax Provision
|
$
|
13,040
|
$
|
14,974
|
$
|
46,262
|
$
|
45,221
|
||||||||||
|
US GAAP Effective Tax Rate
|
18.2
|
%
|
19.1
|
%
|
33.4
|
%
|
14.9
|
%
|
||||||||||
|
Non-GAAP Adjusted Effective Tax Rate
|
19.6
|
%
|
21.9
|
%
|
21.0
|
%
|
21.9
|
%
|
||||||||||
|
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 and nine months ended January 31, 2022 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.
|
||||||||||||||||
|
(3)
|
|
Reflects the amortization of intangible assets established on the opening balance sheet for an acquired business. This includes the amortization of
intangible assets such as developed technology, customer relationships, tradenames, etc., which is reflected in the "Amortization of intangible assets" line in the Condensed Consolidated Statements of Net Income. It also includes the
amortization of acquired product development assets, which is reflected in "Cost of sales" in the Condensed Consolidated Statements of Net Income.
|
||||||||||||||||
|
(4)
|
|
The gain on sale of certain assets is due to the sale of our world languages product portfolio which was included in our Academic &
Professional Learning segment,and resulted in a pretax gain of approximately $3.7 million during the nine months ended January 31, 2022.
|
||||||||||||||||
|
(5)
|
|
In the three months ended July 31, 2021, the UK enacted legislation that increased its statutory rate from 19% to 25% effective April 1, 2023. This
resulted in a $20.7 million, or $0.37 per share non-cash deferred tax expense from the re-measurement of the Company’s applicable UK net deferred tax liabilities during the three months ended July 31, 2021. These adjustments impacted
deferred taxes.
In the three months ended July 31, 2020, the UK enacted legislation that increased its statutory rate from 17% to 19%. This resulted in a $6.7
million, or $0.12 per share non-cash deferred tax expense from the re-measurement of the Company’s applicable UK net deferred tax liabilities during the three months ended July 31, 2020. These adjustments impacted deferred taxes.
|
||||||||||||||||
|
(6)
|
|
In connection with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and certain regulations, we carried back our April 30, 2020
US net operating loss (NOL) to our year ended April 30, 2015 and claimed a $20.7 million refund. The refund plus interest was received in February 2021. The NOL was carried back to fiscal year 2015 when the US corporate tax rate was 35.0%.
The carryback to a year with a higher rate, plus certain additional net permanent deductions included in the carryback resulted in a $14.0 million tax benefit, or $(0.25) per share, $8.4 million from current taxes and $5.6 million from
deferred taxes, for the nine months ended January 31, 2021.
|
||||||||||||||||
|
(7)
|
|
For the three and nine months ended January 31, 2022 and 2021, substantially all of the tax impact was from deferred taxes.
|
||||||||||||||||
|
JOHN WILEY & SONS, INC.
|
||||||||||||||||
|
SUPPLEMENTARY INFORMATION (1)
|
||||||||||||||||
|
RECONCILIATION OF US GAAP NET INCOME TO NON-GAAP EBITDA AND ADJUSTED EBITDA
|
||||||||||||||||
|
(unaudited)
|
||||||||||||||||
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
January 31,
|
January 31,
|
|||||||||||||||
|
2022
|
2021
|
2022
|
2021
|
|||||||||||||
|
Net Income
|
$
|
35,366
|
$
|
22,161
|
$
|
105,163
|
$
|
106,927
|
||||||||
|
Interest expense
|
5,103
|
4,853
|
14,739
|
13,928
|
||||||||||||
|
Provision for income taxes
|
7,853
|
5,231
|
52,673
|
18,712
|
||||||||||||
|
Depreciation and amortization
|
53,363
|
49,316
|
162,484
|
147,253
|
||||||||||||
|
Non-GAAP EBITDA
|
101,685
|
81,561
|
335,059
|
286,820
|
||||||||||||
|
Restructuring and related charges (credits)
|
448
|
20,675
|
(1,161
|
)
|
24,813
|
|||||||||||
|
Foreign exchange transaction losses
|
488
|
5,694
|
1,488
|
6,473
|
||||||||||||
|
Gain on sale of certain assets
|
-
|
-
|
(3,694
|
)
|
-
|
|||||||||||
|
Other income, net
|
(2,821
|
)
|
(3,612
|
)
|
(9,524
|
)
|
(11,769
|
)
|
||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
99,800
|
$
|
104,318
|
$
|
322,168
|
$
|
306,337
|
||||||||
|
Adjusted EBITDA Margin
|
19.3
|
%
|
21.6
|
%
|
21.0
|
%
|
21.8
|
%
|
||||||||
|
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 and nine months ended January 31, 2022 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)
|
|||||||||||||||||
|
% Change
|
|||||||||||||||||
|
Three Months Ended January 31,
|
Favorable (Unfavorable)
|
||||||||||||||||
|
2022
|
2021
|
Reported
|
Constant
Currency
|
||||||||||||||
|
Research Publishing & Platforms:
|
|||||||||||||||||
|
Revenue, net
|
|||||||||||||||||
|
Research Publishing
|
$
|
248,884
|
$
|
229,327
|
9
|
%
|
9
|
%
|
|||||||||
|
Research Platforms
|
14,457
|
10,523
|
37
|
%
|
37
|
%
|
|||||||||||
|
Total Revenue, net
|
$
|
263,341
|
$
|
239,850
|
10
|
%
|
10
|
%
|
|||||||||
|
Contribution to Profit
|
$
|
62,165
|
$
|
60,782
|
2
|
%
|
1
|
%
|
|||||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring charges
|
-
|
83
|
100
|
%
|
100
|
%
|
|||||||||||
|
Non-GAAP Adjusted Contribution to Profit
|
$
|
62,165
|
$
|
60,865
|
2
|
%
|
1
|
%
|
|||||||||
|
Depreciation and amortization
|
23,914
|
20,997
|
-14
|
%
|
-14
|
%
|
|||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
86,079
|
$
|
81,862
|
5
|
%
|
4
|
%
|
|||||||||
|
Adjusted EBITDA margin
|
32.7
|
%
|
34.1
|
%
|
|||||||||||||
|
Academic & Professional Learning:
|
|||||||||||||||||
|
Revenue, net
|
|||||||||||||||||
|
Education Publishing (2)
|
$
|
95,498
|
$
|
97,671
|
-2
|
%
|
-2
|
%
|
|||||||||
|
Professional Learning
|
75,135
|
75,955
|
-1
|
%
|
0
|
%
|
|||||||||||
|
Total Revenue, net
|
$
|
170,633
|
$
|
173,626
|
-2
|
%
|
-1
|
%
|
|||||||||
|
Contribution to Profit
|
$
|
34,774
|
$
|
32,823
|
6
|
%
|
7
|
%
|
|||||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring charges
|
215
|
328
|
34
|
%
|
34
|
%
|
|||||||||||
|
Non-GAAP Adjusted Contribution to Profit
|
$
|
34,989
|
$
|
33,151
|
6
|
%
|
6
|
%
|
|||||||||
|
Depreciation and amortization
|
17,038
|
17,233
|
1
|
%
|
0
|
%
|
|||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
52,027
|
$
|
50,384
|
3
|
%
|
4
|
%
|
|||||||||
|
Adjusted EBITDA margin
|
30.5
|
%
|
29.0
|
%
|
|||||||||||||
|
Education Services:
|
|||||||||||||||||
|
Revenue, net
|
|||||||||||||||||
|
University Services (3)
|
$
|
55,090
|
$
|
56,725
|
-3
|
%
|
-3
|
%
|
|||||||||
|
Talent Development Services (2) (4)
|
26,820
|
12,711
|
#
|
#
|
|||||||||||||
|
Total Revenue, net
|
$
|
81,910
|
$
|
69,436
|
18
|
%
|
18
|
%
|
|||||||||
|
Contribution to Profit
|
$
|
2,654
|
$
|
5,210
|
-49
|
%
|
-49
|
%
|
|||||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring charges
|
5
|
71
|
93
|
%
|
93
|
%
|
|||||||||||
|
Non-GAAP Adjusted Contribution to Profit
|
$
|
2,659
|
$
|
5,281
|
-50
|
%
|
-49
|
%
|
|||||||||
|
Depreciation and amortization
|
8,260
|
7,493
|
-10
|
%
|
-10
|
%
|
|||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
10,919
|
$
|
12,774
|
-15
|
%
|
-14
|
%
|
|||||||||
|
Adjusted EBITDA margin
|
13.3
|
%
|
18.4
|
%
|
|||||||||||||
|
Corporate Expenses:
|
$
|
(53,604
|
)
|
$
|
(64,488
|
)
|
17
|
%
|
16
|
%
|
|||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring charges
|
228
|
20,193
|
99
|
%
|
99
|
%
|
|||||||||||
|
Non-GAAP Adjusted Contribution to Profit
|
$
|
(53,376
|
)
|
$
|
(44,295
|
)
|
-21
|
%
|
-21
|
%
|
|||||||
|
Depreciation and amortization
|
4,151
|
3,593
|
-16
|
%
|
-16
|
%
|
|||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
(49,225
|
)
|
$
|
(40,702
|
)
|
-21
|
%
|
-22
|
%
|
|||||||
|
Consolidated Results:
|
|||||||||||||||||
|
Revenue, net
|
$
|
515,884
|
$
|
482,912
|
7
|
%
|
7
|
%
|
|||||||||
|
Operating Income
|
$
|
45,989
|
$
|
34,327
|
34
|
%
|
31
|
%
|
|||||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring charges
|
448
|
20,675
|
98
|
%
|
98
|
%
|
|||||||||||
|
Non-GAAP Adjusted Contribution to Profit
|
$
|
46,437
|
$
|
55,002
|
-16
|
%
|
-17
|
%
|
|||||||||
|
Depreciation and amortization
|
53,363
|
49,316
|
-8
|
%
|
-9
|
%
|
|||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
99,800
|
$
|
104,318
|
-4
|
%
|
-5
|
%
|
|||||||||
|
Adjusted EBITDA margin
|
19.3
|
%
|
21.6
|
%
|
|||||||||||||
|
Notes:
|
|||||||||||||||||
|
(1) The supplementary information included in this press release for the three and nine months ended January 31, 2022 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 2021, we moved the WileyNXT product offering from Academic & Professional Learning – Education Publishing to Education Services –
Talent Development Services. As a result, the prior period results related to the WileyNXT product offering have been included in Education Services - Talent Development Services. The Revenue, Adjusted Contribution to Profit and Adjusted
EBITDA for WileyNXT was $0.5 million, $(0.2) million, and $(0.2) million, respectively, for the three months ended January 31, 2021. The Revenue, Adjusted Contribution to Profit and Adjusted EBITDA for WileyNXT was $1.6 million, $(0.4)
million, and $(0.4) million, respectively, for the nine months ended January 31, 2021. There were no changes to our total consolidated financial results.
|
|||||||||||||||||
|
(3) University Services was previously referred to as Education Services OPM.
|
|||||||||||||||||
|
(4) Talent Development Services was previously referred to as mthree.
|
|||||||||||||||||
|
# Variance greater than 100%
|
|
||||||||||||||||
|
JOHN WILEY & SONS, INC.
|
|||||||||||||||||
|
SUPPLEMENTARY INFORMATION (1)
|
|||||||||||||||||
|
SEGMENT RESULTS
|
|||||||||||||||||
|
(in thousands)
|
|||||||||||||||||
|
(unaudited)
|
|||||||||||||||||
|
% Change
|
|||||||||||||||||
|
Nine Months Ended January 31,
|
Favorable (Unfavorable)
|
||||||||||||||||
|
2022
|
2021
|
Reported
|
Constant
Currency
|
||||||||||||||
|
Research Publishing & Platforms:
|
|||||||||||||||||
|
Revenue, net
|
|||||||||||||||||
|
Research Publishing
|
$
|
775,115
|
$
|
700,482
|
11
|
%
|
9
|
%
|
|||||||||
|
Research Platforms
|
38,136
|
31,512
|
21
|
%
|
21
|
%
|
|||||||||||
|
Total Revenue, net
|
$
|
813,251
|
$
|
731,994
|
11
|
%
|
10
|
%
|
|||||||||
|
Contribution to Profit
|
$
|
218,004
|
$
|
204,688
|
7
|
%
|
6
|
%
|
|||||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring charges (credits)
|
238
|
(352
|
)
|
#
|
#
|
||||||||||||
|
Non-GAAP Adjusted Contribution to Profit
|
$
|
218,242
|
$
|
204,336
|
7
|
%
|
7
|
%
|
|||||||||
|
Depreciation and amortization
|
71,140
|
60,463
|
-18
|
%
|
-16
|
%
|
|||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
289,382
|
$
|
264,799
|
9
|
%
|
9
|
%
|
|||||||||
|
Adjusted EBITDA margin
|
35.6
|
%
|
36.2
|
%
|
|||||||||||||
|
Academic & Professional Learning:
|
|||||||||||||||||
|
Revenue, net
|
|||||||||||||||||
|
Education Publishing (2)
|
$
|
260,459
|
$
|
263,702
|
-1
|
%
|
-2
|
%
|
|||||||||
|
Professional Learning
|
225,967
|
206,269
|
10
|
%
|
9
|
%
|
|||||||||||
|
Total Revenue, net
|
$
|
486,426
|
$
|
469,971
|
4
|
%
|
3
|
%
|
|||||||||
|
Contribution to Profit
|
$
|
83,997
|
$
|
62,552
|
34
|
%
|
33
|
%
|
|||||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring (credits) charges
|
(79
|
)
|
1,902
|
#
|
#
|
||||||||||||
|
Non-GAAP Adjusted Contribution to Profit
|
$
|
83,918
|
$
|
64,454
|
30
|
%
|
29
|
%
|
|||||||||
|
Depreciation and amortization
|
53,550
|
53,757
|
0
|
%
|
1
|
%
|
|||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
137,468
|
$
|
118,211
|
16
|
%
|
15
|
%
|
|||||||||
|
Adjusted EBITDA margin
|
28.3
|
%
|
25.2
|
%
|
|||||||||||||
|
Education Services:
|
|||||||||||||||||
|
Revenue, net
|
|||||||||||||||||
|
University Services (3)
|
$
|
167,565
|
$
|
163,248
|
3
|
%
|
2
|
%
|
|||||||||
|
Talent Development Services (2)(4)
|
70,033
|
40,036
|
75
|
%
|
70
|
%
|
|||||||||||
|
Total Revenue, net
|
$
|
237,598
|
$
|
203,284
|
17
|
%
|
16
|
%
|
|||||||||
|
Contribution to Profit
|
$
|
1,548
|
$
|
12,962
|
-88
|
%
|
-89
|
%
|
|||||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring (credits) charges
|
(23
|
)
|
294
|
#
|
#
|
||||||||||||
|
Non-GAAP Adjusted Contribution to Profit
|
$
|
1,525
|
$
|
13,256
|
-88
|
%
|
-90
|
%
|
|||||||||
|
Depreciation and amortization
|
25,376
|
21,982
|
-15
|
%
|
-15
|
%
|
|||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
26,901
|
$
|
35,238
|
-24
|
%
|
-24
|
%
|
|||||||||
|
Adjusted EBITDA margin
|
11.3
|
%
|
17.3
|
%
|
|||||||||||||
|
Corporate Expenses:
|
$
|
(142,704
|
)
|
$
|
(145,931
|
)
|
2
|
%
|
2
|
%
|
|||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring (credits) charges
|
(1,297
|
)
|
22,969
|
#
|
#
|
||||||||||||
|
Non-GAAP Adjusted Contribution to Profit
|
$
|
(144,001
|
)
|
$
|
(122,962
|
)
|
-17
|
%
|
-17
|
%
|
|||||||
|
Depreciation and amortization
|
12,418
|
11,051
|
-12
|
%
|
-12
|
%
|
|||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
(131,583
|
)
|
$
|
(111,911
|
)
|
-18
|
%
|
-17
|
%
|
|||||||
|
Consolidated Results:
|
|||||||||||||||||
|
Revenue, net
|
$
|
1,537,275
|
$
|
1,405,249
|
9
|
%
|
8
|
%
|
|||||||||
|
Operating Income
|
$
|
160,845
|
$
|
134,271
|
20
|
%
|
19
|
%
|
|||||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring (credits) charges
|
(1,161
|
)
|
24,813
|
#
|
#
|
||||||||||||
|
Non-GAAP Adjusted Contribution to Profit
|
$
|
159,684
|
$
|
159,084
|
0
|
%
|
0
|
%
|
|||||||||
|
Depreciation and amortization
|
162,484
|
147,253
|
-10
|
%
|
-10
|
%
|
|||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
322,168
|
$
|
306,337
|
5
|
%
|
4
|
%
|
|||||||||
|
Adjusted EBITDA margin
|
21.0
|
%
|
21.8
|
%
|
|||||||||||||
|
# Variance greater than 100%
|
|||||||||||||||||
|
JOHN WILEY & SONS, INC.
|
||||||||
|
SUPPLEMENTARY INFORMATION (1)
|
||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
||||||||
|
(in thousands)
|
||||||||
|
(unaudited)
|
||||||||
|
January 31,
|
April 30,
|
|||||||
|
2022
|
2021
|
|||||||
|
Assets:
|
||||||||
|
Current assets
|
||||||||
|
Cash and cash equivalents
|
$
|
109,444
|
$
|
93,795
|
||||
|
Accounts receivable, net
|
267,988
|
311,571
|
||||||
|
Inventories, net
|
39,726
|
42,538
|
||||||
|
Prepaid expenses and other current assets
|
74,412
|
78,393
|
||||||
|
Total current assets
|
491,570
|
526,297
|
||||||
|
Product development assets, net
|
44,350
|
49,517
|
||||||
|
Royalty advances, net
|
36,523
|
39,582
|
||||||
|
Technology, property and equipment, net
|
271,984
|
282,270
|
||||||
|
Intangible assets, net
|
970,893
|
1,015,302
|
||||||
|
Goodwill
|
1,325,964
|
1,304,340
|
||||||
|
Operating lease right-of-use assets
|
118,155
|
121,430
|
||||||
|
Other non-current assets
|
118,545
|
107,701
|
||||||
|
Total assets
|
$
|
3,377,984
|
$
|
3,446,439
|
||||
|
Liabilities and shareholders' equity:
|
||||||||
|
Current liabilities
|
||||||||
|
Accounts payable
|
$
|
76,743
|
$
|
95,791
|
||||
|
Accrued royalties
|
141,304
|
78,582
|
||||||
|
Short-term portion of long-term debt
|
15,625
|
12,500
|
||||||
|
Contract liabilities
|
355,846
|
545,425
|
||||||
|
Accrued employment costs
|
105,286
|
144,744
|
||||||
|
Accrued income taxes
|
16,804
|
8,590
|
||||||
|
Short-term portion of operating lease liabilities
|
21,598
|
22,440
|
||||||
|
Other accrued liabilities
|
88,275
|
80,900
|
||||||
|
Total current liabilities
|
821,481
|
988,972
|
||||||
|
Long-term debt
|
902,045
|
809,088
|
||||||
|
Accrued pension liability
|
115,860
|
146,247
|
||||||
|
Deferred income tax liabilities
|
182,899
|
172,903
|
||||||
|
Operating lease liabilities
|
139,587
|
145,832
|
||||||
|
Other long-term liabilities
|
96,594
|
92,106
|
||||||
|
Total liabilities
|
2,258,466
|
2,355,148
|
||||||
|
Shareholders' equity
|
1,119,518
|
1,091,291
|
||||||
|
Total liabilities and shareholders' equity
|
$
|
3,377,984
|
$
|
3,446,439
|
||||
|
Notes:
|
||||||||
|
(1) The supplementary information included in this press release for January 31, 2022 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 FLOWS
|
|||||||||
|
(in thousands)
|
|||||||||
|
(unaudited)
|
|||||||||
|
Nine Months Ended
|
|||||||||
|
January 31,
|
|||||||||
|
2022
|
2021
|
||||||||
|
Operating activities:
|
|||||||||
|
Net income
|
$
|
105,163
|
$
|
106,927
|
|||||
|
Amortization of intangible assets
|
63,683
|
53,089
|
|||||||
|
Amortization of product development assets
|
26,662
|
25,323
|
|||||||
|
Depreciation and amortization of technology, property, and equipment
|
72,139
|
68,841
|
|||||||
|
Other noncash charges
|
69,347
|
84,366
|
|||||||
|
Net change in operating assets and liabilities
|
(178,510
|
)
|
(183,720
|
)
|
|||||
|
Net cash provided by operating activities
|
158,484
|
154,826
|
|||||||
|
Investing activities:
|
|||||||||
|
Additions to technology, property, and equipment
|
(60,668
|
)
|
(58,176
|
)
|
|||||
|
Product development spending
|
(20,388
|
)
|
(17,103
|
)
|
|||||
|
Businesses acquired in purchase transactions, net of cash acquired
|
(70,620
|
)
|
(298,590
|
)
|
|||||
|
Proceeds related to the sale of certain assets
|
3,375
|
-
|
|||||||
|
Acquisitions of publication rights and other
|
(3,750
|
)
|
(18,524
|
)
|
|||||
|
Net cash used in investing activities
|
(152,051
|
)
|
(392,393
|
)
|
|||||
|
Financing activities:
|
|||||||||
|
Net debt borrowings
|
105,334
|
174,170
|
|||||||
|
Cash dividends
|
(57,900
|
)
|
(57,802
|
)
|
|||||
|
Purchases of treasury shares
|
(24,867
|
)
|
(7,063
|
)
|
|||||
|
Other
|
(9,468
|
)
|
6,538
|
||||||
|
Net cash provided by financing activities
|
13,099
|
115,843
|
|||||||
|
Effects of exchange rate changes on cash, cash equivalents and restricted cash
|
(3,875
|
)
|
10,631
|
||||||
|
Change in cash, cash equivalents and restricted cash for period
|
15,657
|
(111,093
|
)
|
||||||
|
Cash, cash equivalents and restricted cash - beginning
|
94,359
|
203,047
|
|||||||
|
Cash, cash equivalents and restricted cash - ending
|
$
|
110,016
|
$
|
91,954
|
|||||
|
CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT DEVELOPMENT SPENDING (2)
|
|||||||||
|
Nine Months Ended
|
|||||||||
|
January 31,
|
|||||||||
|
2022
|
2021
|
||||||||
|
Net cash provided by operating activities
|
$
|
158,484
|
$
|
154,826
|
|||||
|
Less: Additions to technology, property, and equipment
|
|
(60,668
|
)
|
(58,176
|
)
|
||||
|
Less: Product development spending
|
|
(20,388
|
)
|
(17,103
|
)
|
||||
|
Free cash flow less product development spending
|
$
|
77,428
|
$
|
79,547
|
|||||
|
Notes:
|
|||||||||
|
(1) The supplementary information included in this press release for the nine months ended January 31, 2022 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) See Explanation of Usage of Non-GAAP Performance Measures included in this supplemental information.
|
|||||||||
|
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:
|
|
• Adjusted Earnings Per Share (Adjusted EPS);
|
|
• Free Cash Flow less Product Development Spending;
|
|
• Adjusted Contribution to Profit and margin;
|
|
• Adjusted Income Before Taxes;
|
|
• Adjusted Income Tax Provision;
|
|
• Adjusted Effective Tax Rate;
|
|
• EBITDA, Adjusted EBITDA and margin;
|
|
• Organic revenue; 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
as for internal reporting and forecasting purposes, when publicly providing our outlook, to evaluate our performance and calculate incentive compensation.
|
|
We present these non-GAAP performance measures in addition to US GAAP financial results because we believe that these non-GAAP performance
measures provide useful information to certain investors and financial analysts for operational trends and comparisons over time. The use of these non-GAAP performance measures may also provide 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.
|
|
The performance metric used by our chief operating decision maker to evaluate performance of our reportable segments is Adjusted
Contribution to Profit. We present both Adjusted Contribution to Profit and Adjusted EBITDA for each of our reportable segments since we believe Adjusted EBITDA provides additional useful information to certain investors and
financial analysts for operational trends and comparisons over time as it removes the impact of depreciation and amortization expense, as well as a consistent basis to evaluate operating profitability and comparing our financial
performance to that of our peer companies and competitors.
|
|
For example:
|
|
• Adjusted EPS, Adjusted Contribution to Profit, Adjusted Income Before Taxes, Adjusted Income Tax Provision, Adjusted Effective Tax Rate, Adjusted EBITDA and organic revenue (excluding
acquisitions) 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
stock dividends and fund share repurchases and 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 excluding 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, we have historically provided these or similar non-GAAP performance measures and understand that some investors and financial
analysts find this information helpful in analyzing our operating margins and net income, and in comparing our financial performance to that of our 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 US 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.
|
|
We have not provided our 2022 outlook for the most directly comparable US GAAP financial measures, as they are not available without
unreasonable effort due to the high variability, complexity, and low visibility with respect to certain items, including restructuring charges and credits, gains and losses on foreign currency, and other gains and losses. These
items are uncertain, depend on various factors, and could be material to our consolidated results computed in accordance with US GAAP.
|
|
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 adjusted metrics have limitations as analytical tools, and should not be considered in
isolation from, or as a substitute for, US GAAP information. It does not purport to represent any similarly titled US GAAP information and is not an indicator of our performance under US GAAP. Non-GAAP financial metrics that we
present may not be comparable with similarly titled measures used by others. Investors are cautioned against placing undue reliance on these non-GAAP measures.
|
