Wiley Reports Second Quarter Fiscal 2021 Results
December 8, 2020 - Hoboken, NJ – John Wiley & Sons, Inc. (NYSE: JW-A and JW-B), a global leader in research and
education, today announced results for the second quarter ended October 31, 2020.
SECOND QUARTER SUMMARY
|
•
|
GAAP Results: Revenue of $491 million (+5%)
and EPS of $1.22 (+54%)
|
|
•
|
|
•
|
Research Publishing & Platforms (at
constant currency): Revenue +5% and Adjusted EBITDA +14% on strong double-digit growth in Open Access
|
|
•
|
Academic & Professional Learning: Revenue
for Education Publishing marginally ahead of prior year as accelerated growth in digital content and courseware more than offset decline in print books
|
|
•
|
Education Services: Second Quarter and First
Half Adjusted EBITDA margin of 21% and 17%, trending ahead of FY22 target of 15%
|
“Wiley’s consistent strategies in open research and online education continued to deliver strong returns with record research
output and content consumption, robust online enrollment growth, and broad digital courseware adoption,” said Brian Napack, President and CEO. “The pandemic is accelerating important trends underlying our core strategies, including a global increase in the demand to publish and access high-quality research and a decisive shift to online learning and digital curriculums.”
SECOND QUARTER PERFORMANCE
|
GAAP Measures
Unaudited ($millions except for EPS)
|
Q2 2021
|
Q2 2020
|
Change
|
|||||||||
|
Revenue
|
$
|
491.0
|
$
|
466.2
|
5
|
%
|
||||||
|
Diluted EPS
|
$
|
1.22
|
$
|
0.79
|
54
|
%
|
||||||
|
Non-GAAP Measures
|
Q2 2021
|
Q2 2020
|
Change
Constant Currency
|
|||||||||
|
Revenue
|
$
|
491.0
|
$
|
466.2
|
4
|
%
|
||||||
|
Adjusted EBITDA
|
$
|
120.3
|
$
|
110.0
|
7
|
%
|
||||||
|
Adjusted EPS
|
$
|
1.00
|
$
|
0.85
|
12
|
%
|
||||||
Excluding
acquisitions and currency impact, revenue was flat for the quarter. Wiley recorded a favorable FX variance of $8 million in revenue, $0.05 in Adjusted EPS, and $2 million in Adjusted EBITDA.
Revenue
|
•
|
|
•
|
Academic & Professional Learning declined
4% as reported and 5% at constant currency mainly due to COVID-19 impact on Professional Learning (-11% reported, -13% constant currency), particularly trade books and in-person corporate training. Within Education Publishing (+1%, 0%
constant currency), digital content and courseware growth accelerated, more than offsetting the decline in print textbooks, while test prep continued its sharp decline due to COVID-related exam cancellations.
|
|
•
|
Education Services increased 28% as reported
and 27% at constant currency, driven by the three-month inorganic contribution from mthree (+$13 million) and organic constant currency
growth of 6% in Online Program Management (OPM) services.
|
Adjusted EBITDA
|
•
|
Research Publishing & Platforms grew 14%
at constant currency, reflecting revenue growth, operational efficiencies, and COVID-related expense savings.
|
|
•
|
Academic & Professional Learning declined
10% at constant currency, reflecting revenue performance partly offset by business optimization gains and COVID-related expense savings.
|
|
•
|
Education Services rose 94% at constant
currency from $8 million to $15 million, driven by revenue growth and business optimization initiatives, notably sustained improvement in student acquisition costs. Adjusted EBITDA margin for the quarter was 21%, up from 14% in the prior year.
|
|
•
|
Corporate Expenses rose 10% to $41 million mainly due to the timing of annual incentive costs.
|
EPS
|
•
|
GAAP EPS of $1.22 compared to $0.79 in the
prior year period and primarily reflected higher Operating Income, lower restructuring charges and interest expense, and a $0.25 discrete tax benefit. In connection with the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"),
Wiley elected to carry back its fiscal year 2020 U.S. loss for tax purposes to its fiscal year 2015, resulting in a $14 million GAAP tax benefit this quarter.
|
|
•
|
Adjusted EPS of $1.00 compared to $0.85 in
the prior year and was driven by improved Adjusted Operating Income. The $0.25 discrete tax benefit related to the CARES Act was excluded from Adjusted EPS.
|
Balance Sheet and Liquidity
|
•
|
Net debt-to-EBITDA ratio (trailing twelve
months) at quarter-end was 1.9 as compared to 1.8 at the end of the year-ago period.
|
|
•
|
Available liquidity was approximately $740
million at quarter-end, including $86 million of cash on hand and $655 million of undrawn credit capacity.
|
Cash Flow (Six Months)
|
•
|
Free Cash Flow less Product Development
Spending was a use of $124 million compared to a use of $156 million in the prior year, primarily reflecting the improvement in Net Cash Used in Operating Activities.
|
FISCAL YEAR 2021 OUTLOOK
Based on performance through the six months and leading indicators for the remainder of the year, Wiley is initiating annual guidance for fiscal year 2021.
For Revenue, the Company anticipates low-single digit growth overall, which includes low-single digit growth in Research, a mid-single digit decline in Academic & Professional Learning, and double-digit growth in Education Services (mid-single
digit growth on an organic basis). Projected performance ranges for consolidated Revenue, Adjusted EBITDA, Adjusted EPS and Free Cash Flow are as follows:
|
METRIC (in millions, except EPS)
|
FY20
|
FY21 OUTLOOK*
|
||||||
|
Revenue
|
$
|
1,831
|
$
|
1,865 - $1,885
|
||||
|
Adjusted EBITDA
|
$
|
356
|
$
|
380 - $395
|
||||
|
Adjusted EPS
|
$
|
2.40
|
$
|
2.50 - $2.70
|
||||
|
Free Cash Flow
|
$
|
173
|
$
|
175 - $200
|
||||
*Outlook reflects actual currency for results through Q2 and assumes current FX rates prevail for remainder of year.
Scheduled for today, December 8 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/xdo3rqb2. U.S. callers, please dial (844) 231-0103
and enter the participant code 6272694#. International callers, please dial (216) 562-0402 and enter the participant code 6272694#.
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.
Investor Contact:
Brian Campbell
201.748.6874
Media Contact:
Katie Roberts
602.373.7233
|
JOHN WILEY & SONS, INC.
|
||||||||||||||||
|
SUPPLEMENTARY INFORMATION (1)(2)
|
||||||||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
||||||||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||
|
(unaudited)
|
||||||||||||||||
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
|
October 31,
|
October 31,
|
|||||||||||||||
|
2020
|
2019
|
2020
|
2019
|
|||||||||||||
|
Revenue, net
|
$
|
491,011
|
$
|
466,205
|
$
|
922,337
|
$
|
889,735
|
||||||||
|
Costs and expenses:
|
||||||||||||||||
|
Cost of sales
|
154,853
|
143,413
|
299,662
|
286,509
|
||||||||||||
|
Operating and administrative expenses
|
247,167
|
240,380
|
484,536
|
490,550
|
||||||||||||
|
Restructuring and related charges
|
1,920
|
4,001
|
4,138
|
14,736
|
||||||||||||
|
Amortization of intangibles
|
17,166
|
15,020
|
34,057
|
29,990
|
||||||||||||
|
Total Costs and Expenses
|
421,106
|
402,814
|
822,393
|
821,785
|
||||||||||||
|
Operating Income
|
69,905
|
63,391
|
99,944
|
67,950
|
||||||||||||
|
As a % of revenue
|
14.2
|
%
|
13.6
|
%
|
10.8
|
%
|
7.6
|
%
|
||||||||
|
Interest expense
|
(4,461
|
)
|
(6,787
|
)
|
(9,075
|
)
|
(12,864
|
)
|
||||||||
|
Foreign exchange transaction losses
|
(697
|
)
|
(2,668
|
)
|
(779
|
)
|
(16
|
)
|
||||||||
|
Other income
|
3,766
|
2,537
|
8,157
|
5,370
|
||||||||||||
|
Income Before Taxes
|
68,513
|
56,473
|
98,247
|
60,440
|
||||||||||||
|
Provision for income taxes
|
81
|
11,783
|
13,481
|
12,126
|
||||||||||||
|
Effective tax rate
|
0.1
|
%
|
20.9
|
%
|
13.7
|
%
|
20.1
|
%
|
||||||||
|
Net Income
|
$
|
68,432
|
$
|
44,690
|
$
|
84,766
|
$
|
48,314
|
||||||||
|
As a % of revenue
|
13.9
|
%
|
9.6
|
%
|
9.2
|
%
|
5.4
|
%
|
||||||||
|
Weighed Average Number of Common Shares Outstanding
|
||||||||||||||||
|
Basic
|
56,005
|
56,326
|
55,959
|
56,431
|
||||||||||||
|
Diluted
|
56,165
|
56,664
|
56,182
|
56,791
|
||||||||||||
|
Earnings Per Share
|
||||||||||||||||
|
Basic
|
$
|
1.22
|
$
|
0.79
|
$
|
1.51
|
$
|
0.86
|
||||||||
|
Diluted
|
$
|
1.22
|
$
|
0.79
|
$
|
1.51
|
$
|
0.85
|
||||||||
|
Notes:
|
||||||||||||||||
|
(1) The supplementary information included in this press release for the three and six months ended October 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
|
Six Months Ended
|
||||||||||||||||
|
October 31,
|
October 31,
|
||||||||||||||||
|
2020
|
2019
|
2020
|
2019
|
||||||||||||||
|
GAAP Earnings Per Share - Diluted
|
$
|
1.22
|
$
|
0.79
|
$
|
1.51
|
$
|
0.85
|
|||||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring and related charges (A)
|
0.02
|
0.06
|
0.05
|
0.20
|
|||||||||||||
|
Foreign exchange losses (gains) on intercompany transactions (A)
|
0.01
|
-
|
(0.02
|
)
|
0.01
|
||||||||||||
|
Impact of increase in U.K. statutory rate on deferred tax balances (B)
|
-
|
-
|
0.12
|
-
|
|||||||||||||
|
Impact of U.S. CARES Act (C)
|
(0.25
|
)
|
-
|
(0.25
|
)
|
-
|
|||||||||||
|
Non-GAAP Adjusted Earnings Per Share - Diluted
|
$
|
1.00
|
$
|
0.85
|
$
|
1.41
|
$
|
1.06
|
|||||||||
|
Notes:
|
|||||||||||||||||
|
(A) The table below shows the net of tax impact of our adjustments to GAAP Earnings Per Share noted above.
|
|||||||||||||||||
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||||
|
October 31,
|
October 31,
|
||||||||||||||||
|
(amounts in millions)
|
2020
|
2019
|
2020
|
2019
|
|||||||||||||
|
Net of tax, charges related to the Business Optimization Program
|
$
|
1.4
|
$
|
2.8
|
$
|
2.9
|
$
|
11.1
|
|||||||||
|
Net of tax, (credits) charges related to the Restructuring and Reinvestment Program
|
$
|
(0.2
|
)
|
$
|
0.3
|
$
|
(0.2
|
)
|
$
|
0.2
|
|||||||
|
Net of tax, foreign exchange transaction losses (gains)
|
$
|
0.2
|
$
|
0.5
|
$
|
(0.8
|
)
|
$
|
0.7
|
||||||||
|
(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.
|
|||||||||||||||||
|
(C) In connection with the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") and certain regulations issued in late July 2020, the
Company elected to carry back its fiscal year 2020 loss for tax purposes ("NOL") to its fiscal year 2015 and claimed a $20.7 million refund. The NOL carryback to a year when our corporate tax rate was 35%, including certain related
benefits, resulted in a $14 million tax benefit. We expect to receive the refund by the end of fiscal 2021.
|
|||||||||||||||||
|
(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 six months ended October 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
|
Six Months Ended
|
|||||||||||||||
|
October 31,
|
October 31,
|
|||||||||||||||
|
2020
|
2019
|
2020
|
2019
|
|||||||||||||
|
Net Income
|
$
|
68,432
|
$
|
44,690
|
$
|
84,766
|
$
|
48,314
|
||||||||
|
Interest expense
|
4,461
|
6,787
|
9,075
|
12,864
|
||||||||||||
|
Provision for income taxes
|
81
|
11,783
|
13,481
|
12,126
|
||||||||||||
|
Depreciation and amortization
|
48,430
|
42,638
|
97,937
|
84,857
|
||||||||||||
|
Non-GAAP EBITDA
|
121,404
|
105,898
|
205,259
|
158,161
|
||||||||||||
|
Restructuring and related charges
|
1,920
|
4,001
|
4,138
|
14,736
|
||||||||||||
|
Foreign exchange transaction losses
|
697
|
2,668
|
779
|
16
|
||||||||||||
|
Other income
|
(3,766
|
)
|
(2,537
|
)
|
(8,157
|
)
|
(5,370
|
)
|
||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
120,255
|
$
|
110,030
|
$
|
202,019
|
$
|
167,543
|
||||||||
|
Adjusted EBITDA Margin
|
24.5
|
%
|
23.6
|
%
|
21.9
|
%
|
18.8
|
%
|
||||||||
|
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 six months ended October 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)
|
|||||||||||||||||
|
% Change
|
|||||||||||||||||
|
Three Months Ended October 31,
|
Favorable (Unfavorable)
|
||||||||||||||||
|
2020
|
2019
|
Reported
|
Constant
Currency
|
||||||||||||||
|
Research Publishing & Platforms:
|
|||||||||||||||||
|
Revenue, net
|
|||||||||||||||||
|
Research Publishing
|
$
|
240,691
|
$
|
225,085
|
7
|
%
|
5
|
%
|
|||||||||
|
Research Platforms
|
10,643
|
9,624
|
11
|
%
|
11
|
%
|
|||||||||||
|
Total Revenue, net
|
$
|
251,334
|
$
|
234,709
|
7
|
%
|
5
|
%
|
|||||||||
|
Contribution to Profit
|
$
|
74,088
|
$
|
63,291
|
17
|
%
|
15
|
%
|
|||||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring (credits) charges
|
(238
|
)
|
726
|
||||||||||||||
|
Non-GAAP Adjusted Contribution to Profit
|
$
|
73,850
|
$
|
64,017
|
15
|
%
|
14
|
%
|
|||||||||
|
Depreciation and amortization
|
19,765
|
17,037
|
|||||||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
93,615
|
$
|
81,054
|
15
|
%
|
14
|
%
|
|||||||||
|
Adjusted EBITDA margin
|
37.2
|
%
|
34.5
|
%
|
|||||||||||||
|
Academic & Professional Learning:
|
|||||||||||||||||
|
Revenue, net
|
|||||||||||||||||
|
Education Publishing
|
$
|
103,105
|
$
|
101,741
|
1
|
%
|
0
|
%
|
|||||||||
|
Professional Learning
|
67,485
|
75,984
|
-11
|
%
|
-13
|
%
|
|||||||||||
|
Total Revenue, net
|
$
|
170,590
|
$
|
177,725
|
-4
|
%
|
-5
|
%
|
|||||||||
|
Contribution to Profit
|
$
|
29,878
|
$
|
35,050
|
-15
|
%
|
-17
|
%
|
|||||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring charges
|
1,541
|
800
|
|||||||||||||||
|
Non-GAAP Adjusted Contribution to Profit
|
$
|
31,419
|
$
|
35,850
|
-12
|
%
|
-15
|
%
|
|||||||||
|
Depreciation and amortization
|
17,720
|
17,349
|
|||||||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
49,139
|
$
|
53,199
|
-8
|
%
|
-10
|
%
|
|||||||||
|
Adjusted EBITDA margin
|
28.8
|
%
|
29.9
|
%
|
|||||||||||||
|
Education Services:
|
|||||||||||||||||
|
Revenue, net
|
|||||||||||||||||
|
Education Services OPM (2)
|
$
|
56,261
|
$
|
52,781
|
7
|
%
|
6
|
%
|
|||||||||
|
mthree (2)
|
12,826
|
990
|
#
|
#
|
|||||||||||||
|
Total Revenue, net
|
$
|
69,087
|
$
|
53,771
|
28
|
%
|
27
|
%
|
|||||||||
|
Contribution to Profit
|
$
|
7,425
|
$
|
2,583
|
#
|
#
|
|||||||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring charges (credits)
|
84
|
(475
|
)
|
||||||||||||||
|
Non-GAAP Adjusted Contribution to Profit
|
$
|
7,509
|
$
|
2,108
|
#
|
#
|
|||||||||||
|
Depreciation and amortization
|
7,210
|
5,522
|
|||||||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
14,719
|
$
|
7,630
|
93
|
%
|
94
|
%
|
|||||||||
|
Adjusted EBITDA margin
|
21.3
|
%
|
14.2
|
%
|
|||||||||||||
|
Corporate Expenses:
|
$
|
(41,486
|
)
|
$
|
(37,533
|
)
|
-11
|
%
|
-10
|
%
|
|||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring charges
|
533
|
2,950
|
|||||||||||||||
|
Non-GAAP Adjusted Corporate Expenses
|
$
|
(40,953
|
)
|
$
|
(34,583
|
)
|
-18
|
%
|
-18
|
%
|
|||||||
|
Depreciation and amortization
|
3,735
|
2,730
|
|||||||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
(37,218
|
)
|
$
|
(31,853
|
)
|
-17
|
%
|
-16
|
%
|
|||||||
|
Consolidated Results:
|
|||||||||||||||||
|
Revenue, net
|
$
|
491,011
|
$
|
466,205
|
5
|
%
|
4
|
%
|
|||||||||
|
Operating Income
|
$
|
69,905
|
$
|
63,391
|
10
|
%
|
8
|
%
|
|||||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring charges
|
1,920
|
4,001
|
|||||||||||||||
|
Non-GAAP Adjusted Operating Income
|
$
|
71,825
|
$
|
67,392
|
7
|
%
|
4
|
%
|
|||||||||
|
Depreciation and amortization
|
48,430
|
42,638
|
|||||||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
120,255
|
$
|
110,030
|
9
|
%
|
7
|
%
|
|||||||||
|
Adjusted EBITDA margin
|
24.5
|
%
|
23.6
|
%
|
|||||||||||||
|
(1) The supplementary information included in this press release for the three and six months ended October 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 OPM 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 and
six months ended October 31, 2020 was $12.5 and $24.9 million, respectively.
|
|||||||||||||||||
|
# Variance greater than 100%
|
|
||||||||||||||||
|
JOHN WILEY & SONS, INC.
|
|||||||||||||||||
|
SUPPLEMENTARY INFORMATION (1)
|
|||||||||||||||||
|
SEGMENT RESULTS
|
|||||||||||||||||
|
(in thousands)
|
|||||||||||||||||
|
(unaudited)
|
|||||||||||||||||
|
% Change
|
|||||||||||||||||
|
Six Months Ended October 31,
|
Favorable (Unfavorable)
|
||||||||||||||||
|
2020
|
2019
|
Reported
|
Constant
Currency
|
||||||||||||||
|
Research Publishing & Platforms:
|
|||||||||||||||||
|
Revenue, net
|
|||||||||||||||||
|
Research Publishing
|
$
|
471,155
|
$
|
445,012
|
6
|
%
|
5
|
%
|
|||||||||
|
Research Platforms
|
20,989
|
19,072
|
10
|
%
|
10
|
%
|
|||||||||||
|
Total Revenue, net
|
$
|
492,144
|
$
|
464,084
|
6
|
%
|
5
|
%
|
|||||||||
|
Contribution to Profit
|
$
|
143,906
|
$
|
118,937
|
21
|
%
|
20
|
%
|
|||||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring (credits) charges
|
(435
|
)
|
3,346
|
||||||||||||||
|
Non-GAAP Adjusted Contribution to Profit
|
$
|
143,471
|
$
|
122,283
|
17
|
%
|
16
|
%
|
|||||||||
|
Depreciation and amortization
|
39,466
|
34,190
|
|||||||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
182,937
|
$
|
156,473
|
17
|
%
|
16
|
%
|
|||||||||
|
Adjusted EBITDA margin
|
37.2
|
%
|
33.7
|
%
|
|||||||||||||
|
Academic & Professional Learning:
|
|||||||||||||||||
|
Revenue, net
|
|||||||||||||||||
|
Education Publishing
|
$
|
167,189
|
$
|
167,264
|
0
|
%
|
0
|
%
|
|||||||||
|
Professional Learning
|
130,314
|
155,319
|
-16
|
%
|
-17
|
%
|
|||||||||||
|
Total Revenue, net
|
$
|
297,503
|
$
|
322,583
|
-8
|
%
|
-8
|
%
|
|||||||||
|
Contribution to Profit
|
$
|
29,498
|
$
|
39,961
|
-26
|
%
|
-28
|
%
|
|||||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring charges
|
1,574
|
3,605
|
|||||||||||||||
|
Non-GAAP Adjusted Contribution to Profit
|
$
|
31,072
|
$
|
43,566
|
-29
|
%
|
-30
|
%
|
|||||||||
|
Depreciation and amortization
|
36,524
|
33,873
|
|||||||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
67,596
|
$
|
77,439
|
-13
|
%
|
-14
|
%
|
|||||||||
|
Adjusted EBITDA margin
|
22.7
|
%
|
24.0
|
%
|
|||||||||||||
|
Education Services:
|
|||||||||||||||||
|
Revenue, net
|
|||||||||||||||||
|
Education Services OPM (2)
|
$
|
106,523
|
$
|
100,937
|
6
|
%
|
6
|
%
|
|||||||||
|
mthree (2)
|
26,167
|
2,131
|
#
|
#
|
|||||||||||||
|
Total Revenue, net
|
$
|
132,690
|
$
|
103,068
|
29
|
%
|
28
|
%
|
|||||||||
|
Contribution to Profit
|
$
|
7,983
|
$
|
(4,616
|
)
|
#
|
#
|
||||||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring charges
|
223
|
1,614
|
|||||||||||||||
|
Non-GAAP Adjusted Contribution to Profit
|
$
|
8,206
|
$
|
(3,002
|
)
|
#
|
#
|
||||||||||
|
Depreciation and amortization
|
14,489
|
11,020
|
|||||||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
22,695
|
$
|
8,018
|
#
|
#
|
|||||||||||
|
Adjusted EBITDA margin
|
17.1
|
%
|
7.8
|
%
|
|||||||||||||
|
Corporate Expenses:
|
$
|
(81,443
|
)
|
$
|
(86,332
|
)
|
6
|
%
|
6
|
%
|
|||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring charges
|
2,776
|
6,171
|
|||||||||||||||
|
Non-GAAP Adjusted Corporate Expenses
|
$
|
(78,667
|
)
|
$
|
(80,161
|
)
|
2
|
%
|
2
|
%
|
|||||||
|
Depreciation and amortization
|
7,458
|
5,774
|
|||||||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
(71,209
|
)
|
$
|
(74,387
|
)
|
4
|
%
|
4
|
%
|
|||||||
|
Consolidated Results:
|
|||||||||||||||||
|
Revenue, net
|
$
|
922,337
|
$
|
889,735
|
4
|
%
|
3
|
%
|
|||||||||
|
Operating Income
|
$
|
99,944
|
$
|
67,950
|
47
|
%
|
44
|
%
|
|||||||||
|
Adjustments:
|
|||||||||||||||||
|
Restructuring charges
|
4,138
|
14,736
|
|||||||||||||||
|
Non-GAAP Adjusted Operating Income
|
$
|
104,082
|
$
|
82,686
|
26
|
%
|
24
|
%
|
|||||||||
|
Depreciation and amortization
|
97,937
|
84,857
|
|||||||||||||||
|
Non-GAAP Adjusted EBITDA
|
$
|
202,019
|
$
|
167,543
|
21
|
%
|
19
|
%
|
|||||||||
|
Adjusted EBITDA margin
|
21.9
|
%
|
18.8
|
%
|
|||||||||||||
|
# Variance greater than 100%
|
|||||||||||||||||
|
JOHN WILEY & SONS, INC.
|
||||||||
|
SUPPLEMENTARY INFORMATION (1)
|
||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
||||||||
|
(in thousands)
|
||||||||
|
(unaudited)
|
||||||||
|
October 31,
|
April 30,
|
|||||||
|
2020
|
2020
|
|||||||
|
Assets:
|
||||||||
|
Current Assets
|
||||||||
|
Cash and cash equivalents
|
$
|
86,063
|
$
|
202,464
|
||||
|
Accounts receivable, net
|
273,264
|
309,384
|
||||||
|
Inventories, net
|
42,169
|
43,614
|
||||||
|
Prepaid expenses and other current assets
|
75,801
|
59,465
|
||||||
|
Total Current Assets
|
477,297
|
614,927
|
||||||
|
Product Development Assets, net
|
48,944
|
53,643
|
||||||
|
Royalty Advances, net
|
18,276
|
36,710
|
||||||
|
Technology, Property and Equipment, net
|
290,071
|
298,005
|
||||||
|
Intangible Assets, net
|
819,834
|
807,405
|
||||||
|
Goodwill
|
1,126,904
|
1,116,790
|
||||||
|
Operating Lease Right-of-Use Assets
|
137,095
|
142,716
|
||||||
|
Other Non-Current Assets
|
101,984
|
98,598
|
||||||
|
Total Assets
|
$
|
3,020,405
|
$
|
3,168,794
|
||||
|
Liabilities and Shareholders' Equity:
|
||||||||
|
Current Liabilities
|
||||||||
|
Accounts payable
|
$
|
54,911
|
$
|
93,691
|
||||
|
Accrued royalties
|
94,390
|
87,408
|
||||||
|
Short-term portion of long-term debt
|
12,500
|
9,375
|
||||||
|
Contract liabilities
|
285,176
|
520,214
|
||||||
|
Accrued employment costs
|
88,761
|
108,448
|
||||||
|
Accrued income taxes
|
1,901
|
13,728
|
||||||
|
Short-term portion of operating lease liabilities
|
20,071
|
21,810
|
||||||
|
Other accrued liabilities
|
77,026
|
72,595
|
||||||
|
Total Current Liabilities
|
634,736
|
927,269
|
||||||
|
Long-Term Debt
|
825,243
|
765,650
|
||||||
|
Accrued Pension Liability
|
173,084
|
187,969
|
||||||
|
Deferred Income Tax Liabilities
|
131,026
|
119,127
|
||||||
|
Operating Lease Liabilities
|
153,355
|
159,782
|
||||||
|
Other Long-Term Liabilities
|
82,748
|
75,373
|
||||||
|
Total Liabilities
|
2,000,192
|
2,235,170
|
||||||
|
Shareholders' Equity
|
1,020,213
|
933,624
|
||||||
|
Total Liabilities and Shareholders' Equity
|
$
|
3,020,405
|
$
|
3,168,794
|
||||
|
(1) The supplementary information included in this press release for October 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)
|
|||||||||
|
Six Months Ended
|
|||||||||
|
October 31,
|
|||||||||
|
2020
|
2019
|
||||||||
|
Operating Activities:
|
|||||||||
|
Net income
|
$
|
84,766
|
$
|
48,314
|
|||||
|
Amortization of intangibles
|
34,057
|
29,990
|
|||||||
|
Amortization of product development assets
|
17,448
|
17,616
|
|||||||
|
Depreciation and amortization of technology, property, and equipment
|
46,432
|
37,251
|
|||||||
|
Other non-cash charges and credits
|
72,521
|
59,302
|
|||||||
|
Net change in operating assets and liabilities
|
(331,846
|
)
|
(291,994
|
)
|
|||||
|
Net Cash Used In Operating Activities
|
(76,622
|
)
|
(99,521
|
)
|
|||||
|
Investing Activities:
|
|||||||||
|
Additions to technology, property, and equipment
|
(36,430
|
)
|
(44,531
|
)
|
|||||
|
Product development spending
|
(10,999
|
)
|
(11,686
|
)
|
|||||
|
Businesses acquired in purchase transactions, net of cash acquired
|
(229
|
)
|
(74,169
|
)
|
|||||
|
Acquisitions of publication rights and other
|
(14,021
|
)
|
(4,045
|
)
|
|||||
|
Net Cash Used in Investing Activities
|
(61,679
|
)
|
(134,431
|
)
|
|||||
|
Financing Activities:
|
|||||||||
|
Net debt borrowings
|
59,590
|
317,471
|
|||||||
|
Cash dividends
|
(38,480
|
)
|
(38,486
|
)
|
|||||
|
Purchase of treasury shares
|
-
|
(25,000
|
)
|
||||||
|
Other
|
(2,511
|
)
|
(4,718
|
)
|
|||||
|
Net Cash Provided By Financing Activities
|
18,599
|
249,267
|
|||||||
|
Effects of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash
|
3,301
|
(461
|
)
|
||||||
|
Change in Cash, Cash Equivalents and Restricted Cash for Period
|
(116,401
|
)
|
14,854
|
||||||
|
Cash, Cash Equivalents and Restricted Cash - Beginning
|
203,047
|
93,548
|
|||||||
|
Cash, Cash Equivalents and Restricted Cash - Ending
|
$
|
86,646
|
$
|
108,402
|
|||||
|
CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT DEVELOPMENT SPENDING
|
|||||||||
|
Six Months Ended
|
|||||||||
|
October 31,
|
|||||||||
|
2020
|
2019
|
||||||||
|
Net Cash Used In Operating Activities
|
$
|
(76,622
|
)
|
$
|
(99,521
|
)
|
|||
|
Less: Additions to technology, property, and equipment
|
|
(36,430
|
)
|
(44,531
|
)
|
||||
|
Less: Product development spending
|
|
(10,999
|
)
|
(11,686
|
)
|
||||
|
Free Cash Flow less Product Development Spending
|
$
|
(124,051
|
)
|
$
|
(155,738
|
)
|
|||
|
See Explanation of Usage of Non-GAAP Measures included in this supplemental information.
|
|||||||||
|
(1) The supplementary information included in this press release for the six months ended October 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:
|
|
• Adjusted Earnings Per Share ("Adjusted EPS");
|
|
• Free Cash Flow less Product Development Spending;
|
|
• Adjusted Revenue;
|
|
• Adjusted Operating Income and margin;
|
|
• Adjusted Contribution to Profit and margin;
|
|
• 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 for
internal reporting and forecasting purposes, when publicly providing its outlook, to evaluate the Company's performance and calculate incentive compensation. Non-GAAP performance measures do not have standardized meanings prescribed by
U.S. 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 U.S. GAAP.
|
|
The Company presents these non-GAAP performance measures in addition to U.S. GAAP financial results because it believes that these non-GAAP
performance measures provide useful information to 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. For example:
|
|
• Adjusted EPS, Adjusted Revenue, Adjusted Operating Income, Adjusted Contribution to Profit, Adjusted EBITDA and organic revenue provide a more comparable basis to analyze operating results and earnings and
are measures commonly used by shareholders to measure our performance.
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• 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.
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• 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.
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In addition, the Company has historically provided these or similar non-GAAP performance measures and understand 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 the Company's non-GAAP performance measures are regarded as useful to our investors as supplemental to our U.S. 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.
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