John Wiley & Sons, Inc 8-K/A, filed Jun 12, 2020

John Wiley & Sons, Inc. (WLY)

8-K/A 2020-06-12 For: 2020-06-11

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Added on April 10, 2026

About this 8-K/A

John Wiley & Sons, Inc filed this 8-K/A on June 12, 2020, reporting on events of June 11, 2020.

Items reported

Item 2.02: Financial results
Item 7.01: Regulation FD disclosure
Item 9.01: Financial statements and exhibits

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	001-11507	13-5593032
	----------------------------------------------------	---------------------------------------------
	Commission File Number	IRS Employer Identification Number
	111 River Street, Hoboken New Jersey	07030
	----------------------------------------------------	---------------------------------------------
	Address of principal executive offices	Zip Code
	Registrant’s telephone number, including area code:	(201) 748-6000
		---------------------------------------------

Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Common Stock, par value $1.00 per share	JW.A	New York Stock Exchange
Class B Common Stock, par value $1.00 per share	JW.B	New York Stock Exchange

	By	/s/ Brian A. Napack
		Brian A. Napack
		President and
		Chief Executive Officer

	By	/s/ John A. Kritzmacher
		John A. Kritzmacher
		Executive Vice President and
		Chief Financial Officer

GAAP Measures Unaudited ($millions except for EPS)		Q4 2020			Q4 2019	Change
Revenue	$	474.6		$	491.2		(3	%)
Diluted EPS	$	(2.83	)	$	1.10	$	(3.93	)
Non-GAAP Measures		Q4 2020			Q4 2019	Change Constant Currency
Revenue	$	474.6		$	491.2		(2	%)
Adjusted EBITDA	$	92.8		$	121.1		(23	%)
Adjusted EPS	$	0.66		$	1.05		(44	%)

GAAP Measures Unaudited ($millions except for EPS)	FY 2020			FY 2019		Change
Revenue	$	1,831		$	1,800		+2	%
Diluted EPS	$	(1.32	)	$	2.91
Net Cash Provided by Operating Activities	$	288.4		$	250.8		+15	%
Non-GAAP Measures	YTD 2020			YTD 2019		Change Constant Currency
Revenue	$	1,831		$	1,800		+3	%
Adjusted EBITDA	$	355.8		$	388.3		(8	%)
Adjusted EPS	$	2.40		$	2.96		(21	%)
Free Cash Flow Less Product Development Spending	$	173.2		$	149.2		+16	%

JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION⁽¹⁾⁽²⁾
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME
(in thousands, except per share data)
(unaudited)

	Three Months Ended						Year Ended
	April 30,						April 30,
	2020			2019			2020			2019
Revenue, net	$	474,617		$	491,179		$	1,831,483		$	1,800,069
Costs and expenses:
Cost of sales		150,591			150,528			591,024			554,722
Operating and administrative expenses		261,122			246,234			997,355			963,582
Impairment of goodwill and intangible assets⁽³⁾		202,348			-			202,348			-
Restructuring and related charges (credits)		14,573			(444	)		32,607			3,118
Amortization of intangibles		16,714			14,833			62,436			54,658
Total Costs and Expenses		645,348			411,151			1,885,770			1,576,080

Operating (Loss) Income		(170,731	)		80,028			(54,287	)		223,989
As a % of revenue		-36.0	%		16.3	%		-3.0	%		12.4	%

Interest expense		(5,786	)		(4,371	)		(24,959	)		(16,121	)
Foreign exchange transaction gains (losses)		4,534			(1,708	)		2,773			(6,016	)
Interest and other income		3,779			3,383			13,381			11,100
(Loss) Income Before Taxes		(168,204	)		77,332			(63,092	)		212,952

(Benefit) Provision for income taxes		(10,160	)		14,090			11,195			44,689
Effective tax rate		6.0	%		18.2	%		-17.7	%		21.0	%
Net (Loss) Income	$	(158,044	)	$	63,242		$	(74,287	)	$	168,263
As a % of revenue		-33.3	%		12.9	%		-4.1	%		9.3	%

Weighed Average Number of Common Shares Outstanding
Basic		55,896			56,754			56,209			57,192
Diluted ⁽⁴⁾		55,896			57,341			56,209			57,840

(Loss) Earnings Per Share
Basic	$	(2.83	)	$	1.11		$	(1.32	)	$	2.94
Diluted ⁽⁴⁾	$	(2.83	)	$	1.10		$	(1.32	)	$	2.91

Notes:
(1) The supplementary information included in this press release for the three months and year ended April 30, 2020 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. In the three months ended April 30, 2020, we completed the acquisition of Madgex, which is included in our Research Publishing & Platforms segment results. We also completed two immaterial acquisitions, of which one is included in our Research Publishing & Platforms segment and one is included in our Education Services segment. In addition to the acquisitions completed in the three months ended April 30, 2020, in the year ended April 30, 2020, we completed the acquisitions of mthree, which is included in our Education Services segment results, Zyante Inc. ("Zybooks") and certain assets of Knewton, Inc. (“Knewton”), which are included in our Academic & Professional Learning segment results and three immaterial acquisitions, of which two are included in our Research Publishing & Platforms segment and one is included in our Academic & Professional Learning segment. In the year ended April 30, 2020, we used $230 million of cash for acquisitions.
(2) All amounts are approximate due to rounding.

(3) During the three months ended April 30, 2020, we identified an impairment in the goodwill of the Education Services segment primarily due to lower forecasted revenue and EBITDA performance, recent business performance compared to prior forecasts, including an impact of COVID-19 on student enrollments and university finances. As a result, we recorded a non-cash, pre-tax charge for impairment of goodwill of $110 million. In addition, we also recorded non-cash impairment charges related to certain intangible assets. This included $89.5 million pre-tax, $74.3 million, net of taxes related to the Blackwell trade name, which the Company acquired in 2007 within the Research Publishing & Platforms segment. This impairment reflects the Company’s decision to simplify Wiley’s brand portfolio that will sharply limit the use of the Blackwell trade name. We also recorded an impairment charge of $2.8 million pre-tax, $2.2 million, net of taxes related to a developed technology intangible asset within the Research Publishing & Platforms segment.
(4) In calculating diluted net (loss) earnings per common share for the three months and year ended April 30, 2020, our diluted weighted average number of common shares outstanding excludes the effect of unvested restricted stock units and other stock awards as the effect was anti-dilutive. This occurs when a U.S. GAAP net loss is reported and the effect of using dilutive shares is antidilutive.

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,
	2020			2019			2020			2019
GAAP (Loss) Earnings Per Share - Diluted	$	(2.83	)	$	1.10		$	(1.32	)	$	2.91
Adjustments:
Impairment of goodwill (A)		1.95			-			1.94			-
Impairment of Blackwell trade name (A)		1.32			-			1.31			-
Impairment of developed technology intangible (A)		0.04			-			0.04			-
Restructuring and related charges (A)		0.20			-			0.43			0.04
Foreign exchange (gains) losses on intercompany transactions (A)		(0.01	)		-			0.02			0.06
Impact of change in certain International tax rates in 2020 and US state tax rates in 2019 (B)		(0.03	)		(0.05	)		(0.03	)		(0.05	)
EPS impact of using weighted-average dilutive shares for adjusted EPS calculation (C)		0.02			-			0.01			-
Non-GAAP Adjusted Earnings Per Share - Diluted	$	0.66		$	1.05		$	2.40		$	2.96

Notes:
(A) The table below shows the net of tax impact of our adjustments to GAAP (Loss) Earnings Per Share noted above.
	Three Months Ended						Year Ended
	April 30,						April 30,
(amounts in millions)		2020			2019			2020			2019
Net of tax, impairment of goodwill	$	110.0		$	-		$	110.0		$	-
Net of tax, impairment of Blackwell trade name	$	74.3		$	-		$	74.3		$	-
Net of tax, impairment of developed technology intangible	$	2.2		$	-		$	2.2		$	-
Net of tax, charges related to the Business Optimization Program	$	11.6		$	-		$	25.5		$	-
Net of tax, (credits) charges related to the Restructuring and Reinvestment Program	$	(0.7	)	$	(0.3	)	$	(0.9	)	$	2.4
Net of tax, foreign exchange transaction (gains) losses	$	(0.3	)	$	0.1		$	1.0		$	3.4

(B) In connection with the reduction in French tax rates in 2020 for the three months and year ended April 30, 2020, we recorded an income tax benefit of $1.9 million, or $(0.03) per share. In connection with the reduction in certain U.S. state tax apportionment factors in 2019, for the three months and year ended April 30, 2019, we recorded an income tax benefit of $2.9 million, or $(0.05) per share.
(C) Represents the impact of using diluted weighted-average number of common shares outstanding (56.4 million and 56.7 million shares for the three months and year ended April 30, 2020, respectively) included in the Non-U.S. GAAP adjusted EPS calculation in order to apply the dilutive impact on adjusted net income due to the effect of unvested restricted stock units and other stock awards. This impact occurs when U.S. GAAP net loss is reported and the effect of using dilutive shares is antidilutive.
(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 and year ended April 30, 2020 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⁾
RECONCILIATION OF GAAP NET (LOSS) INCOME to NON-GAAP EBITDA AND ADJUSTED EBITDA
(unaudited)

	Three Months Ended						Year Ended
	April 30,						April 30,
	2020			2019			2020			2019
Net (Loss) Income	$	(158,044	)	$	63,242		$	(74,287	)	$	168,263
Interest expense		5,786			4,371			24,959			16,121
(Benefit) Provision for income taxes		(10,160	)		14,090			11,195			44,689
Depreciation and amortization		46,589			41,499			175,127			161,155
Non-GAAP EBITDA		(115,829	)		123,202			136,994			390,228
Impairment of goodwill and intangible assets		202,348			-			202,348			-
Restructuring and related charges (credits)		14,573			(444	)		32,607			3,118
Foreign exchange transaction (gains) losses		(4,534	)		1,708			(2,773	)		6,016
Interest and other income		(3,779	)		(3,383	)		(13,381	)		(11,100	)
Non-GAAP Adjusted EBITDA	$	92,779		$	121,083		$	355,795		$	388,262
Adjusted EBITDA margin		19.5	%		24.7	%		19.4	%		21.6	%

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 and year ended April 30, 2020 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⁾⁽²⁾
SEGMENT RESULTS
(in thousands)
(unaudited)

							% Change
	Three Months Ended April 30,						Favorable (Unfavorable)
	2020			2019 ⁽²⁾			Reported			Constant Currency
Research Publishing & Platforms:
Revenue, net
Research Publishing	$	240,547		$	248,852			-3	%	-2	%
Research Platforms		10,652			8,936			19	%	19	%
Total Revenue, net	$	251,199		$	257,788			-3	%	-1	%

Contribution to (Loss) Profit	$	(13,679	)	$	82,364			#		#
Adjustments:
Impairment of intangible assets		92,348		$	-
Restructuring charges (credits)		500			(120	)
Non-GAAP Adjusted Contribution to Profit	$	79,169		$	82,244			-4	%	-3	%
Depreciation and amortization		18,249			15,451
Non-GAAP Adjusted EBITDA	$	97,418		$	97,695			0	%	0	%
Adjusted EBITDA margin		38.8	%		37.9	%

Academic & Professional Learning:
Revenue, net
Education Publishing	$	83,942		$	94,948			-12	%	-10	%
Professional Learning		65,986			86,138			-23	%	-22	%
Total Revenue, net	$	149,928		$	181,086			-17	%	-16	%

Contribution to Profit	$	5,422		$	39,884			-86	%	-86	%
Adjustments:
Restructuring charges (credits)		5,324			(136	)
Non-GAAP Adjusted Contribution to Profit	$	10,746		$	39,748			-73	%	-73	%
Depreciation and amortization		18,128			17,050
Non-GAAP Adjusted EBITDA	$	28,874		$	56,798			-49	%	-49	%
Adjusted EBITDA margin		19.3	%		31.4	%

Education Services:
Revenue, net
Education Services	$	60,532		$	52,305			16	%	16	%
mthree		12,958			-			100	%	100	%
Total Revenue, net	$	73,490		$	52,305			41	%	42	%

Contribution to (Loss) Profit	$	(107,733	)	$	203			#		#
Adjustments:
Impairment of goodwill		110,000			-
Restructuring charges		2,053			15
Non-GAAP Adjusted Contribution to Profit	$	4,320		$	218			#		#
Depreciation and amortization		7,124			5,880
Non-GAAP Adjusted EBITDA	$	11,444		$	6,098			88	%	87	%
Adjusted EBITDA margin		15.6	%		11.7	%

Corporate Expenses:	$	(54,741	)	$	(42,423	)		-29	%	-31	%
Adjustments:
Restructuring charges (credits)		6,696			(203	)
Non-GAAP Adjusted Corporate Expenses	$	(48,045	)	$	(42,626	)		-13	%	-14	%
Depreciation and amortization		3,088			3,118
Non-GAAP Adjusted EBITDA	$	(44,957	)	$	(39,508	)		-14	%	-15	%

Consolidated Results:
Revenue, net	$	474,617		$	491,179			-3	%	-2	%

Operating (Loss) Income	$	(170,731	)	$	80,028			#		#
Adjustments:
Impairment of goodwill and intangible assets		202,348			-
Restructuring charges (credits)		14,573			(444	)
Non-GAAP Adjusted Operating Income	$	46,190		$	79,584			-42	%	-42	%
Depreciation and amortization		46,589			41,499
Non-GAAP Adjusted EBITDA	$	92,779		$	121,083			-23	%	-23	%
Adjusted EBITDA margin		19.5	%		24.7	%

(1) The supplementary information included in this press release for the three months and year ended April 30, 2020 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) As previously announced, we have changed our segment reporting structure to align with our strategic focus areas: (1) Research Publishing & Platforms, which continues to include the Research publishing and Atypon businesses, (2) Academic & Professional Learning, which is the former “Publishing” segment combined with our corporate training businesses – previously noted as Professional Assessment and Corporate Learning; and (3) Education Services, which includes our Online Program Management and mthree training, upskilling and talent placement services for professionals and businesses. Prior period segment results have been revised to the new segment presentation. There were no changes to our consolidated financial results.

# Not meaningful

JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION ^{(1) (2)}
SEGMENT RESULTS
(in thousands)
(unaudited)
							% Change
	Year Ended April 30,						Favorable (Unfavorable)
	2020			2019⁽²⁾			Reported			Constant Currency
Research Publishing & Platforms:
Revenue, net
Research Publishing	$	908,952		$	903,249			1	%	2	%
Research Platforms		39,887			35,968			11	%	11	%
Total Revenue, net	$	948,839		$	939,217			1	%	2	%

Contribution to Profit	$	169,119		$	259,754			-35	%	-35	%
Adjustments:
Impairment of intangible assets		92,348			-
Restructuring charges		3,886			1,131
Non-GAAP Adjusted Contribution to Profit	$	265,353		$	260,885			2	%	2	%
Depreciation and amortization		69,495			60,889
Non-GAAP Adjusted EBITDA	$	334,848		$	321,774			4	%	4	%
Adjusted EBITDA margin		35.3	%		34.3	%

Academic & Professional Learning:
Revenue, net
Education Publishing	$	352,188		$	372,018			-5	%	-4	%
Professional Learning		298,601			331,285			-10	%	-9	%
Total Revenue, net	$	650,789		$	703,303			-7	%	-6	%

Contribution to Profit	$	74,176		$	146,265			-49	%	-49	%
Adjustments:
Restructuring charges		10,470			1,139
Non-GAAP Adjusted Contribution to Profit	$	84,646		$	147,404			-43	%	-42	%
Depreciation and amortization		69,807			68,126
Non-GAAP Adjusted EBITDA	$	154,453		$	215,530			-28	%	-28	%
Adjusted EBITDA margin		23.7	%		30.6	%

Education Services:
Revenue, net
Education Services	$	214,376		$	157,549			36	%	36	%
mthree		17,479			-			100	%	100	%
Total Revenue, net	$	231,855		$	157,549			47	%	48	%

Contribution to Loss	$	(117,515	)	$	(13,272	)		#		#
Adjustments:
Impairment of goodwill		110,000			-
Restructuring charges		3,671			389
Non-GAAP Adjusted Contribution to Loss	$	(3,844	)	$	(12,883	)		70	%	70	%
Depreciation and amortization		24,131			18,117
Non-GAAP Adjusted EBITDA	$	20,287		$	5,234			#		#
Adjusted EBITDA margin		8.7	%		3.3	%

Corporate Expenses:	$	(180,067	)	$	(168,758	)		-7	%	-8	%
Adjustments:
Restructuring charges		14,580			459
Non-GAAP Adjusted Corporate Expenses	$	(165,487	)	$	(168,299	)		2	%	1	%
Depreciation and amortization		11,694			14,023
Non-GAAP Adjusted EBITDA	$	(153,793	)	$	(154,276	)		0	%	-1	%

Consolidated Results:
Revenue, net	$	1,831,483		$	1,800,069			2	%	3	%

Operating (Loss) Income	$	(54,287	)	$	223,989			#		#
Adjustments:
Impairment of goodwill and intangible assets		202,348			-
Restructuring charges		32,607			3,118
Non-GAAP Adjusted Operating Income	$	180,668		$	227,107			-20	%	-20	%
Depreciation and amortization		175,127			161,155
Non-GAAP Adjusted EBITDA	$	355,795		$	388,262			-8	%	-8	%
Adjusted EBITDA margin		19.4	%		21.6	%
# Not meaningful

JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION ⁽¹⁾
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands)
(unaudited)

	April 30,		April 30,
	2020		2019 ⁽²⁾
Assets:
Current Assets
Cash and cash equivalents	$	202,464	$	92,890
Accounts receivable, net⁽²⁾		309,384		306,631
Inventories, net		43,614		35,582
Prepaid expenses and other current assets		59,465		67,441
Total Current Assets		614,927		502,544

Product Development Assets, net		53,643		62,470
Royalty Advances, net		36,710		36,185
Technology, Property and Equipment, net		298,005		289,021
Intangible Assets, net		807,405		865,572
Goodwill		1,116,790		1,095,666
Operating Lease Right-of-Use Assets⁽³⁾		142,716		-
Other Non-Current Assets		98,598		97,308
Total Assets	$	3,168,794	$	2,948,766

Liabilities and Shareholders' Equity:
Current Liabilities
Accounts payable	$	93,691	$	90,980
Accrued royalties		87,408		78,062
Short-term portion of long-term debt		9,375		-
Contract liabilities⁽²⁾		520,214		519,129
Accrued employment costs		108,448		97,230
Accrued income taxes		13,728		21,025
Short-term portion of operating lease liabilities ⁽³⁾		21,810		-
Other accrued liabilities		72,595		75,900
Total Current Liabilities		927,269		882,326
Long-Term Debt		765,650		478,790
Accrued Pension Liability		187,969		166,331
Deferred Income Tax Liabilities		119,127		143,775
Operating Lease Liabilities ⁽³⁾		159,782		-
Other Long-Term Liabilities		75,373		96,197
Total Liabilities		2,235,170		1,767,419
Shareholders' Equity		933,624		1,181,347
Total Liabilities and Shareholders' Equity	$	3,168,794	$	2,948,766

(1) The supplementary information included in this press release for April 30, 2020 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) As previously disclosed, during the third quarter of 2020, the Company identified an immaterial error within its Condensed Consolidated Statements of Financial Position, including the results for the fiscal year ended April 30, 2019. Certain consideration received for services not yet performed, mainly for annual subscription licensing revenue agreements, was presented as a reduction to accounts receivable, net, rather than an increase to contract liabilities. The correction increases accounts receivable, net and increases contract liabilities by approximately $11.8 million for the fiscal year ended April 30, 2019. There was no impact on revenue, net, operating income, net income, earnings per share, or net cash provided by operating activities or the Condensed Consolidated Statements of Cash Flow. Management has evaluated all relevant quantitative and qualitative factors and has concluded that the error is not material to the Condensed Consolidated Statements of Financial Position for the previously reported periods. The Company has revised its accompanying Condensed Consolidated Statements of Financial Position to correct this for the fiscal year ended April 30, 2019. This immaterial error did not impact the April 30, 2020 Condensed Consolidated Statements of Financial Position.
(3) We adopted ASU 2016-02, "Leases (Topic 842)” on May 1, 2019 using the required modified retrospective approach, whereby we used the effective date as the date of initial application and therefore, previously reported financial information was not updated.

JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION⁽¹⁾
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(in thousands)
(unaudited)

	Year Ended
	April 30,
	2020			2019
Operating Activities:
Net (loss) income	$	(74,287	)	$	168,263
Impairment of goodwill and intangible assets		202,348			-
Amortization of intangibles		62,436			54,658
Amortization of product development assets		35,975			37,079
Depreciation and amortization of technology, property, and equipment		76,716			69,418
Other non-cash charges and credits		65,691			20,737
Net change in operating assets and liabilities		(80,444	)		(99,324	)
Net Cash Provided By Operating Activities		288,435			250,831

Investing Activities:
Additions to technology, property, and equipment		(88,593	)		(77,167	)
Product development spending		(26,608	)		(24,426	)
Businesses acquired in purchase transactions, net of cash acquired		(229,629	)		(190,415	)
Acquisitions of publication rights and other		(1,840	)		(9,494	)
Net Cash Used in Investing Activities		(346,670	)		(301,502	)

Financing Activities:
Net debt borrowings		303,772			120,074
Cash dividends		(76,658	)		(75,752	)
Purchase of treasury shares		(46,589	)		(59,994	)
Other		(7,848	)		(1,923	)
Net Cash Provided By (Used In) Financing Activities		172,677			(17,595	)

Effects of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash		(4,943	)		(8,443	)

Change in Cash, Cash Equivalents and Restricted Cash for Period		109,499			(76,709	)

Cash, Cash Equivalents and Restricted Cash - Beginning		93,548			170,257
Cash, Cash Equivalents and Restricted Cash - Ending	$	203,047			93,548

CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT DEVELOPMENT SPENDING

	Year Ended
	April 30,
		2020			2019
Net Cash Provided By Operating Activities	$	288,435		$	250,831
Less: Additions to technology, property, and equipment		(88,593	)		(77,167	)
Less: Product development spending		(26,608	)		(24,426	)
Free Cash Flow less Product Development Spending	$	173,234		$	149,238

See Explanation of Usage of Non-GAAP Measures included in this supplemental information.
(1) The supplementary information included in this press release for the year ended April 30, 2020 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.