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Wiley Reports Fourth Quarter and Fiscal Year 2015 Results

  • Fourth quarter revenue of $442 million, up 2% on a constant currency basis. Fiscal year revenue of $1,822 million, up 4% on a constant currency basis
  • Percent of full-year revenue from digital products and services increased to 60% from 55% for the prior year. Percent of full-year revenue from print books declined to 25%
  • Fourth quarter adjusted EPS of $0.81, up 17% on a constant currency basis. Fiscal year adjusted EPS of $3.26, up 10% on a constant currency basis
  • Fiscal Year 2016 outlook of low-single-digit revenue growth and flat EPS growth on a constant currency basis and excluding the adverse transitional impact of shifting to time-based journal subscription agreements
Tuesday, June 16, 2015 8:00 am EDT

Public Company Information:

NYSE:
JWA
NYSE:
JWB
"We are pleased to report that we delivered on our revenue and earnings guidance for the year"

HOBOKEN, N.J.--(BUSINESS WIRE)--John Wiley & Sons, Inc. (NYSE:JWa and JWb), a global provider of knowledge and knowledge-enabled services that improve outcomes in research, professional practice, and education, today announced the following results for the fourth quarter and fiscal year 2015, ending April 30, 2015:

                       

  Change

   
$ millions         FY15         FY14        

Excluding
FX

     

Including
FX

     

ADJUSTED

Revenue
Q4 $442 $457 2 % (3 %)
Full Year $1,822 $1,775 4 % 3 %
 
EPS
Q4 $0.81 $0.77 17 % 5 %
Full Year $3.26 $3.05 10 % 7 %
 

US GAAP

Revenue
Q4 $442 $457 (3 %)
Full Year $1,822 $1,775 3 %
 
EPS
Q4 $0.79 $0.60 32 %
Full Year $2.97 $2.70 10 %
 

Please see the attached financial schedules for more detail

Management Commentary

“We are pleased to report that we delivered on our revenue and earnings guidance for the year,” said Mark Allin, President and CEO of Wiley. “On a constant currency basis, our largest and most profitable business, Research journals (‘Research Communication’) delivered 4% revenue growth for the year. Our strategic digital solutions businesses also contributed to our growth, with digital products and services rising to 60% of revenues for the full year. Revenue growth, the continued shift to digital, and additional savings from restructuring all contributed to 9% operating income growth for the year.”

Fiscal Year 2016 Outlook

Wiley’s fiscal year 2016 outlook is for low-single-digit revenue growth and flat adjusted EPS growth on a constant currency basis and excluding the adverse transitional impact of shifting to time-based journal subscription agreements. As previously announced, Wiley is moving to time-based digital journal subscription agreements for calendar year 2016 in order to simplify the contracting and administration of such agreements. The change will shift roughly $35 million of revenue and $0.35 of EPS from FY16 to FY17, with recurring effect annually thereafter. The change will not impact free cash flow. Included in the EPS guidance is an incremental expense impact of more than $0.15 for the previously announced ERP implementation as compared to FY15.

Foreign Exchange (FX)

Wiley generates half of its revenue from outside the United States, and is therefore exposed to a stronger dollar, particularly in relation to the euro and pound sterling. For fiscal year 2015, the weighted average rates for sterling and the euro were 1.60 and 1.25, respectively, on a US dollar equivalent basis. Also, throughout this report, references are made to variances “excluding foreign exchange” or “on a constant currency basis”; such amounts exclude both currency translation effects and transactional gains and losses.

Adjusted Results

The Company provides financial measures referred to as “adjusted” revenue, contribution to profit, and EPS, which exclude restructuring and impairment charges, deferred tax benefits related to a UK corporate income tax rate reduction, and other nonrecurring tax benefits. Variances to adjusted revenue, contribution to profit, and EPS are on a constant currency basis unless otherwise noted. Management believes the exclusion of such items provides additional information to facilitate the analysis of results. These non-GAAP measures are not intended to replace the financial results reported in accordance with GAAP.

Fourth Quarter Summary

  • Revenue on a constant currency basis rose 2% to $442 million. Growth in Professional Development (+10%), aided by the CrossKnowledge and Profiles International acquisitions, and Education (+2%) offset a decline in Research (-1%). Organic revenue decreased 1% at constant currency, while revenue on a US GAAP basis declined 3% due to the adverse impact of foreign exchange.
  • Adjusted earnings per share (EPS) on a constant currency basis grew 17% to $0.81 due to restructuring savings, higher gross margins from the shift to digital, and a lower effective income tax rate. Adjusted EPS excludes certain one-time or unusual items in both years as further described in the attached reconciliation of US GAAP to Adjusted EPS. US GAAP EPS for the fourth quarter grew 32%.
  • Wiley recorded a restructuring charge of $4.9 million this quarter for severance and other costs related to reorganization and consolidation across the business.
  • CEO Update: In the quarter, EVP and COO Mark Allin was named Wiley’s 12th President and CEO after the retirement of Stephen M. Smith. Prior to serving as Chief Operating Officer, Mr. Allin had been EVP, Professional Development.

Fiscal Year Summary

  • Revenue on a constant currency basis grew 4% over prior year to $1,822 million, with organic growth in Research (+2%) and Education (+3%), as well as contributions from acquisitions in Professional Development (+13%), driving results. Total organic revenue, which excludes CrossKnowledge and Profiles International, increased modestly (+1%) over prior year at constant currency. Revenue grew 3% on a US GAAP basis.
  • Adjusted EPS on a constant currency basis grew 10% to $3.26 with revenue growth, higher gross margins from the shift to digital, restructuring savings, and a lower effective income tax rate. The adverse impact of foreign exchange compared to the prior year was -$0.11 per share. Adjusted EPS excludes certain one-time or unusual items in both years, as described in the attached reconciliation of US GAAP to Adjusted EPS. US GAAP EPS for fiscal year 2015 was $2.97 vs. $2.70 in the prior year.
  • Adjusted shared services and administrative costs were essentially flat for the year at $494 million due to restructuring, procurement, and outsourcing savings offset by additional investment in new business growth. Lower Distribution and Operation Services (-10%) and Finance (-1%) expense offset higher Technology and Content Management (+2%) and Other Administration (+6%) expense.
  • Restructuring Charges: Wiley recorded $29 million in restructuring charges principally related to facility consolidations and dispositions in connection with prior restructuring actions, as well as severance costs related to reorganization and consolidation.
  • Free Cash Flow of $247 million was $4 million behind prior year due to increased investment in technology and restructuring payments related to severance.
  • Net Debt and Cash Position: Net debt (long-term debt less cash and cash equivalents) at the end of April was $293 million, up from $214 million at the end of the prior year due to the acquisition of CrossKnowledge. Net debt to EBITDA was at 0.7 on a trailing twelve month basis. Cash and cash equivalents as of April 30, 2015 were $457 million.
  • Share repurchases: In fiscal year 2015, Wiley repurchased 1.1 million shares for $62 million, an average cost of $57.26. As of April 30, the Company had nearly 2.2 million shares remaining in the repurchase program announced in June 2013. Wiley did not repurchase shares in the fourth quarter.
  • Dividend: In June 2014, Wiley increased its quarterly dividend by 16% to $0.29, or $1.16 annualized. It was the 21st consecutive annual increase.

RESEARCH

  • Revenue: Fourth quarter revenue on a constant currency basis declined 1% to $275 million, with a decline in journal subscription (-2%) and print book (-8%) revenue offsetting growth in other journal revenue (+6%), digital books (+3%), and funded access (+3%). For the year, revenue on a constant currency basis rose 2% to $1,041 million, driven by journal subscriptions (+1%), funded access (+29%), and other journal revenue (+15%), which offset an overall book decline of 7%.
  • Adjusted Contribution to Profit: Fourth quarter adjusted contribution to profit grew 2% on a constant currency basis to $99 million, with procurement and outsourcing savings offsetting the revenue decline. For the year, adjusted contribution to profit grew 5% on a constant currency basis to $320 million, reflecting revenue growth and gross margin expansion. Gross margin improved due to procurement and outsourcing savings, as well as the continuing shift to digital.
  • Calendar Year 2015 Journal Subscriptions: At the end of April, calendar year 2015 journal subscriptions were up 1% on a constant currency basis, with 97% of targeted business closed for the 2015 volume year.
  • Society Business: Two new society contracts were signed in the three month period ending April with combined annual revenue of $4 million; 11 were renewed with combined annual revenue of $4 million; and five with combined annual revenue of $5 million were not renewed. For calendar year 2015, nine new society contracts were signed with combined annual revenue of $4 million, and seven with combined annual revenue of $8 million were not renewed, for an annualized revenue loss on a calendar year basis of $4 million. This compares to an annualized revenue gain of $11 million in CY14 and $20 million in CY13. Additionally, CY15 includes renewals of 121 contracts with combined annual revenue of $57 million.

PROFESSIONAL DEVELOPMENT

  • Revenue: Fourth quarter revenue grew 10% on a constant currency basis to $100 million due to revenue contributions from CrossKnowledge and Profiles International (+$15 million) and strong growth in Online Test Preparation (+34%), which more than offset continued weakness in Book sales (-9%). Excluding the acquisitions, which were closed on May 1 and April 1, 2014, respectively, revenue declined 5%. For the year, revenue on a constant currency basis increased 13% to $407 million, but decreased 5% excluding the acquisitions, driven by a continued decline in print and digital books.
  • Adjusted Contribution to Profit: Fourth quarter adjusted contribution to profit grew 30% on a constant currency basis to $12 million primarily due to restructuring savings, which offset modest dilution from the two recent acquisitions. For the year, adjusted contribution to profit grew 28% to $43 million. Gross margin improved due to the shift to higher margin solutions businesses.
  • Institute of Management Accountants (IMA) India Partnership: In the quarter, the IMA® announced a partnership agreement in India with Wiley to offer Wiley’s Certified Management Accountant Exam (CMA) Learning System as part of a full offering that includes live training from Miles Professional Education, a major professional certification course provider in India.

EDUCATION

  • Revenue: Fourth quarter revenue rose 2% on a constant currency basis to $67 million. Revenue growth from Education Services/Deltak (+15%), Digital Books (+7%), and Course Workflow/WileyPLUS (+1%) offset a decline in Print Textbooks (-15%). For the year, Education revenue increased 3% on a constant currency basis to $375 million with double digit growth in Education Services/Deltak (+16%), Custom Products (+16%), WileyPLUS (+11%), and Digital Books (+15%) offsetting a 9% decline in Print Textbooks.
  • Adjusted Contribution to Profit: Fourth quarter adjusted contribution to profit improved 13% to a seasonal loss of $8 million, reflecting revenue growth and gross margin expansion. For the year, adjusted contribution to profit increased 1% to $48 million, excluding the impact of foreign exchange. Continued investment in Education Services/Deltak offset revenue growth and restructuring savings. Gross profit improved modestly due to portfolio management and improvements in composition costs.
  • Online Program Management (OPM): Education Services/Deltak secured two new large university partners in the quarter, the University of Delaware (US) and University College Cork (Ireland). University College Cork is the second international partner signed by Deltak and is one of Ireland’s largest educational institutions, with 18,000 students. At fiscal year-end, Deltak had 38 partners and 200 degree programs under contract.

Earnings Conference Call

  • Scheduled for today, June 16, at 10:00 a.m. (EDT)
  • Access the webcast at www.wiley.com> Investor Relations> Events and Presentations, or http://www.wiley.com/WileyCDA/Section/id-370238.html
  • U.S. callers, please dial (888) 505-4375 and enter the participant code 3217239#
  • International callers, please dial (719) 325-2435 and enter the participant code 3217239#
  • An archive of the webcast will be available for a period of up to 14 days

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

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 and (x) other factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any such forward-looking statements to reflect subsequent events or circumstances.

About Wiley

Wiley is a global provider of knowledge and knowledge-enabled services that improve outcomes in areas of research, professional practice, and education. Through the Research segment, the Company provides digital and print scientific, technical, medical, and scholarly journals, reference works, books, database services, and advertising. The Professional Development segment provides digital and print books, online assessment and corporate learning services, and test prep and certification. In Education, Wiley provides education solutions including online program management services for higher education institutions and course management tools for instructors and students, as well as print and digital content.

                                       
JOHN WILEY & SONS, INC.
UNAUDITED SUMMARY OF OPERATIONS
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2015 AND 2014
(in thousands, except per share amounts)
 
 

FOURTH QUARTER ENDED APRIL 30,

 
2015 2014 % Change  
US GAAP

Adjustments
(A,C)

Adjusted US GAAP

Adjustments
(A,C)

Adjusted US GAAP

Adjusted
excl. FX

 
Revenue $ 441,646 - 441,646 457,089 - 457,089 -3 % 2 %
 
Costs and Expenses
Cost of Sales 116,844 - 116,844 126,173 - 126,173 -7 % -3 %
Operating and Administrative 249,459 - 249,459 256,366 - 256,366 -3 % 2 %
Restructuring Charges (A) 4,925 (4,925 ) - 15,395 (15,395 ) -
Amortization of Intangibles 12,355   -   12,355   11,613   -   11,613   6 % 11 %
 
Total Costs and Expenses 383,583 (4,925 ) 378,658 409,547 (15,395 ) 394,152 -6 % 1 %
 
Operating Income 58,063 4,925 62,988 47,542 15,395 62,937 22 % 10 %
Operating Margin 13.1 % 14.3 % 10.4 % 13.8 %
 
Interest Expense (4,062 ) - (4,062 ) (3,568 ) - (3,568 ) 14 % 14 %
Foreign Exchange Gain (1,086 ) - (1,086 ) (337 ) - (337 )
Interest Income and Other 839   -   839   690   -   690   22 % 22 %
 
Income Before Taxes 53,754 4,925 58,679 44,327 15,395 59,722 21 % 10 %
 
Provision for Income Taxes (A,C) 6,857   3,945   10,802   8,436   5,331   13,767   -19 % -8 %
 
Net Income $ 46,897   980   47,877   35,891   10,064   45,955   31 % 16 %
 
 
Earnings Per Share- Diluted (A,C) $ 0.79 0.02 0.81 0.60 0.17 0.77 32 % 17 %
 
Average Shares - Diluted 59,368 59,368 59,368 59,925 59,925 59,925
 
 

TWELVE MONTHS ENDED APRIL 30,

 
2015 2014 % Change  
US GAAP

Adjustments
(A,C)

Adjusted US GAAP

Adjustments
(A-D)

Adjusted US GAAP

Adjusted
excl. FX

 
Revenue $ 1,822,440 - 1,822,440 1,775,195 - 1,775,195 3 % 4 %
 
Costs and Expenses
Cost of Sales 499,683 - 499,683 506,879 - 506,879 -1 % 0 %
Operating and Administrative 1,005,000 - 1,005,000 969,456 - 969,456 4 % 5 %
Restructuring Charges (A) 28,804 (28,804 ) - 42,722 (42,722 ) -
Impairment Charges (B) - - - 4,786 (4,786 ) -
Amortization of Intangibles 51,214   -   51,214   44,679   -   44,679   15 % 14 %
 
Total Costs and Expenses 1,584,701 (28,804 ) 1,555,897 1,568,522 (47,508 ) 1,521,014 1 % 3 %
 
Operating Income 237,739 28,804 266,543 206,673 47,508 254,181 15 % 9 %
Operating Margin 13.0 % 14.6 % 11.6 % 14.3 %
 
Interest Expense (17,077 ) - (17,077 ) (13,916 ) - (13,916 ) 23 % 23 %
Foreign Exchange Gain 1,742 - 1,742 (8 ) - (8 )
Interest Income and Other 3,057   -   3,057   2,785   -   2,785   10 % 10 %
 
Income Before Taxes 225,461 28,804 254,265 195,534 47,508 243,042 15 % 8 %
 
Provision for Income Taxes (A-D) 48,593   11,599   60,192   35,024   26,457   61,481   39 % 1 %
 
Net Income $ 176,868   17,205   194,073   160,510   21,051   181,561   10 % 10 %
 
 
Earnings Per Share- Diluted (A-D) $ 2.97 0.29 3.26 2.70 0.35 3.05 10 % 10 %
 
Average Shares - Diluted 59,594 59,594 59,594 59,514 59,514 59,514
 
 

     See the accompanying Notes to Unaudited Financial Statements for a description of each Adjustment.

 
 
JOHN WILEY & SONS, INC.
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2015 AND 2014
                                               
 

RECONCILIATION OF US GAAP TO ADJUSTED EPS - DILUTED (UNAUDITED)

 
 
Fourth Quarter Ended Twelve Months Ended
April 30, April 30,
2015   2014   2015   2014  
 
US GAAP Earnings Per Share - Diluted $ 0.79 $ 0.60 $ 2.97 $ 2.70
Adjusted to exclude the following:
Restructuring Charges (A) (0.07 ) (0.17 ) (0.34 ) (0.48 )
Impairment Charges (B) - - - (0.06 )
Non-recurring Tax Benefit (C) 0.05 - 0.05 -
Deferred Income Tax Benefit on UK Rate Change (D) - - - 0.18
 
Adjusted Earnings Per Share - Diluted $     0.81   $     0.77   $     3.26   $     3.05  
 

NOTES TO UNAUDITED FINANCIAL STATEMENTS

 
 
Adjustments:

(A)

  RESTRUCTURING CHARGES: The adjusted results for the three and twelve months ended April 30, 2015 and the three and twelve months ended April 30, 2014 exclude restructuring charges related to the Company's Restructuring and Reinvestment Program of $4.9 million or $0.07 per share, $28.8 million or $0.34 per share, $15.4 million or $0.17 per share, and $42.7 million or $0.48 per share, respectively.
 
(B) IMPAIRMENT CHARGES: The adjusted results for the twelve months ended April 30, 2014 exclude impairment charges related to certain technology investments of $4.8 million or $0.06 per share.
 
(C) NON-RECURRING TAX BENEFIT: The adjusted results for the three and twelve months ended April 30, 2015 reflect a non-recurring tax benefit of $3.1 million or $0.05 per share related to tax deductions claimed on the write-up of certain foreign tax assets to fair market value.
 
(D) Deferred Income Tax Benefit on UK Rate Change: The adjusted results for the twelve months ended April 30, 2014 exclude deferred tax benefits of $10.6 million, or $0.18 per share, associated with tax legislation enacted in the United Kingdom that reduced the U.K. corporate income tax rates by 3%. The benefits reflect the remeasurement of the Company's deferred tax balances to the new income tax rates of 21% effective April 1, 2014 and 20% effective April 1, 2015 and had no current cash tax impact.
 

Non-GAAP Financial Measures:

In addition to providing financial results in accordance with GAAP, the Company has provided adjusted financial results that exclude the impact of other nonrecurring items described in more detail throughout this press release. These non-GAAP financial measures are labeled as "Adjusted" and are used for evaluating the results of operations for internal purposes. These non-GAAP measures are not intended to replace the presentation of financial results in accordance with GAAP. Rather, the Company believes the exclusion of such items provides additional information to investors to facilitate the comparison of past and present operations. Unless otherwise noted, adjusted amounts in the attached schedules include foreign exchange.

 
 
JOHN WILEY & SONS, INC.
UNAUDITED SEGMENT RESULTS
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2015 and 2014
(in thousands)
                                   
 

FOURTH QUARTER ENDED APRIL 30,

 
2015 2014 % Change  
US GAAP

Adjustments
(A)

Adjusted US GAAP

Adjustments
(A)

Adjusted US GAAP

Adjusted
excl. FX

Revenue

Research $ 274,646 - 274,646 296,817 - 296,817 -7 % -1 %
Professional Development 100,442 - 100,442 93,037 - 93,037 8 % 10 %
Education 66,558 - 66,558 67,235 - 67,235 -1 % 2 %
             
Total $ 441,646   -   441,646   457,089   -   457,089   -3 % 2 %
 

Direct Contribution to Profit

Research $ 139,258 233 139,491 145,240 3,184 148,424 -4 % 0 %
Professional Development 36,234 552 36,786 28,901 7,026 35,927 25 % 5 %
Education 11,149 487 11,636 8,937 516 9,453 25 % 28 %
             
Total $ 186,641   1,272   187,913   183,078   10,726   193,804   2 % 3 %
 

Contribution to Profit (After Allocated Shared Services

and Admin. Costs)

Research $ 99,186 233 99,419 101,081 3,184 104,265 -2 % 2 %
Professional Development 11,486 552 12,038 2,654 7,026 9,680 333 % 30 %
Education (8,582 ) 487 (8,095 ) (9,715 ) 516 (9,199 ) 12 % 13 %
             
Total $ 102,090 1,272 103,362 94,020 10,726 104,746 9 % 6 %
 
Unallocated Shared Services and Admin. Costs (44,027 ) 3,653 (40,374 ) (46,478 ) 4,669 (41,809 ) -5 % 0 %
             
Operating Income $ 58,063   4,925   62,988   47,542   15,395   62,937   22 % 10 %
 
 
 
 

Total Shared Services and Admin. Costs by Function

Distribution and Operation Services $ (21,031 ) 131 (20,900 ) (27,111 ) 3,421 (23,690 ) -22 % -6 %
Technology and Content Management (63,662 ) 1,337 (62,325 ) (64,024 ) 777 (63,247 ) -1 % 1 %
Finance (13,564 ) 74 (13,490 ) (14,593 ) (321 ) (14,914 ) -7 % -6 %
Other Administration (30,321 ) 2,111   (28,210 ) (29,808 ) 792   (29,016 ) 2 % 1 %
Total $ (128,578 ) 3,653   (124,925 ) (135,536 ) 4,669   (130,867 ) -5 % -1 %
 
 

TWELVE MONTHS ENDED APRIL 30,

 
2015 2014 % Change  
US GAAP

Adjustments
(A)

Adjusted US GAAP

Adjustments
(A-B)

Adjusted US GAAP

Adjusted
excl. FX

Revenue

Research $ 1,040,795 - 1,040,795 1,044,349 - 1,044,349 0 % 2 %
Professional Development 407,023 - 407,023 363,869 - 363,869 12 % 13 %
Education 374,622 - 374,622 366,977 - 366,977 2 % 3 %
             

Total

$ 1,822,440   -   1,822,440   1,775,195   -   1,775,195   3 % 4 %
 

Direct Contribution to Profit

Research $ 483,413 4,555 487,968 479,419 7,774 487,193 1 % 2 %
Professional Development 140,588 4,385 144,973 128,976 11,860 140,836 9 % 4 %
Education 125,870 1,571 127,441 121,978 891 122,869 3 % 5 %
             
Total $ 749,871   10,511   760,382   730,373   20,525   750,898   3 % 3 %
 

Contribution to Profit (After Allocated Shared Services

and Admin. Costs)

Research $ 315,789 4,555 320,344 305,727 7,774 313,501 3 % 5 %
Professional Development 38,116 4,385 42,501 22,167 11,860 34,027 - 28 %
Education 46,175 1,571 47,746 47,787 891 48,678 -3 % 1 %
             
Total $ 400,080 10,511 410,591 375,681 20,525 396,206 6 % 7 %
 
Unallocated Shared Services and Admin. Costs (162,341 ) 18,293 (144,048 ) (169,008 ) 26,983 (142,025 ) -4 % 2 %
             
Operating Income $ 237,739   28,804   266,543   206,673   47,508   254,181   15 % 9 %
 
 
 
 

Total Shared Services and Admin. Costs by Function

Distribution and Operation Services $ (92,791 ) 4,567 (88,224 ) (105,445 ) 6,012 (99,433 ) -12 % -10 %
Technology and Content Management (248,914 ) 2,622 (246,292 ) (255,349 ) 14,020 (241,329 ) -3 % 2 %
Finance (53,133 ) 145 (52,988 ) (55,029 ) 561 (54,468 ) -3 % -1 %
Other Administration (117,294 ) 10,959   (106,335 ) (107,877 ) 6,390   (101,487 ) 9 % 6 %
Total $ (512,132 ) 18,293   (493,839 ) (523,700 ) 26,983   (496,717 ) -2 % 0 %
 
 
 

     See the accompanying Notes to Unaudited Financial Statements for a description of each Adjustment. Certain prior year amounts have been reclassified to conform
      to the current year's presentation.

 
 
 
UNAUDITED ADJUSTED CONTRIBUTION TO PROFIT
INCLUDING ALLOCATED SHARED SERVICES AND ADMINISTRATIVE COSTS
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2015 and 2014
(in thousands)
                                     
 
Fourth Quarter Ended Twelve Months Ended
April 30, April 30,
2015   2014  

%
Change

%
Change
excl. FX

2015   2014  

%
Change

%
Change
excl. FX

 
 

Research:

Direct Contribution to Profit $ 139,258 145,240 -4 % 2 % 483,413 479,419 1 % 3 %
Restructuring Charges (A) 233   3,184   4,555   7,774  
Adjusted Direct Contribution to Profit 139,491 148,424 -6 % 0 % 487,968 487,193 0 % 2 %
 
Allocated Shared Services and Admin. Costs:
Distribution and Operation Services (10,461 ) (10,972 ) -5 % 4 % (44,602 ) (45,773 ) -3 % -1 %
Technology and Content Management (24,256 ) (25,953 ) -7 % -2 % (99,696 ) (101,922 ) -2 % -2 %
Occupancy and Other (5,355 ) (7,234 ) -26 % -19 % (23,326 ) (25,997 ) -10 % -9 %
Adjusted Contribution to Profit (after allocated $ 99,419   104,265   -5 % 2 % 320,344   313,501   2 % 5 %
Shared Services and Admin. Costs)
 

Professional Development:

Direct Contribution to Profit $ 36,234 28,901 25 % 29 % 140,588 128,976 9 % 10 %
Restructuring Charges (A) 552   7,026   4,385   11,860  
Adjusted Direct Contribution to Profit 36,786 35,927 2 % 5 % 144,973 140,836 3 % 4 %
 
Allocated Shared Services and Admin. Costs:
Distribution and Operation Services (7,167 ) (8,883 ) -19 % -16 % (30,838 ) (37,673 ) -18 % -17 %
Technology and Content Management (12,227 ) (12,502 ) -2 % -1 % (47,574 ) (50,374 ) -6 % -6 %
Occupancy and Other (5,354 ) (4,862 ) 10 % 12 % (24,060 ) (18,762 ) 28 % 29 %
Adjusted Contribution to Profit (after allocated $ 12,038   9,680   24 % 30 % 42,501   34,027   25 % 28 %
Shared Services and Admin. Costs)
 

Education:

Direct Contribution to Profit $ 11,149 8,937 25 % 30 % 125,870 121,978 3 % 5 %
Restructuring Charges (A) 487   516   1,571   891  
Adjusted Direct Contribution to Profit 11,636 9,453 23 % 28 % 127,441 122,869 4 % 5 %
 
Allocated Shared Services and Admin. Costs:
Distribution and Operation Services (2,977 ) (3,698 ) -19 % -14 % (12,863 ) (15,685 ) -18 % -16 %
Technology and Content Management (13,324 ) (11,808 ) 13 % 15 % (52,954 ) (46,787 ) 13 % 14 %
Occupancy and Other (3,430 ) (3,146 ) 9 % 9 % (13,878 ) (11,719 ) 18 % 19 %
Adjusted Contribution to Profit (after allocated $ (8,095 ) (9,199 ) 12 % 13 % 47,746   48,678   -2 % 1 %
Shared Services and Admin. Costs)
 
Total Adjusted Contribution to Profit (after $ 103,362 104,746 -1 % 6 % 410,591 396,206 4 % 7 %
allocated Shared Services and Admin. Costs)
 

Unallocated Shared Services and Admin. Costs:

Unallocated Shared Services and Admin. Costs $ (44,027 ) (46,478 ) -5 % -2 % (162,341 ) (169,008 ) -4 % -3 %
Restructuring Charges (A) 3,653 4,669 18,293 22,197
Impairment Charges (B) -   -   -   4,786  
Adjusted Unallocated Shared Services and Admin. Costs $ (40,374 ) (41,809 ) -3 % 0 % (144,048 ) (142,025 ) 1 % 2 %
       
Adjusted Operating Income $ 62,988   62,937   0 % 10 % 266,543   254,181   5 % 9 %
 
     

See the accompanying Notes to Unaudited Financial Statements for a description of each Adjustment. Certain prior year amounts have been reclassified to conform to the current year's presentation.

 
JOHN WILEY & SONS, INC.  
SEGMENT REVENUE by PRODUCT/SERVICE
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2015 and 2014
(in thousands)
                                                                       
  Fourth Quarter               Twelve Months        
Ended April 30, % of % Change Ended April 30, % of % Change
    2015       2014       Revenue     excl. FX         2015       2014     Revenue     excl. FX
           
 

RESEARCH

Research Communication:
Journal Subscriptions $ 173,562 188,931 63 % -2 % $ 664,455 667,305 64 % 1 %
Funded Access 5,826 6,135 2 % 3 % 22,388 17,673 2 % 29 %
Other Journal Revenue 36,222 37,438   13 %   6 %   126,942 113,925 12 %   15 %
215,610 232,504 79 % -1 % 813,785 798,903 78 % 4 %
 
Books and References:
Print Books 21,214 24,652 8 % -8 % 101,872 114,135 10 % -9 %
Digital Books 15,396 16,105   6 %   3 %   45,550 47,693 4 %   -2 %
36,610 40,757 13 % -3 % 147,422 161,828 14 % -7 %
 
Other Research Revenue 22,426 23,556 8 % 4 % 79,588 83,618 8 % -2 %
                                                                       
  Total Revenue       $   274,646       296,817       100 %       -1 %       $   1,040,795       1,044,349     100 %       2 %
 
 

PROFESSIONAL DEVELOPMENT

Knowledge Services:
Print Books $ 44,917 51,385 45 % -9 % $ 209,484 231,984 51 % -9 %
Digital Books 13,506 15,025 13 % -9 % 49,822 53,764 12 % -7 %
Online Test Preparation and Certification 6,051 4,526 6 % 34 % 18,568 15,192 5 % 22 %
Other Knowledge Service Revenue 9,891 10,679   10 %   -6 %   30,370 29,882 7 %   2 %
74,365 81,615 74 % -6 % 308,244 330,822 76 % -6 %
 
Talent Solutions:
Assessment 15,562 11,422 15 % 36 % 56,762 33,047 14 % 72 %
Online Learning and Training 10,515 -   10 %       42,017   10 %    
26,077 11,422 26 % 128 % 98,779 33,047 24 % 199 %
                                                                       
  Total Revenue       $   100,442       93,037       100 %       10 %       $   407,023       363,869     100 %       13 %
 
 

EDUCATION

Books:
Print Textbooks $ 17,630 22,189 25 % -15 % $ 144,416 163,152 39 % -9 %
Digital Books 8,840 8,615   13 %   7 %   34,036 30,137 9 %   15 %
26,470 30,804 40 % -9 % 178,452 193,289 48 % -6 %
 
Custom Products 1,062 (410 ) 2 % - 50,622 43,556 14 % 16 %
 
Course Workflow Solutions (WileyPLUS) 13,671 13,872 21 % 1 % 54,223 49,459 14 % 11 %
 
Education Services (Deltak) 22,687 19,784 34 % 15 % 81,595 70,179 22 % 16 %
 
Other Education Revenue 2,668 3,185 4 % -16 % 9,730 10,494 3 % -7 %
                                                                       
  Total Revenue       $   66,558       67,235       100 %       2 %       $   374,622       366,977     100 %       3 %
 
 
Note: Segment Revenue Categorization
 
JOHN WILEY & SONS, INC.
UNAUDITED STATEMENTS OF FINANCIAL POSITION
(in thousands)
                     
  April 30,  
  2015     2014  
 
Current Assets
Cash & cash equivalents $ 457,441 486,377
Accounts receivable 147,183 149,733
Inventories 63,779 75,495
Prepaid and other   72,516     78,057  
Total Current Assets 740,919 789,662
Product Development Assets 69,589 82,940
Technology, Property and Equipment 193,010 188,718
Intangible Assets 917,621 984,661
Goodwill 962,367 903,665
Income Tax Deposits 57,098 64,037
Other Assets   63,639     63,682  
Total Assets   3,004,243     3,077,365  
 
Current Liabilities
Short-term debt 100,000 -
Accounts and royalties payable 161,465 142,534
Deferred revenue 372,051 385,654
Accrued employment costs 93,922 118,503
Accrued income taxes 9,484 13,324
Accrued pension liability 4,594 4,671
Other accrued liabilities   62,167     64,901  
Total Current Liabilities 803,683 729,587
Long-Term Debt 650,090 700,100
Accrued Pension Liability 209,727 164,634
Deferred Income Tax Liabilities 198,947 222,482
Other Long-Term Liabilities 86,756 78,314
Shareholders' Equity   1,055,040     1,182,248  
Total Liabilities & Shareholders' Equity $   3,004,243     3,077,365  
 
           
JOHN WILEY & SONS, INC.
UNAUDITED STATEMENTS OF FREE CASH FLOW
(in thousands)
       
 
Twelve Months Ended
  April 30,
  2015     2014  
Operating Activities:
Net income $ 176,868 160,510
Amortization of intangibles 51,214 44,679
Amortization of composition costs 40,639 45,097
Depreciation of technology, property and equipment 62,072 58,321
Restructuring and impairment charges 28,804 47,508
Restructuring payments (32,341 ) (28,276 )
Deferred tax benefits on U.K. rate changes - (10,634 )
Share-based compensation expense 13,617 12,851
Employee retirement plan expense 22,599 30,454
Excess tax (benefits) charges from share-based compensation (3,191 ) 1,466
Royalty advances (103,136 ) (107,639 )
Earned royalty advances 108,314 107,529
Other non-cash charges and credits (8,046 ) (3,626 )
Change in deferred revenue 3,913 (750 )
Income tax deposit (5,280 ) (11,968 )
Net change in operating assets and liabilities, excluding acquisitions   (924 )   2,702  
Cash Provided by Operating Activities 355,122 348,224
 
Investments in organic growth:
Composition spending (39,421 ) (40,568 )
Additions to technology, property and equipment   (69,121 )   (57,564 )
 
Free Cash Flow 246,580 250,092
 
Other Investing and Financing Activities:
Acquisitions, net of cash (172,229 ) (54,515 )
Escrowed proceeds from sale of consumer publishing programs 1,100 3,300
Repayment of long-term debt (711,654 ) (658,224 )
Borrowings of long-term debt 659,369 685,324
Borrowings of short-term debt 100,000 -
Change in book overdrafts (6,711 ) (12,354 )
Cash dividends (68,498 ) (58,953 )
Purchase of treasury shares (61,981 ) (63,393 )
Proceeds from exercise of stock options and other 25,326 55,532
Excess tax benefits (charges) from share-based compensation   3,191     (1,466 )
Cash Used for Investing and Financing Activities (232,087 ) (104,749 )
       
Effects of Exchange Rate Changes on Cash   (43,429 )   6,894  
 
Decrease in Cash and Cash Equivalents for Period $   (28,936 )   152,237  
 
 
 
RECONCILIATION TO GAAP PRESENTATION
 
Investing Activities:
Composition spending $ (39,421 ) (40,568 )
Additions to technology, property and equipment (69,121 ) (57,564 )
Acquisitions, net of cash (172,229 ) (54,515 )
Escrowed proceeds from sale of consumer publishing programs   1,100     3,300  
Cash Used for Investing Activities $   (279,671 )   (149,347 )
 
Financing Activities:
Cash Used for Investing and Financing Activities $ (232,087 ) (104,749 )
Excluding:
Acquisitions, net of cash (172,229 ) (54,515 )
Escrowed proceeds from sale of consumer publishing programs   1,100     3,300  
Cash Used for Financing Activities $   (60,958 )   (53,534 )
 
Note: The Company’s management evaluates performance using free cash flow. The Company believes free cash flow provides a meaningful and comparable measure of performance. Since free cash flow is not a measure calculated in accordance with GAAP, it should not be considered as a substitute for other GAAP measures, including cash used for or provided by operating activities, investing activities and financing activities, as an indicator of performance.
 
 

Contact:

John Wiley & Sons, Inc.
Investor:
Brian Campbell, 201-748-6874
Investor Relations
brian.campbell@wiley.com
or
Media:
Helen Bray, +441243770185
Corporate Communications
hbray@wiley.com