Wiley Reports First Quarter 2024 Results
Wiley reports Q1 results with revenue of $451 million (-7%) and operating loss of -$16 million (+4%). Adjusted revenue at constant currency is $367 million (-8%). Wiley realigned its organization and divested University Services, Wiley Edge, and CrossKnowledge. Q1 performance as expected, with underlying strength and momentum returning in Research. Wiley reaffirms Fiscal 2024 outlook with adjusted revenue of $1.58 to $1.63 billion and adjusted EPS of $2.05 to $2.40.
Positive
Underlying strength and momentum returning in Research
Wiley reaffirms Fiscal 2024 outlook
Negative
Revenue decline of 7% in Q1
Operating loss of -$16 million in Q1
Adjusted revenue decline of 8% at constant currency
09/07/2023 - 07:30 AM
HOBOKEN, N.J. --(BUSINESS WIRE)--
Wiley (NYSE: WLY and WLYB), a global knowledge company and a leader in research, publishing, and knowledge solutions today reported results for the first quarter ended July 31, 2023.
GAAP Results : Revenue of $451 million 7% ), Operating loss of -$16 million 4% ), and EPS loss of -$1.67 -$1.35 ). GAAP earnings impacted by impairment charges totalling $103 million
Adjusted Results at Constant Currency (excluding Held for Sale or Sold segment results): Adjusted Revenue of $367 million 8% ), Adjusted EBITDA of $60 million 10% ), and Adjusted EPS of $0.27 37% ).
FISCAL YEAR 2024 TRANSITION
Wiley recently realigned its organization to focus on its core strengths in research, academic, and professional publishing, improve profit and performance, and drive greater operating and capital efficiency.
In June of 2023, Wiley announced that it was divesting University Services , Wiley Edge , and CrossKnowledge . These businesses are currently reported in Held for Sale or Sold segment.
Wiley is rightsizing its cost structure to reflect smaller revenue base and a more narrowly focused company.
The benefits of these portfolio and restructuring actions are expected to be realized in Fiscal 2025 and Fiscal 2026.
MANAGEMENT COMMENTARY
“Our Q1 performance was as expected as we continue to execute on our plans and position Wiley for the future,” said Brian Napack, President and CEO. “While Research was down due to an unusual publishing pause in the second half of last year, we are seeing underlying strength and momentum returning, including growing article volumes, higher journal impact scores, and new partner signings. We are making steady progress on our transition and recently streamlined Wiley into one focused, market-facing team to better leverage our collective strength and drive operating leverage.”
FINANCIAL PERFORMANCE
See accompanying financial tables for the First Quarter 2024. For GAAP purposes, Wiley’s reporting structure consists of three segments: (1) Research, (2) Learning, and (3) Held for Sale or Sold. Research is unchanged with reporting lines of Research Publishing and Research Solutions. Learning includes reporting lines of Academic (education publishing) and Professional (professional publishing and assessments).
Research
Revenue of $258 million 6% , or 7% at constant currency, mainly due to the Hindawi publishing pause and macro headwinds impacting our corporate advertising and recruitment offerings. This offset continued strong growth in our core open access publishing program. Excluding Hindawi, revenue was flat.
Adjusted EBITDA of $77 million 18% at constant currency due to the Hindawi publishing pause. Adjusted EBITDA margin for the quarter was 29.8% compared to 33.8% in the prior year period. Excluding Hindawi, Adjusted EBITDA was up modestly.
Learning
Revenue of $109 million 9% as reported and at constant currency due to lower print sales in a seasonally light quarter for academic publishing, offsetting solid growth in assessments.
Adjusted EBITDA of $21 million 19% as reported and at constant currency mainly due to restructuring savings. Adjusted EBITDA margin for the quarter was 19.4% compared to 14.9% in the prior year period.
Businesses Held for Sale or Sold
Revenue of $84 million 10% on a reported and constant currency basis driven by declines in Wiley Edge (Talent Development) and CrossKnowledge, and the disposal of test prep and advancement courses lines. Adjusted EBITDA of $6 million $2 million .
Corporate Expenses
Corporate Expenses of $49 million 24% due to restructuring savings and lower occupancy costs. Adjusted Corporate Expenses (Adjusted EBITDA) of $38 million 15% .
EPS
GAAP EPS loss of $1.67 $0.32 $103 million
Adjusted EPS excluding businesses held for sale or sold of $0.27 was down 37% primarily due to higher interest expense and lower Adjusted Operating Income.
Balance Sheet, Cash Flow, and Capital Allocation
Net Debt-to-EBITDA Ratio (Trailing Twelve Months) at quarter end was 1.9x compared to 2.1x at prior year end.
Net Cash Used in Operating Activities was a use of $82 million $90 million
Free Cash Flow less Product Development Spending was a use of $106 million $114 million
Returns to Shareholders: The Company raised its dividend for the 30th consecutive year in June. For the quarter, Wiley allocated $19 million $10 million $33.25
FISCAL YEAR 2024 TRANSITION YEAR OUTLOOK
Wiley is reaffirming its Fiscal 2024 outlook. The outlook excludes businesses held for sale or sold: University Services, Wiley Edge (Talent Development), and CrossKnowledge . Collectively, these businesses generated $393 million $43 million $0.36
Metric ($millions, except EPS)
Fiscal 2023
All Company
Fiscal 2023
Ex-Divestitures
Fiscal 2024 Outlook
Ex-Divestitures
Adjusted Revenue*
$2,020
$1,627
$1,580 $1,630
Research
$1,080
Flat (+3% ex-Hindawi)
Learning
$547
Down low single digits
Adjusted EBITDA*
$422
$379
$305 $330
Adjusted EPS*
$3.84
$3.48
$2.05 $2.40
*Wiley’s Fiscal 2024 outlook (“Adjusted Revenue,” “Adjusted EBITDA,” and “Adjusted EPS”) exclude businesses held for sale, including University Services, Wiley Edge (formerly Talent Development), and CrossKnowledge, as well as those sold in Fiscal 2023: Test Prep and Advancement Courses.
Fiscal Year 2024 Transition Year Outlook
Adjusted Revenue - primarily due to the Hindawi special issues publishing pause and lower print demand in Academic. Note, this is a new metric defined as revenue adjusted to exclude businesses held for sale or sold.
Adjusted EBITDA - primarily due to projected revenue performance, notably Hindawi, and higher employee costs from the combination of an incentive compensation reset and wage inflation. From its portfolio and restructuring actions, the Company expects material margin improvement in Fiscal 2025 and Fiscal 2026.
Adjusted EPS - further impacted by $0.42 -$0.21 /share), pension expense (-$0.11 /share), and interest expense (-$0.10 /share). Wiley’s higher tax rate is primarily due to a less favorable mix of earnings by country and an increase in the UK statutory rate. Wiley froze its U.S. and U.K. pension programs in 2015, and they are approximately 90% funded.
Wiley is not providing a Free Cash Flow outlook at this time due to the uncertainty around the timing of divestitures and the size and scope of restructuring payments.
EARNINGS CONFERENCE CALL
Scheduled for today, September 7 at 10:00 am (ET). Access webcast at Investor Relations at investors.wiley.com , or directly at https://events.q4inc.com/attendee/255554735. U.S. callers, please dial (888) 210-3346 and enter the participant code 2521217#. International callers, please dial (646) 960-0253 and enter the participant code 2521217#.
ABOUT WILEY
Wiley is a knowledge company and a global leader in research, publishing, and knowledge solutions. Dedicated to the creation and application of knowledge, Wiley serves the world’s researchers, learners, innovators, and leaders, helping them achieve their goals and solve the world's most important challenges. For more than two centuries, Wiley has been delivering on its timeless mission to unlock human potential. Visit us at Wiley.com. Follow us on Facebook , Twitter , LinkedIn and Instagram .
NON-GAAP FINANCIAL MEASURES
Wiley provides non-GAAP financial measures and performance results such as “Adjusted EPS,” “Adjusted Operating Income,” “Adjusted EBITDA,” “Adjusted CTP,” “Adjusted Income before Taxes,” “Adjusted Income Tax Provision,” “Adjusted Effective Income Tax Rate,” “Free Cash Flow less Product Development Spending,” “organic revenue,” “Adjusted Revenue,” and results on a Constant Currency basis to assess underlying business performance and trends. Management believes non-GAAP financial measures, which exclude the impact of restructuring charges and credits and certain other items, and the impact of acquisitions provide a useful comparable basis to analyze operating results and earnings. See the reconciliations of non-GAAP financial measures and explanations of the uses of non-GAAP measures in the supplementary information. We have not provided our 2024 outlook for the most directly comparable U.S. GAAP financial measures, as they are not available without unreasonable effort due to the high variability, complexity, and low visibility with respect to certain items, including restructuring charges and credits, gains and losses on foreign currency, and other gains and losses. These items are uncertain, depend on various factors, and could be material to our consolidated results computed in accordance with U.S. GAAP.
FORWARD-LOOKING STATEMENTS
This release contains certain forward-looking statements concerning the Company's operations, performance, and financial condition. Reliance should not be placed on forward-looking statements, as actual results may differ materially from those in any forward-looking statements. Any such forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to uncertainties and contingencies, many of which are beyond the control of the Company and are subject to change based on many important factors. Such factors include, but are not limited to: (i) the level of investment 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 ability to realize operating savings over time and in fiscal year 2024 in connection with our multiyear Global Restructuring Program and planned dispositions; (xi) the possibility that the divestitures will not be pursued, failure to obtain necessary regulatory approvals or required financing or to satisfy any of the other conditions to planned dispositions; 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.
CATEGORY: EARNINGS RELEASES
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)(2)
CONDENSED CONSOLIDATED STATEMENTS OF NET LOSS
(Dollars in thousands, except per share information)
(unaudited)
Three Months Ended
July 31,
2023
2022
Revenue, net
$
451,013
$
487,569
Costs and expenses:
Cost of sales
157,101
174,031
Operating and administrative expenses
255,801
282,751
Impairment of goodwill (3)
26,695
-
Restructuring and related charges
12,123
22,441
Amortization of intangible assets
15,648
25,311
Total costs and expenses
467,368
504,534
Operating loss
(16,355)
(16,965)
As a % of revenue
-3.6%
-3.5%
Interest expense
(11,334)
(6,332)
Foreign exchange transaction losses
(1,620)
(616)
Impairment charge related to assets held-for-sale and loss on sale of a business (3)
(75,929)
-
Other (expense) income, net
(1,485)
526
Loss before taxes
(106,723)
(23,387)
Benefit for income taxes
(14,459)
(5,552)
Effective tax rate
13.5%
23.7%
Net loss
$
(92,264)
$
(17,835)
As a % of revenue
-20.5%
-3.7%
Loss per share
Basic
$
(1.67)
$
(0.32)
Diluted (4)
$
(1.67)
$
(0.32)
Weighted average number of common shares outstanding
Basic
55,270
55,736
Diluted (4)
55,270
55,736
Notes:
(1) The supplementary information included in this press release for the three months ended July 31, 2023 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.
(2) All amounts are approximate due to rounding.
(3) As previously announced, we are divesting non-core businesses, including University Services, Wiley Edge, and CrossKnowledge. These dispositions are expected to be completed during fiscal year 2024. As a result, we reorganized our segments and our new structure consists of three reportable segments which includes Research (no change), Learning, and Held for Sale or Sold, as well as a Corporate expense category (no change). As a result of this realignment, we were required to test goodwill for impairment immediately before and after the realignment. Prior to the realignment, we concluded that the fair value of the University Services reporting unit within the Held for Sale or Sold segment was below its carrying value which resulted in a pretax non-cash goodwill impairment of $11.4 million $15.3 million $40.6 million $33.3 million $2.0 million $1.6 million
(4) In calculating diluted net loss per common share for the three months ended July 31, 2023 and 2022, 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 antidilutive. This occurs when a US GAAP net loss is reported and the effect of using dilutive shares is antidilutive.
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1) (2)
RECONCILIATION OF US GAAP MEASURES to NON-GAAP MEASURES
(unaudited)
Reconciliation of US GAAP EPS to Non-GAAP Adjusted EPS
Three Months Ended
July 31,
2023
2022
US GAAP Loss Per Share - Diluted
$
(1.67)
$
(0.32)
Adjustments:
Impairment of goodwill
0.43
-
Restructuring and related charges
0.16
0.30
Foreign exchange (gains) losses on intercompany transactions, including the write off of certain cumulative translation adjustments (3)
-
0.01
Amortization of acquired intangible assets (4)
0.23
0.36
Impairment charge related to assets held-for-sale and loss on sale of a business (5)
1.17
-
Held for Sale or Sold segment Adjusted Net (Income) Loss (5)
(0.07)
0.10
EPS impact of using weighted-average dilutive shares for adjusted EPS calculation (6)
0.02
0.01
Non-GAAP Adjusted Earnings Per Share - Diluted
$
0.27
$
0.46
Reconciliation of US GAAP Loss Before Taxes to Non-GAAP Adjusted Income Before Taxes
Three Months Ended
(amounts in thousands) July 31,
2023
2022
US GAAP Loss Before Taxes
$
(106,723)
$
(23,387)
Pretax Impact of Adjustments:
Impairment of goodwill
26,695
-
Restructuring and related charges
12,123
22,441
Foreign exchange (gains) losses on intercompany transactions, including the write off of certain cumulative translation adjustments (3)
(6)
666
Amortization of acquired intangible assets (4)
16,668
26,385
Impairment charge related to assets held-for-sale and loss on sale of a business (5)
75,929
-
Held for Sale or Sold segment Adjusted (Income) Loss Before Taxes (5)
(5,034)
7,594
Non-GAAP Adjusted Income Before Taxes
$
19,652
$
33,699
Reconciliation of US GAAP Income Tax Benefit to Non-GAAP Adjusted Income Tax Provision, including our US GAAP Effective Tax Rate and our Non-GAAP Adjusted Effective Tax Rate
US GAAP Income Tax Benefit
$
(14,459)
$
(5,552)
Income Tax Impact of Adjustments (7)
Impairment of goodwill
2,697
-
Restructuring and related charges
2,936
5,517
Foreign exchange (gains) losses on intercompany transactions, including the write off of certain cumulative translation adjustments (3)
(34)
175
Amortization of acquired intangible assets (4)
3,873
5,832
Impairment charge related to assets held-for-sale and loss on sale of a business (5)
10,660
-
Held for Sale or Sold segment Adjusted Tax (Provision) Benefit (5)
(996)
1,569
Non-GAAP Adjusted Income Tax Provision
$
4,677
$
7,541
US GAAP Effective Tax Rate
13.5%
23.7%
Non-GAAP Adjusted Effective Tax Rate
23.8%
22.4%
Notes:
(1) See Explanation of Usage of Non-GAAP Performance Measures included in this supplementary information for additional details on the reasons why management believes presentation of each non-GAAP performance measure provides useful information to investors. The supplementary information included in this press release for the three months ended July 31, 2023 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.
(2) All amounts are approximate due to rounding.
(3) In fiscal year 2023 due to the closure of our operations in Russia , the Russia entity was deemed substantially liquidated. In the three months ended July 31, 2023, we wrote off an additional $0.9 million
(4) Reflects the amortization of intangible assets established on the opening balance sheet for an acquired business. This includes the amortization of intangible assets such as developed technology, customer relationships, tradenames, etc., which is reflected in the "Amortization of intangible assets" line in the Condensed Consolidated Statements of Net Loss. It also includes the amortization of acquired product development assets, which is reflected in Cost of sales in the Condensed Consolidated Statements of Net Loss.
(5) We are divesting non-core businesses, including University Services, Wiley Edge, and CrossKnowledge. These three businesses met the held-for-sale criteria and we measured each business at the lower of carrying value or fair value less cost to sell. We recorded a pretax impairment of $40.6 million $33.3 million $2.0 million $1.6 million
(6) Represents the impact of using diluted weighted-average number of common shares outstanding (55.8 million shares and 56.5 million shares for the three months ended July 31, 2023 and 2022, respectively) included in the Non-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 a US GAAP net loss is reported and the effect of using dilutive shares is antidilutive.
(7) For the three months ended July 31, 2023 and 2022, substantially all of the tax impact was from deferred taxes.
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
RECONCILIATION OF US GAAP NET LOSS TO NON-GAAP EBITDA AND ADJUSTED EBITDA
(unaudited)
Three Months Ended
July 31,
2023
2022
Net Loss
$
(92,264)
$
(17,835)
Interest expense
11,334
6,332
Benefit for income taxes
(14,459)
(5,552)
Depreciation and amortization
43,728
58,279
Non-GAAP EBITDA
(51,661)
41,224
Impairment of goodwill
26,695
-
Restructuring and related charges
12,123
22,441
Foreign exchange losses, including the write off of certain cumulative translation adjustments
1,620
616
Impairment charge related to assets held-for-sale and loss on sale of a business
75,929
-
Other expense (income), net
1,485
(526)
Held for Sale or Sold segment Adjusted EBITDA (2)
(6,521)
2,435
Non-GAAP Adjusted EBITDA
$
59,670
$
66,190
Adjusted EBITDA Margin
16.3%
16.8%
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 months ended July 31, 2023 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) Our Non-GAAP Adjusted EBITDA excludes the Held for Sale or Sold segment Non-GAAP Adjusted EBITDA.
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1) (2) (3)
SEGMENT RESULTS
(in thousands)
(unaudited)
% Change
Three Months Ended July 31, Favorable (Unfavorable)
2023
2022 (3)
Reported
Constant
Research:
Revenue, net
Research Publishing
$
223,000
$
239,523
-7%
-8%
Research Solutions
34,804
35,390
-2%
-2%
Total Revenue, net
$
257,804
$
274,913
-6%
-7%
Contribution to Profit
$
51,580
$
69,023
-25%
-26%
Adjustments:
Restructuring charges
1,947
81
#
#
Non-GAAP Adjusted Contribution to Profit
$
53,527
$
69,104
-23%
-23%
Depreciation and amortization
23,212
23,801
2%
3%
Non-GAAP Adjusted EBITDA
$
76,739
$
92,905
-17%
-18%
Adjusted EBITDA margin
29.8%
33.8%
Learning:
Revenue, net
Academic
$
48,292
$
58,748
-18%
-18%
Professional
61,028
60,899
0%
0%
Total Revenue, net
$
109,320
$
119,647
-9%
-9%
Contribution to Profit
$
7,408
$
610
# #
Adjustments:
Restructuring charges
218
3,131
93%
93%
Non-GAAP Adjusted Contribution to Profit
$
7,626
$
3,741
# #
Depreciation and amortization
13,552
14,055
4%
4%
Non-GAAP Adjusted EBITDA
$
21,178
$
17,796
19%
19%
Adjusted EBITDA margin
19.4%
14.9%
Held for Sale or Sold:
Total Revenue, net
$
83,889
$
93,009
-10%
-10%
Contribution to Profit
$
(26,234)
$
(22,194)
-18%
-19%
Adjustments:
Restructuring charges
2,623
3,492
25%
25%
Impairment of goodwill
26,695
-
#
#
Accelerated amortization of an intangible asset (4)
-
4,594
#
#
Non-GAAP Adjusted Contribution to Profit
$
3,084
$
(14,108)
#
#
Depreciation and amortization
3,437
11,673
71%
70%
Non-GAAP Adjusted EBITDA
$
6,521
$
(2,435)
# #
Adjusted EBITDA margin
7.8%
-2.6%
Corporate Expenses:
$
(49,109)
$
(64,404)
24%
24%
Adjustments:
Restructuring charges
7,335
15,737
53%
53%
Non-GAAP Adjusted Contribution to Profit
$
(41,774)
$
(48,667)
14%
15%
Depreciation and amortization
3,527
4,156
15%
16%
Non-GAAP Adjusted EBITDA
$
(38,247)
$
(44,511)
14%
15%
Consolidated Results:
Revenue, net
$
451,013
$
487,569
-7%
-8%
Less: Held for Sale or Sold Segment (5)
(83,889)
(93,009)
-10%
-10%
Adjusted Revenue, net
$
367,124
$
394,560
-7%
-8%
Operating Loss
$
(16,355)
$
(16,965)
-4%
-1%
Adjustments:
Restructuring charges
12,123
22,441
46%
46%
Impairment of goodwill
26,695
-
#
#
Accelerated amortization of an intangible asset (4)
-
4,594
#
#
Held for Sale or Sold Segment Adjusted Contribution to Profit (5)
(3,084)
14,108
#
#
Non-GAAP Adjusted Operating Income
$
19,379
$
24,178
-20%
-21%
Depreciation and amortization
43,728
53,685
19%
19%
Less: Held for Sale or Sold Segment depreciation and amortization (5)
(3,437)
(11,673)
71%
71%
Non-GAAP Adjusted EBITDA
$
59,670
$
66,190
-10%
-10%
Adjusted EBITDA margin
16.3%
16.8%
Notes:
(1) The supplementary information included in this press release for the three months ended July 31, 2023 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.
(2) All amounts are approximate due to rounding.
(3) As previously announced, in the three months ended July 31, 2023 we changed our reportable segments. Our new segment reporting structure consists of three reportable segments which includes Research (no change), Learning, and Held for Sale or Sold, as well as a Corporate expense category (no change). Prior period segment results have been revised to the new segment presentation. There were no changes to our consolidated financial results.
(4) On January 1, 2020, Wiley acquired mthree, a talent placement provider that addresses the IT skills gap by finding, training, and placing job-ready technology talent in roles with leading corporations worldwide. Its results of operations are included in our Held for Sale or Sold segment. In late May 2022, Wiley renamed the mthree talent development solution to Wiley Edge and discontinued use of the mthree trademark during the three months ended July 31, 2022. As a result of these actions, we determined that a revision of the useful life was warranted, and the intangible asset was fully amortized over its remaining useful life resulting in accelerated amortization expense of $4.6 million
(5) Our Adjusted Revenue, Adjusted Operating Income and Adjusted EBITDA excludes the impact of our Held for Sale or Sold segment Revenue, Adjusted Operating Income or Loss and Adjusted EBITDA results.
# Variance greater than 100%
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands)
(unaudited)
July 31, April 30,
2023
2023
Assets:
Current assets
Cash and cash equivalents
$
75,144
$
106,714
Accounts receivable, net
153,392
310,121
Inventories, net
30,289
30,733
Prepaid expenses and other current assets
79,703
93,711
Current assets held-for-sale (2)
139,250
-
Total current assets
477,778
541,279
Technology, property and equipment, net
223,534
247,149
Intangible assets, net
657,093
854,794
Goodwill
1,102,499
1,204,050
Operating lease right-of-use assets
82,415
91,197
Other non-current assets
141,159
170,341
Non-current assets held-for-sale (2)
241,483
-
Total assets
$
2,925,961
$
3,108,810
Liabilities and shareholders' equity:
Current liabilities
Accounts payable
$
43,713
$
84,325
Accrued royalties
98,690
113,423
Short-term portion of long-term debt
5,000
5,000
Contract liabilities
369,562
504,695
Accrued employment costs
52,307
80,458
Short-term portion of operating lease liabilities
17,869
19,673
Other accrued liabilities
68,541
87,979
Current liabilities held-for-sale (2)
50,257
-
Total current liabilities
705,939
895,553
Long-term debt
890,917
743,292
Accrued pension liability
81,367
86,304
Deferred income tax liabilities
109,916
144,042
Operating lease liabilities
106,652
115,540
Other long-term liabilities
78,838
79,052
Long-term liabilities held-for-sale (2)
15,126
-
Total liabilities
1,988,755
2,063,783
Shareholders' equity
937,206
1,045,027
Total liabilities and shareholders' equity
$
2,925,961
$
3,108,810
Notes:
(1) The supplementary information included in this press release for July 31, 2023 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) As previously announced, we are divesting non-core businesses, including University Services, Wiley Edge and CrossKnowlegde. These businesses met the held-for-sale criteria and were measured at the lower of carrying value or fair value less cost to sell. We recorded a pretax impairment of $40.6 million $33.3 million
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
July 31,
2023
2022
Operating activities:
Net loss
$
(92,264)
$
(17,835)
Impairment of goodwill
26,695
-
Impairment charge related to assets held-for-sale and loss on sale of a business
75,929
-
Amortization of intangible assets
15,648
25,311
Amortization of product development assets
6,687
8,288
Depreciation and amortization of technology, property, and equipment
21,393
24,680
Other noncash charges
8,753
27,714
Net change in operating assets and liabilities
(145,176)
(158,097)
Net cash used in operating activities
(82,335)
(89,939)
Investing activities:
Additions to technology, property, and equipment
(20,086)
(17,923)
Product development spending
(3,747)
(5,825)
Businesses acquired in purchase transactions, net of cash acquired
(1,500)
(96)
Proceeds related to the sale of a business
457
-
Acquisitions of publication rights and other
(866)
2,038
Net cash used in investing activities
(25,742)
(21,806)
Financing activities:
Net debt borrowings
145,473
156,873
Cash dividends
(19,382)
(19,468)
Purchases of treasury shares
(10,000)
(10,000)
Other
(10,277)
(9,416)
Net cash provided by financing activities
105,814
117,989
Effects of exchange rate changes on cash, cash equivalents and restricted cash
2,257
(1,985)
Change in cash, cash equivalents and restricted cash for period
(6)
4,259
Cash, cash equivalents and restricted cash - beginning
107,262
100,727
Cash, cash equivalents and restricted cash - ending (2)
$
107,256
$
104,986
CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT DEVELOPMENT SPENDING (3)
Three Months Ended
July 31,
2023
2022
Net cash used in operating activities
$
(82,335)
$
(89,939)
Less:
Additions to technology, property, and equipment
(20,086)
(17,923)
Less:
Product development spending
(3,747)
(5,825)
Free cash flow less product development spending
$
(106,168)
$
(113,687)
Notes:
(1) The supplementary information included in this press release for the three months ended July 31, 2023 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) Cash, cash equivalents and restricted cash as of July 31, 2023 includes held-for-sale cash, cash equivalents and restricted cash of $32.1 million
(3) See Explanation of Usage of Non-GAAP Performance Measures included in this supplemental information.
JOHN WILEY & SONS, INC.
EXPLANATION OF USAGE OF NON-GAAP PERFORMANCE MEASURES
In this earnings release and supplemental information, management may present the following non-GAAP performance measures:
· Adjusted Earnings Per Share (Adjusted EPS);
· Free Cash Flow less Product Development Spending;
· Adjusted Revenue;
· Adjusted Contribution to Profit and margin;
· Adjusted Operating Income and margin;
· Adjusted Income Before Taxes;
· Adjusted Income Tax Provision;
· Adjusted Effective Tax Rate;
· EBITDA, Adjusted EBITDA and margin;
· Organic revenue; and
· Results on a constant currency basis.
For example:
View source version on businesswire.com: https://www.businesswire.com/news/home/20230907231263/en/
Investor Contact:
brian.campbell@wiley.com
Source: John Wiley and Sons
