Wiley Reports Second Quarter Fiscal Year 2023 Results
12/07/2022 - 07:30 AM
HOBOKEN, N.J. --(BUSINESS WIRE)--
Wiley (NYSE: WLY), one of the world’s largest publishers and a global leader in scientific research and career-connected education, today announced results for the second quarter ended October 31, 2022 .
GAAP Results : Revenue of $515 million 3% vs. prior year), Operating Income of $57 million 22% vs. prior year), and EPS of $0.68 (-31% vs. prior year)
Adjusted Results at constant currency : Revenue of $515 million 1% vs. prior year), Adjusted EBITDA of $124 million 4% vs. prior year), and Adjusted EPS of $1.20 (-13% vs. prior year)
Fiscal 2023 Outlook: Wiley is lowering its revenue outlook at constant currency due to consumer spending and enrollment headwinds in Academic & Professional Learning. Reaffirms full year outlook for Adjusted EBITDA and Free Cash Flow; Adjusted EPS trending to lower end of range mainly due to rising interest expense
MANAGEMENT COMMENTARY
“Despite the challenging economic environment, we continue to see good underlying momentum in our core growth areas of Research Publishing , Research Solutions, and Corporate Talent Development ,” said Brian Napack , President and CEO. “This quarter’s results were weighed down by difficult market conditions in our publishing lines in Academic & Professional Learning. We are aggressively managing costs to offset these challenges while continuing to scale our growth offerings in line with favorable long-term trends.”
SECOND QUARTER PERFORMANCE
GAAP Measures
Unaudited ($millions except for EPS)
Q2 2023
Q2 2022
Change
Revenue
$514.8
$533.0
(3% )
Operating Income
$57.4
$73.9
(22% )
Diluted EPS
$0.68
$0.99
(31% )
Non-GAAP Measures
Q2 2023
Q2 2022
Change
Change
Constant Currency
Revenue
$514.8
$533.0
(3% )
+1%
Adjusted EBITDA
$123.8
$127.1
(3% )
(4% )
Adjusted EPS
$1.20
$1.29
(7% )
(13% )
Please see attached financial tables for results for three month and six month periods
Excluding acquisitions and currency impact, revenue was down 0.5% for the quarter
Unfavorable FX variance of $22 million $1.7 million $0.08 in Adjusted EPS
Revenue
Research was down 1% as reported, or up 3% at constant currency (+2% organic), driven by organic growth in Research Publishing and Research Solutions and contributions from Solutions acquisitions.
Academic & Professional Learning revenue declined 14% as reported and 10% at constant currency. Education Publishing performance saw a significant decline in print course material offsetting solid growth in digital content and courseware. Professional Learning saw a material decline in professional publishing from a pullback in consumer spending offsetting continued strong growth in corporate leadership training.
Education Services increased 12% as reported and 17% at constant currency (+13% organic), with strong double-digit growth in Talent Development offsetting a modest decline in University Services primarily from market-related enrollment challenges.
Adjusted EBITDA
Research was down 4% at constant currency with revenue growth offset by investment to optimize and scale publishing and solutions.
Academic & Professional Learning declined 12% at constant currency due to the revenue performance.
Education Services rose 69% at constant currency due to revenue flow-through in Talent Development and the timing of expenses in University Services
Adjusted Corporate Expenses were flat at constant currency with higher employee costs offset by the timing of certain expenses.
EPS
GAAP EPS was $0.68 as compared to $0.99 in the prior year period, primarily reflecting lower operating income and a $0.19 /share ($14 million
Adjusted EPS of $1.20 was down 13% at constant currency, driven by lower adjusted EBITDA and higher interest expense.
Balance Sheet, Cash Flow, and Capital Allocation
Net Debt-to-EBITDA ratio (trailing twelve months) at quarter-end was 2.1 compared to 2.0 in the year-ago period, and 1.6 at year end (April 30 ).
Financing: On November 30 , Wiley entered into an amendment to its revolving credit agreement that provides for senior unsecured credit facilities comprised of (i) five-year credit commitments with the principal amount of $1.315 billion November 2027 , and (ii) $185 million May 2024 .
Net Cash Used in Operating Activities $76 million
Free Cash Flow less Product Development Spending (YTD) was a use of $126 million
Share Repurchases (YTD): The Company utilized $17.5 million $45.84 .
FISCAL YEAR 2023 OUTLOOK
Wiley is reducing its revenue growth outlook at constant currency due to consumer spending and enrollment headwinds in Education. Based on leading indicators, Wiley is reaffirming its guidance for Adjusted EBITDA and Free Cash Flow. Adjusted EPS is reaffirmed but trending to the lower end of range mainly due to rising interest expense.
Metric
($millions, except EPS)
FY22 Actual*
FY23 Outlook*
Constant currency
Original
FY23 Outlook*
Constant currency
Update
FY23 Outlook*
Constant currency
Current
Revenue
$2,083
$2,175 - $2,215
Reduced
$2,110 - $2,150
Adjusted EBITDA
$433
$425 - $450
Reaffirmed
$425 - $450
Adjusted EPS
$4.16
$3.70 - $4.05
Reaffirmed
$3.70 - $4.05
Free Cash Flow
$223
$210 - $235
Reaffirmed
$210 - $235
*Based on Fiscal 2022 average rates of 1.15 euro and 1.36 British pound . FX impact to FY23 outlook based on YTD average rates of 1.00 euro and 1.16 British pound: $85M
EARNINGS CONFERENCE CALL
Scheduled for today, December 7 at 10:00 am (ET) . Access webcast at investors.wiley.com . or directly at https://events.q4inc.com/attendee/570471412 . US callers, please dial (888) 210-3346 and enter the participant code 2521217#. International callers, please dial (646) 960-0253 and enter the participant code 2521217#.
ABOUT WILEY
Wiley is one of the world’s largest publishers and a global leader in scientific research and career-connected education. Founded in 1807, Wiley enables discovery, powers education, and shapes workforces. Through its industry-leading content, digital platforms, and knowledge networks, the company delivers 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,” “EBITDA,” “Adjusted EBITDA,” “Adjusted Contribution to Profit,” “Adjusted Income before Taxes,” “Adjusted Income Tax Provision,” “Adjusted Effective Tax Rate,” “Free Cash Flow less Product Development Spending,” “organic revenue,” and results on a Constant Currency basis to assess underlying business performance and trends. Management believes non-GAAP financial measures, which exclude the impact of restructuring charges and credits and certain other items, and the impact of acquisitions provide a useful comparable basis to analyze operating results and earnings. See the reconciliations of non-GAAP financial measures and explanations of the uses of non- GAAP measures in the supplementary information. We have not provided our 2023 outlook for the most directly comparable US GAAP financial measures, as they are not available without unreasonable effort due to the high variability, complexity, and low visibility with respect to certain items, including restructuring charges and credits, gains and losses on foreign currency, and other gains and losses. These items are uncertain, depend on various factors, and could be material to our consolidated results computed in accordance with US GAAP.
FORWARD-LOOKING STATEMENTS
This release contains certain forward-looking statements concerning the Company's operations, performance, and financial condition. Reliance should not be placed on forward-looking statements, as actual results may differ materially from those in any forward-looking statements. Any such forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to uncertainties and contingencies, many of which are beyond the control of the Company and are subject to change based on many important factors. Such factors include, but are not limited to: (i) the level of investment by Wiley in new technologies and products; (ii) subscriber renewal rates for the Company's journals; (iii) the financial stability and liquidity of journal subscription agents; (iv) the consolidation of book wholesalers and retail accounts; (v) the market position and financial stability of key retailers; (vi) the seasonal nature of the Company's educational business and the impact of the used book market; (vii) worldwide economic and political conditions; (viii) the Company's ability to protect its copyrights and other intellectual property worldwide (ix) the ability of the Company to successfully integrate acquired operations and realize expected opportunities; (x) the Company’s ability to realize operating savings over time and in fiscal year 2023 in connection with our multi-year Business Optimization Program and Fiscal Year 2023 Restructuring 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.
CATEGORY: ALL CORPORATE NEWS
CATEGORY: EARNINGS RELEASES
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)(2)
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME
(Dollars in thousands, except per share information)
(unaudited)
Three Months Ended Six Months Ended
October 31 ,October 31 ,
2022
2021
2022
2021
Revenue, net
$
514,836
$
533,003
$
1,002,405
$
1,021,391
Costs and expenses:
Cost of sales
170,302
174,782
344,333
340,738
Operating and administrative expenses
253,029
264,190
535,780
524,779
Restructuring and related charges (credits)
13,956
(1,333)
36,397
(1,609)
Amortization of intangible assets
20,110
21,476
45,421
42,627
Total costs and expenses
457,397
459,115
961,931
906,535
Operating income
57,439
73,888
40,474
114,856
As a % of revenue
11.2%
13.9%
4.0%
11.2%
Interest expense
(9,332)
(4,997)
(15,664)
(9,636)
Foreign exchange transaction gains (losses)
478
(1,370)
(138)
(1,000)
(Loss) gain on sale of certain assets
-
(56)
-
3,694
Other (expense) income, net
(255)
3,150
271
6,703
Income before taxes
48,330
70,615
24,943
114,617
Provision for income taxes
10,137
14,648
4,585
44,820
Effective tax rate
21.0%
20.7%
18.4%
39.1%
Net income
$
38,193
$
55,967
$
20,358
$
69,797
As a % of revenue
7.4%
10.5%
2.0%
6.8%
Earnings per share
Basic
$
0.69
$
1.00
$
0.37
$
1.25
Diluted
$
0.68
$
0.99
$
0.36
$
1.24
Weighted average number of common shares outstanding
Basic
55,622
55,806
55,679
55,833
Diluted
56,195
56,388
56,326
56,477
Notes:
(1) The supplementary information included in this press release for the three and six months ended October 31, 2022 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission .
(2) All amounts are approximate due to rounding.
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 Six Months Ended
October 31 ,October 31 ,
2022
2021
2022
2021
US GAAP Earnings Per Share - Diluted
$
0.68
$
0.99
$
0.36
$
1.24
Adjustments:
Restructuring and related charges (credits)
0.19
(0.02)
0.49
(0.02)
Foreign exchange losses (gains) on intercompany transactions
0.03
0.01
0.04
-
Amortization of acquired intangible assets (3)
0.30
0.31
0.67
0.60
Loss (gain) on sale of certain assets (4)
-
-
-
(0.05)
Income tax adjustments (5)
-
-
-
0.37
Non-GAAP Adjusted Earnings Per Share - Diluted
$
1.20
$
1.29
$
1.56
$
2.14
Reconciliation of US GAAP Income Before Taxes to Non-GAAP Adjusted Income Before Taxes
Three Months Ended Six Months Ended
(amounts in thousands) October 31 ,October 31 ,
2022
2021
2022
2021
US GAAP Income Before Taxes
$
48,330
$
70,615
$
24,943
$
114,617
Pretax Impact of Adjustments:
Restructuring and related charges (credits)
13,956
(1,333)
36,397
(1,609)
Foreign exchange losses (gains) on intercompany transactions
2,654
567
3,320
(228)
Amortization of acquired intangible assets (3)
21,185
22,608
47,570
44,892
Loss (gain) on sale of certain assets (4)
-
56
-
(3,694)
Non-GAAP Adjusted Income Before Taxes
$
86,125
$
92,513
$
112,230
$
153,978
Reconciliation of US GAAP Income Tax Provision to Non-GAAP Adjusted Income Tax Provision, including our US GAAP Effective Tax Rate and our Non-GAAP Adjusted Effective Tax Rate
US GAAP Income Tax Provision
$
10,137
$
14,648
$
4,585
$
44,820
Income Tax Impact of Adjustments (6)
Restructuring and related charges (credits)
3,422
(277)
8,939
(232)
Foreign exchange losses (gains) on intercompany transactions
694
120
869
19
Amortization of acquired intangible assets (3)
4,388
5,420
10,220
10,263
Loss (gain) on sale of certain assets (4)
-
14
-
(922)
Income Tax Adjustments:
Impact of increase in UK statutory rate on deferred tax balances (5)
-
-
-
(20,726)
Non-GAAP Adjusted Income Tax Provision
$
18,641
$
19,925
$
24,613
$
33,222
US GAAP Effective Tax Rate
21.0%
20.7%
18.4%
39.1%
Non-GAAP Adjusted Effective Tax Rate
21.6%
21.5%
21.9%
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 and six months ended October 31, 2022 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission .
(2)
All amounts are approximate due to rounding.
(3)
Reflects the amortization of intangible assets established on the opening balance sheet for an acquired business. This includes the amortization of intangible assets such as developed technology, customer relationships, tradenames, etc., which is reflected in the "Amortization of intangible assets" line in the Condensed Consolidated Statements of Net Income. It also includes the amortization of acquired product development assets, which is reflected in "Cost of sales" in the Condensed Consolidated Statements of Net Income.
(4)
The gain on sale of certain assets is due to the sale of our world languages product portfolio which was included in our Academic & Professional Learning segment, and resulted in a pretax gain of approximately $3.7 million October 31, 2021 .
(5)
In the three months ended July 31, 2021 , the UK enacted legislation that increased its statutory rate from 19% to 25% effective April 1, 2023 . This resulted in a $20.7 million UK net deferred tax liabilities during the three months ended July 31, 2021 . These adjustments impacted deferred taxes.
(6)
For the three and six months ended October 31, 2022 and 2021, substantially all of the tax impact was from deferred taxes.
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
RECONCILIATION OF US GAAP NET INCOME TO NON-GAAP EBITDA AND ADJUSTED EBITDA
(unaudited)
Three Months Ended Six Months Ended
October 31 ,October 31 ,
2022
2021
2022
2021
Net Income
$
38,193
$
55,967
$
20,358
$
69,797
Interest expense
9,332
4,997
15,664
9,636
Provision for income taxes
10,137
14,648
4,585
44,820
Depreciation and amortization
52,421
54,555
110,700
109,121
Non-GAAP EBITDA
110,083
130,167
151,307
233,374
Restructuring and related charges (credits)
13,956
(1,333)
36,397
(1,609)
Foreign exchange transaction (gains) losses
(478)
1,370
138
1,000
Loss (gain) on sale of certain assets
-
56
-
(3,694)
Other expense (income), net
255
(3,150)
(271)
(6,703)
Non-GAAP Adjusted EBITDA
$
123,816
$
127,110
$
187,571
$
222,368
Adjusted EBITDA Margin
24.0%
23.8%
18.7%
21.8%
Notes:
(1) See Explanation of Usage of Non-GAAP Performance Measures included in this supplementary information for additional details on the reasons why management believes presentation of each non-GAAP performance measure provides useful information to investors. The supplementary information included in this press release for the three and six months ended October 31, 2022 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission .
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
SEGMENT RESULTS
(in thousands)
(unaudited)
% Change
Three Months Ended October 31 , Favorable (Unfavorable)
2022
2021
Reported Constant Currency
Research (2) :
Revenue, net
Research Publishing (3)
$
232,641
$
238,853
-3%
2%
Research Solutions (3)
38,718
36,301
7%
11%
Total Revenue, net
$
271,359
$
275,154
-1%
3%
Contribution to Profit
$
73,279
$
77,031
-5%
-8%
Adjustments:
Restructuring charges
1,179
22
#
#
Non-GAAP Adjusted Contribution to Profit
$
74,458
$
77,053
-3%
-7%
Depreciation and amortization
23,384
23,464
0%
-4%
Non-GAAP Adjusted EBITDA
$
97,842
$
100,517
-3%
-4%
Adjusted EBITDA margin
36.1%
36.5%
Academic & Professional Learning:
Revenue, net
Education Publishing
$
86,200
$
98,581
-13%
-10%
Professional Learning
66,441
77,948
-15%
-11%
Total Revenue, net
$
152,641
$
176,529
-14%
-10%
Contribution to Profit
$
30,411
$
41,071
-26%
-24%
Adjustments:
Restructuring charges (credits)
3,439
(465)
#
#
Non-GAAP Adjusted Contribution to Profit
$
33,850
$
40,606
-17%
-15%
Depreciation and amortization
16,152
18,148
11%
7%
Non-GAAP Adjusted EBITDA
$
50,002
$
58,754
-15%
-12%
Adjusted EBITDA margin
32.8%
33.3%
Education Services:
Revenue, net
University Services (4)
$
57,759
$
58,630
-1%
-1%
Talent Development Services (4)
33,077
22,690
46%
61%
Total Revenue, net
$
90,836
$
81,320
12%
17%
Contribution to Profit
$
6,082
$
721
# #
Adjustments:
Restructuring charges
506
6
#
#
Non-GAAP Adjusted Contribution to Profit
$
6,588
$
727
# #
Depreciation and amortization
8,975
8,813
-2%
-3%
Non-GAAP Adjusted EBITDA
$
15,563
$
9,540
63%
69%
Adjusted EBITDA margin
17.1%
11.7%
Corporate Expenses:
$
(52,333)
$
(44,935)
-16%
-22%
Adjustments:
Restructuring charges (credits)
8,832
(896)
#
#
Non-GAAP Adjusted Contribution to Profit
$
(43,501)
$
(45,831)
5%
0%
Depreciation and amortization
3,910
4,130
5%
2%
Non-GAAP Adjusted EBITDA
$
(39,591)
$
(41,701)
5%
0%
Consolidated Results:
Revenue, net
$
514,836
$
533,003
-3%
1%
Operating Income
$
57,439
$
73,888
-22%
-27%
Adjustments:
Restructuring charges (credits)
13,956
(1,333)
#
#
Non-GAAP Adjusted Operating Income
$
71,395
$
72,555
-2%
-6%
Depreciation and amortization
52,421
54,555
4%
1%
Non-GAAP Adjusted EBITDA
$
123,816
$
127,110
-3%
-4%
Adjusted EBITDA margin
24.0%
23.8%
Notes:
(1) The supplementary information included in this press release for the three and six months ended October 31, 2022 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission .
(2) The Research segment was previously referred to as Research Publishing & Platforms .
(3) As previously announced in May 2022 , our revenue by product type previously referred to as Research Platforms was changed to Research Solutions. Research Solutions includes infrastructure and publishing services that help societies and corporations thrive in a complex knowledge ecosystem. In addition to Platforms (Atypon ), certain product offerings such as corporate sales which included the recent acquisitions of Madgex Holdings Limited (Madgex ), and Bio-Rad Laboratories Inc.’s Informatics products (Informatics) that were previously included in Research Publishing moved to Research Solutions to align with our strategic focus. Research Solutions also includes product offerings related to certain recent acquisitions such as J&J, and EJP. Prior period results have been revised to the new presentation. There were no changes to the total Research segment or our consolidated financial results. The revenue was $24.0 million October 31, 2021 , $44.1 million October 2021 , $93.3 million April 30, 2022 , and $80.3 million April 30, 2021 .
(4) In May 2022 , we moved the WileyNXT product offering from Talent Development Services to University Services and the prior period results have been included in University Services. The revenue was $0.5 million $1.1 million October 31, 2021 , respectively. There were no changes to the total Education Services segment or our total consolidated financial results.
(5) 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 Education Services 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 July 31, 2022 .
# Variance greater than 100%
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
SEGMENT RESULTS
(in thousands)
(unaudited)
% Change
Six Months Ended October 31 , Favorable (Unfavorable)
2022
2021
Reported Constant Currency
Research (2) :
Revenue, net
Research Publishing (3)
$
472,164
$
482,137
-2%
2%
Research Solutions (3)
74,108
67,773
9%
14%
Total Revenue, net
$
546,272
$
549,910
-1%
3%
Contribution to Profit
$
142,302
$
155,839
-9%
-11%
Adjustments:
Restructuring charges
1,260
238
#
#
Non-GAAP Adjusted Contribution to Profit
$
143,562
$
156,077
-8%
-10%
Depreciation and amortization
47,185
47,226
0%
-3%
Non-GAAP Adjusted EBITDA
$
190,747
$
203,303
-6%
-7%
Adjusted EBITDA margin
34.9%
37.0%
Academic & Professional Learning:
Revenue, net
Education Publishing
$
149,256
$
164,961
-10%
-6%
Professional Learning
136,344
150,832
-10%
-6%
Total Revenue, net
$
285,600
$
315,793
-10%
-6%
Contribution to Profit
$
25,996
$
49,223
-47%
-45%
Adjustments:
Restructuring charges (credits)
9,229
(294)
#
#
Non-GAAP Adjusted Contribution to Profit
$
35,225
$
48,929
-28%
-26%
Depreciation and amortization
32,684
36,512
10%
7%
Non-GAAP Adjusted EBITDA
$
67,909
$
85,441
-21%
-18%
Adjusted EBITDA margin
23.8%
27.1%
Education Services:
Revenue, net
University Services (4)
$
105,570
$
113,598
-7%
-6%
Talent Development Services (4)
64,963
42,090
54%
68%
Total Revenue, net
$
170,533
$
155,688
10%
14%
Contribution to Profit
$
(11,087)
$
(1,106)
# #
Adjustments:
Restructuring charges (credits)
1,339
(28)
#
#
Accelerated amortization of an intangible asset (5)
4,594
-
#
#
Non-GAAP Adjusted Contribution to Profit
$
(5,154)
$
(1,134)
# #
Depreciation and amortization
18,171
17,116
-6%
-7%
Non-GAAP Adjusted EBITDA
$
13,017
$
15,982
-19%
-14%
Adjusted EBITDA margin
7.6%
10.3%
Corporate Expenses:
$
(116,737)
$
(89,100)
-31%
-36%
Adjustments:
Restructuring charges (credits)
24,569
(1,525)
#
#
Non-GAAP Adjusted Contribution to Profit
$
(92,168)
$
(90,625)
-2%
-7%
Depreciation and amortization
8,066
8,267
2%
0%
Non-GAAP Adjusted EBITDA
$
(84,102)
$
(82,358)
-2%
-7%
Consolidated Results:
Revenue, net
$
1,002,405
$
1,021,391
-2%
2%
Operating Income
$
40,474
$
114,856
-65%
-70%
Adjustments:
Restructuring charges (credits)
36,397
(1,609)
#
#
Accelerated amortization of an intangible asset (5)
4,594
-
#
#
Non-GAAP Adjusted Operating Income
$
81,465
$
113,247
-28%
-33%
Depreciation and amortization
106,106
109,121
3%
0%
Non-GAAP Adjusted EBITDA
$
187,571
$
222,368
-16%
-17%
Adjusted EBITDA margin
18.7%
21.8%
# Variance greater than 100%
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands)
(unaudited)
October 31 ,April 30 ,
2022
2022
Assets:
Current assets
Cash and cash equivalents
$
118,423
$
100,397
Accounts receivable, net
260,026
331,960
Inventories, net
34,447
36,585
Prepaid expenses and other current assets
70,098
81,924
Total current assets
482,994
550,866
Technology, property and equipment, net
249,922
271,572
Intangible assets, net
860,576
931,429
Goodwill
1,268,312
1,302,142
Operating lease right-of-use assets
93,334
111,719
Other non-current assets
173,233
193,967
Total assets
$
3,128,371
$
3,361,695
Liabilities and shareholders' equity:
Current liabilities
Accounts payable
$
46,250
$
77,438
Accrued royalties
101,598
101,596
Short-term portion of long-term debt
25,000
18,750
Contract liabilities
263,821
538,126
Accrued employment costs
84,333
117,121
Short-term portion of operating lease liabilities
19,043
20,576
Other accrued liabilities
94,532
95,812
Total current liabilities
634,577
969,419
Long-term debt
978,683
768,277
Accrued pension liability
75,668
78,622
Deferred income tax liabilities
157,048
180,065
Operating lease liabilities
120,559
132,541
Other long-term liabilities
84,029
90,502
Total liabilities
2,050,564
2,219,426
Shareholders' equity
1,077,807
1,142,269
Total liabilities and shareholders' equity
$
3,128,371
$
3,361,695
Notes:
(1) The supplementary information included in this press release for October 31, 2022 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission .
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended
October 31 ,
2022
2021
Operating activities:
Net income
$
20,358
$
69,797
Amortization of intangible assets
45,421
42,627
Amortization of product development assets
16,452
18,088
Depreciation and amortization of technology, property, and equipment
48,827
48,406
Other noncash charges
56,601
56,311
Net change in operating assets and liabilities
(263,855)
(310,851)
Net cash used in operating activities
(76,196)
(75,622)
Investing activities:
Additions to technology, property, and equipment
(38,530)
(37,676)
Product development spending
(11,445)
(13,001)
Businesses acquired in purchase transactions, net of cash acquired
(96)
(13,615)
Proceeds related to the sale of certain assets
40
3,375
Acquisitions of publication rights and other
1,738
(1,654)
Net cash used in investing activities
(48,293)
(62,571)
Financing activities:
Net debt borrowings
228,386
227,476
Cash dividends
(38,749)
(38,619)
Purchases of treasury shares
(17,500)
(17,367)
Other
(20,534)
(24,444)
Net cash provided by financing activities
151,603
147,046
Effects of exchange rate changes on cash, cash equivalents and restricted cash
(8,784)
(1,742)
Change in cash, cash equivalents and restricted cash for period
18,330
7,111
Cash, cash equivalents and restricted cash - beginning
100,727
94,359
Cash, cash equivalents and restricted cash - ending
$
119,057
$
101,470
CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT DEVELOPMENT SPENDING (2)
Six Months Ended
October 31 ,
2022
2021
Net cash used in operating activities
$
(76,196)
$
(75,622)
Less: Additions to technology, property, and equipment
(38,530)
(37,676)
Less: Product development spending
(11,445)
(13,001)
Free cash flow less product development spending
$
(126,171)
$
(126,299)
Notes:
(1) The supplementary information included in this press release for the six months ended October 31, 2022 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission .
(2) See Explanation of Usage of Non-GAAP Performance Measures included in this supplemental information.
JOHN WILEY & SONS, INC.
EXPLANATION OF USAGE OF NON-GAAP PERFORMANCE MEASURES
In this earnings release and supplemental information, management may present the following non-GAAP performance measures:
· Earnings Per Share (Adjusted EPS);
· Free Cash Flow less Product Development Spending;
· 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.
Management uses these non-GAAP performance measures as supplemental indicators of our operating performance and financial position as well as for internal reporting and forecasting purposes, when publicly providing our outlook, to evaluate our performance and calculate incentive compensation.
We present these non-GAAP performance measures in addition to US GAAP financial results because we believe that these non-GAAP performance measures provide useful information to certain investors and financial analysts for operational trends and comparisons over time. The use of these non-GAAP performance measures may also provide a consistent basis to evaluate operating profitability and performance trends by excluding items that we do not consider to be controllable activities for this purpose.
The performance metric used by our chief operating decision maker to evaluate performance of our reportable segments is Adjusted Contribution to Profit. We present both Adjusted Contribution to Profit and Adjusted EBITDA for each of our reportable segments as we believe Adjusted EBITDA provides additional useful information to certain investors and financial analysts for operational trends and comparisons over time. It removes the impact of depreciation and amortization expense, as well as presents a consistent basis to evaluate operating profitability and compare our financial performance to that of our peer companies and competitors.
For example:
Adjusted EPS, Adjusted Contribution to Profit, Adjusted Operating Income, Adjusted Income Before Taxes, Adjusted Income Tax Provision, Adjusted Effective Tax Rate, Adjusted EBITDA and organic revenue (excluding acquisitions) provide a more comparable basis to analyze operating results and earnings, and are measures commonly used by shareholders to measure our performance.
Free Cash Flow less Product Development Spending helps assess our ability, over the long term, to create value for our shareholders as it represents cash available to repay debt, pay common stock dividends, and fund share repurchases and acquisitions.
Results on a constant currency basis remove distortion from the effects of foreign currency movements to provide better comparability of our business trends from period to period. We measure our performance excluding the impact of foreign currency (or at constant currency), which means that we apply the same foreign currency exchange rates for the current and equivalent prior period.
In addition, we have historically provided these or similar non-GAAP performance measures and understand that some investors and financial analysts find this information helpful in analyzing our operating margins and net income, and in comparing our financial performance to that of our peer companies and competitors. Based on interactions with investors, we also believe that our non-GAAP performance measures are regarded as useful to our investors as supplemental to our US GAAP financial results, and that there is no confusion regarding the adjustments or our operating performance to our investors due to the comprehensive nature of our disclosures.
We have not provided our 2023 outlook for the most directly comparable US GAAP financial measures, as they are not available
Non-GAAP performance measures do not have standardized meanings prescribed by US GAAP and therefore may not be comparable to the calculation of similar measures used by other companies and should not be viewed as alternatives to measures of financial results under US GAAP. The adjusted metrics have limitations as analytical tools, and should not be considered in isolation from, or as a substitute for, US GAAP information. It does not purport to represent any similarly titled US GAAP information and is not an indicator of our performance under US GAAP. Non-GAAP financial metrics that we present may not be comparable with similarly titled measures used by others. Investors are cautioned against placing undue reliance on these non-GAAP measures.
View source version on businesswire.com : https://www.businesswire.com/news/home/20221207005328/en/
Brian Campbell
brian.campbell@wiley.com
Source: John Wiley and Sons
WLYB Rankings
#3692 Ranked by Stock Gains
WLYB Stock Data
Industry
Newspaper Publishers
Sector
Information
Country
US
City
Hoboken
About WLYB
founded in 1807, john wiley & sons, inc. has been a valued source of information and understanding for more than 200 years, helping people around the world meet their needs and fulfill their aspirations. wiley and its acquired companies have published the works of more than 400 nobel laureates in all categories: literature, economics, physiology or medicine, physics, chemistry, and peace. our core businesses publish scientific, technical, medical, and scholarly journals, encyclopedias, books, and online products and services; professional/trade books, subscription products, training materials, and online applications and web sites; and educational materials for undergraduate and graduate students and lifelong learners. wiley's global headquarters are located in hoboken, new jersey, with operations in the u.s., europe, asia, canada, and australia. the company's web site can be accessed at http://www.wiley.com. the company is listed on the new york stock exchange under the symbols jwa
