Wiley (NYSE: WLY and WLYB), one of the world’s largest
publishers and a global leader in research and learning, today
reported results for the second quarter ended October 31, 2023.
- GAAP Results: Revenue of $493 million (-4%), Operating
income of $46 million (-19%), and EPS loss of -$0.35 (-$1.03). GAAP
earnings impacted by impairment charges of $52 million related to
our held for sale or sold assets and restructuring charges
totalling $25 million related to our value creation plan.
- Adjusted Results at Constant Currency (excluding Held for
Sale or Sold segment results): Adjusted Revenue of $407 million
(-2%), Adjusted EBITDA of $92 million (-13%), and Adjusted EPS of
$0.73 (-25%).
VALUE CREATION PLAN PROGRESS
- Intensify focus on core of Research & Learning:
Reorganized from three business units to one market-facing Research
& Learning team under one leader to drive scale, synergies, and
capital efficiency; consolidated global operations under one leader
to improve operating efficiency.
- Divest non-core assets: Recently announced sale of
University Services business for total consideration of up to $150
million and a 10% share in acquiring company.
- Rightsize and optimize: Recently executed on
restructuring actions that will yield $65 million of run rate
savings, with approximately $30 million of that to be realized this
fiscal year and already reflected in the Company’s current
guidance.
MANAGEMENT COMMENTARY
“Our second quarter and year-to-date overall performance was in
line with our expectations as we execute on our value creation plan
to make Wiley a stronger, leaner, and more profitable company
focused on driving consistent growth in our core,” said Matthew
Kissner, Interim President and CEO. “We expect year-over-year
revenue improvement in the second half and expect to exit the year
with a stronger margin profile. Fiscal 2025 and 2026 is where we
will realize the full benefits of our current actions.”
FINANCIAL PERFORMANCE
See accompanying financial tables for the second quarter
and year-to-date 2024. For GAAP purposes, Wiley’s reporting
structure consists of three segments: (1) Research, (2) Learning,
and (3) Held for Sale or Sold.
Research
- Revenue of $258 million was down 5%, or 7% at constant
currency, mainly due to the Hindawi publishing pause (-$18 million)
and a soft market for recruiting. This offset continued growth in
our core open access publishing program. Excluding Hindawi, revenue
was flat.
- Adjusted EBITDA of $82 million was down 17% at constant
currency due to revenue performance, namely Hindawi. Adjusted
EBITDA margin for the quarter was 31.6%. Excluding Hindawi,
Adjusted EBITDA was down 4% primarily due to higher employee
costs.
Learning
- Revenue of $149 million was up 7% as reported or 6% at
constant currency due to growth in both Academic (driven by
zyBooks digital courseware and inclusive access) and
Professional (driven by improved channel environment and
fewer returns).
- Adjusted EBITDA of $54 million was up 14% as reported or
13% at constant currency mainly due to revenue growth and
restructuring savings. Adjusted EBITDA margin for the quarter was
36.2%.
Businesses Held for Sale or Sold (HFS)
- Revenue of $86 million was down 17% on a reported basis or 18%
at constant currency mainly due to declines in Wiley Edge. Adjusted
EBITDA of $19 million was up from $18 million in the prior year
with restructuring savings offsetting revenue performance.
- Wiley announced the sale of University Services during the
quarter with an anticipated close in early calendar 2024. For
details on the transaction, please see Wiley's 8K filing.
Corporate Expenses (Adjusted EBITDA)
- Adjusted Corporate Expenses (Adjusted EBITDA) of $43
million was up 8% over prior year on a constant currency basis,
driven by a lower incentive compensation accrual in the prior year
and higher executive severance costs.
EPS
- GAAP EPS loss of $0.35 compared to +$0.68 in the prior
year period due to impairment of held-for-sale assets totalling $52
million and restructuring charges totalling $25 million.
- Adjusted EPS excluding businesses held for sale or sold
of $0.73 was down 25% primarily due to lower Adjusted Operating
Income from lower revenue, and higher interest expense.
Balance Sheet, Cash Flow, and Capital Allocation
- Net Debt-to-EBITDA Ratio (Trailing Twelve Months) at
quarter end was 2.0x compared to 2.1x at prior year end.
- Net Cash Used in Operating Activities (Year-to-Date) was
a use of $83 million compared to a use of $76 million in the prior
year period due to lower cash earnings and higher restructuring
payments partially offset by reduced incentive compensation. Note,
Wiley’s regular use of cash in the first half of the fiscal year is
driven by the timing of cash collections for annual journal
subscriptions, which are concentrated in Q3 and Q4.
- Free Cash Flow less Product Development Spending
(Year-to-Date) was a use of $132 million compared to a use of $126
million due to lower cash earnings and higher restructuring
payments. Capex of $48 million was moderately below prior year.
Note, Wiley does not provide an adjusted free cash flow metric;
results include held for sale or sold businesses.
- Returns to Shareholders (Year-to-Date): In June, the
Company raised its annual dividend for the 30th consecutive year.
Year-to-date, Wiley allocated $39 million toward dividends in line
with prior year, and $23 million toward repurchasing 669,000 shares
at an average cost per share of $33.64. This compares to 382,000
shares repurchased ($18 million) in the prior year period. The
Company has $140 million remaining in its current share repurchase
authorization program. There were no acquisitions of note in the
quarter.
FISCAL YEAR 2024 TRANSITION YEAR OUTLOOK
Fiscal Year 2024 is a transition year for Wiley as it divests
non-core assets and streamlines the organization. The Company is
reaffirming its overall Fiscal 2024 outlook for Adjusted Revenue,
Adjusted EBITDA, and Adjusted EPS.
Metric ($millions, except EPS)
Fiscal 2023 All
Company
Fiscal 2023
Ex-Divestitures
Fiscal 2024 Outlook
Ex-Divestitures
Adjusted Revenue*
$2,020
$1,627
$1,580 to $1,630
Research
$1,080
Flat to low-single digit decline
(+2% excluding Hindawi)
Learning
$547
Flat to low-single digit
increase
Adjusted EBITDA*
$422
$379
$305 to $330
Adjusted EPS*
$3.84
$3.48
$2.05 to $2.40
*“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 – reaffirming overall with Research
moderately below expectations and Learning ahead of expectations.
The Company now expects Research growth excluding Hindawi of 2%,
down from 3% originally. Note, Adjusted Revenue excludes businesses
held for sale or sold.
- Adjusted EBITDA – reaffirming with projected revenue
performance, incentive compensation resetting, and wage inflation
offsetting expected restructuring savings.
- Adjusted EPS – reaffirming due to projected adjusted
operating income performance and higher interest expense.
The Company is not providing a Free Cash Flow outlook due to the
uncertainty around the timing of divestitures and the size and
scope of restructuring payments.
EARNINGS CONFERENCE CALL
Scheduled for today, December 6 at 10:00 am (ET). Access webcast
at Investor Relations at investors.wiley.com, or directly at
https://events.q4inc.com/attendee/108195967 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 one of the world’s largest publishers and a global
leader in research and learning. 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) INCOME (Dollars in thousands, except per share
information) (unaudited) Three Months
Ended Six Months Ended October 31, October
31,
2023
2022
2023
2022
Revenue, net
$
492,808
$
514,836
$
943,821
$
1,002,405
Costs and expenses: Cost of sales
155,614
170,302
312,715
344,333
Operating and administrative expenses
252,282
253,029
508,083
535,780
Impairment of goodwill (3)
-
-
26,695
-
Restructuring and related charges
25,102
13,956
37,225
36,397
Amortization of intangible assets
13,565
20,110
29,213
45,421
Total costs and expenses
446,563
457,397
913,931
961,931
Operating income
46,245
57,439
29,890
40,474
As a % of revenue
9.4
%
11.2
%
3.2
%
4.0
%
Interest expense
(12,937
)
(9,332
)
(24,271
)
(15,664
)
Foreign exchange transaction (losses) gains
(2,357
)
478
(3,977
)
(138
)
Impairment charge related to assets held-for-sale and loss on sale
of a business (3)
(51,414
)
-
(127,343
)
-
Other (expense) income, net
(1,567
)
(255
)
(3,052
)
271
(Loss) income before taxes
(22,030
)
48,330
(128,753
)
24,943
(Benefit) provision for income taxes
(2,585
)
10,137
(17,044
)
4,585
Effective tax rate
11.7
%
21.0
%
13.2
%
18.4
%
Net (loss) income
$
(19,445
)
$
38,193
$
(111,709
)
$
20,358
As a % of revenue
-3.9
%
7.4
%
-11.8
%
2.0
%
(Loss) earnings per share Basic
$
(0.35
)
$
0.69
$
(2.02
)
$
0.37
Diluted (4)
$
(0.35
)
$
0.68
$
(2.02
)
$
0.36
Weighted average number of common shares outstanding
Basic
55,102
55,622
55,186
55,679
Diluted (4)
55,102
56,195
55,186
56,326
Notes: (1) The supplementary information included in
this press release for the three and six months ended October 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
in the first quarter of fiscal year 2024, 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 in the six months ended
October 31, 2023. After the realignment, we concluded that the fair
value of the CrossKnowledge 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 $15.3 million in the six
months ended October 31, 2023.In addition, these three businesses
met the held-for-sale criteria. We measured each business at the
lower of carrying value or fair value less cost to sell. We
recorded a held-for-sale pretax impairment charge of $51.9 million
and $125.8 million in the three and six months ended October 31,
2023, respectively, related to University Services and
CrossKnowledge. The total impairment charge for University Services
in the six months ended October 31, 2023 was $75.4 million, which
includes $34.8 million in the three months ended October 31, 2023.
The total impairment charge for CrossKnowledge in the six months
ended October 31, 2023 was $50.4 million, which includes $17.1
million in the three months ended October 31, 2023.In the three
months ended October 31, 2023, there was a reduction in the pretax
loss on the sale of our Tuition Manager business previously in our
Held for Sale or Sold segment due to cash received after the
closing of approximately $0.5 million, which resulted in a total
net pretax loss of $1.5 million (net of tax loss of $1.1 million).
(4) In calculating diluted net loss per common share for the
three and six months ended October 31, 2023, 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 Six Months Ended October 31, October
31,
2023
2022
2023
2022
US GAAP (Loss) Earnings Per Share - Diluted
$
(0.35
)
$
0.68
$
(2.02
)
$
0.36
Adjustments: Impairment of goodwill
-
-
0.43
-
Restructuring and related charges
0.34
0.19
0.50
0.49
Foreign exchange losses on intercompany transactions, including the
write off of certain cumulative translation adjustments (3)
0.04
0.03
0.04
0.04
Amortization of acquired intangible assets (4)
0.19
0.30
0.42
0.67
Impairment charge related to assets held-for-sale and loss on sale
of a business (5)
0.77
-
1.94
-
Held for Sale or Sold segment Adjusted Net Income (5)
(0.27
)
(0.18
)
(0.34
)
(0.08
)
EPS impact of using weighted-average dilutive shares for adjusted
EPS calculation (6)
0.01
-
0.02
-
Non-GAAP Adjusted Earnings Per Share - Diluted
$
0.73
$
1.02
$
0.99
$
1.48
Reconciliation of US GAAP (Loss) Income Before Taxes to
Non-GAAP Adjusted Income Before Taxes Three Months Ended
Six Months Ended (amounts in thousands)
October 31,
October 31,
2023
2022
2023
2022
US GAAP (Loss) Income Before Taxes
$
(22,030
)
$
48,330
$
(128,753
)
$
24,943
Pretax Impact of Adjustments: Impairment of goodwill
-
-
26,695
-
Restructuring and related charges
25,102
13,956
37,225
36,397
Foreign exchange losses on intercompany transactions, including the
write off of certain cumulative translation adjustments (3)
3,223
2,654
3,217
3,320
Amortization of acquired intangible assets (4)
14,303
21,185
30,971
47,570
Impairment charge related to assets held-for-sale and loss on sale
of a business (5)
51,414
-
127,343
-
Held for Sale or Sold segment Adjusted Income Before Taxes (5)
(19,099
)
(13,230
)
(24,133
)
(5,636
)
Non-GAAP Adjusted Income Before Taxes
$
52,913
$
72,895
$
72,565
$
106,594
Reconciliation of US GAAP Income Tax (Benefit) 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 (Benefit) Provision
$
(2,585
)
$
10,137
$
(17,044
)
$
4,585
Income Tax Impact of Adjustments (7) Impairment of goodwill
-
-
2,697
-
Restructuring and related charges
6,315
3,422
9,251
8,939
Foreign exchange losses on intercompany transactions, including the
write off of certain cumulative translation adjustments (3)
888
694
854
869
Amortization of acquired intangible assets (4)
3,645
4,388
7,517
10,220
Impairment charge related to assets held-for-sale and loss on sale
of a business (5)
8,542
-
19,203
-
Held for Sale or Sold segment Adjusted Tax Provision (5)
(4,270
)
(3,015
)
(5,266
)
(1,446
)
Non-GAAP Adjusted Income Tax Provision
$
12,535
$
15,626
$
17,212
$
23,167
US GAAP Effective Tax Rate
11.7
%
21.0
%
13.2
%
18.4
%
Non-GAAP Adjusted Effective Tax Rate
23.7
%
21.4
%
23.7
%
21.7
%
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, 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 and six months ended October 31, 2023, we
wrote off an additional $0.1 million and $1.0 million,
respectively, of cumulative translation adjustments in earnings.
This amount is reflected in Foreign exchange transaction (losses)
gains on our Condensed Consolidated Statements of Net (Loss)
Income. (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) 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 (Loss) Income. (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
held-for-sale pretax impairment charge of $34.8 million and $75.4
million, in the three and six months ended October 31, 2023,
respectively, related to University Services. We recorded a
held-for-sale pretax impairment charge of $17.1 million and $50.4
million, in the three and six months ended October 31, 2023,
respectively, related to CrossKnowledge.In the three months ended
October 31, 2023, there was a reduction in the pretax loss on the
sale of our Tuition Manager business previously in our Held for
Sale or Sold segment due to cash received after the closing of
approximately $0.5 million, which resulted in a total net pretax
loss of $1.5 million (net of tax loss of $1.1 million).In addition,
our Adjusted EPS excludes the Adjusted Net Income of our Held for
Sale or Sold segment. (6) Represents the impact of using
diluted weighted-average number of common shares outstanding (55.6
million and 55.7 million shares for the three and six months ended
October 31, 2023, 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 and six months ended October 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) INCOME
TO NON-GAAP EBITDA AND ADJUSTED EBITDA (unaudited)
Three Months Ended Six Months Ended October
31, October 31,
2023
2022
2023
2022
Net (Loss) Income
$
(19,445
)
$
38,193
$
(111,709
)
$
20,358
Interest expense
12,937
9,332
24,271
15,664
(Benefit) provision for income taxes
(2,585
)
10,137
(17,044
)
4,585
Depreciation and amortization
40,174
52,421
83,902
110,700
Non-GAAP EBITDA
31,081
110,083
(20,580
)
151,307
Impairment of goodwill
-
-
26,695
-
Restructuring and related charges
25,102
13,956
37,225
36,397
Foreign exchange losses (gains), including the write off of certain
cumulative translation adjustments
2,357
(478
)
3,977
138
Impairment charge related to assets held-for-sale and loss on sale
of a business
51,414
-
127,343
-
Other expense (income), net
1,567
255
3,052
(271
)
Held for Sale or Sold segment Adjusted EBITDA (2)
(19,100
)
(18,089
)
(25,621
)
(15,654
)
Non-GAAP Adjusted EBITDA
$
92,421
$
105,727
$
152,091
$
171,917
Adjusted EBITDA Margin
22.7
%
25.7
%
19.7
%
21.3
%
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,
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 October 31, Favorable (Unfavorable)
2023
2022 (3)
Reported ConstantCurrency Research:
Revenue, net Research Publishing
$
219,743
$
232,641
-6%
-7%
Research Solutions
37,927
38,718
-2%
-3%
Total Revenue, net
$
257,670
$
271,359
-5%
-7%
Contribution to Profit
$
54,101
$
73,279
-26%
-26%
Adjustments: Restructuring charges
4,755
1,179
# #
Non-GAAP Adjusted Contribution to Profit
$
58,856
$
74,458
-21%
-21%
Depreciation and amortization
22,668
23,384
3%
4%
Non-GAAP Adjusted EBITDA
$
81,524
$
97,842
-17%
-17%
Adjusted EBITDA margin
31.6
%
36.1
%
Learning: Revenue, net Academic
$
89,125
$
82,256
8%
8%
Professional
59,815
57,393
4%
3%
Total Revenue, net
$
148,940
$
139,649
7%
6%
Contribution to Profit
$
34,053
$
29,912
14%
14%
Adjustments: Restructuring charges
5,859
3,664
-60%
-60%
Non-GAAP Adjusted Contribution to Profit
$
39,912
$
33,576
19%
19%
Depreciation and amortization
13,974
13,900
-1%
0%
Non-GAAP Adjusted EBITDA
$
53,886
$
47,476
14%
13%
Adjusted EBITDA margin
36.2
%
34.0
%
Held for Sale or Sold: Total Revenue, net
$
86,198
$
103,828
-17%
-18%
Contribution to Profit
$
17,078
$
6,581
# # Adjustments: Restructuring charges
2,022
281
# #
Non-GAAP Adjusted Contribution to Profit
$
19,100
$
6,862
#
# Depreciation and amortization
-
11,227
# #
Non-GAAP Adjusted EBITDA
$
19,100
$
18,089
6%
4%
Adjusted EBITDA margin
22.2
%
17.4
%
Corporate Expenses:
$
(58,987
)
$
(52,333
)
-13%
-12%
Adjustments: Restructuring charges
12,466
8,832
-41%
-41%
Non-GAAP Adjusted Contribution to Profit
$
(46,521
)
$
(43,501
)
-7%
-6%
Depreciation and amortization
3,532
3,910
10%
10%
Non-GAAP Adjusted EBITDA
$
(42,989
)
$
(39,591
)
-9%
-8%
Consolidated Results: Revenue, net
$
492,808
$
514,836
-4%
-6%
Less: Held for Sale or Sold Segment (5)
(86,198
)
(103,828
)
-17%
-18%
Adjusted Revenue, net
$
406,610
$
411,008
-1%
-2%
Operating Income
$
46,245
$
57,439
-19%
-19%
Adjustments: Restructuring charges
25,102
13,956
-80%
-80%
Held for Sale or Sold Segment Adjusted Contribution to Profit (5)
(19,100
)
(6,862
)
# #
Non-GAAP Adjusted Operating Income
$
52,247
$
64,533
-19%
-18%
Depreciation and amortization
40,174
52,421
23%
24%
Less: Held for Sale or Sold Segment depreciation and amortization
(5)
-
(11,227
)
# #
Non-GAAP Adjusted EBITDA
$
92,421
$
105,727
-13%
-13%
Adjusted EBITDA margin
22.7
%
25.7
%
Notes: (1) The supplementary information included in
this press release for the three and six months ended October 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
in the three months ended July 31, 2022. (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) (2) (3) SEGMENT
RESULTS (in thousands) (unaudited) %
Change Six Months Ended October 31, Favorable
(Unfavorable)
2023
2022 (3)
Reported ConstantCurrency Research:
Revenue, net Research Publishing
$
442,743
$
472,164
-6%
-7%
Research Solutions
72,731
74,108
-2%
-3%
Total Revenue, net
$
515,474
$
546,272
-6%
-7%
Contribution to Profit
$
105,681
$
142,302
-26%
-26%
Adjustments: Restructuring charges
6,702
1,260
# #
Non-GAAP Adjusted Contribution to Profit
$
112,383
$
143,562
-22%
-22%
Depreciation and amortization
45,880
47,185
3%
4%
Non-GAAP Adjusted EBITDA
$
158,263
$
190,747
-17%
-18%
Adjusted EBITDA margin
30.7
%
34.9
%
Learning: Revenue, net Academic
$
137,417
$
141,004
-3%
-3%
Professional
120,843
118,292
2%
2%
Total Revenue, net
$
258,260
$
259,296
0%
-1%
Contribution to Profit
$
41,461
$
30,522
36%
36%
Adjustments: Restructuring charges
6,077
6,795
11%
11%
Non-GAAP Adjusted Contribution to Profit
$
47,538
$
37,317
27%
28%
Depreciation and amortization
27,526
27,955
2%
2%
Non-GAAP Adjusted EBITDA
$
75,064
$
65,272
15%
15%
Adjusted EBITDA margin
29.1
%
25.2
%
Held for Sale or Sold: Total Revenue, net
$
170,087
$
196,837
-14%
-15%
Contribution to Profit
$
(9,156
)
$
(15,613
)
41%
39%
Adjustments: Restructuring charges
4,645
3,773
-23%
-23%
Impairment of goodwill
26,695
-
# # Accelerated amortization of an intangible asset (4)
-
4,594
# #
Non-GAAP Adjusted Contribution to Profit
$
22,184
$
(7,246
)
# # Depreciation and amortization
3,437
22,900
85%
85%
Non-GAAP Adjusted EBITDA
$
25,621
$
15,654
64%
62%
Adjusted EBITDA margin
15.1
%
8.0
%
Corporate Expenses:
$
(108,096
)
$
(116,737
)
7%
8%
Adjustments: Restructuring charges
19,801
24,569
19%
19%
Non-GAAP Adjusted Contribution to Profit
$
(88,295
)
$
(92,168
)
4%
5%
Depreciation and amortization
7,059
8,066
12%
13%
Non-GAAP Adjusted EBITDA
$
(81,236
)
$
(84,102
)
3%
4%
Consolidated Results: Revenue, net
$
943,821
$
1,002,405
-6%
-7%
Less: Held for Sale or Sold (5)
(170,087
)
(196,837
)
14%
15%
Adjusted Revenue, net
$
773,734
$
805,568
-4%
-5%
Operating Income
$
29,890
$
40,474
-26%
-27%
Adjustments: Restructuring charges
37,225
#
36,397
-2%
-2%
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)
(22,184
)
7,246
# # Non-GAAP Adjusted Operating Income
$
71,626
$
88,711
-19%
-19%
Depreciation and amortization
83,902
106,106
21%
21%
Less: Held for Sale or Sold depreciation and amortization (5)
(3,437
)
(22,900
)
85%
85%
Non-GAAP Adjusted EBITDA
$
152,091
$
171,917
-12%
-12%
Adjusted EBITDA margin
19.7
%
21.3
%
# Variance greater than 100%
JOHN WILEY &
SONS, INC. SUPPLEMENTARY INFORMATION (1) CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in
thousands) (unaudited) October 31,
April 30,
2023
2023
Assets: Current assets Cash and cash equivalents
$
83,218
$
106,714
Accounts receivable, net
147,253
310,121
Inventories, net
30,131
30,733
Prepaid expenses and other current assets
58,583
93,711
Current assets held-for-sale (2)
106,384
-
Total current assets
425,569
541,279
Technology, property and equipment, net
222,504
247,149
Intangible assets, net
630,562
854,794
Goodwill
1,081,517
1,204,050
Operating lease right-of-use assets
79,009
91,197
Other non-current assets
136,782
170,341
Non-current assets held-for-sale (2)
203,100
-
Total assets
$
2,779,043
$
3,108,810
Liabilities and shareholders' equity: Current
liabilities Accounts payable
$
48,512
$
84,325
Accrued royalties
105,552
113,423
Short-term portion of long-term debt
5,000
5,000
Contract liabilities
235,839
504,695
Accrued employment costs
82,935
80,458
Short-term portion of operating lease liabilities
17,804
19,673
Other accrued liabilities
72,331
87,979
Current liabilities held-for-sale (2)
42,277
-
Total current liabilities
610,250
895,553
Long-term debt
937,624
743,292
Accrued pension liability
76,005
86,304
Deferred income tax liabilities
94,278
144,042
Operating lease liabilities
101,816
115,540
Other long-term liabilities
78,169
79,052
Long-term liabilities held-for-sale (2)
13,625
-
Total liabilities
1,911,767
2,063,783
Shareholders' equity
867,276
1,045,027
Total liabilities and shareholders' equity
$
2,779,043
$
3,108,810
Notes: (1) The supplementary information included in
this press release for October 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 CrossKnowledge. 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 $125.8 million in the six months
ended October 31, 2023 which is recorded as a contra asset account
within Current assets held-for-sale and Non-current assets
held-for-sale.
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1) CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (in thousands)
(unaudited) Six Months Ended October
31,
2023
2022
Operating activities: Net (loss) income
$
(111,709
)
$
20,358
Impairment of goodwill
26,695
-
Impairment charge related to assets held-for-sale and loss on sale
of a business
127,343
-
Amortization of intangible assets
29,213
45,421
Amortization of product development assets
12,937
16,452
Depreciation and amortization of technology, property, and
equipment
41,752
48,827
Other noncash charges
31,699
56,601
Net change in operating assets and liabilities
(241,416
)
(263,855
)
Net cash used in operating activities
(83,486
)
(76,196
)
Investing activities: Additions to technology,
property, and equipment
(40,321
)
(38,530
)
Product development spending
(8,168
)
(11,445
)
Businesses acquired in purchase transactions, net of cash acquired
(1,500
)
(96
)
Proceeds related to the sale of a business
1,025
40
Acquisitions of publication rights and other
(2,953
)
1,738
Net cash used in investing activities
(51,917
)
(48,293
)
Financing activities: Net debt borrowings
198,231
228,386
Cash dividends
(38,691
)
(38,749
)
Purchases of treasury shares
(22,500
)
(17,500
)
Other
(7,338
)
(20,534
)
Net cash provided by financing activities
129,702
151,603
Effects of exchange rate changes on cash, cash
equivalents and restricted cash
(1,943
)
(8,784
)
Change in cash, cash equivalents and restricted cash for
period
(7,644
)
18,330
Cash, cash equivalents and restricted cash -
beginning
107,262
100,727
Cash, cash equivalents and restricted cash - ending (2)
$
99,618
$
119,057
CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT
DEVELOPMENT SPENDING (3) Six Months Ended
October 31,
2023
2022
Net cash used in operating activities
$
(83,486
)
$
(76,196
)
Less: Additions to technology, property, and equipment
(40,321
)
(38,530
)
Less: Product development spending
(8,168
)
(11,445
)
Free cash flow less product development spending
$
(131,975
)
$
(126,171
)
Notes: (1) The supplementary information included in
this press release for the six months ended October 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 October 31, 2023 includes held-for-sale cash,
cash equivalents and restricted cash of $16.4 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.
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 Revenue, 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 2024 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.
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/20231206070496/en/
Brian Campbell Investor Relations 201.748.6874
brian.campbell@wiley.com
John Wiley and Sons (NYSE:WLY)
Gráfica de Acción Histórica
De Jun 2024 a Jul 2024
John Wiley and Sons (NYSE:WLY)
Gráfica de Acción Histórica
De Jul 2023 a Jul 2024