Exceeds FY24 earnings guidance and reports
confident FY25 outlook and GenAI momentum
Wiley (NYSE: WLY) today reported results for the fourth quarter
and fiscal year ended April 30, 2024.
HIGHLIGHTS
- FY24 Adjusted EBITDA and Adjusted EPS guidance exceeded;
Adjusted Revenue in higher end of range
- GenAI content rights project completed this quarter with large
tech company; another executed GenAI project with second large tech
company to be realized in FY25
- Advancing Value Creation Plan with 2 of 3 non-core divestitures
closed and $90 million of $130 million run-rate cost savings
actioned
- FY25 growth outlook driven by Research & Learning momentum
and accelerated cost savings
MANAGEMENT COMMENTARY
“We finished the year strong and head into Fiscal 2025 with full
confidence in our Research trajectory, GenAI momentum, and profit
and performance outlook,” said Matthew Kissner, Interim President
and CEO. “We are seeing robust demand to publish and significant
output acceleration in Research as well as continued outperformance
in Learning. On top of this, we’re seeing significant interest in
leveraging our authoritative content to train AI and machine
learning models. Finally, we’ve executed on our stated commitments
with discipline and speed, enabling us to exceed our earnings
guidance and accelerate our cost savings program, setting us up
well for continued margin expansion and strong cash generation
ahead.”
FOURTH QUARTER SUMMARY
Fiscal Year 2024 was a transition year for Wiley as the Company
divested non-core assets, restructured and realigned the
organization, and recorded multiple non-cash impairments. Results
reflect this activity.
- GAAP Results (including Held for Sale or Sold Assets):
Revenue of $468 million (-11%), Operating income of $69 million
(-17%), and EPS of $0.46 (-$0.76).
- Adjusted Results at Constant Currency (excluding Held for
Sale or Sold Assets): Revenue of $441 million (+4%), Adjusted
EBITDA of $125 million (+7%), and Adjusted EPS of $1.21 (+2%).
FULL YEAR SUMMARY
- GAAP Results: Revenue of $1,873 million (-7%), Operating
income of $52 million (-6%), and EPS loss of $3.65 (-$3.96).
- Adjusted Results at Constant Currency: Revenue of $1,617
million (-1%), Adjusted EBITDA of $369 million (-3%), and Adjusted
EPS of $2.78 (-19%).
- Cash from Operations of $208 million (-$69 million) and
Free Cash Flow of $114 million (-$59 million) mainly due to
lower cash earnings and higher restructuring payments.
For GAAP purposes, Wiley’s reporting structure consists of three
segments: (1) Research, (2) Learning, and (3) Held for Sale or
Sold. Adjusted numbers exclude our Held for Sale or Sold reporting
segment, as well as restructuring costs and other unusual items.
See the reconciliation provided in the tables that follow.
Research
- Fourth Quarter Revenue of $271 million was down 3% as
reported and at constant currency, mainly due to timing and
declines in ancillary print and licensing revenue in Research
Publishing, and soft market conditions in advertising and
recruiting in Research Solutions. Full Year Revenue of
$1,043 million was down 3% as reported, or 4% at constant currency,
mainly due to the full year Hindawi impact. Excluding Hindawi,
Research revenue for the year was flat.
- Fourth Quarter Adjusted EBITDA of $94 million was down
11% as reported and 12% at constant currency due to lower revenue
and lower incentive compensation costs in the prior year due to
underperformance. Adjusted EBITDA margin for the quarter was 34.6%.
Full Year Adjusted EBITDA of $331 million was down 13% at
constant currency mainly driven by revenue performance and the
incentive compensation swing. Excluding Hindawi, Research Adjusted
EBITDA for the year was down 4%. Adjusted EBITDA margin for the
year was 31.8%.
Learning
- Fourth Quarter Revenue of $170 million was up 18% as
reported and at constant currency driven by a $23 million content
rights project for training GenAI large language models and
continued growth in Academic content and courseware. Excluding the
one-time GenAI project, Q4 Learning revenue rose 2% on a constant
currency basis. Full Year Revenue of $574 million was up 5%
as reported and at constant currency due to outperformance in
digital content and courseware in Academic and the GenAI content
rights project in both Academic and Professional. Excluding the
one-time project, full year Learning revenue rose 1% on a constant
currency basis.
- Fourth Quarter Adjusted EBITDA of $74 million was up 54%
as reported and at constant currency due to the GenAI content
rights project and restructuring savings. Adjusted EBITDA margin
for the quarter was 43.5% compared to 33.5% in the prior year
period. Full Year Adjusted EBITDA of $200 million was up 27%
at constant currency mainly due to revenue performance and
restructuring savings. Full Year Adjusted EBITDA margin of 34.9%
compared to 28.9% in the prior year period.
Corporate Expense Category
- Fourth Quarter Adjusted Corporate Expenses of $43
million on an Adjusted EBITDA basis was up 15% over prior year at
constant currency, driven by higher professional fees. Full Year
Adjusted Corporate Expenses of $163 million was up 4% primarily
due to higher incentive compensation.
Businesses Held for Sale or Sold (HFS)
Our Held for Sale or Sold segment reflects the performance of
those businesses for the periods owned. Wiley University Services
was sold on January 1, 2024. The sale of Wiley Edge, with the
exception of its India operation, was completed on May 31, 2024.
The sale of Wiley Edge's India operation will be finalized later in
calendar year 2024. See accompanying financial tables for Q4
and FY24 performance.
EPS
- Fourth Quarter GAAP EPS of $0.46 compared to $1.22 in
the prior year period primarily due to a valuation allowance on US
deferred tax assets, restructuring charges, and a net increase in
the loss on the sale of University Services. Fourth Quarter
Adjusted EPS of $1.21 was up 2% at constant currency due to
revenue performance partially offset by tech write-offs as part of
our legacy decommissioning.
- Full Year GAAP EPS loss of $3.65 compared to +$0.31 in
the prior year period primarily due to non-cash impairments related
to held for sale or sold assets and losses on sale, as well as
higher restructuring charges. Full Year Adjusted EPS of
$2.78 was down 19% impacted by lower Adjusted Operating Income,
higher interest and tax expense, and higher pension expense.
Balance Sheet, Cash Flow, and Capital Allocation
- Net Debt-to-EBITDA Ratio (Trailing Twelve Months) at
quarter end was 1.7 compared to 1.5 in the year-ago period.
- Net Cash Provided by Operating Activities (full year)
was $208 million compared to $277 million in the prior year period
due to lower cash earnings and higher restructuring payments.
- Free Cash Flow less Product Development Spending (full
year) was $114 million compared to $173 million in the prior year
period due to lower cash provided by operating activities and
higher restructuring and interest payments partially offset by
lower Capex. Capex of $93 million was below prior year by $11
million. Note, Wiley does not provide an adjusted Free Cash Flow
metric; results include held for sale or sold businesses.
- Returns to Shareholders (full year): Wiley allocated
$122 million toward dividends and share repurchases, up from $112
million in the prior year, with $45 million used to acquire 1.3
million shares at an average cost per share of $34.71. This
compares to 832,000 shares repurchased in the prior year period. In
June 2023, Wiley raised its dividend for the 30th consecutive
year.
FISCAL YEAR 2025 OUTLOOK
Metric
($millions, except EPS)
Fiscal 2024 Results
Ex-Divestitures
Fiscal 2025 Outlook
Ex-Divestitures
Adj. Revenue*
$1,617
$1,650 to $1,690
Research
$1,043
Low to mid-single digit
growth
Learning
$574
Low-single digit growth
Adj. EBITDA*
$369
$385 to $410
Adj. EPS*
$2.78
$3.25 to $3.60
Free Cash Flow
$114
Approx. $125
*Excludes held for sale or sold assets
- Adjusted Revenue – growth outlook driven by favorable
trends and key indicators in Research Publishing, notably open
access and institutional models; new business in Research
Solutions; and strong momentum in digital courseware and
assessments in Learning. Research is entering FY25 with strong
leading indicators, including 15% submissions growth and mid-single
digit output growth in Q4.
- Adjusted EBITDA – margin expansion outlook in line with
previous targets driven by revenue growth and cost savings while
reflecting reinvestments to scale and optimize Research, modernize
infrastructure and expand GenAI content licensing, capabilities,
and product development.
- Adjusted EPS – significant growth expectation driven by
higher expected Adjusted Operating Income and accrued interest
income from divestitures offsetting higher interest and tax
expense.
- Free Cash Flow – growth outlook driven by lower
restructuring payments and favorable working capital partially
offset by higher capex and year-over-year swing in incentive
compensation payments. The Company expects capex of $130 million
compared to $93 million in Fiscal 2024 driven by the acceleration
of its Research Publishing platform work and infrastructure
modernization.
The Company remains on track with its Fiscal 2026 targets.
EARNINGS CONFERENCE CALL
Scheduled for today, June 13 at 10:00 am (ET). Access webcast at
Investor Relations at investors.wiley.com, or directly at
https://events.q4inc.com/attendee/333300189. 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 (NYSE: WLY) is one of the world’s largest publishers and a
trusted leader in research and learning. Our industry-leading
content, services, platforms, and knowledge networks are tailored
to meet the evolving needs of our customers and partners, including
researchers, students, instructors, professionals, institutions,
and corporations. We enable knowledge-seekers to transform today’s
biggest obstacles into tomorrow’s brightest opportunities. 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 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 divestitures and 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 2025 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
2025 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; (xii) cyber risk and the
failure to maintain the integrity of our operational or security
systems or infrastructure, or those of third parties with which we
do business; (xiii) as a result of acquisitions, we have and may
record a significant amount of goodwill and other identifiable
intangible assets and we may never realize the full carrying value
of these assets; and (xiii) 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
INCOME (LOSS) (Dollars in thousands, except per share
information) (unaudited) Three Months
Ended Year Ended April 30, April 30,
2024
2023
2024
2023
Revenue, net
$
468,461
$
526,127
$
1,872,987
$
2,019,900
Costs and expenses: Cost of sales
123,345
174,157
579,722
692,541
Operating and administrative expenses
252,062
245,821
1,013,520
1,037,399
Impairment of goodwill (3)
-
-
108,449
99,800
Restructuring and related charges
11,008
4,185
63,041
49,389
Amortization of intangible assets
13,264
19,492
55,994
84,881
Total costs and expenses
399,679
443,655
1,820,726
1,964,010
Operating income
68,782
82,472
52,261
55,890
As a % of revenue
14.7%
15.7%
2.8%
2.8%
Interest expense
(11,411)
(10,560)
(49,003)
(37,745)
Foreign exchange transaction gains (losses)
530
611
(2,959)
894
(Losses) gains on sale of businesses and certain assets and
impairment charges related to assets held-for-sale (3)
(3,642)
10,177
(183,389)
10,177
Other (expense) income, net
(257)
2,908
(3,957)
3,884
Income (loss) before taxes
54,002
85,608
(187,047)
33,100
Provision for income taxes
28,737
17,264
13,272
15,867
Effective tax rate
53.2%
20.2%
-7.1%
47.9%
Net income (loss)
$
25,265
$
68,344
$
(200,319)
$
17,233
As a % of revenue
5.4%
13.0%
-10.7%
0.9%
Earnings (loss) per share Basic
$
0.46
$
1.23
$
(3.65)
$
0.31
Diluted (4)
$
0.46
$
1.22
$
(3.65)
$
0.31
Weighted average number of common shares outstanding
Basic
54,591
55,355
54,945
55,558
Diluted (4)
55,356
56,137
54,945
56,355
Notes: (1) The supplementary information included in
this press release for the three months and year ended April 30,
2024 is preliminary and subject to change prior to the filing of
our upcoming Annual Report on Form 10-K with the Securities and
Exchange Commission. (2) 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 three businesses met the held-for-sale
criteria starting in the first quarter of fiscal year 2024. We
measured each disposal group at the lower of carrying value or fair
value less costs to sell prior to its disposition. On January 1,
2024 we completed the sale of University Services. On January 8,
2024 we entered into an agreement to sell our Wiley Edge business,
which closed on May 31, 2024, with the exception of its India
operations. The sale of Wiley Edge's India operation will be
finalized later in calendar year 2024. We expect to complete the
sale of CrossKnowledge in the second quarter of fiscal year 2025.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 noncash goodwill impairment of $11.4 million in the year
ended April 30, 2024. 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 noncash goodwill impairment of $15.3 million in the year
ended April 30, 2024.As a result of signing an agreement to sell
Wiley Edge and the decrease in the fair value of the business which
was impacted by a decline in placements in the third quarter of
fiscal year 2024, we tested the goodwill of the Wiley Edge
reporting unit within the Held for Sale or Sold segment for
impairment. We concluded that the carrying value of the reporting
unit was above its fair value which resulted in a pretax noncash
goodwill impairment of $81.7 million in the year ended April 30,
2024.In the three months ended April 30, 2024, there was an
increase in the pretax loss on the sale of University Services
after the closing of approximately $5.6 million, which resulted in
a total pretax loss of $107.0 million (net of tax loss of $80.5
million) in the year ended April 30, 2024. We also completed the
sale of our Tuition Manager business previously in our Held for
Sale or Sold segment, which resulted in a total net pretax loss of
$1.5 million (net of tax loss of $1.1 million) in the year ended
April 30, 2024.Wiley Edge and CrossKnowledge continue to be
reported as held-for-sale. We recorded a held-for-sale pretax
impairment release of $2.0 million and charges of $74.8 million in
the three months and year ended April 30, 2024, respectively,
related to Wiley Edge and CrossKnowledge. The total impairment
charge for Wiley Edge in the year ended April 30, 2024 was $19.4
million, which includes a release of $1.2 million in the three
months ended April 30, 2024. The total impairment charge for
CrossKnowledge in the year ended April 30, 2024 was $55.4 million,
which includes a release of $0.8 million in the three months ended
April 30, 2024. (4) In calculating diluted net loss per
common share for the year ended April 30, 2024, 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 Earnings (Loss) per Share to Non-GAAP Adjusted EPS
Three Months Ended Year Ended April 30,
April 30,
2024
2023
2024
2023
US GAAP Income (Loss) Per Share - Diluted
$
0.46
$
1.22
$
(3.65)
$
0.31
Adjustments: Impairment of goodwill
-
0.09
1.90
1.77
Legal settlement (3)
-
-
-
0.05
Pension income related to the wind up of the Russia plan (4)
-
(0.02)
-
(0.02)
Restructuring and related charges
0.16
0.06
0.85
0.66
Foreign exchange losses (gains) on intercompany transactions,
including the write off of certain cumulative translation
adjustments (4)
0.01
(0.01)
0.02
0.01
Amortization of acquired intangible assets (5)
0.02
0.26
0.68
1.21
Losses (gains) on sale of businesses and certain assets and
impairment charges related to assets held-for-sale (6)
0.04
(0.11)
2.81
(0.11)
Held for Sale or Sold segment Adjusted Net Income (6)
(0.03)
(0.26)
(0.42)
(0.36)
Income tax adjustments
0.55
(0.04)
0.54
(0.04)
EPS impact of using weighted-average dilutive shares for adjusted
EPS calculation (7)
-
-
0.05
-
Non-GAAP Adjusted Earnings Per Share - Diluted
$
1.21
$
1.19
$
2.78
$
3.48
Reconciliation of US GAAP Income (Loss) Before Taxes to
Non-GAAP Adjusted Income Before Taxes Three Months Ended
Year Ended (amounts in thousands)
April 30, April
30,
2024
2023
2024
2023
US GAAP Income (Loss) Before Taxes
$
54,002
$
85,608
$
(187,047)
$
33,100
Pretax Impact of Adjustments: Impairment of goodwill
-
-
108,449
99,800
Legal settlement (3)
-
-
-
3,671
Pension income related to the wind up of the Russia plan (4)
-
(1,750)
-
(1,750)
Restructuring and related charges
11,008
4,185
63,041
49,389
Foreign exchange losses (gains) on intercompany transactions,
including the write off of certain cumulative translation
adjustments (4)
815
(449)
1,903
457
Amortization of acquired intangible assets (5)
13,324
20,566
57,874
89,177
Losses (gains) on sale of businesses and certain assets and
impairment charges related to assets held-for-sale (6)
3,641
(10,177)
183,389
(10,177)
Held for Sale or Sold segment Adjusted Income Before Taxes (6)
(2,408)
(17,974)
(30,661)
(26,094)
Non-GAAP Adjusted Income Before Taxes
$
80,382
$
80,009
$
196,948
$
237,573
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
$
28,737
$
17,264
$
13,272
$
15,867
Income Tax Impact of Adjustments (8) Impairment of goodwill
255
(4,857)
2,953
-
Legal settlement (3)
-
-
-
716
Pension income related to the wind up of the Russia plan (4)
-
(437)
-
(437)
Restructuring and related charges
2,425
992
15,662
12,151
Foreign exchange losses (gains) on intercompany transactions,
including the write off of certain cumulative translation
adjustments (4)
471
(142)
582
132
Amortization of acquired intangible assets (5)
11,459
5,372
20,127
20,183
Losses (gains) on sale of businesses and certain assets and
impairment charges related to assets held-for-sale (6)
1,197
(3,860)
26,908
(3,860)
Held for Sale or Sold segment Adjusted Tax Provision (6)
(622)
(3,555)
(7,140)
(5,533)
Income Tax Adjustments Impact of increase in UK statutory rate on
deferred tax balances (9)
-
2,370
-
2,370
Impact of valuation allowance (10)
(30,249)
-
(30,249)
-
Non-GAAP Adjusted Income Tax Provision
$
13,673
$
13,147
$
42,115
$
41,589
US GAAP Effective Tax Rate
53.2%
20.2%
-7.1%
47.9%
Non-GAAP Adjusted Effective Tax Rate
17.0%
16.4%
21.4%
17.5%
Notes: (1) See Explanation of Usage of Non-GAAP Performance
Measures included in this supplementary information for additional
details on the reasons why management believes presentation of each
non-GAAP performance measure provides useful information to
investors. The supplementary information included in this press
release for the three months and year ended April 30, 2024 is
preliminary and subject to change prior to the filing of our
upcoming Annual Report on Form 10-K with the Securities and
Exchange Commission. (2) All amounts are approximate due to
rounding. (3) In the three months ended January 31, 2023, we
settled a litigation matter related to consideration for a previous
acquisition for $3.7 million. (4) In fiscal year 2023 due to
the closure of our operations in Russia, the Russia entity was
deemed substantially liquidated. In the three months and year ended
April 30, 2024, we wrote off an additional $0.2 million and $1.0
million, respectively, of cumulative translation adjustments in
earnings. In the three months and year ended April 30, 2023, we
wrote off $1.1 million of cumulative translation adjustments in
earnings. This amount is reflected in Foreign exchange transaction
gains (losses) on our Condensed Consolidated Statements of Net
Income (Loss). In addition, in the three months and year ended
April 30, 2023, there was a curtailment and settlement credit due
to the wind up of the Russia Pension Plan of $1.8 million which is
reflected in Other (expense) income, net on our Condensed
Consolidated Statements of Net Income (Loss). (5) 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 (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 Income (Loss). (6) We are divesting non-core
businesses, including University Services, Wiley Edge, and
CrossKnowledge. On January 1, 2024 we completed the sale of
University Services. Wiley Edge and CrossKnowledge continue to be
reported as held-for-sale, and we measured each business at the
lower of carrying value or fair value less costs to sell. The total
impairment charge for Wiley Edge in the year ended April 30, 2024
was $19.4 million, which includes a release of $1.2 million in the
three months ended April 30, 2024. The total impairment charge for
CrossKnowledge in the year ended April 30, 2024 was $55.4 million,
which includes a release of $0.8 million in the three months ended
April 30, 2024.In the three months ended April 30, 2024, there was
an increase in the pretax loss on the sale of University Services
after the closing of approximately $5.6 million, which resulted in
a total pretax loss of $107.0 million (net of tax loss of $80.5
million) in the year ended April 30, 2024. We also completed the
sale of our Tuition Manager business previously in our Held for
Sale or Sold segment, which resulted in a total net pretax loss of
$1.5 million (net of tax loss of $1.1 million) in the year ended
April 30, 2024.In addition, our Adjusted EPS excludes the Adjusted
Net Income of our Held for Sale or Sold segment. (7)
Represents the impact of using diluted weighted-average number of
common shares outstanding (55.7 million for the year ended April
30, 2024) 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. (8) For
the three months and year ended April 30, 2024 substantially all of
the tax impact was from deferred taxes. For the three months ended
April 30, 2023, the tax impact was $4.3 million of current tax
benefit and $0.1 million of deferred taxes. For the year ended
April 30, 2023, substantially all of the tax impact was from
deferred taxes. (9) 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. For the three months and year
ended April 30, 2023, we recorded a $2.4 million noncash deferred
tax benefit related to pensions due to the UK statutory rate
change. These adjustments impacted deferred taxes. (10) In
fiscal year 2024, due to temporary differences in the US, our
deferred taxes reversed from a deferred tax liability position to a
deferred tax asset position. Due to losses in the US resulting from
impairments, restructuring, and acceleration of depreciation
expense on capitalized software, we concluded it was
more-likely-than-not that all or a portion of our deferred tax
asset may not be realized. As a result, we increased the valuation
allowance by $30.2 million.
JOHN WILEY & SONS,
INC. SUPPLEMENTARY INFORMATION (1) RECONCILIATION OF
US GAAP NET INCOME (LOSS) TO NON-GAAP EBITDA AND ADJUSTED
EBITDA (unaudited) Three Months Ended
Year Ended April 30, April 30,
2024
2023
2024
2023
Net Income (Loss)
$
25,265
$
68,344
$
(200,319)
$
17,233
Interest expense
11,411
10,560
49,003
37,745
Provision for income taxes
28,737
17,264
13,272
15,867
Depreciation and amortization
47,613
50,111
176,989
213,253
Non-GAAP EBITDA
113,026
146,279
38,945
284,098
Impairment of goodwill
-
-
108,449
99,800
Legal settlement
-
-
-
3,671
Restructuring and related charges
11,008
4,185
63,041
49,389
Foreign exchange (gains) losses, including the write off of certain
cumulative translation adjustments
(530)
(611)
2,959
(894)
Losses (gains) on sale of businesses and certain assets and
impairment charges related to assets held-for-sale
3,642
(10,177)
183,389
(10,177)
Other expense (income), net
257
(2,908)
3,957
(3,884)
Held for Sale or Sold segment Adjusted EBITDA (2)
(2,409)
(19,698)
(32,148)
(42,677)
Non-GAAP Adjusted EBITDA
$
124,994
$
117,070
$
368,592
$
379,326
Adjusted EBITDA Margin
28.3%
27.6%
22.8%
23.3%
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 months and year ended April 30, 2024 is
preliminary and subject to change prior to the filing of our
upcoming Annual Report on Form 10-K with the Securities and
Exchange Commission. (2) 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 April 30, Favorable (Unfavorable)
2024
2023 (3)
Reported Constant Currency Research:
Revenue, net Research Publishing
$
233,455
$
240,889
-3%
-3%
Research Solutions
37,577
39,550
-5%
-5%
Total Revenue, net
$
271,032
$
280,439
-3%
-3%
Non-GAAP Adjusted Operating Income
$
68,282
$
83,245
-18%
-18%
Depreciation and amortization
25,513
22,700
-12%
-12%
Non-GAAP Adjusted EBITDA
$
93,795
$
105,945
-11%
-12%
Adjusted EBITDA margin
34.6%
37.8%
Learning: Revenue, net Academic
$
98,908
$
80,807
22%
22%
Professional
71,237
63,049
13%
13%
Total Revenue, net
$
170,145
$
143,856
18%
18%
Non-GAAP Adjusted Operating Income
$
57,682
$
32,915
75%
75%
Depreciation and amortization
16,358
15,253
-7%
-7%
Non-GAAP Adjusted EBITDA
$
74,040
$
48,168
54%
54%
Adjusted EBITDA margin
43.5%
33.5%
Held for Sale or Sold: Total Revenue, net
$
27,284
$
101,832
-73%
-74%
Non-GAAP Adjusted Operating Income
$
2,409
$
11,997
-80%
-84%
Depreciation and amortization
-
7,701
# #
Non-GAAP Adjusted EBITDA
$
2,409
$
19,698
-88%
-90%
Adjusted EBITDA margin
8.8%
19.3%
Non-GAAP Adjusted Corporate Expenses
$
(48,583)
$
(41,500)
-17%
-17%
Depreciation and amortization
5,742
4,457
-29%
-29%
Non-GAAP Adjusted EBITDA
$
(42,841)
$
(37,043)
-16%
-15%
Consolidated Results: Revenue, net
$
468,461
$
526,127
-11%
-11%
Less: Held for Sale or Sold Segment (4)
(27,284)
(101,832)
-73%
-74%
Adjusted Revenue, net
$
441,177
$
424,295
4%
4%
Operating Income
$
68,782
$
82,472
17%
17%
Adjustments: Restructuring charges
11,008
4,185
# # Held for Sale or Sold Segment Adjusted Operating Income (4)
(2,409)
(11,997)
-80%
76%
Non-GAAP Adjusted Operating Income
$
77,381
$
74,660
4%
4%
Depreciation and amortization
47,613
50,111
5%
5%
Less: Held for Sale or Sold Segment depreciation and amortization
(4)
-
(7,701)
# #
Non-GAAP Adjusted EBITDA
$
124,994
$
117,070
7%
7%
Adjusted EBITDA margin
28.3%
27.6%
Notes: (1) The supplementary information included in
this press release for the three months and year ended April 30,
2024 is preliminary and subject to change prior to the filing of
our upcoming Annual Report on Form 10-K with the Securities and
Exchange Commission. (2) 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 recast to the new segment
presentation. There were no changes to our consolidated financial
results. (4) 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. (5) In the three months ended
January 31, 2023, we settled a litigation matter related to
consideration for a previous acquisition for $3.7 million.
(6) We discontinued use of the mthree trademark that resulted in a
change in the useful life and accelerated amortization expense of
$4.6 million in the three months ended July 31, 2022. #
Variance greater than 100%
JOHN WILEY & SONS,
INC. SUPPLEMENTARY INFORMATION (1) (2) (3) SEGMENT
RESULTS (in thousands) (unaudited) %
Change Year Ended April 30, Favorable
(Unfavorable)
2024
2023 (3)
Reported Constant Currency Research:
Revenue, net Research Publishing
$
892,784
$
926,773
-4%
-5%
Research Solutions
149,921
153,538
-2%
-3%
Total Revenue, net
$
1,042,705
$
1,080,311
-3%
-4%
Non-GAAP Adjusted Operating Income
$
237,763
$
283,984
-16%
-16%
Depreciation and amortization
93,422
93,008
0%
0%
Non-GAAP Adjusted EBITDA
$
331,185
$
376,992
-12%
-13%
Adjusted EBITDA margin
31.8%
34.9%
Learning: Revenue, net Academic
$
323,541
$
304,633
6%
6%
Professional
251,198
241,762
4%
3%
Total Revenue, net
$
574,739
$
546,395
5%
5%
Non-GAAP Adjusted Operating Income
$
142,733
$
100,100
43%
43%
Depreciation and amortization
57,696
57,698
0%
0%
Non-GAAP Adjusted EBITDA
$
200,429
$
157,798
27%
27%
Adjusted EBITDA margin
34.9%
28.9%
Held for Sale or Sold: Total Revenue, net
$
255,543
$
393,194
-35%
-36%
Non-GAAP Adjusted Operating Income
$
28,711
$
1,186
# # Depreciation and amortization
3,437
41,491
92%
92%
Non-GAAP Adjusted EBITDA
$
32,148
$
42,677
-25%
-27%
Adjusted EBITDA margin
12.6%
10.9%
Non-GAAP Adjusted Corporate Expenses
$
(185,456)
$
(171,926)
-8%
-7%
Depreciation and amortization
22,434
16,462
-36%
-36%
Non-GAAP Adjusted EBITDA
$
(163,022)
$
(155,464)
-5%
-4%
Consolidated Results: Revenue, net
$
1,872,987
$
2,019,900
-7%
-8%
Less: Held for Sale or Sold Segment (4)
(255,543)
(393,194)
-35%
-36%
Adjusted Revenue, net
$
1,617,444
$
1,626,706
-1%
-1%
Operating Income
$
52,261
$
55,890
-6%
-7%
Adjustments: Restructuring charges
63,041
49,389
-28%
-28%
Impairment of goodwill
108,449
99,800
-9%
-9%
Legal settlement (5)
-
3,671
# # Accelerated amortization of an intangible asset (6)
-
4,594
# # Held for Sale or Sold Segment Adjusted Operating Income (4)
(28,711)
(1,186)
# # Non-GAAP Adjusted Operating Income
$
195,040
$
212,158
-8%
-8%
Depreciation and amortization
176,989
208,659
15%
16%
Less: Held for Sale or Sold depreciation and amortization (4)
(3,437)
(41,491)
92%
92%
Non-GAAP Adjusted EBITDA
$
368,592
$
379,326
-3%
-3%
Adjusted EBITDA margin
22.8%
23.3%
# Variance greater than 100%
JOHN WILEY &
SONS, INC. SUPPLEMENTARY INFORMATION (1) CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in
thousands) (unaudited) April 30, April
30,
2024
2023
Assets: Current assets Cash and cash equivalents
$
83,249
$
106,714
Accounts receivable, net
224,198
310,121
Inventories, net
26,219
30,733
Prepaid expenses and other current assets
85,954
93,711
Current assets held-for-sale (2)
34,422
-
Total current assets
454,042
541,279
Technology, property and equipment, net
192,438
247,149
Intangible assets, net
615,694
854,794
Goodwill
1,091,368
1,204,050
Operating lease right-of-use assets
69,074
91,197
Other non-current assets
283,719
170,341
Non-current assets held-for-sale (2)
19,160
-
Total assets
$
2,725,495
$
3,108,810
Liabilities and shareholders' equity: Current
liabilities Accounts payable
$
55,659
$
84,325
Accrued royalties
97,173
113,423
Short-term portion of long-term debt
7,500
5,000
Contract liabilities
483,778
504,695
Accrued employment costs
96,980
80,458
Short-term portion of operating lease liabilities
18,294
19,673
Other accrued liabilities
76,266
87,979
Current liabilities held-for-sale (2)
37,632
-
Total current liabilities
873,282
895,553
Long-term debt
767,096
743,292
Accrued pension liability
70,832
86,304
Deferred income tax liabilities
97,186
144,042
Operating lease liabilities
94,386
115,540
Other long-term liabilities
71,760
79,052
Long-term liabilities held-for-sale (2)
11,237
-
Total liabilities
1,985,779
2,063,783
Shareholders' equity
739,716
1,045,027
Total liabilities and shareholders' equity
$
2,725,495
$
3,108,810
Notes: (1) The supplementary information included in this
press release for April 30, 2024 is preliminary and subject to
change prior to the filing of our upcoming Annual Report on Form
10-K with the Securities and Exchange Commission. (2) As
previously announced, we are divesting non-core businesses,
including 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 costs to sell. We recorded a pretax
impairment of $74.8 million in the year ended April 30, 2024 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) Year Ended April
30,
2024
2023
Operating activities: Net (loss) income
$
(200,319)
$
17,233
Impairment of goodwill
108,449
99,800
Losses (gains) on sale of businesses and certain assets and
impairment charges related to assets held-for-sale
183,389
(10,217)
Amortization of intangible assets
55,994
84,881
Amortization of product development assets
22,835
32,366
Depreciation and amortization of technology, property, and
equipment
98,160
96,006
Other noncash charges
106,507
95,636
Net change in operating assets and liabilities
(167,377)
(138,634)
Net cash provided by operating activities
207,638
277,071
Investing activities: Additions to technology,
property, and equipment
(76,080)
(81,155)
Product development spending
(17,262)
(22,958)
Businesses acquired in purchase transactions, net of cash acquired
(3,116)
(7,292)
(Costs) proceeds related to the sale of businesses and certain
assets
(1,771)
15,585
Acquisitions of publication rights and other
(8,414)
(2,578)
Net cash used in investing activities
(106,643)
(98,398)
Financing activities: Net debt borrowings
(repayments)
27,767
(38,934)
Cash dividends
(76,964)
(77,298)
Purchases of treasury shares
(45,050)
(35,000)
Other
(12,974)
(17,336)
Net cash used in financing activities
(107,221)
(168,568)
Effects of exchange rate changes on cash, cash
equivalents and restricted cash
(1,493)
(3,570)
Change in cash, cash equivalents and restricted cash for
period
(7,719)
6,535
Cash, cash equivalents and restricted cash -
beginning
107,262
100,727
Cash, cash equivalents and restricted cash - ending (2)
$
99,543
$
107,262
CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT
DEVELOPMENT SPENDING (3) Year Ended April
30,
2024
2023
Net cash provided by operating activities
$
207,638
$
277,071
Less: Additions to technology, property, and equipment
(76,080)
(81,155)
Less: Product development spending
(17,262)
(22,958)
Free cash flow less product development spending
$
114,296
$
172,958
Notes: (1) The supplementary information included in this
press release for the year ended April 30, 2024 is preliminary and
subject to change prior to the filing of our upcoming Annual Report
on Form 10-K with the Securities and Exchange Commission.
(2) Cash, cash equivalents and restricted cash as of April 30, 2024
includes held-for-sale cash, cash equivalents and restricted cash
of $16.2 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 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 Operating Income. We present both
Adjusted Operating Income 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 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 2025
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/20240613737152/en/
Brian Campbell brian.campbell@wiley.com 1-201.748.6874
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