Wiley (NYSE:JWA)(NYSE:JWB), a global leader in scientific
research and career-connected education, today announced results
for the third quarter ended January 31, 2022.
THIRD QUARTER SUMMARY
- GAAP Results: Revenue of $516 million (+7%), Operating
Income of $46 million (+34%), and EPS of $0.63 (+62%)
- Adjusted Results (at constant currency): Revenue of $516
million (+7%), Adjusted EBITDA of $100 million (-5%), and Adjusted
EPS of $0.95 (-9%)
NINE MONTHS SUMMARY
- GAAP Results: Revenue of $1,537 million (+9%), Operating
Income of $161 million (+20%), EPS of $1.86 (-2%), Cash Provided by
Operating Activities of $158 million (+2%)
- Adjusted Results (at constant currency): Revenue of
$1,537 million (+8%), Adjusted EBITDA of $322 million (+4%),
Adjusted EPS of $3.09 (+4%), Free Cash Flow of $77 million
(-3%)
MANAGEMENT COMMENTARY
“Wiley’s strategy to meet the world’s acute need for scientific
research and career-connected education is allowing us to drive
solid year-to-date performance and significant social impact,” said
Brian Napack, President and CEO. “We continue to benefit from
strong competitive advantages, robust cash generation, and
favorable long-term growth trends that benefit from the steadily
rising demand to publish peer-reviewed research, the continued
migration to digital, career-focused learning, and the need for
employers to fill critical skill and talent gaps.”
THIRD QUARTER PERFORMANCE
GAAP Measures Unaudited ($millions
except for EPS)
Q3 2022
Q3 2021
Change
Revenue
$515.9
$482.9
+7%
Operating Income
$46.0
$34.3
+34%
Diluted EPS
$0.63
$0.39
+62%
Non-GAAP Measures
Q3 2022
Q3 2021
Change
Change Constant
Currency
Revenue
$515.9
$482.9
+7%
+7%
Adjusted EBITDA
$99.8
$104.3
(4%)
(5%)
Adjusted EPS*
$0.95
$0.95
0%
(9%)
Excluding acquisitions and currency impact, revenue rose 4%
for the quarter. Wiley recorded an unfavorable FX variance of
$2 million in Revenue and favorable FX variances of $0.7 million in
Adjusted EBITDA and $0.09 in Adjusted EPS.
*Adjusted EPS: In September 2021, Wiley changed how it
reported Adjusted EPS metric to exclude the impact of certain
non-cash items directly related to acquisitions, most notably the
amortization of acquired intangible assets. The Company does not
consider these non-cash items to be indicative of its ongoing
operating performance.
Revenue
- Research Publishing & Platforms rose 10% as reported
and at constant currency or 5% excluding acquisitions, driven by
growth in publishing, corporate solutions, and platforms.
- Academic & Professional Learning declined 2% as
reported and 1% at constant currency due to lower US college
enrollment and an easing of prior-year COVID-related tailwinds for
education content and courseware and professional publishing,
offsetting continued recovery in corporate training.
- Education Services increased 18% as reported and at
constant currency, driven by a doubling of revenue for Talent
Development (formerly mthree) offsetting a 3% decline in University
Services (formerly OPM) mainly from lower US student
enrollment.
Adjusted EBITDA
- Research Publishing & Platforms rose 4% at constant
currency, primarily driven by revenue growth partially offset by
investments in growth initiatives. Q3 Adjusted EBITDA margin of
33%.
- Academic & Professional Learning rose 4% at constant
currency, with cost savings offsetting lower revenue. Q3 Adjusted
EBITDA margin of 30%.
- Education Services declined 14% at constant currency
mainly due to investments to further accelerate growth in Talent
Development. Q3 Adjusted EBITDA margin of 13%.
- Adjusted Corporate Expenses were 22% higher mainly due
to higher technology and employee costs.
EPS
- GAAP EPS was $0.63 as compared to $0.39 in the prior
year period. The favorable variance was mainly driven by a prior
year restructuring charge of $21 million, or $0.28 per share.
- Adjusted EPS was down 9% at constant currency mainly
driven by higher operating expenses and employee-related
costs.
Cash Flow, Balance Sheet, and Capital Allocation
- Net Cash Provided by Operating Activities (nine months)
was $158 million compared to $155 million in the prior year period
due to favorable changes in working capital.
- Free Cash Flow less Product Development Spending (nine
months) was $77 million as compared to $80 million in the prior
year driven by higher capex.
- Net Debt-to-EBITDA ratio (trailing twelve months) at
quarter-end was 1.9 compared to 2.2 in the prior year period.
- Acquisitions: During the quarter, Wiley acquired student
acquisition company, XYZ Media, and open research service provider,
eJournal Press.
- Share Repurchases: During the quarter, the Company
utilized approximately $7.5 million to repurchase approximately
135,000 shares at an average cost per share of $55.40.
FISCAL YEAR 2022 OUTLOOK Given its year-to-date
performance and leading indicators, the Company is reaffirming its
full year outlook.
Metric ($millions, except EPS)
Fiscal 2020
Fiscal 2021
Fiscal 2022 Outlook
Revenue
$1,831
$1,942
$2,070 to $2,100
Adjusted EBITDA
$356
$419
$415 to $435
Adjusted EPS
$3.30
$4.00
$4.00 to $4.25
Free Cash Flow
$173
$257
$200 to $220
EARNINGS CONFERENCE CALL Scheduled for today, March 8 at 10:00
am (ET). Access webcast at investors.wiley.com, or directly at
http://event.on24.com/wcc/r/3574356/B31C9ADF91B6B0ECEB3B1EE2286E98AF.
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 a global leader in research and
education, unlocking human potential by enabling discovery,
powering education, and shaping workforces. For over 200 years,
Wiley has fueled the world’s knowledge ecosystem. Today, our
high-impact content, platforms, and services help researchers,
learners, institutions, and corporations achieve their goals in an
ever-changing world. Visit us at Wiley.com, Like us on Facebook and
Follow us on Twitter and LinkedIn.
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 2022 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
2022 in connection with our multi-year Business Optimization
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 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
Nine Months Ended
January 31,
January 31,
2022
2021
2022
2021
Revenue, net
$
515,884
$
482,912
$
1,537,275
$
1,405,249
Costs and expenses: Cost of sales
172,916
157,636
513,654
457,298
Operating and administrative expenses
275,475
251,242
800,254
735,778
Restructuring and related charges (credits)
448
20,675
(1,161
)
24,813
Amortization of intangible assets
21,056
19,032
63,683
53,089
Total costs and expenses
469,895
448,585
1,376,430
1,270,978
Operating income
45,989
34,327
160,845
134,271
As a % of revenue
8.9
%
7.1
%
10.5
%
9.6
%
Interest expense
(5,103
)
(4,853
)
(14,739
)
(13,928
)
Foreign exchange transaction losses
(488
)
(5,694
)
(1,488
)
(6,473
)
Gain on sale of certain assets
-
-
3,694
-
Other income, net
2,821
3,612
9,524
11,769
Income before taxes
43,219
27,392
157,836
125,639
Provision for income taxes
7,853
5,231
52,673
18,712
Effective tax rate
18.2
%
19.1
%
33.4
%
14.9
%
Net income
$
35,366
$
22,161
$
105,163
$
106,927
As a % of revenue
6.9
%
4.6
%
6.8
%
7.6
%
Earnings per share Basic
$
0.63
$
0.40
$
1.89
$
1.91
Diluted
$
0.63
$
0.39
$
1.86
$
1.90
Weighted average number of common shares outstanding
Basic
55,701
55,984
55,789
55,967
Diluted
56,389
56,332
56,481
56,230
Notes: (1) The supplementary information
included in this press release for the three and nine months ended
January 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.In the three months ended
January 31, 2022, we completed the acquisition of certain assets of
XYZ Media Inc.(Education Services segment), the assets of the
eJournalPress business (Research Publishing & Platforms
segment), and one immaterial business in our Research Publishing
& Platforms segment. In the nine months ended January 31, 2022,
we also acquired certain assets of J&J Editorial Services, LLC.
(Research Publishing & Platforms segment) and the acquisition
of one immaterial business included in our Education Services
segment. (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
Nine Months Ended
January 31,
January 31,
2022
2021
2022
2021
US GAAP Earnings Per Share - Diluted
$
0.63
$
0.39
$
1.86
$
1.90
Adjustments: Restructuring and related charges (credits)
0.01
0.28
(0.02
)
0.33
Foreign exchange losses (gains) on intercompany transactions
0.01
0.01
-
(0.01
)
Amortization of acquired intangible assets (3)
0.30
0.27
0.93
0.77
Gain on sale of certain assets (4)
-
-
(0.05
)
-
Income tax adjustments (5) (6)
-
-
0.37
(0.13
)
Non-GAAP Adjusted Earnings Per Share - Diluted
$
0.95
$
0.95
$
3.09
$
2.86
Reconciliation of US GAAP Income Before Taxes to Non-GAAP
Adjusted Income Before Taxes Three Months Ended Nine
Months Ended (amounts in thousands)
January 31,
January 31,
2022
2021
2022
2021
US GAAP Income Before Taxes
$
43,219
$
27,392
$
157,836
$
125,639
Pretax Impact of Adjustments: Restructuring and related charges
(credits)
448
20,675
(1,161
)
24,813
Foreign exchange losses (gains) on intercompany transactions
722
267
494
(1,071
)
Amortization of acquired intangible assets
22,189
20,163
67,081
56,693
Gain on sale of certain assets (4)
-
-
(3,694
)
-
Non-GAAP Adjusted Income Before Taxes
$
66,578
$
68,497
$
220,556
$
206,074
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
$
7,853
$
5,231
$
52,673
$
18,712
Income Tax Impact of Adjustments (7) Restructuring and related
charges (credits)
114
4,965
(118
)
6,362
Foreign exchange losses (gains) on intercompany transactions
239
87
258
(403
)
Amortization of acquired intangible assets
4,834
4,691
15,097
13,324
Gain on sale of certain assets (4)
-
-
(922
)
-
Income Tax Adjustments: Impact of increase in UK statutory rate on
deferred tax balances (5)
-
-
(20,726
)
(6,772
)
Impact of US CARES Act (6)
-
-
-
13,998
Non-GAAP Adjusted Income Tax Provision
$
13,040
$
14,974
$
46,262
$
45,221
US GAAP Effective Tax Rate
18.2
%
19.1
%
33.4
%
14.9
%
Non-GAAP Adjusted Effective Tax Rate
19.6
%
21.9
%
21.0
%
21.9
%
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 nine months ended January 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 during the nine months ended January
31, 2022.
(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, or $0.37 per share
non-cash deferred tax expense from the re-measurement of the
Company’s applicable UK net deferred tax liabilities during the
three months ended July 31, 2021. These adjustments impacted
deferred taxes.In the three months ended July 31, 2020, the UK
enacted legislation that increased its statutory rate from 17% to
19%. This resulted in a $6.7 million, or $0.12 per share non-cash
deferred tax expense from the re-measurement of the Company’s
applicable UK net deferred tax liabilities during the three months
ended July 31, 2020. These adjustments impacted deferred taxes.
(6
)
In connection with the Coronavirus Aid, Relief, and Economic
Security Act (CARES Act) and certain regulations, we carried back
our April 30, 2020 US net operating loss (NOL) to our year ended
April 30, 2015 and claimed a $20.7 million refund. The refund plus
interest was received in February 2021. The NOL was carried back to
fiscal year 2015 when the US corporate tax rate was 35.0%. The
carryback to a year with a higher rate, plus certain additional net
permanent deductions included in the carryback resulted in a $14.0
million tax benefit, or $(0.25) per share, $8.4 million from
current taxes and $5.6 million from deferred taxes, for the nine
months ended January 31, 2021.
(7
)
For the three and nine months ended January 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
Nine Months Ended
January 31,
January 31,
2022
2021
2022
2021
Net Income
$
35,366
$
22,161
$
105,163
$
106,927
Interest expense
5,103
4,853
14,739
13,928
Provision for income taxes
7,853
5,231
52,673
18,712
Depreciation and amortization
53,363
49,316
162,484
147,253
Non-GAAP EBITDA
101,685
81,561
335,059
286,820
Restructuring and related charges (credits)
448
20,675
(1,161
)
24,813
Foreign exchange transaction losses
488
5,694
1,488
6,473
Gain on sale of certain assets
-
-
(3,694
)
-
Other income, net
(2,821
)
(3,612
)
(9,524
)
(11,769
)
Non-GAAP Adjusted EBITDA
$
99,800
$
104,318
$
322,168
$
306,337
Adjusted EBITDA Margin
19.3
%
21.6
%
21.0
%
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 nine months ended January 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 January
31,
Favorable
(Unfavorable)
2022
2021
Reported
Constant Currency
Research Publishing & Platforms: Revenue, net
Research Publishing
$
248,884
$
229,327
9%
9%
Research Platforms
14,457
10,523
37%
37%
Total Revenue, net
$
263,341
$
239,850
10%
10%
Contribution to Profit
$
62,165
$
60,782
2%
1%
Adjustments: Restructuring charges
-
83
100%
100%
Non-GAAP Adjusted Contribution to Profit
$
62,165
$
60,865
2%
1%
Depreciation and amortization
23,914
20,997
-14%
-14%
Non-GAAP Adjusted EBITDA
$
86,079
$
81,862
5%
4%
Adjusted EBITDA margin
32.7
%
34.1
%
Academic & Professional Learning: Revenue,
net Education Publishing (2)
$
95,498
$
97,671
-2%
-2%
Professional Learning
75,135
75,955
-1%
0%
Total Revenue, net
$
170,633
$
173,626
-2%
-1%
Contribution to Profit
$
34,774
$
32,823
6%
7%
Adjustments: Restructuring charges
215
328
34%
34%
Non-GAAP Adjusted Contribution to Profit
$
34,989
$
33,151
6%
6%
Depreciation and amortization
17,038
17,233
1%
0%
Non-GAAP Adjusted EBITDA
$
52,027
$
50,384
3%
4%
Adjusted EBITDA margin
30.5
%
29.0
%
Education Services: Revenue, net University
Services (3)
$
55,090
$
56,725
-3%
-3%
Talent Development Services (2) (4)
26,820
12,711
# #
Total Revenue, net
$
81,910
$
69,436
18%
18%
Contribution to Profit
$
2,654
$
5,210
-49%
-49%
Adjustments: Restructuring charges
5
71
93%
93%
Non-GAAP Adjusted Contribution to Profit
$
2,659
$
5,281
-50%
-49%
Depreciation and amortization
8,260
7,493
-10%
-10%
Non-GAAP Adjusted EBITDA
$
10,919
$
12,774
-15%
-14%
Adjusted EBITDA margin
13.3
%
18.4
%
Corporate Expenses:
$
(53,604
)
$
(64,488
)
17%
16%
Adjustments: Restructuring charges
228
20,193
99%
99%
Non-GAAP Adjusted Contribution to Profit
$
(53,376
)
$
(44,295
)
-21%
-21%
Depreciation and amortization
4,151
3,593
-16%
-16%
Non-GAAP Adjusted EBITDA
$
(49,225
)
$
(40,702
)
-21%
-22%
Consolidated Results: Revenue, net
$
515,884
$
482,912
7%
7%
Operating Income
$
45,989
$
34,327
34%
31%
Adjustments: Restructuring charges
448
20,675
98%
98%
Non-GAAP Adjusted Contribution to Profit
$
46,437
$
55,002
-16%
-17%
Depreciation and amortization
53,363
49,316
-8%
-9%
Non-GAAP Adjusted EBITDA
$
99,800
$
104,318
-4%
-5%
Adjusted EBITDA margin
19.3
%
21.6
%
Notes: (1) The supplementary information included in
this press release for the three and nine months ended January 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) In May 2021, we moved
the WileyNXT product offering from Academic & Professional
Learning – Education Publishing to Education Services – Talent
Development Services. As a result, the prior period results related
to the WileyNXT product offering have been included in Education
Services - Talent Development Services. The Revenue, Adjusted
Contribution to Profit and Adjusted EBITDA for WileyNXT was $0.5
million, $(0.2) million, and $(0.2) million, respectively, for the
three months ended January 31, 2021. The Revenue, Adjusted
Contribution to Profit and Adjusted EBITDA for WileyNXT was $1.6
million, $(0.4) million, and $(0.4) million, respectively, for the
nine months ended January 31, 2021. There were no changes to our
total consolidated financial results. (3) University
Services was previously referred to as Education Services OPM.
(4) Talent Development Services was previously referred to
as mthree. # Variance greater than 100%
JOHN WILEY
& SONS, INC. SUPPLEMENTARY INFORMATION (1)
SEGMENT RESULTS (in thousands) (unaudited)
% Change
Nine Months Ended January
31,
Favorable
(Unfavorable)
2022
2021
Reported
Constant Currency
Research Publishing & Platforms: Revenue, net
Research Publishing
$
775,115
$
700,482
11%
9%
Research Platforms
38,136
31,512
21%
21%
Total Revenue, net
$
813,251
$
731,994
11%
10%
Contribution to Profit
$
218,004
$
204,688
7%
6%
Adjustments: Restructuring charges (credits)
238
(352
)
# #
Non-GAAP Adjusted Contribution to Profit
$
218,242
$
204,336
7%
7%
Depreciation and amortization
71,140
60,463
-18%
-16%
Non-GAAP Adjusted EBITDA
$
289,382
$
264,799
9%
9%
Adjusted EBITDA margin
35.6
%
36.2
%
Academic & Professional Learning: Revenue,
net Education Publishing (2)
$
260,459
$
263,702
-1%
-2%
Professional Learning
225,967
206,269
10%
9%
Total Revenue, net
$
486,426
$
469,971
4%
3%
Contribution to Profit
$
83,997
$
62,552
34%
33%
Adjustments: Restructuring (credits) charges
(79
)
1,902
# #
Non-GAAP Adjusted Contribution to Profit
$
83,918
$
64,454
30%
29%
Depreciation and amortization
53,550
53,757
0%
1%
Non-GAAP Adjusted EBITDA
$
137,468
$
118,211
16%
15%
Adjusted EBITDA margin
28.3
%
25.2
%
Education Services: Revenue, net University
Services (3)
$
167,565
$
163,248
3%
2%
Talent Development Services (2)(4)
70,033
40,036
75%
70%
Total Revenue, net
$
237,598
$
203,284
17%
16%
Contribution to Profit
$
1,548
$
12,962
-88%
-89%
Adjustments: Restructuring (credits) charges
(23
)
294
# #
Non-GAAP Adjusted Contribution to Profit
$
1,525
$
13,256
-88%
-90%
Depreciation and amortization
25,376
21,982
-15%
-15%
Non-GAAP Adjusted EBITDA
$
26,901
$
35,238
-24%
-24%
Adjusted EBITDA margin
11.3
%
17.3
%
Corporate Expenses:
$
(142,704
)
$
(145,931
)
2%
2%
Adjustments: Restructuring (credits) charges
(1,297
)
22,969
# #
Non-GAAP Adjusted Contribution to Profit
$
(144,001
)
$
(122,962
)
-17%
-17%
Depreciation and amortization
12,418
11,051
-12%
-12%
Non-GAAP Adjusted EBITDA
$
(131,583
)
$
(111,911
)
-18%
-17%
Consolidated Results: Revenue, net
$
1,537,275
$
1,405,249
9%
8%
Operating Income
$
160,845
$
134,271
20%
19%
Adjustments: Restructuring (credits) charges
(1,161
)
24,813
# #
Non-GAAP Adjusted Contribution to Profit
$
159,684
$
159,084
0%
0%
Depreciation and amortization
162,484
147,253
-10%
-10%
Non-GAAP Adjusted EBITDA
$
322,168
$
306,337
5%
4%
Adjusted EBITDA margin
21.0
%
21.8
%
# Variance greater than 100%
JOHN WILEY & SONS,
INC. SUPPLEMENTARY INFORMATION (1) CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in
thousands) (unaudited)
January 31,
April 30,
2022
2021
Assets: Current assets Cash and cash equivalents
$
109,444
$
93,795
Accounts receivable, net
267,988
311,571
Inventories, net
39,726
42,538
Prepaid expenses and other current assets
74,412
78,393
Total current assets
491,570
526,297
Product development assets, net
44,350
49,517
Royalty advances, net
36,523
39,582
Technology, property and equipment, net
271,984
282,270
Intangible assets, net
970,893
1,015,302
Goodwill
1,325,964
1,304,340
Operating lease right-of-use assets
118,155
121,430
Other non-current assets
118,545
107,701
Total assets
$
3,377,984
$
3,446,439
Liabilities and shareholders' equity: Current
liabilities Accounts payable
$
76,743
$
95,791
Accrued royalties
141,304
78,582
Short-term portion of long-term debt
15,625
12,500
Contract liabilities
355,846
545,425
Accrued employment costs
105,286
144,744
Accrued income taxes
16,804
8,590
Short-term portion of operating lease liabilities
21,598
22,440
Other accrued liabilities
88,275
80,900
Total current liabilities
821,481
988,972
Long-term debt
902,045
809,088
Accrued pension liability
115,860
146,247
Deferred income tax liabilities
182,899
172,903
Operating lease liabilities
139,587
145,832
Other long-term liabilities
96,594
92,106
Total liabilities
2,258,466
2,355,148
Shareholders' equity
1,119,518
1,091,291
Total liabilities and shareholders' equity
$
3,377,984
$
3,446,439
Notes: (1) The supplementary information included in
this press release for January 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)
Nine Months Ended
January 31,
2022
2021
Operating activities: Net income
$
105,163
$
106,927
Amortization of intangible assets
63,683
53,089
Amortization of product development assets
26,662
25,323
Depreciation and amortization of technology, property, and
equipment
72,139
68,841
Other noncash charges
69,347
84,366
Net change in operating assets and liabilities
(178,510
)
(183,720
)
Net cash provided by operating activities
158,484
154,826
Investing activities: Additions to technology,
property, and equipment
(60,668
)
(58,176
)
Product development spending
(20,388
)
(17,103
)
Businesses acquired in purchase transactions, net of cash acquired
(70,620
)
(298,590
)
Proceeds related to the sale of certain assets
3,375
-
Acquisitions of publication rights and other
(3,750
)
(18,524
)
Net cash used in investing activities
(152,051
)
(392,393
)
Financing activities: Net debt borrowings
105,334
174,170
Cash dividends
(57,900
)
(57,802
)
Purchases of treasury shares
(24,867
)
(7,063
)
Other
(9,468
)
6,538
Net cash provided by financing activities
13,099
115,843
Effects of exchange rate changes on cash, cash
equivalents and restricted cash
(3,875
)
10,631
Change in cash, cash equivalents and restricted cash for
period
15,657
(111,093
)
Cash, cash equivalents and restricted cash -
beginning
94,359
203,047
Cash, cash equivalents and restricted cash - ending
$
110,016
$
91,954
CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT
DEVELOPMENT SPENDING (2) Nine Months Ended
January 31,
2022
2021
Net cash provided by operating activities
$
158,484
$
154,826
Less: Additions to technology, property, and equipment
(60,668
)
(58,176
)
Less: Product development spending
(20,388
)
(17,103
)
Free cash flow less product development spending
$
77,428
$
79,547
Notes: (1) The supplementary information included in
this press release for the nine months ended January 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: · Adjusted
Earnings Per Share (Adjusted EPS); · Free Cash Flow less Product
Development Spending; · Adjusted Contribution to Profit 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
since we believe Adjusted EBITDA provides additional useful
information to certain investors and financial analysts for
operational trends and comparisons over time as it removes the
impact of depreciation and amortization expense, as well as a
consistent basis to evaluate operating profitability and comparing
our financial performance to that of our peer companies and
competitors. For example: • Adjusted EPS, Adjusted
Contribution to Profit, 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 removes 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 2022
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/20220308005506/en/
Brian Campbell Investor Relations brian.campbell@wiley.com
201.748.6874
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