Wiley Reports Second Quarter Fiscal 2020 Results
December 4, 2019 –
John Wiley & Sons, Inc. (NYSE: JW-A and JW-B), a global research and education company, today announced results for the second quarter ended October 31, 2019.

Highlights
GAAP Results: Revenue of $466 million (+4%) and EPS of $0.79 (+4%)
Adjusted Results (at constant currency): Revenue +5%, EBITDA +3%, and EPS -1%
Strong growth in Research and Education Services segments
Academic & Professional Learning decline reflecting market pressures in book publishing
Efficiency improvements and cost savings through business optimization

“We continue to make good progress on our strategic initiatives, building upon our competitive advantages and extending into adjacent opportunities,” said Brian Napack, Wiley’s President and CEO.  “Our Research and Education Services businesses delivered another quarter of strong growth and improved profitability, driven by noteworthy gains in research publishing volume and enrollment growth in Education Services.  In Academic & Professional Learning, we faced further market-driven declines for traditional books.  We continue to build toward profitable growth in this segment by shifting to innovative learning tools and services for high-demand careers.”

GAAP Measures
Unaudited ($millions except for EPS)
   
Q2 2020
     
Q2 2019
   
Change
 
Revenue
 
$
466.2
   
$
448.6
     
+4
%
Diluted EPS
 
$
0.79
   
$
0.76
     
+4
%
Non-GAAP Measures
   
Q2 2020
     
Q2 2019
   
Change
Constant Currency
 
Revenue
 
$
466.2
   
$
448.6
     
+5
%
Adjusted EBITDA
 
$
110.0
   
$
107.1
     
+3
%
Adjusted EPS
 
$
0.85
   
$
0.89
     
(1
%)

Notes:
Excluding acquisitions and currency impact, revenue decreased 1% for the quarter.
Wiley recorded foreign currency variances in the quarter of $6 million unfavorable in revenue, $0.8 million unfavorable in EBITDA, and $0.03 unfavorable in EPS.

Second Quarter Revenue
Research Publishing & Platforms increased 2% as reported and 4% at constant currency, primarily driven by growth in open access publishing volume.
Academic & Professional Learning declined 6% as reported and 5% at constant currency, with a decline in book publishing offsetting growth in test preparation.  Excluding the zyBooks and Knewton acquisitions, organic revenue declined 10% as reported and 9% at constant currency.
Education Services increased 80% (reported and constant currency), driven by organic growth of 10% and the addition of Learning House (acquired November 2018).

Second Quarter Earnings
GAAP Operating Income of $63 million rose 10%, driven by revenue growth and efficiency gains in Research and Education Services, reduced Corporate Expenses, and lower restructuring charges.  Adjusted Operating Income was flat compared to prior year due to investments in growth and optimization initiatives.
Adjusted EBITDA rose 3% to $110 million.
o
Research Publishing & Platforms Adjusted EBITDA at constant currency rose 6% due to revenue growth and efficiency gains.
o
Academic & Professional Learning Adjusted EBITDA at constant currency declined 19%, reflecting the revenue decline and investment in growth initiatives.
o
Education Services Adjusted EBITDA increased $5.1 million to $7.6 million due to organic revenue growth and favorable timing of expenses.
o
Corporate Expenses declined 18% to $32 million due to cost savings and certain non-recurring items.
GAAP EPS increase reflected lower restructuring charges and a lower effective tax rate, partially offset by higher foreign exchange transaction losses and interest expense.  Adjusted EPS decline was primarily due to investments in growth and optimization initiatives.

Second Quarter Returns to Shareholders
Repurchased 334,336 shares for a total of $15 million at an average cost per share of $44.87
Paid cash dividends totaling $19 million ($0.34 per share)

GAAP Measures
Unaudited ($millions except for EPS)
   
1H 2020
     
1H 2019
   
Change
 
Revenue
 
$
889.7
   
$
859.5
     
+4
%
Diluted EPS
 
$
0.85
   
$
1.21
     
(30
%)
Net Cash Used in Operating Activities
 
(99.5
)
 
(116.6
)
   
+15
%
Non-GAAP Measures
   
1H 2020
     
1H 2019
   
Change
Constant Currency
 
Revenue
 
$
889.7
   
$
859.5
     
+5
%
Adjusted EBITDA
 
$
167.5
   
$
177.3
     
(5
%)
Adjusted EPS
 
$
1.06
   
$
1.31
     
(18
%)
Free Cash Flow Less Product Development Spending
 
(155.7
)
 
(163.5
)
   
+5
%

Notes:
Excluding acquisitions and currency impact, revenue was flat for the six months.
Wiley recorded foreign currency variances in the quarter of $12 million unfavorable in revenue, $0.7 million favorable in EBITDA, and $0.02 unfavorable in EPS.

First Half Commentary
Revenue increased on growth in Research Publishing & Platforms (+2% as reported, +4% constant currency) and Education Services (+75% as reported, or +10% organically), partially offset by declines in Academic & Professional Learning (-7% as reported, or -8% organically).
GAAP EPS declined by $0.36 to $0.85 due in part to a $0.15 impact from higher restructuring charges.  Adjusted EPS declined 19% and Adjusted EBITDA declined 6% due to investment in growth and optimization initiatives.
Net Cash Used in Operating Activities was $100 million compared to a net use of $117 million in the prior year period, primarily driven by the timing of cash collections.  Free Cash Flow less Product Development Spending was a use of $156 million compared to a use of $163 million in the prior year period.  Capital expenditures rose $9 million to $56 million due to increased investment in technology-enabled products and services.  Generally, cash flow is a use of cash in the first half of Wiley’s fiscal year, principally due to the timing of collections for annual research journal subscriptions, which are heavily weighted toward the second half of the year.

FISCAL YEAR 2020 OUTLOOK
The Company is reaffirming its financial outlook for the year.

ITEM (IN MILLIONS, EXCEPT EPS)
 
FY20 OUTLOOK*
 
Revenue
 
$
1,855-$1,885
 
Adjusted EBITDA
 
$
357-$372
 
Adjusted EPS
 
$
2.35-$2.45
 
Free Cash Flow
 
$
210-$230
 
*Outlook is at constant currency (reflecting FY19 average exchange rates and excluding the impact of foreign exchange movements on results through the second quarter).

EARNINGS CONFERENCE CALL
Scheduled for today, December 4 at 10:00 a.m. (ET).  Access the webcast on Wiley.com, at  https://www.wiley.com/en-us/investors.  U.S. callers, please dial (844) 231-0103 and enter the participant code 2179423#.  International callers, please dial (216) 562-0402 and enter the participant code 2179423#.

ABOUT WILEY
Wiley drives the world forward with research and education.  Through publishing, platforms and services, we help researchers, professionals, students, universities, and corporations to achieve their goals in an ever-changing world.  And for more than 200 years, we have delivered consistent performance to all of our stakeholders. The Company's website can be accessed at www.wiley.com.

NON-GAAP FINANCIAL MEASURES
Wiley provides non-GAAP financial measures and performance results such as “Adjusted EPS,” “Adjusted Revenue,” “Adjusted Operating Income,” “Adjusted EBITDA,” “Adjusted CTP,” “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.

FORWARD-LOOKING STATEMENTS
This release contains certain forward-looking statements concerning the Company's Fiscal Year 2020 Outlook, 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 Company’s ability to realize operating savings over time and in fiscal year 2020 in connection with our multi-year Business Optimization Program and (xi) 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.



JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)(2)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
                         
   
Three Months Ended
   
Six Months Ended
 
   
October 31,
   
October 31,
 
   
2019
   
2018
   
2019
   
2018
 
Revenue, net
 
$
466,205
   
$
448,622
   
$
889,735
   
$
859,523
 
Costs and expenses:
                               
  Cost of sales
   
143,413
     
132,577
     
286,509
     
260,315
 
  Operating and administrative expenses
   
240,380
     
236,207
     
490,550
     
476,633
 
  Restructuring and related charges
   
4,001
     
9,996
     
14,736
     
3,910
 
  Amortization of intangibles
   
15,020
     
12,367
     
29,990
     
25,050
 
Total Costs and Expenses
   
402,814
     
391,147
     
821,785
     
765,908
 
                                 
Operating Income
   
63,391
     
57,475
     
67,950
     
93,615
 
As a % of revenue
   
13.6
%
   
12.8
%
   
7.6
%
   
10.9
%
                                 
Interest expense
   
(6,787
)
   
(3,608
)
   
(12,864
)
   
(6,404
)
Foreign exchange transaction losses
   
(2,668
)
   
(54
)
   
(16
)
   
(1,783
)
Interest and other income
   
2,537
     
2,509
     
5,370
     
4,975
 
Income Before Taxes
   
56,473
     
56,322
     
60,440
     
90,403
 
                                 
Provision for income taxes
   
11,783
     
12,538
     
12,126
     
20,324
 
Effective tax rate
   
20.9
%
   
22.3
%
   
20.1
%
   
22.5
%
Net Income
 
$
44,690
   
$
43,784
   
$
48,314
   
$
70,079
 
As a % of revenue
   
9.6
%
   
9.8
%
   
5.4
%
   
8.2
%
                                 
Weighted-Average Shares - Diluted
   
56,664
     
57,870
     
56,791
     
57,955
 
                                 
Earnings per share - Diluted
 
$
0.79
   
$
0.76
   
$
0.85
   
$
1.21
 
                                 
Notes:
                               
(1) The supplementary information included in this press release for the three and six months ended October 31, 2019 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 six months ended October 31, 2019, we completed the acquisition of Zyante Inc. ("Zybooks"), certain assets of Knewton, Inc. (“Knewton”), which are included in our Academic & Professional Learning segment results and three immaterial acquisitions, of which two are included in our Research Publishing & Platforms segment and one included in our Academic & Professional Learning segment which was completed during the three months ended October 31, 2019.

 
(2) All amounts are approximate due to rounding.
                               



JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
RECONCILIATION OF GAAP EPS to NON-GAAP ADJUSTED EPS - DILUTED
(unaudited)
                         
   
Three Months Ended
   
Six Months Ended
 
   
October 31,
   
October 31,
 
   
2019
   
2018
   
2019
   
2018
 
 GAAP Earnings Per Share - Diluted
 
$
0.79
   
$
0.76
   
$
0.85
   
$
1.21
 
 Adjustments:
                               
 Restructuring and related charges (A)
   
0.06
     
0.13
     
0.20
     
0.05
 
 Foreign exchange losses (gains) on intercompany transactions (A)
   
-
     
-
     
0.01
     
0.05
 
 Non-GAAP Adjusted Earnings Per Share - Diluted
 
$
0.85
   
$
0.89
   
$
1.06
   
$
1.31
 
                                 
Notes:
                               
(A) The table below shows the net of tax impact of our multi-year Business Optimization Program, Restructuring and Reinvestment Program and foreign exchange losses (gains) on intercompany transactions.

 
   
Three Months Ended
   
Six Months Ended
 
   
October 31,
   
October 31,
 
(amounts in millions)
   
2019
     
2018
     
2019
     
2018
 
Net of tax charges related to the Business Optimization Program
 
$
2.8
   
$
-
   
$
11.1
   
$
-
 
Net of tax charges related to the Restructuring and Reinvestment Program
 
$
0.3
   
$
7.6
   
$
0.2
   
$
3.0
 
Net of tax foreign exchange transaction losses (gains)
 
$
0.5
   
$
0.0
   
$
0.7
   
$
3.1
 
                                 
(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, 2019 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)
RECONCILIATION OF GAAP NET INCOME to NON-GAAP EBITDA AND ADJUSTED EBITDA
(unaudited)
                         
   
Three Months Ended
   
Six Months Ended
 
   
October 31,
   
October 31,
 
   
2019
   
2018
   
2019
   
2018
 
Net Income
 
$
44,690
   
$
43,784
   
$
48,314
   
$
70,079
 
Interest expense
   
6,787
     
3,608
     
12,864
     
6,404
 
Provision for income taxes
   
11,783
     
12,538
     
12,126
     
20,324
 
Depreciation and amortization
   
42,638
     
39,652
     
84,857
     
79,823
 
Non-GAAP EBITDA
   
105,898
     
99,582
     
158,161
     
176,630
 
Restructuring and related charges
   
4,001
     
9,996
     
14,736
     
3,910
 
Foreign exchange transaction losses
   
2,668
     
54
     
16
     
1,783
 
Interest and other income
   
(2,537
)
   
(2,509
)
   
(5,370
)
   
(4,975
)
Non-GAAP Adjusted EBITDA
 
$
110,030
   
$
107,123
   
$
167,543
   
$
177,348
 
                                 
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, 2019 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)(2)
SEGMENT RESULTS
(in thousands)
(unaudited)
                           
      
Three Months Ended October 31,
   
% Change
Favorable (Unfavorable)
 
       
2019
     2018 (2)    
Reported
   
Constant
Currency
 
Research Publishing & Platforms:
                       
Revenue, net
                       
Research Publishing
 
$
225,085
   
$
219,710
     
2
%
   
4
%
Research Platforms
   
9,624
     
9,365
     
3
%
   
3
%
Total Revenue, net
 
$
234,709
   
$
229,075
     
2
%
   
4
%
                                   
Contribution to Profit
 
$
63,291
   
$
59,210
     
7
%
   
7
%
Adjustments:
                               
Restructuring charges
   
726
     
2,282
                 
Non-GAAP Adjusted Contribution to Profit
 
$
64,017
   
$
61,492
     
4
%
   
4
%
Depreciation and amortization
   
17,037
     
15,422
                 
Non-GAAP Adjusted EBITDA
 
$
81,054
   
$
76,914
     
5
%
   
6
%
                                   
Academic & Professional Learning:
                               
Revenue, net
                               
Education Publishing
 
$
101,741
   
$
107,474
     
-5
%
   
-4
%
Professional Learning
   
75,984
     
82,196
     
-8
%
   
-6
%
Total Revenue, net
   
177,725
     
189,670
     
-6
%
   
-5
%
                                   
Contribution to Profit
 
$
35,050
   
$
47,078
     
-26
%
   
-24
%
Adjustments:
                               
Restructuring charges
   
800
     
2,194
                 
Non-GAAP Adjusted Contribution to Profit
 
$
35,850
   
$
49,272
     
-27
%
   
-26
%
Depreciation and amortization
   
17,349
     
17,473
                 
Non-GAAP Adjusted EBITDA
 
$
53,199
   
$
66,745
     
-20
%
   
-19
%
                                   
Education Services:
                               
Total Revenue, net
 
$
53,771
   
$
29,877
     
80
%
   
80
%
                                   
Contribution to Profit
 
$
2,583
   
$
(867
)
   
#
     
#
 
Adjustments:
                               
Restructuring (credits) charges
   
(475
)
   
310
                 
Non-GAAP Adjusted Contribution to Profit
 
$
2,108
   
$
(557
)
   
#
     
#
 
Depreciation and amortization
   
5,522
     
3,045
                 
Non-GAAP Adjusted EBITDA
 
$
7,630
   
$
2,488
     
#
     
#
 
                                   
Corporate Expenses:
 
$
(37,533
)
 
$
(47,946
)
   
22
%
   
21
%
Adjustments:
                               
Restructuring charges
   
2,950
     
5,210
                 
Non-GAAP Adjusted Corporate Expenses
 
$
(34,583
)
 
$
(42,736
)
   
19
%
   
18
%
Depreciation and amortization
   
2,730
     
3,712
                 
Non-GAAP Adjusted EBITDA
 
$
(31,853
)
 
$
(39,024
)
   
18
%
   
18
%
                                   
Consolidated Results:
                               
Revenue, net
 
$
466,205
   
$
448,622
     
4
%
   
5
%
                                   
Operating Income
 
$
63,391
   
$
57,475
     
10
%
   
11
%
Adjustments:
                               
Restructuring charges
   
4,001
     
9,996
                 
Non-GAAP Adjusted Operating Income
 
$
67,392
   
$
67,471
     
0
%
   
0
%
Depreciation and amortization
   
42,638
     
39,652
                 
Non-GAAP Adjusted EBITDA
 
$
110,030
   
$
107,123
     
3
%
   
3
%
As a % of revenue
   
23.6
%
   
23.9
%
               
                                   
(1) The supplementary information included in this press release for the three months ended October 31, 2019 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 have changed our segment reporting structure to align with our strategic focus areas: (1) Research Publishing & Platforms, which continues to include the Research and Atypon businesses, (2) Academic & Professional Learning, which is the former “Publishing” segment combined with our corporate training businesses – previously noted as Professional Assessment and Corporate Learning and (3) Education Services, which includes our Online Program Management and related businesses. Prior period segment results have been revised to the new segment presentation. There were no changes to our consolidated financial results.

 
# Not meaningful

                               


JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
SEGMENT RESULTS
(in thousands)
(unaudited)
                 
% Change
 
      
Six Months Ended October 31,
   
Favorable (Unfavorable)
 
     
2019
   
2018 (2)
   
Reported
   
Constant
Currency
 
Research Publishing & Platforms:
                       
Revenue, net
                       
Research Publishing
 
$
445,012
   
$
436,424
     
2
%
   
4
%
Research Platforms
   
19,072
     
17,968
     
6
%
   
6
%
Total Revenue, net
 
$
464,084
   
$
454,392
     
2
%
   
4
%
                                   
Contribution to Profit
 
$
118,937
   
$
116,527
     
2
%
   
2
%
Adjustments:
                               
Restructuring charges
   
3,346
     
1,302
                 
Non-GAAP Adjusted Contribution to Profit
 
$
122,283
   
$
117,829
     
4
%
   
4
%
Depreciation and amortization
   
34,190
     
30,787
                 
Non-GAAP Adjusted EBITDA
 
$
156,473
   
$
148,616
     
5
%
   
6
%
                                   
Academic & Professional Learning:
                               
Revenue, net
                               
Education Publishing
 
$
167,264
   
$
181,508
     
-8
%
   
-7
%
Professional Learning
   
155,319
     
164,586
     
-6
%
   
-4
%
Total Revenue, net
 
$
322,583
   
$
346,094
     
-7
%
   
-5
%
                                   
Contribution to Profit
 
$
39,961
   
$
68,845
     
-42
%
   
-41
%
Adjustments:
                               
Restructuring charges
   
3,605
     
1,477
                 
Non-GAAP Adjusted Contribution to Profit
 
$
43,566
   
$
70,322
     
-38
%
   
-37
%
Depreciation and amortization
   
33,873
     
35,050
                 
Non-GAAP Adjusted EBITDA
 
$
77,439
   
$
105,372
     
-27
%
   
-26
%
                                   
Education Services:
                               
Total Revenue, net
 
$
103,068
   
$
59,037
     
75
%
   
75
%
                                   
Contribution to Profit
 
$
(4,616
)
 
$
(5,886
)
   
22
%
   
21
%
Adjustments:
                               
Restructuring charges
   
1,614
     
102
                 
Non-GAAP Adjusted Contribution to Profit
 
$
(3,002
)
 
$
(5,784
)
   
48
%
   
48
%
Depreciation and amortization
   
11,020
     
6,512
                 
Non-GAAP Adjusted EBITDA
 
$
8,018
   
$
728
     
#
     
#
 
                                   
Corporate Expenses:
 
$
(86,332
)
 
$
(85,871
)
   
-1
%
   
-1
%
Adjustments:
                               
Restructuring charges
   
6,171
     
1,029
                 
Non-GAAP Adjusted Corporate Expenses
 
$
(80,161
)
 
$
(84,842
)
   
6
%
   
5
%
Depreciation and amortization
   
5,774
     
7,474
                 
Non-GAAP Adjusted EBITDA
 
$
(74,387
)
 
$
(77,368
)
   
4
%
   
3
%
                                   
Consolidated Results:
                               
Revenue, net
 
$
889,735
   
$
859,523
     
4
%
   
5
%
                                   
Operating Income
 
$
67,950
   
$
93,615
     
-27
%
   
-28
%
Adjustments:
                               
Restructuring charges
   
14,736
     
3,910
                 
Non-GAAP Adjusted Operating Income
 
$
82,686
   
$
97,525
     
-15
%
   
-16
%
Depreciation and amortization
   
84,857
     
79,823
                 
Non-GAAP Adjusted EBITDA
 
$
167,543
   
$
177,348
     
-6
%
   
-5
%
                                   
Notes:
                               
(1) The supplementary information included in this press release for the six months ended October 31, 2019 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 have changed our segment reporting structure to align with our strategic focus areas: (1) Research Publishing & Platforms, which continues to include the Research and Atypon businesses, (2) Academic & Professional Learning, which is the former “Publishing” segment combined with our corporate training businesses – previously noted as Professional Assessment and Corporate Learning and (3) Education Services, which includes our Online Program Management and related businesses. Prior period segment results have been revised to the new segment presentation. There were no changes to our consolidated financial results.

 
# Not meaningful

                               


JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands)
(unaudited)
             
   
October 31,
   
April 30,
 
   
2019
   
2019
 
Assets:
           
Current Assets
           
Cash and cash equivalents
 
$
107,744
   
$
92,890
 
Accounts receivable, net
   
235,466
     
294,867
 
Inventories, net
   
45,032
     
35,582
 
Prepaid expenses and other current assets
   
58,926
     
67,441
 
Total Current Assets
   
447,168
     
490,780
 
                 
Product Development Assets, net
   
57,394
     
62,470
 
Royalty Advances, net
   
16,473
     
36,185
 
Technology, Property and Equipment, net
   
294,761
     
289,021
 
Intangible Assets, net
   
880,613
     
865,572
 
Goodwill
   
1,143,197
     
1,095,666
 
Operating Lease Right-of-Use Assets (2)
   
145,886
     
-
 
Other Non-Current Assets
   
97,279
     
97,308
 
Total Assets
 
$
3,082,771
   
$
2,937,002
 
                 
Liabilities and Shareholders' Equity:
               
Current Liabilities
               
Accounts payable
 
$
74,425
   
$
90,980
 
Accrued royalties
   
91,438
     
78,062
 
Short-term portion of long-term debt
   
6,250
     
-
 
Contract liabilities
   
248,653
     
507,365
 
Accrued employment costs
   
74,727
     
97,230
 
Accrued income taxes
   
3,294
     
21,025
 
Short-term portion of operating lease liabilities (2)
   
18,409
     
-
 
Other accrued liabilities
   
68,446
     
75,900
 
Total Current Liabilities
   
585,642
     
870,562
 
Long-Term Debt
   
788,360
     
478,790
 
Accrued Pension Liability
   
152,707
     
166,331
 
Deferred Income Tax Liabilities
   
137,295
     
143,775
 
Operating Lease Liabilities (2)
   
164,622
     
-
 
Other Long-Term Liabilities
   
75,149
     
96,197
 
Total Liabilities
   
1,903,775
     
1,755,655
 
Shareholders' Equity
   
1,178,996
     
1,181,347
 
Total Liabilities and Shareholders' Equity
 
$
3,082,771
   
$
2,937,002
 
                 
(1) The supplementary information included in this press release for October 31, 2019 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) We adopted ASU 2016-02, "Leases (Topic 842)” on May 1, 2019 using the required modified retrospective approach, whereby we used the effective date as the date of initial application and therefore previously reported financial information was not updated.

 


JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(in thousands)
(unaudited)
               
      
Six Months Ended
 
      
October 31,
 
     
2019
   
2018 (2)
 
Operating Activities:
           
Net income
 
$
48,314
   
$
70,079
 
Amortization of intangibles
   
29,990
     
25,050
 
Amortization of product development assets
   
17,616
     
18,928
 
Depreciation and amortization of technology, property, and equipment
   
37,251
     
35,845
 
Other non-cash charges and credits
   
59,302
     
43,009
 
Net change in operating assets and liabilities
   
(291,994
)
   
(309,472
)
Net Cash Used In Operating Activities
   
(99,521
)
   
(116,561
)
                   
Investing Activities:
               
Additions to technology, property, and equipment
   
(44,531
)
   
(34,560
)
Product development spending
   
(11,686
)
   
(12,351
)
Businesses acquired in purchase transactions, net of cash acquired
   
(74,169
)
   
-
 
Acquisitions of publication rights and other
   
(4,045
)
   
(2,795
)
Net Cash Used in Investing Activities
   
(134,431
)
   
(49,706
)
                   
Financing Activities:
               
Net debt borrowings
   
317,471
     
179,275
 
Cash dividends
   
(38,486
)
   
(38,033
)
Purchase of treasury shares
   
(25,000
)
   
(24,994
)
Other
   
(4,718
)
   
4,217
 
Net Cash Provided By Financing Activities
   
249,267
     
120,465
 
                   
Effects of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash
   
(461
)
   
(8,368
)
                   
Change in Cash, Cash Equivalents and Restricted Cash for Period
   
14,854
     
(54,170
)
                   
Cash, Cash Equivalents and Restricted Cash - Beginning
   
93,548
     
170,257
 
Cash, Cash Equivalents and Restricted Cash - Ending
 
$
108,402
   
$
116,087
 
                   
CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT DEVELOPMENT SPENDING 
 
                   
      
Six Months Ended
 
      
October 31,
 
       
2019
     
2018
 
Net Cash Used In Operating Activities
 
$
(99,521
)
 
$
(116,561
)
Less: Additions to technology, property, and equipment

   
(44,531
)
   
(34,560
)
Less: Product development spending

   
(11,686
)
   
(12,351
)
Free Cash Flow less Product Development Spending
 
$
(155,738
)
 
$
(163,472
)
                   
See Explanation of Usage of Non-GAAP Measures included in this supplemental information.

               
(1) The supplementary information included in this press release for the six months ended October 31, 2019 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.

 
(2) The Condensed Consolidated Statement of Cash Flows for the six months ended October 31, 2018, includes a reclassification of $4.5 million between Operating Activities within the net change in operating assets and liabilities and Investing Activities related to costs to fulfill a contract and product development spending. In addition, for the six months ended October 31, 2018, amortization expense related to costs to fulfill a contract of $1.2 million was reclassified from amortization of product development assets to other non-cash charges and credits within Operating Activities.
 


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 Contribution to Profit ("CTP") and margin;
      EBITDA and Adjusted EBITDA;
      Organic revenue;
      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 for internal reporting and forecasting purposes, when publicly providing its outlook, to evaluate the Company's performance and to evaluate and calculate incentive compensation. 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 Company presents these non-GAAP performance measures in addition to GAAP financial results because it believes that these non-GAAP performance measures provide useful information to certain investors and financial analysts for operational trends and comparisons across accounting periods. The use of these non-GAAP performance measures provides 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. For example:
     Adjusted EPS, Adjusted Revenue, Adjusted Operating Profit, Adjusted Contribution to Profit, Adjusted EBITDA and organic revenue provide a 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 dividends and fund share repurchases and new 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 before 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, the Company has historically provided these or similar non-GAAP performance measures and understands that some investors and financial analysts find this information helpful in analyzing the Company's operating margins, and net income and comparing the Company's financial performance to that of its 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 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.




The following information was filed by Wiley John Sons, Inc. on Wednesday, December 4, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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