JWA John Wiley & Sons, Inc.(CL A)

John Wiley & Sons, Inc. (NYSE:JWA)(NYSE:JWB), a global leader in research and education, today announced results for the fourth quarter and fiscal year ended April 30, 2021.

FOURTH QUARTER 2021 SUMMARY

• GAAP results: Revenue of $536 million, Operating Income of $51 million, and EPS of $0.73
• Adjusted results (at constant currency): Revenue +10%, EBITDA +21%, and EPS +41%

FISCAL YEAR 2021 SUMMARY

• GAAP results: Revenue of $1,942 million, Operating Income of $186 million, EPS of $2.63, and Cash Flow from Operations of $360 million
• Adjusted results (at constant currency): Revenue +4%, EBITDA +16%, and EPS +27%
• Free Cash Flow of $257 million, up 48% from prior year
• Digital products and tech-enabled services now at 82% of total revenue, up from 80% a year ago

MANAGEMENT COMMENTARY

“Fiscal 2021 was a good year for Wiley as our growth strategies in open research and career-connected education took firm root and benefited from long-term trends pulled forward by COVID,” said Brian Napack, President and CEO. “These positive market dynamics, combined with great execution in a very complex time, resulted in strong performance and increasing momentum. In the face of historic challenges, Wiley continued to help researchers and learners pursue their critical journeys of discovery and growth.”

FOURTH QUARTER PERFORMANCE

GAAP Measures

Unaudited ($millions except for EPS)

Q4 2021

Q4 2020

Change

Revenue

$536.3

$474.6

+13%

Operating Income (Loss)

$51.2

($170.7)

NM

Diluted EPS

$0.73

($2.83)

NM

Non-GAAP Measures

Q4 2021

Q4 2020

Change

Constant Currency

Revenue

$536.3

$474.6

+10%

Adjusted EBITDA

$112.7

$92.8

+21%

Adjusted EPS

$0.84

$0.66

+41%

Excluding FX and acquisitions, revenue rose 7% for the quarter. Wiley recorded a favorable FX variance of $14.8 million in revenue and $0.5 million in Adjusted EBITDA, along with an unfavorable FX variance of $0.09 in Adjusted EPS.

Revenue

• Research Publishing & Platforms rose 13% as reported and 4% at constant currency and excluding acquisitions, driven primarily by strong growth in open access.
• Academic & Professional Learning grew 15% as reported and 12% at constant currency driven by strong growth in Education Publishing and trade publishing, accompanied by further recovery in corporate training.
• Education Services increased 9% as reported and 7% at constant currency, driven by growth in online enrollment and mthree IT talent placements.

Adjusted EBITDA

• Research Publishing & Platforms was down 6% at constant currency due to increased editorial resources to support higher article output, as well as higher annual incentive compensation and Hindawi acquisition costs.
• Academic & Professional Learning rose 57% at constant currency, reflecting revenue growth, business optimization gains, and COVID-related savings, offsetting higher annual incentive compensation.
• Education Services rose 32%, driven by revenue growth and business optimization gains, offsetting higher annual incentive compensation.
• Adjusted Corporate Expenses were down 11% mainly due to lower retirement plan expense.

EPS

• GAAP EPS was $0.73 compared to a loss of ($2.83) in the prior year period. Wiley recorded a restructuring charge of $0.12 per share this quarter primarily related to business optimization efforts.
• Adjusted EPS growth was primarily due to higher operating income and a lower effective tax rate.

FISCAL YEAR 2021 PERFORMANCE

GAAP Measures

Unaudited ($millions except for EPS)

Fiscal 2021

Fiscal 2020

Change

Revenue

$1,941.5

$1,831.5

+6%

Operating Income (Loss)

$185.5

($54.3)

NM

Diluted EPS

$2.63

($1.32)

NM

Net Cash Provided by Operating Activities

$359.9

$288.4

+25%

Non-GAAP Measures

Fiscal 2021

Fiscal 2020

Change

Constant Currency

Revenue

$1,941.5

$1,831.5

+4%

Adjusted EBITDA

$419.0

$355.8

+16%

Adjusted EPS

$2.92

$2.40

+27%

Free Cash Flow Less Product Development Spending

$256.6

$173.2

+48%

Excluding FX and acquisitions, revenue rose 1%. Wiley recorded a favorable FX variance of $27.8 million in revenue and $4.7 million in Adjusted EBITDA, along with an unfavorable FX variance of $0.13 in Adjusted EPS.

• Revenue growth was driven by Research Publishing & Platforms (+7% as reported, +3% constant currency and excluding impact of acquisitions) and Education Services (+21% as reported, +7% constant currency and excluding impact of acquisitions), partially offset by a decline in Academic & Professional Learning (-1% as reported, -3% at constant currency and excluding impact of acquisitions).
• GAAP EPS increase mainly reflected operating income growth this year and impairment and restructuring charges in the prior year. Fiscal 2021 restructuring charges totalling $0.44 per share were primarily related to a previously disclosed reduction in Wiley’s real estate footprint.
• Adjusted EPS and Adjusted EBITDA growth largely due to revenue growth, business optimization gains, and COVID-related savings, including travel and events. Wiley’s Adjusted EBITDA margin rose from 19.4% in Fiscal 2020 to 21.6% in Fiscal 2021.
• Balance Sheet: The Company’s net debt-to-EBITDA ratio was 1.7, inclusive of acquisitions.
• Net Cash Provided by Operating Activities and Free Cash Flow less Product Development Spending increase primarily due to higher cash earnings. Capital Expenditures declined $12 million to $103 million largely due to delayed first-half investment in response to COVID-19.
• Acquisitions: The Company spent $298 million in cash to acquire Hindawi, a leader in open access research publishing.
• Returns to Shareholders: The Company utilized approximately $77 million of cash for dividends and $15.8 million to repurchase approximately 310,000 shares at an average cost per share of $50.93.

FISCAL YEAR 2022 OUTLOOK

Given positive market trends and Wiley’s favorable momentum, the Company anticipates revenue growth to continue to accelerate in Fiscal 2022, with organic growth anticipated for all segments.

• Revenue Outlook: Wiley expects revenue to exceed $2 billion for the first time, with mid-to-high single digit growth anticipated for Research Publishing & Platforms, low-single digit growth for Academic & Professional Learning, and low-teens growth for Education Services.
• Earnings Outlook: Wiley expects profit gains from revenue growth to be tempered by investments to accelerate growth initiatives, as well as higher T&E expenses due to the resumption of in-person business activities. Adjusted EPS performance is expected to be moderated by higher depreciation and amortization expense, and a higher effective tax rate.
• Free Cash Flow Outlook: Wiley expectsstrong cash earnings to be partially offset by higher capex (outlook of $120-$130 million vs. $103 million in Fiscal 2021), non-recurrence of a $21 million tax refund received in Fiscal 2021, and higher annual incentive compensation payments related to Fiscal 2021 performance.

Metric ($millions, except EPS)

Fiscal 2021

Fiscal 2022 Outlook

Revenue

$1,942

$2,070 to $2,100

Adjusted EBITDA

$419

$415 to $435

Adjusted EPS

$2.92

$2.80 to $3.05

Free Cash Flow

$257

$200 to $220

EARNINGS CONFERENCE CALL

Scheduled for today, June 10 at 10:00 am (ET). Access webcast at Investor Relations at investors.wiley.com, or directly at https://event.on24.com/wcc/r/3081625/07B503CEDF337A0960EE124635E07D12. U.S. callers, please dial (844) 418-0103 and enter the participant code 3516229#. International callers, please dial (236) 714-3019 and enter the participant code 3516229#.

ABOUT WILEY

Wiley (NYSE: JWA) 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,” “Adjusted Operating Income,” “Adjusted EBITDA,” “Adjusted CTP,” “Adjusted Income before Taxes,” “Adjusted Income Tax Provision,” “Adjusted Effective Income Tax Rate,” “Free Cash Flow less Product Development Spending,” “organic revenue,” 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 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 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 events or circumstances.

Category: Earnings Releases

 

JOHN WILEY & SONS, INC.

SUPPLEMENTARY INFORMATION (1)(2)

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(in thousands, except per share data)

(unaudited)

 

Three Months Ended

Year Ended

April 30,

April 30,

2021

2020

2021

2020

Revenue, net

 $         536,252

 $        474,617

 $      1,941,501

 $   1,831,483

Costs and expenses:

  Cost of sales

            168,037

           150,591

            625,335

         591,024

  Operating and administrative expenses

            286,882

           261,122

         1,022,660

         997,355

  Impairment of goodwill and intangible assets

                      -  

           202,348

                      -  

         202,348

  Restructuring and related charges

                8,497

             14,573

              33,310

           32,607

  Amortization of intangible assets

              21,596

             16,714

              74,685

           62,436

Total Costs and Expenses

            485,012

           645,348

         1,755,990

      1,885,770

 

Operating Income (Loss)

              51,240

         (170,731)

            185,511

          (54,287)

As a % of revenue

9.6%

-36.0%

9.6%

-3.0%

 

Interest expense

               (4,455)

             (5,786)

             (18,383)

          (24,959)

Foreign exchange transaction (losses) gains

               (1,504)

               4,534

               (7,977)

             2,773

Other income

                4,992

               3,779

              16,761

           13,381

Income (Loss) Before Taxes

              50,273

         (168,204)

            175,912

          (63,092)

 

Provision (Benefit) for income taxes

                8,944

           (10,160)

              27,656

           11,195

Effective tax rate

17.8%

6.0%

15.7%

-17.7%

Net Income (Loss)

 $           41,329

 $      (158,044)

 $         148,256

 $       (74,287)

As a % of revenue

7.7%

-33.3%

7.6%

-4.1%

 

Weighted Average Number of Common Shares Outstanding

Basic

              55,814

             55,896

              55,930

           56,209

Diluted

              56,616

             55,896

              56,461

           56,209

 

Earnings (Loss) Per Share

Basic

 $               0.74

 $            (2.83)

 $               2.65

 $           (1.32)

Diluted

 $               0.73

 $            (2.83)

 $               2.63

 $           (1.32)

 

 Notes:

(1) The supplementary information included in this press release for the three months and year ended April 30, 2021 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. In the year ended April 30, 2021, we completed the acquisition of Hindawi, which is included in our Research Publishing & Platforms segment results.

(2) All amounts are approximate due to rounding.

JOHN WILEY & SONS, INC.

SUPPLEMENTARY INFORMATION (1) (2)

RECONCILIATION OF U.S. GAAP MEASURES to NON-GAAP MEASURES

(unaudited)

 

 Reconciliation of U.S. GAAP EPS to Non-GAAP Adjusted EPS

 

 

 

 

 

 

 

 

 

 

Three Months Ended

Year Ended

April 30,

April 30,

2021

2020

2021

2020

 U.S. GAAP Earnings (Loss) Per Share - Diluted

 $                0.73

 $             (2.83)

 $                  2.63

 $               (1.32)

 Adjustments:

 Restructuring and related charges 

                   0.12

                  0.20

                     0.44

                    0.43

 Foreign exchange (gains) losses on intercompany transactions 

                 (0.01)

                (0.01)

                    (0.02)

                    0.02

 Income tax adjustments (A) (B) (C)

                       -  

                (0.03)

                    (0.13)

                  (0.03)

 Impairment of goodwill 

                       -  

                  1.95

                         -  

                    1.94

  Impairment of Blackwell trade name 

                       -  

                  1.32

                         -  

                    1.31

 Impairment of developed technology intangible 

                       -  

                  0.04

                         -  

                    0.04

 EPS impact of using weighted-average dilutive shares for adjusted EPS calculation (D)

                       -  

                  0.02

                         -  

                    0.01

 Non-GAAP Adjusted Earnings Per Share - Diluted

 $                0.84

 $               0.66

 $                  2.92

 $                 2.40

 

 Reconciliation of U.S. GAAP Income (Loss) Before Taxes to Non-GAAP Adjusted Income Before Taxes 

Three Months Ended

Year Ended

 (amounts in thousands)

April 30,

April 30,

2021

2020

2021

2020

 U.S. GAAP Income (Loss) Before Taxes

 $            50,273

 $       (168,204)

 $            175,912

 $           (63,092)

  Pre-Tax Impact of Adjustments:

Restructuring and related charges

                 8,497

              14,573

                 33,310

                32,607

Foreign exchange (gains) losses on intercompany transactions

                  (385)

                 (462)

                  (1,457)

                  1,256

Impairment of goodwill

                       -  

            110,000

                         -  

              110,000

Impairment of Blackwell trade name

                       -  

              89,507

                         -  

                89,507

Impairment of developed technology intangible

                       -  

                2,841

                         -  

                  2,841

 Non-GAAP Adjusted Income Before Taxes

 $            58,385

 $           48,255

 $            207,765

 $           173,119

 

 Reconciliation of U.S. GAAP Income Tax Provision (Benefit) to Non-GAAP Adjusted Income Tax Provision

 

 U.S. GAAP Income Tax Provision (Benefit)

 $              8,944

 $         (10,160)

 $              27,656

 $             11,195

  Income Tax Impact of Adjustments (E):

Restructuring and related charges

                 1,702

                3,675

                   8,065

                  7,949

Foreign exchange (gains) losses on intercompany transactions

                      40

                 (166)

                     (363)

                     242

Impairment of goodwill

                       -  

                      -  

                         -  

                        -  

Impairment of Blackwell trade name

                       -  

              15,216

                         -  

                15,216

Impairment of developed technology intangible

                       -   

                   686

                         -  

                     686

 

  Income Tax Adjustments:

 Impact of increase in U.K. statutory rate on deferred tax balances (A)

                 3,261

                      -  

                  (3,511)

                        -  

 Impact of U.S. CARES Act (B)

                       -  

                      -  

                 13,998

                        -  

 Impact of change in certain U.S. state tax rates in 2021 and tax rates in France in 2020 (C)

               (3,225)

                1,887

                  (3,225)

                  1,887

 Non GAAP Adjusted Income Tax Provision 

 $            10,722

 $           11,138

 $              42,620

 $             37,175

 

 U.S. GAAP Effective Tax Rate

17.8%

6.0%

15.7%

-17.7%

 Non-GAAP Adjusted Effective Tax Rate

18.4%

23.1%

20.5%

21.5%

 

 Notes:

 

 

 

 

 

 

 

 

 

 

 

 (A)

During the first quarter of fiscal 2021, the U.K. officially enacted legislation that increased its statutory rate from 17% to 19%.  This resulted in a $3.3 million, or $(0.06) per share, non-cash deferred tax benefit, and a $3.5 million, or $0.06 per share, non-cash deferred tax expense from the re-measurement of the Company’s applicable U.K. net deferred tax liabilities for the three months and year ended April 30, 2021, respectively.

 (B)

In connection with the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") and certain regulations issued in late July 2020, the Company elected to carry back its fiscal year 2020 loss for tax purposes ("NOL") to its fiscal year 2015 and claimed a $20.7 million refund.  The NOL carryback to a year when our corporate tax rate was 35%, including certain related benefits, 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. We received the refund in February 2021.

 (C)

In connection with the increase in certain U.S. state tax apportionment factors in 2021, we recorded income tax expense of $3.2 million, or $0.06 per share for the three months and year ended April 30, 2021. In connection with the reduction in French tax rates in 2020, we recorded an income tax benefit of $1.9 million, or $(0.03) per share, for the three months and year ended April 30, 2020. These adjustments impacted deferred taxes.

 (D)

Represents the impact of using diluted weighted-average number of common shares outstanding (56.4 million and 56.7 million shares for the three months and year ended April 30, 2020, respectively) included in the Non-U.S. 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 U.S. GAAP net loss is reported and the effect of using dilutive shares is antidilutive.

 (E)

For fiscal year 2021, substantially all of the tax impact was from deferred taxes. For fiscal year 2020, the tax impact was $1.5 million from current taxes and $22.6 million from deferred taxes.

(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, 2021 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.

JOHN WILEY & SONS, INC.

SUPPLEMENTARY INFORMATION (1)

RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP EBITDA AND ADJUSTED EBITDA

(unaudited)

 

Three Months Ended

Year Ended

April 30,

April 30,

2021

2020

2021

2020

 Net Income (Loss)

 $          41,329

 $      (158,044)

 $        148,256

 $         (74,287)

Interest expense

               4,455

              5,786

             18,383

              24,959

Provision (Benefit) for income taxes

               8,944

           (10,160)

             27,656

              11,195

Depreciation and amortization

             52,936

            46,589

           200,189

            175,127

 Non-GAAP EBITDA

           107,664

         (115,829)

           394,484

            136,994

Impairment of goodwill and intangible assets

                     -  

          202,348

                     -  

            202,348

Restructuring and related charges

               8,497

            14,573

             33,310

              32,607

Foreign exchange transaction losses (gains)

               1,504

             (4,534)

               7,977

              (2,773)

Other income

              (4,992)

             (3,779)

            (16,761)

            (13,381)

 Non-GAAP Adjusted EBITDA

 $        112,673

 $         92,779

 $        419,010

 $         355,795

 Adjusted EBITDA Margin

21.0%

19.5%

21.6%

19.4%

 

 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, 2021 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.  

JOHN WILEY & SONS, INC.

SUPPLEMENTARY INFORMATION (1)

SEGMENT RESULTS

(in thousands)

(unaudited)

 

% Change

Three Months Ended April 30,

Favorable (Unfavorable)

2021

2020

Reported

Constant Currency

Research Publishing & Platforms:

Revenue, net

Research Publishing

 $              272,030

 $             240,547

13%

9%

Research Platforms

                   11,325

                  10,652

6%

6%

Total Revenue, net

 $              283,355

 $             251,199

13%

9%

 

Contribution to Profit (Loss)

 $                68,371

 $              (13,679)

#

#

Adjustments:

Impairment of intangible assets

                           -  

                  92,348

Restructuring charges

                        316

                       500

Non-GAAP Adjusted Contribution to Profit

 $                68,687

 $               79,169

-13%

-13%

Depreciation and amortization

                   23,403

                  18,249

Non-GAAP Adjusted EBITDA

 $                92,090

 $               97,418

-5%

-6%

Adjusted EBITDA margin

32.5%

38.8%

 

Academic & Professional Learning:

Revenue, net

Education Publishing

 $                98,521

 $               83,942

17%

15%

Professional Learning

                   74,398

                  65,986

13%

9%

Total Revenue, net

 $              172,919

 $             149,928

15%

12%

 

Contribution to Profit

 $                26,069

 $                 5,422

#

#

Adjustments:

Restructuring charges

                     1,601

                    5,324

Non-GAAP Adjusted Contribution to Profit

 $                27,670

 $               10,746

#

#

Depreciation and amortization

                   18,240

                  18,128

Non-GAAP Adjusted EBITDA

 $                45,910

 $               28,874

59%

57%

Adjusted EBITDA margin

26.6%

19.3%

 

Education Services:

Revenue, net

Education Services OPM (2)

 $                64,452

 $               59,682

8%

8%

mthree (2)

                   15,526

                  13,808

12%

4%

Total Revenue, net

 $                79,978

 $               73,490

9%

7%

 

Contribution to Profit (Loss)

 $                  7,234

 $            (107,733)

#

#

Adjustments:

Impairment of goodwill

                           -  

                110,000

Restructuring charges

                        237

                    2,053

Non-GAAP Adjusted Contribution to Profit

 $                  7,471

 $                 4,320

73%

75%

Depreciation and amortization

                     7,672

                    7,124

Non-GAAP Adjusted EBITDA

 $                15,143

 $               11,444

32%

32%

Adjusted EBITDA margin

18.9%

15.6%

 

Corporate Expenses:

 $              (50,434)

 $              (54,741)

8%

9%

Adjustments:

Restructuring charges

                     6,343

                    6,696

Non-GAAP Adjusted Contribution to Profit (Loss)

 $              (44,091)

 $              (48,045)

8%

10%

Depreciation and amortization

                     3,621

                    3,088

Non-GAAP Adjusted EBITDA

 $              (40,470)

 $              (44,957)

10%

11%

 

 

 

 

 

 

 

 

 

 

Consolidated Results:

Revenue, net

 $              536,252

 $             474,617

13%

10%

 

Operating Income (Loss)

 $                51,240

 $            (170,731)

#

#

Adjustments:

Impairment of goodwill and intangible assets

                           -  

                202,348

Restructuring charges

                     8,497

                  14,573

Non-GAAP Adjusted Contribution to Profit

 $                59,737

 $               46,190

29%

31%

Depreciation and amortization

                   52,936

                  46,589

Non-GAAP Adjusted EBITDA

 $              112,673

 $               92,779

21%

21%

Adjusted EBITDA margin

21.0%

19.5%

 

(1) The supplementary information included in this press release for the three months and year ended April 30, 2021 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) In May 2020, we moved the IT bootcamp business acquired as part of The Learning House acquisition from Education Services OPM to mthree. As a result, the prior period revenue related to the IT bootcamp business has been included in mthree. There were no changes to our total Education Services or our consolidated financial results. The inorganic revenue from mthree in the year ended April 30, 2021 was $32.6 million.

 

#

Variance greater than 100%

JOHN WILEY & SONS, INC.

SUPPLEMENTARY INFORMATION (1)

SEGMENT RESULTS

(in thousands)

(unaudited)

% Change

Year Ended April 30,

Favorable (Unfavorable)

2021

2020

Reported

Constant Currency

Research Publishing & Platforms:

Revenue, net

Research Publishing

 $              972,512

 $             908,952

7%

5%

Research Platforms

                   42,837

                  39,887

7%

7%

Total Revenue, net

 $           1,015,349

 $             948,839

7%

5%

 

Contribution to Profit

 $              273,059

 $             169,119

61%

60%

Adjustments:

Impairment of intangible assets

                           -  

                  92,348

Restructuring (credits) charges

                        (36)

                    3,886

Non-GAAP Adjusted Contribution to Profit

 $              273,023

 $             265,353

3%

2%

Depreciation and amortization

                   83,866

                  69,495

Non-GAAP Adjusted EBITDA

 $              356,889

 $             334,848

7%

6%

Adjusted EBITDA margin

35.1%

35.3%

 

Academic & Professional Learning:

Revenue, net

Education Publishing

 $              363,870

 $             352,188

3%

2%

Professional Learning

                 280,667

                298,601

-6%

-8%

Total Revenue, net

 $              644,537

 $             650,789

-1%

-2%

 

Contribution to Profit

 $                88,173

 $               74,176

19%

17%

Adjustments:

Restructuring charges

                     3,503

                  10,470

Non-GAAP Adjusted Contribution to Profit

 $                91,676

 $               84,646

8%

6%

Depreciation and amortization

                   71,997

                  69,807

Non-GAAP Adjusted EBITDA

 $              163,673

 $             154,453

6%

4%

Adjusted EBITDA margin

25.4%

23.7%

 

Education Services:

Revenue, net

Education Services OPM (2)

 $              227,700

 $             210,882

8%

8%

mthree (2)

                   53,915

                  20,973

#

#

Total Revenue, net

 $              281,615

 $             231,855

21%

21%

 

Contribution to Profit (Loss)

 $                20,644

 $            (117,515)

#

#

Adjustments:

Impairment of goodwill

                           -  

                110,000

Restructuring charges

                        531

                    3,671

Non-GAAP Adjusted Contribution to Profit (Loss)

 $                21,175

 $                (3,844)

#

#

Depreciation and amortization

                   29,654

                  24,131

Non-GAAP Adjusted EBITDA

 $                50,829

 $               20,287

#

#

Adjusted EBITDA margin

18.0%

8.7%

 

Corporate Expenses:

 $            (196,365)

 $            (180,067)

-9%

-9%

Adjustments:

Restructuring charges

                   29,312

                  14,580

Non-GAAP Adjusted Contribution to Profit (Loss)

 $            (167,053)

 $            (165,487)

-1%

-1%

Depreciation and amortization

                   14,672

                  11,694

Non-GAAP Adjusted EBITDA

 $            (152,381)

 $            (153,793)

1%

1%

 

 

 

 

 

 

 

 

 

 

Consolidated Results:

Revenue, net

 $           1,941,501

 $          1,831,483

6%

4%

 

Operating Income (Loss)

 $              185,511

 $              (54,287)

#

#

Adjustments:

Impairment of goodwill and intangible assets

                           -  

                202,348

Restructuring charges

                   33,310

                  32,607

Non-GAAP Adjusted Contribution to Profit

 $              218,821

 $             180,668

21%

20%

Depreciation and amortization

                 200,189

                175,127

Non-GAAP Adjusted EBITDA

 $              419,010

 $             355,795

18%

16%

Adjusted EBITDA margin

21.6%

19.4%

 

#

Variance greater than 100%

SUPPLEMENTARY INFORMATION (1)

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in thousands)

(unaudited)

 

April 30,

April 30,

2021

2020

Assets:

Current Assets

Cash and cash equivalents

 $          93,795

 $      202,464

Accounts receivable, net

           311,571

         309,384

Inventories, net

             42,538

           43,614

Prepaid expenses and other current assets

             78,393

           59,465

Total Current Assets

           526,297

         614,927

 

Product Development Assets, net

             49,517

           53,643

Royalty Advances, net

             39,582

           36,710

Technology, Property and Equipment, net

           282,270

         298,005

Intangible Assets, net

        1,015,302

         807,405

Goodwill

        1,304,340

      1,116,790

Operating Lease Right-of-Use Assets

           121,430

         142,716

Other Non-Current Assets

           107,701

           98,598

Total Assets

 $     3,446,439

 $   3,168,794

 

Liabilities and Shareholders' Equity:

Current Liabilities

Accounts payable

 $          95,791

 $        93,691

Accrued royalties

             78,582

           87,408

Short-term portion of long-term debt

             12,500

             9,375

Contract liabilities

           545,425

         520,214

Accrued employment costs

           144,744

         108,448

Accrued income taxes

               8,590

           13,728

Short-term portion of operating lease liabilities

             22,440

           21,810

Other accrued liabilities

             80,900

           72,595

Total Current Liabilities

           988,972

         927,269

Long-Term Debt

           809,088

         765,650

Accrued Pension Liability

           146,247

         187,969

Deferred Income Tax Liabilities

           172,903

         119,127

Operating Lease Liabilities

           145,832

         159,782

Other Long-Term Liabilities

             92,106

           75,373

Total Liabilities

        2,355,148

      2,235,170

Shareholders' Equity

        1,091,291

         933,624

Total Liabilities and Shareholders' Equity

 $     3,446,439

 $   3,168,794

 

 

(1) The supplementary information included in this press release for April 30, 2021 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.

SUPPLEMENTARY INFORMATION (1)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(in thousands)

(unaudited)

 

Year Ended

April 30,

2021

2020

Operating Activities:

Net income (loss)

 $        148,256

            (74,287)

Impairment of goodwill and intangible assets

                     -  

            202,348

Amortization of intangible assets

             74,685

              62,436

Amortization of product development assets

             34,365

              35,975

Depreciation and amortization of technology, property, and equipment

             91,139

              76,716

Other non-cash charges and credits

           111,382

              67,790

Net change in operating assets and liabilities

            (99,904)

            (82,543)

Net Cash Provided By Operating Activities

           359,923

            288,435

 

Investing Activities:

Additions to technology, property, and equipment

            (77,407)

            (88,593)

Product development spending

            (25,954)

            (26,608)

Businesses acquired in purchase transactions, net of cash acquired

          (299,942)

          (229,629)

Acquisitions of publication rights and other

            (29,851)

              (1,840)

Net Cash Used in Investing Activities

          (433,154)

          (346,670)

 

Financing Activities:

Net debt borrowings

             30,653

            303,772

Cash dividends

            (76,938)

            (76,658)

Purchase of treasury shares

            (15,765)

            (46,589)

Other

             14,964

              (7,848)

Net Cash (Used In) Provided By Financing Activities

            (47,086)

            172,677

 

Effects of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash

             11,629

              (4,943)

 

Change in Cash, Cash Equivalents and Restricted Cash for Period

          (108,688)

            109,499

 

Cash, Cash Equivalents and Restricted Cash - Beginning

           203,047

              93,548

Cash, Cash Equivalents and Restricted Cash - Ending

 $          94,359

 $         203,047

 

CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT DEVELOPMENT SPENDING

 

 Year Ended

 April 30,

2021

2020

Net Cash Provided By Operating Activities

 $        359,923

 $         288,435

Less:

Additions to technology, property, and equipment

            (77,407)

            (88,593)

Less:

Product development spending

            (25,954)

            (26,608)

Free Cash Flow less Product Development Spending

 $        256,562

 $         173,234

 

 

 

 

 

 

See Explanation of Usage of Non-GAAP Measures included in this supplemental information.

(1) The supplementary information included in this press release for the year ended April 30, 2021 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.

 

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 for internal reporting and forecasting purposes, when publicly providing its outlook, to evaluate the Company's performance and calculate incentive compensation. Non-GAAP performance measures do not have standardized meanings prescribed by U.S. 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 underU.S. GAAP. The Company presents these non-GAAP performance measures in addition to U.S. GAAP financial results because it believes that these non-GAAP performance measures provide useful information to 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. 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 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, the Company has historically provided these or similar non-GAAP performance measures and understand 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 the Company's non-GAAP performance measures are regarded as useful to our investors as supplemental to our U.S. 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 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.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210610005502/en/

Investor Contact: Brian Campbell 201.748.6874 brian.campbell@wiley.com

Media Contact: Katie Roberts 602.373.7233 karoberts@wiley.com