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EX-99.10 - EARNINGS PRESENTATION - JOHN WILEY & SONS, INC.exhibit99_10.htm
 
UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 8-K

CURRENT REPORT


Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934


June 16, 2015
(Date of Report)
(Date of earliest event reported)

JOHN WILEY & SONS, INC.
(Exact name of registrant as specified in its charter)

New York
(State or jurisdiction of incorporation)

 
0-11507
13-5593032
 
----------------------------------------------------
---------------------------------------------
 
Commission File Number
IRS Employer Identification Number
 
111 River Street, Hoboken NJ
07030
 
----------------------------------------------------
---------------------------------------------
 
Address of principal executive offices
Zip Code
 
Registrant’s telephone number, including area code:
(201) 748-6000
   
---------------------------------------------


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
  [ ] Written communications pursuant to Rule 425 under the Securities Act(17 CFR 230.425)
  [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act(17 CFR 240.14a-12)
  [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
       (17 CFR 240.14d-2(b))
  [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
      (17 CFR   240.13e-4(c))

 
 

 

ITEM 7.01:  
REGULATION FD DISCLOSURE

The information in this report is being furnished (i) pursuant to Regulation FD, and (ii) pursuant to item 12 Results of Operation and Financial Condition (in accordance with SEC interim guidance issued March 28, 2003).  In accordance with General Instructions B.2 and B.6 of Form 8-K, the information in this report shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1934, as amended. The furnishing of the information set forth in this report is not intended to, and does not, constitute a determination or admission as to the materiality or completeness of such information.

On June 16, 2015, John Wiley & Sons Inc., a New York corporation (the “Company”), issued a press release announcing the Company’s financial results for the fourth quarter of fiscal year 2015. A copy of the Company’s press release is attached hereto as Exhibit 99.1 and incorporated.  Exhibit 99.10 is a copy of the slides furnished at the fourth quarter fiscal year 2015 earnings presentation.

Exhibit No.
Description

99.1           Press release dated June 16, 2015 titled “Wiley Reports Fourth Quarter and Fiscal Year 2015 Results” (furnished and not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and not deemed incorporated by reference in any filing under the Securities Act of 1934, as amended).
 
99.10         Press release slideshow presentation (furnished and not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and not deemed incorporated by reference in any filing under the Securities Act of 1934, as amended).
 
 
 

 

 
Investor Contact:                                                                Media Contact:
Brian Campbell, Investor Relations                                  Helen Bray, Corporate Communications
201.748.6874                                                                         +441243770185
brian.campbell@wiley.com                                                hbray@wiley.com

Wiley Reports Fourth Quarter and Fiscal Year 2015 Results

·  
Fourth quarter revenue of $442 million, up 2% on a constant currency basis.  Fiscal year revenue of $1,822 million, up 4% on a constant currency basis
·  
Percent of full-year revenue from digital products and services increased to 60% from 55% for the prior year.  Percent of full-year revenue from print books declined to 25%
·  
Fourth quarter adjusted EPS of $0.81, up 17% on a constant currency basis.  Fiscal year adjusted EPS of $3.26, up 10% on a constant currency basis
·  
Fiscal Year 2016 outlook of low-single-digit revenue growth and flat EPS growth on a constant currency basis and excluding the adverse transitional impact of shifting to time-based journal subscription agreements

June 16, 2015 (Hoboken, NJ) – John Wiley & Sons, Inc. (NYSE: JWa and JWb), a global provider of knowledge and knowledge-enabled services that improve outcomes in research, professional practice, and education, today announced the following results for the fourth quarter and fiscal year 2015, ending April 30, 2015:
 
                                                                                                                                                  Change
$ millions
  FY15
 FY14
 
Excluding FX
Including FX
 
ADJUSTED
         
 
Revenue
    Q4
    Full Year
 
 
$442
$1,822
 
 
$457
$1,775
 
 
 
2%
4%
 
 
(3%)
3%
 
EPS
    Q4
    Full Year
 
 
$0.81
$3.26
 
 
$0.77
$3.05
 
 
 
17%
10%
 
 
5%
7%
 
US GAAP
         
 
Revenue
    Q4
    Full Year
 
 
$442
$1,822
 
 
$457
$1,775
   
 
 
(3%)
3%
 
EPS
    Q4
    Full Year
 
 
$0.79
$2.97
 
 
$0.60
$2.70
   
 
 
32%
10%
 
Please see the attached financial schedules for more detail

Management Commentary
“We are pleased to report that we delivered on our revenue and earnings guidance for the year,” said Mark Allin, President and CEO of Wiley.  “On a constant currency basis, our largest and most profitable business, Research journals (‘Research Communication’) delivered 4% revenue growth for the year.  Our strategic digital solutions businesses also contributed to our growth, with digital products and services rising to 60% of revenues for the full year.  Revenue growth, the continued shift to digital, and additional savings from restructuring all contributed to 9% operating income growth for the year.”
 
 
 

 
 
Fiscal Year 2016 Outlook
Wiley’s fiscal year 2016 outlook is for low-single-digit revenue growth and flat adjusted EPS growth on a constant currency basis and excluding the adverse transitional impact of shifting to time-based journal subscription agreements.   As previously announced, Wiley is moving to time-based digital journal subscription agreements for calendar year 2016 in order to simplify the contracting and administration of such agreements.  The change will shift roughly $35 million of revenue and $0.35 of EPS from FY16 to FY17, with recurring effect annually thereafter.  The change will not impact free cash flow.  Included in the EPS guidance is an incremental expense impact of more than $0.15 for the previously announced ERP implementation as compared to FY15.

Foreign Exchange (FX)
Wiley generates half of its revenue from outside the United States, and is therefore exposed to a stronger dollar, particularly in relation to the euro and pound sterling.  For fiscal year 2015, the weighted average rates for sterling and the euro were 1.60 and 1.25, respectively, on a US dollar equivalent basis.  Also, throughout this report, references are made to variances “excluding foreign exchange” or “on a constant currency basis”; such amounts exclude both currency translation effects and transactional gains and losses.

Adjusted Results
The Company provides financial measures referred to as “adjusted” revenue, contribution to profit, and EPS, which exclude restructuring and impairment charges, deferred tax benefits related to a UK corporate income tax rate reduction, and other nonrecurring tax benefits.  Variances to adjusted revenue, contribution to profit, and EPS are on a constant currency basis unless otherwise noted. Management believes the exclusion of such items provides additional information to facilitate the analysis of results.  These non-GAAP measures are not intended to replace the financial results reported in accordance with GAAP.

Fourth Quarter Summary
·  
Revenue on a constant currency basis rose 2% to $442 million.  Growth in Professional Development (+10%), aided by the CrossKnowledge and Profiles International acquisitions, and Education (+2%) offset a decline in Research (-1%).  Organic revenue decreased 1% at constant currency, while revenue on a US GAAP basis declined 3% due to the adverse impact of foreign exchange.
·  
Adjusted earnings per share (EPS) on a constant currency basis grew 17% to $0.81 due to restructuring savings, higher gross margins from the shift to digital, and a lower effective income tax rate.  Adjusted EPS excludes certain one-time or unusual items in both years as further described in the attached reconciliation of US GAAP to Adjusted EPS.  US GAAP EPS for the fourth quarter grew 32%.
·  
Wiley recorded a restructuring charge of $4.9 million this quarter for severance and other costs related to reorganization and consolidation across the business.
·  
CEO Update:  In the quarter, EVP and COO Mark Allin was named Wiley’s 12th President and CEO after the retirement of Stephen M. Smith.  Prior to serving as Chief Operating Officer, Mr. Allin had been EVP, Professional Development.
 
 
 

 
 
Fiscal Year Summary
·  
Revenue on a constant currency basis grew 4% over prior year to $1,822 million, with organic growth in Research (+2%) and Education (+3%), as well as contributions from acquisitions in Professional Development (+13%), driving results.  Total organic revenue, which excludes CrossKnowledge and Profiles International, increased modestly (+1%) over prior year at constant currency.  Revenue grew 3% on a US GAAP basis.
·  
Adjusted EPS on a constant currency basis grew 10% to $3.26 with revenue growth, higher gross margins from the shift to digital, restructuring savings, and a lower effective income tax rate. The adverse impact of foreign exchange compared to the prior year was -$0.11 per share.  Adjusted EPS excludes certain one-time or unusual items in both years, as described in the attached reconciliation of US GAAP to Adjusted EPS.  US GAAP EPS for fiscal year 2015 was $2.97 vs. $2.70 in the prior year.
·  
Adjusted shared services and administrative costs were essentially flat for the year at $494 million due to restructuring, procurement, and outsourcing savings offset by additional investment in new business growth.  Lower Distribution and Operation Services (-10%) and Finance (-1%) expense offset higher Technology and Content Management (+2%) and Other Administration (+6%) expense.
·  
Restructuring Charges:  Wiley recorded $29 million in restructuring charges principally related to facility consolidations and dispositions in connection with prior restructuring actions, as well as severance costs related to reorganization and consolidation.
·  
Free Cash Flow of $247 million was $4 million behind prior year due to increased investment in technology and restructuring payments related to severance. 
·  
Net Debt and Cash Position:  Net debt (long-term debt less cash and cash equivalents) at the end of April was $293 million, up from $214 million at the end of the prior year due to the acquisition of CrossKnowledge.  Net debt to EBITDA was at 0.7 on a trailing twelve month basis.  Cash and cash equivalents as of April 30, 2015 were $457 million.
·  
Share repurchases: In fiscal year 2015, Wiley repurchased 1.1 million shares for $62 million, an average cost of $57.26. As of April 30, the Company had nearly 2.2 million shares remaining in the repurchase program announced in June 2013.  Wiley did not repurchase shares in the fourth quarter.
·  
Dividend: In June 2014, Wiley increased its quarterly dividend by 16% to $0.29, or $1.16 annualized.  It was the 21st consecutive annual increase.


RESEARCH
·  
Revenue:  Fourth quarter revenue on a constant currency basis declined 1% to $275 million, with a decline in journal subscription (-2%) and print book (-8%) revenue offsetting growth in other journal revenue (+6%), digital books (+3%), and funded access (+3%).   For the year, revenue on a constant currency basis rose 2% to $1,041 million, driven by journal subscriptions (+1%), funded access (+29%), and other journal revenue (+15%), which offset an overall book decline of 7%.
·  
Adjusted Contribution to Profit: Fourth quarter adjusted contribution to profit grew 2% on a constant currency basis to $99 million, with procurement and outsourcing savings offsetting the revenue decline.  For the year, adjusted contribution to profit grew 5% on a constant currency basis to $320 million, reflecting revenue growth and gross margin expansion.  Gross margin improved due to procurement and outsourcing savings, as well as the continuing shift to digital.
·  
Calendar Year 2015 Journal Subscriptions:   At the end of April, calendar year 2015 journal subscriptions were up 1% on a constant currency basis, with 97% of targeted business closed for the 2015 volume year.
·  
Society Business:  Two new society contracts were signed in the three month period ending April with combined annual revenue of $4 million; 11 were renewed with combined annual revenue of $4 million; and five with combined annual revenue of $5 million were not renewed.  For calendar year 2015, nine new society contracts were signed with combined annual revenue of $4 million, and seven with combined annual revenue of $8 million were not renewed, for an annualized revenue loss on a calendar year basis of $4 million.  This compares to an annualized revenue gain of $11 million in CY14 and $20 million in CY13.   Additionally, CY15 includes renewals of 121 contracts with combined annual revenue of $57 million.
 
 
 

 
 
PROFESSIONAL DEVELOPMENT
·  
Revenue:  Fourth quarter revenue grew 10% on a constant currency basis to $100 million due to revenue contributions from CrossKnowledge and Profiles International (+$15 million) and strong growth in Online Test Preparation (+34%), which more than offset continued weakness in Book sales (-9%).  Excluding the acquisitions, which were closed on May 1 and April 1, 2014, respectively, revenue declined 5%.  For the year, revenue on a constant currency basis increased 13% to $407 million, but decreased 5% excluding the acquisitions, driven by a continued decline in print and digital books.
·  
Adjusted Contribution to Profit:  Fourth quarter adjusted contribution to profit  grew 30% on a constant currency basis to $12 million primarily due to restructuring savings, which offset modest dilution from the two recent acquisitions.  For the year, adjusted contribution to profit grew 28% to $43 million.  Gross margin improved due to the shift to higher margin solutions businesses.
·  
Institute of Management Accountants (IMA) India Partnership:  In the quarter, the IMA® announced a partnership agreement in India with Wiley to offer Wiley’s Certified Management Accountant Exam (CMA) Learning System as part of a full offering that includes live training from Miles Professional Education, a major professional certification course provider in India.
 
 
EDUCATION
·  
Revenue:  Fourth quarter revenue rose 2% on a constant currency basis to $67 million.  Revenue growth from Education Services/Deltak (+15%), Digital Books (+7%), and Course Workflow/WileyPLUS (+1%) offset a decline in Print Textbooks (-15%).  For the year, Education revenue increased 3% on a constant currency basis to $375 million with double digit growth in Education Services/Deltak (+16%), Custom Products (+16%), WileyPLUS (+11%), and Digital Books (+15%) offsetting a 9% decline in Print Textbooks.
·  
Adjusted Contribution to Profit:  Fourth quarter adjusted contribution to profit improved 13% to a seasonal loss of $8 million, reflecting revenue growth and gross margin expansion.  For the year, adjusted contribution to profit increased 1% to $48 million, excluding the impact of foreign exchange.  Continued investment in Education Services/Deltak offset revenue growth and restructuring savings.  Gross profit improved modestly due to portfolio management and improvements in composition costs.
·  
Online Program Management (OPM):  Education Services/Deltak secured two new large university partners in the quarter, the University of Delaware (US) and University College Cork (Ireland).  University College Cork is the second international partner signed by Deltak and is one of Ireland’s largest educational institutions, with 18,000 students.  At fiscal year-end, Deltak had 38 partners and 200 degree programs under contract.

Earnings Conference Call
·  
Scheduled for today, June 16, at 10:00 a.m. (EDT)
·  
Access the webcast at www.wiley.com> Investor Relations> Events and Presentations, or http://www.wiley.com/WileyCDA/Section/id-370238.html
·  
U.S. callers, please dial (888) 505-4375 and enter the participant code 3217239#
·  
International callers, please dial (719) 325-2435 and enter the participant code 3217239#
·  
An archive of the webcast will be available for a period of up to 14 days
 
 
 

 
 
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995
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 and (x) 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.

About Wiley
Wiley is a global provider of knowledge and knowledge-enabled services that improve outcomes in areas of research, professional practice, and education.  Through the Research segment, the Company provides digital and print scientific, technical, medical, and scholarly journals, reference works, books, database services, and advertising. The Professional Development segment provides digital and print books, online assessment and corporate learning services, and test prep and certification.   In Education, Wiley provides education solutions including online program management services for higher education institutions and course management tools for instructors and students, as well as print and digital content.
 
 
 

 
 
JOHN WILEY & SONS, INC.
UNAUDITED SUMMARY OF OPERATIONS
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2015 AND 2014
(in thousands, except per share amounts)
 
FOURTH QUARTER ENDED APRIL 30,
 
       
2015
 
2014
 
% Change
        US GAAP    Adjustments (A,C)    Adjusted    US GAAP    Adjustments (A,C)    Adjusted   US GAAP
 
Adjusted
excl. FX
                                     
Revenue
$
       441,646
 
                 -
 
     441,646
 
    457,089
 
                -
 
    457,089
 
-3%
 
2%
                                     
Costs and Expenses
                               
 
Cost of Sales
 
       116,844
 
                 -
 
     116,844
 
    126,173
 
                -
 
    126,173
 
-7%
 
-3%
 
Operating and Administrative
 
       249,459
 
                 -
 
     249,459
 
    256,366
 
                -
 
    256,366
 
-3%
 
2%
 
Restructuring Charges (A)
 
          4,925
 
           (4,925)
 
              -
 
      15,395
 
        (15,395)
 
             -
       
 
Amortization of Intangibles
 
        12,355
 
                 -
 
       12,355
 
      11,613
 
                -
 
      11,613
 
6%
 
11%
                                     
 
Total Costs and Expenses
 
       383,583
 
           (4,925)
 
     378,658
 
    409,547
 
        (15,395)
 
    394,152
 
-6%
 
1%
                                     
Operating Income
 
        58,063
 
            4,925
 
       62,988
 
      47,542
 
         15,395
 
      62,937
 
22%
 
10%
 
Operating Margin
 
13.1%
     
14.3%
 
10.4%
     
13.8%
       
                                     
Interest Expense
 
         (4,062)
 
                 -
 
        (4,062)
 
       (3,568)
 
                -
 
       (3,568)
 
14%
 
14%
Foreign Exchange Gain
 
         (1,086)
 
                 -
 
        (1,086)
 
          (337)
 
                -
 
         (337)
       
Interest Income and Other
 
             839
 
                 -
 
            839
 
           690
 
                -
 
          690
 
22%
 
22%
                                     
Income Before Taxes
 
        53,754
 
            4,925
 
       58,679
 
      44,327
 
         15,395
 
      59,722
 
21%
 
10%
                                     
Provision for Income Taxes (A,C)
 
          6,857
 
            3,945
 
       10,802
 
        8,436
 
           5,331
 
      13,767
 
-19%
 
-8%
                                     
Net Income
$
        46,897
 
               980
 
       47,877
 
      35,891
 
         10,064
 
      45,955
 
31%
 
16%
                                     
                                     
Earnings Per Share- Diluted (A,C)
$
            0.79
 
              0.02
 
           0.81
 
          0.60
 
             0.17
 
         0.77
 
32%
 
17%
                                     
Average Shares - Diluted
 
        59,368
 
           59,368
 
       59,368
 
      59,925
 
         59,925
 
      59,925
       
                                     
TWELVE MONTHS ENDED APRIL 30,
 
       
2015
 
2014
 
% Change
        US GAAP   Adjustments (A,C)    Adjusted    US GAAP   Adjustments (A-D)   Adjusted   US GAAP  
Adjusted
excl. FX
                                     
Revenue
$
    1,822,440
 
                 -
 
   1,822,440
 
  1,775,195
 
                -
 
 1,775,195
 
3%
 
4%
                                     
Costs and Expenses
                               
 
Cost of Sales
 
       499,683
 
                 -
 
     499,683
 
    506,879
 
                -
 
    506,879
 
-1%
 
0%
 
Operating and Administrative
 
    1,005,000
 
                 -
 
   1,005,000
 
    969,456
 
                -
 
    969,456
 
4%
 
5%
 
Restructuring Charges (A)
 
        28,804
 
          (28,804)
 
              -
 
      42,722
 
        (42,722)
 
             -
       
 
Impairment Charges (B)
 
               -
 
                 -
 
              -
 
        4,786
 
          (4,786)
 
             -
       
 
Amortization of Intangibles
 
        51,214
 
                 -
 
       51,214
 
      44,679
 
                -
 
      44,679
 
15%
 
14%
                                     
 
Total Costs and Expenses
 
    1,584,701
 
          (28,804)
 
   1,555,897
 
  1,568,522
 
        (47,508)
 
 1,521,014
 
1%
 
3%
                                     
Operating Income
 
       237,739
 
           28,804
 
     266,543
 
    206,673
 
         47,508
 
    254,181
 
15%
 
9%
 
Operating Margin
 
13.0%
     
14.6%
 
11.6%
     
14.3%
       
                                     
Interest Expense
 
       (17,077)
 
                 -
 
      (17,077)
 
     (13,916)
 
                -
 
     (13,916)
 
23%
 
23%
Foreign Exchange Gain
 
          1,742
 
                 -
 
         1,742
 
             (8)
 
                -
 
             (8)
       
Interest Income and Other
 
          3,057
 
                 -
 
         3,057
 
        2,785
 
                -
 
        2,785
 
10%
 
10%
                                     
Income Before Taxes
 
       225,461
 
           28,804
 
     254,265
 
    195,534
 
         47,508
 
    243,042
 
15%
 
8%
                                     
Provision for Income Taxes (A-D)
 
        48,593
 
           11,599
 
       60,192
 
      35,024
 
         26,457
 
      61,481
 
39%
 
1%
                                     
Net Income
$
       176,868
 
           17,205
 
     194,073
 
    160,510
 
         21,051
 
    181,561
 
10%
 
10%
                                     
                                     
Earnings Per Share- Diluted (A-D)
$
            2.97
 
              0.29
 
           3.26
 
          2.70
 
             0.35
 
         3.05
 
10%
 
10%
                                     
Average Shares - Diluted
 
        59,594
 
           59,594
 
       59,594
 
      59,514
 
         59,514
 
      59,514
       
                                     
                                     
   
See the accompanying Notes to Unaudited Financial Statements for a description of each Adjustment.
     
 
 
 

 
 
JOHN WILEY & SONS, INC.
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2015 AND 2014
 
RECONCILIATION OF US GAAP TO ADJUSTED EPS - DILUTED (UNAUDITED)
 
   
 Fourth Quarter Ended
 
 Twelve Months Ended
   
 April 30,
 
 April 30,
    2015   2014   2015   2014
                         
 US GAAP Earnings Per Share - Diluted
 $
               0.79
 
 $
            0.60
 
 $
       2.97
 
 $
         2.70
 Adjusted to exclude the following:
                     
 
 Restructuring Charges (A)
 
              (0.07)
   
           (0.17)
   
      (0.34)
   
       (0.48)
 
 Impairment Charges (B)
 
                    -
   
                 -
   
            -
   
       (0.06)
 
 Non-recurring Tax Benefit (C)
 
               0.05
   
                 -
   
       0.05
   
             -
 
 Deferred Income Tax Benefit on UK Rate Change (D)
                    -
   
              -
   
            -
   
         0.18
                         
 Adjusted Earnings Per Share - Diluted
 $
               0.81
 
 $
            0.77
 
 $
       3.26
 
 $
         3.05
                         
                         
                         
NOTES TO UNAUDITED FINANCIAL STATEMENTS
                         
                         
 Adjustments:
                     
 (A)
RESTRUCTURING CHARGES: The adjusted results for the three and twelve months ended April 30, 2015 and the three and twelve months ended April 30, 2014 exclude restructuring charges related to the Company's Restructuring and Reinvestment Program of $4.9 million or $0.07 per share, $28.8 million or $0.34 per share, $15.4 million or $0.17 per share, and $42.7 million or $0.48 per share, respectively.
 
 (B)
IMPAIRMENT CHARGES: The adjusted results for the twelve months ended April 30, 2014 exclude impairment charges related to certain technology investments of $4.8 million or $0.06 per share.
 
 (C)
NON-RECURRING TAX BENEFIT: The adjusted results for the three and twelve months ended April 30, 2015 reflect a non-recurring tax benefit of $3.1 million or $0.05 per share related to tax deductions claimed on the write-up  of certain foreign tax assets to fair market value.
 
 (D)
Deferred Income Tax Benefit on UK Rate Change: The adjusted results for the twelve months ended April 30, 2014 exclude deferred tax benefits of $10.6 million, or $0.18 per share, associated with tax legislation enacted in the United Kingdom that reduced the U.K. corporate income tax rates by 3%.  The benefits reflect the remeasurement of the Company's deferred tax balances to the new income tax rates of 21% effective April 1, 2014 and 20% effective April 1, 2015 and had no current cash tax impact.
 
                         
                         
Non-GAAP Financial Measures:
                     
In addition to providing financial results in accordance with GAAP, the Company has provided adjusted financial results that exclude the impact of other nonrecurring items described in more detail throughout this press release.  These non-GAAP financial measures are labeled as "Adjusted" and are used for evaluating the results of operations for internal purposes.  These non-GAAP measures are not intended to replace the presentation of financial results in accordance with GAAP.  Rather, the Company believes the exclusion of such items provides additional information to investors to facilitate the comparison of past and present operations. Unless otherwise noted, adjusted amounts in the attached schedules include foreign exchange.
 
 
 
 

 
 
JOHN WILEY & SONS, INC.
UNAUDITED SEGMENT RESULTS
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2015 and 2014
(in thousands)
                                     
FOURTH QUARTER ENDED APRIL 30,
                                     
       
2015
 
2014
 
% Change
    US GAAP   Adjustments (A)    Adjusted    US GAAP   Adjustments (A)   Adjusted   US GAAP  
Adjusted
excl. FX
Revenue
                               
Research
$
      274,646
 
                -
 
      274,646
 
    296,817
 
                -
 
    296,817
 
-7%
 
-1%
Professional Development
 
      100,442
 
                -
 
      100,442
 
      93,037
 
                -
 
      93,037
 
8%
 
10%
Education
 
        66,558
 
                -
 
        66,558
 
      67,235
 
                -
 
      67,235
 
-1%
 
2%
                                     
 
Total
$
      441,646
 
                -
 
      441,646
 
    457,089
 
                -
 
    457,089
 
-3%
 
2%
                                     
Direct Contribution to Profit
                               
Research
$
      139,258
 
              233
 
      139,491
 
    145,240
 
           3,184
 
    148,424
 
-4%
 
0%
Professional Development
 
        36,234
 
              552
 
        36,786
 
      28,901
 
           7,026
 
      35,927
 
25%
 
5%
Education
 
        11,149
 
              487
 
        11,636
 
        8,937
 
             516
 
        9,453
 
25%
 
28%
                                     
 
Total
$
      186,641
 
           1,272
 
      187,913
 
    183,078
 
         10,726
 
    193,804
 
2%
 
3%
                                     
Contribution to Profit (After Allocated Shared Services and Admin. Costs)
                   
Research
$
        99,186
 
              233
 
        99,419
 
    101,081
 
           3,184
 
    104,265
 
-2%
 
2%
Professional Development
 
        11,486
 
              552
 
        12,038
 
        2,654
 
           7,026
 
        9,680
 
333%
 
30%
Education
 
        (8,582)
 
              487
 
        (8,095)
 
       (9,715)
 
             516
 
       (9,199)
 
12%
 
13%
                                     
 
Total
$
      102,090
 
           1,272
 
      103,362
 
      94,020
 
         10,726
 
    104,746
 
9%
 
6%
                                     
Unallocated Shared Services and Admin. Costs
       (44,027)
 
           3,653
 
       (40,374)
 
     (46,478)
 
           4,669
 
     (41,809)
 
-5%
 
0%
                                     
Operating Income
$
        58,063
 
           4,925
 
        62,988
 
      47,542
 
         15,395
 
      62,937
 
22%
 
10%
                                     
                                     
                                     
                                     
Total Shared Services and Admin. Costs by Function
                   
 
Distribution and Operation Services
$
       (21,031)
 
              131
 
       (20,900)
 
     (27,111)
 
           3,421
 
     (23,690)
 
-22%
 
-6%
 
Technology and Content Management
       (63,662)
 
           1,337
 
       (62,325)
 
     (64,024)
 
             777
 
     (63,247)
 
-1%
 
1%
 
Finance
 
       (13,564)
 
                74
 
       (13,490)
 
     (14,593)
 
            (321)
 
     (14,914)
 
-7%
 
-6%
 
Other Administration
 
       (30,321)
 
           2,111
 
       (28,210)
 
     (29,808)
 
             792
 
     (29,016)
 
2%
 
1%
 
Total
$
     (128,578)
 
           3,653
 
     (124,925)
 
   (135,536)
 
           4,669
 
   (130,867)
 
-5%
 
-1%
                                     
                                     
TWELVE MONTHS ENDED APRIL 30,
                                     
                                     
       
2015
 
2014
 
% Change
    US GAAP    Adjustments (A)   Adjusted   US GAAP   Adjustments (A-B)   Adjusted   US GAAP  
Adjusted
excl. FX
Revenue
                               
Research
$
   1,040,795
 
                -
 
   1,040,795
 
 1,044,349
 
                -
 
 1,044,349
 
0%
 
2%
Professional Development
 
      407,023
 
                -
 
      407,023
 
    363,869
 
                -
 
    363,869
 
12%
 
13%
Education
 
      374,622
 
                -
 
      374,622
 
    366,977
 
                -
 
    366,977
 
2%
 
3%
                                     
 
Total
$
   1,822,440
 
                -
 
   1,822,440
 
 1,775,195
 
                -
 
 1,775,195
 
3%
 
4%
                                     
Direct Contribution to Profit
                               
Research
$
      483,413
 
           4,555
 
      487,968
 
    479,419
 
           7,774
 
    487,193
 
1%
 
2%
Professional Development
 
      140,588
 
           4,385
 
      144,973
 
    128,976
 
         11,860
 
    140,836
 
9%
 
4%
Education
 
      125,870
 
           1,571
 
      127,441
 
    121,978
 
             891
 
    122,869
 
3%
 
5%
                                     
 
Total
$
      749,871
 
          10,511
 
      760,382
 
    730,373
 
         20,525
 
    750,898
 
3%
 
3%
                                     
Contribution to Profit (After Allocated Shared Services and Admin. Costs)
                   
Research
$
      315,789
 
           4,555
 
      320,344
 
    305,727
 
           7,774
 
    313,501
 
3%
 
5%
Professional Development
 
        38,116
 
           4,385
 
        42,501
 
      22,167
 
         11,860
 
      34,027
 
-
 
28%
Education
 
        46,175
 
           1,571
 
        47,746
 
      47,787
 
             891
 
      48,678
 
-3%
 
1%
                                     
 
Total
$
      400,080
 
          10,511
 
      410,591
 
    375,681
 
         20,525
 
    396,206
 
6%
 
7%
                                     
Unallocated Shared Services and Admin. Costs
     (162,341)
 
          18,293
 
     (144,048)
 
   (169,008)
 
         26,983
 
   (142,025)
 
-4%
 
2%
                                     
Operating Income
$
      237,739
 
          28,804
 
      266,543
 
    206,673
 
         47,508
 
    254,181
 
15%
 
9%
                                     
                                     
                                     
                                     
Total Shared Services and Admin. Costs by Function
                   
 
Distribution and Operation Services
$
       (92,791)
 
           4,567
 
       (88,224)
 
   (105,445)
 
           6,012
 
     (99,433)
 
-12%
 
-10%
 
Technology and Content Management
     (248,914)
 
           2,622
 
     (246,292)
 
   (255,349)
 
         14,020
 
   (241,329)
 
-3%
 
2%
 
Finance
 
       (53,133)
 
              145
 
       (52,988)
 
     (55,029)
 
             561
 
     (54,468)
 
-3%
 
-1%
 
Other Administration
 
     (117,294)
 
          10,959
 
     (106,335)
 
   (107,877)
 
           6,390
 
   (101,487)
 
9%
 
6%
 
Total
$
     (512,132)
 
          18,293
 
     (493,839)
 
   (523,700)
 
         26,983
 
   (496,717)
 
-2%
 
0%
                                     
                                     
   
See the accompanying Notes to Unaudited Financial Statements for a description of each Adjustment.  Certain prior year amounts have been reclassified to conform to the current year's presentation.
 
 
 
 

 
 
UNAUDITED ADJUSTED CONTRIBUTION TO PROFIT
INCLUDING ALLOCATED SHARED SERVICES AND ADMINISTRATIVE COSTS
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2015 and 2014
(in thousands)
                                       
         
Fourth Quarter Ended
 
Twelve Months Ended
         
April 30,
 
April 30,
          2015   2014   
%
Change
 
% Change
excl. FX
  2015   2014  
%
Change
 
% Change
excl. FX
                                       
Research:
                                 
 
Direct Contribution to Profit
 
      139,258
 
        145,240
 
-4%
 
2%
 
             483,413
 
         479,419
 
1%
 
3%
 
Restructuring Charges (A)
   
              233
 
           3,184
         
                4,555
 
             7,774
       
 
Adjusted Direct Contribution to Profit
   
       139,491
 
        148,424
 
-6%
 
0%
 
             487,968
 
         487,193
 
0%
 
2%
                                       
 
Allocated Shared Services and Admin. Costs:
                           
   
Distribution and Operation Services
   
        (10,461)
 
        (10,972)
 
-5%
 
4%
 
             (44,602)
 
          (45,773)
 
-3%
 
-1%
   
Technology and Content Management
   
        (24,256)
 
        (25,953)
 
-7%
 
-2%
 
             (99,696)
 
        (101,922)
 
-2%
 
-2%
   
Occupancy and Other
   
          (5,355)
 
          (7,234)
 
-26%
 
-19%
 
             (23,326)
 
          (25,997)
 
-10%
 
-9%
 
Adjusted Contribution to Profit (after allocated
         99,419
 
        104,265
 
-5%
 
2%
 
             320,344
 
         313,501
 
2%
 
5%
   
Shared Services and Admin. Costs)
                                 
                                       
Professional Development:
                                 
 
Direct Contribution to Profit
 
         36,234
 
         28,901
 
25%
 
29%
 
             140,588
 
         128,976
 
9%
 
10%
 
Restructuring Charges (A)
   
              552
 
           7,026
         
                4,385
 
           11,860
       
 
Adjusted Direct Contribution to Profit
   
         36,786
 
         35,927
 
2%
 
5%
 
             144,973
 
         140,836
 
3%
 
4%
                                       
 
Allocated Shared Services and Admin. Costs:
                           
   
Distribution and Operation Services
   
          (7,167)
 
          (8,883)
 
-19%
 
-16%
 
             (30,838)
 
          (37,673)
 
-18%
 
-17%
   
Technology and Content Management
   
        (12,227)
 
        (12,502)
 
-2%
 
-1%
 
             (47,574)
 
          (50,374)
 
-6%
 
-6%
   
Occupancy and Other
   
          (5,354)
 
          (4,862)
 
10%
 
12%
 
             (24,060)
 
          (18,762)
 
28%
 
29%
 
Adjusted Contribution to Profit (after allocated
         12,038
 
           9,680
 
24%
 
30%
 
              42,501
 
           34,027
 
25%
 
28%
   
Shared Services and Admin. Costs)
                                 
                                       
Education:
                                 
 
Direct Contribution to Profit
 
         11,149
 
           8,937
 
25%
 
30%
 
             125,870
 
         121,978
 
3%
 
5%
 
Restructuring Charges (A)
   
              487
 
              516
         
                1,571
 
                891
       
 
Adjusted Direct Contribution to Profit
   
         11,636
 
           9,453
 
23%
 
28%
 
             127,441
 
         122,869
 
4%
 
5%
                                       
 
Allocated Shared Services and Admin. Costs:
                           
   
Distribution and Operation Services
   
          (2,977)
 
          (3,698)
 
-19%
 
-14%
 
             (12,863)
 
          (15,685)
 
-18%
 
-16%
   
Technology and Content Management
   
        (13,324)
 
        (11,808)
 
13%
 
15%
 
             (52,954)
 
          (46,787)
 
13%
 
14%
   
Occupancy and Other
   
          (3,430)
 
          (3,146)
 
9%
 
9%
 
             (13,878)
 
          (11,719)
 
18%
 
19%
 
Adjusted Contribution to Profit (after allocated
         (8,095)
 
          (9,199)
 
12%
 
13%
 
              47,746
 
           48,678
 
-2%
 
1%
   
Shared Services and Admin. Costs)
                                 
                                       
Total Adjusted Contribution to Profit (after
 
       103,362
 
        104,746
 
-1%
 
6%
 
             410,591
 
         396,206
 
4%
 
7%
 
allocated Shared Services and Admin. Costs)
                           
                                       
Unallocated Shared Services and Admin. Costs:
                           
 
Unallocated Shared Services and Admin. Costs
        (44,027)
 
        (46,478)
 
-5%
 
-2%
 
            (162,341)
 
        (169,008)
 
-4%
 
-3%
 
Restructuring Charges (A)
   
           3,653
 
           4,669
         
              18,293
 
           22,197
       
 
Impairment Charges (B)
   
                -
 
                -
         
                     -
 
             4,786
       
 
Adjusted Unallocated Shared Services and Admin. Costs
        (40,374)
 
        (41,809)
 
-3%
 
0%
 
            (144,048)
 
        (142,025)
 
1%
 
2%
                                       
Adjusted Operating Income
 
        62,988
 
         62,937
 
0%
 
10%
 
             266,543
 
         254,181
 
5%
 
9%
                                       
                                       
                                       
   
See the accompanying Notes to Unaudited Financial Statements for a description of each Adjustment.  Certain prior year amounts have been reclassified to conform to the current year's presentation.
 
 
 

 
 
JOHN WILEY & SONS, INC.
SEGMENT REVENUE by PRODUCT/SERVICE
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2015 and 2014
(in thousands)
                                       
                                       
       
Fourth Quarter
           
Twelve Months
       
       
Ended April 30,
           
Ended April 30,
     
 
        2015    2014  
% of
Revenue
  % Change excl. FX      2015   2014  
% of
Revenue
  % Change excl. FX
RESEARCH
                                 
 
Research Communication:
                                 
   
Journal Subscriptions
$
         173,562
 
        188,931
 
63%
 
-2%
 
$
            664,455
 
           667,305
 
64%
 
1%
   
Funded Access
 
              5,826
 
             6,135
 
2%
 
3%
   
              22,388
 
             17,673
 
2%
 
29%
   
Other Journal Revenue
 
           36,222
 
          37,438
 
13%
 
6%
   
            126,942
 
           113,925
 
12%
 
15%
       
         215,610
 
        232,504
 
79%
 
-1%
   
            813,785
 
           798,903
 
78%
 
4%
                                       
 
Books and References:
                                 
   
Print Books
 
           21,214
 
          24,652
 
8%
 
-8%
   
            101,872
 
           114,135
 
10%
 
-9%
   
Digital Books
 
           15,396
 
          16,105
 
6%
 
3%
   
              45,550
 
             47,693
 
4%
 
-2%
       
           36,610
 
          40,757
 
13%
 
-3%
   
            147,422
 
           161,828
 
14%
 
-7%
                                       
 
Other Research Revenue
 
           22,426
 
          23,556
 
8%
 
4%
   
              79,588
 
             83,618
 
8%
 
-2%
                                       
   
Total Revenue
$
         274,646
 
        296,817
 
100%
 
-1%
 
$
         1,040,795
 
        1,044,349
 
100%
 
2%
                                       
                                       
PROFESSIONAL DEVELOPMENT
                                 
 
Knowledge Services:
                                 
   
Print Books
$
           44,917
 
          51,385
 
45%
 
-9%
 
$
            209,484
 
           231,984
 
51%
 
-9%
   
Digital Books
 
           13,506
 
          15,025
 
13%
 
-9%
   
              49,822
 
             53,764
 
12%
 
-7%
   
Online Test Preparation and Certification
              6,051
 
             4,526
 
6%
 
34%
   
              18,568
 
             15,192
 
5%
 
22%
   
Other Knowledge Service Revenue
              9,891
 
          10,679
 
10%
 
-6%
   
              30,370
 
             29,882
 
7%
 
2%
       
           74,365
 
          81,615
 
74%
 
-6%
   
            308,244
 
           330,822
 
76%
 
-6%
                                       
 
Talent Solutions:
                                 
   
Assessment
 
           15,562
 
          11,422
 
15%
 
36%
   
              56,762
 
             33,047
 
14%
 
72%
   
Online Learning and Training
 
           10,515
 
                      -
 
10%
       
              42,017
     
10%
   
       
           26,077
 
          11,422
 
26%
 
128%
   
              98,779
 
             33,047
 
24%
 
199%
                                       
   
Total Revenue
$
         100,442
 
          93,037
 
100%
 
10%
 
$
            407,023
 
           363,869
 
100%
 
13%
                                       
                                       
EDUCATION
                                 
 
Books:
                                 
 
Print Textbooks
$
           17,630
 
          22,189
 
25%
 
-15%
 
$
            144,416
 
           163,152
 
39%
 
-9%
 
Digital Books
 
              8,840
 
             8,615
 
13%
 
7%
   
              34,036
 
             30,137
 
9%
 
15%
       
           26,470
 
          30,804
 
40%
 
-9%
   
            178,452
 
           193,289
 
48%
 
-6%
                                       
 
Custom Products
 
              1,062
 
              (410)
 
2%
 
               -
   
              50,622
 
             43,556
 
14%
 
16%
                                       
 
Course Workflow Solutions (WileyPLUS)
           13,671
 
          13,872
 
21%
 
1%
   
              54,223
 
             49,459
 
14%
 
11%
                                       
 
Education Services (Deltak)
 
           22,687
 
          19,784
 
34%
 
15%
   
              81,595
 
             70,179
 
22%
 
16%
                                       
 
Other Education Revenue
 
              2,668
 
             3,185
 
4%
 
-16%
   
                 9,730
 
             10,494
 
3%
 
-7%
                                       
   
Total Revenue
$
           66,558
 
          67,235
 
100%
 
2%
 
$
            374,622
 
           366,977
 
100%
 
3%
                                       
                                       
Note: Segment Revenue Categorization
                                 
 
 
 

 
 
JOHN WILEY & SONS, INC.
UNAUDITED STATEMENTS OF FINANCIAL POSITION
(in thousands)
           
     
April 30,
     
2015
 
2014
Current Assets
       
 
Cash & cash equivalents
$
     457,441
 
          486,377
 
Accounts receivable
 
     147,183
 
          149,733
 
Inventories
 
       63,779
 
            75,495
 
Prepaid and other
 
       72,516
 
            78,057
 
Total Current Assets
 
     740,919
 
          789,662
Product Development Assets
 
       69,589
 
            82,940
Technology, Property and Equipment
 
     193,010
 
          188,718
Intangible Assets
 
     917,621
 
          984,661
Goodwill
   
     962,367
 
          903,665
Income Tax Deposits
 
       57,098
 
            64,037
Other Assets
 
       63,639
 
            63,682
 
Total Assets
 
  3,004,243
 
       3,077,365
           
Current Liabilities
       
 
Short-term debt
 
     100,000
 
                  -
 
Accounts and royalties payable
 
     161,465
 
          142,534
 
Deferred revenue
 
     372,051
 
          385,654
 
Accrued employment costs
 
       93,922
 
          118,503
 
Accrued income taxes
 
         9,484
 
            13,324
 
Accrued pension liability
 
         4,594
 
             4,671
 
Other accrued liabilities
 
       62,167
 
            64,901
 
Total Current Liabilities
 
     803,683
 
          729,587
Long-Term Debt
 
     650,090
 
          700,100
Accrued Pension Liability
 
     209,727
 
          164,634
Deferred Income Tax Liabilities
 
     198,947
 
          222,482
Other Long-Term Liabilities
 
       86,756
 
            78,314
Shareholders' Equity
 
  1,055,040
 
       1,182,248
 
Total Liabilities & Shareholders' Equity
$
  3,004,243
 
       3,077,365
 
 
 

 
 
JOHN WILEY & SONS, INC.
UNAUDITED STATEMENTS OF FREE CASH FLOW
(in thousands)
           
           
     
 Twelve Months Ended
     
 April 30,
     
2015
 
2014
Operating Activities:
       
 
Net income
$
         176,868
 
           160,510
 
Amortization of intangibles
 
           51,214
 
             44,679
 
Amortization of composition costs
 
           40,639
 
             45,097
 
Depreciation of technology, property and equipment
           62,072
 
             58,321
 
Restructuring and impairment charges
 
           28,804
 
             47,508
 
Restructuring payments
 
          (32,341)
 
            (28,276)
 
Deferred tax benefits on U.K. rate changes
 
                  -
 
            (10,634)
 
Share-based compensation expense
 
           13,617
 
             12,851
 
Employee retirement plan expense
 
           22,599
 
             30,454
 
Excess tax (benefits) charges from share-based compensation
            (3,191)
 
               1,466
 
Royalty advances
 
        (103,136)
 
          (107,639)
 
Earned royalty advances
 
         108,314
 
           107,529
 
Other non-cash charges and credits
 
            (8,046)
 
              (3,626)
 
Change in deferred revenue
 
             3,913
 
                (750)
 
Income tax deposit
 
            (5,280)
 
            (11,968)
 
Net change in operating assets and liabilities, excluding acquisitions
               (924)
 
               2,702
 
       Cash Provided by Operating Activities
 
         355,122
 
           348,224
           
Investments in organic growth:
       
 
Composition spending
 
          (39,421)
 
            (40,568)
 
Additions to technology, property and equipment
          (69,121)
 
            (57,564)
           
 
        Free Cash Flow
 
         246,580
 
           250,092
           
Other Investing and Financing Activities:
       
 
Acquisitions, net of cash
 
        (172,229)
 
            (54,515)
 
Escrowed proceeds from sale of consumer publishing programs
             1,100
 
               3,300
 
Repayment of long-term debt
 
        (711,654)
 
          (658,224)
 
Borrowings of long-term debt
 
         659,369
 
           685,324
 
Borrowings of short-term debt
 
         100,000
 
                    -
 
Change in book overdrafts
 
            (6,711)
 
            (12,354)
 
Cash dividends
 
          (68,498)
 
            (58,953)
 
Purchase of treasury shares
 
          (61,981)
 
            (63,393)
 
Proceeds from exercise of stock options and other
           25,326
 
             55,532
 
Excess tax benefits (charges) from share-based compensation
             3,191
 
              (1,466)
 
         Cash Used for Investing and Financing Activities
        (232,087)
 
          (104,749)
           
Effects of Exchange Rate Changes on Cash
 
          (43,429)
 
               6,894
           
Decrease in Cash and Cash Equivalents for Period
$
          (28,936)
 
           152,237
           
           
           
RECONCILIATION TO GAAP PRESENTATION
           
Investing Activities:
       
 
Composition spending
$
          (39,421)
 
            (40,568)
 
Additions to technology, property and equipment
          (69,121)
 
            (57,564)
 
Acquisitions, net of cash
 
        (172,229)
 
            (54,515)
 
Escrowed proceeds from sale of consumer publishing programs
             1,100
 
               3,300
 
         Cash Used for Investing Activities
$
        (279,671)
 
          (149,347)
           
Financing Activities:
       
Cash Used for Investing and Financing Activities
$
        (232,087)
 
          (104,749)
Excluding:
       
 
Acquisitions, net of cash
 
        (172,229)
 
            (54,515)
 
Escrowed proceeds from sale of consumer publishing programs
             1,100
 
               3,300
 
          Cash Used for Financing Activities
$
          (60,958)
 
            (53,534)
           
           
           
Note: The Company’s management evaluates performance using free cash flow.  The Company believes free cash flow provides a meaningful and comparable measure of performance.  Since free cash flow is not a measure calculated in accordance with GAAP, it should not be considered as a substitute for other GAAP measures, including cash used for or provided by operating activities, investing activities and financing activities, as an indicator of performance.
 
 
 
 

 
 
SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized



 
JOHN WILEY & SONS, INC.
 
Registrant



 
By 
/s/ Mark Allin
 
   
Mark Allin
 
   
President and
 
   
Chief Executive Officer
 




 
By 
/s/ John A. Kritzmacher
 
   
John A. Kritzmacher
 
   
Executive Vice President and
 
   
Chief Financial Officer
 
       


 
Dated: June 16, 2015