Wiley (NYSE: WLY), one of the world’s largest publishers and a
trusted leader in research and learning, today reported results for
the second quarter ended October 31, 2024.
SECOND QUARTER HIGHLIGHTS
- High-single digit revenue growth in Learning from favorable
market conditions and AI licensing
- Low single digit revenue growth in Research from solid demand
to publish and modest improvement in Research Solutions offsetting
a large year-over-year swing in legacy print and licensing
revenue
- Continued strong margin improvement and EPS growth
SECOND QUARTER PERFORMANCE
- GAAP Results: Revenue of $427 million vs. $493 million
in prior year due to foregone revenue from divested businesses,
Operating Income of $64 million (+39%), and EPS of $0.74
(+$1.09)
- Adjusted Results at Constant Currency (excludes the impact
of divested businesses): Adjusted Revenue of $423 million
(+3%), Adjusted Operating Income of $69 million (+32%), Adjusted
EBITDA of $106 million (+14%), and Adjusted EPS of $0.97
(+36%)
MANAGEMENT COMMENTARY
“Continuous improvement is a way of life for us now, and it’s
beginning to pay off in our quality growth and margin expansion,”
said Matthew Kissner, Wiley President and CEO. “Learning has had a
good year so far, both Academic and Professional, and Research
delivered low-single digit growth with leading indicators and
favorable comparisons signaling a better second half ahead.
Additionally, we continue to see interest from tech companies and
other corporate LLM developers for our high-value content and data
to train and commercialize AI models.”
Research
- Revenue of $262 million was up 2% or 1% at constant
currency, with strong growth in gold open access, modest growth in
institutional models, and improved solutions performance offsetting
a year-over-year decline in legacy print and licensing revenue.
Year-to-date, Research revenue was up 2% as reported and at
constant currency.
- Adjusted EBITDA of $82 million was up 1% as reported and
at constant currency due to revenue performance partially offset by
investments to drive volume growth and publishing innovation.
Adjusted EBITDA margin for the quarter was 31.3% compared to 31.6%
in the prior year period.
Learning
- Revenue of $162 million was up 8% or 5% at constant
currency and excluding one-time AI licensing revenue of $4 million.
Strong underlying performance was driven by 11% growth for
Professional or 8% at constant currency and ex-AI due to an
improved retail channel environment and increased sell through.
Academic saw 5% growth or 3% growth at constant currency and ex-AI
driven by zyBooks digital courseware, inclusive access, and
licensing. Year-to-date, Learning revenue was up 11%, or 2% at
constant currency and ex-AI.
- Adjusted EBITDA of $67 million was up 24% or 23% at
constant currency mainly due to revenue growth. Adjusted EBITDA
margin for the quarter was 41.3% compared to 36.2% in the prior
year period.
Corporate Expenses
- Adjusted Corporate Expenses of $43 million on an
Adjusted EBITDA basis was up 1% or flat at constant currency.
Year-to-date, Corporate Expenses on an Adjusted EBITDA basis was up
1% reported and at constant currency.
Businesses Held for Sale or Sold (HFS)
Our Held for Sale or Sold segment reflects the performance of
those businesses for the periods owned. All businesses in this
reporting segment have been sold. Wiley University Services was
completed on January 1, 2024. The sale of Wiley Edge, with the
exception of its India operation, was completed on May 31, 2024.
The sale of Wiley Edge's India operation was completed on August
31, 2024. The sale of CrossKnowledge was also completed on August
31, 2024.
EPS
- GAAP EPS was $0.74 compared to a loss of ($0.35) in the
prior year period. The year-over-year variance is largely due to
higher impairment and restructuring charges in the prior year and
foregone net income from businesses sold.
- Adjusted EPS of $0.97 was up 36% at constant currency
due to higher Adjusted Operating Income and accrued interest income
from divestitures.
Balance Sheet, Cash Flow, and Capital Allocation
(YTD)
- Net Debt-to-EBITDA Ratio (Trailing Twelve Months) at
quarter end was 2.2 compared to 2.0 in the year-ago period.
- Net Cash Used in Operating Activities was $94 million
compared to $84 million in the prior year period mainly due to
higher annual incentive compensation payments for prior year
performance and the cash earnings impact from divested assets.
Wiley does not provide adjusted cash flow metrics; results include
sold businesses. Wiley’s regular use of cash in the first half of
the fiscal year is driven by the timing of cash collections for
annual journal subscriptions, which are concentrated in Q3 and
Q4.
- Free Cash Flow less Product Development Spending was a
use of $130 million compared to a use of $132 million in the prior
year, with higher annual incentive compensation payments for prior
year performance offsetting lower capex. Capex of $36 million was
below prior year by $12 million due to timing.
- Returns to Shareholders: Wiley allocated $64 million
toward dividends and share repurchases, up from $61 million in the
prior year, with $25 million used to acquire 557 thousand shares at
an average cost per share of $44.89. In June 2024, Wiley raised its
dividend for the 31st consecutive year.
FISCAL YEAR 2025 GROWTH OUTLOOK
Wiley is reaffirming its Fiscal 2025 growth outlook based on
first half results and second half indicators. Wiley’s revenue
outlook is driven by favorable demand trends and performance
indicators. Wiley’s earnings outlook is driven by expected
revenue growth and cost savings, while reflecting reinvestments to
scale and optimize Research, modernize infrastructure and expand
GenAI content licensing and capabilities. Wiley’s cash flow
outlook is driven by lower restructuring payments and favorable
working capital partially offset by a year-over-year swing in
incentive compensation payments.
Quarterly phasing in the second half of the year: The
Company's projected growth in the second half of its fiscal year is
expected to occur in Q4 due to strong momentum and favorable
comparisons in Research.
Metric ($millions, except EPS)
Fiscal 2024 Results
Ex-Divestitures
Fiscal 2025 Outlook
Ex-Divestitures
Adj. Revenue*
$1,617
$1,650 to $1,690
Research
$1,043
Low to mid-single digit
growth
Learning
$574
Low-single digit growth
Adj. EBITDA*
$369
$385 to $410
Adj. EPS*
$2.78
$3.25 to $3.60
Free Cash Flow
$114
Approx. $125
*Excludes held for sale or sold
businesses
The Company remains on track with its Fiscal 2026 targets.
EARNINGS CONFERENCE CALL
Scheduled for today, December 5 at 10:00 am (ET). Access webcast
at Investor Relations at investors.wiley.com, or directly at
https://events.q4inc.com/attendee/593717942. U.S. callers, please
dial (888) 210-3346 and enter the participant code 2521217#.
International callers, please dial (646) 960-0253 and enter the
participant code 2521217#.
ABOUT WILEY
Wiley (NYSE: WLY) is one of the world’s largest publishers and a
trusted leader in research and learning. Our industry-leading
content, services, platforms, and knowledge networks are tailored
to meet the evolving needs of our customers and partners, including
researchers, students, instructors, professionals, institutions,
and corporations. We enable knowledge-seekers to transform today’s
biggest obstacles into tomorrow’s brightest opportunities. For more
than two centuries, Wiley has been delivering on its timeless
mission to unlock human potential. Visit us at Wiley.com. Follow us
on Facebook, Twitter, LinkedIn and Instagram.
NON-GAAP FINANCIAL MEASURES
Wiley provides non-GAAP financial measures and performance
results such as “Adjusted EPS,” “Adjusted Operating Income,”
“Adjusted EBITDA,” “Adjusted Income before Taxes,” “Adjusted Income
Tax Provision,” “Adjusted Effective Income Tax Rate,” “Free Cash
Flow less Product Development Spending,” “organic revenue,”
“Adjusted Revenue,” and results on a Constant Currency basis to
assess underlying business performance and trends. Management
believes non-GAAP financial measures, which exclude the impact of
restructuring charges and credits and certain other items, and the
impact of divestitures and acquisitions provide a useful comparable
basis to analyze operating results and earnings. See the
reconciliations of non-GAAP financial measures and explanations of
the uses of non-GAAP measures in the supplementary information. We
have not provided our 2025 outlook for the most directly comparable
U.S. GAAP financial measures, as they are not available without
unreasonable effort due to the high variability, complexity, and
low visibility with respect to certain items, including
restructuring charges and credits, gains and losses on foreign
currency, and other gains and losses. These items are uncertain,
depend on various factors, and could be material to our
consolidated results computed in accordance with U.S. GAAP.
FORWARD-LOOKING STATEMENTS
This release contains certain forward-looking statements
concerning the Company's operations, performance, and financial
condition. Reliance should not be placed on forward-looking
statements, as actual results may differ materially from those in
any forward-looking statements. Any such forward-looking statements
are based upon a number of assumptions and estimates that are
inherently subject to uncertainties and contingencies, many of
which are beyond the control of the Company and are subject to
change based on many important factors. Such factors include, but
are not limited to: (i) the level of investment in new technologies
and products; (ii) subscriber renewal rates for the Company's
journals; (iii) the financial stability and liquidity of journal
subscription agents; (iv) the consolidation of book wholesalers and
retail accounts; (v) the market position and financial stability of
key online retailers; (vi) the seasonal nature of the Company's
educational business and the impact of the used book market; (vii)
worldwide economic and political conditions; (viii) the Company's
ability to protect its copyrights and other intellectual property
worldwide (ix) the ability of the Company to successfully integrate
acquired operations and realize expected opportunities; (x) the
ability to realize operating savings over time and in fiscal year
2025 in connection with our multiyear Global Restructuring Program
and planned and completed dispositions; (xi) cyber risk and the
failure to maintain the integrity of our operational or security
systems or infrastructure, or those of third parties with which we
do business; (xii) as a result of acquisitions, we have and may
record a significant amount of goodwill and other identifiable
intangible assets and we may never realize the full carrying value
of these assets; (xiii) our ability to leverage artificial
intelligence technologies in our products and services, including
generative artificial intelligence, large language models, machine
learning, and other artificial intelligence tools; and (xiv) other
factors detailed from time to time in our filings with the SEC. The
Company undertakes no obligation to update or revise any such
forward-looking statements to reflect subsequent events or
circumstances.
CATEGORY: EARNINGS RELEASES
JOHN WILEY & SONS, INC. SUPPLEMENTARY INFORMATION
(1)(2) CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME
(LOSS) (Dollars in thousands, except per share
information) (unaudited) Three Months
Ended Six Months Ended October 31, October
31,
2024
2023
2024
2023
Revenue, net
$
426,595
$
492,808
$
830,404
$
943,821
Costs and expenses: Cost of sales
107,000
155,614
216,220
312,715
Operating and administrative expenses
238,891
252,282
487,710
508,083
Impairment of goodwill (3)
-
-
-
26,695
Restructuring and related charges
3,627
25,102
7,497
37,225
Amortization of intangible assets
12,944
13,565
25,871
29,213
Total costs and expenses
362,462
446,563
737,298
913,931
Operating income
64,133
46,245
93,106
29,890
As a % of revenue
15.0%
9.4%
11.2%
3.2%
Interest expense
(14,463)
(12,937)
(27,250)
(24,271)
Net foreign exchange transaction losses
(3,328)
(2,357)
(3,094)
(3,977)
Net gain (loss) on sale of businesses, assets, and impairment
charges related to assets held-for-sale (3)
369
(51,414)
6,170
(127,343)
Other income (expense), net
2,226
(1,567)
3,008
(3,052)
Income (loss) before taxes
48,937
(22,030)
71,940
(128,753)
Provision (benefit) for income taxes
8,479
(2,585)
32,918
(17,044)
Effective tax rate
17.3%
11.7%
45.8%
13.2%
Net income (loss)
$
40,458
$
(19,445)
$
39,022
$
(111,709)
As a % of revenue
9.5%
-3.9%
4.7%
-11.8%
Earnings (loss) per share Basic
$
0.75
$
(0.35)
$
0.72
$
(2.02)
Diluted (4)
$
0.74
$
(0.35)
$
0.71
$
(2.02)
Weighted average number of common shares outstanding
Basic
54,191
55,102
54,284
55,186
Diluted (4)
54,850
55,102
54,928
55,186
Notes: (1) The supplementary information
included in this press release for the three and six months ended
October 31, 2024 is preliminary and subject to change prior to the
filing of our upcoming Quarterly Report on Form 10-Q with the
Securities and Exchange Commission. (2) All amounts are
approximate due to rounding. (3) As previously announced in
fiscal year 2024, we executed a plan to divest non-core businesses,
including University Services, Wiley Edge, and CrossKnowledge.
These three businesses met the held-for-sale criteria starting in
the first quarter of fiscal year 2024. We measured each disposal
group at the lower of carrying value or fair value less costs to
sell prior to its disposition.On August 31, 2024, we completed the
sale of CrossKnowledge which was included in our Held for Sale or
Sold segment. The pretax loss on sale was $51.5 million. In
connection with the held-for-sale classification, we recognized
cumulative impairment charges of $51.0 million which included $55.4
million recognized in fiscal year 2024 and a reduction of $4.4
million in the three months ended July 31, 2024. Upon the
completion of the sale, we recognized an additional loss of $0.5
million in the three months ended October 31, 2024 due to
subsequent changes in the fair value less costs to sell, as well as
changes in the carrying amount of the disposal group. This resulted
in a net reduction in the loss of $3.9 million in the six months
ended October 31, 2024.On May 31, 2024, we completed the sale of
Wiley Edge which was included in our Held for Sale or Sold segment,
with the exception of its India operations which sold on August 31,
2024. The total pretax loss on sale was $18.6 million. In
connection with the held-for-sale classification, we recognized
cumulative impairment charges of $19.4 million. Upon the completion
of the sale, we recognized a net gain of $0.8 million in the six
months ended October 31, 2024, which included $1.0 million in the
three months ended October 31, 2024, primarily due to the sale of
the India operations, partially offset by subsequent changes in the
costs to sell.On January 1, 2024 we completed the sale of
University Services which was included in our Held for Sale or Sold
segment. In the six months ended October 31, 2024, there was a
reduction in the pretax loss on the sale of University Services due
to third-party customer consents and working capital adjustments of
$1.5 million that occurred in the first quarter of fiscal year
2025. In the six months ended October 31, 2024, there was a
reduction in the pretax loss on the sale of our Tuition Manager
business, previously in our Held for Sale or Sold segment, due to a
selling price adjustment for cash received after the closing of
$0.1 million that occurred in the first quarter of fiscal year
2025.In the three months ended October 31, 2024 we sold a facility
which was reflected in Technology, property, and equipment, net in
our Unaudited Condensed Consolidated Statements of Financial
Position which resulted in a pretax loss on sale of $0.2 million.In
fiscal year 2024, we reorganized our segments and recorded pretax
noncash goodwill impairments of $26.7 million which included $11.4
million related to University Services and $15.3 million related to
CrossKnowledge. Additionally, in the six months ended October 31,
2023 there was a pretax loss on the sale of our Tuition Manager
business of approximately $1.5 million.
Three Months
EndedOctober 31, Six Months EndedOctober 31,
2024
2023
2024
2023
Wiley Edge
$
956
$
-
$
788
$
-
University Services
-
(34,807)
1,489
(75,466)
Tuition Manager
-
568
120
(1,500)
CrossKnowledge
(438)
(17,175)
3,922
(50,377)
Sale of assets
(149)
-
(149)
-
Net gain (loss) on sale of businesses, assets, and impairment
charges related to assets held-for-sale
$
369
$
(51,414)
$
6,170
$
(127,343)
(4) In calculating diluted net loss per common share for the
three and six months ended October 31, 2023, our diluted weighted
average number of common shares outstanding excludes the effect of
unvested restricted stock units and other stock awards as the
effect was antidilutive. This occurs when a US GAAP net loss is
reported and the effect of using dilutive shares is antidilutive.
JOHN WILEY & SONS, INC. SUPPLEMENTARY INFORMATION (1)
(2) RECONCILIATION OF US GAAP MEASURES to NON-GAAP
MEASURES (unaudited) Reconciliation of US GAAP
Earnings (Loss) per Share to Non-GAAP Adjusted EPS Three
Months Ended Six Months Ended October 31,
October 31,
2024
2023
2024
2023
US GAAP Earnings (Loss) Per Share - Diluted
$
0.74
$
(0.35)
$
0.71
$
(2.02)
Adjustments: Impairment of goodwill
-
-
-
0.43
Restructuring and related charges
0.06
0.34
0.12
0.50
Foreign exchange losses on intercompany transactions, including the
write off of certain cumulative translation adjustments (3)
0.04
0.04
-
0.04
Amortization of acquired intangible assets (4)
0.21
0.19
0.40
0.42
Net (gain) loss on sale of businesses, assets, and impairment
charges related to assets held-for-sale (5)
-
0.77
(0.08)
1.94
Held for Sale or Sold segment Adjusted Net Loss (Income) (5)
0.01
(0.27)
0.05
(0.34)
Income tax adjustments
(0.09)
-
0.24
-
EPS impact of using weighted-average dilutive shares for adjusted
EPS calculation (6)
-
0.01
-
0.02
Non-GAAP Adjusted Earnings Per Share - Diluted
$
0.97
$
0.73
$
1.44
$
0.99
Reconciliation of US GAAP Income (Loss) Before Taxes to
Non-GAAP Adjusted Income Before Taxes Three Months Ended
Six Months Ended (amounts in thousands)
October 31,
October 31,
2024
2023
2024
2023
US GAAP Income (Loss) Before Taxes
$
48,937
$
(22,030)
$
71,940
$
(128,753)
Pretax Impact of Adjustments: Impairment of goodwill
-
-
-
26,695
Restructuring and related charges
3,627
25,102
7,497
37,225
Foreign exchange losses on intercompany transactions, including the
write off of certain cumulative translation adjustments (3)
2,943
3,223
351
3,217
Amortization of acquired intangible assets (4)
12,944
14,303
25,913
30,971
Net (gain) loss on sale of businesses, assets, and impairment
charges related to assets held-for-sale (5)
(369)
51,414
(6,170)
127,343
Held for Sale or Sold segment Adjusted Loss (Income) Before Taxes
(5)
1,059
(19,099)
3,578
(24,133)
Non-GAAP Adjusted Income Before Taxes
$
69,141
$
52,913
$
103,109
$
72,565
Reconciliation of US GAAP Income Tax Provision (Benefit)
to Non-GAAP Adjusted Income Tax Provision, including our US GAAP
Effective Tax Rate and our Non-GAAP Adjusted Effective Tax Rate
US GAAP Income Tax Provision (Benefit)
$
8,479
$
(2,585)
$
32,918
$
(17,044)
Income Tax Impact of Adjustments (7) Impairment of goodwill
-
-
-
2,697
Restructuring and related charges
161
6,315
911
9,251
Foreign exchange losses on intercompany transactions, including the
write off of certain cumulative translation adjustments (3)
729
888
338
854
Amortization of acquired intangible assets (4)
1,792
3,645
3,601
7,517
Net (gain) loss on sale of businesses, assets, and impairment
charges related to assets held-for-sale (5)
(588)
8,542
(1,513)
19,203
Held for Sale or Sold segment Adjusted Tax Benefit (Provision) (5)
515
(4,270)
887
(5,266)
Income Tax Adjustments Impact of valuation allowance on the US GAAP
effective tax rate (8)
4,911
-
(13,119)
-
Non-GAAP Adjusted Income Tax Provision
$
15,999
$
12,535
$
24,023
$
17,212
US GAAP Effective Tax Rate
17.3%
11.7%
45.8%
13.2%
Non-GAAP Adjusted Effective Tax Rate
23.1%
23.7%
23.3%
23.7%
Notes: (1) See Explanation of Usage of Non-GAAP
Performance Measures included in this supplementary information for
additional details on the reasons why management believes
presentation of each non-GAAP performance measure provides useful
information to investors. The supplementary information included in
this press release for the three and six months ended October 31,
2024 is preliminary and subject to change prior to the filing of
our upcoming Quarterly Report on Form 10-Q with the Securities and
Exchange Commission. (2) All amounts are approximate due to
rounding. (3) In fiscal year 2023 due to the closure of our
operations in Russia, the Russia entity was deemed substantially
liquidated. In the three and six months ended October 31, 2024, we
wrote off an additional $0.8 million and $0.3 million,
respectively, of cumulative translation adjustments in earnings. In
the three and six months ended October 31, 2023, we wrote off an
additional $0.1 million and $1.0 million, respectively, of
cumulative translation adjustments in earnings. These amounts are
reflected in Net foreign exchange transaction losses on our
Condensed Consolidated Statements of Net Income (Loss). (4)
Reflects the amortization of intangible assets established on the
opening balance sheet for an acquired business. This includes the
amortization of intangible assets such as developed technology,
customer relationships, tradenames, etc., which is reflected in the
"Amortization of intangible assets" line in the Condensed
Consolidated Statements of Net Income (Loss). It also includes the
amortization of acquired product development assets, which is
reflected in Cost of sales in the Condensed Consolidated Statements
of Net Income (Loss). (5) On August 31, 2024, we completed
the sale of CrossKnowledge. The pretax loss on sale was $51.5
million (net of tax loss of $51.5 million). In connection with the
held-for-sale classification, we recognized cumulative impairment
charges of $51.0 million which included $55.4 million recognized in
fiscal year 2024 and a reduction of $4.4 million in the three
months ended July 31, 2024. Upon the completion of the sale, we
recognized an additional loss of $0.5 million in the three months
ended October 31, 2024. This resulted in a net reduction in the
loss of $3.9 million in the six months ended October 31, 2024.On
May 31, 2024, we completed the sale of Wiley Edge, with the
exception of its India operations which sold on August 31, 2024.
The total pretax loss of $18.6 million (net of tax loss of $20.1
million). In connection with the held-for-sale classification, we
recognized cumulative impairment charges of $19.4 million. Upon the
completion of the sale, we recognized a net gain of $0.8 million in
the six months ended October 31, 2024, which included $1.0 million
in the three months ended October 31, 2024.In the six months ended
October 31, 2024, there was a reduction in the pretax loss on the
sale of University Services of approximately $1.5 million, which
resulted in a total pretax loss of $105.6 million (net of tax loss
of $79.4 million). In the six months ended October 31, 2024, there
was a reduction in the pretax loss on the sale of our Tuition
Manager business of approximately $0.1 million, which resulted in a
total net pretax loss of $1.4 million (net of tax loss of $1.0
million).In the three months ended October 31, 2023, there was a
reduction in the pretax loss on the sale of our Tuition Manager
business due to cash received after the closing of approximately
$0.5 million, which resulted in a total net pretax loss of $1.5
million (net of tax loss of $1.1 million).In the three months ended
October 31, 2024 we sold a facility which was reflected in
Technology, property, and equipment, net in our Unaudited Condensed
Consolidated Statements of Financial Position which resulted in a
pretax loss on sale of $0.2 million.In fiscal year 2024 while
University Services, Wiley Edge, and CrossKnowledge continued to be
reported as held-for-sale, we measured each business at the lower
of carrying value or fair value less costs to sell. We recorded a
held-for-sale pretax impairment charge of $34.8 million and $75.4
million, in the three and six months ended October 31, 2023,
respectively, related to University Services. We recorded a
held-for-sale pretax impairment charge of $17.1 million and $50.4
million, in the three and six months ended October 31, 2023,
respectively, related to CrossKnowledge.In addition, our Adjusted
EPS excludes the Adjusted Net Income or Loss of our Held for Sale
or Sold segment. (6) Represents the impact of using diluted
weighted-average number of common shares outstanding (55.6 million
and 55.7 million shares for the three and six months ended October
31, 2023, respectively) included in the Non-GAAP Adjusted EPS
calculation in order to apply the dilutive impact on adjusted net
income due to the effect of unvested restricted stock units and
other stock awards. This impact occurs when a US GAAP net loss is
reported and the effect of using dilutive shares is antidilutive.
(7) For the three and six months ended October 31, 2024 and
2023, substantially all of the tax impact was from deferred taxes.
(8) In the six months ended October 31, 2024, there was an
impact on the US GAAP effective tax rate due to the valuation
allowance on deferred tax assets in the US of $13.1 million, which
includes an adjustment of $4.9 million in the three months ended
October 31, 2024.
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1) RECONCILIATION OF US GAAP
NET INCOME (LOSS) TO NON-GAAP EBITDA AND ADJUSTED EBITDA
(unaudited) Three Months Ended Six Months
Ended October 31, October 31,
2024
2023
2024
2023
Net Income (Loss)
$
40,458
$
(19,445)
$
39,022
$
(111,709)
Interest expense
14,463
12,937
27,250
24,271
Provision (benefit) for income taxes
8,479
(2,585)
32,918
(17,044)
Depreciation and amortization
36,718
40,174
73,971
83,902
Non-GAAP EBITDA
100,118
31,081
173,161
(20,580)
Impairment of goodwill
-
-
-
26,695
Restructuring and related charges
3,627
25,102
7,497
37,225
Net foreign exchange transaction losses
3,328
2,357
3,094
3,977
Net (gain) loss on sale of businesses, assets, and impairment
charges related to assets held-for-sale
(369)
51,414
(6,170)
127,343
Other (income) expense, net
(2,226)
1,567
(3,008)
3,052
Held for Sale or Sold segment Adjusted EBITDA (2)
1,059
(19,100)
3,578
(25,621)
Non-GAAP Adjusted EBITDA
$
105,537
$
92,421
$
178,152
$
152,091
Adjusted EBITDA Margin
24.9%
22.7%
21.9%
19.7%
Notes: (1) See Explanation of Usage of Non-GAAP
Performance Measures included in this supplementary information for
additional details on the reasons why management believes
presentation of each non-GAAP performance measure provides useful
information to investors. The supplementary information included in
this press release for the three and six months ended October 31,
2024 is preliminary and subject to change prior to the filing of
our upcoming Quarterly Report on Form 10-Q with the Securities and
Exchange Commission. (2) Our Non-GAAP Adjusted EBITDA
excludes the Held for Sale or Sold segment Non-GAAP Adjusted
EBITDA.
JOHN WILEY & SONS, INC. SUPPLEMENTARY
INFORMATION (1) (2) (3) SEGMENT RESULTS (in
thousands) (unaudited) % Change Three
Months Ended October 31, Favorable (Unfavorable)
2024
2023
Reported ConstantCurrency Research:
Revenue, net Research Publishing
$
222,667
$
219,743
1%
1%
Research Solutions
39,218
37,927
3%
2%
Total Revenue, net
$
261,885
$
257,670
2%
1%
Non-GAAP Adjusted Operating Income
$
59,527
$
58,856
1%
2%
Depreciation and amortization
22,522
22,668
1%
2%
Non-GAAP Adjusted EBITDA
$
82,049
$
81,524
1%
1%
Adjusted EBITDA margin
31.3%
31.6%
Learning: Revenue, net Academic
$
94,788
$
89,125
6%
5%
Professional
66,726
59,815
12%
11%
Total Revenue, net
$
161,514
$
148,940
8%
7%
Non-GAAP Adjusted Operating Income
$
55,871
$
39,912
40%
38%
Depreciation and amortization
10,897
13,974
22%
23%
Non-GAAP Adjusted EBITDA
$
66,768
$
53,886
24%
23%
Adjusted EBITDA margin
41.3%
36.2%
Held for Sale or Sold: Total Revenue, net
$
3,196
$
86,198
-96%
-96%
Non-GAAP Adjusted Operating (Loss) Income
$
(1,059)
$
19,100
# # Depreciation and amortization
-
-
#
# Non-GAAP Adjusted EBITDA
$
(1,059)
$
19,100
# # Adjusted EBITDA margin
-33.1%
22.2%
Non-GAAP Adjusted Corporate Expenses
$
(46,579)
$
(46,521)
0%
0%
Depreciation and amortization
3,299
3,532
7%
7%
Non-GAAP Adjusted EBITDA
$
(43,280)
$
(42,989)
-1%
0%
Consolidated Results: Revenue, net
$
426,595
$
492,808
-13%
-14%
Less: Held for Sale or Sold Segment (3)
(3,196)
(86,198)
-96%
-96%
Adjusted Revenue, net
$
423,399
$
406,610
4%
3%
Operating Income
$
64,133
$
46,245
39%
39%
Adjustments: Restructuring charges
3,627
25,102
86%
86%
Held for Sale or Sold Segment Adjusted Operating Loss (Income) (3)
1,059
(19,100)
# #
Non-GAAP Adjusted Operating Income
$
68,819
$
52,247
32%
32%
Adjusted Operating Income margin
16.3%
12.8%
Depreciation and amortization
36,718
40,174
9%
9%
Less: Held for Sale or Sold Segment depreciation and amortization
(3)
-
-
# #
Non-GAAP Adjusted EBITDA
$
105,537
$
92,421
14%
14%
Adjusted EBITDA margin
24.9%
22.7%
Notes: (1) The supplementary information included in
this press release for the three and six months ended October 31,
2024 is preliminary and subject to change prior to the filing of
our upcoming Quarterly Report on Form 10-Q with the Securities and
Exchange Commission. (2) All amounts are approximate due to
rounding. (3) Our Adjusted Revenue, Adjusted Operating
Income and Adjusted EBITDA excludes the impact of our Held for Sale
or Sold segment Revenue, Adjusted Operating Income or Loss and
Adjusted EBITDA results. # Variance greater than 100%
JOHN WILEY & SONS, INC. SUPPLEMENTARY INFORMATION (1)
(2) (3) SEGMENT RESULTS (in thousands)
(unaudited) % Change Six Months Ended October
31, Favorable (Unfavorable)
2024
2023
Reported
Constant Currency
Research: Revenue, net Research Publishing
$
453,618
$
442,743
2%
2%
Research Solutions
73,576
72,731
1%
1%
Total Revenue, net
$
527,194
$
515,474
2%
2%
Non-GAAP Adjusted Operating Income
$
114,743
$
112,383
2%
3%
Depreciation and amortization
45,081
45,880
2%
2%
Non-GAAP Adjusted EBITDA
$
159,824
$
158,263
1%
1%
Adjusted EBITDA margin
30.3%
30.7%
Learning: Revenue, net Academic
$
154,752
$
137,417
13%
12%
Professional
131,076
120,843
8%
8%
Total Revenue, net
$
285,828
$
258,260
11%
10%
Non-GAAP Adjusted Operating Income
$
78,371
$
47,538
65%
63%
Depreciation and amortization
22,191
27,526
19%
20%
Non-GAAP Adjusted EBITDA
$
100,562
$
75,064
34%
33%
Adjusted EBITDA margin
35.2%
29.1%
Held for Sale or Sold: Total Revenue, net
$
17,382
$
170,087
-90%
-90%
Non-GAAP Adjusted Operating (Loss) Income
$
(3,578)
$
22,184
# # Depreciation and amortization
-
3,437
# #
Non-GAAP Adjusted EBITDA
$
(3,578)
$
25,621
# # Adjusted EBITDA margin
-20.6%
15.1%
Non-GAAP Adjusted Corporate Expenses
$
(88,933)
$
(88,295)
-1%
0%
Depreciation and amortization
6,699
7,059
5%
5%
Non-GAAP Adjusted EBITDA
$
(82,234)
$
(81,236)
-1%
-1%
Consolidated Results: Revenue, net
$
830,404
$
943,821
-12%
-12%
Less: Held for Sale or Sold Segment (3)
(17,382)
(170,087)
-90%
-90%
Adjusted Revenue, net
$
813,022
$
773,734
5%
5%
Operating Income
$
93,106
$
29,890
# # Adjustments: Restructuring charges
7,497
37,225
80%
80%
Impairment of goodwill
-
26,695
# # Held for Sale or Sold Segment Adjusted Operating Loss (Income)
(3)
3,578
(22,184)
# # Non-GAAP Adjusted Operating Income
$
104,181
$
71,626
45%
46%
Adjusted Operating Income margin
12.8%
9.3%
Depreciation and amortization
73,971
83,902
12%
12%
Less: Held for Sale or Sold depreciation and amortization (3)
-
(3,437)
# #
Non-GAAP Adjusted EBITDA
$
178,152
$
152,091
17%
17%
Adjusted EBITDA margin
21.9%
19.7%
# Variance greater than 100%
JOHN WILEY & SONS,
INC. SUPPLEMENTARY INFORMATION (1) CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in
thousands) (unaudited) October 31,
April 30,
2024
2024
Assets: Current assets Cash and cash equivalents
$
75,536
$
83,249
Accounts receivable, net
183,015
224,198
Inventories, net
27,103
26,219
Prepaid expenses and other current assets
84,659
85,954
Current assets held-for-sale
-
34,422
Total current assets
370,313
454,042
Technology, property and equipment, net
172,371
192,438
Intangible assets, net
598,262
615,694
Goodwill
1,102,372
1,091,368
Operating lease right-of-use assets
70,527
69,074
Other non-current assets
295,013
283,719
Non-current assets held-for-sale
-
19,160
Total assets
$
2,608,858
$
2,725,495
Liabilities and shareholders' equity: Current
liabilities Accounts payable
$
40,358
$
55,659
Accrued royalties
119,043
97,173
Short-term portion of long-term debt
10,000
7,500
Contract liabilities
241,488
483,778
Accrued employment costs
60,935
96,980
Short-term portion of operating lease liabilities
18,080
18,294
Other accrued liabilities
71,567
76,266
Current liabilities held-for-sale
-
37,632
Total current liabilities
561,471
873,282
Long-term debt
951,010
767,096
Accrued pension liability
71,082
70,832
Deferred income tax liabilities
98,676
97,186
Operating lease liabilities
88,403
94,386
Other long-term liabilities
82,961
71,760
Long-term liabilities held-for-sale
-
11,237
Total liabilities
1,853,603
1,985,779
Shareholders' equity
755,255
739,716
Total liabilities and shareholders' equity
$
2,608,858
$
2,725,495
Notes: (1) The supplementary information included in
this press release for October 31, 2024 is preliminary and subject
to change prior to the filing of our upcoming Quarterly Report on
Form 10-Q with the Securities and Exchange Commission.
JOHN
WILEY & SONS, INC. SUPPLEMENTARY INFORMATION (1)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in
thousands) (unaudited) Six Months Ended
October 31,
2024
2023
Operating activities: Net income (loss)
$
39,022
$
(111,709)
Impairment of goodwill
-
26,695
Net (gain) loss on sale of businesses, assets, and impairment
charges related to assets held-for-sale
(6,170)
127,343
Amortization of intangible assets
25,871
29,213
Amortization of product development assets
8,622
12,937
Depreciation and amortization of technology, property, and
equipment
39,478
41,752
Other noncash charges
45,064
31,698
Net change in operating assets and liabilities
(245,879)
(241,415)
Net cash used in operating activities
(93,992)
(83,486)
Investing activities: Additions to technology,
property, and equipment
(29,030)
(40,321)
Product development spending
(7,127)
(8,168)
Businesses acquired in purchase transactions, net of cash acquired
(915)
(1,500)
Net cash (transferred) proceeds related to the sale of businesses
and assets
(8,117)
1,025
Acquisitions of publication rights and other
700
(2,953)
Net cash used in investing activities
(44,489)
(51,917)
Financing activities: Net debt borrowings
184,066
198,231
Cash dividends
(38,264)
(38,691)
Purchases of treasury shares
(25,421)
(22,500)
Other
(7,298)
(7,338)
Net cash provided by financing activities
113,083
129,702
Effects of exchange rate changes on cash, cash
equivalents and restricted cash
1,441
(1,943)
Change in cash, cash equivalents and restricted cash for
period
(23,957)
(7,644)
Cash, cash equivalents and restricted cash -
beginning
99,543
107,262
Cash, cash equivalents and restricted cash - ending
$
75,586
$
99,618
CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT
DEVELOPMENT SPENDING (2) Six Months Ended
October 31,
2024
2023
Net cash used in operating activities
$
(93,992)
$
(83,486)
Less: Additions to technology, property, and equipment
(29,030)
(40,321)
Less: Product development spending
(7,127)
(8,168)
Free cash flow less product development spending
$
(130,149)
$
(131,975)
Notes: (1) The supplementary information included in
this press release for the six months ended October 31, 2024 is
preliminary and subject to change prior to the filing of our
upcoming Quarterly Report on Form 10-Q with the Securities and
Exchange Commission. (2) See Explanation of Usage of
Non-GAAP Performance Measures included in this supplemental
information.
JOHN WILEY & SONS, INC.
EXPLANATION OF USAGE OF NON-GAAP PERFORMANCE MEASURES
In this earnings release and supplemental information,
management may present the following non-GAAP performance
measures:
- Adjusted Earnings Per Share (Adjusted EPS);
- Free Cash Flow less Product Development Spending;
- Adjusted Revenue;
- Adjusted Operating Income and margin;
- Adjusted Income Before Taxes;
- Adjusted Income Tax Provision;
- Adjusted Effective Tax Rate;
- EBITDA, Adjusted EBITDA and margin;
- Organic revenue; and
- Results on a constant currency basis.
Management uses these non-GAAP performance measures as
supplemental indicators of our operating performance and financial
position as well as for internal reporting and forecasting
purposes, when publicly providing our outlook, to evaluate our
performance and calculate incentive compensation.
We present these non-GAAP performance measures in addition to US
GAAP financial results because we believe that these non-GAAP
performance measures provide useful information to certain
investors and financial analysts for operational trends and
comparisons over time. The use of these non-GAAP performance
measures may also provide a consistent basis to evaluate operating
profitability and performance trends by excluding items that we do
not consider to be controllable activities for this purpose.
The performance metric used by our chief operating decision
maker to evaluate performance of our reportable segments is
Adjusted Operating Income. We present both Adjusted Operating
Income and Adjusted EBITDA for each of our reportable segments as
we believe Adjusted EBITDA provides additional useful information
to certain investors and financial analysts for operational trends
and comparisons over time. It removes the impact of depreciation
and amortization expense, as well as presents a consistent basis to
evaluate operating profitability and compare our financial
performance to that of our peer companies and competitors.
For example:
- Adjusted EPS, Adjusted Revenue, Adjusted Operating Income,
Adjusted Income Before Taxes, Adjusted Income Tax Provision,
Adjusted Effective Tax Rate, Adjusted EBITDA, and organic revenue
(excluding acquisitions) provide a more comparable basis to analyze
operating results and earnings and are measures commonly used by
shareholders to measure our performance.
- Free Cash Flow less Product Development Spending helps assess
our ability, over the long term, to create value for our
shareholders as it represents cash available to repay debt, pay
common stock dividends, and fund share repurchases and
acquisitions.
- Results on a constant currency basis remove distortion from the
effects of foreign currency movements to provide better
comparability of our business trends from period to period. We
measure our performance excluding the impact of foreign currency
(or at constant currency), which means that we apply the same
foreign currency exchange rates for the current and equivalent
prior period.
In addition, we have historically provided these or similar
non-GAAP performance measures and understand that some investors
and financial analysts find this information helpful in analyzing
our operating margins and net income, and in comparing our
financial performance to that of our peer companies and
competitors. Based on interactions with investors, we also believe
that our non-GAAP performance measures are regarded as useful to
our investors as supplemental to our US GAAP financial results, and
that there is no confusion regarding the adjustments or our
operating performance to our investors due to the comprehensive
nature of our disclosures.
We have not provided our 2025 outlook for the most directly
comparable US GAAP financial measures, as they are not available
without unreasonable effort due to the high variability,
complexity, and low visibility with respect to certain items,
including restructuring charges and credits, gains and losses on
foreign currency, and other gains and losses. These items are
uncertain, depend on various factors, and could be material to our
consolidated results computed in accordance with US GAAP.
Non-GAAP performance measures do not have standardized meanings
prescribed by US GAAP and therefore may not be comparable to the
calculation of similar measures used by other companies and should
not be viewed as alternatives to measures of financial results
under US GAAP. The adjusted metrics have limitations as analytical
tools, and should not be considered in isolation from, or as a
substitute for, US GAAP information. It does not purport to
represent any similarly titled US GAAP information and is not an
indicator of our performance under US GAAP. Non-GAAP financial
metrics that we present may not be comparable with similarly titled
measures used by others. Investors are cautioned against placing
undue reliance on these non-GAAP measures.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241205382986/en/
Brian Campbell Investor Relations 201.748.6874
brian.campbell@wiley.com
John Wiley and Sons (NYSE:WLYB)
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