Wiley Reports Second Quarter Fiscal 2022 Results

Rhea-AI Summary

Wiley (JW.A, JW.B) reported Q2 results for the period ending October 31, 2021, with revenues of $533 million, a 9% increase from the previous year. Operating income rose 6% to $74 million, while GAAP EPS of $0.99 fell 19% due to a one-time tax benefit in the previous year's results. Adjusted EPS was $1.29, up 6%. Revenue growth driven by Research Publishing & Platforms (up 9%) and Education Services (up 17%). The company reaffirmed its 2022 fiscal outlook with projected revenues between $2.070 billion and $2.100 billion.

Positive

• Revenue increased by 9% year-over-year to $533 million.
• Adjusted EBITDA grew by 7%, reflecting improved profitability.
• Education Services revenue rose by 17%, indicating strong demand in Talent Development.

Negative

• GAAP EPS decreased by 19% compared to the prior year.
• Education Publishing revenue declined due to reduced US enrollments.
• Net Debt-to-EBITDA ratio increased to 2.1 from 1.9.

HOBOKEN, N.J.--(BUSINESS WIRE)-- Wiley (NYSE: JWA and JWB), a global leader in scientific research and career-connected education, today announced results for the second quarter ended October 31, 2021.

SUMMARY

• GAAP Results: Revenue of $533 million (+9%), Operating Income of $74 million (+6%), and EPS of $0.99 (-19%)
• Adjusted Results (at constant currency): Revenue of $533 million (+8%), Adjusted EBITDA of $127 million (+7%), and Adjusted EPS of $1.29 (+6%)
• CFO Transition: John Kritzmacher retiring from Company after eight years of service; Christina Van Tassell joins Wiley as successor

MANAGEMENT COMMENTARY

“Wiley's strong performance reflects our continued effectiveness in helping the world’s leading universities and corporations to increase the impact of new scientific discoveries, improve the return on investment in education, and close critical skill and talent gaps,” said Brian Napack, President and CEO. “Our revenue growth in Research and Talent Development continues to be particularly noteworthy, driven by steady execution of our strategy and favorable market trends.”

SECOND QUARTER PERFORMANCE

GAAP Measures Unaudited ($millions except for EPS)	Q2 2022	Q2 2021	Change
Revenue	$533.0	$491.0	+9%
Operating Income	$73.9	$69.9	+6%
Diluted EPS	$0.99	$1.22	(19%)
Non-GAAP Measures	Q2 2022	Q2 2021	Change Constant Currency
Revenue	$533.0	$491.0	+8%
Adjusted EBITDA	$127.1	$120.3	+7%
Adjusted EPS*	$1.29	$1.25	+6%

Excluding acquisitions and currency impact, revenue rose 5% for the quarter. Wiley recorded a favorable FX variance of $2.8 million in Revenue and unfavorable FX variances of $2.1 million in Adjusted EBITDA and $0.03 in Adjusted EPS.

*Adjusted EPS: Wiley’s Adjusted EPS metric excludes the impact of certain non-cash items directly related to acquisitions, most notably the amortization of acquired intangible assets. The Company does not consider these non-cash items to be indicative of its ongoing operating performance.

Revenue

• Research Publishing & Platforms rose 9% as reported and at constant currency and 4% excluding acquisitions, driven by strong growth in open access, corporate solutions, and research platforms.
• Academic & Professional Learning grew 4% as reported and 3% at constant currency, driven by strong recovery in Professional Learning from prior-year COVID lockdown impacts. This more than offset a decline in Education Publishing due to softer US enrollment and some easing of prior-year COVID-related tailwinds in content and courseware.
• Education Services increased 17% as reported and 15% at constant currency, driven by 3% growth in University Services (formerly OPM) and strong double-digit growth in Talent Development (formerly mthree).

Adjusted EBITDA

• Research Publishing & Platforms rose 10% at constant currency, primarily driven by revenue growth.
• Academic & Professional Learning rose 18% at constant currency, reflecting the Professional Learning recovery.
• Education Services declined 35% at constant currency due to higher student acquisition costs in University Services and investments to accelerate growth in Talent Development.
• Adjusted Corporate Expenses were up 12% mainly due to higher employee-related costs.

EPS

• GAAP EPS was $0.99 as compared to $1.22 in the prior year period, which included a $0.25 discrete tax benefit related to the Coronavirus Aid, Relief, and Economic Security Act (CARES ACT).
• Adjusted EPS of $1.29 was up 6% at constant currency driven by higher adjusted EBITDA offsetting higher interest expense.

Balance Sheet, Cash Flow, and Capital Allocation

• Net Debt-to-EBITDA ratio (trailing twelve months) at quarter-end was 2.1 compared to 1.9 in the prior year period.
• Net Cash Used in Operating Activities (six months) was $76 million compared to $77 million in the prior year period, with higher cash earnings offset by higher annual incentive payments related to Fiscal 2021 outperformance. Note, Wiley’s seasonal use of cash in the first half of the fiscal year is driven by the timing of cash collections for annual research journal subscriptions.
• Free Cash Flow less Product Development Spending (six months) was a use of $126 million as compared to a use of $124 million in the prior year.
• Acquisitions: During the quarter, Wiley acquired research editorial services provider, J&J Editorial, for $12 million.
• Share Repurchases: During the quarter, the Company utilized approximately $10 million to repurchase approximately 183,000 shares at an average cost per share of $54.54.

FISCAL YEAR 2022 OUTLOOK

Given performance through six months and leading indicators, the Company is reaffirming its full year outlook.

Metric ($millions, except EPS)	Fiscal 2020	Fiscal 2021	Fiscal 2022 Outlook
Revenue	$1,831	$1,942	$2,070 to $2,100
Adjusted EBITDA	$356	$419	$415 to $435
Adjusted EPS	$3.30	$4.00	$4.00 to $4.25
Free Cash Flow	$173	$257	$200 to $220

EARNINGS CONFERENCE CALL

Scheduled for today, December 7 at 10:00 am (ET). Access webcast at investors.wiley.com, or directly at https://event.on24.com/wcc/r/3551395/01DAF1B2966C0BBB1AB1A59ED5F92CBB. US callers, please dial (844) 418-0103 and enter the participant code 4565599#. International callers, please dial (236) 714-3019 and enter the participant code 4565599#.

ABOUT WILEY

Wiley is a global leader in research and education, unlocking human potential by enabling discovery, powering education, and shaping workforces. For over 200 years, Wiley has fueled the world’s knowledge ecosystem. Today, our high-impact content, platforms, and services help researchers, learners, institutions, and corporations achieve their goals in an ever-changing world. Visit us at Wiley.com, Like us on Facebook and Follow us on Twitter and LinkedIn

NON-GAAP FINANCIAL MEASURES

Wiley provides non-GAAP financial measures and performance results such as “Adjusted EPS,” “EBITDA”, “Adjusted EBITDA,” “Adjusted Contribution to Profit,” “Adjusted Income before Taxes,” “Adjusted Income Tax Provision,” “Adjusted Effective Tax Rate,” “Free Cash Flow less Product Development Spending,” “organic revenue,” and results on a Constant Currency basis to assess underlying business performance and trends. Management believes non-GAAP financial measures, which exclude the impact of restructuring charges and credits and certain other items, and the impact of acquisitions provide a useful comparable basis to analyze operating results and earnings. See the reconciliations of non-GAAP financial measures and explanations of the uses of non-GAAP measures in the supplementary information. We have not provided our 2022 outlook for the most directly comparable US GAAP financial measures, as they are not available without unreasonable effort due to the high variability, complexity, and low visibility with respect to certain items, including restructuring charges and credits, gains and losses on foreign currency, and other gains and losses. These items are uncertain, depend on various factors, and could be material to our consolidated results computed in accordance with US GAAP.

FORWARD-LOOKING STATEMENTS

This release contains certain forward-looking statements concerning the Company's operations, performance, and financial condition. Reliance should not be placed on forward-looking statements, as actual results may differ materially from those in any forward-looking statements. Any such forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to uncertainties and contingencies, many of which are beyond the control of the Company and are subject to change based on many important factors. Such factors include, but are not limited to: (i) the level of investment by Wiley in new technologies and products; (ii) subscriber renewal rates for the Company's journals; (iii) the financial stability and liquidity of journal subscription agents; (iv) the consolidation of book wholesalers and retail accounts; (v) the market position and financial stability of key retailers; (vi) the seasonal nature of the Company's educational business and the impact of the used book market; (vii) worldwide economic and political conditions; (viii) the Company's ability to protect its copyrights and other intellectual property worldwide (ix) the ability of the Company to successfully integrate acquired operations and realize expected opportunities; (x) the Company’s ability to realize operating savings over time and in fiscal year 2022 in connection with our multi-year Business Optimization Program; (xi) the impact of COVID-19 on our operations, performance, and financial condition; and (xii) other factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any such forward-looking statements to reflect subsequent circumstances.

CATEGORY: ALL CORPORATE NEWS
CATEGORY: EARNINGS RELEASES

JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)(2)
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME
(Dollars in thousands, except per share information)
(unaudited)
		Three Months Ended								Six Months Ended
		October 31,								October 31,
			2021				2020				2021				2020
Revenue, net		$	533,003			$	491,011			$	1,021,391			$	922,337
Costs and expenses:
Cost of sales			174,782				154,853				340,738				299,662
Operating and administrative expenses			264,190				247,167				524,779				484,536
Restructuring and related (credits) charges			(1,333	)			1,920				(1,609	)			4,138
Amortization of intangible assets			21,476				17,166				42,627				34,057
Total costs and expenses			459,115				421,106				906,535				822,393
Operating income			73,888				69,905				114,856				99,944
As a % of revenue			13.9	%			14.2	%			11.2	%			10.8	%
Interest expense			(4,997	)			(4,461	)			(9,636	)			(9,075	)
Foreign exchange transaction losses			(1,370	)			(697	)			(1,000	)			(779	)
(Loss) gain on sale of certain assets			(56	)			-				3,694				-
Other income, net			3,150				3,766				6,703				8,157
Income before taxes			70,615				68,513				114,617				98,247
Provision for income taxes			14,648				81				44,820				13,481
Effective tax rate			20.7	%			0.1	%			39.1	%			13.7	%
Net income		$	55,967			$	68,432			$	69,797			$	84,766
As a % of revenue			10.5	%			13.9	%			6.8	%			9.2	%
Earnings per share
Basic		$	1.00			$	1.22			$	1.25			$	1.51
Diluted		$	0.99			$	1.22			$	1.24			$	1.51
Weighted average number of common shares outstanding
Basic			55,806				56,005				55,833				55,959
Diluted			56,388				56,165				56,477				56,182
Notes:
(1) The supplementary information included in this press release for the three and six months ended October 31, 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.   In the three months ended October 31, 2021, we completed the acquisition of J&J Editorial Services, LLC, which is included in our Research Publishing & Platforms segment results.
(2) All amounts are approximate due to rounding.

JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1) (2)
RECONCILIATION OF US GAAP MEASURES to NON-GAAP MEASURES
(unaudited)
Reconciliation of US GAAP EPS to Non-GAAP Adjusted EPS
					Three Months Ended								Six Months Ended
					October 31,								October 31,
						2021				2020				2021				2020
US GAAP Earnings Per Share - Diluted					$	0.99			$	1.22			$	1.24			$	1.51
Adjustments:
		Restructuring and related (credits) charges				(0.02	)			0.02				(0.02	)			0.05
		Foreign exchange losses (gains) on intercompany transactions				0.01				0.01				-				(0.02	)
		Amortization of acquired intangible assets (3)				0.31				0.25				0.60				0.50
		Loss (gain) loss on sale of certain assets (4)				-				-				(0.05	)			-
		Income tax adjustments (5) (6)				-				(0.25	)			0.37				(0.13	)
Non-GAAP Adjusted Earnings Per Share - Diluted					$	1.29			$	1.25			$	2.14			$	1.91
Reconciliation of US GAAP Income Before Taxes to Non-GAAP Adjusted Income Before Taxes
					Three Months Ended								Six Months Ended
(amounts in thousands)					October 31,								October 31,
						2021				2020				2021				2020
US GAAP Income Before Taxes					$	70,615			$	68,513			$	114,617			$	98,247
Pretax Impact of Adjustments:
		Restructuring and related (credits) charges				(1,333	)			1,920				(1,609	)			4,138
		Foreign exchange losses (gains) on intercompany transactions				567				231				(228	)			(1,338	)
		Amortization of acquired intangible assets				22,608				18,381				44,892				36,530
		Loss (gain) loss on sale of certain assets (4)				56				-				(3,694	)			-
Non-GAAP Adjusted Income Before Taxes					$	92,513			$	89,045			$	153,978			$	137,577
Reconciliation of US GAAP Income Tax Provision to Non-GAAP Adjusted Income Tax Provision,  including our US GAAP Effective Tax Rate and our Non-GAAP Adjusted Effective Tax Rate
US GAAP Income Tax Provision					$	14,648			$	81			$	44,820			$	13,481
Income Tax Impact of Adjustments (7)
		Restructuring and related (credits) charges				(277	)			654				(232	)			1,397
		Foreign exchange losses (gains) on intercompany transactions				120				122				19				(490	)
		Amortization of acquired intangible assets				5,420				4,335				10,263				8,633
		Loss (gain) loss on sale of certain assets (4)				14				-				(922	)			-
Income Tax Adjustments:
		Impact of increase in UK statutory rate on deferred tax balances (5)				-				(83	)			(20,726	)			(6,772	)
		Impact of US CARES Act (6)				-				13,998				-				13,998
Non-GAAP Adjusted Income Tax Provision					$	19,925			$	19,107			$	33,222			$	30,247
US GAAP Effective Tax Rate						20.7	%			0.1	%			39.1	%			13.7	%
Non-GAAP Adjusted Effective Tax Rate						21.5	%			21.5	%			21.6	%			22.0	%
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, 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.
(2	)	All amounts are approximate due to rounding.
(3	)	Reflects the amortization of intangible assets established on the opening balance sheet for an acquired business. This includes the amortization of intangible assets such as developed technology, customer relationships, tradenames, etc., which is reflected in the "Amortization of intangible assets" line in the Condensed Consolidated Statements of Net Income. It also includes the amortization of acquired product development assets, which is reflected in "Cost of sales" in the Condensed Consolidated Statements of Net Income.
(4	)	The gain on sale of certain assets is due to the sale of our world languages product portfolio which was included in our Academic & Professional Learning segment and resulted in a pretax gain of approximately $3.7 million during the six months ended October 31, 2021.
(5	)	In the three months ended July 31, 2021, the UK enacted legislation that increased its statutory rate from 19% to 25% effective April 1, 2023. This resulted in a $20.7 million, or $0.37 per share non-cash deferred tax expense from the re-measurement of the Company’s applicable UK net deferred tax liabilities during the three months ended July 31, 2021. These adjustments impacted deferred taxes.   In the three months ended July 31, 2020, the UK enacted legislation that increased its statutory rate from 17% to 19%.  This resulted in a $6.7 million, or $0.12 per share non-cash deferred tax expense from the re-measurement of the Company’s applicable UK net deferred tax liabilities during the three months ended July 31, 2020. These adjustments impacted deferred taxes.
(6	)	In connection with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and certain regulations, we carried back our April 30, 2020 US net operating loss (NOL) to our year ended April 30, 2015 and claimed a $20.7 million refund.  The refund plus interest was received in February 2021.  The NOL was carried back to fiscal year 2015 when the US corporate tax rate was 35.0%.  The carryback to a year with a higher rate, plus certain additional net permanent deductions included in the carryback resulted in a $14.0 million tax benefit, or $(0.25) per share, $8.4 million from current taxes and $5.6 million from deferred taxes, for the three and six months ended October 31, 2020.
(7	)	For the three and six months ended October 31, 2021 and 2020, substantially all of the tax impact was from deferred taxes.

JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
RECONCILIATION OF US GAAP NET INCOME TO NON-GAAP EBITDA AND ADJUSTED EBITDA
(unaudited)
			Three Months Ended								Six Months Ended
			October 31,								October 31,
				2021				2020				2021				2020
Net Income			$	55,967			$	68,432			$	69,797			$	84,766
Interest expense				4,997				4,461				9,636				9,075
Provision for income taxes				14,648				81				44,820				13,481
Depreciation and amortization				54,555				48,430				109,121				97,937
Non-GAAP EBITDA				130,167				121,404				233,374				205,259
Restructuring and related (credits) charges				(1,333	)			1,920				(1,609	)			4,138
Foreign exchange transaction losses				1,370				697				1,000				779
Loss (gain) on sale of certain assets				56				-				(3,694	)			-
Other income, net				(3,150	)			(3,766	)			(6,703	)			(8,157	)
Non-GAAP Adjusted EBITDA			$	127,110			$	120,255			$	222,368			$	202,019
Adjusted EBITDA Margin				23.8	%			24.5	%			21.8	%			21.9	%
Notes:
(1) See Explanation of Usage of Non-GAAP Performance Measures included in this supplementary information for additional details on the reasons why management believes presentation of each non-GAAP performance measure provides useful information to investors. The supplementary information included in this press release for the three and six months ended October 31, 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.

JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
SEGMENT RESULTS
(in thousands)
(unaudited)
											% Change
			Three Months Ended October 31,								Favorable (Unfavorable)
				2021				2020			Reported	Constant Currency
Research Publishing & Platforms:
Revenue, net
Research Publishing			$	262,873			$	240,691			9%	9%
Research Platforms				12,281				10,643			15%	15%
Total Revenue, net			$	275,154			$	251,334			9%	9%
Contribution to Profit			$	77,031			$	74,088			4%	8%
Adjustments:
Restructuring charges (credits)				22				(238	)		#	#
Non-GAAP Adjusted Contribution to Profit			$	77,053			$	73,850			4%	8%
Depreciation and amortization				23,464				19,765			-19%	-18%
Non-GAAP Adjusted EBITDA			$	100,517			$	93,615			7%	10%
Adjusted EBITDA margin				36.5	%			37.2	%
Academic & Professional Learning:
Revenue, net
Education Publishing (2)			$	98,581			$	102,428			-4%	-5%
Professional Learning				77,948				67,485			16%	15%
Total Revenue, net			$	176,529			$	169,913			4%	3%
Contribution to Profit			$	41,071			$	30,007			37%	36%
Adjustments:
Restructuring (credits) charges				(465	)			1,541			#	#
Non-GAAP Adjusted Contribution to Profit			$	40,606			$	31,548			29%	28%
Depreciation and amortization				18,148				17,720			-2%	-2%
Non-GAAP Adjusted EBITDA			$	58,754			$	49,268			19%	18%
Adjusted EBITDA margin				33.3	%			29.0	%
Education Services:
Revenue, net
University Services (3)			$	58,081			$	56,261			3%	3%
Talent Development Services (2) (4)				23,239				13,503			72%	67%
Total Revenue, net			$	81,320			$	69,764			17%	15%
Contribution to Profit			$	721			$	7,296			-90%	-91%
Adjustments:
Restructuring charges				6				84			93%	93%
Non-GAAP Adjusted Contribution to Profit			$	727			$	7,380			-90%	-91%
Depreciation and amortization				8,813				7,210			-22%	-22%
Non-GAAP Adjusted EBITDA			$	9,540			$	14,590			-35%	-35%
Adjusted EBITDA margin				11.7	%			20.9	%
Corporate Expenses:			$	(44,935	)		$	(41,486	)		-8%	-8%
Adjustments:
Restructuring (credits) charges				(896	)			533			#	#
Non-GAAP Adjusted Contribution to Profit			$	(45,831	)		$	(40,953	)		-12%	-12%
Depreciation and amortization				4,130				3,735			-11%	-11%
Non-GAAP Adjusted EBITDA			$	(41,701	)		$	(37,218	)		-12%	-12%
Consolidated Results:
Revenue, net			$	533,003			$	491,011			9%	8%
Operating Income			$	73,888			$	69,905			6%	9%
Adjustments:
Restructuring (credits) charges				(1,333	)			1,920			#	#
Non-GAAP Adjusted Contribution to Profit			$	72,555			$	71,825			1%	4%
Depreciation and amortization				54,555				48,430			-13%	-12%
Non-GAAP Adjusted EBITDA			$	127,110			$	120,255			6%	7%
Adjusted EBITDA margin				23.8	%			24.5	%
Notes:
(1) The supplementary information included in this press release for the three and six months ended October 31, 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.
(2) In May 2021, we moved the WileyNXT product offering from Academic & Professional Learning – Education Publishing to Education Services – Talent Development Services. As a result, the prior period results related to the WileyNXT product offering have been included in Education Services - Talent Development Services. The Revenue, Adjusted Contribution to Profit and Adjusted EBITDA for WileyNXT was $0.7 million, $(0.1) million, and $(0.1) million, respectively, for the three months ended October 31, 2020. The Revenue, Adjusted Contribution to Profit and Adjusted EBITDA for WileyNXT was $1.2 million, $(0.2) million, and $(0.2) million, respectively, for the six months ended October 31, 2020. There were no changes to our total consolidated financial results.
(3) University Services was previously referred to as Education Services OPM.
(4) Talent Development Services was previously referred to as mthree.
#Variance greater than 100%

JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
SEGMENT RESULTS
(in thousands)
(unaudited)
											% Change
			Six Months Ended October 31,								Favorable (Unfavorable)
				2021				2020			Reported		Constant Currency
Research Publishing & Platforms:
Revenue, net
Research Publishing			$	526,231			$	471,155			12%		9%
Research Platforms				23,679				20,989			13%		13%
Total Revenue, net			$	549,910			$	492,144			12%		10%
Contribution to Profit			$	155,839			$	143,906			8%		9%
Adjustments:
Restructuring charges (credits)				238				(435	)		#		#
Non-GAAP Adjusted Contribution to Profit			$	156,077			$	143,471			9%		9%
Depreciation and amortization				47,226				39,466			-20%		-18%
Non-GAAP Adjusted EBITDA			$	203,303			$	182,937			11%		11%
Adjusted EBITDA margin				37.0	%			37.2	%
Academic & Professional Learning:
Revenue, net
Education Publishing (2)			$	164,961			$	166,031			-1%		-3%
Professional Learning				150,832				130,314			16%		14%
Total Revenue, net			$	315,793			$	296,345			7%		5%
Contribution to Profit			$	49,223			$	29,729			66%		61%
Adjustments:
Restructuring (credits) charges				(294	)			1,574			#		#
Non-GAAP Adjusted Contribution to Profit			$	48,929			$	31,303			56%		52%
Depreciation and amortization				36,512				36,524			0%		1%
Non-GAAP Adjusted EBITDA			$	85,441			$	67,827			26%		23%
Adjusted EBITDA margin				27.1	%			22.9	%
Education Services:
Revenue, net
University Services (3)			$	112,475			$	106,523			6%		5%
Talent Development Services (2)(4)				43,213				27,325			58%		50%
Total Revenue, net			$	155,688			$	133,848			16%		14%
Contribution to Profit			$	(1,106	)		$	7,752			#		#
Adjustments:
Restructuring (credits) charges				(28	)			223			#		#
Non-GAAP Adjusted Contribution to Profit			$	(1,134	)		$	7,975			#		#
Depreciation and amortization				17,116				14,489			-18%		-17%
Non-GAAP Adjusted EBITDA			$	15,982			$	22,464			-29%		-30%
Adjusted EBITDA margin				10.3	%			16.8	%
Corporate Expenses:			$	(89,100	)		$	(81,443	)		-9%		-9%
Adjustments:
Restructuring (credits) charges				(1,525	)			2,776			#		#
Non-GAAP Adjusted Contribution to Profit			$	(90,625	)		$	(78,667	)		-15%		-14%
Depreciation and amortization				8,267				7,458			-11%		-11%
Non-GAAP Adjusted EBITDA			$	(82,358	)		$	(71,209	)		-16%		-15%
Consolidated Results:
Revenue, net			$	1,021,391			$	922,337			11%		9%
Operating Income			$	114,856			$	99,944			15%		15%
Adjustments:
Restructuring (credits) charges				(1,609	)			4,138			#		#
Non-GAAP Adjusted Contribution to Profit			$	113,247			$	104,082			9%		9%
Depreciation and amortization				109,121				97,937			-11%		-10%
Non-GAAP Adjusted EBITDA			$	222,368			$	202,019			10%		9%
Adjusted EBITDA margin				21.8	%			21.9	%
#Variance greater than 100%

JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands)
(unaudited)
		October 31,			April 30,
		2021			2021
Assets:
Current assets
Cash and cash equivalents		$	100,898		$	93,795
Accounts receivable, net			291,891			311,571
Inventories, net			39,725			42,538
Prepaid expenses and other current assets			67,952			78,393
Total current assets			500,466			526,297
Product development assets, net			46,274			49,517
Royalty advances, net			15,260			39,582
Technology, property and equipment, net			271,774			282,270
Intangible assets, net			970,036			1,015,302
Goodwill			1,302,234			1,304,340
Operating lease right-of-use assets			121,708			121,430
Other non-current assets			118,279			107,701
Total assets		$	3,346,031		$	3,446,439
Liabilities and shareholders' equity:
Current liabilities
Accounts payable		$	51,271		$	95,791
Accrued royalties			102,137			78,582
Short-term portion of long-term debt			12,500			12,500
Contract liabilities			267,890			545,425
Accrued employment costs			85,890			144,744
Accrued income taxes			12,862			8,590
Short-term portion of operating lease liabilities			22,353			22,440
Other accrued liabilities			89,606			80,900
Total current liabilities			644,509			988,972
Long-term debt			1,032,505			809,088
Accrued pension liability			126,198			146,247
Deferred income tax liabilities			187,931			172,903
Operating lease liabilities			143,638			145,832
Other long-term liabilities			104,585			92,106
Total liabilities			2,239,366			2,355,148
Shareholders' equity			1,106,665			1,091,291
Total liabilities and shareholders' equity		$	3,346,031		$	3,446,439
Notes:
(1) The supplementary information included in this press release for October 31, 2021 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,
			2021				2020
Operating activities:
Net income		$	69,797				84,766
Amortization of intangible assets			42,627				34,057
Amortization of product development assets			18,088				17,448
Depreciation and amortization of technology, property, and equipment			48,406				46,432
Other noncash charges			56,311				51,624
Net change in operating assets and liabilities			(310,851	)			(310,949	)
Net cash used in operating activities			(75,622	)			(76,622	)
Investing activities:
Additions to technology, property, and equipment			(37,676	)			(36,430	)
Product development spending			(13,001	)			(10,999	)
Businesses acquired in purchase transactions, net of cash acquired			(13,615	)			(229	)
Proceeds related to the sale of certain assets			3,375				-
Acquisitions of publication rights and other			(1,654	)			(14,021	)
Net cash used in investing activities			(62,571	)			(61,679	)
Financing activities:
Net debt borrowings			227,476				59,590
Cash dividends			(38,619	)			(38,480	)
Purchases of treasury shares			(17,367	)			-
Other			(24,444	)			(2,511	)
Net cash provided by financing activities			147,046				18,599
Effects of exchange rate changes on cash, cash equivalents and restricted cash			(1,742	)			3,301
Change in cash, cash equivalents and restricted cash for period			7,111				(116,401	)
Cash, cash equivalents and restricted cash - beginning			94,359				203,047
Cash, cash equivalents and restricted cash - ending		$	101,470			$	86,646
CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT DEVELOPMENT SPENDING (2)
		Six Months Ended
		October 31,
			2021				2020
Net cash used in operating activities		$	(75,622	)		$	(76,622	)
Less: Additions to technology, property, and equipment			(37,676	)			(36,430	)
Less: Product development spending			(13,001	)			(10,999	)
Free cash flow less product development spending		$	(126,299	)		$	(124,051	)
Notes:
(1) The supplementary information included in this press release for the six months ended October 31, 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.
(2) See Explanation of Usage of Non-GAAP Performance Measures included in this supplemental information.

JOHN WILEY & SONS, INC.

EXPLANATION OF USAGE OF NON-GAAP PERFORMANCE MEASURES

In this earnings release and supplemental information, management may present the following non-GAAP performance measures:

·        Adjusted Earnings Per Share (Adjusted EPS);

·        Free Cash Flow less Product Development Spending;

·        Adjusted Contribution to Profit and margin;

·        Adjusted Income Before Taxes;

·        Adjusted Income Tax Provision;

·        Adjusted Effective Tax Rate;

·        EBITDA, Adjusted EBITDA and margin;

·        Organic revenue; and

·        Results on a constant currency basis.

Management uses these non-GAAP performance measures as supplemental indicators of our operating performance and financial position as well for internal reporting and forecasting purposes, when publicly providing our outlook, to evaluate our performance and calculate incentive compensation.

We present these non-GAAP performance measures in addition to US GAAP financial results because we believe that these non-GAAP performance measures provide useful information to certain investors and financial analysts for operational trends and comparisons over time. The use of these non-GAAP performance measures may also provide a consistent basis to evaluate operating profitability and performance trends by excluding items that we do not consider to be controllable activities for this purpose.

The performance metric used by our chief operating decision maker to evaluate performance of our reportable segments is Adjusted Contribution to Profit. We present both Adjusted Contribution to Profit and Adjusted EBITDA for each of our reportable segments since we believe Adjusted EBITDA provides additional useful information to certain investors and financial analysts for operational trends and comparisons over time as it removes the impact of depreciation and amortization expense, as well as a consistent basis to evaluate operating profitability and comparing our financial performance to that of our peer companies and competitors.

For example:

Adjusted EPS, Adjusted Contribution to Profit, Adjusted Income Before Taxes, Adjusted Income Tax Provision, Adjusted Effective Tax Rate, Adjusted EBITDA and organic revenue (excluding acquisitions) provide a more comparable basis to analyze operating results and earnings and are measures commonly used by shareholders to measure our performance.

Free Cash Flow less Product Development Spending helps assess our ability, over the long term, to create value for our shareholders as it represents cash available to repay debt, pay common stock dividends and fund share repurchases and acquisitions.

Results on a constant currency basis removes distortion from the effects of foreign currency movements to provide better comparability of our business trends from period to period. We measure our performance excluding the impact of foreign currency (or at constant currency), which means that we apply the same foreign currency exchange rates for the current and equivalent prior period.

In addition, we have historically provided these or similar non-GAAP performance measures and understand that some investors and financial analysts find this information helpful in analyzing our operating margins and net income, and in comparing our financial performance to that of our peer companies and competitors. Based on interactions with investors, we also believe that our non-GAAP performance measures are regarded as useful to our investors as supplemental to our US GAAP financial results, and that there is no confusion regarding the adjustments or our operating performance to our investors due to the comprehensive nature of our disclosures.

We have not provided our 2022 outlook for the most directly comparable US GAAP financial measures, as they are not available without unreasonable effort due to the high variability, complexity, and low visibility with respect to certain items, including restructuring charges and credits, gains and losses on foreign currency, and other gains and losses. These items are uncertain, depend on various factors, and could be material to our consolidated results computed in accordance with US GAAP.

Non-GAAP performance measures do not have standardized meanings prescribed by US GAAP and therefore may not be comparable to the calculation of similar measures used by other companies and should not be viewed as alternatives to measures of financial results under US GAAP. The adjusted metrics have limitations as analytical tools, and should not be considered in isolation from, or as a substitute for, US GAAP information. It does not purport to represent any similarly titled US GAAP information and is not an indicator of our performance under US GAAP. Non-GAAP financial metrics that we present may not be comparable with similarly titled measures used by others. Investors are cautioned against placing undue reliance on these non-GAAP measures.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20211207005620/en/

Brian Campbell

Investor Relations

brian.campbell@wiley.com

201.748.6874

Source: John Wiley and Sons

FAQ

What were Wiley's Q2 2022 revenue results?

Wiley reported revenues of $533 million for Q2 2022, a 9% increase from $491 million in Q2 2021.

How did Wiley's adjusted EPS change in Q2 2022?

Wiley's adjusted EPS for Q2 2022 was $1.29, reflecting a 6% increase from $1.25 in Q2 2021.

What is Wiley's full year revenue outlook for 2022?

Wiley is projecting full-year revenues between $2.070 billion and $2.100 billion for fiscal year 2022.