Wiley Reports First Quarter Fiscal Year 2023 Results
Wiley (NYSE: WLY) reported first-quarter results for the period ending July 31, 2022. Revenue totaled $488 million, unchanged from the previous year, with an operating loss of $17 million compared to a profit of $41 million last year. GAAP EPS was a loss of $0.32, down from a profit of $0.24.
Adjusted EBITDA decreased by 34% to $64 million, and Adjusted EPS fell 60% to $0.36, primarily due to elevated costs and market challenges. Despite these results, Wiley maintained its full-year guidance for revenue and earnings, citing strong momentum in key business areas.
- Reaffirms full-year outlook for revenue between $2,175 million and $2,215 million.
- Increased quarterly dividend for the 29th consecutive year to $1.39 per share.
- Strong performance in Research Publishing and Corporate Talent Development segments.
- Operating loss of $17 million compared to a profit of $41 million last year.
- Adjusted EBITDA down 34% year-over-year.
- Adjusted EPS decreased by 60% year-over-year.
FIRST QUARTER SUMMARY
-
GAAP Results: Revenue of
(-$488 million 0% vs. prior year), Operating (loss) of - ($17 million - vs. prior year), and EPS (loss) of -$58 million ($0.32 - vs. prior year)$0.56 -
Adjusted Results at constant currency: Revenue of
(+$488 million 4% vs. prior year), Adjusted EBITDA of (-$64 million 34% vs. prior year), and Adjusted EPS of (-$0.36 60% vs. prior year). Adjusted EBITDA and Adjusted EPS performance mainly due to investments in Research, higher employee costs, increased T&E spend related to the resumption of in-person activities, and market-related challenges in University Services - Fiscal 2023 Outlook: Wiley reaffirms its full year outlook for Revenue, Adjusted EBITDA, Adjusted EPS, and Free Cash Flow
- Dividend Increase: Wiley raises quarterly dividend for 29th consecutive year
MANAGEMENT COMMENTARY
“Q1 unfolded largely as expected, and we are confident in the full year outlook based on our strong, continued momentum in
FIRST QUARTER PERFORMANCE
GAAP Measures
|
Q1 2023 |
Q1 2022 |
Change
|
|
|
|||||||
Revenue |
$ |
487.6 |
|
$ |
488.4 |
0 |
% |
|
||||
Operating (Loss) Income |
($ |
17.0 |
) |
$ |
41.0 |
# |
|
|||||
Diluted EPS |
($ |
0.32 |
) |
$ |
0.24 |
# |
|
|||||
Non-GAAP Measures |
Q1 2023 |
Q1 2022 |
Change
|
Change
|
||||||||
Revenue |
$ |
487.6 |
|
$ |
488.4 |
0 |
% |
+4 |
% |
|||
Adjusted EBITDA |
$ |
63.8 |
|
$ |
95.3 |
(33 |
%) |
(34 |
%) |
|||
Adjusted EPS |
$ |
0.36 |
|
$ |
0.85 |
(58 |
%) |
(60 |
%) |
Excluding acquisitions and currency impact, revenue rose
# Variance greater than
Unfavorable FX variance of
Revenue
-
Research was flat as reported, or up
4% at constant currency, driven by organic growth in Publishing and Solutions and contributions from recent acquisitions.-
Revenue by product type reporting change – Research is now reported as
Research Publishing and Research Solutions. Research Solutions includes platforms, corporate solutions and services for societies and other publishers. It replaces the Research Platforms reporting line. Please see the tables below for more detail.
-
Revenue by product type reporting change – Research is now reported as
-
Academic & Professional Learning revenue declined
5% as reported and1% at constant currency.Education Publishing performance saw a decline in print course material offsetting growth in digital content and courseware. Professional Learning saw growth in corporate training offsetting a decline in professional publishing. -
Education Services increased
7% as reported and11% at constant currency, with very strong double-digit growth inTalent Development offsetting a decline in University Services from market-related enrollment challenges.
Adjusted EBITDA
-
Research was down
9% at constant currency with revenue growth more than offset by investment, higher employee costs, and increased T&E compared to prior year COVID period. -
Academic & Professional Learning declined
30% at constant currency due to revenue performance, timing of spend, higher employee costs, and higher T&E expenses compared to prior year COVID period -
Education Services reported a loss of
due to the revenue decline in University Services and investments in$3 million Talent Development growth initiatives. -
Adjusted Corporate Expenses were
higher at constant currency mainly due to higher employee costs and the timing of expenses.$6 million
EPS
-
GAAP EPS was a loss of
as compared to$0.32 + in the prior year period, primarily reflecting a$0.24 /share ($0.30 ) restructuring charge and accelerated amortization of intangibles of$22 million /share ($0.07 ) related to the discontinuation of the mthree brand.$5 million -
Adjusted EPS of
was down$0.36 60% at constant currency, driven by lower adjusted EBITDA, lower pension income, and 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 2.0 in the year-ago period, and 1.6 at year end (
April 30 ). -
Net Cash Used in Operating Activities was a use of compared to$90 million in the prior year period. Note, 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.$85 million -
Free Cash Flow less Product Development Spending was a use of
compared to a use of$114 million in the prior year.$108 million -
Dividends: In June, Wiley raised its dividend for the 29th consecutive year. The current quarterly dividend is equivalent to an annual dividend of
per share, an increase from$1.39 per share in Fiscal 2022.$1.38 -
Share Repurchases: The Company utilized
to repurchase approximately 212,200 shares at an average cost per share of$10 million .$47.12
FISCAL YEAR 2023 OUTLOOK
The Company is reaffirming its full year outlook.
Metric
|
Fiscal 2022*
|
FY23 Outlook*
|
FX Impact**
|
FY23 Outlook^
|
|||
Revenue |
|
|
( |
|
|||
Adjusted EBITDA |
|
|
Immaterial |
|
|||
Adjusted EPS |
|
|
Immaterial |
|
|||
Free Cash Flow |
|
|
Immaterial |
|
*Based on Fiscal 2022 average rates of
**Variance between Fiscal 2022 average rates and Q1 average rates:
^Fiscal 2023 outlook at Q1 average rates
EARNINGS CONFERENCE CALL
Scheduled for today,
ABOUT WILEY
Wiley (NYSE: WLY), a global leader in scientific research and career-connected education, is 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 investors.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 2023 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 2023 in connection with our multi-year Business Optimization Program and Fiscal Year 2023 Restructuring 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
CATEGORY: ALL CORPORATE NEWS
CATEGORY: EARNINGS RELEASES
SUPPLEMENTARY INFORMATION (1)(2) | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF NET (LOSS) INCOME | ||||||||
(Dollars in thousands, except per share information) | ||||||||
(unaudited) | ||||||||
Three Months Ended |
||||||||
|
||||||||
|
2022 |
|
|
2021 |
|
|||
Revenue, net | $ |
487,569 |
|
$ |
488,388 |
|
||
Costs and expenses: | ||||||||
Cost of sales |
|
174,031 |
|
|
165,956 |
|
||
Operating and administrative expenses |
|
282,751 |
|
|
260,589 |
|
||
Restructuring and related charges (credits) |
|
22,441 |
|
|
(276 |
) |
||
Amortization of intangible assets |
|
25,311 |
|
|
21,151 |
|
||
Total costs and expenses |
|
504,534 |
|
|
447,420 |
|
||
Operating (loss) income |
|
(16,965 |
) |
|
40,968 |
|
||
As a % of revenue |
|
-3.5 |
% |
|
8.4 |
% |
||
Interest expense |
|
(6,332 |
) |
|
(4,639 |
) |
||
Foreign exchange transaction (losses) gains |
|
(616 |
) |
|
370 |
|
||
Gain on sale of certain assets |
|
- |
|
|
3,750 |
|
||
Other income, net |
|
526 |
|
|
3,553 |
|
||
(Loss) Income before taxes |
|
(23,387 |
) |
|
44,002 |
|
||
(Benefit) provision for income taxes |
|
(5,552 |
) |
|
30,172 |
|
||
Effective tax rate |
|
23.7 |
% |
|
68.6 |
% |
||
Net (loss) income | $ |
(17,835 |
) |
$ |
13,830 |
|
||
As a % of revenue |
|
-3.7 |
% |
|
2.8 |
% |
||
(Loss) Earnings per share | ||||||||
Basic | $ |
(0.32 |
) |
$ |
0.25 |
|
||
Diluted (3) | $ |
(0.32 |
) |
$ |
0.24 |
|
||
Weighted average number of common shares outstanding | ||||||||
Basic |
|
55,736 |
|
|
55,869 |
|
||
Diluted (3) |
|
55,736 |
|
|
56,599 |
|
||
Notes: | ||||||||
(1) The supplementary information included in this press release for the three months ended |
||||||||
(2) All amounts are approximate due to rounding. | ||||||||
(3) In calculating diluted net loss per common share for the three months ended |
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 | ||||||||||
|
2022 |
|
|
2021 |
|
|||||
US GAAP (Loss) Earnings Per Share - Diluted | $ |
(0.32 |
) |
$ |
0.24 |
|
||||
Adjustments: | ||||||||||
Restructuring and related charges (credits) |
|
0.30 |
|
|
(0.01 |
) |
||||
Foreign exchange losses (gains) on intercompany transactions |
|
0.01 |
|
|
(0.01 |
) |
||||
Amortization of acquired intangible assets (3) |
|
0.36 |
|
|
0.31 |
|
||||
Gain on sale of certain assets (4) |
|
- |
|
|
(0.05 |
) |
||||
Income tax adjustments (5) |
|
- |
|
|
0.37 |
|
||||
EPS impact of using weighted-average dilutive shares for adjusted EPS calculation (6) |
|
0.01 |
|
|
- |
|
||||
Non-GAAP Adjusted Earnings Per Share - Diluted | $ |
0.36 |
|
$ |
0.85 |
|
||||
Reconciliation of US GAAP (Loss) Income Before Taxes to Non-GAAP Adjusted Income Before Taxes | ||||||||||
Three Months Ended | ||||||||||
(amounts in thousands) | ||||||||||
|
2022 |
|
|
2021 |
|
|||||
US GAAP (Loss) Income Before Taxes | $ |
(23,387 |
) |
$ |
44,002 |
|
||||
Pretax Impact of Adjustments: | ||||||||||
Restructuring and related charges (credits) |
|
22,441 |
|
|
(276 |
) |
||||
Foreign exchange losses (gains) on intercompany transactions |
|
666 |
|
|
(795 |
) |
||||
Amortization of acquired intangible assets (3) |
|
26,385 |
|
|
22,284 |
|
||||
Gain on sale of certain assets (4) |
|
- |
|
|
(3,750 |
) |
||||
Non-GAAP Adjusted Income Before Taxes | $ |
26,105 |
|
$ |
61,465 |
|
||||
Reconciliation of US GAAP Income Tax (Benefit) 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 (Benefit) Provision | $ |
(5,552 |
) |
$ |
30,172 |
|
||||
Income Tax Impact of Adjustments (7) | ||||||||||
Restructuring and related charges (credits) |
|
5,517 |
|
|
45 |
|
||||
Foreign exchange losses (gains) on intercompany transactions |
|
175 |
|
|
(101 |
) |
||||
Amortization of acquired intangible assets (3) |
|
5,832 |
|
|
4,843 |
|
||||
Gain on sale of certain assets (4) |
|
- |
|
|
(936 |
) |
||||
Income Tax Adjustments: | ||||||||||
Impact of increase in |
|
- |
|
|
(20,726 |
) |
||||
Non-GAAP Adjusted Income Tax Provision | $ |
5,972 |
|
$ |
13,297 |
|
||||
US GAAP Effective Tax Rate |
|
23.7 |
% |
|
68.6 |
% |
||||
Non-GAAP Adjusted Effective Tax Rate |
|
22.9 |
% |
|
21.6 |
% |
||||
Notes: | ||||||||||
(1 |
) |
See Explanation of Usage of Non-GAAP Performance Measures included in this supplementary information for additional details on the reasons why management believes presentation of each non-GAAP performance measure provides useful information to investors. The supplementary information included in this press release for the three months ended |
||||||||
(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 (Loss) 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 (Loss) 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 |
||||||||
(5 |
) |
In the three months ended |
||||||||
(6 |
) |
Represents the impact of using diluted weighted-average number of common shares outstanding (56.5 million shares for the three months ended |
||||||||
(7 |
) |
For the three months ended |
SUPPLEMENTARY INFORMATION (1) | |||||||||
RECONCILIATION OF US GAAP NET (LOSS) INCOME TO NON-GAAP EBITDA AND ADJUSTED EBITDA | |||||||||
(unaudited) | |||||||||
Three Months Ended | |||||||||
|
2022 |
|
|
2021 |
|
||||
Net (Loss) Income | $ |
(17,835 |
) |
$ |
13,830 |
|
|||
Interest expense |
|
6,332 |
|
|
4,639 |
|
|||
(Benefit) Provision for income taxes |
|
(5,552 |
) |
|
30,172 |
|
|||
Depreciation and amortization |
|
58,279 |
|
|
54,566 |
|
|||
Non-GAAP EBITDA |
|
41,224 |
|
|
103,207 |
|
|||
Restructuring and related charges (credits) |
|
22,441 |
|
|
(276 |
) |
|||
Foreign exchange transaction losses (gains) |
|
616 |
|
|
(370 |
) |
|||
Gain on sale of certain assets |
|
- |
|
|
(3,750 |
) |
|||
Other income, net |
|
(526 |
) |
|
(3,553 |
) |
|||
Non-GAAP Adjusted EBITDA | $ |
63,755 |
|
$ |
95,258 |
|
|||
Adjusted EBITDA Margin |
|
13.1 |
% |
|
19.5 |
% |
|||
Notes: | |||||||||
(1) See Explanation of Usage of Non-GAAP Performance Measures included in this supplementary information for additional details on the reasons why management believes presentation of each non-GAAP performance measure provides useful information to investors. The supplementary information included in this press release for the three months ended |
SUPPLEMENTARY INFORMATION (1) | |||||||||||||||
SEGMENT RESULTS | |||||||||||||||
(in thousands) | |||||||||||||||
(unaudited) | |||||||||||||||
% Change | |||||||||||||||
Three Months Ended |
Favorable (Unfavorable) | ||||||||||||||
|
2022 |
|
|
2021 |
|
Reported | Constant Currency |
||||||||
Research (2): | |||||||||||||||
Revenue, net | |||||||||||||||
$ |
239,523 |
|
$ |
243,284 |
|
-2 |
% |
2 |
% |
||||||
Research Solutions (3) |
|
35,390 |
|
|
31,472 |
|
12 |
% |
17 |
% |
|||||
Total Revenue, net | $ |
274,913 |
|
$ |
274,756 |
|
0 |
% |
4 |
% |
|||||
Contribution to Profit | $ |
69,023 |
|
$ |
78,808 |
|
-12 |
% |
-13 |
% |
|||||
Adjustments: | |||||||||||||||
Restructuring charges |
|
81 |
|
|
216 |
|
63 |
% |
63 |
% |
|||||
Non-GAAP Adjusted Contribution to Profit | $ |
69,104 |
|
$ |
79,024 |
|
-13 |
% |
-13 |
% |
|||||
Depreciation and amortization |
|
23,801 |
|
|
23,762 |
|
0 |
% |
-3 |
% |
|||||
Non-GAAP Adjusted EBITDA | $ |
92,905 |
|
$ |
102,786 |
|
-10 |
% |
-9 |
% |
|||||
Adjusted EBITDA margin |
|
33.8 |
% |
|
37.4 |
% |
|||||||||
Academic & Professional Learning: | |||||||||||||||
Revenue, net | |||||||||||||||
$ |
63,056 |
|
$ |
66,380 |
|
-5 |
% |
-2 |
% |
||||||
Professional Learning |
|
69,903 |
|
|
72,884 |
|
-4 |
% |
0 |
% |
|||||
Total Revenue, net | $ |
132,959 |
|
$ |
139,264 |
|
-5 |
% |
-1 |
% |
|||||
Contribution to Profit | $ |
(4,415 |
) |
$ |
8,152 |
|
# | # | |||||||
Adjustments: | |||||||||||||||
Restructuring charges |
|
5,790 |
|
|
171 |
|
# | # | |||||||
Non-GAAP Adjusted Contribution to Profit | $ |
1,375 |
|
$ |
8,323 |
|
-83 |
% |
-80 |
% |
|||||
Depreciation and amortization |
|
16,532 |
|
|
18,364 |
|
10 |
% |
7 |
% |
|||||
Non-GAAP Adjusted EBITDA | $ |
17,907 |
|
$ |
26,687 |
|
-33 |
% |
-30 |
% |
|||||
Adjusted EBITDA margin |
|
13.5 |
% |
|
19.2 |
% |
|||||||||
Education Services: | |||||||||||||||
Revenue, net | |||||||||||||||
University Services (4) | $ |
47,811 |
|
$ |
54,968 |
|
-13 |
% |
-12 |
% |
|||||
Talent Development Services (4) |
|
31,886 |
|
|
19,400 |
|
64 |
% |
76 |
% |
|||||
Total Revenue, net | $ |
79,697 |
|
$ |
74,368 |
|
7 |
% |
11 |
% |
|||||
Contribution to Profit | $ |
(17,169 |
) |
$ |
(1,827 |
) |
# | # | |||||||
Adjustments: | |||||||||||||||
Restructuring charges (credits) |
|
833 |
|
|
(34 |
) |
# | # | |||||||
Accelerated amortization of an intangible asset (5) |
|
4,594 |
|
|
- |
|
# | # | |||||||
Non-GAAP Adjusted Contribution to Profit | $ |
(11,742 |
) |
$ |
(1,861 |
) |
# | # | |||||||
Depreciation and amortization |
|
9,196 |
|
|
8,303 |
|
-11 |
% |
-12 |
% |
|||||
Non-GAAP Adjusted EBITDA | $ |
(2,546 |
) |
$ |
6,442 |
|
# | # | |||||||
Adjusted EBITDA margin |
|
-3 |
% |
|
8.7 |
% |
|||||||||
Corporate Expenses: | $ |
(64,404 |
) |
$ |
(44,165 |
) |
-46 |
% |
-51 |
% |
|||||
Adjustments: | |||||||||||||||
Restructuring charges (credits) |
|
15,737 |
|
|
(629 |
) |
# | # | |||||||
Non-GAAP Adjusted Contribution to Profit | $ |
(48,667 |
) |
$ |
(44,794 |
) |
-9 |
% |
-13 |
% |
|||||
Depreciation and amortization |
|
4,156 |
|
|
4,137 |
|
0 |
% |
-3 |
% |
|||||
Non-GAAP Adjusted EBITDA | $ |
(44,511 |
) |
$ |
(40,657 |
) |
-9 |
% |
-14 |
% |
|||||
Consolidated Results: | |||||||||||||||
Revenue, net | $ |
487,569 |
|
$ |
488,388 |
|
0 |
% |
4 |
% |
|||||
Operating (Loss) Income | $ |
(16,965 |
) |
$ |
40,968 |
|
# | # | |||||||
Adjustments: | |||||||||||||||
Restructuring charges (credits) |
|
22,441 |
|
|
(276 |
) |
# | # | |||||||
Accelerated amortization of an intangible asset (5) |
|
4,594 |
|
|
- |
|
# | # | |||||||
Non-GAAP Adjusted Operating Income | $ |
10,070 |
|
$ |
40,692 |
|
-75 |
% |
-81 |
% |
|||||
Depreciation and amortization |
|
53,685 |
|
|
54,566 |
|
2 |
% |
-1 |
% |
|||||
Non-GAAP Adjusted EBITDA | $ |
63,755 |
|
$ |
95,258 |
|
-33 |
% |
-34 |
% |
|||||
Adjusted EBITDA margin |
|
13.1 |
% |
|
19.5 |
% |
|||||||||
Notes: | |||||||||||||||
(1) The supplementary information included in this press release for the three months ended |
|||||||||||||||
|
|||||||||||||||
(2) The Research segment was previously referred to as |
|||||||||||||||
(3) As previously announced in |
|||||||||||||||
(4) In |
|||||||||||||||
(5) On |
|||||||||||||||
# | Variance greater than |
SUPPLEMENTARY INFORMATION (1) | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
|
|
||||||
2022 |
2022 |
||||||
Assets: | |||||||
Current assets | |||||||
Cash and cash equivalents | $ |
104,495 |
$ |
100,397 |
|||
Accounts receivable, net |
|
281,443 |
|
331,960 |
|||
Inventories, net |
|
33,422 |
|
36,585 |
|||
Prepaid expenses and other current assets |
|
81,410 |
|
81,924 |
|||
Total current assets |
|
500,770 |
|
550,866 |
|||
Technology, property and equipment, net |
|
258,454 |
|
271,572 |
|||
Intangible assets, net |
|
895,808 |
|
931,429 |
|||
|
1,289,242 |
|
1,302,142 |
||||
Operating lease right-of-use assets |
|
103,196 |
|
111,719 |
|||
Other non-current assets |
|
181,838 |
|
193,967 |
|||
Total assets | $ |
3,229,308 |
$ |
3,361,695 |
|||
Liabilities and shareholders' equity: | |||||||
Current liabilities | |||||||
Accounts payable | $ |
56,677 |
$ |
77,438 |
|||
Accrued royalties |
|
93,552 |
|
101,596 |
|||
Short-term portion of long-term debt |
|
21,875 |
|
18,750 |
|||
Contract liabilities |
|
407,098 |
|
538,126 |
|||
Accrued employment costs |
|
80,200 |
|
117,121 |
|||
Short-term portion of operating lease liabilities |
|
19,788 |
|
20,576 |
|||
Other accrued liabilities |
|
101,554 |
|
95,812 |
|||
Total current liabilities |
|
780,744 |
|
969,419 |
|||
Long-term debt |
|
917,236 |
|
768,277 |
|||
Accrued pension liability |
|
77,511 |
|
78,622 |
|||
Deferred income tax liabilities |
|
159,717 |
|
180,065 |
|||
Operating lease liabilities |
|
127,055 |
|
132,541 |
|||
Other long-term liabilities |
|
84,719 |
|
90,502 |
|||
Total liabilities |
|
2,146,982 |
|
2,219,426 |
|||
Shareholders' equity |
|
1,082,326 |
|
1,142,269 |
|||
Total liabilities and shareholders' equity | $ |
3,229,308 |
$ |
3,361,695 |
|||
Notes: | |||||||
(1) The supplementary information included in this press release for |
SUPPLEMENTARY INFORMATION (1) | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
(in thousands) | |||||||||
(unaudited) | |||||||||
Three Months Ended |
|||||||||
|
|||||||||
2022 |
2021 |
||||||||
Operating activities: | |||||||||
Net (loss) income | $ |
(17,835 |
) |
$ |
13,830 |
|
|||
Amortization of intangible assets |
|
25,311 |
|
|
21,151 |
|
|||
Amortization of product development assets |
|
8,288 |
|
|
9,058 |
|
|||
Depreciation and amortization of technology, property, and equipment |
|
24,680 |
|
|
24,357 |
|
|||
Other noncash charges |
|
27,714 |
|
|
35,856 |
|
|||
Net change in operating assets and liabilities |
|
(158,097 |
) |
|
(189,026 |
) |
|||
Net cash used in operating activities |
|
(89,939 |
) |
|
(84,774 |
) |
|||
Investing activities: | |||||||||
Additions to technology, property, and equipment |
|
(17,923 |
) |
|
(17,910 |
) |
|||
Product development spending |
|
(5,825 |
) |
|
(5,670 |
) |
|||
Businesses acquired in purchase transactions, net of cash acquired |
|
(96 |
) |
|
(3,032 |
) |
|||
Proceeds related to the sale of certain assets |
|
- |
|
|
3,375 |
|
|||
Acquisitions of publication rights and other |
|
2,038 |
|
|
(295 |
) |
|||
Net cash used in investing activities |
|
(21,806 |
) |
|
(23,532 |
) |
|||
Financing activities: | |||||||||
Net debt borrowings |
|
156,873 |
|
|
142,703 |
|
|||
Cash dividends |
|
(19,468 |
) |
|
(19,307 |
) |
|||
Purchases of treasury shares |
|
(10,000 |
) |
|
(7,367 |
) |
|||
Other |
|
(9,416 |
) |
|
(16,940 |
) |
|||
Net cash provided by financing activities |
|
117,989 |
|
|
99,089 |
|
|||
Effects of exchange rate changes on cash, cash equivalents and restricted cash |
|
(1,985 |
) |
|
(1,586 |
) |
|||
Change in cash, cash equivalents and restricted cash for period |
|
4,259 |
|
|
(10,803 |
) |
|||
Cash, cash equivalents and restricted cash - beginning |
|
100,727 |
|
|
94,359 |
|
|||
Cash, cash equivalents and restricted cash - ending | $ |
104,986 |
|
$ |
83,556 |
|
|||
CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT DEVELOPMENT SPENDING (2) | |||||||||
Three Months Ended |
|||||||||
|
|||||||||
2022 |
2021 |
||||||||
Net cash used in operating activities | $ |
(89,939 |
) |
$ |
(84,774 |
) |
|||
Less: | Additions to technology, property, and equipment |
|
(17,923 |
) |
|
(17,910 |
) |
||
Less: | Product development spending |
|
(5,825 |
) |
|
(5,670 |
) |
||
Free cash flow less product development spending | $ |
(113,687 |
) |
$ |
(108,354 |
) |
|||
Notes: | |||||||||
(1) The supplementary information included in this press release for the three months ended |
|||||||||
(2) See Explanation of Usage of Non-GAAP Performance Measures included in this supplemental information. |
|
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 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 Contribution to Profit. We present both Adjusted Contribution to Profit 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: |
|
|
|
|
|
|
|
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 2023 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/20220907005573/en/
201.748.6874
brian.campbell@wiley.com
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