Wiley Reports Third Quarter 2024 Results
- None.
- GAAP revenue decrease due to completed divestiture and declines in other held for sale businesses.
- GAAP results impacted by charges related to held for sale or sold assets, including goodwill and held for sale impairments.
- Adjusted EPS of $0.59 (-27%) due to lower Adjusted Operating Income, higher tax expense, and higher interest expense.
- Free Cash Flow less Product Development Spending was a use of $45 million compared to a use of $22 million in the prior year period.
- Net Cash Provided by Operating Activities was $24 million compared to $54 million in the prior year period due to timing delays in closing journal subscription renewals, higher restructuring payments, and higher interest payments.
Insights
Wiley's reported GAAP results reflect a notable decline in revenue and earnings per share (EPS), which can be attributed to divestitures and declines in businesses held for sale. The operating loss and EPS loss are significant metrics for investors as they directly impact the company's profitability. The reported impairments and losses on divestitures are non-recurring items that investors should consider separately from ongoing operations. The increase in operating loss suggests Wiley is undergoing a transitional phase, which could be a red flag for potential investors seeking stable returns.
The adjusted results, however, paint a slightly different picture. A modest growth in adjusted revenue and adjusted EBITDA at constant currency indicates some underlying stability in the company's core operations, particularly in the Research and Learning segments. This is crucial for investors focusing on the company's core competency and long-term growth potential. The decline in adjusted EPS is a concern, as it suggests that despite revenue growth, profitability is under pressure, potentially due to increased costs or investments. Wiley's guidance update, with raised adjusted EBITDA and EPS, signals management's confidence in the company's performance, which could influence investor sentiment positively.
The publishing industry is undergoing significant changes with the rise of digital content and open access models. Wiley's growth in Research Publishing, driven by open access, indicates an adaptation to industry trends. However, the modest decline in Research Solutions could be a sign of market saturation or competitive pressures. The growth in Learning Revenue, especially in digital courseware and content, highlights the increasing demand for digital education solutions, which is a growing market segment. The restructuring savings contributing to the increase in adjusted EBITDA for the Learning segment suggests that Wiley's cost optimization strategies are yielding financial benefits.
For investors, the performance of the Research and Learning segments is critical, as these are the areas where Wiley appears to be investing and expecting growth. The decline in Businesses Held for Sale or Sold indicates a strategic shift away from non-core assets, which could be seen as a positive move for focusing on more profitable core areas. The net debt-to-EBITDA ratio improvement is a positive sign of financial health, indicating that the company is managing its debt responsibly relative to its earnings before interest, taxes, depreciation and amortization.
The financial results of a company like Wiley can be indicative of broader economic trends, such as the health of the global research and education sectors. The operating loss and impairment charges reflect Wiley's current financial struggles but also signal a potential period of consolidation and refocusing on core business areas. The positive momentum in the Research and Learning segments, despite a challenging economic environment, suggests resilience in these markets. Wiley's ability to grow its Learning Revenue in the face of a global shift towards digital education platforms could be seen as a microcosm of the larger digital transformation in the education sector.
Furthermore, the company's focus on cost savings and restructuring may be a response to the economic pressures to maintain profitability. The lowered net debt-to-EBITDA ratio is a positive indicator that the company is strengthening its balance sheet, which is particularly important during uncertain economic times. Wiley's revised fiscal outlook, with higher expectations for adjusted revenue and earnings, could be interpreted as a sign of economic optimism within the company's leadership, potentially reflecting a forecasted recovery or growth in the research and education sectors.
-
GAAP Results: Revenue of
$461 million 6% ), Operating loss of$46 million + ), and EPS loss of$21 million $2.08 - ). GAAP revenue decrease due to completed divestiture and declines in other held for sale businesses. GAAP results impacted by charges related to held for sale or sold assets, including goodwill and held for sale impairments of$0.79 $82 million $26 million $26 million $15 million -
Adjusted Results at Constant Currency (excluding Held for Sale or Sold segment results): Adjusted Revenue of
$403 million 1% ), Adjusted EBITDA of$92 million 1% ), and Adjusted EPS of$0.59 27% ). -
Full Year Outlook:
-
Adjusted Revenue trending toward mid-to-high end of
$1,580 $1,630 million -
Adjusted EBITDA raised to
$335 $355 million -
Adjusted EPS raised to
$2.45 $2.65
-
Adjusted Revenue trending toward mid-to-high end of
MANAGEMENT COMMENTARY
“As we finish out the year, we’re increasingly confident in our underlying momentum and recovery in Research and continued outperformance in Learning,” said Matthew Kissner, Interim President and CEO. “We’ve moved decisively on our improvement and optimization plans and expect a strong fourth quarter as Research continues to recover, Learning continues to outperform, and in-year cost savings accelerate. Our disciplined execution and positive momentum are allowing us to raise our earnings guidance this year and set us up well for material performance and profit improvement in Fiscal 2025 and 2026.”
FINANCIAL PERFORMANCE
See accompanying financial tables for the third quarter and year-to-date 2024. For GAAP purposes, Wiley’s reporting structure consists of three segments: (1) Research, (2) Learning, and (3) Held for Sale or Sold.
Research
-
Revenue of
$256 million 1% as reported, or consistent with prior year at constant currency, due to modest growth in Research Publishing (+0.4% or +2% ex-Hindawi) driven by open access, offsetting a modest decline in Research Solutions. -
Adjusted EBITDA of
$79 million 1% as reported and2% at constant currency driven by higher editorial and marketing costs and the Hindawi profit impact, offsetting revenue performance. Adjusted EBITDA margin for the quarter was30.9% .
Learning
-
Revenue of
$146 million 2% as reported and at constant currency due to5% growth in Academic (driven by digital courseware, digital content, and licensing) offsetting a3% decline in Professional. -
Adjusted EBITDA of
$51 million 16% as reported or15% at constant currency due to revenue growth and restructuring savings. Adjusted EBITDA margin for the quarter was35.1% .
Businesses Held for Sale or Sold (HFS)
-
Revenue of
$58 million 38% on a reported basis or39% at constant currency primarily due to the sale of University Services and declines in Wiley Edge. Adjusted EBITDA of$4 million 45% in the prior year due to revenue performance in held for sale assets and the completion of the sale of University Services. - During the quarter, Wiley announced the sale of Wiley Edge and the close of University Services. For details related to the Edge announcement, please see 8K – Wiley Edge. For details related to the University Services close, please see 8K – University Services.
Corporate Expense Category
-
Adjusted Corporate Expenses of
$39 million 13% over prior year at constant currency, driven by a lower incentive compensation accrual in the prior year.
EPS
-
GAAP EPS loss of
$2.08 $1.29 $82 million $52 million $15 million -
Adjusted EPS excluding businesses held for sale or sold of
$0.59 27% due to lower Adjusted Operating Income, higher tax expense, and higher interest expense.
Balance Sheet, Cash Flow, and Capital Allocation
- Net Debt-to-EBITDA Ratio (Trailing Twelve Months) at quarter end was 1.9 compared to 2.1 in the year-ago period.
-
Net Cash Provided by Operating Activities (Year-to-Date) was
$24 million $54 million -
Free Cash Flow less Product Development Spending (Year-to-Date) was a use of
$45 million $22 million $70 million $5 million $100 million -
Returns to Shareholders (Year-to-Date): Wiley allocated
$87 million $29 million $33.24
FISCAL YEAR 2024 OUTLOOK
Given leading indicators, outperformance in Learning augmented by an anticipated Q4 content rights deal for training AI models, and accelerated in-year cost savings, Wiley sees revenue trending toward the mid-to-high end of the range and is raising its Adjusted EBITDA and Adjusted EPS guidance.
Metric ($millions, except EPS) |
Fiscal 2023 All Company |
Fiscal 2023 Ex-Divestitures |
Fiscal 2024 Outlook Ex-Divestitures Former |
Fiscal 2024 Outlook Ex-Divestitures Current |
Adj. Revenue* |
|
|
|
Mid-to-High End of Range |
Research |
|
|
Flat to low-single digit decline |
Low end of range |
Learning |
|
|
Low-single digit growth |
Above range |
Adj. EBITDA* |
|
|
|
|
Adj. EPS* |
|
|
|
|
*“Adjusted Revenue,” “Adjusted EBITDA,” and “Adjusted EPS” exclude businesses held for sale, including Wiley Edge (formerly Talent Development) and CrossKnowledge, as well as those sold: University, Services, Test Prep and Advancement Courses.
EARNINGS CONFERENCE CALL
Scheduled for today, March 7 at 10:00 am (ET). Access webcast at Investor Relations at investors.wiley.com, or directly at https://events.q4inc.com/attendee/269336383.
ABOUT WILEY
Wiley (NYSE: WLY) is one of the world’s largest publishers and a global leader in research and learning. Dedicated to the creation and application of knowledge, Wiley serves the world’s researchers, learners, innovators, and leaders, helping them achieve their goals and solve the world's most important challenges. 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 CTP,” “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 2024 outlook for the most directly comparable
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 2024 in connection with our multiyear Global Restructuring Program and planned dispositions; (xi) the possibility that the divestitures will not be pursued, failure to obtain necessary regulatory approvals or required financing or to satisfy any of the other conditions to planned dispositions; and (xii) other factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any such forward-looking statements to reflect subsequent events or circumstances.
CATEGORY: EARNINGS RELEASES
CATEGORY: CORPORATE NEWS
| JOHN WILEY & SONS, INC. | ||||||||||||||||
| SUPPLEMENTARY INFORMATION (1)(2) | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF NET LOSS | ||||||||||||||||
| (Dollars in thousands, except per share information) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| January 31, | January 31, | |||||||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|||||
| Revenue, net | $ |
460,705 |
|
$ |
491,368 |
|
$ |
1,404,526 |
|
$ |
1,493,773 |
|
||||
| Costs and expenses: | ||||||||||||||||
| Cost of sales |
|
143,662 |
|
|
174,051 |
|
|
456,377 |
|
|
518,384 |
|
||||
| Operating and administrative expenses |
|
253,375 |
|
|
255,798 |
|
|
761,458 |
|
|
791,578 |
|
||||
| Impairment of goodwill (3) |
|
81,754 |
|
|
99,800 |
|
|
108,449 |
|
|
99,800 |
|
||||
| Restructuring and related charges |
|
14,808 |
|
|
8,807 |
|
|
52,033 |
|
|
45,204 |
|
||||
| Amortization of intangible assets |
|
13,517 |
|
|
19,968 |
|
|
42,730 |
|
|
65,389 |
|
||||
| Total costs and expenses |
|
507,116 |
|
|
558,424 |
|
|
1,421,047 |
|
|
1,520,355 |
|
||||
| Operating loss |
|
(46,411 |
) |
|
(67,056 |
) |
|
(16,521 |
) |
|
(26,582 |
) |
||||
| As a % of revenue |
|
-10.1 |
% |
|
-13.6 |
% |
|
-1.2 |
% |
|
-1.8 |
% |
||||
| Interest expense |
|
(13,321 |
) |
|
(11,521 |
) |
|
(37,592 |
) |
|
(27,185 |
) |
||||
| Foreign exchange transaction gains (losses) |
|
488 |
|
|
421 |
|
|
(3,489 |
) |
|
283 |
|
||||
| Losses on sale of businesses and impairment charges related to assets held-for-sale (3) |
|
(52,404 |
) |
|
- |
|
|
(179,747 |
) |
|
- |
|
||||
| Other (expense) income, net |
|
(648 |
) |
|
705 |
|
|
(3,700 |
) |
|
976 |
|
||||
| Loss before taxes |
|
(112,296 |
) |
|
(77,451 |
) |
|
(241,049 |
) |
|
(52,508 |
) |
||||
| Provision (benefit) for income taxes |
|
1,579 |
|
|
(5,982 |
) |
|
(15,465 |
) |
|
(1,397 |
) |
||||
| Effective tax rate |
|
-1.4 |
% |
|
7.7 |
% |
|
6.4 |
% |
|
2.7 |
% |
||||
| Net loss | $ |
(113,875 |
) |
$ |
(71,469 |
) |
$ |
(225,584 |
) |
$ |
(51,111 |
) |
||||
| As a % of revenue |
|
-24.7 |
% |
|
-14.5 |
% |
|
-16.1 |
% |
|
-3.4 |
% |
||||
| Loss per share | ||||||||||||||||
| Basic | $ |
(2.08 |
) |
$ |
(1.29 |
) |
$ |
(4.10 |
) |
$ |
(0.92 |
) |
||||
| Diluted (4) | $ |
(2.08 |
) |
$ |
(1.29 |
) |
$ |
(4.10 |
) |
$ |
(0.92 |
) |
||||
| Weighted average number of common shares outstanding | ||||||||||||||||
| Basic |
|
54,812 |
|
|
55,514 |
|
|
55,061 |
|
|
55,625 |
|
||||
| Diluted (4) |
|
54,812 |
|
|
55,514 |
|
|
55,061 |
|
|
55,625 |
|
||||
| Notes: | ||||||||
| (1) The supplementary information included in this press release for the three and nine months ended January 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, we are divesting 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 cost to sell prior to its disposition. On January 1, 2024 we completed the sale of University Services, and on January 8, 2024 we signed an agreement to sell Wiley Edge. We expect to complete the sale of Wiley Edge and CrossKnowledge by the first quarter of fiscal year 2025. As a result, we reorganized our segments in the first quarter of fiscal year 2024, and our new structure consists of three reportable segments which includes Research (no change), Learning, and Held for Sale or Sold, as well as a Corporate expense category (no change). As a result of this realignment, we were required to test goodwill for impairment immediately before and after the realignment. Prior to the realignment, we concluded that the fair value of the University Services reporting unit within the Held for Sale or Sold segment was below its carrying value which resulted in a pretax noncash goodwill impairment of As a result of signing an agreement to sell Wiley Edge and the decrease in the fair value of the business, we tested the goodwill of the Wiley Edge reporting unit within the Held for Sale or Sold segment for impairment. We concluded that the carrying value of the reporting unit was above its fair value which resulted in a pretax noncash goodwill impairment of On January 1, 2024, we completed the sale of University Services and recorded a pretax loss of Wiley Edge and CrossKnowledge continue to be reported as held-for-sale. We recorded a held-for-sale pretax impairment charge of |
||||||||
| (4) In calculating diluted net loss per common share for the three and nine months ended January 31, 2024 and 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 Loss per Share to Non-GAAP Adjusted EPS | ||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| January 31, | January 31, | |||||||||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|||||||
| US GAAP Loss Per Share - Diluted | $ |
(2.08 |
) |
$ |
(1.29 |
) |
$ |
(4.10 |
) |
$ |
(0.92 |
) |
||||||
| Adjustments: | ||||||||||||||||||
| Impairment of goodwill |
|
1.48 |
|
|
1.69 |
|
|
1.90 |
|
|
1.69 |
|
||||||
| Legal settlement (3) |
|
- |
|
|
0.05 |
|
|
- |
|
|
0.05 |
|
||||||
| Restructuring and related charges |
|
0.20 |
|
|
0.12 |
|
|
0.70 |
|
|
0.60 |
|
||||||
| Foreign exchange (gains) losses on intercompany transactions, including the write off of certain cumulative translation adjustments (4) |
|
(0.03 |
) |
|
(0.03 |
) |
|
0.02 |
|
|
0.01 |
|
||||||
| Amortization of acquired intangible assets (5) |
|
0.22 |
|
|
0.29 |
|
|
0.65 |
|
|
0.96 |
|
||||||
| Losses on sale of businesses and impairment charges related to assets held-for-sale (6) |
|
0.83 |
|
|
- |
|
|
2.77 |
|
|
- |
|
||||||
| Held for Sale or Sold segment Adjusted Net Income (6) |
|
(0.05 |
) |
|
(0.04 |
) |
|
(0.39 |
) |
|
(0.11 |
) |
||||||
| EPS impact of using weighted-average dilutive shares for adjusted EPS calculation (7) |
|
0.02 |
|
|
0.02 |
|
|
0.04 |
|
|
0.01 |
|
||||||
| Non-GAAP Adjusted Earnings Per Share - Diluted | $ |
0.59 |
|
$ |
0.81 |
|
$ |
1.59 |
|
$ |
2.29 |
|
||||||
| Reconciliation of US GAAP Loss Before Taxes to Non-GAAP Adjusted Income Before Taxes | ||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| (amounts in thousands) | January 31, | January 31, | ||||||||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|||||||
| US GAAP Loss Before Taxes | $ |
(112,296 |
) |
$ |
(77,451 |
) |
$ |
(241,049 |
) |
$ |
(52,508 |
) |
||||||
| Pretax Impact of Adjustments: | ||||||||||||||||||
| Impairment of goodwill |
|
81,754 |
|
|
99,800 |
|
|
108,449 |
|
|
99,800 |
|
||||||
| Legal settlement (3) |
|
- |
|
|
3,671 |
|
|
- |
|
|
3,671 |
|
||||||
| Restructuring and related charges |
|
14,808 |
|
|
8,807 |
|
|
52,033 |
|
|
45,204 |
|
||||||
| Foreign exchange (gains) losses on intercompany transactions, including the write off of certain cumulative translation adjustments (4) |
|
(2,128 |
) |
|
(2,414 |
) |
|
1,089 |
|
|
906 |
|
||||||
| Amortization of acquired intangible assets (5) |
|
13,580 |
|
|
21,042 |
|
|
44,550 |
|
|
68,611 |
|
||||||
| Losses on sale of businesses and impairment charges related to assets held-for-sale (6) |
|
52,404 |
|
|
- |
|
|
179,747 |
|
|
- |
|
||||||
| Held for Sale or Sold segment Adjusted Income Before Taxes (6) |
|
(4,120 |
) |
|
(2,484 |
) |
|
(28,253 |
) |
|
(8,120 |
) |
||||||
| Non-GAAP Adjusted Income Before Taxes | $ |
44,002 |
|
$ |
50,971 |
|
$ |
116,566 |
|
$ |
157,564 |
|
||||||
| 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) | $ |
1,579 |
|
$ |
(5,982 |
) |
$ |
(15,465 |
) |
$ |
(1,397 |
) |
||||||
| Income Tax Impact of Adjustments (8) | ||||||||||||||||||
| Impairment of goodwill |
|
- |
|
|
4,857 |
|
|
2,697 |
|
|
4,857 |
|
||||||
| Legal settlement (3) |
|
- |
|
|
716 |
|
|
- |
|
|
716 |
|
||||||
| Restructuring and related charges |
|
3,985 |
|
|
2,221 |
|
|
13,237 |
|
|
11,159 |
|
||||||
| Foreign exchange (gains) losses on intercompany transactions, including the write off of certain cumulative translation adjustments (4) |
|
(742 |
) |
|
(596 |
) |
|
112 |
|
|
274 |
|
||||||
| Amortization of acquired intangible assets (5) |
|
1,152 |
|
|
4,591 |
|
|
8,668 |
|
|
14,811 |
|
||||||
| Losses on sale of businesses and impairment charges related to assets held-for-sale (6) |
|
6,508 |
|
|
- |
|
|
25,711 |
|
|
- |
|
||||||
| Held for Sale or Sold segment Adjusted Tax Provision (6) |
|
(1,252 |
) |
|
(531 |
) |
|
(6,518 |
) |
|
(1,977 |
) |
||||||
| Non-GAAP Adjusted Income Tax Provision | $ |
11,230 |
|
$ |
5,276 |
|
$ |
28,442 |
|
$ |
28,443 |
|
||||||
| US GAAP Effective Tax Rate |
|
-1.4 |
% |
|
7.7 |
% |
|
6.4 |
% |
|
2.7 |
% |
||||||
| Non-GAAP Adjusted Effective Tax Rate |
|
25.5 |
% |
|
10.4 |
% |
|
24.4 |
% |
|
18.1 |
% |
||||||
| 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 nine months ended January 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 the three months ended January 31, 2023, we settled a litigation matter related to consideration for a previous acquisition for |
||||||||||
| (4) In fiscal year 2023 due to the closure of our operations in |
||||||||||
| (5) 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. 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. | ||||||||||
| (6) We are divesting non-core businesses, including University Services, Wiley Edge, and CrossKnowledge. On January 1, 2024 we completed the sale of University Services. Wiley Edge and CrossKnowledge continue to be reported as held-for-sale, and we measured each business at the lower of carrying value or fair value less cost to sell. We recorded a held-for-sale pretax impairment charge of On January 1, 2024, we completed the sale of University Services and recorded a pretax loss of In addition, our Adjusted EPS excludes the Adjusted Net Income of our Held for Sale or Sold segment. |
||||||||||
| (7) Represents the impact of using diluted weighted-average number of common shares outstanding (55.3 million and 55.6 million shares for the three and nine months ended January 31, 2024, respectively, and 56.1 million and 56.3 million shares for the three and nine months ended January 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. | ||||||||||
| (8) For the three and nine months ended January 31, 2024, substantially all of the tax impact was from deferred taxes. For the three months ended January 31, 2023, the tax impact was |
||||||||||
| JOHN WILEY & SONS, INC. | |||||||||||||||||
| SUPPLEMENTARY INFORMATION (1) | |||||||||||||||||
| RECONCILIATION OF US GAAP NET LOSS TO NON-GAAP EBITDA AND ADJUSTED EBITDA | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||
| January 31, | January 31, | ||||||||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||||
| Net Loss | $ |
(113,875 |
) |
$ |
(71,469 |
) |
$ |
(225,584 |
) |
$ |
(51,111 |
) |
|||||
| Interest expense |
|
13,321 |
|
|
11,521 |
|
|
37,592 |
|
|
27,185 |
|
|||||
| Provision (benefit) for income taxes |
|
1,579 |
|
|
(5,982 |
) |
|
(15,465 |
) |
|
(1,397 |
) |
|||||
| Depreciation and amortization |
|
45,474 |
|
|
52,442 |
|
|
129,376 |
|
|
163,142 |
|
|||||
| Non-GAAP EBITDA |
|
(53,501 |
) |
|
(13,488 |
) |
|
(74,081 |
) |
|
137,819 |
|
|||||
| Impairment of goodwill |
|
81,754 |
|
|
99,800 |
|
|
108,449 |
|
|
99,800 |
|
|||||
| Legal settlement |
|
- |
|
|
3,671 |
|
|
- |
|
|
3,671 |
|
|||||
| Restructuring and related charges |
|
14,808 |
|
|
8,807 |
|
|
52,033 |
|
|
45,204 |
|
|||||
| Foreign exchange (gains) losses, including the write off of certain cumulative translation adjustments |
|
(488 |
) |
|
(421 |
) |
|
3,489 |
|
|
(283 |
) |
|||||
| Losses on sale of businesses and impairment charges related to assets held-for-sale |
|
52,404 |
|
|
- |
|
|
179,747 |
|
|
- |
|
|||||
| Other expense (income), net |
|
648 |
|
|
(705 |
) |
|
3,700 |
|
|
(976 |
) |
|||||
| Held for Sale or Sold segment Adjusted EBITDA (2) |
|
(4,118 |
) |
|
(7,325 |
) |
|
(29,739 |
) |
|
(22,979 |
) |
|||||
| Non-GAAP Adjusted EBITDA | $ |
91,507 |
|
$ |
90,339 |
|
$ |
243,598 |
|
$ |
262,256 |
|
|||||
| Adjusted EBITDA Margin |
|
22.7 |
% |
|
22.8 |
% |
|
20.7 |
% |
|
21.8 |
% |
|||||
| 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 nine months ended January 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 January 31, | Favorable (Unfavorable) | ||||||||||||||
2024 |
2023 (3) |
Reported | Constant Currency | ||||||||||||
| Research: | |||||||||||||||
| Revenue, net | |||||||||||||||
| Research Publishing | $ |
216,586 |
|
$ |
213,720 |
|
1 |
% |
0 |
% |
|||||
| Research Solutions |
|
39,613 |
|
|
39,880 |
|
-1 |
% |
-1 |
% |
|||||
| Total Revenue, net | $ |
256,199 |
|
$ |
253,600 |
|
1 |
% |
0 |
% |
|||||
| Contribution to Profit | $ |
57,847 |
|
$ |
56,860 |
|
2 |
% |
2 |
% |
|||||
| Adjustments: | |||||||||||||||
| Restructuring (credits) charges |
|
(749 |
) |
|
317 |
|
# | # | |||||||
| Non-GAAP Adjusted Contribution to Profit | $ |
57,098 |
|
$ |
57,177 |
|
0 |
% |
0 |
% |
|||||
| Depreciation and amortization |
|
22,029 |
|
|
23,123 |
|
5 |
% |
6 |
% |
|||||
| Non-GAAP Adjusted EBITDA | $ |
79,127 |
|
$ |
80,300 |
|
-1 |
% |
-2 |
% |
|||||
| Adjusted EBITDA margin |
|
30.9 |
% |
|
31.7 |
% |
|||||||||
| Learning: | |||||||||||||||
| Revenue, net | |||||||||||||||
| Academic | $ |
87,216 |
|
$ |
82,822 |
|
5 |
% |
5 |
% |
|||||
| Professional |
|
59,118 |
|
|
60,421 |
|
-2 |
% |
-3 |
% |
|||||
| Total Revenue, net | $ |
146,334 |
|
$ |
143,243 |
|
2 |
% |
2 |
% |
|||||
| Contribution to Profit | $ |
36,200 |
|
$ |
28,453 |
|
27 |
% |
27 |
% |
|||||
| Adjustments: | |||||||||||||||
| Restructuring charges |
|
1,313 |
|
|
1,415 |
|
7 |
% |
7 |
% |
|||||
| Non-GAAP Adjusted Contribution to Profit | $ |
37,513 |
|
$ |
29,868 |
|
26 |
% |
25 |
% |
|||||
| Depreciation and amortization |
|
13,812 |
|
|
14,490 |
|
5 |
% |
5 |
% |
|||||
| Non-GAAP Adjusted EBITDA | $ |
51,325 |
|
$ |
44,358 |
|
16 |
% |
15 |
% |
|||||
| Adjusted EBITDA margin |
|
35.1 |
% |
|
31.0 |
% |
|||||||||
| Held for Sale or Sold: | |||||||||||||||
| Total Revenue, net | $ |
58,172 |
|
$ |
94,525 |
|
-38 |
% |
-39 |
% |
|||||
| Contribution to Profit | $ |
(79,134 |
) |
$ |
(103,873 |
) |
24 |
% |
24 |
% |
|||||
| Adjustments: | |||||||||||||||
| Restructuring charges |
|
1,498 |
|
|
508 |
|
# | # | |||||||
| Impairment of goodwill |
|
81,754 |
|
|
99,800 |
|
18 |
% |
18 |
% |
|||||
| Non-GAAP Adjusted Contribution to Profit | $ |
4,118 |
|
$ |
(3,565 |
) |
# | # | |||||||
| Depreciation and amortization |
|
- |
|
|
10,890 |
|
# | # | |||||||
| Non-GAAP Adjusted EBITDA | $ |
4,118 |
|
$ |
7,325 |
|
-44 |
% |
-45 |
% |
|||||
| Adjusted EBITDA margin |
|
7.1 |
% |
|
7.7 |
% |
|||||||||
| Corporate Expenses: | $ |
(61,324 |
) |
$ |
(48,496 |
) |
-26 |
% |
-26 |
% |
|||||
| Adjustments: | |||||||||||||||
| Restructuring charges |
|
12,746 |
|
|
6,567 |
|
-94 |
% |
-94 |
% |
|||||
| Legal settlement (6) |
|
- |
|
|
3,671 |
|
# | # | |||||||
| Non-GAAP Adjusted Contribution to Profit | $ |
(48,578 |
) |
$ |
(38,258 |
) |
-27 |
% |
-26 |
% |
|||||
| Depreciation and amortization |
|
9,633 |
|
|
3,939 |
|
# | # | |||||||
| Non-GAAP Adjusted EBITDA | $ |
(38,945 |
) |
$ |
(34,319 |
) |
-13 |
% |
-13 |
% |
|||||
| Consolidated Results: | |||||||||||||||
| Revenue, net | $ |
460,705 |
|
$ |
491,368 |
|
-6 |
% |
-7 |
% |
|||||
| Less: Held for Sale or Sold Segment (5) |
|
(58,172 |
) |
|
(94,525 |
) |
-38 |
% |
-39 |
% |
|||||
| Adjusted Revenue, net | $ |
402,533 |
|
$ |
396,843 |
|
1 |
% |
1 |
% |
|||||
| Operating Loss | $ |
(46,411 |
) |
$ |
(67,056 |
) |
31 |
% |
31 |
% |
|||||
| Adjustments: | |||||||||||||||
| Restructuring charges |
|
14,808 |
|
|
8,807 |
|
-68 |
% |
-68 |
% |
|||||
| Impairment of goodwill |
|
81,754 |
|
|
99,800 |
|
18 |
% |
18 |
% |
|||||
| Legal settlement (6) |
|
- |
|
|
3,671 |
|
# | # | |||||||
| Held for Sale or Sold Segment Adjusted Contribution to Profit (5) |
|
(4,118 |
) |
|
3,565 |
|
# | # | |||||||
| Non-GAAP Adjusted Operating Income | $ |
46,033 |
|
$ |
48,787 |
|
-6 |
% |
-5 |
% |
|||||
| Depreciation and amortization |
|
45,474 |
|
|
52,442 |
|
13 |
% |
14 |
% |
|||||
| Less: Held for Sale or Sold Segment depreciation and amortization (5) |
|
- |
|
|
(10,890 |
) |
# | # | |||||||
| Non-GAAP Adjusted EBITDA | $ |
91,507 |
|
$ |
90,339 |
|
1 |
% |
1 |
% |
|||||
| Adjusted EBITDA margin |
|
22.7 |
% |
|
22.8 |
% |
|||||||||
| Notes: | |||||||||
| (1) The supplementary information included in this press release for the three and nine months ended January 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 the three months ended July 31, 2023 we changed our reportable segments. Our new segment reporting structure consists of three reportable segments which includes Research (no change), Learning, and Held for Sale or Sold, as well as a Corporate expense category (no change). Prior period segment results have been revised to the new segment presentation. There were no changes to our consolidated financial results. | |||||||||
| (4) On January 1, 2020, Wiley acquired mthree, a talent placement provider that addresses the IT skills gap by finding, training, and placing job-ready technology talent in roles with leading corporations worldwide. Its results of operations are included in our Held for Sale or Sold segment. In late May 2022, Wiley renamed the mthree talent development solution to Wiley Edge and discontinued use of the mthree trademark during the three months ended July 31, 2022. As a result of these actions, we determined that a revision of the useful life was warranted, and the intangible asset was fully amortized over its remaining useful life resulting in accelerated amortization expense of |
|||||||||
| (5) 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. | |||||||||
| (6) In the three months ended January 31, 2023, we settled a litigation matter related to consideration for a previous acquisition for |
|||||||||
| # Variance greater than |
|||||||||
| JOHN WILEY & SONS, INC. | |||||||||||||||
| SUPPLEMENTARY INFORMATION (1) (2) (3) | |||||||||||||||
| SEGMENT RESULTS | |||||||||||||||
| (in thousands) | |||||||||||||||
| (unaudited) | |||||||||||||||
| % Change | |||||||||||||||
| Nine Months Ended January 31, | Favorable (Unfavorable) | ||||||||||||||
2024 |
2023 (3) |
Reported | Constant Currency | ||||||||||||
| Research: | |||||||||||||||
| Revenue, net | |||||||||||||||
| Research Publishing | $ |
659,329 |
|
$ |
685,884 |
|
-4 |
% |
-5 |
% |
|||||
| Research Solutions |
|
112,344 |
|
|
113,988 |
|
-1 |
% |
-2 |
% |
|||||
| Total Revenue, net | $ |
771,673 |
|
$ |
799,872 |
|
-4 |
% |
-5 |
% |
|||||
| Contribution to Profit | $ |
163,528 |
|
$ |
199,162 |
|
-18 |
% |
-18 |
% |
|||||
| Adjustments: | |||||||||||||||
| Restructuring charges |
|
5,953 |
|
|
1,577 |
|
# | # | |||||||
| Non-GAAP Adjusted Contribution to Profit | $ |
169,481 |
|
$ |
200,739 |
|
-16 |
% |
-16 |
% |
|||||
| Depreciation and amortization |
|
67,909 |
|
|
70,308 |
|
3 |
% |
4 |
% |
|||||
| Non-GAAP Adjusted EBITDA | $ |
237,390 |
|
$ |
271,047 |
|
-12 |
% |
-13 |
% |
|||||
| Adjusted EBITDA margin |
|
30.8 |
% |
|
33.9 |
% |
|||||||||
| Learning: | |||||||||||||||
| Revenue, net | |||||||||||||||
| Academic | $ |
224,633 |
|
$ |
223,826 |
|
0 |
% |
0 |
% |
|||||
| Professional |
|
179,961 |
|
|
178,713 |
|
1 |
% |
0 |
% |
|||||
| Total Revenue, net | $ |
404,594 |
|
$ |
402,539 |
|
1 |
% |
0 |
% |
|||||
| Contribution to Profit | $ |
77,661 |
|
$ |
58,975 |
|
32 |
% |
32 |
% |
|||||
| Adjustments: | |||||||||||||||
| Restructuring charges |
|
7,390 |
|
|
8,210 |
|
10 |
% |
10 |
% |
|||||
| Non-GAAP Adjusted Contribution to Profit | $ |
85,051 |
|
$ |
67,185 |
|
27 |
% |
27 |
% |
|||||
| Depreciation and amortization |
|
41,338 |
|
|
42,445 |
|
3 |
% |
3 |
% |
|||||
| Non-GAAP Adjusted EBITDA | $ |
126,389 |
|
$ |
109,630 |
|
15 |
% |
15 |
% |
|||||
| Adjusted EBITDA margin |
|
31.2 |
% |
|
27.2 |
% |
|||||||||
| Held for Sale or Sold: | |||||||||||||||
| Total Revenue, net | $ |
228,259 |
|
$ |
291,362 |
|
-22 |
% |
-23 |
% |
|||||
| Contribution to Profit | $ |
(88,290 |
) |
$ |
(119,486 |
) |
26 |
% |
26 |
% |
|||||
| Adjustments: | |||||||||||||||
| Restructuring charges |
|
6,143 |
|
|
4,281 |
|
-43 |
% |
-43 |
% |
|||||
| Impairment of goodwill |
|
108,449 |
|
|
99,800 |
|
-9 |
% |
-9 |
% |
|||||
| Accelerated amortization of an intangible asset (4) |
|
- |
|
|
4,594 |
|
# | # | |||||||
| Non-GAAP Adjusted Contribution to Profit | $ |
26,302 |
|
$ |
(10,811 |
) |
# | # | |||||||
| Depreciation and amortization |
|
3,437 |
|
|
33,790 |
|
90 |
% |
90 |
% |
|||||
| Non-GAAP Adjusted EBITDA | $ |
29,739 |
|
$ |
22,979 |
|
29 |
% |
28 |
% |
|||||
| Adjusted EBITDA margin |
|
13.0 |
% |
|
7.9 |
% |
|||||||||
| Corporate Expenses: | $ |
(169,420 |
) |
$ |
(165,233 |
) |
-3 |
% |
-2 |
% |
|||||
| Adjustments: | |||||||||||||||
| Restructuring charges |
|
32,547 |
|
|
31,136 |
|
-5 |
% |
-5 |
% |
|||||
| Legal settlement (6) |
|
- |
|
|
3,671 |
|
# | # | |||||||
| Non-GAAP Adjusted Contribution to Profit | $ |
(136,873 |
) |
$ |
(130,426 |
) |
-5 |
% |
-4 |
% |
|||||
| Depreciation and amortization |
|
16,692 |
|
|
12,005 |
|
-39 |
% |
-39 |
% |
|||||
| Non-GAAP Adjusted EBITDA | $ |
(120,181 |
) |
$ |
(118,421 |
) |
-1 |
% |
-1 |
% |
|||||
| Consolidated Results: | |||||||||||||||
| Revenue, net | $ |
1,404,526 |
|
$ |
1,493,773 |
|
-6 |
% |
-7 |
% |
|||||
| Less: Held for Sale or Sold Segment (5) |
|
(228,259 |
) |
|
(291,362 |
) |
-22 |
% |
-23 |
% |
|||||
| Adjusted Revenue, net | $ |
1,176,267 |
|
$ |
1,202,411 |
|
-2 |
% |
-3 |
% |
|||||
| Operating Loss | $ |
(16,521 |
) |
$ |
(26,582 |
) |
38 |
% |
38 |
% |
|||||
| Adjustments: | |||||||||||||||
| Restructuring charges |
|
52,033 |
|
|
45,204 |
|
-15 |
% |
-15 |
% |
|||||
| Impairment of goodwill |
|
108,449 |
|
|
99,800 |
|
-9 |
% |
-9 |
% |
|||||
| Legal settlement (6) |
|
- |
|
|
3,671 |
|
# | # | |||||||
| Accelerated amortization of an intangible asset (4) |
|
- |
|
|
4,594 |
|
# | # | |||||||
| Held for Sale or Sold Segment Adjusted Contribution to Profit (5) |
|
(26,302 |
) |
|
10,811 |
|
# | # | |||||||
| Non-GAAP Adjusted Operating Income | $ |
117,659 |
|
$ |
137,498 |
|
-14 |
% |
-14 |
% |
|||||
| Depreciation and amortization |
|
129,376 |
|
|
158,548 |
|
18 |
% |
19 |
% |
|||||
| Less: Held for Sale or Sold depreciation and amortization (5) |
|
(3,437 |
) |
|
(33,790 |
) |
90 |
% |
90 |
% |
|||||
| Non-GAAP Adjusted EBITDA | $ |
243,598 |
|
$ |
262,256 |
|
-7 |
% |
-7 |
% |
|||||
| Adjusted EBITDA margin |
|
20.7 |
% |
|
21.8 |
% |
|||||||||
| # | Variance greater than |
||||||||||||||
| JOHN WILEY & SONS, INC. | |||||||
| SUPPLEMENTARY INFORMATION (1) | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | |||||||
| (in thousands) | |||||||
| (unaudited) | |||||||
| January 31, | April 30, | ||||||
2024 |
2023 |
||||||
| Assets: | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ |
93,100 |
$ |
106,714 |
|||
| Accounts receivable, net |
|
161,009 |
|
310,121 |
|||
| Inventories, net |
|
28,377 |
|
30,733 |
|||
| Prepaid expenses and other current assets |
|
68,868 |
|
93,711 |
|||
| Current assets held-for-sale (2) |
|
32,648 |
|
- |
|||
| Total current assets |
|
384,002 |
|
541,279 |
|||
| Technology, property and equipment, net |
|
208,339 |
|
247,149 |
|||
| Intangible assets, net |
|
628,886 |
|
854,794 |
|||
| Goodwill |
|
1,096,674 |
|
1,204,050 |
|||
| Operating lease right-of-use assets |
|
71,306 |
|
91,197 |
|||
| Other non-current assets |
|
298,582 |
|
170,341 |
|||
| Non-current assets held-for-sale (2) |
|
19,499 |
|
- |
|||
| Total assets | $ |
2,707,288 |
$ |
3,108,810 |
|||
| Liabilities and shareholders' equity: | |||||||
| Current liabilities | |||||||
| Accounts payable | $ |
44,992 |
$ |
84,325 |
|||
| Accrued royalties |
|
151,159 |
|
113,423 |
|||
| Short-term portion of long-term debt |
|
6,250 |
|
5,000 |
|||
| Contract liabilities |
|
300,675 |
|
504,695 |
|||
| Accrued employment costs |
|
78,203 |
|
80,458 |
|||
| Short-term portion of operating lease liabilities |
|
18,181 |
|
19,673 |
|||
| Other accrued liabilities |
|
78,771 |
|
87,979 |
|||
| Current liabilities held-for-sale (2) |
|
33,908 |
|
- |
|||
| Total current liabilities |
|
712,139 |
|
895,553 |
|||
| Long-term debt |
|
900,524 |
|
743,292 |
|||
| Accrued pension liability |
|
72,374 |
|
86,304 |
|||
| Deferred income tax liabilities |
|
94,862 |
|
144,042 |
|||
| Operating lease liabilities |
|
98,219 |
|
115,540 |
|||
| Other long-term liabilities |
|
71,160 |
|
79,052 |
|||
| Long-term liabilities held-for-sale (2) |
|
9,704 |
|
- |
|||
| Total liabilities |
|
1,958,982 |
|
2,063,783 |
|||
| Shareholders' equity |
|
748,306 |
|
1,045,027 |
|||
| Total liabilities and shareholders' equity | $ |
2,707,288 |
$ |
3,108,810 |
|||
| Notes: | |||||
| (1) The supplementary information included in this press release for January 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) As previously announced, we are divesting non-core businesses, including Wiley Edge and CrossKnowledge. These businesses met the held-for-sale criteria and were measured at the lower of carrying value or fair value less cost to sell. We recorded a pretax impairment of |
|||||
| JOHN WILEY & SONS, INC. | ||||||||||
| SUPPLEMENTARY INFORMATION (1) | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| (in thousands) | ||||||||||
| (unaudited) | ||||||||||
| Nine Months Ended | ||||||||||
| January 31, | ||||||||||
|
2024 |
|
|
2023 |
|
|||||
| Operating activities: | ||||||||||
| Net loss | $ |
(225,584 |
) |
$ |
(51,111 |
) |
||||
| Impairment of goodwill |
|
108,449 |
|
|
99,800 |
|
||||
| Losses on sale of businesses and impairment charges related to assets held-for-sale |
|
179,747 |
|
|
- |
|
||||
| Amortization of intangible assets |
|
42,730 |
|
|
65,389 |
|
||||
| Amortization of product development assets |
|
17,894 |
|
|
25,175 |
|
||||
| Depreciation and amortization of technology, property, and equipment |
|
68,752 |
|
|
72,578 |
|
||||
| Other noncash charges |
|
50,146 |
|
|
71,660 |
|
||||
| Net change in operating assets and liabilities |
|
(217,782 |
) |
|
(229,773 |
) |
||||
| Net cash provided by operating activities |
|
24,352 |
|
|
53,718 |
|
||||
| Investing activities: | ||||||||||
| Additions to technology, property, and equipment |
|
(57,275 |
) |
|
(57,616 |
) |
||||
| Product development spending |
|
(12,324 |
) |
|
(17,763 |
) |
||||
| Businesses acquired in purchase transactions, net of cash acquired |
|
(3,116 |
) |
|
(5,792 |
) |
||||
| (Costs) proceeds related to the sale of businesses and certain assets |
|
(1,237 |
) |
|
40 |
|
||||
| Acquisitions of publication rights and other |
|
(4,541 |
) |
|
1,059 |
|
||||
| Net cash used in investing activities |
|
(78,493 |
) |
|
(80,072 |
) |
||||
| Financing activities: | ||||||||||
| Net debt borrowings |
|
158,681 |
|
|
162,303 |
|
||||
| Cash dividends |
|
(57,869 |
) |
|
(58,067 |
) |
||||
| Purchases of treasury shares |
|
(29,000 |
) |
|
(24,000 |
) |
||||
| Other |
|
(16,458 |
) |
|
(24,952 |
) |
||||
| Net cash provided by financing activities |
|
55,354 |
|
|
55,284 |
|
||||
| Effects of exchange rate changes on cash, cash equivalents and restricted cash |
|
432 |
|
|
(2,670 |
) |
||||
| Change in cash, cash equivalents and restricted cash for period |
|
1,645 |
|
|
26,260 |
|
||||
| Cash, cash equivalents and restricted cash - beginning |
|
107,262 |
|
|
100,727 |
|
||||
| Cash, cash equivalents and restricted cash - ending (2) | $ |
108,907 |
|
$ |
126,987 |
|
||||
| CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT DEVELOPMENT SPENDING (3) | ||||||||||
| Nine Months Ended | ||||||||||
| January 31, | ||||||||||
|
2024 |
|
|
2023 |
|
|||||
| Net cash provided by operating activities | $ |
24,352 |
|
$ |
53,718 |
|
||||
| Less: | Additions to technology, property, and equipment |
|
(57,275 |
) |
|
(57,616 |
) |
|||
| Less: | Product development spending |
|
(12,324 |
) |
|
(17,763 |
) |
|||
| Free cash flow less product development spending | $ |
(45,247 |
) |
$ |
(21,661 |
) |
||||
| Notes: | ||||||
| (1) The supplementary information included in this press release for the nine months ended January 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) Cash, cash equivalents and restricted cash as of January 31, 2024 includes held-for-sale cash, cash equivalents and restricted cash of |
||||||
| (3) 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 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:
- Adjusted EPS, Adjusted Revenue, Adjusted Contribution to Profit, 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 2024 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/20240307297781/en/
Brian Campbell
Investor Relations
brian.campbell@wiley.com
+1 (201) 748-6874
Source: John Wiley and Sons
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