Wiley Reports Fourth Quarter and Fiscal 2017 Results

  Wiley Reports Fourth Quarter and Fiscal 2017 Results

  * Full year revenue of $1,719 million, up 2% at constant currency and down
    1% excluding the impacts of foreign exchange, shifting to time-based
    journal subscriptions, and contributions from acquisitions. GAAP revenue
    flat including a $43 million unfavorable foreign exchange impact.
  * Full year adjusted EPS of $3.00, up 13% at constant currency or up 1%
    (favorable to guidance of mid-single digit decline) excluding the impacts
    of foreign exchange, the journal subscription shift, dilution from
    acquisitions, and unusual charges and credits. GAAP EPS down 21% primarily
    due to an unfavorable tax decision in Germany.
  * Revenue from digital products and services now 68% of total revenue, up
    from 63% in the prior year.
  * Calendar year 2017 Journal Subscriptions up 1% on a constant currency
    basis with approximately 97% of targeted business under contract.

Business Wire

HOBOKEN, N.J. -- June 13, 2017

John Wiley & Sons, Inc. (NYSE: JWa and JWb), a global research and learning
company, today announced the following results for the fourth quarter and
fiscal year 2017, ending April 30:

                                       
                                      % Change
$ millions      FY17       FY16       Excluding FX   Including FX
Revenue:                                            
Q4              $452.2     $434.3     6%             4%
Full Year       $1,718.5   $1,727.0   2%             0%
GAAP EPS:        
Q4              $0.81      $0.59                     38%
Full Year       $1.95      $2.48                     (21%)
Adjusted EPS:
Q4              $0.82      $0.67      19%            22%
Full Year       $3.00      $2.70      13%            11%
 

Adjusted EPS exclude tax charges and credits, restructuring charges and
credits, and pension settlement as more fully described in the attached
financial schedules.

Management Commentary

“We posted stronger revenue and earnings growth this quarter, largely due to
growth in our Solutions business and the favorable timing of sales in
Publishing,” said Matthew Kissner, Wiley’s Interim CEO and Chairman. “For the
year, Research revenue growth was marginally positive and in line with
expectations. The Solutions business, in addition to posting double-digit
revenue growth, also reported substantial profit improvement. Overall, we
ended the year with favorable operating momentum, a strong balance sheet, and
reliable cash flow that will enable us to continue investing for growth while
returning cash to shareholders through dividends and share repurchases.”

Fiscal Year 2018 Outlook

Wiley’s financial outlook anticipates low-single digit revenue growth in
Research and low-double digit revenue growth in Solutions offset by a
high-single digit revenue decline in Publishing due to further erosion of
print book markets.

  * Revenue at constant currency to be approximately even with FY17. In
    addition, at current FX rates, Wiley would report a FY18 positive FX
    variance of approximately $25 million in revenue due to functional
    currency gains.
  * Operating income at constant currency to be approximately even with FY17
    primarily due to flat revenue. In addition, at current rates, Wiley would
    report a positive FX variance of approximately $20 million in operating
    income.
  * Adjusted EPS performance at constant currency down low-single digits
    mostly due to $0.12 in EPS non-recurring tax benefits in FY17. The
    positive FX variance mentioned above would be approximately $0.25 in EPS.
  * Cash from Operations expected to improve to $350 million or higher, from
    $315 million in FY17.
  * Capex (TP&E + Composition and Product Development Spend) projected to be
    slightly lower than FY17.

Wiley will continue investing for revenue growth across its business segments.
In FY18, the Company will near the completion of its ERP implementation and
headquarters office transformation. Wiley is also in the process of a
multi-year operational excellence initiative that focuses on achieving
competitive benchmarks for quality, speed and customer service. Through
organization simplification and process optimization, standardization and
automation, the Company expects to meaningfully improve operating income, EPS,
and Free Cash Flow in Fiscal Years 2019 and 2020. In the first quarter of
fiscal 2018, Wiley will record a restructuring charge of approximately $25
million related to these activities, which will yield around $45 million in
run rate savings starting in FY19, with roughly half of that realized in FY18.
About half of the $45 million will be reinvested.

Adjusted Results

The Company provides financial measures referred to as “adjusted” contribution
to profit and EPS, which exclude tax charges, restructuring charges, pension
settlement charges related to voluntary lump sum buyouts, and certain deferred
tax benefits as more fully described in the attached financial schedules.
Variances to adjusted contribution to profit and EPS are on a constant
currency basis unless otherwise noted. Management believes the exclusion of
such items provides additional information to facilitate the analysis of
results. These non-GAAP measures are not intended to replace the financial
results reported in accordance with GAAP.

Foreign Exchange (FX)

Note that foreign exchange was adverse to FY17 revenue and EPS by $43 million
and $0.04, respectively. Wiley generates approximately half of its revenue
from outside the United States and is therefore exposed to foreign exchange
rate fluctuations, particularly in relation to the euro and pound sterling.
The weighted average rates for fiscal 2017 were 1.09 and 1.30, respectively.
Throughout this report, references are made to variances “excluding foreign
exchange” or “on a constant currency basis”; such amounts exclude both
currency translation effects and transactional gains and losses.

CEO Announcement

In May, the Company announced the resignation of President and CEO Mark Allin.
Matthew Kissner, Chairman of the Board, was named interim CEO. The Board has
begun a search for Mr. Allin’s successor.

Fourth Quarter Summary

  * Revenue grew 4% on a US GAAP basis to $452.2 million, or 6% excluding the
    impact of currency. Year-over-year performance at constant currency  was
    driven by growth in Solutions (+$8 million) and Publishing (+$10 million),
    and the revenue contribution from Atypon (+$9 million). Excluding that
    contribution, fourth quarter revenue on a constant currency basis was up
    4% due to continued growth in Solutions and growth in Publishing, due to
    favorable timing of orders and lower returns.
  * EPS increased 38% on a US GAAP basis to $0.81, or 19% on an adjusted
    basis. Adjusted EPS excludes restructuring credits in the current quarter
    ($0.02) and charges in the prior year period ($0.08). The year-over-year
    increase is attributed to significant improvement in Contribution to
    Profit for Publishing (+117%) and Solutions (+27%), partially offset by
    dilution from the recent Atypon and Ranku acquisitions ($0.03). Excluding
    that dilution, fourth quarter adjusted EPS was up 24%.
  * Adjusted shared services and administrative costs of $135.8 million were
    flat for the quarter with Distribution and Operation Services declining 3%
    and Technology and Content Management even with the prior year.
  * Share Repurchases: Wiley repurchased 282,728 shares this quarter at a cost
    of $15.0 million, an average of $52.90 per share. Nearly 3.8 million
    shares remain in the current authorized repurchase program announced in
    June 2016.

Fiscal Year Summary

  * Revenue of $1,719 million was consistent with the prior year on a US GAAP
    basis, or up 2% excluding the adverse impact of foreign exchange (-$43
    million). Performance was driven by the favorable impact of the shift to
    time-based Journal Subscriptions (+$34 million) and a partial year
    contribution from the Atypon acquisition (+$19 million). Excluding these
    items and the impact of currency, revenue was down 1% as steady
    performance in Journal Subscriptions and double-digit growth in
    Author-Funded Access (+26%), Online Test Preparation (+27%), and our
    Solutions segment (14%) did not fully offset declines in Education Books
    (-13%) and STM and Professional Development Books (-9%). Wiley’s
    percentage of revenue from digital content and services increased to 68%
    in FY17 (from 63% in FY16).
  * EPS declined 21% on a US GAAP basis to $1.95, or rose 13% on an adjusted
    basis to $3.00. Adjusted EPS excludes $1.04 and $0.22 in the current and
    prior year, respectively, to remove the impacts of currency, restructuring
    charges or credits, and unusual items. Details for these items can be
    found in the accompanying tables. Adjusted EPS growth is attributed to the
    favorable transitional impact of the shift to time-based journal
    subscriptions (+$0.38) and tax credits recorded in the third quarter
    (+$0.12), which offset dilution from the Atypon and Ranku acquisitions
    (-$0.08). Excluding the impact of the subscription revenue shift and the
    dilution of the acquisitions, adjusted EPS was up 1% primarily due to the
    aforementioned tax benefits and efficiency gains.
  * Adjusted shared services and administrative costs were down 2% on a US
    GAAP basis to $507 million, or flat on a constant currency basis. The
    performance is mainly due to declines in Other Administration (-9%) and
    Distribution and Operations (-1%), which offset a 5% increase in
    Technology and Content Management related to ERP and other systems
    development and integration.
  * Cash from Operations of $314.5 million down from $350.0 million primarily
    due to unfavorable timing around working capital and an unbudgeted $7
    million contribution to our UK pension just before year-end. The adverse
    working capital performance included the timing of end-of-year payments in
    fiscal 2017 as compared to fiscal 2016. Collections also lagged due to
    unexpectedly strong book sales in April. These impacts will unwind in
    fiscal 2018.
  * Free Cash Flow less Composition and Product Development Spend (identical
    FCF metric that has been reported previously) decreased to $166.2 million
    from $219.0 million primarily due to lower cash from operations and higher
    capex (+$17 million) primarily related to the office transformation.
  * Net Debt and Cash Position: Net debt (debt less cash and cash equivalents)
    at the end of April was $306.5 million compared to $241.2 million as of
    April 30, 2016. During fiscal year 2017, the company used approximately
    $120 million of cash to acquire Atypon. Cash and cash equivalents were
    $58.5 million compared to $363.8 million at end of the prior year
    primarily due to the repayment of debt with proceeds from the Company’s
    actions to efficiently repatriate cash from foreign entities. The
    repatriation initiative also included $60 million in proceeds related to
    an associated inter-company transfer of GPB to USD, received in the fourth
    quarter.
  * Share Repurchases: In fiscal year 2017, Wiley repurchased 953K shares for
    approximately $50.3 million, an average cost of $52.80. As of April 30,
    the Company had nearly 3.8 million shares remaining in the repurchase
    program announced in June 2016.
  * Dividend: In June 2016, Wiley increased its quarterly dividend by 3.3% to
    $0.31 per share. It was the 23rd consecutive annual increase and raised
    the annualized dividend payout to $1.24 per share.

RESEARCH (JOURNALS AND ATYPON)

  * Revenue: Fourth quarter revenue of $234.5 million rose 2% on a US GAAP
    basis, or 3% on a constant currency basis. Performance was driven by the
    contribution from the Atypon acquisition (+$9 million), and double-digit
    growth in Author-Funded Access (+26%), which offset a timing-related
    decline in Journal Subscription revenue. For the year, revenue on a GAAP
    basis rose 3% to $853.5 million, or 7% at constant currency. Excluding the
    subscription shift ($34 million) and the Atypon contribution ($19
    million), Research revenue for the year was up modestly at constant
    currency. Results were mainly driven by steady performance from Journal
    Subscriptions and strong growth in Author-Funded Access, which offset an
    unusually large backfile sale of $10 million in the prior year.
  * Contribution to Profit: Fourth quarter contribution to profit (CTP) of
    $80.3 million was down 2% on a US GAAP basis and down 3% on an adjusted
    basis primarily due to costs associated with the Atypon acquisition (-$2
    million) and other spending to support society journals. For the year,
    GAAP CTP was flat and adjusted was up 2% including the benefit from the
    shift to time-based journal subscriptions (+$29 million) and costs
    associated with the Atypon acquisition (-$4 million). Excluding those
    items, adjusted CTP was down 8% attributed to revenue performance, higher
    content and royalty costs and investment in new technology.
  * Calendar Year 2017 Journal Subscriptions: As of the end of April, calendar
    year 2017 Journal Subscriptions were up 1% on a constant currency basis
    with 97% of business contracted.
  * Society Publishing Agreements: Two new society contracts were signed in
    the quarter with combined annual revenue of $1.7 million; fifteen were
    renewed with combined annual revenue of $17.3 million; and one was not
    renewed with annual revenue of $0.4 million, for a net gain of $1.3
    million. Note: the revenue cited in quarterly society contract signings is
    typically not achieved until the following calendar year. For calendar
    year 2017, six new society contracts were signed (+$9 million annual) and
    fifteen were not renewed (-$9 million). Additionally, calendar year 2017
    includes renewals of 91 contracts with combined annual revenue of $67
    million.

PUBLISHING (BOOKS, COURSE WORKFLOW, ONLINE TEST PREPARATION)

  * Revenue: Fourth quarter revenue increased 5% on a US GAAP basis to $153.7
    million, or 7% at constant currency due to growth in Education Books
    (+28%), Online Test Preparation and Certification (+52%), and Course
    Workflow/WileyPLUS (+6%), offsetting a 2% decline in STM and Professional
    Books and a 2% decline in Licensing, Distribution, Advertising and Other.
    Education Books improved due to favorable timing of orders, lower returns,
    and growth in digital books. Publishing revenue for the year declined 9%
    on a GAAP basis or 7% on a constant currency basis, with declines in Books
    and Reference Material (-11%) offsetting growth in Online Test Preparation
    (+27%), Course Workflow/WileyPLUS (+7%), and Licensing, Distribution,
    Advertising, and Other (+3%).
  * Contribution to Profit: Fourth quarter CTP grew 111% on a US GAAP basis to
    $31.1 million, or 117% on an adjusted basis. Strong growth was driven by
    revenue performance and restructuring savings, including facility closures
    and expense rationalization. For the year, CTP was flat on both a US GAAP
    and adjusted basis.

SOLUTIONS (ONLINE PROGRAM MANAGEMENT, CORPORATE LEARNING AND ASSESSMENT)

  * Revenue: Fourth quarter revenue rose 13% on a US GAAP basis to $64.0
    million, or 14% at constant currency. Solid growth occurred across all
    product areas, including Online Program Management (+14%), Corporate
    Learning (+21%), and Professional Assessment (+9%). For the year,
    Solutions revenue of $232 million was up 13% on a US GAAP basis, or 14% at
    constant currency.
  * Contribution to Profit: Fourth quarter CTP on a US GAAP basis rose 49% to
    $5.7 million, or 27% on an adjusted basis. Growth at constant currency was
    due to revenue growth and improved operating efficiency. For the year, CTP
    on a US GAAP basis was $14.8 million, or $16.6 million adjusted, as
    compared to $4.0 million and $5.0 million, respectively, in the prior
    year.
  * Online Program Management: In the quarter, Wiley signed eleven new
    programs and discontinued five. As of April 30, 2017, Wiley had 39
    university partners (one partnership retired this quarter) and 250
    programs under contract. In the year, Wiley signed important new partners
    – including George Mason (VA), Seton Hall (NJ), St. John’s (NY), and
    Vlerick (Belgium) – and added 24 net new programs.

Earnings Conference Call

  * Scheduled for today, June 13, at 10:00 a.m. (ET)
  * Access the webcast at www.wiley.com> Investor Relations> Events and
    Presentations, or http://www.wiley.com/WileyCDA/Section/id-370238.html
  * U.S. callers, please dial (888) 397-5350 and enter the participant code
    1528095#.
  * International callers, please dial (719) 325-2142  and enter the
    participant code 1528095#.
  * An archive of the webcast will be available for a period of up to 14 days

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995

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

About Wiley

Wiley is a global research and learning company. Through the Research segment,
the Company provides scientific, technical, medical, and scholarly journals,
as well as related content and services, for academic, corporate, and
government libraries, learned societies, and individual researchers and other
professionals. The Publishing segment provides scientific (STM), professional
development, and education books and related content, as well as test
preparation services and course workflow tools, to libraries, corporations,
students, professionals, and researchers. In Solutions, Wiley provides online
program management services for higher education institutions, and learning,
development, and assessment services for businesses and professionals.

JOHN WILEY & SONS, INC.
UNAUDITED SUMMARY OF OPERATIONS
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2017 AND 2016
(in thousands, except per share amounts)
                                                                                                                    
                                                                                                                      
FOURTH QUARTER ENDED APRIL 30,
                                                                                                                      
                     2017                                        2016                                        % Change       
                     US GAAP       Adjustments   Adjusted        US GAAP       Adjustments   Adjusted        US      Adjusted
                                                                                                             GAAP    excl. FX
                                                                                                                      
Revenue            $ 452,201       -             452,201         434,301       -             434,301         4   %   6     %
                                                                                                                      
Costs and
Expenses
Cost of Sales        119,299       -             119,299         109,820       -             109,820         9   %   10    %
Operating and
Administrative       258,822       -             258,822         260,869       -             260,869         -1  %   2     %
(B)
Restructuring
(Credits)            (1,690    )   1,690         -               7,779         (7,779   )    -
Charges (A)
Amortization         12,348        -             12,348          12,513        -             12,513          -1  %   3     %
of Intangibles
                                                                                                                      
Total Costs          388,779       1,690         390,469         390,981       (7,779   )    383,202         -1  %   4     %
and Expenses
                                                                                                                      
Operating            63,422        (1,690   )    61,732          43,320        7,779         51,099          46  %   16    %
Income
Operating            14.0      %                 13.7      %     10.0      %                 11.8      %
Margin
                                                                                                                      
Interest             (3,576    )   -             (3,576    )     (4,220    )   -             (4,220    )     -15 %   -15   %
Expense
Foreign
Exchange             (1,558    )   -             (1,558    )     (916      )   -             (916      )
(Loss) Gain
Interest
Income and           115           -             115             820           -             820             -86 %   -86   %
Other
                                                                                                                      
Income Before        58,403        (1,690   )    56,713          39,004        7,779         46,783          50  %   18    %
Taxes
                                                                                                                      
Provision for
Income Taxes         11,728        (2,355   )    9,373           4,797         3,010         7,807           144 %   15    %
(C,D)
                                                                                                                      
Net Income         $ 46,675        665           47,340          34,207        4,769         38,976          36  %   18    %
                                                                                                                      
                                                                                                                      
Earnings Per
Share- Diluted     $ 0.81          0.01          0.82            0.59          0.08          0.67            38  %   19    %
(A)
                                                                                                                      
Average Shares       57,943        57,943        57,943          58,089        58,089        58,089
- Diluted
                                                                                                                      
                                                                                                                      
TWELVE MONTHS ENDED APRIL 30,
                                                                                                                      
                     2017                                        2016                                        % Change
                     US GAAP       Adjustments   Adjusted        US GAAP       Adjustments   Adjusted        US      Adjusted
                                                                                                             GAAP    excl. FX
                                                                                                                      
Revenue            $ 1,718,530     -             1,718,530       1,727,037     -             1,727,037       0   %   2     %
                                                                                                                      
Costs and
Expenses
Cost of Sales        460,756       -             460,756         466,177       -             466,177         -1  %   2     %
Operating and
Administrative       988,597       (8,842   )    979,755         994,372       -             994,372         -1  %   1     %
(B)
Restructuring        13,355        (13,355  )    -               28,611        (28,611  )    -
Charges (A)
Amortization         49,669        -             49,669          49,764        -             49,764          0   %   4     %
of Intangibles
                                                                                                                      
Total Costs          1,512,377     (22,197  )    1,490,180       1,538,924     (28,611  )    1,510,313       -2  %   1     %
and Expenses
                                                                                                                      
Operating            206,153       22,197        228,350         188,113       28,611        216,724         10  %   7     %
Income
Operating            12.0      %                 13.3      %     10.9      %                 12.5      %
Margin
                                                                                                                      
Interest             (16,938   )   -             (16,938   )     (16,707   )   -             (16,707   )     1   %   1     %
Expense
Foreign
Exchange Gain        421           -             421             473           -             473
(Loss)
Interest
Income and           1,480         -             1,480           2,914         -             2,914           -49 %   -49   %
Other
                                                                                                                      
Income Before        191,116       22,197        213,313         174,793       28,611        203,404         9   %   6     %
Taxes
                                                                                                                      
Provision for
Income Taxes         77,473        (38,599  )    38,874          29,011        15,777        44,788          167 %   -12   %
(C,D)
                                                                                                                      
Net Income         $ 113,643       60,796        174,439         145,782       12,834        158,616         -22 %   11    %
                                                                                                                      
                                                                                                                      
Earnings Per
Share- Diluted     $ 1.95          1.05          3.00            2.48          0.22          2.70            -21 %   13    %
(A)
                                                                                                                      
Average Shares       58,199        58,199        58,199          58,734        58,734        58,734
- Diluted
                                                                                                                      
                                                                                                                      
See the accompanying Notes to Unaudited Financial Statements for a description of each adjustment.
                                                                                                                      

 
JOHN WILEY & SONS, INC.
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2017 AND 2016
                                                                    
                                                                        
RECONCILIATION OF US GAAP TO ADJUSTED EPS - DILUTED (UNAUDITED)
                                                                        
                                                                        
                                Fourth Quarter Ended     Twelve Months Ended
                                April 30,                April 30,
                                2017          2016       2017        2016
                                                                        
US GAAP Earnings Per Share      $  0.81       $ 0.59     $ 1.95      $ 2.48
- Diluted
Adjusted to exclude the
following:
Restructuring (Credits)            (0.02  )     0.08       0.15        0.32
Charges (A)
One-time - Pension                 -            -          0.09        -
Settlement (B)
Unfavorable Tax Settlement         0.03         -          0.85        -
(C)
Deferred Income Tax Benefit        -            -          (0.04 )     (0.10 )
on UK Rate Change (D)
                                                                        
Adjusted Earnings Per Share     $  0.82       $ 0.67     $ 3.00      $ 2.70   
- Diluted
                                                                              

NOTES TO UNAUDITED FINANCIAL STATEMENTS
    
                                           
Adjustments:
      Restructuring Charges: The adjusted results for the three and twelve
      months ended April 30, 2017 exclude restructuring (credits) charges
      related to the Company's Restructuring and Reinvestment Program of
A     $(1.7) million or $(0.02) per share, and $13.4 million or $0.15 per
      share, respectively. The adjusted results for the three and twelve
      months ended April 30, 2016 exclude restructuring charges of $7.8
      million or $0.08 per share, and $28.6 million or $0.32 per share,
      respectively.
       
      In fiscal year 2017, the Company announced a voluntary, limited-time
      opportunity for terminated vested employees who were participants in the
      U.S. defined benefit retirement plan to elect a single lump sum payment
B     of accumulated benefits. The aggregate amount of payments made under
      this one time election was $28.3 million. The total charge, recorded in
      the second quarter of fiscal year 2017, including a prorata portion of
      the unamortized net actuarial loss was $8.8 million or $0.09 per share.
       
      As previously disclosed and as reported in the Company's SEC filings,
      the Company was appealing an unfavorable tax ruling in Germany related
      to tax benefits obtained through an increase in the tax deductible basis
C     of certain merged German subsidiaries. In September 2016, the German
      Federal Fiscal Court issued an unfavorable final judgement in Wiley's
      longstanding tax appeal. As a consequence, the Company reported a $49.1
      million charge, or $0.85 per share in fiscal year 2017.
       
      Deferred Income Tax Benefit on UK Rate Change: The adjusted results
      exclude deferred tax benefits of $2.6 million, or $0.04 per share, for
      the twelve months ended April 30, 2017, and $5.9 million, or $0.10 per
      share for the twelve months ended April 30, 2016. The benefits in these
      periods are associated with changes in tax legislation enacted in the
D     United Kingdom which reduced the U.K. corporate income tax rates. The
      benefits reflect the remeasurement of the Company's deferred tax
      balances to the new income tax rates and had no current cash tax impact.
      The fiscal year 2016 legislation reduced the U.K. income tax rates to
      19% effective April 1, 2017 and 18% effective April 1, 2020, and the
      fiscal year 2017 legislation further reduced the April 1, 2020 statutory
      income tax rate to 17%.
                                           
Non-GAAP Financial Measures:
In addition to providing financial results in accordance with GAAP, the
Company has provided adjusted financial results that exclude the impact of
other nonrecurring items described in more detail throughout this press
release. These non-GAAP financial measures are labeled as "Adjusted" and are
used for evaluating the results of operations for internal purposes. These
non-GAAP measures are not intended to replace the presentation of financial
results in accordance with GAAP. Rather, the Company believes the exclusion of
such items provides additional information to investors to facilitate the
comparison of past and present operations. Unless otherwise noted, adjusted
amounts in the attached schedules include foreign exchange.
 

 
JOHN WILEY & SONS, INC.
UNAUDITED SEGMENT RESULTS
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2017 AND 2016
(in thousands)
                                                                                                                    
                                                                                                                      
FOURTH QUARTER ENDED APRIL 30,
                                                                                                                      
                     2017                                        2016                                        % Change
                     US GAAP       Adjustments   Adjusted        US GAAP       Adjustments   Adjusted        US      Adjusted
                                   (A)                                         (A)                           GAAP    excl. FX
Revenue
Research           $ 234,502       -             234,502         230,846       -             230,846         2   %   3     %
Publishing           153,748       -             153,748         147,072       -             147,072         5   %   7     %
Solutions            63,951        -             63,951          56,383        -             56,383          13  %   14    %
                                                                                              
Total              $ 452,201       -             452,201         434,301       -             434,301         4   %   6     %
                                                                                                                      
Direct
Contribution
to Profit
Research           $ 112,578       1,272         113,850         113,884       (381     )    113,503         -1  %   -1    %
Publishing           70,720        -             70,720          62,345        127           62,472          13  %   16    %
Solutions            12,811        168           12,979          12,121        657           12,778          6   %   1     %
                                                                                              
Total              $ 196,109       1,440         197,549         188,350       403           188,753         4   %   5     %
                                                                                                                      
Contribution
to Profit
(After
Allocated
Shared
Services
and Admin.
Costs)
Research           $ 78,993        1,272         80,265          80,753        (381     )    80,372          -2  %   -3    %
Publishing           31,064        -             31,064          14,713        127           14,840          111 %   117   %
Solutions            5,725         168           5,893           3,832         657           4,489           49  %   27    %
                                                                                              
Total              $ 115,782       1,440         117,222         99,298        403           99,701          17  %   16    %
                                                                                                                      
Unallocated
Shared               (52,360   )   (3,130   )    (55,490   )     (55,978   )   7,376         (48,602   )     -6  %   16    %
Services and
Admin. Costs
                                                                                              
Operating          $ 63,422        (1,690   )    61,732          43,320        7,779         51,099          46  %   16    %
Income
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
Total Shared
Services and
Admin. Costs
by Function
Distribution
and Operation      $ (15,754   )   (3,113   )    (18,867   )     (25,921   )   5,817         (20,104   )     -39 %   -3    %
Services
Technology and
Content              (66,839   )   (204     )    (67,043   )     (68,156   )   94            (68,062   )     -2  %   0     %
Management
Finance              (12,437   )   2             (12,435   )     (13,140   )   1,159         (11,981   )     -5  %   6     %
Other                (37,657   )   185           (37,472   )     (37,813   )   306           (37,507   )     0   %   2     %
Administration
Total              $ (132,687  )   (3,130   )    (135,817  )     (145,030  )   7,376         (137,654  )     -9  %   0     %
                                                                                                                      
                                                                                                                      
TWELVE MONTHS ENDED APRIL 30,
                                                                                                                      
                     2017                                        2016                                        % Change
                     US GAAP       Adjustments   Adjusted        US GAAP       Adjustments   Adjusted        US      Adjusted
                                   (A)                                         (A)                           GAAP    excl. FX
Revenue
Research           $ 853,489       -             853,489         826,778       -             826,778         3   %   7     %
Publishing           633,449       -             633,449         695,728       -             695,728         -9  %   -7    %
Solutions            231,592       -             231,592         204,531       -             204,531         13  %   14    %
                                                                                              
Total              $ 1,718,530     -             1,718,530       1,727,037     -             1,727,037       0   %   2     %
                                                                                                                      
Direct
Contribution
to Profit
Research           $ 397,486       1,949         399,435         383,499       2,982         386,481         4   %   5     %
Publishing           285,174       1,596         286,770         304,965       4,507         309,472         -6  %   -5    %
Solutions            47,673        1,787         49,460          36,975        1,042         38,017          29  %   29    %
                                                                                              
Total              $ 730,333       5,332         735,665         725,439       8,531         733,970         1   %   2     %
                                                                                                                      
Contribution
to Profit
(After
Allocated
Shared
Services
and Admin.
Costs)
Research           $ 252,228       1,949         254,177         252,110       2,982         255,092         0   %   2     %
Publishing           125,703       1,596         127,299         126,058       4,507         130,565         0   %   0     %
Solutions            14,822        1,787         16,609          3,992         1,042         5,034           271 %   224   %
                                                                                              
Total              $ 392,753       5,332         398,085         382,160       8,531         390,691         3   %   4     %
                                                                                                                      
Unallocated
Shared               (186,600  )   16,865        (169,735  )     (194,047  )   20,080        (173,967  )     -4  %   1     %
Services and
Admin. Costs
                                                                                              
Operating          $ 206,153       22,197        228,350         188,113       28,611        216,724         10  %   7     %
Income
                                                                                                                      
                                                                                                                      
                                                                                                                      
                                                                                                                      
Total Shared
Services and
Admin. Costs
by Function
Distribution
and Operation      $ (82,474   )   6,668         (75,806   )     (90,180   )   10,137        (80,043   )     -9  %   -1    %
Services
Technology and
Content              (268,259  )   1,458         (266,801  )     (262,178  )   3,537         (258,641  )     2   %   5     %
Management
Finance              (46,755   )   (294     )    (47,049   )     (50,233   )   3,474         (46,759   )     -7  %   3     %
One-time
Pension              (8,842    )   8,842         -               -             -             -
Settlement
Other                (117,850  )   191           (117,659  )     (134,735  )   2,932         (131,803  )     -13 %   -9    %
Administration
Total              $ (524,180  )   16,865        (507,315  )     (537,326  )   20,080        (517,246  )     -2  %   0     %
                                                                                                                      
                                                                                                                      
(A) See the accompanying Notes to Unaudited Financial Statements for a description of the adjustment.
                

 
UNAUDITED ADJUSTED CONTRIBUTION TO PROFIT
INCLUDING ALLOCATED SHARED SERVICES AND ADMINISTRATIVE COSTS
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2017 AND 2016
(in thousands)
                                                                                                  
                                                                                                    
                    Fourth Quarter Ended                        Twelve Months Ended
                    April 30,                                   April 30,
                                                     %                                             %
                    2017        2016        %        Change     2017         2016         %        Change
                                            Change   excl.                                Change   excl.
                                                     FX                                            FX
                                                                                                    
                                                                                                    
Research:
Direct
Contribution      $ 112,578     113,884     -1   %   -3   %   $ 397,486      383,499      4    %   6   %
to Profit
Restructuring
Charges             1,272       (381    )                       1,949        2,982     
(Credits) (A)
Adjusted
Direct              113,850     113,503     0    %   -1   %     399,435      386,481      3    %   5   %
Contribution
to Profit
                                                                              
Allocated
Shared              (33,585 )   (33,131 )   1    %   3    %     (145,258 )   (131,389 )   11   %   13  %
Services and
Admin. Costs
Adjusted
Contribution
to Profit         $ 80,265      80,372      0    %   -3   %   $ 254,177      255,092      0    %   2   %
(after
allocated
Shared
Services and
Admin. Costs)
                                                                                                    
Publishing:
Direct
Contribution      $ 70,720      62,345      13   %   16   %   $ 285,174      304,965      -6   %   -5  %
to Profit
Restructuring       -           127                             1,596        4,507     
Charges (A)
Adjusted
Direct              70,720      62,472      13   %   16   %     286,770      309,472      -7   %   -5  %
Contribution
to Profit
                                                                              
Allocated
Shared              (39,656 )   (47,632 )   -17  %   -15  %     (159,471 )   (178,907 )   -11  %   -9  %
Services and
Admin. Costs
Adjusted
Contribution
to Profit         $ 31,064      14,840      109  %   117  %   $ 127,299      130,565      -3   %   0   %
(after
allocated
Shared
Services and
Admin. Costs)
                    -           -                               -            -
Solutions:
Direct
Contribution      $ 12,811      12,121      6    %   5    %   $ 47,673       36,975       29   %   28  %
to Profit
Restructuring       168         657                             1,787        1,042     
Charges (A)
Adjusted
Direct              12,979      12,778      2    %   1    %     49,460       38,017       30   %   29  %
Contribution
to Profit
                                                                              
Allocated
Shared              (7,086  )   (8,289  )   -15  %   -13  %     (32,851  )   (32,983  )   0    %   0   %
Services and
Admin. Costs
Adjusted
Contribution
to Profit         $ 5,893       4,489       31   %   27   %   $ 16,609       5,034     
(after
allocated
Shared
Services and
Admin. Costs)
                                                                                                    
                                                                                                    
Total
Adjusted
Contribution      $ 117,222     99,701      18   %   16   %   $ 398,085      390,691      2    %   4   %
to Profit
(after
allocated
Shared
Services and
Admin. Costs)
                                                                                                    
Unallocated
Shared
Services and
Admin. Costs:
Unallocated
Shared            $ (52,360 )   (55,978 )   -6   %   -5   %   $ (186,600 )   (194,047 )   -4   %   -1  %
Services and
Admin. Costs
Restructuring
(Credits)           (3,130  )   7,376                           8,023        20,080
Charges (A)
One-time -
Pension             -           -                               8,842        -         
Settlement
(B)
Adjusted
Unallocated
Shared            $ (55,490 )   (48,602 )   14   %   16   %   $ (169,735 )   (173,967 )   -2   %   1   %
Services and
Admin. Costs
                                                                              
Adjusted
Operating         $ 61,732      51,099      21   %   16   %   $ 228,350      216,724      5    %   7   %
Income
                                                                                                    
                                                                                                    
See the accompanying Notes to Unaudited Financial Statements for a description of the adjustment.
 

 
JOHN WILEY & SONS, INC.
SEGMENT REVENUE by PRODUCT/SERVICE
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2017 AND 2016
(in thousands)
                                                                                                
                  Fourth Quarter                             Twelve Months                    
                  Ended April 30,     % of      %            Ended April 30,         % of      %
                                                Change                                         Change
                  2017      2016      Revenue   excl.        2017        2016        Revenue   excl.
                                                FX                                             FX
                                                                        
                                                                                                
RESEARCH
Journal
Revenue
Journal         $ 167,319   171,335   71%       -3%        $ 639,720     622,305     75%       6%
Subscriptions
Author-Funded     8,782     7,370     4%        26%          30,633      25,671      4%        26%
Access
Licensing,
Reprints,         49,775    52,141    21%       1%           164,070     178,802     19%       -3%
Backfiles,
and Other
Total Journal     225,876   230,846   96%       -1%          834,423     826,778     98%       4%
Revenue
                                                                                                
Platform
Services          8,626     -         4%                     19,066      -           2%
(Atypon)
                                                                                                
                                                                                                
Total
Research        $ 234,502   230,846   100%      3%         $ 853,489     826,778     100%      7%
Revenue
                                                                                                
                                                                                                
Publishing
STM and
Professional    $ 75,521    79,242    49%       -2%        $ 291,255     330,984     46%       -9%
Books
Education         33,674    26,656    22%       28%          196,343     229,989     31%       -13%
Books
Total Books
and Reference     109,195   105,898   71%       6%           487,598     560,973     77%       -11%
Material
                                                                                                
                                                                                                
Course
Workflow          18,178    17,160    12%       6%           62,348      58,519      10%       7%
(WileyPLUS)
Online Test
Preparation       10,024    6,643     7%        52%          35,609      28,115      6%        27%
and
Certification
Licensing,
Distribution,     16,351    17,371    11%       -2%          47,894      48,121      8%        3%
Advertising
and Other
                                                                                                
Total
Publishing      $ 153,748   147,072   100%      7%         $ 633,449     695,728     100%      -7%
Revenue
                                                                                                
                                                                                                
Solutions
                                                                                                
Online
Program           30,443    26,715    48%       14%          111,638     96,469      48%       16%
Management
Professional      16,417    15,174    26%       9%           59,868      57,370      26%       5%
Assessment
Corporate         17,091    14,494    27%       21%          60,086      50,692      26%       20%
Learning
                                                                                                
                                                                                                
Total
Solutions       $ 63,951    56,383    100%      14%        $ 231,592     204,531     100%      14%
Revenue
                                                                                                
                                                                                                
                                                                                                
                                                                          
Total Revenue   $ 452,201   434,301             6%         $ 1,718,530   1,727,037             2%
                                                                                                

 
JOHN WILEY & SONS, INC.
UNAUDITED STATEMENTS OF FINANCIAL POSITION
(in thousands)
                                                          
                                               April 30,
                                               2017        2016
                                                            
Current Assets
Cash & cash equivalents                      $ 58,516      363,806
Accounts receivable                            188,679     167,638
Inventories                                    47,852      57,779
Prepaid and other                              64,688      81,456
Total Current Assets                           359,735     670,679
Product Development Assets                     99,275      72,126
Technology, Property and Equipment             252,488     214,770
Intangible Assets                              828,099     877,007
Goodwill                                       982,101     951,663
Income Tax Deposits                            -           62,912
Other Assets                                   84,519      71,939
Total Assets                                   2,606,217   2,921,096
                                                            
Current Liabilities
Accounts and royalties payable                 139,206     166,222
Deferred revenue                               436,235     426,489
Accrued employment costs                       98,185      97,902
Accrued income taxes                           22,222      9,450
Accrued pension liability                      5,776       5,492
Other accrued liabilities                      86,232      76,252
Total Current Liabilities                      787,856     781,807
Long-Term Debt                                 365,000     605,007
Accrued Pension Liability                      214,597     224,170
Deferred Income Tax Liabilities                160,491     189,868
Other Long-Term Liabilities                    75,136      83,138
Shareholders' Equity                           1,003,137   1,037,106
Total Liabilities & Shareholders' Equity     $ 2,606,217   2,921,096
                                                            

JOHN WILEY & SONS, INC.
UNAUDITED STATEMENTS OF FREE CASH FLOW
(in thousands)
                                                                   
                                                                     
                                                       Twelve Months Ended
                                                       April 30,
                                                       2017         2016
Operating Activities:
Net income                                           $ 113,643      145,782
Amortization of intangibles                            49,669       49,764
Amortization of composition costs                      40,209       39,658
Depreciation of technology, property and               66,683       66,427
equipment
Restructuring charges                                  13,355       28,611
Restructuring payments                                 (22,854  )   (29,864  )
Deferred income tax benefit on UK rate change          (2,575   )   (5,859   )
Unfavorable tax settlement                             49,029       -
One-time pension settlement                            8,842        -
Share-based compensation expense                       17,552       16,105
Excess tax benefits from share-based                   (414     )   (1,027   )
compensation
Royalty advances                                       (112,370 )   (110,135 )
Earned royalty advances                                114,647      109,102
Other non-cash charges and credits                     6,298        15,786
Change in deferred revenue                             22,692       66,983
Net change in operating assets and liabilities         (49,905  )   (41,376  )
Cash Provided by Operating Activities                  314,501      349,957
                                                                     
Investments in organic growth:
Additions to technology, property and equipment        (110,700 )   (93,705  )
Book composition and other product development         (37,559  )   (37,272  )
spending
Free Cash Flow less Book Composition and Other         166,242      218,980
Product Development Spending
                                                                     
Other Investing and Financing Activities:
Acquisitions, net of cash                              (154,766 )   (20,418  )
Proceeds from settlement of foreign exchange           60,417       -
forward contract
Repayment of long-term debt                            (923,007 )   (460,085 )
Repayment of short-term debt                           -            (150,000 )
Borrowings of long-term debt                           683,000      415,000
Borrowings of short-term Debt                          -            50,000
Change in book overdrafts                              (214     )   1,725
Cash dividends                                         (71,545  )   (69,896  )
Purchase of treasury shares                            (50,326  )   (69,977  )
Debt issuance costs                                    -            (3,362   )
Proceeds from exercise of stock options and            15,506       (95      )
other
Excess tax benefits from share-based                   414          1,027     
compensation
Cash Used for Investing and Financing Activities       (440,521 )   (306,081 )
                                                                     
Effects of Exchange Rate Changes on Cash               (31,011  )   (6,534   )
                                                                     
Decrease in Cash and Cash Equivalents for Period     $ (305,290 )   (93,635  )
                                                                     
                                                                     
                                                                     
RECONCILIATION TO GAAP PRESENTATION
                                                                     
Investing Activities:
Book composition and other product development       $ (37,559  )   (37,272  )
spending
Additions to technology, property and equipment        (110,700 )   (93,705  )
Proceeds from settlement of foreign exchange           60,417       -
forward contract
Acquisitions, net of cash                              (154,766 )   (20,418  )
Cash Used for Investing Activities                   $ (242,608 )   (151,395 )
                                                                     
Financing Activities:
Cash Used for Investing and Financing Activities     $ (440,521 )   (306,081 )
Excluding:
Acquisitions, net of cash                              (154,766 )   (20,418  )
Proceeds from settlement of FX forward contract        60,417       -         
Cash Used for Financing Activities                   $ (346,172 )   (285,663 )
                                                                     

Free Cash Flow less Composition Spending:
 
The Company provides financial measures referred to as “Free Cash Flow less
Book Composition and Other Product Development Spending.” Free Cash Flow less
Book Composition and Other Product Development Spending is defined as “cash
flow from operating activities, less book composition and other product
development and capital spending.” Management believes this metric provides
additional information to investors to facilitate the comparison of past and
present results. This metric is also used internally by management in
evaluating results. This non-GAAP measure is not intended to replace the
financial results reported in accordance with US Generally Accepted Accounting
Principles.

View source version on businesswire.com:
http://www.businesswire.com/news/home/20170613005509/en/

Contact:

Investors:
John Wiley & Sons, Inc.
Brian Campbell, 201-748-6874
Investor Relations
brian.campbell@wiley.com
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