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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
June 13, 2024
(Date of Report)
(Date of earliest event reported)
JOHN WILEY & SONS, INC.
(Exact name of registrant as specified in its charter)
New York
(State or other jurisdiction of incorporation)
| | | | | | | | | | | | | | |
| 001-11507 | | 13-5593032 | |
| | | | |
| (Commission File Number) | | (IRS Employer Identification No.) | |
| 111 River Street, Hoboken New Jersey | | 07030 | |
| | | | |
| (Address of principal executive offices) | | (Zip Code) | |
| Registrant’s telephone number, including area code: | | (201) 748-6000 | |
| | | | |
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.
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☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| Class A Common Stock, par value $1.00 per share | | WLY | | New York Stock Exchange |
| Class B Common Stock, par value $1.00 per share | | WLYB | | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02 Results of Operations and Financial Condition.
On June 13, 2024, John Wiley & Sons Inc., a New York corporation (the “Company”), issued a press release announcing the Company’s financial results for the fourth quarter and fiscal year ended April 30, 2024. A copy of the Company’s press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On June 13, 2024, the Company held its fourth quarter fiscal 2024 earnings conference call. The Company is furnishing as Exhibit 99.2 to this Current Report on Form 8-K the presentation materials that were provided and discussed during the earnings conference call.
The information in these Items 2.02 and 7.01, including the exhibits hereto, (x) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section and (y) shall not be incorporated by reference into any filing of the Company with the Securities and Exchange Commission, whether made before or after the date hereof, regardless of any general incorporation language in such filings (unless the Company specifically states that the information or exhibits in this particular report are incorporated by reference). The furnishing of the information set forth in this report is not intended to, and does not, constitute a determination or admission as to the materiality or completeness of such information.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description
99.1 - Press release dated June 13, 2024 “Wiley Reports Fourth Quarter and Fiscal Year 2024 Results.” 99.2 - Presentation materials dated June 13, 2024. 104 - Cover Page Interactive Data File (embedded within the Inline XBRL document).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | | | | | | | | | | | | | |
| JOHN WILEY & SONS, INC. | |
| (Registrant) | |
| | | | |
| | | | |
| | By | /s/ Christina Van Tassell | |
| | | Christina Van Tassell | |
| | | Executive Vice President and
Chief Financial Officer | |
| | | | |
| | | | |
| | Dated: June 13, 2024 | |
Wiley Reports Fourth Quarter and Fiscal Year 2024 Results
Exceeds FY24 earnings guidance and reports confident FY25 outlook and GenAI momentum
June 13, 2024 - Hoboken, NJ – Wiley (NYSE: WLY) today reported results for the fourth quarter and fiscal year ended April 30, 2024.
HIGHLIGHTS
•FY24 Adjusted EBITDA and Adjusted EPS guidance exceeded; Adjusted Revenue in higher end of range
•GenAI content rights project completed this quarter with large tech company; another executed GenAI project with second large tech company to be realized in FY25
•Advancing Value Creation Plan with 2 of 3 non-core divestitures closed and $90 million of $130 million run-rate cost savings actioned
•FY25 growth outlook driven by Research & Learning momentum and accelerated cost savings
MANAGEMENT COMMENTARY
“We finished the year strong and head into Fiscal 2025 with full confidence in our Research trajectory, GenAI momentum, and profit and performance outlook,” said Matthew Kissner, Interim President and CEO. “We are seeing robust demand to publish and significant output acceleration in Research as well as continued outperformance in Learning. On top of this, we’re seeing significant interest in leveraging our authoritative content to train AI and machine learning models. Finally, we’ve executed on our stated commitments with discipline and speed, enabling us to exceed our earnings guidance and accelerate our cost savings program, setting us up well for continued margin expansion and strong cash generation ahead.”
FOURTH QUARTER SUMMARY
Fiscal Year 2024 was a transition year for Wiley as the Company divested non-core assets, restructured and realigned the organization, and recorded multiple non-cash impairments. Results reflect this activity.
•GAAP Results (including Held for Sale or Sold Assets): Revenue of $468 million (-11%), Operating income of $69 million (-17%), and EPS of $0.46 (-$0.76).
•Adjusted Results at Constant Currency (excluding Held for Sale or Sold Assets): Revenue of $441 million (+4%), Adjusted EBITDA of $125 million (+7%), and Adjusted EPS of $1.21 (+2%).
FULL YEAR SUMMARY
•GAAP Results: Revenue of $1,873 million (-7%), Operating income of $52 million (-6%), and EPS loss of $3.65 (-$3.96).
•Adjusted Results at Constant Currency: Revenue of $1,617 million (-1%), Adjusted EBITDA of $369 million (-3%), and Adjusted EPS of $2.78 (-19%).
•Cash from Operations of $208 million (-$69 million) and Free Cash Flow of $114 million (-$59 million) mainly due to lower cash earnings and higher restructuring payments.
For GAAP purposes, Wiley’s reporting structure consists of three segments: (1) Research, (2) Learning, and (3) Held for Sale or Sold. Adjusted numbers exclude our Held for Sale or Sold reporting segment, as well as restructuring costs and other unusual items. See the reconciliation provided in the tables that follow.
Research
•Fourth Quarter Revenue of $271 million was down 3% as reported and at constant currency, mainly due to timing and declines in ancillary print and licensing revenue in Research Publishing, and soft market conditions in advertising and recruiting in Research Solutions. Full Year Revenue of $1,043 million was down 3% as reported, or 4% at constant currency, mainly due to the full year Hindawi impact. Excluding Hindawi, Research revenue for the year was flat.
•Fourth Quarter Adjusted EBITDA of $94 million was down 11% as reported and 12% at constant currency due to lower revenue and lower incentive compensation costs in the prior year due to underperformance. Adjusted EBITDA margin for the quarter was 34.6%. Full Year Adjusted EBITDA of $331 million was down 13% at constant currency mainly driven by revenue performance and the incentive compensation swing. Excluding Hindawi, Research Adjusted EBITDA for the year was down 4%. Adjusted EBITDA margin for the year was 31.8%.
Learning
•Fourth Quarter Revenue of $170 million was up 18% as reported and at constant currency driven by a $23 million content rights project for training GenAI large language models and continued growth in Academic content and courseware. Excluding the one-time GenAI project, Q4 Learning revenue rose 2% on a constant currency basis. Full Year Revenue of $574 million was up 5% as reported and at constant currency due to outperformance in digital content and courseware in Academic and the GenAI content rights project in both Academic and Professional. Excluding the one-time project, full year Learning revenue rose 1% on a constant currency basis.
•Fourth Quarter Adjusted EBITDA of $74 million was up 54% as reported and at constant currency due to the GenAI content rights project and restructuring savings. Adjusted EBITDA margin for the quarter was 43.5% compared to 33.5% in the prior year period. Full Year Adjusted EBITDA of $200 million was up 27% at constant currency mainly due to revenue performance and restructuring savings. Full Year Adjusted EBITDA margin of 34.9% compared to 28.9% in the prior year period.
Corporate Expense Category
•Fourth Quarter Adjusted Corporate Expenses of $43 million on an Adjusted EBITDA basis was up 15% over prior year at constant currency, driven by higher professional fees. Full Year Adjusted Corporate Expenses of $163 million was up 4% primarily due to higher incentive compensation.
Businesses Held for Sale or Sold (HFS)
Our Held for Sale or Sold segment reflects the performance of those businesses for the periods owned. Wiley University Services was sold on January 1, 2024. The sale of Wiley Edge, with the exception of its India operation, was completed on May 31, 2024. The sale of Wiley Edge's India operation will be finalized later in calendar year 2024. See accompanying financial tables for Q4 and FY24 performance.
EPS
•Fourth Quarter GAAP EPS of $0.46 compared to $1.22 in the prior year period primarily due to a valuation allowance on US deferred tax assets, restructuring charges, and a net increase in the loss on the sale of University Services. Fourth Quarter Adjusted EPS of $1.21 was up 2% at constant currency due to revenue performance partially offset by tech write-offs as part of our legacy decommissioning.
•Full Year GAAP EPS loss of $3.65 compared to +$0.31 in the prior year period primarily due to non-cash impairments related to held for sale or sold assets and losses on sale, as well as higher restructuring charges. Full Year Adjusted EPS of $2.78 was down 19% impacted by lower Adjusted Operating Income, higher interest and tax expense, and higher pension expense.
Balance Sheet, Cash Flow, and Capital Allocation
•Net Debt-to-EBITDA Ratio (Trailing Twelve Months) at quarter end was 1.7 compared to 1.5 in the year-ago period.
•Net Cash Provided by Operating Activities (full year) was $208 million compared to $277 million in the prior year period due to lower cash earnings and higher restructuring payments.
•Free Cash Flow less Product Development Spending (full year) was $114 million compared to $173 million in the prior year period due to lower cash provided by operating activities and higher restructuring and interest payments partially offset by lower Capex. Capex of $93 million was below prior year by $11 million. Note, Wiley does not provide an adjusted Free Cash Flow metric; results include held for sale or sold businesses.
•Returns to Shareholders (full year): Wiley allocated $122 million toward dividends and share repurchases, up from $112 million in the prior year, with $45 million used to acquire 1.3 million shares at an average cost per share of $34.71. This compares to 832,000 shares repurchased in the prior year period. In June 2023, Wiley raised its dividend for the 30th consecutive year.
FISCAL YEAR 2025 OUTLOOK
| | | | | | | | |
Metric ($millions, except EPS) | Fiscal 2024 Results Ex-Divestitures | Fiscal 2025 Outlook Ex-Divestitures |
| Adj. Revenue* | $1,617 | $1,650 to $1,690 |
| Research | $1,043 | Low to mid-single digit growth |
| Learning | $574 | Low-single digit growth |
| Adj. EBITDA* | $369 | $385 to $410 |
| Adj. EPS* | $2.78 | $3.25 to $3.60 |
| Free Cash Flow | $114 | Approx. $125 |
*Excludes held for sale or sold assets
•Adjusted Revenue – growth outlook driven by favorable trends and key indicators in Research Publishing, notably open access and institutional models; new business in Research Solutions; and strong momentum in digital courseware and assessments in Learning. Research is entering FY25 with strong leading indicators, including 15% submissions growth and mid-single digit output growth in Q4.
•Adjusted EBITDA – margin expansion outlook in line with previous targets driven by revenue growth and cost savings while reflecting reinvestments to scale and optimize Research, modernize infrastructure and expand GenAI content licensing, capabilities, and product development.
•Adjusted EPS – significant growth expectation driven by higher expected Adjusted Operating Income and accrued interest income from divestitures offsetting higher interest and tax expense.
•Free Cash Flow – growth outlook driven by lower restructuring payments and favorable working capital partially offset by higher capex and year-over-year swing in incentive compensation payments. The Company expects capex of $130 million compared to $93 million in Fiscal 2024 driven by the acceleration of its Research Publishing platform work and infrastructure modernization.
The Company remains on track with its Fiscal 2026 targets.
EARNINGS CONFERENCE CALL
Scheduled for today, June 13 at 10:00 am (ET). Access webcast at Investor Relations at investors.wiley.com, or directly at https://events.q4inc.com/attendee/333300189. U.S. callers, please dial (888) 210-3346 and enter the participant code 2521217#. International callers, please dial (646) 960-0253 and enter the participant code 2521217#.
ABOUT WILEY
Wiley (NYSE: WLY) is one of the world’s largest publishers and a trusted leader in research and learning. Our industry-leading content, services, platforms, and knowledge networks are tailored to meet the evolving needs of our customers and partners, including researchers, students, instructors, professionals, institutions, and corporations. We enable knowledge-seekers to transform today’s biggest obstacles into tomorrow’s brightest opportunities. For more than two centuries, Wiley has been delivering on its timeless mission to unlock human potential. Visit us at Wiley.com. Follow us on Facebook, Twitter, LinkedIn and Instagram.
NON-GAAP FINANCIAL MEASURES
Wiley provides non-GAAP financial measures and performance results such as “Adjusted EPS,” “Adjusted Operating Income,” “Adjusted EBITDA,” “Adjusted Income before Taxes,” “Adjusted Income Tax Provision,” “Adjusted Effective Income Tax Rate,” “Free Cash Flow less Product Development Spending,” “organic revenue,” “Adjusted Revenue,” and results on a Constant Currency basis to assess underlying business performance and trends. Management believes non-GAAP financial measures, which exclude the impact of restructuring charges and credits and certain other items, and the impact of divestitures and acquisitions provide a useful comparable basis to analyze operating results and earnings. See the reconciliations of non-GAAP financial measures and explanations of the uses of non-GAAP measures in the supplementary information. We have not provided our 2025 outlook for the most directly comparable U.S. GAAP financial measures, as they are not available without unreasonable effort due to the high variability, complexity, and low visibility with respect to certain items, including restructuring charges and credits, gains and losses on foreign currency, and other gains and losses. These items are uncertain, depend on various factors, and could be material to our consolidated results computed in accordance with U.S. GAAP.
FORWARD-LOOKING STATEMENTS
This release contains certain forward-looking statements concerning the Company's operations, performance, and financial condition. Reliance should not be placed on forward-looking statements, as actual results may differ materially from those in any forward-looking statements. Any such forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to uncertainties and contingencies, many of which are beyond the control of the Company and are subject to change based on many important factors. Such factors include, but are not limited to: (i) the level of investment in new technologies and products; (ii) subscriber renewal rates for the Company's journals; (iii) the financial stability and liquidity of journal subscription agents; (iv) the consolidation of book wholesalers and retail accounts; (v) the market position and financial stability of key online retailers; (vi) the seasonal nature of the Company's educational business and the impact of the used book market; (vii) worldwide economic and political conditions; (viii) the Company's ability to protect its copyrights and other intellectual property worldwide (ix) the ability of the Company to successfully integrate acquired operations and realize expected opportunities; (x) the ability to realize operating savings over time and in fiscal year 2025 in connection with our multiyear Global Restructuring Program and planned 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; (xii) cyber risk and the failure to maintain the integrity of our operational or security systems or infrastructure, or those of third parties with which we do business; (xiii) as a result of acquisitions, we have and may record a significant amount of goodwill and other identifiable intangible assets and we may never realize the full carrying value of these assets; and (xiii) 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
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1) (2)
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME (LOSS)
(Dollars in thousands, except per share information)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
April 30, | | Year Ended
April 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| Revenue, net | $ | 468,461 | | | $ | 526,127 | | | $ | 1,872,987 | | | $ | 2,019,900 | |
| Costs and expenses: | | | | | | | |
| Cost of sales | 123,345 | | | 174,157 | | | 579,722 | | | 692,541 | |
| Operating and administrative expenses | 252,062 | | | 245,821 | | | 1,013,520 | | | 1,037,399 | |
Impairment of goodwill (3) | — | | | — | | | 108,449 | | | 99,800 | |
| Restructuring and related charges | 11,008 | | | 4,185 | | | 63,041 | | | 49,389 | |
| Amortization of intangible assets | 13,264 | | | 19,492 | | | 55,994 | | | 84,881 | |
| Total costs and expenses | 399,679 | | | 443,655 | | | 1,820,726 | | | 1,964,010 | |
| | | | | | | |
| Operating income | 68,782 | | | 82,472 | | | 52,261 | | | 55,890 | |
| As a % of revenue | 14.7 | % | | 15.7 | % | | 2.8 | % | | 2.8 | % |
| | | | | | | |
| Interest expense | (11,411) | | | (10,560) | | | (49,003) | | | (37,745) | |
| Foreign exchange transaction gains (losses) | 530 | | | 611 | | | (2,959) | | | 894 | |
(Losses) gains on sale of businesses and certain assets and impairment charges related to assets held-for-sale (3) | (3,642) | | | 10,177 | | | (183,389) | | | 10,177 | |
| Other (expense) income, net | (257) | | | 2,908 | | | (3,957) | | | 3,884 | |
| | | | | | | |
| Income (loss) before taxes | 54,002 | | | 85,608 | | | (187,047) | | | 33,100 | |
| | | | | | | |
| Provision for income taxes | 28,737 | | | 17,264 | | | 13,272 | | | 15,867 | |
| Effective tax rate | 53.2 | % | | 20.2 | % | | -7.1 | % | | 47.9 | % |
| Net income (loss) | $ | 25,265 | | | $ | 68,344 | | | $ | (200,319) | | | $ | 17,233 | |
| As a % of revenue | 5.4 | % | | 13.0 | % | | -10.7 | % | | 0.9 | % |
| | | | | | | |
| Earnings (loss) per share | | | | | | | |
| Basic | $ | 0.46 | | | $ | 1.23 | | | $ | (3.65) | | | $ | 0.31 | |
Diluted (4) | $ | 0.46 | | | $ | 1.22 | | | $ | (3.65) | | | $ | 0.31 | |
| | | | | | | |
| Weighted average number of common shares outstanding | | | | | | | |
| Basic | 54,591 | | | 55,355 | | | 54,945 | | | 55,558 | |
Diluted (4) | 55,356 | | | 56,137 | | | 54,945 | | | 56,355 | |
| | | | | | | |
| | |
Notes: |
| (1) The supplementary information included in this press release for the three months and year ended April 30, 2024 is preliminary and subject to change prior to the filing of our upcoming Annual Report on Form 10-K 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 costs to sell prior to its disposition. On January 1, 2024 we completed the sale of University Services. On January 8, 2024 we entered into an agreement to sell our Wiley Edge business, which closed on May 31, 2024, with the exception of its India operations. The sale of Wiley Edge's India operation will be finalized later in calendar year 2024. We expect to complete the sale of CrossKnowledge in the second 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 $11.4 million in the year ended April 30, 2024. After the realignment, we concluded that the fair value of the CrossKnowledge reporting unit within the Held for Sale or Sold segment was below its carrying value which resulted in a pretax noncash goodwill impairment of $15.3 million in the year ended April 30, 2024.
As a result of signing an agreement to sell Wiley Edge and the decrease in the fair value of the business which was impacted by a decline in placements in the third quarter of fiscal year 2024, 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 $81.7 million in the year ended April 30, 2024.
In the three months ended April 30, 2024, there was an increase in the pretax loss on the sale of University Services after the closing of approximately $5.6 million, which resulted in a total pretax loss of $107.0 million (net of tax loss of $80.5 million) in the year ended April 30, 2024. We also completed the sale of our Tuition Manager business previously in our Held for Sale or Sold segment, which resulted in a total net pretax loss of $1.5 million (net of tax loss of $1.1 million) in the year ended April 30, 2024.
Wiley Edge and CrossKnowledge continue to be reported as held-for-sale. We recorded a held-for-sale pretax impairment release of $2.0 million and charges of $74.8 million in the three months and year ended April 30, 2024, respectively, related to Wiley Edge and CrossKnowledge. The total impairment charge for Wiley Edge in the year ended April 30, 2024 was $19.4 million, which includes a release of $1.2 million in the three months ended April 30, 2024. The total impairment charge for CrossKnowledge in the year ended April 30, 2024 was $55.4 million, which includes a release of $0.8 million in the three months ended April 30, 2024. |
|
| (4) In calculating diluted net loss per common share for the year ended April 30, 2024, our diluted weighted average number of common shares outstanding excludes the effect of unvested restricted stock units and other stock awards as the effect was antidilutive. This occurs when a US GAAP net loss is reported and the effect of using dilutive shares is antidilutive. |
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1) (2)
RECONCILIATION OF US GAAP MEASURES to NON-GAAP MEASURES
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Reconciliation of US GAAP Earnings (Loss) per Share to Non-GAAP Adjusted EPS |
| | Three Months Ended
April 30, | | Year Ended April 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
| US GAAP Income (Loss) Per Share - Diluted | $ | 0.46 | | | $ | 1.22 | | | $ | (3.65) | | | $ | 0.31 | |
| Adjustments: | | | | | | | |
| Impairment of goodwill | — | | | 0.09 | | | 1.90 | | | 1.77 | |
Legal settlement (3) | — | | | — | | | — | | | 0.05 | |
Pension income related to the wind up of the Russia plan (4) | — | | | (0.02) | | | — | | | (0.02) | |
| Restructuring and related charges | 0.16 | | | 0.06 | | | 0.85 | | | 0.66 | |
Foreign exchange losses (gains) on intercompany transactions, including the write off of certain cumulative translation adjustments (4) | 0.01 | | | (0.01) | | | 0.02 | | | 0.01 | |
Amortization of acquired intangible assets (5) | 0.02 | | | 0.26 | | | 0.68 | | | 1.21 | |
Losses (gains) on sale of businesses and certain assets and impairment charges related to assets held-for-sale (6) | 0.04 | | | (0.11) | | | 2.81 | | | (0.11) | |
Held for Sale or Sold segment Adjusted Net Income (6) | (0.03) | | | (0.26) | | | (0.42) | | | (0.36) | |
| Income tax adjustments | 0.55 | | | (0.04) | | | 0.54 | | | (0.04) | |
EPS impact of using weighted-average dilutive shares for adjusted EPS calculation (7) | — | | | — | | | 0.05 | | | — | |
| Non-GAAP Adjusted Earnings Per Share - Diluted | $ | 1.21 | | | $ | 1.19 | | | $ | 2.78 | | | $ | 3.48 | |
| | | | | | | |
| Reconciliation of US GAAP Income (Loss) Before Taxes to Non-GAAP Adjusted Income Before Taxes |
(amounts in thousands) | Three Months Ended
April 30, | | Year Ended April 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| US GAAP Income (Loss) Before Taxes | $ | 54,002 | | | $ | 85,608 | | | $ | (187,047) | | | $ | 33,100 | |
| Pretax Impact of Adjustments: | | | | | | | |
| Impairment of goodwill | — | | | — | | | 108,449 | | | 99,800 | |
Legal settlement (3) | — | | | — | | | — | | | 3,671 | |
Pension income related to the wind up of the Russia plan (4) | — | | | (1,750) | | | — | | | (1,750) | |
| Restructuring and related charges | 11,008 | | | 4,185 | | | 63,041 | | | 49,389 | |
Foreign exchange losses (gains) on intercompany transactions, including the write off of certain cumulative translation adjustments (4) | 815 | | | (449) | | | 1,903 | | | 457 | |
Amortization of acquired intangible assets (5) | 13,324 | | | 20,566 | | | 57,874 | | | 89,177 | |
Losses (gains) on sale of businesses and certain assets and impairment charges related to assets held-for-sale (6) | 3,641 | | | (10,177) | | | 183,389 | | | (10,177) | |
Held for Sale or Sold segment Adjusted Income Before Taxes (6) | (2,408) | | | (17,974) | | | (30,661) | | | (26,094) | |
| Non-GAAP Adjusted Income Before Taxes | $ | 80,382 | | | $ | 80,009 | | | $ | 196,948 | | | $ | 237,573 | |
| | | | | | | |
| Reconciliation of US GAAP Income Tax Provision to Non-GAAP Adjusted Income Tax Provision, including our US GAAP Effective Tax Rate and our Non-GAAP Adjusted Effective Tax Rate |
| | | | | | | |
| US GAAP Income Tax Provision | $ | 28,737 | | | $ | 17,264 | | | $ | 13,272 | | | $ | 15,867 | |
Income Tax Impact of Adjustments (8) | | | | | | | |
| Impairment of goodwill | 255 | | | (4,857) | | | 2,953 | | | — | |
Legal settlement (3) | — | | | — | | | — | | | 716 | |
Pension income related to the wind up of the Russia plan (4) | — | | | (437) | | | — | | | (437) | |
| Restructuring and related charges | 2,425 | | | 992 | | | 15,662 | | | 12,151 | |
Foreign exchange losses (gains) on intercompany transactions, including the write off of certain cumulative translation adjustments (4) | 471 | | | (142) | | | 582 | | | 132 | |
Amortization of acquired intangible assets (5) | 11,459 | | | 5,372 | | | 20,127 | | | 20,183 | |
Losses (gains) on sale of businesses and certain assets and impairment charges related to assets held-for-sale (6) | 1,197 | | | (3,860) | | | 26,908 | | | (3,860) | |
Held for Sale or Sold segment Adjusted Tax Provision (6) | (622) | | | (3,555) | | | (7,140) | | | (5,533) | |
| Income Tax Adjustments: | | | | | | | |
Impact of increase in UK statutory rate on deferred tax balances (9) | — | | | 2,370 | | | — | | | 2,370 | |
Impact of valuation allowance (10) | (30,249) | | | — | | | (30,249) | | | — | |
| Non-GAAP Adjusted Income Tax Provision | $ | 13,673 | | | $ | 13,147 | | | $ | 42,115 | | | $ | 41,589 | |
| | | | | | | |
| US GAAP Effective Tax Rate | 53.2 | % | | 20.2 | % | | -7.1 | % | | 47.9 | % |
| Non-GAAP Adjusted Effective Tax Rate | 17.0 | % | | 16.4 | % | | 21.4 | % | | 17.5 | % |
| | | | | |
Notes: |
| (1) See Explanation of Usage of Non-GAAP Performance Measures included in this supplementary information for additional details on the reasons why management believes presentation of each non-GAAP performance measure provides useful information to investors. The supplementary information included in this press release for the three months and year ended April 30, 2024 is preliminary and subject to change prior to the filing of our upcoming Annual Report on Form 10-K 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 $3.7 million. |
|
| (4) In fiscal year 2023 due to the closure of our operations in Russia, the Russia entity was deemed substantially liquidated. In the three months and year ended April 30, 2024, we wrote off an additional $0.2 million and $1.0 million, respectively, of cumulative translation adjustments in earnings. In the three months and year ended April 30, 2023, we wrote off $1.1 million of cumulative translation adjustments in earnings. This amount is reflected in Foreign exchange transaction gains (losses) on our Condensed Consolidated Statements of Net Income (Loss). In addition, in the three months and year ended April 30, 2023, there was a curtailment and settlement credit due to the wind up of the Russia Pension Plan of $1.8 million which is reflected in Other (expense) income, net on our Condensed Consolidated Statements of Net Income (Loss). |
|
| (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 Income (Loss). It also includes the amortization of acquired product development assets, which is reflected in Cost of sales in the Condensed Consolidated Statements of Net Income (Loss). |
|
(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 costs to sell. The total impairment charge for Wiley Edge in the year ended April 30, 2024 was $19.4 million, which includes a release of $1.2 million in the three months ended April 30, 2024. The total impairment charge for CrossKnowledge in the year ended April 30, 2024 was $55.4 million, which includes a release of $0.8 million in the three months ended April 30, 2024.
In the three months ended April 30, 2024, there was an increase in the pretax loss on the sale of University Services after the closing of approximately $5.6 million, which resulted in a total pretax loss of $107.0 million (net of tax loss of $80.5 million) in the year ended April 30, 2024. We also completed the sale of our Tuition Manager business previously in our Held for Sale or Sold segment, which resulted in a total net pretax loss of $1.5 million (net of tax loss of $1.1 million) in the year ended April 30, 2024.
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 (55.7 million for the year ended April 30, 2024) 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 months and year ended April 30, 2024 substantially all of the tax impact was from deferred taxes. For the three months ended April 30, 2023, the tax impact was $4.3 million of current tax benefit and $0.1 million of deferred taxes. For the year ended April 30, 2023, substantially all of the tax impact was from deferred taxes. |
|
| (9) In the three months ended July 31, 2021, the UK enacted legislation that increased its statutory rate from 19% to 25% effective April 1, 2023. For the three months and year ended April 30, 2023, we recorded a $2.4 million noncash deferred tax benefit related to pensions due to the UK statutory rate change. These adjustments impacted deferred taxes. |
|
| (10) In fiscal year 2024, due to temporary differences in the US, our deferred taxes reversed from a deferred tax liability position to a deferred tax asset position. Due to losses in the US resulting from impairments, restructuring, and acceleration of depreciation expense on capitalized software, we concluded it was more-likely-than-not that all or a portion of our deferred tax asset may not be realized. As a result, we increased the valuation allowance by $30.2 million. |
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
RECONCILIATION OF US GAAP NET INCOME (LOSS) TO NON-GAAP EBITDA AND ADJUSTED EBITDA
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
April 30, | | Year Ended
April 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| Net Income (Loss) | $ | 25,265 | | | $ | 68,344 | | | $ | (200,319) | | | $ | 17,233 | |
| Interest expense | 11,411 | | | 10,560 | | | 49,003 | | | 37,745 | |
| Provision for income taxes | 28,737 | | | 17,264 | | | 13,272 | | | 15,867 | |
| Depreciation and amortization | 47,613 | | | 50,111 | | | 176,989 | | | 213,253 | |
| Non-GAAP EBITDA | 113,026 | | | 146,279 | | | 38,945 | | | 284,098 | |
| Impairment of goodwill | — | | | — | | | 108,449 | | | 99,800 | |
| Legal settlement | — | | | — | | | — | | | 3,671 | |
| Restructuring and related charges | 11,008 | | | 4,185 | | | 63,041 | | | 49,389 | |
| Foreign exchange (gains) losses, including the write off of certain cumulative translation adjustments | (530) | | | (611) | | | 2,959 | | | (894) | |
| Losses (gains) on sale of businesses and certain assets and impairment charges related to assets held-for-sale | 3,642 | | | (10,177) | | | 183,389 | | | (10,177) | |
| Other expense (income), net | 257 | | | (2,908) | | | 3,957 | | | (3,884) | |
Held for Sale or Sold segment Adjusted EBITDA (2) | (2,409) | | | (19,698) | | | (32,148) | | | (42,677) | |
| Non-GAAP Adjusted EBITDA | $ | 124,994 | | | $ | 117,070 | | | $ | 368,592 | | | $ | 379,326 | |
| Adjusted EBITDA Margin | 28.3 | % | | 27.6 | % | | 22.8 | % | | 23.3 | % |
| | |
Notes: |
(1) See Explanation of Usage of Non-GAAP Performance Measures included in this supplementary information for additional details on the reasons why management believes presentation of each non-GAAP performance measure provides useful information to investors. The supplementary information included in this press release for the three months and year ended April 30, 2024 is preliminary and subject to change prior to the filing of our upcoming Annual Report on Form 10-K 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
April 30, | | Favorable (Unfavorable) | | | |
| 2024 | | 2023 (3) | | Reported | | Constant
Currency | | | |
| Research: | | | | | | | | | | |
| Revenue, net | | | | | | | | | | |
| Research Publishing | $ | 233,455 | | | $ | 240,889 | | | -3 | % | | -3 | % | | | |
| Research Solutions | 37,577 | | | 39,550 | | | -5 | % | | -5 | % | | | |
| Total Revenue, net | $ | 271,032 | | | $ | 280,439 | | | -3 | % | | -3 | % | | | |
| | | | | | | | | | |
| Non-GAAP Adjusted Operating Income | $ | 68,282 | | | $ | 83,245 | | | -18 | % | | -18 | % | | | |
| Depreciation and amortization | 25,513 | | | 22,700 | | | -12 | % | | -12 | % | | | |
| Non-GAAP Adjusted EBITDA | $ | 93,795 | | | $ | 105,945 | | | -11 | % | | -12 | % | | | |
| Adjusted EBITDA margin | 34.6 | % | | 37.8 | % | | | | | | | |
| | | | | | | | | | |
| Learning: | | | | | | | | | | |
| Revenue, net | | | | | | | | | | |
| Academic | $ | 98,908 | | | $ | 80,807 | | | 22 | % | | 22 | % | | | |
| Professional | 71,237 | | | 63,049 | | | 13 | % | | 13 | % | | | |
| Total Revenue, net | $ | 170,145 | | | $ | 143,856 | | | 18 | % | | 18 | % | | | |
| | | | | | | | | | |
| Non-GAAP Adjusted Operating Income | $ | 57,682 | | | $ | 32,915 | | | 75 | % | | 75 | % | | | |
| Depreciation and amortization | 16,358 | | | 15,253 | | | -7 | % | | -7 | % | | | |
| Non-GAAP Adjusted EBITDA | $ | 74,040 | | | $ | 48,168 | | | 54 | % | | 54 | % | | | |
| Adjusted EBITDA margin | 43.5 | % | | 33.5 | % | | | | | | | |
| | | | | | | | | | |
| Held for Sale or Sold: | | | | | | | | | | |
| Total Revenue, net | $ | 27,284 | | | $ | 101,832 | | | -73 | % | | -74 | % | | | |
| | | | | | | | | | |
| Non-GAAP Adjusted Operating Income | $ | 2,409 | | | $ | 11,997 | | | -80 | % | | -84 | % | | | |
| Depreciation and amortization | — | | | 7,701 | | | # | | # | | | |
| Non-GAAP Adjusted EBITDA | $ | 2,409 | | | $ | 19,698 | | | -88 | % | | -90 | % | | | |
| Adjusted EBITDA margin | 8.8 | % | | 19.3 | % | | | | | | | |
| | | | | | | | | | |
| Non-GAAP Adjusted Corporate Expenses | $ | (48,583) | | | $ | (41,500) | | | -17 | % | | -17 | % | | | |
| Depreciation and amortization | 5,742 | | | 4,457 | | | -29 | % | | -29 | % | | | |
| Non-GAAP Adjusted EBITDA | $ | (42,841) | | | $ | (37,043) | | | -16 | % | | -15 | % | | | |
| | | | | | | | | | |
| Consolidated Results: | | | | | | | | | | |
| Revenue, net | $ | 468,461 | | | $ | 526,127 | | | -11 | % | | -11 | % | | | |
Less: Held for Sale or Sold Segment (4) | (27,284) | | | (101,832) | | | -73 | % | | -74 | % | | | |
| Adjusted Revenue, net | $ | 441,177 | | | $ | 424,295 | | | 4 | % | | 4 | % | | | |
| | | | | | | | | | |
| Operating Income | $ | 68,782 | | | $ | 82,472 | | | 17 | % | | 17 | % | | | |
| Adjustments: | | | | | | | | | | |
| Restructuring charges | 11,008 | | | 4,185 | | | # | | # | | | |
Held for Sale or Sold Segment Adjusted Operating Income (4) | (2,409) | | | (11,997) | | | -80 | % | | 76 | % | | | |
| Non-GAAP Adjusted Operating Income | $ | 77,381 | | | $ | 74,660 | | | 4 | % | | 4 | % | | | |
| Depreciation and amortization | 47,613 | | | 50,111 | | | 5 | % | | 5 | % | | | |
Less: Held for Sale or Sold Segment depreciation and amortization (4) | — | | | (7,701) | | | # | | # | | | |
| Non-GAAP Adjusted EBITDA | $ | 124,994 | | | $ | 117,070 | | | 7 | % | | 7 | % | | | |
| Adjusted EBITDA margin | 28.3 | % | | 27.6 | % | | | | | | | |
| | |
Notes: |
| (1) The supplementary information included in this press release for the three months and year ended April 30, 2024 is preliminary and subject to change prior to the filing of our upcoming Annual Report on Form 10-K 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 recast to the new segment presentation. There were no changes to our consolidated financial results. |
|
| (4) 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. |
|
| (5) In the three months ended January 31, 2023, we settled a litigation matter related to consideration for a previous acquisition for $3.7 million. |
|
| (6) We discontinued use of the mthree trademark that resulted in a change in the useful life and accelerated amortization expense of $4.6 million in the three months ended July 31, 2022. |
|
| # Variance greater than 100% |
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1) (2) (3)
SEGMENT RESULTS
(in thousands)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| | % Change |
| Year Ended
April 30, | | Favorable (Unfavorable) |
| 2024 | | 2023 (3) | | Reported | | Constant
Currency |
| Research: | | | | | | | |
| Revenue, net | | | | | | | |
| Research Publishing | $ | 892,784 | | | $ | 926,773 | | | -4 | % | | -5 | % |
| Research Solutions | 149,921 | | | 153,538 | | | -2 | % | | -3 | % |
| Total Revenue, net | $ | 1,042,705 | | | $ | 1,080,311 | | | -3 | % | | -4 | % |
| | | | | | | |
| Non-GAAP Adjusted Operating Income | $ | 237,763 | | | $ | 283,984 | | | -16 | % | | -16 | % |
| Depreciation and amortization | 93,422 | | | 93,008 | | | 0 | % | | 0 | % |
| Non-GAAP Adjusted EBITDA | $ | 331,185 | | | $ | 376,992 | | | -12 | % | | -13 | % |
| Adjusted EBITDA margin | 31.8 | % | | 34.9 | % | | | | |
| | | | | | | |
| Learning: | | | | | | | |
| Revenue, net | | | | | | | |
| Academic | $ | 323,541 | | | $ | 304,633 | | | 6 | % | | 6 | % |
| Professional | 251,198 | | | 241,762 | | | 4 | % | | 3 | % |
| Total Revenue, net | $ | 574,739 | | | $ | 546,395 | | | 5 | % | | 5 | % |
| | | | | | | |
| Non-GAAP Adjusted Operating Income | $ | 142,733 | | | $ | 100,100 | | | 43 | % | | 43 | % |
| Depreciation and amortization | 57,696 | | | 57,698 | | | 0 | % | | 0 | % |
| Non-GAAP Adjusted EBITDA | $ | 200,429 | | | $ | 157,798 | | | 27 | % | | 27 | % |
| Adjusted EBITDA margin | 34.9 | % | | 28.9 | % | | | | |
| | | | | | | |
| Held for Sale or Sold: | | | | | | | |
| Total Revenue, net | $ | 255,543 | | | $ | 393,194 | | | -35 | % | | -36 | % |
| | | | | | | |
| Non-GAAP Adjusted Operating Income | $ | 28,711 | | | $ | 1,186 | | | # | | # |
| Depreciation and amortization | 3,437 | | | 41,491 | | | 92 | % | | 92 | % |
| Non-GAAP Adjusted EBITDA | $ | 32,148 | | | $ | 42,677 | | | -25 | % | | -27 | % |
| Adjusted EBITDA margin | 12.6 | % | | 10.9 | % | | | | |
| | | | | | | |
| Non-GAAP Adjusted Corporate Expenses | $ | (185,456) | | | $ | (171,926) | | | -8 | % | | -7 | % |
| Depreciation and amortization | 22,434 | | | 16,462 | | | -36 | % | | -36 | % |
| Non-GAAP Adjusted EBITDA | $ | (163,022) | | | $ | (155,464) | | | -5 | % | | -4 | % |
| | | | | | | |
| Consolidated Results: | | | | | | | |
| Revenue, net | $ | 1,872,987 | | | $ | 2,019,900 | | | -7 | % | | -8 | % |
Less: Held for Sale or Sold Segment (4) | (255,543) | | | (393,194) | | | -35 | % | | -36 | % |
| Adjusted Revenue, net | $ | 1,617,444 | | | $ | 1,626,706 | | | -1 | % | | -1 | % |
| | | | | | | |
| Operating Income | $ | 52,261 | | | $ | 55,890 | | | -6 | % | | -7 | % |
| Adjustments: | | | | | | | |
| Restructuring charges | 63,041 | | | 49,389 | | | -28 | % | | -28 | % |
| Impairment of goodwill | 108,449 | | | 99,800 | | | -9 | % | | -9 | % |
Legal settlement (5) | — | | | 3,671 | | | # | | # |
Accelerated amortization of an intangible asset (6) | — | | | 4,594 | | | # | | # |
Held for Sale or Sold Segment Adjusted Operating Income (4) | (28,711) | | | (1,186) | | | # | | # |
| Non-GAAP Adjusted Operating Income | $ | 195,040 | | | $ | 212,158 | | | -8 | % | | -8 | % |
| Depreciation and amortization | 176,989 | | | 208,659 | | | 15 | % | | 16 | % |
Less: Held for Sale or Sold depreciation and amortization (4) | (3,437) | | | (41,491) | | | 92 | % | | 92 | % |
| Non-GAAP Adjusted EBITDA | $ | 368,592 | | | $ | 379,326 | | | -3 | % | | -3 | % |
| Adjusted EBITDA margin | 22.8 | % | | 23.3 | % | | | | |
| | |
# Variance greater than 100% |
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands)
(unaudited)
| | | | | | | | | | | |
| April 30,
2024 | | April 30,
2023 |
| Assets: | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 83,249 | | | $ | 106,714 | |
| Accounts receivable, net | 224,198 | | | 310,121 | |
| Inventories, net | 26,219 | | | 30,733 | |
| Prepaid expenses and other current assets | 85,954 | | | 93,711 | |
Current assets held-for-sale (2) | 34,422 | | | — | |
| Total current assets | 454,042 | | | 541,279 | |
| | | |
| Technology, property and equipment, net | 192,438 | | | 247,149 | |
| Intangible assets, net | 615,694 | | | 854,794 | |
| Goodwill | 1,091,368 | | | 1,204,050 | |
| Operating lease right-of-use assets | 69,074 | | | 91,197 | |
| Other non-current assets | 283,719 | | | 170,341 | |
Non-current assets held-for-sale (2) | 19,160 | | | — | |
| Total assets | $ | 2,725,495 | | | $ | 3,108,810 | |
| | | |
| Liabilities and shareholders' equity: | | | |
| Current liabilities | | | |
| Accounts payable | $ | 55,659 | | | $ | 84,325 | |
| Accrued royalties | 97,173 | | | 113,423 | |
| Short-term portion of long-term debt | 7,500 | | | 5,000 | |
| Contract liabilities | 483,778 | | | 504,695 | |
| Accrued employment costs | 96,980 | | | 80,458 | |
| Short-term portion of operating lease liabilities | 18,294 | | | 19,673 | |
| Other accrued liabilities | 76,266 | | | 87,979 | |
Current liabilities held-for-sale (2) | 37,632 | | | — | |
| Total current liabilities | 873,282 | | | 895,553 | |
| Long-term debt | 767,096 | | | 743,292 | |
| Accrued pension liability | 70,832 | | | 86,304 | |
| Deferred income tax liabilities | 97,186 | | | 144,042 | |
| Operating lease liabilities | 94,386 | | | 115,540 | |
| Other long-term liabilities | 71,760 | | | 79,052 | |
Long-term liabilities held-for-sale (2) | 11,237 | | | — | |
| Total liabilities | 1,985,779 | | | 2,063,783 | |
| Shareholders' equity | 739,716 | | | 1,045,027 | |
| Total liabilities and shareholders' equity | $ | 2,725,495 | | | $ | 3,108,810 | |
| | |
Notes: |
| (1) The supplementary information included in this press release for April 30, 2024 is preliminary and subject to change prior to the filing of our upcoming Annual Report on Form 10-K 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 costs to sell. We recorded a pretax impairment of $74.8 million in the year ended April 30, 2024 which is recorded as a contra asset account within Current assets held-for-sale and Non-current assets held-for-sale. |
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited) | | | | | | | | | | | |
| Year Ended
April 30, |
| 2024 | | 2023 |
| Operating activities: | | | |
| Net (loss) income | $ | (200,319) | | | $ | 17,233 | |
| Impairment of goodwill | 108,449 | | | 99,800 | |
| Losses (gains) on sale of businesses and certain assets and impairment charges related to assets held-for-sale | 183,389 | | | (10,217) | |
| Amortization of intangible assets | 55,994 | | | 84,881 | |
| Amortization of product development assets | 22,835 | | | 32,366 | |
| Depreciation and amortization of technology, property, and equipment | 98,160 | | | 96,006 | |
| Other noncash charges | 106,507 | | | 95,636 | |
| Net change in operating assets and liabilities | (167,377) | | | (138,634) | |
| Net cash provided by operating activities | 207,638 | | | 277,071 | |
| | | |
| Investing activities: | | | |
| Additions to technology, property, and equipment | (76,080) | | | (81,155) | |
| Product development spending | (17,262) | | | (22,958) | |
| Businesses acquired in purchase transactions, net of cash acquired | (3,116) | | | (7,292) | |
| (Costs) proceeds related to the sale of businesses and certain assets | (1,771) | | | 15,585 | |
| Acquisitions of publication rights and other | (8,414) | | | (2,578) | |
| Net cash used in investing activities | (106,643) | | | (98,398) | |
| | | |
| Financing activities: | | | |
| Net debt borrowings (repayments) | 27,767 | | | (38,934) | |
| Cash dividends | (76,964) | | | (77,298) | |
| Purchases of treasury shares | (45,050) | | | (35,000) | |
| Other | (12,974) | | | (17,336) | |
| Net cash used in financing activities | (107,221) | | | (168,568) | |
| | | |
| Effects of exchange rate changes on cash, cash equivalents and restricted cash | (1,493) | | | (3,570) | |
| | | |
| Change in cash, cash equivalents and restricted cash for period | (7,719) | | | 6,535 | |
| | | |
| Cash, cash equivalents and restricted cash - beginning | 107,262 | | | 100,727 | |
Cash, cash equivalents and restricted cash - ending (2) | $ | 99,543 | | | $ | 107,262 | |
| | | |
CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT DEVELOPMENT SPENDING (3) |
| | | |
| Year Ended
April 30, |
| 2024 | | 2023 |
| Net cash provided by operating activities | $ | 207,638 | | | $ | 277,071 | |
| Less: Additions to technology, property, and equipment | (76,080) | | | (81,155) | |
| Less: Product development spending | (17,262) | | | (22,958) | |
| Free cash flow less product development spending | $ | 114,296 | | | $ | 172,958 | |
| | |
Notes: |
| (1) The supplementary information included in this press release for the year ended April 30, 2024 is preliminary and subject to change prior to the filing of our upcoming Annual Report on Form 10-K with the Securities and Exchange Commission. |
|
| (2) Cash, cash equivalents and restricted cash as of April 30, 2024 includes held-for-sale cash, cash equivalents and restricted cash of $16.2 million. |
|
| (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 Operating Income and margin;
•Adjusted Income Before Taxes;
•Adjusted Income Tax Provision;
•Adjusted Effective Tax Rate;
•EBITDA, Adjusted EBITDA and margin;
•Organic revenue; and
•Results on a constant currency basis.
Management uses these non-GAAP performance measures as supplemental indicators of our operating performance and financial position as well as for internal reporting and forecasting purposes, when publicly providing our outlook, to evaluate our performance and calculate incentive compensation.
We present these non-GAAP performance measures in addition to US GAAP financial results because we believe that these non-GAAP performance measures provide useful information to certain investors and financial analysts for operational trends and comparisons over time. The use of these non-GAAP performance measures may also provide a consistent basis to evaluate operating profitability and performance trends by excluding items that we do not consider to be controllable activities for this purpose.
The performance metric used by our chief operating decision maker to evaluate performance of our reportable segments is Adjusted Operating Income. We present both Adjusted Operating Income and Adjusted EBITDA for each of our reportable segments as we believe Adjusted EBITDA provides additional useful information to certain investors and financial analysts for operational trends and comparisons over time. It removes the impact of depreciation and amortization expense, as well as presents a consistent basis to evaluate operating profitability and compare our financial performance to that of our peer companies and competitors.
For example:
•Adjusted EPS, Adjusted Revenue, Adjusted Operating Income, Adjusted Income Before Taxes, Adjusted Income Tax Provision, Adjusted Effective Tax Rate, Adjusted EBITDA, and organic revenue (excluding acquisitions) provide a more comparable basis to analyze operating results and earnings and are measures commonly used by shareholders to measure our performance.
•Free Cash Flow less Product Development Spending helps assess our ability, over the long term, to create value for our shareholders as it represents cash available to repay debt, pay common stock dividends, and fund share repurchases and acquisitions.
•Results on a constant currency basis remove distortion from the effects of foreign currency movements to provide better comparability of our business trends from period to period. We measure our performance excluding the impact of foreign currency (or at constant currency), which means that we apply the same foreign currency exchange rates for the current and equivalent prior period.
In addition, we have historically provided these or similar non-GAAP performance measures and understand that some investors and financial analysts find this information helpful in analyzing our operating margins and net income, and in comparing our financial performance to that of our peer companies and competitors. Based on interactions with investors, we also believe that our non-GAAP performance measures are regarded as useful to our investors as supplemental to our US GAAP financial results, and that there is no confusion regarding the adjustments or our operating performance to our investors due to the comprehensive nature of our disclosures.
We have not provided our 2025 outlook for the most directly comparable US GAAP financial measures, as they are not available without unreasonable effort due to the high variability, complexity, and low visibility with respect to certain items, including restructuring charges and credits, gains and losses on foreign currency, and other gains and losses. These items are uncertain, depend on various factors, and could be material to our consolidated results computed in accordance with US GAAP.
Non-GAAP performance measures do not have standardized meanings prescribed by US GAAP and therefore may not be comparable to the calculation of similar measures used by other companies and should not be viewed as alternatives to measures of financial results under US GAAP. The adjusted metrics have limitations as analytical tools, and should not be considered in isolation from, or as a substitute for, US GAAP information. It does not purport to represent any similarly titled US GAAP information and is not an indicator of our performance under US GAAP. Non-GAAP financial metrics that we present may not be comparable with similarly titled measures used by others. Investors are cautioned against placing undue reliance on these non-GAAP measures.
Fourth Quarter and Fiscal 2024 Earnings Review June 13, 2024
SAFE HARBOR STATEMENT This presentation contains certain forward-looking statements concerning the Company's operations, performance, and financial condition. Reliance should not be placed on forward-looking statements, as actual results may differ materially from those in any forward-looking statements. Any such forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to uncertainties and contingencies, many of which are beyond the control of the Company and are subject to change based on many important factors. Such factors include, but are not limited to: (i) the level of investment in new technologies and products; (ii) subscriber renewal rates for the Company's journals; (iii) the financial stability and liquidity of journal subscription agents; (iv) the consolidation of book wholesalers and retail accounts; (v) the market position and financial stability of key online retailers; (vi) the seasonal nature of the Company's educational business and the impact of the used book market; (vii) worldwide economic and political conditions; (viii) the Company's ability to protect its copyrights and other intellectual property worldwide (ix) the ability of the Company to successfully integrate acquired operations and realize expected opportunities; (x) the ability to realize operating savings over time and in fiscal year 2025 in connection with our multiyear Global Restructuring Program and planned 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; (xii) cyber risk and the failure to maintain the integrity of our operational or security systems or infrastructure, or those of third parties with which we do business; (xiii) as a result of acquisitions, we have and may record a significant amount of goodwill and other identifiable intangible assets and we may never realize the full carrying value of these assets; and (xiii) 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. . NON-GAAP MEASURES In this presentation, Wiley provides the following non-GAAP performance measures: Adjusted Revenue Adjusted Earnings Per Share (“Adjusted EPS”); Free Cash Flow less Product Development Spending; Adjusted Operating Income and margin; Adjusted EBITDA and margin; Organic revenue; and Results on a constant currency (“CC”) basis. Management believes non-GAAP financial measures, which exclude the impact of restructuring charges and credits and certain other items, and the impact of divestitures and acquisitions provide a useful comparable basis to analyze operating results and earnings. See the reconciliations of non-GAAP financial measures and explanations of the uses of non-GAAP measures in the supplementary information. We have not provided our 2025 outlook for the most directly comparable U.S. GAAP financial measures, as they are not available without unreasonable effort due to the high variability, complexity, and low visibility with respect to certain items, including restructuring charges and credits, gains and losses on foreign currency, and other gains and losses. These items are uncertain, depend on various factors, and could be material to our consolidated results computed in accordance with U.S. GAAP. 2
3 Wiley enables the creation of new knowledge and its application in science, learning, innovation, and other critical areas of the digital knowledge economy The Knowledge Company
4 Executive Summary Strong underlying momentum in Research and outperformance in Learning GenAI demand accelerating with execution of Q4 content rights project for large tech company; second GenAI rights project executed to be recognized in Fiscal 2025 2 of 3 divestitures closed; Wiley reorganized into one Research & Learning team Cost savings and right sizing program accelerated with $90M of $130M actioned Returning cash to shareholders with share repurchases increased to $45M and dividend growth streak hitting 30 consecutive years
5 Disciplined Execution for Meet and Exceed METRIC COMMITMENT RESULT OUTCOME Adj. Revenue guidance $1,580 to $1,630 Mid-to-high end of range $1,617M Meets Adj. EBITDA guidance Original: $305-$330M Raised: $335-$355M $369M Exceeds Adj. EPS guidance Original: $2.05 to $2.40 Raised: $2.45-$2.65 $2.78 Exceeds Q4 exit margin (Adj. EBITDA) 23.3% 28.3%* Exceeds In-year cost savings $30 million $60 million Exceeds Free Cash Flow Approx. $100M $114M Exceeds *25.6% excluding the AI deal
6 Highly Valued and Well Positioned for AI 1. Wiley’s content highly valued for training GenAI large language models Two GenAI content rights projects executed for previously-published content with limited duration and narrow use 1. Learning content rights project for large tech company ($23 million realized in Q4 Fiscal 2024) 2. Learning and Research content rights project for second large tech company ($21M realized in 1H Fiscal 2025) Significant interest from other AI providers 2. AI initiatives underway to drive publishing innovation and colleague productivity 3. Piloting new AI-powered research integrity detection tool Train and fine tune foundational GenAI models with our high-quality and authoritative content Content Licensing Develop new content application models that bring Wiley closer to the customer Business Model Innovation Transform the publishing experience for authors and editors; add new customer features Product & Publishing Innovation Empower colleagues, unlock productivity gains, and improve customer experience Colleague Productivity
7 Fourth Quarter Performance GAAP Revenue performance due to completed sale and declines in Held for Sale businesses Adjusted Revenue growth driven by Learning content rights project for GenAI training models partly offset by Research timing issues and declines in ancillary print and licensing revenue GAAP EPS loss due to a valuation allowance on US deferred tax assets, restructuring charges, and a net increase in the loss on the sale of business Adjusted EPS growth driven by revenue performance partially offset by tech write-offs as part of our legacy decommissioning Adjusted EBITDA growth mainly due to Learning outperformance and cost savings GAAP Revenue ▼11% $468M Adj. Revenue* ▲4% $441M GAAP EPS ▼$0.76 $0.46 Adj. EPS* ▲2% $1.21 Adj. EBITDA* ▲7% $125M *Adjusted Revenue, Adjusted EPS, and Adjusted EBITDA performance excludes businesses held for sale or sold. Adjusted numbers exclude impact of foreign exchange (+$0.7M favorable to revenue) Q4 Summary
8 Full Year Performance GAAP Revenue performance due to completed sale and declines in Held for Sale businesses Adjusted Revenue performance driven by outperformance in Learning and strong open access growth in Research offset by impact of Hindawi disruption and market conditions in Solutions GAAP EPS loss mainly due to charges related to held for sale or sold assets and restructuring Adjusted EPS performance further impacted by lower Adjusted Operating Income, higher interest and tax expense, and higher pension expense Adjusted EBITDA performance mainly due to revenue performance GAAP Revenue ▼7% $1,873M Adj. Revenue* ▼1% $1,617M GAAP EPS ▼$3.96 ($3.65) Adj. EPS* ▼19% $2.78 Adj. EBITDA* ▼3% $369M *Adjusted Revenue, Adjusted EPS, and Adjusted EBITDA performance excludes businesses held for sale or sold. Adjusted numbers exclude impact of foreign exchange (+$11M favorable to revenue) Full Year Summary
9 Research Momentum Significant momentum in Research after some unusual challenges this year Demand to publish strong with submissions +15%* and output accelerating. Q4 output up mid-single digits Robust recovery and growth across key geographies after slow start to FY24 from the unusual COVID publishing lag Institutional models (subscription plus transformational agreements) solid with moderate growth expected Gold Open Access* revenue growth to remain at or above 20% Wiley’s journal quality and impact remains top-tier; another strong showing expected in annual rankings Research end-to-end platform development accelerating with first large scale journal migration; platform to transform author experience, publishing efficiency, and peer review *TTM Excluding Hindawi
10 Learning Momentum Significant momentum in Learning with more favorable market conditions and strong execution and focus Outperformance in FY24 with return to growth and margin expansion Strong digital content and courseware growth and inclusive access momentum US undergrad enrollment up for the first time since the pandemic Healthy demand to publish with new author and title signings Solid growth in Assessments from new partner signings Learning content highly valued for training GenAI Large Language Models New photo coming
VCP progress Reinvestment Segment performance Outlook
12 Value Creation Plan Progress Plans FY24 Progress Focus on strong, profitable core Reorganized from three disparate segments into one market-facing Research & Learning team under one leader Drove outperformance and material margin expansion in Learning Executed on AI content rights projects in Learning Divest non-core assets Closed sale of University Services for total consideration of $119M at close, subject to adjustments Closed sale of Wiley Edge for up to $56M in total consideration, subject to adjustments CrossKnowledge divestiture in process; proceeds expected to be immaterial Right-size and optimize Accelerated $130M cost savings program, actioning $90M to-date. Half of savings to be reinvested. Consolidated office footprint with 2 office closures and 4 reductions; since March 2020, Wiley has reduced its global office footprint by ~40%
13 Reinvestment Driving continuous margin expansion while reinvesting for sustained, long term success Grow Publishing Volumes Expand refer & transfer, content acquisition, new journals, editorial expansion, and new author and title signings Expand Verticals and Brands Buildout of flagship Research brands to additional verticals; expansion of audience solutions into high growth verticals Optimize Go To Market Deliver martech and other enhancements to drive author engagement and retention; build out corporate sales teams, and expand partnerships Monetize and Leverage GenAI Modernize Backoffice and Enterprise Apps Deliver Research Publishing Platform Migration of Journals to End-to-End workflows and platforms delivering productivity benefits and lower infrastructure costs Leverage Generative AI & Machine Learning to extend our content-enabled products and services, and drive productivity gains Backoffice modernization to improve decision making, execution, and productivity; decommission legacy systems +
14 Research Performance (millions) Q4 2024 Change Change CC Research Publishing $233 (3%) (3%) Research Solutions $38 (5%) (5%) Total Revenue $271 (3%) (3%) Adjusted EBITDA $94 (12%) Adjusted EBITDA Margin 34.6% FY 2024 Change Change CC $893 (4%) (5%) $150 (2%) (3%) $1,043 (3%) (4%) $331 (13%) 31.8% Q4’24 FY25 Expectations Timing impact with journal renewal billings Expected market recovery (US, EMEA, China, India) Stronger than expected submissions and output growth Solutions market headwinds Large incentive compensation swing due to reset after prior year underperformance Timing recovery Consistently favorable market trends (growth tied to global R&D) Strong publishing demand and mid-single digit output growth expectation Moderately improving trends in Solutions Q1 GenAI content project already executed Margins steady while reinvesting in growth opportunities and publishing platform
15 Learning Performance (millions) Q4 2024 Change Change CC Academic $99 22% 22% Professional $71 13% 13% Total Revenue $170 18% 18% Adjusted EBITDA $74 54% Adjusted EBITDA Margin 43.5% FY 2024 Change Change CC $323 6% 6% $251 4% 3% $574 5% 5% $200 27% 34.9% Q4’24 FY25 Expectations Learning outperformance with favorable market conditions Academic driven by robust digital courseware and content growth and inclusive access models Professional impacted by soft publishing frontlist and low Assessments consumption GenAI content rights project executed, split evenly between Academic and Professional Margin expansion driven by revenue growth and restructuring Learning momentum and favorable market conditions expected to continue Strong digital courseware and content growth anticipated New title signings up Sales agent network expanded in Assessments Q1 GenAI content project already executed Margin expansion expected to continue
16 • Adjusted Revenue – growth expected in Research Publishing, Research Solutions, Academic and Professional. • Adjusted EBITDA – margin expansion driven by revenue growth and cost savings while reflecting reinvestments to scale and optimize Research, modernize infrastructure and expand GenAI content licensing, capabilities, and product development. • Adjusted EPS – growth driven by higher expected Adjusted Operating Income and accrued interest income from divestitures offsetting higher interest and tax expense. • Free Cash Flow – growth driven by lower restructuring payments and favorable working capital partially offset by higher capex and year-over-year swing in incentive compensation payments. Projected capex of $130 million compared to $93 million in Fiscal 2024 driven by acceleration of Research Publishing platform work and infrastructure modernization. *Wiley’s Fiscal 2025 “Adjusted Revenue,” “Adjusted EBITDA,” and “Adjusted EPS” outlook exclude businesses held for sale or sold Fiscal 2025 Growth Outlook Metric (Millions, except EPS) Fiscal 2024 Results Fiscal 2025 Outlook Adjusted Revenue* $1,617 $1,650 to $1,690 Research $1,043 Low-to-mid-single digit growth Learning $574 Low-single digit growth Adjusted EBITDA* $369 $385-$410 Adjusted EBITDA Margin* 22.8% 23-24% Adjusted EPS* $2.78 $3.25 to $3.60 Free Cash Flow $114 Approx. $125
17 $122M $112M Free Cash Flow of $114 million moderately above expectations. Variance to prior year due to lower cash earnings, increased restructuring costs, and higher interest payments Capex of $93M vs. $104M in prior year period. Wiley expects to ramp up capex in FY25 for its Research platform and enterprise application modernization projects. M&A: No material acquisitions in FY24. Focused on divesting assets Dividends: Yield at 3.9% (as of June 10) Share Repurchases: Acquired approximately 1.3M shares for $45M at an average cost of $34.71/share (vs. 832K shares in prior year) Leverage: Net Debt-to-EBITDA of 1.7 compared to 1.5 prior year Dividends and Repurchases Full Year Allocation FY23 FY24 Note: Free Cash Flow and Leverage include assets held for sale until divestiture is completed Financial Position and Capital Allocation
Summary
19 Growing Confidence and Optimism Strong underlying momentum in Research and outperformance in Learning GenAI momentum accelerating with two executed content projects Significant progress made on Value Creation Plan, including divestitures and savings Confident FY25 outlook with healthy revenue growth and margin expansion Continued revenue, margin, and FCF acceleration expected in FY26 and beyond
20 Fiscal 2026 Targets On Track Metric FY26 Target Adjusted Revenue Low-to-mid single digit growth Adjusted EBITDA margin 24-25% Free Cash Flow Approx. $200M Note: FY25 & FY26 targets exclude any potential acquisitions through this period Objectives beyond Fiscal 2026 Consistent revenue growth at or above our markets Continued margin expansion from greater publishing scale and delivery, leaner processes and operations, and modernized infrastructure Continued Free Cash Flow growth as earnings expand and capex normalizes
Q424 Earnings Presentation .pptx 21 Thank you for joining us IR website at https://investors.wiley.com/ Contact: Brian Campbell brian.campbell@wiley.com +1 (201) 748-6874
Q424 Earnings Presentation .pptx 22 Appendix – US GAAP to Non-GAAP EPS Reconciliation Reconciliation of US GAAP Earnings (Loss) per Share to Non-GAAP Adjusted EPS 2024 2023 2024 2023 US GAAP Income (Loss) Per Share - Diluted 0.46$ 1.22$ (3.65)$ 0.31$ Adjustments: Impairment of goodwill - 0.09 1.90 1.77 Legal settlement (3) - - - 0.05 Pension income related to the wind up of the Russia plan (4) - (0.02) - (0.02) Restructuring and related charges 0.16 0.06 0.85 0.66 Foreign exchange losses (gains) on intercompany transactions, including the write off of certain cumulative translation adjustments (4) 0.01 (0.01) 0.02 0.01 Amortization of acquired intangible assets (5) 0.02 0.26 0.68 1.21 Losses (gains) on sale of businesses and certain assets and impairment charges related to assets held-for-sale (6) 0.04 (0.11) 2.81 (0.11) Held for Sale or Sold segment Adjusted Net Income (6) (0.03) (0.26) (0.42) (0.36) Income tax adjustments 0.55 (0.04) 0.54 (0.04) EPS impact of using weighted-average dilutive shares for adjusted EPS calculation (7) - - 0.05 - Non-GAAP Adjusted Earnings Per Share - Diluted 1.21$ 1.19$ 2.78$ 3.48$ (amounts in thousands) 2024 2023 2024 2023 US GAAP Income (Loss) Before Taxes 54,002$ 85,608$ (187,047)$ 33,100$ Impairment of goodwill - - 108,449 99,800 Legal settlement (3) - - - 3,671 Pension income related to the wind up of the Russia plan (4) - (1,750) - (1,750) Restructuring and related charges 11,008 4,185 63,041 49,389 Foreign exchange losses (gains) on intercompany transactions, including the write off of certain cumulative translation adjustments (4) 815 (449) 1,903 457 Amortization of acquired intangible assets (5) 13,324 20,566 57,874 89,177 Losses (gains) on sale of businesses and certain assets and impairment charges related to assets held-for-sale (6) 3,641 (10,177) 183,389 (10,177) Held for Sale or Sold segment Adjusted Income Before Taxes (6) (2,408) (17,974) (30,661) (26,094) Non-GAAP Adjusted Income Before Taxes 80,382$ 80,009$ 196,948$ 237,573$ US GAAP Income Tax Provision 28,737$ 17,264$ 13,272$ 15,867$ Impairment of goodwill 255 (4,857) 2,953 - Legal settlement (3) - - - 716 Pension income related to the wind up of the Russia plan (4) - (437) - (437) Restructuring and related charges 2,425 992 15,662 12,151 Foreign exchange losses (gains) on intercompany transactions, including the write off of certain cumulative translation adjustments (4) 471 (142) 582 132 Amortization of acquired intangible assets (5) 11,459 5,372 20,127 20,183 Losses (gains) on sale of businesses and certain assets and impairment charges related to assets held-for-sale (6) 1,197 (3,860) 26,908 (3,860) Held for Sale or Sold segment Adjusted Tax Provision (6) (622) (3,555) (7,140) (5,533) Impact of increase in UK statutory rate on deferred tax balances (9) - 2,370 - 2,370 Impact of valuation allowance (10) (30,249) - (30,249) - Non-GAAP Adjusted Income Tax Provision 13,673$ 13,147$ 42,115$ 41,589$ US GAAP Effective Tax Rate 53.2% 20.2% -7.1% 47.9% Non-GAAP Adjusted Effective Tax Rate 17.0% 16.4% 21.4% 17.5% JOHN WILEY & SONS, INC. SUPPLEMENTARY INFORMATION (1) (2) RECONCILIATION OF US GAAP MEASURES to NON-GAAP MEASURES (unaudited) Three Months Ended Year Ended April 30, April 30, April 30, April 30, Reconciliation of US GAAP Income (Loss) Before Taxes to Non-GAAP Adjusted Income Before Taxes Three Months Ended Year Ended Pretax Impact of Adjustments: Reconciliation of US GAAP Income Tax Provision to Non-GAAP Adjusted Income Tax Provision, including our US GAAP Effective Tax Rate and our Non-GAAP Adjusted Effective Tax Rate Income Tax Impact of Adjustments (8) Income Tax Adjustments
Q424 Earnings Presentation .pptx 23 Appendix – US GAAP to Non-GAAP EPS Notes Notes: (2) All amounts are approximate due to rounding. (1) See Explanation of Usage of Non-GAAP Performance Measures included in this supplementary information for additional details on the reasons why management believes presentation of each non-GAAP performance measure provides useful information to investors. The supplementary information included in this press release for the three months and year ended April 30, 2024 is preliminary and subject to change prior to the filing of our upcoming Annual Report on Form 10-K with the Securities and Exchange Commission. (9) In the three months ended July 31, 2021, the UK enacted legislation that increased its statutory rate from 19% to 25% effective April 1, 2023. For the three months and year ended April 30, 2023, we recorded a $2.4 million noncash deferred tax benefit related to pensions due to the UK statutory rate change. These adjustments impacted deferred taxes. (10) In fiscal year 2024, due to temporary differences in the US, our deferred taxes reversed from a deferred tax liability position to a deferred tax asset position. Due to losses in the US resulting from impairments, restructuring, and acceleration of depreciation expense on capitalized software, we concluded it was more-likely-than-not that all or a portion of our deferred tax asset may not be realized. As a result, we increased the valuation allowance by $30.2 million. (3) In the three months ended January 31, 2023, we settled a litigation matter related to consideration for a previous acquisition for $3.7 million. (4) In fiscal year 2023 due to the closure of our operations in Russia, the Russia entity was deemed substantially liquidated. In the three months and year ended April 30, 2024, we wrote off an additional $0.2 million and $1.0 million, respectively, of cumulative translation adjustments in earnings. In the three months and year ended April 30, 2023, we wrote off $1.1 million of cumulative translation adjustments in earnings. This amount is reflected in Foreign exchange transaction gains (losses) on our Condensed Consolidated Statements of Net Income (Loss). In addition, in the three months and year ended April 30, 2023, there was a curtailment and settlement credit due to the wind up of the Russia Pension Plan of $1.8 million which is reflected in Other (expense) income, net on our Condensed Consolidated Statements of Net Income (Loss). (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 Income (Loss). It also includes the amortization of acquired product development assets, which is reflected in Cost of sales in the Condensed Consolidated Statements of Net Income (Loss). (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 costs to sell. The total impairment charge for Wiley Edge in the year ended April 30, 2024 was $19.4 million, which includes a release of $1.2 million in the three months ended April 30, 2024. The total impairment charge for CrossKnowledge in the year ended April 30, 2024 was $55.4 million, which includes a release of $0.8 million in the three months ended April 30, 2024. In the three months ended April 30, 2024, there was an increase in the pretax loss on the sale of University Services after the closing of approximately $5.6 million, which resulted in a total pretax loss of $107.0 million (net of tax loss of $80.5 million) in the year ended April 30, 2024. We also completed the sale of our Tuition Manager business previously in our Held for Sale or Sold segment, which resulted in a total net pretax loss of $1.5 million (net of tax loss of $1.1 million) in the year ended April 30, 2024. 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 (55.7 million for the year ended April 30, 2024) 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 months and year ended April 30, 2024 substantially all of the tax impact was from deferred taxes. For the three months ended April 30, 2023, the tax impact was $4.3 million of current tax benefit and $0.1 million of deferred taxes. For the year ended April 30, 2023, substantially all of the tax impact was from deferred taxes.
Q424 Earnings Presentation .pptx 24 Appendix – Net Income to Adjusted EBITDA 2024 2023 2024 2023 Net Income (Loss) 25,265$ 68,344$ (200,319)$ 17,233$ Interest expense 11,411 10,560 49,003 37,745 Provision for income taxes 28,737 17,264 13,272 15,867 Depreciation and amortization 47,613 50,111 176,989 213,253 Non-GAAP EBITDA 113,026 146,279 38,945 284,098 Impairment of goodwill - - 108,449 99,800 Legal settlement - - - 3,671 Restructuring and related charges 11,008 4,185 63,041 49,389 Foreign exchange (gains) losses, including the write off of certain cumulative translation adjustments (530) (611) 2,959 (894) Losses (gains) on sale of businesses and certain assets and impairment charges related to assets held-for-sale 3,642 (10,177) 183,389 (10,177) Other expense (income), net 257 (2,908) 3,957 (3,884) Held for Sale or Sold segment Adjusted EBITDA (2) (2,409) (19,698) (32,148) (42,677) Non-GAAP Adjusted EBITDA 124,994$ 117,070$ 368,592$ 379,326$ Adjusted EBITDA Margin 28.3% 27.6% 22.8% 23.3% Notes: JOHN WILEY & SONS, INC. SUPPLEMENTARY INFORMATION (1) RECONCILIATION OF US GAAP NET INCOME (LOSS) TO NON-GAAP EBITDA AND ADJUSTED EBITDA (unaudited) Three Months Ended Year Ended (1) See Explanation of Usage of Non-GAAP Performance Measures included in this supplementary information for additional details on the reasons why management believes presentation of each non-GAAP performance measure provides useful information to investors. The supplementary information included in this press release for the three months and year ended April 30, 2024 is preliminary and subject to change prior to the filing of our upcoming Annual Report on Form 10-K with the Securities and Exchange Commission. (2) Our Non-GAAP Adjusted EBITDA excludes the Held for Sale or Sold segment Non-GAAP Adjusted EBITDA. April 30, April 30,
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- DefinitionName of the state or province.
| Name: |
dei_EntityAddressStateOrProvince |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:stateOrProvinceItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityCentralIndexKey |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:centralIndexKeyItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionIndicate if registrant meets the emerging growth company criteria. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityEmergingGrowthCompany |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
| Name: |
dei_EntityFileNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:fileNumberItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
| Name: |
dei_EntityIncorporationStateCountryCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarStateCountryItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionLine items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
| Name: |
dei_EntityListingsLineItems |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:stringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityRegistrantName |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityTaxIdentificationNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:employerIdItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionLocal phone number for entity.
| Name: |
dei_LocalPhoneNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
| Name: |
dei_PreCommencementIssuerTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14d
-Subsection 2b
| Name: |
dei_PreCommencementTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTitle of a 12(b) registered security. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
| Name: |
dei_Security12bTitle |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:securityTitleItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionName of the Exchange on which a security is registered. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection d1-1
| Name: |
dei_SecurityExchangeName |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarExchangeCodeItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Section 14a
-Number 240
-Subsection 12
| Name: |
dei_SolicitingMaterial |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTrading symbol of an instrument as listed on an exchange.
| Name: |
dei_TradingSymbol |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:tradingSymbolItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
| Name: |
dei_WrittenCommunications |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- Details
| Name: |
us-gaap_StatementClassOfStockAxis=us-gaap_CommonClassAMember |
| Namespace Prefix: |
|
| Data Type: |
na |
| Balance Type: |
|
| Period Type: |
|
|
| X |
- Details
| Name: |
us-gaap_StatementClassOfStockAxis=us-gaap_CommonClassBMember |
| Namespace Prefix: |
|
| Data Type: |
na |
| Balance Type: |
|
| Period Type: |
|
|
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