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
September 7, 2017
(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 jurisdiction of incorporation)
| | 0-11507 | 13-5593032 |
| | ---------------------------------------------------- | --------------------------------------------- |
| | Commission File Number | IRS Employer Identification Number |
| | 111 River Street, Hoboken NJ | 07030 |
| | ---------------------------------------------------- | --------------------------------------------- |
| | Address of principal executive offices | Zip Code |
| | Registrant's telephone number, including area code: | (201) 748-6000 |
| | | --------------------------------------------- |
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 (see General Instruction A.2. below):
[ ] 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))
ITEM 2.02: RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On September 7, 2017, John Wiley & Sons Inc., a New York corporation (the "Company"), issued a press release announcing the Company's financial results for the first quarter of fiscal year 2018. A copy of the Company's press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
The information in this report, 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 September 7, 2017 titled "Wiley Reports First Quarter 2018 Results" (furnished and not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and not deemed incorporated by reference in any filing under the Securities Act of 1934, as amended).
Contact:
Brian Campbell, Investor Relations
201.748.6874
brian.campbell@wiley.com
Wiley Reports First Quarter 2018 Results
September 7, 2017 (Hoboken, NJ) – John Wiley & Sons, Inc. (NYSE: JWa and JWb), a global research and learning company, today announced results for the first quarter ending July 31, 2017.
HIGHLIGHTS
| Ø | Revenue increased 2% to $411 million; +1% at constant currency |
| Ø | Adjusted EPS increased 9% to $0.59 per share; -5% at constant currency |
| Ø | Operational excellence initiatives resulted in $29 million of restructuring and related charges, expected to yield $45 million in gross run-rate savings beginning in fiscal 2019 |
| Ø | Free Cash Flow less Product Development spending improved by $48 million |
| Ø | Quarterly dividend increased for 24th consecutive year to $0.32 per share |
FINANCIAL SUMMARY
Unaudited ($millions except for EPS)
GAAP Measures | Q1 2018 | Q1 2017 | Change | Change Constant Currency |
| Revenue | $411.4 | $404.3 | 2% | 1% |
| Operating Income | $14.5 | $43.8 | -67% | |
| Diluted EPS | $0.16 | $0.53 | -70% | |
Cash from Operations | ($81.8) | ($136.7) | 40% | |
| Non-GAAP Measures | Q1 2018 | Q1 2017 | Change | Change Constant Currency |
| Adjusted Operating Income | $43.8 | $42.9 | 2% | -13% |
| Adjusted EPS | $0.59 | $0.54 | 9% | -5% |
| Free Cash Flow less Product Development Spending | ($117.8) | ($165.5) | 29% | |
| · | Revenue increase was largely driven by the contribution from the Atypon acquisition, as print book declines in Publishing were offset by increases in Research and Solutions. |
| · | Adjusted Operating Income decline at constant currency was mainly due to $6 million in one-time credits in the prior year related to employee benefit plans. Cost of Sales and Operating and Administrative Costs were up 1% and 3% at constant currency, respectively. GAAP Operating Income additionally reflected $29.3 million in restructuring and related charges. |
| · | Adjusted EPS decline at constant currency was due to lower adjusted operating income. GAAP EPS also reflected restructuring and related charges as well as foreign exchange losses on intercompany transactions. |
| · | Free Cash Flow less Product Development Spending improvement was mainly due to the timing of cash collections and payments as anticipated in the fourth quarter 2017 report. Free cash flow is seasonally negative in the first half of Wiley's fiscal year principally due to the timing of collections for journal subscriptions. |
| · | Return to Shareholders: During the quarter, Wiley repurchased 265,158 shares for $14 million at an average cost of $52.86. Approximately 3.5 million shares remain in the repurchase program. In June, Wiley increased its quarterly dividend by 3% to $0.32 per share, marking the 24th consecutive annual increase and raising the annualized dividend payout to $1.28 per share. |
MANAGEMENT COMMENTARY
"We continue to make important progress in shifting our strategic focus to the delivery of enhanced digital products and services for researchers, educators, professionals, and higher education students around the globe," said Matthew Kissner, Interim CEO and Chairman. "We are realigning our cost base, reallocating resources, reinvesting in specific growth areas, and focusing on culture, productivity, and customer engagement – all of which should benefit us in fiscal 2019 and beyond."
FISCAL YEAR 2018 OUTLOOK
The Company reaffirms its fiscal 2018 guidance.
| Metric ($M) | FY17 Actual | FY18 Expectation (at constant currency) |
| Revenue | $1,718.5 | Approximately even |
| Adjusted Operating Income | $228.4 | Approximately even |
| Adjusted EPS | $3.01 | Low-single digit % decline |
| Cash from Operations | $314.5 | $350 million or higher |
| Capex | $148.3 | Slightly lower |
Financial Tables: Please see accompanying tables for additional details on financial performance. Please note that certain labels in the tables have changed, including Author-Funded Access (now Open Access), Platform Services (now Publishing Technology Services), Online Program Management (now Education Services), and Unallocated Shared Services Costs (now Corporate Expenses).
Adjusted Results: The Company provides financial measures referred to as "adjusted," which exclude unusual charges and credits as more fully described in the attached financial schedules. For the first quarter ended July 31, the Company excluded foreign exchange gains and losses on intercompany transactions in deriving adjusted earnings in the current and prior year periods. This change will also be reflected in subsequent periods. The Company believes these gains and losses, which result from transactions associated with tax planning efforts, do not reflect its underlying performance.
Foreign Exchange: Foreign exchange was beneficial to first quarter revenue and EPS by $2.8 million and $0.07, respectively. If current rates hold, Wiley expects to record a positive FY18 FX variance due to functional currency gains related to calendar year 2017 journal subscriptions in the UK. Variances are on a constant currency basis unless otherwise noted.
RESEARCH SEGMENT (SCIENTIFIC, TECHNICAL, MEDICAL, SCHOLARLY JOURNALS AND SERVICES)
| · | Revenue: $223.6 million (+8% GAAP; +6% constant currency). Growth was driven primarily by the contribution from the Atypon acquisition (+$8 million, acquired October 2016) and higher Open Access revenues (+20%). |
| · | Adjusted Contribution to Profit: $66.3 million (0% constant currency). Performance reflected higher revenues offset primarily by Atypon expenses and higher royalty costs. GAAP Contribution to Profit: $61.5 million (2%) included restructuring charges of $4.8 million in the current year. |
| · | Calendar Year 2017 Journal Subscriptions: As of the end of July, calendar year 2017 Journal Subscriptions were up 0.3% on a constant currency basis with 98% of expected business contracted. |
| · | Society Publishing Partnerships: Nine new society contracts were signed in the quarter with combined annual revenue of $6.6 million; nineteen were renewed with combined annual revenue of $11.6 million; four were not renewed totaling $0.9M. |
PUBLISHING SEGMENT (BOOKS, COURSEWARE, TEST PREPARATION)
| · | Revenue: $131.3 million (-9% GAAP; -8% constant currency). Strong growth in Test Preparation and Certification (+20%) and Course Workflow (+40%) were not enough to offset market-driven declines and erosion of demand for print products in Education Publishing (-16% overall) and STM and Professional Publishing (-8% overall). |
| · | Adjusted Contribution to Profit: $15.9 million (-18% constant currency). Performance reflects lower revenues and the timing of development and licensing costs. GAAP Contribution to Profit of $5.0 million (-74%) included restructuring charges of $10.9 million in the current year. |
SOLUTIONS SEGMENT (EDUCATION SERVICES, CORPORATE LEARNING, PROFESSIONAL ASSESSMENT)
| · | Revenue: $56.5 million (+9% GAAP and constant currency). Growth in Education Services (+14%) and Assessment (+10%) offset a 1% decline in Corporate Learning. |
| · | Adjusted Contribution to Profit: Increased to $0.8 million from $0.1 million in the prior year. Improvement driven by revenue growth and increased operating efficiency. GAAP Contribution to Profit: -$2.0 million including restructuring charges of $2.8 million. |
| · | Education Services (formerly Online Program Management): In the quarter, Wiley signed one new partner (Winthrop University) and six new programs. One partner and five programs were retired. As of July 31, Wiley had 39 university partners and 251 programs under contract. |
EARNINGS CONFERENCE CALL
Scheduled for today, September 7 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 866-564-2842 and enter the participant code 2784819#. International callers, please dial (323) 794-2130 and enter the participant code 2784819#.
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.
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 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.
| JOHN WILEY & SONS, INC. |
| UNAUDITED SUMMARY OF OPERATIONS |
| FOR THE FIRST QUARTER ENDED |
| JULY 31, 2017 AND 2016 |
| (in thousands, except per share amounts) |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
FIRST QUARTER ENDED JULY 31, | |
| | | | | | | | | | | | | | | | | | | |
| | | | | 2017 | | 2016 | | % Change |
| | | | | US GAAP | | Adjustments | | Adjusted | | US GAAP | | Adjustments | | Adjusted | | US GAAP | | Adjusted excl. FX |
| | | | | | | | | | | | | | | | | | | |
| Revenue | $ | 411,444 | | - | | 411,444 | | 404,285 | | - | | 404,285 | | 2% | | 1% |
| | | | | | | | | | | | | | | | | | | |
| Costs and Expenses | | | | | | | | | | | | | | | | |
| | Cost of Sales | | 114,788 | | - | | 114,788 | | 113,478 | | - | | 113,478 | | 1% | | 1% |
| | Operating and Administrative (A) | 243,808 | | (3,600) | | 240,208 | | 235,340 | | | | 235,340 | | 4% | | 3% |
| | Restructuring (Credits) Charges (A) | 25,729 | | (25,729) | | - | | (920) | | 920 | | - | | | | |
| | Amortization of Intangibles | | 12,619 | | - | | 12,619 | | 12,573 | | - | | 12,573 | | 0% | | 3% |
| | | | | | | | | | | | | | | | | | | |
| | Total Costs and Expenses | | 396,944 | | (29,329) | | 367,615 | | 360,471 | | 920 | | 361,391 | | 10% | | 3% |
| | | | | | | | | | | | | | | | | | | |
| Operating Income | | 14,500 | | 29,329 | | 43,829 | | 43,814 | | (920) | | 42,894 | | -67% | | -13% |
| | Operating Margin | | 3.5% | | | | 10.7% | | 10.8% | | | | 10.6% | | | | |
| | | | | | | | | | | | | | | | | | | |
| Interest Expense | | (3,273) | | - | | (3,273) | | (4,071) | | - | | (4,071) | | -20% | | -20% |
| Foreign Exchange (Loss) Gain (B) | (5,136) | | 6,017 | | 881 | | 221 | | 1,329 | | 1,550 | | | | |
| Interest Income and Other | | 5 | | - | | 5 | | 377 | | - | | 377 | | -99% | | -99% |
| | | | | | | | | | | | | | | | | | | |
| Income Before Taxes | | 6,096 | | 35,346 | | 41,442 | | 40,341 | | 409 | | 40,750 | | -85% | | -12% |
| | | | | | | | | | | | | | | | | | | |
| (Benefit) Provision for Income Taxes (A,B) | (3,140) | | 10,627 | | 7,487 | | 9,327 | | (65) | | 9,262 | | -134% | | -33% |
| | | | | | | | | | | | | | | | | | | |
| Net Income | $ | 9,236 | | 24,719 | | 33,955 | | 31,014 | | 474 | | 31,488 | | -70% | | -6% |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Earnings Per Share- Diluted (A) | $ | 0.16 | | 0.43 | | 0.59 | | 0.53 | | 0.01 | | 0.54 | | -70% | | -5% |
| | | | | | | | | | | | | | | | | | | |
| Average Shares - Diluted | | 57,709 | | 57,709 | | 57,709 | | 58,176 | | 58,176 | | 58,176 | | | | |
| | | | | | | | | | | | | | | | | | | |
| |
| | | | | | | | | | | | | | | | | | | |
| (A,B) See the accompanying Notes to Unaudited Financial Statements for a description of each adjustment. |
| JOHN WILEY & SONS, INC. |
| FOR THE FIRST QUARTER ENDED |
| JULY 31, 2017 AND 2016 |
| | | | | | | |
RECONCILIATION OF US GAAP TO ADJUSTED EPS - DILUTED (UNAUDITED) |
| | | | | | | |
| | | | | | | |
| | | First Quarter Ended |
| | | July 31, |
| | | | 2017 | | | 2016 |
| | | | | | | |
| US GAAP Earnings Per Share - Diluted | $ | 0.16 | | $ | 0.53 |
| Adjusted to exclude the following: | | | | | |
| | Restructuring and Related Charges (Credits) (A) | | 0.35 | | | (0.01) |
| | FX Losses on Intercompany Transactions (B) | | 0.08 | | | 0.02 |
| Adjusted Earnings Per Share - Diluted | $ | 0.59 | | $ | 0.54 |
| | | | | | | |
| |
| | | | | | | |
| |
NOTES TO UNAUDITED FINANCIAL STATEMENTS |
| |
| | | | | | | |
| Adjustments: |
| A | Adjusted results for the three months ended July 31, 2017 and 2016 exclude restructuring and related charges (credits) associated with the Company's Restructuring and Reinvestment Program of $29.3 million, or $0.35 per share, and $(0.9) million, or $(0.01) per share, respectively. The first quarter of fiscal year 2017 credit reflects the true-up of facility lease reserves. |
| B | Adjusted results exclude foreign exchange gains and losses associated with intercompany transactions. For the three months ended July 31, 2017 and 2016, there were losses of $6.0 million, or $0.08 per share, and $1.3 million, or $0.02 per share, respectively. |
| | | | | | | |
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 FIRST QUARTER ENDED |
| JULY 31, 2017 AND 2016 |
| (in thousands) |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
FIRST QUARTER ENDED JULY 31, |
| | | | | | | | | | | | | | | | | | | |
| | | | | 2017 | | 2016 | | % Change |
| | | US GAAP | | Adjustments (A) | | Adjusted | | US GAAP | | Adjustments (A) | | Adjusted | | US GAAP | | Adjusted excl. FX |
Research | | | | | | | | | | | | | | | | |
| Revenue | | | | | | | | | | | | | | | | |
| | Journal Subscriptions | $ | 168,325 | | - | | 168,325 | | 162,684 | | - | | 162,684 | | 3% | | 0% |
| | Open Access | | 8,803 | | - | | 8,803 | | 7,513 | | - | | 7,513 | | 17% | | 20% |
| | Licensing, Reprints, Backfiles and Other | 38,230 | | - | | 38,230 | | 37,026 | | - | | 37,026 | | 3% | | 6% |
| | | Total Journal Revenue | | 215,358 | | - | | 215,358 | | 207,223 | | - | | 207,223 | | 4% | | 2% |
| | Publishing Technology Services (Atypon) | 8,269 | | - | | 8,269 | | - | | - | | - | | | | |
| Total Research Revenue | | 223,627 | | - | | 223,627 | | 207,223 | | - | | 207,223 | | 8% | | 6% |
| Contribution to Profit | | 61,461 | | 4,836 | | 66,297 | | 60,435 | | (69) | | 60,366 | | 2% | | 0% |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Publishing | | | | | | | | | | | | | | | | |
| Revenue | | | | | | | | | | | | | | | | |
| | STM and Professional Publishing | $ | 63,600 | | - | | 63,600 | | 70,697 | | - | | 70,697 | | -10% | | -8% |
| | Education Publishing | | 45,736 | | - | | 45,736 | | 54,861 | | - | | 54,861 | | -17% | | -16% |
| | Course Workflow (WileyPLUS) | | 1,210 | | - | | 1,210 | | 866 | | - | | 866 | | 40% | | 40% |
| | Test Preparation and Certification | 11,490 | | �� - | | 11,490 | | 9,558 | | - | | 9,558 | | 20% | | 20% |
| | Licensing, Distribution, Advertising and Other | 9,242 | | - | | 9,242 | | 8,980 | | - | | 8,980 | | 3% | | 4% |
| Total Publishing Revenue | | 131,278 | | - | | 131,278 | | 144,962 | | - | | 144,962 | | -9% | | -8% |
| Contribution to Profit | | 5,009 | | 10,854 | | 15,863 | | 19,320 | | 353 | | 19,673 | | -74% | | -18% |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Solutions | | | | | | | | | | | | | | | | |
| Revenue | | | | | | | | | | | | | | | | |
| | Education Services (Online Program Management) | $ | 26,337 | | - | | 26,337 | | 23,172 | | - | | 23,172 | | 14% | | 14% |
| | Professional Assessment | | 14,887 | | - | | 14,887 | | 13,522 | | - | | 13,522 | | 10% | | 10% |
| | Corporate Learning | | 15,315 | | | | 15,315 | | 15,406 | | - | | 15,406 | | -1% | | -1% |
| Total Solutions Revenue | | 56,539 | | - | | 56,539 | | 52,100 | | - | | 52,100 | | 9% | | 9% |
| Contribution to Profit | | (1,968) | | 2,795 | | 827 | | 146 | | - | | 146 | | N/M | | N/M |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Corporate Expenses | | (50,002) | | 10,844 | | (39,158) | | (36,087) | | (1,204) | | (37,291) | | 39% | | 6% |
| | | | | | | | | | | | | | | | | | | |
| Operating Income | $ | 14,500 | | 29,329 | | 43,829 | | 43,814 | | (920) | | 42,894 | | -67% | | -13% |
| |
| | | (A) See the accompanying Notes to Unaudited Financial Statements for a description of the adjustment. |
| | | N/M- Not Meaningful | |
| JOHN WILEY & SONS, INC. |
| UNAUDITED CONDENSED STATEMENTS OF FINANCIAL POSITION |
| (in thousands) |
| | | | | | | | |
| | | | July 31, | | April 30, |
| | | | 2017 | | 2016 | | 2017 |
| | | | | | | | |
| Current Assets | | | | | | |
| | Cash and cash equivalents | $ | 84,113 | | 185,894 | | 58,516 |
| | Accounts receivable | | 198,576 | | 213,968 | | 188,679 |
| | Inventories | | 47,892 | | 54,822 | | 47,852 |
| | Prepaid and other | | 66,177 | | 119,392 | | 64,688 |
| | Total Current Assets | | 396,758 | | 574,076 | | 359,735 |
| Product Development Assets | | 68,773 | | 39,239 | | 70,955 |
| Royalty Advances | | 21,578 | | 24,883 | | 28,320 |
| Technology, Property and Equipment | | 265,291 | | 214,740 | | 252,488 |
| Intangible Assets | | 833,676 | | 831,249 | | 828,099 |
| Goodwill | | 996,000 | | 916,690 | | 982,101 |
| Income Tax Deposits | | - | | 62,200 | | - |
| Other Assets | | 85,028 | | 80,185 | | 84,519 |
| | Total Assets | | 2,667,104 | | 2,743,262 | | 2,606,217 |
| | | | | | | | |
| Current Liabilities | | | | | | |
| | Accounts and royalties payable | | 141,034 | | 138,397 | | 139,206 |
| | Deferred revenue | | 334,625 | | 321,616 | | 436,235 |
| | Accrued employment costs | | 81,245 | | 55,241 | | 98,185 |
| | Accrued income taxes | | 24,605 | | 3,368 | | 22,222 |
| | Accrued pension liability | | 5,820 | | 5,467 | | 5,776 |
| | Other accrued liabilities | | 83,509 | | 69,042 | | 86,232 |
| | Total Current Liabilities | | 670,838 | | 593,131 | | 787,856 |
| Long-Term Debt | | 551,645 | | 653,000 | | 365,000 |
| Accrued Pension Liability | | 212,843 | | 206,814 | | 214,597 |
| Deferred Income Tax Liabilities | | 150,425 | | 191,388 | | 160,491 |
| Other Long-Term Liabilities | | 72,135 | | 82,521 | | 75,136 |
| Shareholders' Equity | | 1,009,218 | | 1,016,408 | | 1,003,137 |
| | Total Liabilities & Shareholders' Equity | $ | 2,667,104 | | 2,743,262 | | 2,606,217 |
| JOHN WILEY & SONS, INC. |
| UNAUDITED CONDENSED STATEMENTS OF FREE CASH FLOW |
| (in thousands) |
| | | | | | |
| | | | | | |
| | | | Three Months Ended |
| | | | July 31, |
| | | | 2017 | | 2016 |
| Operating Activities: | | | | |
| | Net income | $ | 9,236 | | 31,014 |
| | Amortization of intangibles | | 12,619 | | 12,573 |
| | Amortization of product development spending | | 9,644 | | 9,731 |
| | Depreciation of technology, property and equipment | 18,540 | | 17,125 |
| | Non-cash charges and credits | | 32,045 | | 20,231 |
| | Net change in operating assets and liabilities | | (163,915) | | (227,386) |
| | Cash Used for Operating Activities | | (81,831) | | (136,712) |
| | | | | | |
| Investments in organic growth: | | | | |
| | Additions to technology, property and equipment | (30,111) | | (20,778) |
| | Product development spending | | (5,907) | | (7,989) |
| | Free Cash Flow less Product Development Spending | (117,849) | | (165,479) |
| | | | | | |
| Other Investing and Financing Activities: | | | | |
| | Acquisitions, net of cash | | (4,413) | | (8,600) |
| | Net debt borrowings | | 185,964 | | 47,993 |
| | Change in book overdrafts | | (13,977) | | (12,261) |
| | Cash dividends | | (18,382) | | (17,914) |
| | Purchase of treasury shares | | (14,016) | | (11,289) |
| | Proceeds from exercise of stock options and other | 5,599 | | 13,689 |
| | Cash Provided by Investing and Financing Activities | 140,775 | | 11,618 |
| | | | | | |
| Effects of Exchange Rate Changes on Cash | | 2,671 | | (24,051) |
| | | | | | |
| Increase (Decrease) in Cash and Cash Equivalents for Period | $ | 25,597 | | (177,912) |
| | | | | | |
| | | | | | |
| | | | | | |
| RECONCILIATION TO GAAP PRESENTATION |
| | | | | | |
| Investing Activities: | | | | |
| | Product development spending | $ | (5,907) | | (7,989) |
| | Additions to technology, property and equipment | (30,111) | | (20,778) |
| | Acquisitions, net of cash | | (4,413) | | (8,600) |
| | Cash Used for Investing Activities | $ | (40,431) | | (37,367) |
| | | | | | |
| Financing Activities: | | | | |
| Cash Provided by Investing and Financing Activities | $ | 140,775 | | 11,618 |
| Excluding: | | | | |
| | Acquisitions, net of cash | | (4,413) | | (8,600) |
| | Cash Provided by Financing Activities | $ | 145,188 | | 20,218 |
| | | | | | |
| Free Cash Flow less Product Development Spending: | | | |
| | | | | | |
| The Company provides financial measures referred to as "Free Cash Flow less Product Development Spending." Free Cash Flow less 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. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, 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/ Matthew S. Kissner | |
| | | Matthew S. Kissner | |
| | | Interim Chief Executive Officer and | |
| | | Chairman of the Board | |
| | By | /s/ John A. Kritzmacher | |
| | | John A. Kritzmacher | |
| | | Chief Financial Officer and | |
| | | Executive Vice President, Technology and Operations | |
| | | | |
