Exhibit No. Description
99.1 Press Release dated September 3, 2003 titled "John Wiley & Sons,
Inc. Reports Revenue and Earnings Increases for the First Quarter
of Fiscal Year 2004 (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).
ITEM 9: REGULATION FD DISCLOSURE
The information in this report is being furnished (i) pursuant to
Regulation FD, and (ii) pursuant to Item 12 Results of Operations
and Financial Condition (in accordance with SEC interim guidance
issued March 28, 2003). In accordance with General Instructions
B.2 and B.6 of Form 8-K, the information in this report shall not
be deemed to be "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, nor shall it be
deemed incorporated by reference in any filing under the
Securities Act of 1934, as amended. 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.
On September 3, 2003, 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 2004. A copy of the Company press release is attached hereto
as Exhibit 99.1 and incorporated
Ellis E. Cousens
Executive Vice President, Chief Financial & Operations Officer
John Wiley & Sons, Inc.
(201) 748-6534
John Wiley & Sons, Inc.
Reports Revenue and Earnings Increases
for the First Quarter of Fiscal Year 2004
Hoboken, N.J. September 3, 2003 -- John Wiley & Sons, Inc. (NYSE:JWa) (NYSE:JWb)
announced today that first quarter revenue increased 6% over prior year to
$219.7 million. Excluding foreign currency translation gains, revenue increased
4%.
Excluding an unusual charge related to the Company's relocation to Hoboken, New
Jersey, in the prior year, first quarter net income advanced to $21.8 million
from $21.5 million while earnings per share increased to $0.35 from $0.34.
Including the unusual charge, net income and EPS in last year's first quarter
were $20.0 million and $0.32, respectively.
Operating and administrative expenses increased 9% over last year's first
quarter. Excluding the combined effects of foreign currency and expense
associated with a small web development company acquired in the second quarter
of last fiscal year, the increase was 5%.
"Wiley's results are consistent with our expectations, particularly given the
generally soft market conditions around the world and comparisons to last year's
strong first quarter. Assuming gradual improvement in market conditions
throughout the year, we continue to anticipate mid-to-high single digit
increases in revenue and earnings in fiscal year 2004," said President and CEO,
William J. Pesce.
Segment Highlights
Professional/Trade (P/T)
- -------------------------
First quarter revenue of Wiley's U.S. P/T business advanced 8% over the same
period in the prior year, reflecting the strength of its publishing, marketing
and sales programs, as well as improvement in sales returns. In a sluggish
retail environment, P/T out-performed the industry, gaining share in its major
market segments.
Wiley's technology program had a successful first quarter, a significant
accomplishment given the continuing softness in the market. Consumer areas
continue to perform well, including digital photography, digital imaging,
Photoshop, general PC technology, Windows XP, and home networking. The
professional segment continues to be soft.
Wiley's business program exhibited strength amidst challenging market
conditions, reflecting healthy backlist sales in leadership, real estate,
high-level finance, and accounting. Seven Wiley business titles appeared on
major bestseller lists, including Five Dysfunctions of a Team: A Leadership
Fable; Home Buying For Dummies; Iron Triangle; Yes, You Can Time the Market;
Martha, Inc.; The Ernst & Young Tax Guide 2003; and JK Lasser's Your Income Tax
2003.
Noteworthy titles that were published during the quarter include Modern
Investment by Bob Litterman of Goldman Sachs and Rich in America by Jeffrey
Maurer, the CEO of US Trust. Bookselling For Dummies, which was produced with
the American Booksellers Association as the official guide for the annual Book
Expo in May, was distributed to all independent booksellers in the U.S.
All the Shah's Men: An American Coup and the Roots of Middle East Terror, a
high-profile current events title by Stephen Kinzer, was published to great
critical acclaim during the first quarter. Top-selling cookbooks during the
quarter were Betty Crocker's Cookie Book, Betty Crocker's Cookbook Bridal
Edition, and Weight Watchers New Complete Cookbook. Webster's New World foreign
language dictionaries also sold well. MTV's reality show, Real World, featured
seven Americans working on a travel guide for Wiley's Frommer's series.
Scientific, Technical, and Medical (STM)
- ----------------------------------------
Wiley's U.S. STM revenue in the first quarter of fiscal year 2004 was slightly
lower than last year due to continued sluggish book sales and the impact of the
Rowecom bankruptcy on calendar year 2003 journal revenue. Global STM journal
revenue performed well, even including the unfavorable effect of the Rowecom
bankruptcy, increasing 4% over the prior year.
Wiley InterScience, the Company's online service, experienced significant growth
with the number of full-text accesses increasing over 40% from prior year. More
than 60% of global journal subscription revenue is generated by Wiley
InterScience licenses. Several new licenses were signed during the first
quarter. Two institutions, Nanjing University and Northeastern University joined
the China Academic Libraries Information System (CALIS) consortium agreement.
The CALIS agreement, which is Wiley's first Enhanced Access License in China,
has already resulted in a dramatic increase in the number of visits to Wiley
InterScience from users in China. New licenses were also signed with Kings
College London, the United Arab Emirates University, and the University of New
Mexico.
A number of new database products were made available online during the quarter,
including the Organic Synthesis Database, the Database of Polymer Properties and
AntiBase 2003. Wiley's Current Protocols program has enjoyed a strong start to
the year, reflecting the performance of CP Bioinformatics and new CP Online
licenses.
Higher Education
- ----------------
First quarter revenue for the U.S. Higher Education business was up 6% over the
comparable prior year period, reflecting growth in the life sciences due to a
strong front list, as well as solid performances of the physical sciences and
social sciences programs. Industry-wide conditions in engineering continue to be
weak. Globally Higher Education revenues increased approximately 8% for the
quarter.
During the quarter, Higher Education benefited from the performance of recent
revisions including Kieso/Intermediate Accounting 11e; Huffman/Psychology 7e;
Davison/Abnormal Psychology 9e; Cutnell/Physics 6e; Kimmel/Financial Accounting
3e; and Tortora and Grabowski/Principles of Anatomy and Physiology 10e.
Wiley is leveraging its investments in technology to help teachers teach and
students learn. During the quarter, eGrade Plus was launched for Cutnell and
Johnson/Physics 6e, the first product built using Wiley's new technology
platform, known as Edugen. This platform enables Wiley to deliver integrated
content that is organized around teaching and learning activities.
Higher Education formed a publishing partnership with Editorial Espasa Calpe, a
subsidiary of Grupo Planeta, one of the largest Spanish language publishers in
the world. Wiley and Espasa will co-develop a textbook and related material for
the first-year undergraduate Spanish course. This innovative program will
provide students with multimedia access to a comprehensive set of tools that
will assist them with pronunciation, vocabulary, and grammar. The program will
help students immerse themselves in the language and culture of the Hispanic
world through high-quality video segments from a professional television series.
Europe
- ------
First quarter revenue in Wiley's European segment increased 6%, but was down 3%
excluding the effect of foreign currency translation gains. Strong journal
performance from Wiley-VCH in Germany was more than offset by weak book sales in
the UK. Strength in journals came from the European Journal of Organic
Chemistry, the Numerical Methods in Engineering journal, the European Journal of
Inorganic Chemistry, and a group of five polymer publications. In addition,
Angewandte Chemie, one of the leading international chemistry research journals,
performed well.
In May, Wiley launched a Website it developed for the European Peptide Society
(www.eurpepsoc.com), as well as new revenue-generating features (advertorials
and HTML email newsletters) for two communities of interest portals,
spectroscopyNOW.com and separationsNOW.com.
Wiley Europe renewed its contract with The Pathological Society of Great Britain
and Northern Ireland to publish the Journal of Pathology, as well as with the
Biometrical Society to publish the Biometrical Journal. The Company also renewed
its license with the UK National Electronic Health Library, which provides
online access to the Cochrane Systematic Reviews in the UK. Wiley formed a
partnership with The Cochrane Collaboration in March to publish these online
databases, which are widely regarded as the world's most authoritative source of
information on the effectiveness of health care interventions. In addition to
enhancing Wiley's medical publishing program with the addition of prestigious
content, the partnership established a major presence for the Company in the
rapidly emerging area of medical informatics.
Wiley Europe formed an alliance with IASeminars for accountancy and finance
titles, giving the Company access to their customer base of 50,000 professionals
throughout Europe. In addition, an agreement was concluded with Cyberlibris, to
feature 150 Wiley titles in this European digital library service for business
schools and corporate institutional training centers.
Asia, Australia & Canada
- ------------------------
First quarter revenue in Asia, Australia, and Canada increased 11%, or 2%
excluding the effect of foreign currency translation gains. Strong Higher
Education sales, driven principally by market share gains in Canada, were
tempered somewhat by soft revenue in Australia. In spite of the lingering effect
of the SARS outbreak, Asia reported growth in the first quarter, reflecting
continued gains in China and India.
The Dollar Crisis, by financial analyst Richard Duncan, received extensive
global publicity that propelled it to the #17 bestseller on Amazon.com. A Wiley
Australia Wrightbooks title, From 0 to 130 Properties in 3.5 Years, by Steve
McKnight, published during the quarter to great acclaim.
For the seventh time in eight years, Wiley Australia won Secondary Publisher of
the Year at the Awards for Excellence in Educational Publishing conference. Two
Higher Education titles received awards: Jones/Investments: Analysis and
Management won best adaptation and Davidson/Management: An Australian
Perspective 2e won best teaching and learning package.
Special Item
Wiley completed the relocation of the Company's headquarters to Hoboken, New
Jersey in the first quarter of fiscal year 2003 and reported an unusual charge
for costs associated with the relocation of approximately $1.5 million after-tax
or $.02 cents per share.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995
This report 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; and (viii) 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.
Conference Call
John Wiley & Sons, Inc., will hold a conference call on Wednesday, September 3,
2003, at 10:30 a.m. (EDT) to discuss its financial results for the first quarter
of fiscal year 2004. The call will include a brief management presentation
followed by a question and answer session. To participate in the conference
call, please dial the following number approximately ten minutes prior to the
scheduled starting time: (800) 406-5345
International callers may participate by dialing: (913) 981-5571
A replay of the call will be available from 1:30 p.m. (EDT) on Wednesday,
September 3 through midnight (EDT) on Wednesday, September 9 by dialing (888)
203-1112 or (719) 457-0820 and entering Passcode 132692.
A live audio Webcast will be accessible at
http://www.wiley.com/go/communications. A replay of the Webcast will be
accessible for 14 days afterwards.
Founded in 1807, John Wiley & Sons, Inc., provides must-have content and
services to customers worldwide. Its core businesses include scientific,
technical, and medical journals, encyclopedias, books, and online products and
services; professional and consumer books and subscription services; and
educational materials for undergraduate and graduate students and lifelong
learners. Wiley has publishing, marketing, and distribution centers in the
United States, Canada, Europe, Asia, and Australia. The Company is listed on the
New York Stock Exchange under the symbols JWa and JWb. Wiley's Internet site can
be accessed at http://www.wiley.com.
JOHN WILEY & SONS, INC.
SUMMARY OF OPERATIONS
FOR THE FIRST QUARTER
ENDED JULY 31, 2003 AND 2002
(in thousands, except per share amounts)
First Quarter
Ended July 31,
----------------------------------------------------
2003 2002 % Change
----------------------------------- ---------
Revenues $ 219,660 206,437 6%
Costs and Expenses
Cost of Sales 72,109 68,721 5%
Operating and Administrative Expenses 112,043 102,367 9%
Amortization of Intangibles 2,330 2,176 7%
Unusual Item - Relocation Expenses (A) - 2,465
----------- -----------
Total Costs and Expenses 186,482 175,729 6%
----------- -----------
Operating Income 33,178 30,708 8%
Operating Margin 15.1% 14.9%
Interest Expense, Net 1,260 1,737
----------- ------------
Income Before Taxes 31,918 28,971 10%
Provision (Benefit) for Income Taxes 10,118 8,941
------------- ------------
Net Income $ 21,800 20,030 9%
============ ============
Income Per Share
Diluted $ 0.35 0.32 10%
Basic $ 0.35 0.32
Reconciliation of Unusual Items
- -------------------------------
Net Income (Loss) as Reported $ 21,800 20,030
Relocation Expense, Net of Tax (A) - 1,479
------------ ------------
Net Income Before Unusual Items $ 21,800 21,509 1%
============ ============
Income (Loss) Per Share-Diluted as Reported $ 0.35 0.32
Relocation Expense, Net of Tax (A) - 0.02
Net Income Per Share-Diluted Before Unusual Items $ 0.35 0.34 2%
============ ===========
Average Shares
Diluted 62,964 63,573
Basic 61,686 61,658
(A) The Company completed the relocation of its headquarters to Hoboken,
N.J. in the first quarter of fiscal year 2003. An unusual charge for
costs associated with the relocation of approximately $1,479 after tax
or $.02 per share was reported.
JOHN WILEY & SONS, INC.
SEGMENT RESULTS
FOR THE FIRST QUARTER
ENDED JULY 31, 2003 AND 2002
(in thousands, except per share amounts)
First Quarter
Ended July 31,
----------------------------------
2003 2002 % Change
----------------- --------------- ------------------
Revenues
- ---------------------------------------
US Segment
Professional/Trade $ 76,144 70,181 8%
Scientific, Technical and Medical 41,707 42,457 -2%
Higher Education 47,768 44,915 6%
---------- ----------
Total US 165,619 157,553 5%
European Segment 50,583 47,892 6%
Asia, Australia & Canada Segment 23,396 21,160 11%
Intersegment Sales Eliminations (19,938) (20,168) -1%
---------- ----------
Total Revenues $ 219,660 206,437 6%
========== ==========
Direct Contribution to Profit
US Segment
Professional/Trade $ 18,188 14,292 27%
Scientific, Technical and Medical 20,716 20,317 2%
Higher Education 18,684 18,158 3%
---------- ----------
Total US 57,588 52,767 9%
European Segment 15,422 16,036 -4%
Asia, Australia & Canada Segment 4,143 3,612 15%
---------- ----------
Total Direct Contribution to Profit (A) 77,153 72,415 7%
Shared Services and Administrative Costs
Distribution (11,261) (11,054) 2%
Information Technology & Development (11,801) (8,522) 38%
Finance (7,051) (7,367) -4%
Other Administration (13,862) (12,299) 13%
---------- ----------
Total Shared Services and Admin. Costs (43,975) (39,242) 12%
Unusual Item - Relocation Expenses (A) - (2,465)
---------- ----------
Operating Income $ 33,178 30,708
========== ==========
(A) The Company completed the relocation of its headquarters to Hoboken, N.J.
in the first quarter of fiscal year 2003. An unusual charge for costs
associated with the relocation of approximately $1,479 after tax or $.02
per share was reported.
JOHN WILEY & SONS, INC.
CONDENSED STATEMENTS OF FINANCIAL POSITION
(in thousands)
July 31, April 30,
---------------------------- -------------------
2003 2002 2003
---------- --------- -------------------
Current Assets
Cash & cash equivalents $ 8,085 9,850 33,241
Accounts receivable 134,802 130,653 120,057
Inventories 83,210 80,051 83,337
Other current assets 39,826 50,659 47,209
-------- ------- --------
Total Current Assets 265,923 271,213 283,844
Product Development Assets 61,397 57,388 60,842
Property and Equipment 114,599 95,827 114,870
Goodwill 193,354 190,501 192,186
Intangible Assets 280,105 281,310 280,872
Other Assets 22,034 21,858 23,358
-------- ------- --------
Total Assets 937,412 918,097 955,972
======== ======= ========
Current Liabilities
Notes Payable & Current portion of long-term debt 45,000 55,000 35,000
Accounts and royalties payable 79,110 103,264 71,296
Deferred subscription revenues 84,198 82,097 131,392
Accrued income taxes 12,198 13,652 7,953
Other accrued liabilities 56,675 66,434 77,624
--------- ------- --------
Total Current Liabilities 277,181 320,447 323,265
Long-Term Debt 200,000 235,000 200,000
Accrued Pension liability 51,493 28,373 54,909
Other Long-Term Liabilities 28,183 22,760 28,190
Deferred Income Taxes 5,847 14,572 5,604
Shareholders' Equity 374,708 296,945 344,004
--------- -------- --------
Total Liabilities & Shareholders' Equity $ 937,412 918,097 955,972
========= ======== ========
CONDENSED STATEMENTS OF CASH FLOWS
First Quarter
Ended July 31,
------------------------------------
2003 2002
---------------- ---------------
Operating Activities
Net income $ 21,800 20,030
Amortization of intangibles 2,330 2,176
Amortization of composition costs 7,511 7,113
Depreciation of property and equipment 7,083 4,219
Other non-cash items 14,437 18,207
Net change in operating assets and liabilities (67,975) (59,347)
--------- -------
Cash Provided By (Used for) Operating Activities (14,814) (7,602)
Investing Activities
Additions to product development assets (12,885) (9,181)
Additions to property and equipment (5,633) (25,510)
Acquisition of publishing assets, net of cash acquired (1,006) (7,812)
--------- -------
Cash Used for Investing Activities (19,524) (42,503)
Financing Activities
Borrowings of short-term debt 10,000 25,000
Cash dividends (4,035) (3,094)
Purchase of treasury shares - (3,531)
Proceeds from issuance of stock on option exercises & other 2,633 1,125
-------- --------
Cash Provided by (Used for) Financing Activities 8,598 19,500
Effects of Exchange Rate Changes on Cash 584 750
-------- --------
Decrease in Cash and Cash Equivalents for Period $ (25,156) (29,855)
======== ========