Ellis E. Cousens
Executive Vice President
Chief Financial & Operations Officer
John Wiley & Sons, Inc.
(201) 748-6534
John Wiley & Sons, Inc. Reports Strong Fourth Quarter and
Record Results for Fiscal Year 2004
-----------------------------------
Hoboken, NJ, June 16, 2004 -- John Wiley & Sons, Inc. (NYSE:JWa) (NYSE:JWb)
announced today record results for the fiscal year ended April 30, 2004.
Earnings per diluted share and net income for fiscal year 2004 rose 12% to $1.36
and $86 million, respectively, excluding certain tax benefits and charges
related to the Company's relocation to Hoboken, New Jersey in fiscal year 2003.
Including the tax benefits and relocation charges, earnings per diluted share
and net income for fiscal year 2004 were $1.41 and $89 million, respectively,
compared to $1.38 and $87 million in the prior year.
For the full year, revenue advanced 8% over prior year to $923 million, or 5%
excluding foreign currency effects. The year-on-year growth was driven primarily
by the strong second half performances of Professional/Trade in the U.S. and
Scientific, Technical, and Medical globally.
Cash flow after investing activities of $120 million increased significantly
from prior year, reflecting the combined effect of a 25% increase in cash
provided by operating activities and the expected decrease in capital
expenditures.
The full-year increase in administrative expenses reflects the unfavorable
impact of foreign exchange, increased employee benefit costs and investments in
technology, which are enabling the Company to better serve its customers and to
improve productivity.
"Wiley performed admirably in fiscal year 2004, achieving yet another year of
record results. Our momentum accelerated during the second half of the year, in
the States and abroad," said William J. Pesce, President and Chief Executive
Officer. He continued, "It was a challenging year for all of the markets in
which Wiley competes; however, we anticipated these conditions, managed our
expenses and investments carefully, and gained market share."
He added, "Our ability to achieve strategic milestones and generate healthy
financial results is reflected in Wiley's ten-year compound annual growth rates
for revenue and EPS, excluding unusual items, of 12% and 22%, respectively. This
decade-long record of success reflects the resiliency of our business, the
strength of our highly regarded global brands and the professionalism and
commitment of our colleagues, who embrace Wiley's performance-driven culture,
which is built on a solid foundation of integrity and ethical behavior in all
that we do."
Mr. Pesce concluded, "Based on fiscal year 2004 results, leading indicators and
market conditions, we anticipate revenue and earnings growth in the mid-to-high
single digits in fiscal year 2005."
For the fourth quarter, revenue increased 14% over the prior year to $232
million, including foreign currency effects, or 11% excluding those effects. In
fiscal year 2004, fourth quarter earnings per diluted share of $0.16 and net
income of $10 million advanced from the comparable prior year period by 20% and
21%, respectively. Robust organic growth by Professional/Trade in the U.S. and
Scientific, Technical, and Medical globally drove these results. Higher
Education's solid growth moderated somewhat in the fourth quarter.
Segment Highlights
Professional/Trade (P/T): Revenue of Wiley's U.S. P/T business increased 6% to
$340 million in fiscal year 2004, principally due to organic growth in key
publishing categories. Revenue rebounded solidly in the second half of the year,
particularly in the business, architecture, culinary, education, and consumer
programs. An improving retail book market contributed to the 16% revenue
increase in the fourth quarter.
P/T's business program generated strong momentum throughout the second half of
the year. Two finance titles performed particularly well, Hirsch & Hirsch/Stock
Trader's Almanac and Mauldin/Bull's Eye Investing (which published during the
fourth quarter and quickly made the Wall Street Journal business bestseller
list). Also contributing to the top-line results were real estate titles, such
as Allen/Multiple Streams of Income (which appeared on the Wall Street Journal
business bestseller list); leadership titles, such as the third edition of
Kouzes & Posner/Leadership Practices Inventory and Lencioni/Five Dysfunctions of
a Team (which celebrated 20 months on the BusinessWeek hardcover business
bestseller list); as well as Testosterone, Inc., an examination of CEO
misbehavior by Martha, Inc. author Christopher Byron.
Wiley's consumer programs, including the CliffsNotes and For Dummies brands, had
a solid year. Extension of the CliffsNotes brand to new CliffsStudySolver Guides
helped generate additional sales. In March, Wiley announced a partnership with
the independent entertainment company Razor & Tie to produce a series of
instructional DVDs based on For Dummies books. The first DVD offering, Golf For
Dummies, is slated for release before Father's Day. Record-breaking traffic on
Dummies.com drove incremental sales and reinforced the brand. Successful general
interest titles included Pescatore/The Hamptons Diet; Dershowitz/The Case for
Israel, which reached The New York Times hardcover bestseller list; and
Kinzer/All the Shah's Men, which was the history selection on The Economist
"Best Books of 2003" list.
P/T's travel program showed renewed strength in the second half of the year as
vacation and business travel rebounded. Frommer's, Wiley's market-leading travel
brand, had an excellent year. Frommers.com had a record number of visitors this
year, as evidenced by a greater than 40% increase in page views and user
sessions. The site not only reinforced the brand's leadership position, but also
generated incremental revenue from licensing, advertising and travel bookings.
The culinary program had a solid quarter and year, led by the Betty Crocker
franchise. The Betty Crocker Bisquick II Cookbook, which published during the
fourth quarter, sold well. Earlier in the year, Wiley launched a Betty Crocker
microsite on FoodTV.com to increase the brand's presence and drive sales.
Building on the successful Betty Crocker publishing partnership, Wiley signed
another multi-year agreement with General Mills to publish new cookbooks under
the well-known Pillsbury brand. Three Wiley cookbooks received awards at the
International Association of Culinary Professionals meeting in April - Cooking
at Home with the Culinary Institute of America; Wolfert/Slow Mediterranean
Kitchen; and Friberg/Advanced Professional Pastry Chef.
The technology publishing program gained some momentum during the second half of
the year despite challenging market conditions. Although sales were down
slightly from last year, Wiley's program maintained the significant market share
gained in the prior year. Sales of consumer technology books on topics such as
digital photography, wireless home networking and security, and professional
technology titles increased modestly for the year.
Scientific, Technical, and Medical (STM): Wiley's U.S. STM revenue increased 6%
to $178 million in fiscal year 2004 from $168 million in the previous year.
Fourth quarter revenue increased over prior year by 17% to $51 million. Society
journals, digitized journal backfiles, online major reference works, Current
Protocols and the book program contributed to the year-on-year growth. STM books
finished the year strongly, posting a 14% increase in the fourth quarter and a
4% increase for fiscal year 2004.
Worldwide STM journal revenue increased 11% for the fiscal year. The Company's
STM business continued its transformation to digital access through Wiley
InterScience. Approximately 70% of STM's global journal subscription revenue is
now generated by Wiley InterScience licenses. The number of journal articles
viewed increased by approximately 39% in fiscal year 2004, continuing the rapid
growth in customer usage since the service was launched commercially in fiscal
year 1999.
Providing customers with a wide range of access options is an important part of
the Company's strategy. Wiley InterScience extended its Pay Per View and Article
Select options to include access to its extensive range of online reference
works. Previously available only for online books and journal content, these
services allow librarians, scientists and other researchers to gain access to
individual articles and chapters from publications for which they do not hold
subscriptions.
In fiscal year 2004, STM enjoyed healthy renewals of Enhanced Access Licenses
for Wiley InterScience. A number of new licenses were signed during the fourth
quarter, including: Indian Institute of Science, Bangalore; GE India Technology
Centre; Niedersachsen Consortium in Germany; Portuguese Academic Consortium,
Fundacao para a Computacao Cientifica Nacional; Universidad de Valencia in
Spain; Private University Libraries Consortium in Japan; Michigan Shared Access
Program; and University of Virginia Consortium. During the year, 18 additional
universities joined the Chinese Academic Libraries Information Service (CALIS)
agreement, Wiley's first major license in China.
Wiley continued to invest in Wiley InterScience by adding more content and
functionality to meet customers' information needs. Additional digitized journal
backfiles were added to the service through the launch of the Angewandte Chemie
Backfile Collection and the Biotechnology, Biochemistry and Biophysics Backfile
Collection. The latter spans more than 50 years of content across 15 seminal
journal titles. New online databases added during the year included Organic
Syntheses Database, the Database of Polymer Properties and Organic Reactions.
Wiley continued to develop its society journal program by forming partnerships
with prominent national, regional, and international societies. Earlier in the
year, the Company entered an agreement with the Society of Plastics Engineers to
provide all publishing services for its technical journals - Polymer Engineering
& Science, Polymer Composites and Journal of Vinyl & Additive Technology. Also
new in fiscal year 2004 was an alliance with the American Institute of Chemical
Engineers to publish its three flagship journals - the AIChE Journal,
Environmental Progress and Process Safety Progress.
The STM book program showed improvement throughout the year. Sales of online
major reference works and OnlineBooks were robust. Early in the fourth quarter,
Wiley signed an agreement to distribute Merck's professional manuals in the
U.S., including The Merck Manual, The Merck Veterinary Manual, The Merck Manual
of Geriatrics and The Merck Index. These titles are widely considered to be
among the most trusted resources for medical and scientific information.
Higher Education: Wiley's U.S. Higher Education revenue increased 3% to $153
million in fiscal year 2004. Programs in the sciences and the social sciences
did especially well. Sales of engineering and computer science titles continued
to reflect sluggish market conditions. In the fourth quarter, which is
seasonally the least significant for Higher Education, revenue declined from the
same period in the previous year, principally due to sluggish market conditions.
Year-on-year growth was driven by top-selling titles such as Tortora/Principles
of Anatomy and Physiology, 10th edition; Kieso/Intermediate Accounting, 11th
edition; Kimmel, Weygandt, and Kieso/Financial Accounting, 3rd edition;
Solomons/Organic Chemistry, 8th edition; Huffman/Psychology in Action, 7th
edition; Connally, Hughes-Hallett and Gleason/Functions Modeling Change, 2nd
edition; and Cutnell and Johnson/Physics, 6th edition. During the fourth
quarter, Wiley Higher Education introduced new editions of leading titles,
including Halliday/ Fundamentals of Physics; 7th edition,
Schermerhorn/Management, 8th edition; and Strahler/Physical Geography, 3rd
edition.
The textbooks and related educational materials that Wiley develops continue to
be widely regarded by professors and students as crucial to effective teaching
and learning. Wiley remains committed to delivering the highest quality
materials and services, while addressing concerns about price and value. For
example, Wiley's Core Concepts texts are pared-down, economical, paperback books
designed to be used in combination with online and customized components.
At the same time, the Company is migrating to online delivery in pace with
customers' needs. Doing so offers opportunities for more customization and new
pricing and business models. At a time when state budget cuts are increasing
class sizes, innovative new products and services, most of which are
technology-enabled, are helping teachers teach and students learn.
During the year, the Company launched eGrade Plus, which is the first product
built on Wiley's Edugen technology platform. This platform enables Wiley to
deliver integrated content that is organized around teaching and learning
activities. Several pricing options are available to students. eGrade Plus is an
innovative service which is being well received by our customers. Recently,
Wiley entered into an agreement with Science Technologies to license its MolQuiz
software for use with eGrade Plus offerings in organic chemistry, general
chemistry, and biochemistry.
In fiscal year 2004, the Company announced an agreement with XanEdu, a division
of ProQuest, to build Wiley Business Extra Select, an online custom courseware
program. The program enables instructors to create customized business course
materials by combining Wiley's textbooks and learning materials with content
from the program's copyright-cleared journal articles, case studies, and
periodical and newspaper articles, which number in the millions. This agreement
was expanded during the fourth quarter to offer more options and greater
flexibility to faculty in creating their customized coursepacks.
Soon after the close of the fiscal year, the Company announced the continuation
of its agreement with the Financial Accounting Standards Board (FASB) to be the
exclusive distributor of its publications in the academic marketplace. In
addition, Wiley will publish FARS Online, a subscription-based service providing
online access to FASB's searchable flagship database, Financial Accounting
Research System.
Europe: Full-year revenue of Wiley Europe advanced 13% over the prior year to
$238 million, including foreign exchange gains, or 5% excluding exchange
effects. Fourth quarter revenue was up 19% to $69 million, including foreign
currency gains, or 10% excluding currency. Several factors contributed to the
revenue growth of Wiley Europe's journal program, including a full year's
results of the British Journal of Surgery and Ultrasound in Obstetrics and
Gynecology, excellent reprint sales, healthy subscription and license renewals,
and growth in Article Select sales. In Germany, Wiley-VCH launched a number of
new journals, including Engineering in Life Sciences, Laser Physics Letters,
Laser Technik Journal and Applied Numerical Analysis and Computational
Mathematics.
In May 2004, Wiley Europe acquired the market-leading publication, Microscopy &
Analysis. With an estimated readership of 131,000 microscopists worldwide, this
controlled-circulation publication, together with the Company's primary
spectroscopy journals, Spectroscopy Europe magazine and the online sites
spectroscopyNOW and separationsNOW, will provide a competitive advantage to
Wiley in this market.
During the quarter, the Company renewed its license agreement with the National
Electronic Library for Health, part of the National Health Service, to enable
broad access to the Cochrane Systematic Review in the U.K. Renewal of this
important agreement completed a successful first year of publication of Cochrane
by Wiley.
The For Dummies list in the U.K. is off to a good start with the successful
release of British History For Dummies and Rugby Union For Dummies. For Dummies
titles developed in the U.S., especially consumer technology titles such as
Windows XP For Dummies, Internet For Dummies and PC For Dummies, also sold well.
Wiley Europe's professional journals program had an excellent year.
During the fourth quarter, for the sixth time in nine years, the Association of
Academic, Professional, and Specialist Booksellers voted Wiley "Academic
Publisher of the Year in the UK and Ireland."
Asia, Australia, and Canada: Wiley's combined revenue for its operations in
Asia, Australia and Canada advanced 13% to $99 million in fiscal year 2004 or 1%
excluding foreign exchange. Fourth quarter revenue increased 11% over the prior
year or 1% excluding foreign exchange. Foreign exchange gains, P/T sales growth
in India, Taiwan and Indonesia and higher sales of indigenous products in
Australia were partially offset by lower sales in Canada due to a weak retail
book market.
The indigenous Asian publishing program finished the year on a high note,
bolstered by strong global sales of key frontlist titles and a robust backlist
performance. Wiley formed an alliance with Citibank to develop personal finance
books in Asia. In addition, Wiley Asia launched the For Dummies franchise in
China, publishing 20 consumer and business titles.
Wiley Canada's Higher Education performance during the quarter and the full year
improved, in part, due to the introduction of adaptations of U.S. Higher
Education titles. Growth in Higher Education did not, however, compensate for
P/T sales, which were depressed by the weak economy and unusually high
industry-wide returns.
In Australia, indigenous P/T publishing performed well, while Higher Education
and School sales were sluggish, reflecting market conditions. During the
quarter, the Company signed publishing agreements with the Australian Stock
Exchange and the Australian Institute of Management.
Special Items
In the third quarter of fiscal year 2004 the Company reported a net tax benefit
of $3 million, or $0.05 per diluted share, due to favorable resolution of
certain state and federal tax matters and an adjustment to accrued foreign
taxes.
During fiscal year 2003, the Company merged several of its European subsidiaries
into a new entity, which enabled the Company to increase the tax-deductible
asset basis of the merged subsidiaries to the fair value of the business at the
date of merger. Under U.S. accounting principles, the tax benefit of $12
million, or $0.19 per share, attributable to the increase in tax basis was
immediately included in income, although the cash benefit of this change will be
recognized pro-rata over a 15-year period.
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 $0.02 per share.
Excluding the above tax benefit and special charges associated with the
relocation, earnings per diluted share were $1.36 for the fiscal year ended
April 30, 2004 as compared with $1.22 for the prior year period.
"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
Wiley will hold a conference call on Wednesday, June 16, 2004, at 11:30 a.m.
(EDT) to discuss its financial results for the fourth quarter and full year 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) 289-0493
International callers may participate by dialing: (913) 981-5510
A replay of the call will be available from 1:30 p.m. (EDT) on Wednesday, June
16 through midnight (EDT) on Tuesday, June 22 by dialing (888) 203-1112 or (719)
457-0820 and entering Passcode 506547.
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 FOURTH QUARTER AND YEAR ENDED
APRIL 30, 2004 AND 2003
(in thousands, except per share amounts)
Fourth Quarter Ended Year Ended
April 30, April 30,
------------------------------------- ----------------------------------
2004 2003 % Change 2004 2003 % Change
----------- ---------- -------- -------- -------- ---------
Revenue $ 232,065 203,330 14% 922,962 853,971 8%
Costs and Expenses
Cost of Sales 76,635 70,279 9% 308,905 288,925 7%
Operating and Administrative Expenses 137,552 113,840 21% 474,902 432,700 10%
Amortization of Intangibles 2,394 2,361 1% 9,776 9,620 2%
Unusual Item - Relocation Expenses (A) - - - 2,465
---------- ----------- ---------- ----------
Total Costs and Expenses 216,581 186,480 16% 793,583 733,710 8%
Operating Income 15,484 16,850 -8% 129,379 120,261 8%
Operating Margin 6.7% 8.3% 14.0% 14.1%
Interest Expense and Other, Net 1,177 2,468 4,269 7,702
---------- ----------- ---------- ----------
Income Before Taxes 14,307 14,382 -1% 125,110 112,559 11%
Provision for Income Taxes (B) 4,259 6,088 36,270 25,284
---------- ----------- ---------- ----------
Net Income $ 10,048 8,294 21% 88,840 87,275 2%
========== =========== ========== ==========
Income Per Share
Diluted $ 0.16 0.13 20% 1.41 1.38 2%
Basic $ 0.16 0.13 1.44 1.42
Reconciliation of Non-GAAP Pro Forma Financial Disclosure
- ---------------------------------------------------------
Net Income as Reported $ 10,048 8,294 88,840 87,275
Relocation Expense, Net of Tax (A) - - - 1,479
Tax Benefit (B) - - (3,019) (12,025)
---------- ----------- ---------- ----------
Pro Forma Net Income $ 10,048 8,294 21% 85,821 76,729 12%
========== =========== ========== ==========
Income Per Share-Diluted as Reported $ 0.16 0.13 1.41 1.38
Relocation Expense, Net of Tax (A) - - - 0.02
Tax Benefit (B) - - (0.05) (0.19)
Pro Forma Income Per Share -Diluted $ 0.16 0.13 20% 1.36 1.22 12%
========== =========== ========== ==========
Average Shares
Diluted 63,080 62,573 63,226 63,086
Basic 61,680 61,501 61,771 61,504
(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 $1.5 million after tax, or
$.02 per share, was reported.
(B) In the third quarter of fiscal year 2004 the Company recognized a net tax
benefit of $3.0 million or $0.05 per diluted share related to the
resolution of certain state and federal tax matters and an adjustment to
accrued foreign taxes. The second quarter of fiscal year 2003 includes a
tax benefit of $12.0 million equal to $0.19 per diluted share, relating to
the step up in the tax basis of a European subsidiary's assets.
Note: Management believes the above non-GAAP financial measures, which exclude
the relocation charge and the tax benefits, provide a meaningful comparison of
the Company's year-over-year results. These measures improve investors' ability
to understand the Company's performance and future expectations. As required by
the SEC, the Company provides the above reconciliation.
JOHN WILEY & SONS, INC.
SEGMENT RESULTS
FOR THE FOURTH QUARTER AND YEAR ENDED
APRIL 30, 2004 AND 2003
(in thousands, except per share amounts)
Fourth Quarter Ended Year Ended
April 30, April 30,
----------------------------------------- ----------------------------------------
2004 2003 % Change 2004 2003 % Change
------------- ----------- --------- ----------- ----------- -----------
Revenue
- ----------------------------------------
US Segment
Professional/Trade $ 92,970 80,315 16% 340,252 321,963 6%
Scientific, Technical and Medical 51,215 43,655 17% 178,100 168,208 6%
Higher Education 20,597 23,125 -11% 152,861 148,220 3%
------------- ------------ ---------- -----------
Total US 164,782 147,095 12% 671,213 638,391 5%
European Segment 68,970 57,719 19% 238,436 210,482 13%
Asia, Australia & Canada Segment 18,237 16,360 11% 98,986 87,314 13%
Intersegment Sales Eliminations (19,924) (17,844) 12% (85,673) (82,216) 4%
------------- ------------ ---------- -----------
Total Revenue $ 232,065 203,330 14% 922,962 853,971 8%
============= ============ ========== ===========
Direct Contribution to Profit
- ----------------------------------------
US Segment
Professional/Trade $ 27,003 21,350 26% 93,945 87,354 8%
Scientific, Technical and Medical 25,458 20,032 27% 86,310 77,937 11%
Higher Education (4,705) (2,163) 118% 41,749 39,938 5%
------------- ------------ ---------- -----------
Total US 47,756 39,219 22% 222,004 205,229 8%
European Segment 21,855 21,120 3% 74,585 69,191 8%
Asia, Australia & Canada Segment 2,175 1,553 40% 22,218 16,278 36%
------------- ------------ ---------- -----------
Total Direct Contribution to Profit 71,786 61,892 16% 318,807 290,698 10%
Shared Services and Administrative Costs
- ----------------------------------------
Distribution (12,744) (11,565) 10% (47,174) (45,680) 3%
Information Technology & Development (15,430) (12,342) 25% (51,918) (42,427) 22%
Finance (9,180) (7,009) 31% (29,900) (27,919) 7%
Other Administration (18,948) (14,126) 34% (60,436) (51,946) 16%
------------- ------------ ---------- -----------
Total Shared Services and Admin. Costs (56,302) (45,042) 25% (189,428) (167,972) 13%
Unusual Item - Relocation Expenses (A) - - - (2,465)
------------- ------------ ---------- -----------
Operating Income $ 15,484 16,850 -8% 129,379 120,261 8%
============= ============ ========== ===========
(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 $1.5 million after tax, or
$.02 per share, was reported.
JOHN WILEY & SONS, INC.
CONDENSED STATEMENTS OF FINANCIAL POSITION
(in thousands)
April 30,
-----------------------------
2004 2003
------------- ------------
Current Assets
Cash & cash equivalents $ 82,027 33,241
Accounts receivable 127,224 107,242
Inventories 83,789 83,337
Deferred income tax benefit 18,113 27,314
Other current assets 12,853 21,181
------------ ------------
Total Current Assets 324,006 272,315
Product Development Assets 60,755 60,842
Property and Equipment 117,305 114,870
Goodwill 194,893 192,186
Intangible Assets 276,440 280,872
Deferred Income Taxes 18,976 30,597
Other Assets 22,207 20,558
------------- ------------
Total Assets 1,014,582 972,240
============= ============
Current Liabilities
Notes Payable & Current portion of long-term debt - 35,000
Accounts and royalties payable 68,338 71,296
Deferred subscription revenues 127,224 118,577
Accrued income taxes 19,338 30,632
Deferred income taxes 5,721 -
Accrued pension liability 4,559 8,074
Other accrued liabilities 81,185 69,550
------------- ------------
Total Current Liabilities 306,365 333,129
Long-Term Debt 200,000 200,000
Accrued Pension Liability 48,505 54,907
Other Long-Term Liabilities 31,757 28,192
Deferred Income Taxes 12,891 12,008
Shareholders' Equity 415,064 344,004
------------- ------------
Total Liabilities & Shareholders' Equity $ 1,014,582 972,240
============= ============
CONDENSED STATEMENTS OF CASH FLOWS
April 30,
-----------------------------
2004 2003
------------- ------------
Operating Activities
Net income $ 88,840 87,275
Amortization of intangibles 9,776 9,620
Amortization of composition costs 31,852 29,923
Depreciation of property and equipment 29,739 23,420
Net pension expense (contribution) (8,603) 5,178
Non-cash tax credit - (12,025)
Deferred income taxes 26,685 23,249
Other items 32,530 35,771
Change in deferred subscription revenue 7,365 (4,706)
Net change in operating assets and liabilities (5,972) (28,577)
------------- ------------
Cash Provided By Operating Activities 212,212 169,128
Investing Activities
Additions to product development assets (59,426) (51,835)
Additions to property and equipment (29,222) (63,221)
Acquisition of publishing assets, net of cash acquired (3,070) (10,500)
------------- ------------
Cash Used for Investing Activities (91,718) (125,556)
Financing Activities
Repayment of long-term debt (35,000) (30,000)
Purchase of treasury shares (26,126) (12,344)
Cash dividends (16,270) (11,661)
Proceeds from exercise of stock options 4,958 1,500
------------- ------------
Cash Used for Financing Activities (72,438) (52,505)
Effects of Exchange Rate Changes on Cash 730 2,469
------------- ------------
Increase (Decrease) in Cash and Cash Equivalents for Period $ 48,786 (6,464)
============= ============
Note: Subscriber receivables for April 30, 2004 and April 30, 2003 of $14.1
million and $12.8 million, respectively, are netted against Deferred
Subscription Revenue in the Statement of Changes in Financial Position above.
Prior period amounts have been reclassified to conform to the current period
presentation.