Exhibit No. Description
99.1 Press Release dated September 1, 2004 titled "John Wiley & Sons,
Inc. Reports First Quarter 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). 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 1, 2004, 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 2005. 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 First Quarter Results
Hoboken, NJ, September 1, 2004. John Wiley & Sons, Inc. (NYSE:JWa) (NYSE:JWb)
announced today that first quarter revenue of $226.9 million increased 3% from
$219.7 million in the previous year's first quarter. Excluding foreign currency
effects, revenue increased 2%. Net income of $19.9 million declined from $21.8
million in the prior year. Earnings per diluted share was $0.32 compared to
$0.35 in the prior year.
"Overall, Wiley's first quarter results are consistent with our expectations.
Our Scientific, Technical, and Medical business reported healthy year-on-year
growth, with journals and books contributing to these results. As expected, our
Professional/Trade business was flat with last year's strong first quarter.
Solid Fall, Winter and Spring frontlists will drive year-on-year growth during
the balance of fiscal year 2005. The only disappointment was in our Higher
Education business, where revenue was below expectations," said William J.
Pesce, President & Chief Executive Officer.
Mr. Pesce concluded, "Based on first quarter results, leading indicators and
market conditions, we continue to anticipate revenue and earnings growth in the
mid-to-high single digits in fiscal year 2005."
Segment Highlights
Professional/Trade (P/T)
- ------------------------
Wiley's U.S. P/T revenue for the first quarter was essentially flat with prior
year and in line with our expectations. The architecture, professional culinary,
psychology and education book programs performed well. Subscription journals and
online advertising also contributed positively to the first quarter results.
Sales in the consumer cooking and business categories lagged behind last year's
first quarter.
Several P/T titles received considerable attention from the media and our
customers, including Maccioni & Wright/Sirio: The Story of My Life and Le
Cirque; Edwards/Edward R. Murrow and the Birth of Broadcast Journalism; and
Pescatore/The Hamptons Diet. The Edwards' book was on the New York
Times-Expanded Best Seller list for nine weeks. Other titles that were on
national and regional bestseller lists include Lencioni/Five Dysfunctions of a
Team; Lencioni/Death by Meeting; Allen/Multiple Streams of Income; and
Mauldin/Bull's Eye Investing.
First quarter highlights for the business program include the publication of
Flying High: How JetBlue Founder and CEO David Neeleman Beat the Competition in
the World's Most Turbulent Industry. Ross & Segal/Breakthrough Thinking for
Nonprofit Organizations was selected as this year's winner of the Terry McAdam
Book Award, a prestigious honor from the Alliance for Nonprofit Management, The
Chronicle of Philanthropy, and the New York Community Trust. Four P/T journals
were recognized for outstanding quality: Leader to Leader, the National Civic
Review, and Natural Gas and Electricity each received a 2004 Apex Award of
Excellence from Communications Concepts, while Human Resources Management
received a 2004 Golden Page Award for general readability.
P/T's architecture/engineering and professional culinary/hospitality programs
had a strong quarter. A bulk sale of a customized edition of our Guide to New
York City Landmarks was made during the quarter. The guide will be distributed
to every delegate and guest attending the Republican National Convention in New
York. Piotrowski/Becoming an Interior Designer was named by the American Society
of Interior Designers as this year's Polsky Prize winner. A multi-year contract
to provide course plans and textbooks and develop curricula in hospitality
management was signed with Axia College, a University of Phoenix sister school.
This was a collaborative effort between Wiley's P/T and Higher Education
businesses.
Throughout July, Wiley participated in a successful co-promotion with
Travelocity. Ads for the campaign appeared in USA Today and The Wall Street
Journal, among other publications and online sites. An agreement with MTV was
signed during the quarter to publish an eight volume series of travel guides
targeted to students and co-branded as MTV and Frommer's.
Guitar For Dummies, Forensics For Dummies, and nine pet-related titles were top
performers in the quarter. Two video/DVDs that were produced with Razor & Tie,
Golf For Dummies and Poker For Dummies, were released successfully and benefited
from a television advertising campaign. PCs Para Dummies, 8th edition, received
an award as the "Best Business Book for 2003" from the Latino Book and Family
Festival.
Scientific, Technical, and Medical (STM)
- ----------------------------------------
Wiley's U.S. STM business started the year on a strong note, with revenue in the
first quarter up 11% over prior year. Journal revenue increased 12%, with new
society journals contributing significantly to the year-on-year growth. The STM
book program performed well, as reflected in a 9% revenue increase over prior
year.
In addition to healthy license renewals, several new Enhanced Access Licenses to
Wiley InterScience were signed by academic and corporate customers around the
world. Customers continue to take advantage of Wiley InterScience's wide range
of access options. During the quarter, the number of visits to Wiley
InterScience increased by approximately 40% over prior year.
STM launched a number of major reference works in Wiley InterScience during the
quarter, including the Encyclopedia of Statistical Sciences, Handbook of Plant
Biotechnology, and Handbook of Statistical Genetics, Genomics, and Proteomics.
In addition, journals were added to the Company's Biotechnology Backfile
collection. Wiley and the American College of Rheumatology signed a long-term
contract extension for the journal publications Arthritis and Rheumatism and
Arthritis Care and Research.
The global STM book program performed very well during the first quarter.
Product output was excellent; manuscript transmittals have been strong; global
market conditions were relatively favorable; and online sales channels have
fueled growth. Key titles that are contributing to these results include
VanBelle/Biostatistics: A Methodology for the Health Sciences, second edition;
Freeman/Telecommunications Systems Engineering, fourth edition; Proctor and
Hughes/Chemical Hazards of the Workplace, fifth edition; Witcoff/Industrial
Organic Chemicals, second edition; Grob/Modern Practice of Gas Chromatography,
fourth edition; Basagni/Mobile Ad Hoc Networking; and Hancock/Dictionary of
Bioinformatics and Computational Biology. Further, the publication of new
volumes of major continuation titles, such as the Kirk-Othmer Encyclopedia of
Chemical Technology and the Encyclopedia of Statistical Sciences, bolstered
sales.
Higher Education
- ----------------
Revenue of Wiley's U.S. Higher Education business declined 5% during the first
quarter. Some delayed ordering and tighter inventory management by college
bookstores, as well as increases in used book sales and the sharing of textbooks
by students appear to have contributed to these results.
Strong performances were recorded by titles such as Tortora/Anatomy and
Physiology, tenth edition; Kieso/Intermediate Accounting, eleventh edition;
Cutnell/Physics, sixth edition; deBlij/Regions; and Solomons/Organic Chemistry,
eleventh edition.
The Company's online product, eGrade Plus, was launched successfully for 30 new
courses in the first quarter. eGrade Plus delivers integrated content that is
organized around teaching and learning activities. Several pricing options are
available to students. In addition to purchasing a textbook, the student
receives online study guides and self-testing products, which provide immediate
feedback to promote understanding of the subject and help the student succeed in
the course. Professors who adopt eGrade Plus can customize the course content to
fit their curriculum.
During the quarter, Wiley Higher Education and Rand McNally & Co. renewed and
expanded an agreement for Wiley to be the exclusive distributor to the academic
community of Rand McNally's Goode's World Atlas, 21st Edition. Wiley is also
publishing and distributing new regional and course editions of Goode's Atlas,
as well as the Goode's World Atlas Map Workbook.
Europe
- ------
Wiley Europe's first quarter revenue was up 18% over prior year, or 12%
excluding foreign currency effects. Journal revenue was up across all markets.
Book sales increased, especially through online sales channels. Of particular
note were the strong sales of indigenous products from both the U.K. and
Germany, as well as of imported U.S. Professional/Trade titles.
Corporate and special sales of Prechter/Conquer the Crash, Hasslacher/Diabetes
and the Kidney, Concise Encyclopedia of Computer Science, and a customized
version of Wi-Fi For Dummies contributed to the quarter's strength. An agreement
was signed with Lilly to sponsor a series of newsletters based on Practical
Diabetes International.
Wiley Europe's general interest and consumer publishing program continues to
generate publicity. First quarter highlights include the serialization in
national newspapers and magazines for Morrison/My Life Among the Serial Killers;
Pound/Inside the Olympics; and Pescatore/The Hamptons Diet. Interior Angles, a
new series in interior design, was launched during the quarter, as part of a
revamped U.K. architecture list. The first title, Fashion Retail, was well
received by the market.
During the quarter, Wiley-VCH successfully launched the new journal, Plasma,
Processes, and Polymers and published a number of new major reference works.
Asia, Australia, and Canada
- ---------------------------
Wiley's revenue in Asia, Australia, and Canada was flat during the first
quarter, or off 2% excluding foreign currency effects. Encouraging growth
throughout most of Asia was offset by sluggish results in Australia and Canada.
Key Wiley Asia publications for the quarter included Lexus: The Relentless
Pursuit by Business Week auto-correspondent Chester Dawson, as well as
Structured Credit Products and Fixed Income Markets, both by Moorad Choudhry.
The gradual economic recovery in Japan, combined with the development of a local
market partnership with a major online bookseller, had a positive effect on
results in Asia.
Sales of Wiley's Higher Education products in Canada were below expectations.
Nonetheless, the market response to eGrade Plus, including a Canadian adaptation
for Weygandt/Accounting Principles, third edition, was positive. Wiley Canada's
indigenous titles did well during the quarter, in particular, Pound/Inside the
Olympics, which picked up interest outside of Canada.
Wiley Australia won Secondary Publisher of the Year for the fifth consecutive
year at the seventh annual Awards for Excellence in Australian Educational
Publishing. Recognizing overall excellence, the award was granted by a panel of
judges that included booksellers, teachers, and publishers.
Conference Call
Wiley will hold a conference call today, Wednesday, September 1, 2004, at 10:30
a.m. (EDT) to discuss its financial results for the first quarter of fiscal year
2005. 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) 478-6251
International callers may participate by dialing: (913) 981-5558
A replay of the call will be available from 1:30 p.m. (EDT) on Wednesday,
September 1 through midnight (EDT) on Tuesday, September 7, by dialing (888)
203-1112 or (719) 457-0820 and entering Passcode 989492.
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.
"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; (viii)the
Company's ability to protect its copyrights and other intellectual property
worldwide and (ix)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.
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, 2004 AND 2003
(in thousands, except per share amounts)
First Quarter
Ended July 31,
-------------------------------------------------
2004 2003 % Change
-------------- ------------ ----------
Revenues $ 226,939 219,660 3%
Costs and Expenses
Cost of Sales 75,229 72,109 4%
Operating and Administrative Expenses 118,434 112,043 6%
Amortization of Intangibles 2,499 2,330 7%
-------------- ------------
Total Costs and Expenses 196,162 186,482 5%
-------------- ------------
Operating Income 30,777 33,178 -7%
Operating Margin 13.6% 15.1%
Interest Expense, Net 1,187 1,260
-------------- ------------
Income Before Taxes 29,590 31,918 -7%
Provision for Income Taxes 9,706 10,118
-------------- ------------
Net Income $ 19,884 21,800 -9%
============== ============
Income Per Share
Diluted $ 0.32 0.35 -9%
Basic $ 0.32 0.35
Average Shares
Diluted 62,851 62,964
Basic 61,442 61,686
JOHN WILEY & SONS, INC.
SEGMENT RESULTS
FOR THE FIRST QUARTER
ENDED JULY 31, 2004 AND 2003
(in thousands, except per share amounts)
First Quarter
Ended July 31,
------------------------------------------------------
2004 2003 % Change
----------------- -------------- ------------
Revenues
- ----------------------------------------------------------
US Segment
Professional/Trade $ 75,908 76,144 0%
Scientific, Technical and Medical 46,206 41,707 11%
Higher Education 45,475 47,768 -5%
---------------- --------------
Total US 167,589 165,619 1%
European Segment 59,523 50,583 18%
Asia, Australia & Canada Segment 23,466 23,396 0%
Intersegment Sales Eliminations (23,639) (19,938) 19%
---------------- --------------
Total Revenues $ 226,939 219,660 3%
================ ==============
Direct Contribution to Profit
- ----------------------------------------------------------
US Segment
Professional/Trade $ 15,551 18,188 -14%
Scientific, Technical and Medical 22,269 20,716 7%
Higher Education 16,051 18,684 -14%
---------------- --------------
Total US 53,871 57,588 -6%
European Segment 18,694 15,422 21%
Asia, Australia & Canada Segment 3,191 4,143 -23%
---------------- --------------
Total Direct Contribution to Profit 75,756 77,153 -2%
Shared Services and Administrative Costs
- ----------------------------------------------------------
Distribution (11,739) (11,261) 4%
Information Technology & Development (12,269) (11,801) 4%
Finance (7,339) (7,051) 4%
Other Administration (13,632) (13,862) -2%
---------------- --------------
Total Shared Services and Admin. Costs (44,979) (43,975) 2%
Operating Income $ 30,777 33,178 -7%
================ ==============
JOHN WILEY & SONS, INC.
CONDENSED STATEMENTS OF FINANCIAL POSITION
(in thousands)
July 31,
-------------------------------- April 30,
2004 2003 2004
------------ ------------- -----------
Current Assets
Cash & cash equivalents $ 40,424 8,085 82,027
Accounts receivable 146,168 134,128 127,224
Inventories 81,452 83,210 83,789
Deferred income tax benefit 18,115 27,156 18,113
Other current assets 11,973 13,956 12,853
------------ ------------ -----------
Total Current Assets 298,132 266,535 324,006
Product Development Assets 58,022 61,397 60,755
Property and Equipment 115,835 114,599 117,305
Intangible Assets 280,644 280,106 276,440
Goodwill 195,400 193,354 194,893
Deferred income tax benefit 18,352 30,340 18,976
Other Assets 22,808 21,021 22,207
------------ ------------ -----------
Total Assets 989,193 967,352 1,014,582
============ ============= ===========
Current Liabilities
Notes Payable & Current portion of long-term debt - 45,000 -
Accounts and royalties payable 76,325 79,110 68,338
Deferred subscription revenues 90,028 83,524 127,224
Accrued income taxes 29,754 34,877 19,338
Deferred income taxes 5,784 - 5,721
Other accrued liabilities 63,945 56,675 85,744
------------ ------------ -----------
Total Current Liabilities 265,836 299,186 306,365
Long-Term Debt 200,000 200,000 200,000
Accrued Pension liability 50,254 54,865 48,505
Other Long-Term Liabilities 31,258 28,184 31,757
Deferred Income Taxes 12,512 12,251 12,891
Shareholders' Equity 429,333 372,866 415,064
------------ ------------ -----------
Total Liabilities & Shareholders' Equity $ 989,193 967,352 1,014,582
============ ============= ===========
CONDENSED STATEMENTS OF CASH FLOWS
First Quarter
Ended July 31,
-----------------------------
2004 2003
------------ ----------
Operating Activities
Net income $ 19,884 21,800
Amortization of intangibles 2,499 2,330
Amortization of composition costs 8,349 7,511
Depreciation of property and equipment 7,487 7,083
Other non-cash items 12,263 8,306
Change in deferred subscription revenue (37,528) (36,948)
Net change in operating assets and liabilities (19,279) (24,896)
------------ ----------
Cash (Used for) Operating Activities (6,325) (14,814)
Investing Activities
Additions to product development assets (11,709) (12,885)
Additions to property and equipment (5,066) (5,633)
Acquisition of publishing assets, net of cash acquired (5,709) (1,006)
------------ ----------
Cash Used for Investing Activities (22,484) (19,524)
Financing Activities
Borrowings of short-term debt - 10,000
Purchase of treasury shares (9,784) -
Cash dividends (4,505) (4,035)
Proceeds from issuance of stock on option exercises & other 1,350 2,633
------------ ----------
Cash Provided by (Used for) Financing Activities (12,939) 8,598
Effects of Exchange Rate Changes on Cash 145 584
------------ ----------
Decrease in Cash and Cash Equivalents for Period $ (41,603) (25,156)
============ ==========