Exhibit No. Description
99.1 Press release dated December 1, 2004 titled "John Wiley and 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 Operation 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 December 1, 2004, John Wiley & Sons Inc., a New York
corporation (the "Company"), issued a press release announcing
the Company's financial results for the second quarter and first
six months of fiscal year 2005. A copy of the Company press
release is attached hereto as Exhibit 99.1 and incorporated.
Ellis E. Cousens Executive VP, Chief Financial & Operations Officer
John Wiley & Sons, Inc.
(201)748-6534
John Wiley & Sons, Inc. Reports
Revenue and Earnings Growth for its Second Quarter
- --------------------------------------------------
Hoboken, NJ, December 1, 2004 - John Wiley & Sons, Inc. (NYSE:JWa) (NYSE:JWb)
announced today that second quarter revenue of $247.1 million increased 8% from
$228.9 million in the previous year's second quarter. Excluding the effects of
foreign currency gains, revenue increased 6%. Operating income of $40.1 million
increased 9% from $36.9 million in the same period of the prior year. Earnings
per diluted share increased to $0.42 from $0.41 in the prior year's second
quarter.
For the first half of fiscal year 2005, Wiley's revenue of $474 million advanced
6%, or 4% excluding the effect of foreign currency gains. Operating income for
the six-month period of $70.9 million was up slightly from prior year. Earnings
per diluted share declined slightly from $0.75 to $0.74 mainly due to a higher
effective tax rate.
"Wiley's second quarter performance was driven primarily by continued strength
in our global Scientific, Technical and Medical business. Improved return rates
in Higher Education and Professional/Trade in the U.S. also contributed to the
year-on-year growth," said William J. Pesce, President & Chief Executive
Officer.
Mr. Pesce concluded, "Based on year-to-date 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."
For the first six months offiscal year 2005 the Company has acquired 959,200
Class A common shares under an authorized stock buyback program at an average
price of $31.96 per share.
Segment Highlights
Professional/Trade (P/T)
- ------------------------
Wiley's U.S. P/T revenue for the second quarter advanced 3% from the prior year
primarily due to improved sales return experience. Also contributing, were
revenues from business, architecture, professional culinary, psychology and
education program titles. Journals and revenue generated through brand licensing
and website advertising also improved in the second quarter. Year-to-date
revenue was up 1% over the prior year.
Several P/T titles received considerable attention from the media and customers,
including Tisch/The Power of We: Succeeding Through Partnerships; Winget/Shut
Up, Stop Whining and Get a Life; Obeidi and Pitzer/The Bomb in My Garden; and
Wirthlin/The Greatest Communicator. Five Wiley titles were featured on major
bestseller lists, The Power of We; Shut Up, Stop Whining, and Get a Life; Five
Dysfunctions of a Team; Mentored by a Millionaire; and Investing For Dummies.
Second quarter highlights also included the publication of MaGee/Ford Tough:
Bill Ford and the Battle to Rebuild America's Automaker; Hagstrom/The Warren
Buffett Way; Taguchi, Chowdhury and Wu/Taguchi's Quality Engineering; Palmer/The
Hidden Wholeness; and The American Medical Association Family Medical Guide. The
second editions of three bestselling Windows XP For Dummies titles were
published during the quarter, tied to Microsoft's launch of the Windows XP
Service Pack 2.
During the quarter, Wiley signed a licensing deal with Acadient for the creation
of a CPA exam review online course that is expected to go live in January 2005.
The Company also reached an agreement to be Agora Publishing's financial book
publisher. Agora is a premier financial newsletter publisher, whose publications
reach more than one million readers around the world.
Wiley entered into a brand licensing agreement with American Media Inc. (AMI) to
publish For Dummies-branded micro magazines that will be sold at cash register
display racks at key mass merchandisers, drug and grocery chain outlets in North
America. The first four titles of the series, which were published during the
quarter, are Organizing For Dummies, Home Decorating For Dummies, Kitchen
Remodeling For Dummies and Bathroom Remodeling For Dummies.
A redesigned CliffsNotes.com launched in August, forming the cornerstone of a
major brand awareness initiative and significantly increasing traffic to the
website. This colorful, easy-to-navigate site offers free online literature
notes, in-depth product information, including Quick Reviews, StudySolvers and
test prep titles, as well as features such as "Ask Cliff" and a weekly poll on
timely topics.
Scientific, Technical, and Medical (STM)
- -------------------------------------------
Wiley's U.S. STM business continued to exhibit strength with revenue up over
prior year by 9% for the quarter and 10% for the six-month period, respectively.
Journal performance was strong, with new society publications contributing
significantly to the year-on-year growth. STM books also contributed to the
growth with year-to-date revenue for the six-month period up 6% over the prior
year period.
Globally, STM revenue increased approximately 11% for the second quarter and
six-months, reflecting robust journal and book sales.
In addition to healthy renewals, new Wiley InterScience licenses were signed by
the Chinese Academy of Sciences, University of Western Australia, Fraunhofer
Gesellschaft, Saxony Consortium and The Scripps Research Institute. Customers
continue to take advantage of Wiley InterScience's wide range of access options,
as reflected in the continuing growth in usage. Full-text accesses of Wiley
InterScience journal content was up 25% year-on-year for the six months, driven
by our ongoing program to enhance the discoverability of our content, including
our participation in CrossRef Search, in collaboration with Google.
During the quarter, STM launched in Wiley InterScience the NeuroScience Backfile
Collection and SpecInfo, a spectral database previously available only on
CD-ROM. Several major reference works were also made available to customers
through Wiley's online service.
Wiley and the Movement Disorders Society signed a long-term contract extension
for the publication of its journal, Movement Disorders. During the quarter, the
Company also reached an agreement with the Society for Hospital Medicine to
publish its newsletter as a controlled-circulation, advertising-supported
publication and to launch its new flagship journal, which is targeted to the
large and growing market of hospital-based medical practitioners.
The global STM book program benefited from a strong frontlist. During the second
quarter, STM acquired Ashgate Chemical References, a list of 18 chemical and
drug reference titles, from Gower. The list, which includes the long-established
Gardner's Chemicals Synonyms and Trade Names, focuses on the pharmaceutical,
chemicals and occupational health and safety markets.
Higher Education
- ----------------
Revenue of Wiley's U.S. Higher Education business increased 8% during the second
quarter, bringing year-to-date revenue ahead of prior year. The revenue increase
reflects the combined effect of improved sales return experience and growth in
the Social Science and Science programs.
Wiley's innovative online product, eGrade Plus, was launched successfully this
summer. Currently available with 32 major frontlist textbooks through several
pricing options, eGrade Plus provides the student with a print and/or online
textbook, as well as online study guides and self-testing products, which
provide immediate feedback to help the student succeed in the course. Professors
who adopt eGrade-Plus can customize the course content to fit their specific
curriculum.
With 50,000 units sold and as many as 15,000 students accessing eGrade Plus at
any given time, Wiley has delivered uninterrupted service this fall. In
addition, more than half of the instructors using eGrade Plus attended
peer-to-peer training sessions led by Wiley's Faculty Resource Network. Students
and faculty have access to Wiley's extensive technical support resources for the
product. Feedback has been positive in the States and abroad.
During the quarter, Higher Education pursued a number of alliances. The Company
reached an agreement with GlobalSpec to provide its search functionality to
engineering students through eGrade Plus. In addition, Higher Education worked
with Just Ask! to create customized online solution products for 11 of Wiley's
textbooks in various quantitative disciplines.
To offer students more purchasing choices, Higher Education has been working
with Amazon to help the online retailer become more effective at selling to the
student market. A market test of Amazon's Search Inside the Book program yielded
positive results.
Europe
- ------
Second quarter revenue for Wiley's European operations was up 13% over prior
year, or 6% excluding foreign currency effects. For the first six months of the
year, Wiley Europe's revenue was up 15%, or 9% excluding foreign currency
effects.
Continuing the positive trends of the first quarter, journal and book revenue
was up. Online sales channels performed particularly well. Indigenous products
from both the U.K. and Germany were robust, as were imported U.S. P/T titles.
Sales of The Cochrane Collection, which is now available through Wiley
InterScience, were strong throughout Europe.
Several agreements were created or extended during the quarter. The Cochrane
Collaboration selected Wiley as the publisher of a series of books in
evidence-based medicine. The Society of Chemical Industry extended its agreement
with Wiley to publish its four primary journals.
Wiley-VCH formed an alliance with the Shanghai Institute of Organic Chemistry, a
part of the Chinese Academy of Sciences, to publish the Chinese Journal of
Chemistry, the Institute's flagship journal. The journal, which was founded in
1983, is published in English 12 times a year and covers all fields of
chemistry, including physical, organic, inorganic and analytical, primarily
through original research papers.
Wiley Europe's general interest and consumer publishing program continued to
generate interest, publicity and sales. Five months after publication,
Barrow/Starting a Business For Dummies, became the best-selling small business
title in the U.K. A psychology title, Iwaniec/Failure to Thrive, was awarded a
commendation at the British Medical Association book awards.
A noteworthy development during the quarter was the U.K. government's response
to the House of Commons Science and Technology Committee inquiry into scientific
publications, dismissing most of the Committee's recommendations and reinforcing
the views of publishers that science is best served by a competitive
market-driven approach.
Asia, Australia and Canada
- --------------------------
Wiley's revenue in Asia, Australia and Canada was up 7% during the second
quarter, or 3% excluding foreign currency effects. For the six-month period,
revenue increased 4%, but was flat excluding foreign exchange effects.
In Asia, all Wiley's businesses contributed to the growth, with strong results
in India, the Philippines, Thailand, Indonesia and Japan. Second quarter results
were slightly lower than expected in Australia, primarily because of delayed
ordering for the school market.
Wiley Canada's performance during the second quarter was mixed with Higher
Education falling short of prior year, while P/T delivered solid results.
eGrade Plus was rolled out internationally, driving sales in Australia and
Canada by helping to win new adoptions, as well as maintaining existing
business. eGrade Plus is now being used at Tongji University in China.
The Australian Campus Booksellers Association and the Australian Publishers
Association have named Wiley Australia as "Tertiary Publisher of the Year" and
"Secondary Publisher of the Year," respectively. Wiley has won these awards
consistently over the last five years.
Conference Call
Wiley will hold a conference call today, Wednesday, December 1, 2004, at 10:30
a.m. (EST) to discuss its financial results for the second 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) 474-8920
International callers may participate by dialing: (719) 457-2727
A replay of the call will be available from 1:30 p.m. (EST) on
Wednesday,December 1 through midnight (EST) on Tuesday, December 7, by
dialing:(719)457-0820 or (888) 203-1112 and entering Passcode 988587.
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 SECOND QUARTER AND SIX MONTHS ENDED
OCTOBER 31, 2004 AND 2003
(in thousands, except per share amounts)
Second Quarter Ended Six Months Ended
October 31, October 31,
--------------------------------------- -----------------------------------
2004 2003 % Change 2004 2003 % Change
----------- --------- ---------- ---------- --------- --------
Revenue $ 247,050 228,880 8% 473,989 448,540 6%
Costs and Expenses
Cost of Sales 85,247 78,182 9% 160,476 150,291 7%
Operating and Administrative Expenses 119,168 111,296 7% 237,602 223,339 6%
Amortization of Intangibles 2,511 2,535 -1% 5,010 4,865 3%
----------- --------- ---------- ---------
Total Costs and Expenses 206,926 192,013 8% 403,088 378,495 6%
----------- --------- ---------- ---------
Operating Income 40,124 36,867 9% 70,901 70,045 1%
Operating Margin 16.2% 16.1% 15.0% 15.6%
Interest Expense and Other, Net 1,560 612 2,747 1,872
----------- --------- ---------- ---------
Income Before Taxes 38,564 36,255 6% 68,154 68,173 0%
Provision for Income Taxes 12,105 10,607 21,811 20,725
----------- --------- ---------- ---------
Net Income $ 26,459 25,648 3% 46,343 47,448 -2%
=========== ========= ========== =========
Income Per Share
Diluted $ 0.42 0.41 4% 0.74 0.75 -2%
Basic $ 0.43 0.41 0.76 0.77
Average Shares
Diluted 62,548 63,176 62,731 63,091
Basic 61,054 61,891 61,240 61,788
JOHN WILEY & SONS, INC.
SEGMENT RESULTS
FOR THE SECOND QUARTER AND SIX MONTHS ENDED
OCTOBER 31, 2004 AND 2003
(in thousands, except per share amounts)
Second Quarter Ended Six Months Ended
October 31, October 31,
--------------------------------------- -------------------------------------
2004 2003 % Change 2004 2003 % Change
---------- -------- --------- --------- -------- ---------
Revenue
- ----------------------------------------
US Segment
Professional/Trade $ 89,089 86,531 3% 164,997 162,675 1%
Scientific, Technical and Medical 46,696 42,694 9% 92,902 84,401 10%
Higher Education 40,675 37,674 8% 86,150 85,442 1%
----------- --------- --------- ---------
Total US 176,460 166,899 6% 344,049 332,518 3%
European Segment 67,725 60,018 13% 127,248 110,601 15%
Asia, Australia & Canada Segment 26,932 25,077 7% 50,398 48,473 4%
Intersegment Sales Eliminations (24,067) (23,114) 4% (47,706) (43,052) 11%
----------- --------- --------- ---------
Total Revenue $ 247,050 228,880 8% 473,989 448,540 6%
=========== ========= ========= =========
Direct Contribution to Profit
- ----------------------------------------
US Segment
Professional/Trade $ 26,155 25,382 3% 41,706 43,570 -4%
Scientific, Technical and Medical 21,397 20,503 4% 43,666 41,219 6%
Higher Education 12,392 9,935 25% 28,443 28,619 -1%
----------- --------- --------- ---------
Total US 59,944 55,820 7% 113,815 113,408 0%
European Segment 21,814 19,230 13% 40,508 34,652 17%
Asia, Australia & Canada Segment 5,813 5,480 6% 9,004 9,623 -6%
----------- --------- --------- ---------
Total Direct Contribution to Profit 87,571 80,530 9% 163,327 157,683 4%
Shared Services and Administrative Costs
- ----------------------------------------
Distribution (12,019) (11,591) 4% (23,758) (22,852) 4%
Information Technology & Development (12,963) (12,428) 4% (25,232) (24,229) 4%
Finance (7,901) (7,189) 10% (15,240) (14,240) 7%
Other Administration (14,564) (12,455) 17% (28,196) (26,317) 7%
----------- --------- --------- ---------
Total Shared Services and Admin. Costs (47,447) (43,663) 9% (92,426) (87,638) 5%
Operating Income $ 40,124 36,867 70,901 70,045
=========== ========= ========= =========
JOHN WILEY & SONS, INC.
CONDENSED STATEMENTS OF FINANCIAL POSITION
(in thousands)
October 31,
-------------------------- April 30,
2004 2003 2004
---------- --------- ---------
Current Assets
Cash & cash equivalents $ 18,359 10,756 82,027
Accounts receivable 142,066 147,124 127,224
Inventories 77,672 84,049 83,789
Deferred income tax benefit 18,041 27,482 18,113
Other current assets 11,638 9,047 12,853
---------- --------- -----------
Total Current Assets 267,776 278,458 324,006
Product Development Assets 59,231 61,353 60,755
Property and Equipment 114,758 116,815 117,305
Intangible Assets 280,736 279,697 276,440
Goodwill 195,354 194,114 194,893
Deferred income tax benefit 17,503 28,046 18,976
Other Assets 21,917 22,310 22,207
---------- --------- -----------
Total Assets 957,275 980,793 1,014,582
========== ========= ============
Current Liabilities
Notes payable & current portion of long-term debt - 60,000 -
Accounts and royalties payable 71,056 91,080 68,338
Deferred subscription revenues 50,103 42,665 127,224
Accrued income taxes 30,352 28,962 19,338
Deferred income taxes 5,784 - 5,721
Other accrued liabilities 69,342 61,114 85,744
---------- --------- ------------
Total Current Liabilities 226,637 283,821 306,365
Long-Term Debt 200,000 200,000 200,000
Accrued Pension Liability 52,171 56,378 48,505
Other Long-Term Liabilities 31,250 28,997 31,757
Deferred Income Taxes 12,543 12,185 12,891
Shareholders' Equity 434,674 399,412 415,064
---------- --------- ------------
Total Liabilities & Shareholders' Equity $ 957,275 980,793 1,014,582
========== ========= ============
CONDENSED STATEMENTS OF CASH FLOWS
Six Months Ended
October 31,
---------------------------
2004 2003
---------- ----------
Operating Activities
Net income $ 46,343 47,448
Amortization of intangibles 5,010 4,865
Amortization of composition costs 16,569 15,254
Depreciation of property and equipment 15,123 13,720
Other non-cash items 28,850 25,030
Change in deferred subscription revenue (77,965) (77,444)
Net change in operating assets and liabilities (14,151) (29,404)
---------- ----------
Cash Provided by (Used for) Operating Activities 19,779 (531)
Investing Activities
Additions to product development assets (28,255) (26,305)
Additions to property and equipment (10,984) (13,140)
Acquisition of publishing assets, net of cash acquired (7,662) (1,904)
---------- ----------
Cash Used for Investing Activities (46,901) (41,349)
Financing Activities
Borrowings of short-term debt - 60,000
Repayment of long-term debt - (35,000)
Purchase of treasury shares (30,657) (2,486)
Cash dividends (9,103) (8,079)
Proceeds from exercise of stock options 2,853 3,287
---------- ---------
Cash (Used for) Provided by Financing Activities (36,907) 17,722
Effects of Exchange Rate Changes on Cash 361 1,673
---------- ----------
Decrease in Cash and Cash Equivalents for Period $ (63,668) (22,485)
========== ==========