SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
June 15, 2006
(Date of Report)
(Date of earliest event reported)
JOHN WILEY & SONS, INC.
(Exact name of registrant as specified in its charter)
New York
(State or jurisdiction of incorporation)
0-11507 13-5593032
- ------------------------------ ----------------------------------
Commission File Number IRS Employer Identification Number
111 River Street, Hoboken NJ 07030
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Address of principal executive offices Zip Code
Registrant's telephone number,
including area code: (201) 748-6000
----------------------------------
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act(17 CFR 240.13e-4(c))
This is the first page of a 16-page document.
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 June 15, 2006, John Wiley & Sons Inc., a New York corporation
(the "Company"), issued a press release announcing the Company's
financial results for the fourth quarter of fiscal year 2006. A
copy of the Company's press release is attached hereto as Exhibit
99.1 and incorporated.
Exhibit No. Description
99.1 Press release dated June 15, 2006 titled "John Wiley and Sons,
Inc., Reports Revenues and Earnings Growth for the Fourth
Quarter" (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).
Ellis E. Cousens
Executive Vice President,
Chief Financial & Operations Officer
(201) 748-8534
John Wiley & Sons, Inc. Reports
Record Revenue, Operating Income, and EPS in
Fiscal Year 2006
Hoboken, NJ, June 15, 2006 -- John Wiley & Sons, Inc. (NYSE: JWa) (NYSE: JWb)
announced today record revenue, operating income, and EPS for fiscal year 2006.
Full-year revenue increased 7% to $1.0 billion, or 8% excluding foreign currency
effects. Operating income of $153 million advanced 8%, or 9% excluding foreign
currency effects. Earnings per diluted share of $1.61 rose 10%, excluding
certain favorable tax adjustments noted below. Including the tax adjustments,
earnings per diluted share for the year rose 37% to $1.85 per diluted share. All
of Wiley's businesses around the world contributed to the year-on-year revenue
and operating income growth.
"As Wiley approaches its bicentennial in 2007, I am proud to report that the
Company reached another significant milestone in fiscal year 2006, revenue of $1
billion. This milestone and record levels of operating income and EPS, reflect
Wiley's competitive strengths - our highly regarded global brands and must-have
content; our ability to adapt and innovate to serve customers better; and an
effective blend of long-term vision and operational excellence," said William J.
Pesce, President and Chief Executive Officer.
"Wiley's greatest strength is our unique culture, which enables us to attract
and retain an extraordinary team of committed and creative colleagues. In a
recent survey to which 97% of our colleagues around the world responded, they
identified commitment, trust and respect, and teamwork as characteristics that
distinguish Wiley. In addition, for the second consecutive year, Wiley was
recognized by FORTUNE magazine in its list of 100 Best Companies to Work For,"
he continued.
Mr. Pesce concluded, "We are pleased with our performance in fiscal year 2006
and well positioned to capitalize on growth opportunities. Based on leading
indicators and market conditions, we anticipate fiscal year 2007 revenue growth
in the mid-single digits and EPS growth in the high single digits, excluding tax
adjustments."
In fiscal year 2006, the Company generated $150 million in free cash flow.
During the year, free cash flow of $109 million was used to acquire 2.8 million
shares of Class A common stock; for the acquisition of publishing assets in
several transactions aggregating to $31 million; for the payment of $21 million
in cash dividends to shareholders; and $33 million for debt repayment.
The Company's management evaluates performance based on several measures,
including non-GAAP measure of free cash flow, as presented in the attached
financial schedules. The Company believes free cash flow is an important measure
of the financial strength of its business. Since free cash flow is not
calculated in accordance with GAAP, it should not be considered as a substitute
for other GAAP measures as an indicator of operating performance.
For the fourth quarter, revenue increased over the previous year by 10% to $267
million, or 12%, excluding foreign currency effects. Operating income improved
14% to $22.9 million, or 16% adjusted for foreign currency. All of Wiley's
businesses contributed to the strong fourth quarter. Fully diluted earnings per
share for the fourth quarter advanced 25% to $0.25, excluding the tax adjustment
noted below.
Tax adjustments
- ---------------
As previously discussed in the Company's Annual Report filed on Form 10-K for
fiscal year 2005, pursuant to guidance issued by the Internal Revenue Service in
May 2005, the Company recorded a tax benefit of approximately $7.5 million, or
$0.12 per diluted share, in the first quarter of fiscal year 2006, and reduced
income taxes due on the fiscal year 2005 repatriation of earnings from its
European subsidiaries. The tax benefit offsets a tax charge of $7.5 million
recorded in the fourth quarter of fiscal year 2005, neither of which had a cash
impact to the Company. A $6.8 million, or $0.11 per diluted share, tax benefit
related to the favorable resolution of certain tax matters with tax authorities
was also reported for the full year ending April 30, 2006. The Company's
management excludes these tax items for comparative purposes so as to not
distort the underlying operating performance of the Company.
Segment Highlights
Professional/Trade (P/T)
- ------------------------
Revenue growth of Wiley's U.S. P/T business accelerated throughout fiscal year
2006, culminating in a strong fourth quarter. Revenue for the full year advanced
9% to $380 million, while the fourth quarter's revenue reached a record $106
million, 13% over the same period during the previous year. Virtually all of
P/T's publishing categories and sales channels contributed to the strong
results, with standout performances by the technology, business, finance and
architectural programs, as well as global rights and website advertising. P/T's
finance and leadership programs, as well as the Sybex acquisition and the
popularity of the Sudoku for Dummies series, helped to deliver the
record-setting results.
Direct contribution to profit was up 5% for the year and 1% for the quarter. The
improvement in top-line results was partially offset by higher inventory costs
and the timing of performance-based compensation in the fourth quarter.
A number of successful titles led the way, notably The Little Book That Beats
the Market by Joel Greenblatt; Sudoku For Dummies, Volumes 1-3 by Andrew Herron
and Edmund James; Weight Watcher's New Complete Cookbook; Betty Crocker
Cookbook: Everything You Need to Know to Cook Today; and Hedgehogging by Barton
Biggs. Several perennial favorites and new titles also made significant
contributions, including Five Dysfunctions of a Team by Patrick Lencioni; his
new title, Silos, Politics, and Turf Wars; Automatic Wealth by Michael
Masterson; and The Party of the Century: The Fabulous Story of Truman Capote and
His Black and White Ball by Deborah Davis. A new series, Frommer's Day by Day,
and the first Frommers.com Podcast, successfully extended this key brand.
Media attention was particularly focused on a number of titles tied to current
affairs (Bird Flu by Marc Siegel and The Global Class War by Jeff Faux); popular
products (The Bear Necessities of Business: Building a Company with Heart by
Maxine Clark and Amy Joyner at the flagship Build-a-Bear store); or movies
(Party of the Century by Deborah Davis which capitalized on the success of the
movie, Capote, as well as well-known authors (The Poker Face of Wall Street,
Aaron Brown and Hedgehogging by Barton Biggs). Aggressive marketing kept Wiley
brands and titles in the public eye, including a major advertising campaign for
Little Book That Beats the Market in The Wall Street Journal and Bloomberg
radio; the annual For Dummies month promotions; and a pay-per-view webcast with
Amazon.com, featuring author Pat Lencioni.
More than 800 articles were adapted from the For Dummies text for licensing with
Yahoo Tech, a new website that provides consumers with plain-English advice and
information on technology. Another agreement with Microsoft was signed to
license content from seven of Wiley's top cookbooks, including How to Cook
Everything by Mark Bittman, Cooking at Home with The Culinary Institute of
America, and Mr. Boston: Official Bartender's and Party Guide by Mr. Boston,
Anthony Giglio and Steven McDonald.
Mark Bittman received a James Beard Foundation Media Broadcast Award in the
category National Television Food Show for his work as host of the PBS series,
How to Cook Everything, which is tied in with the Wiley title of the same name.
The Handbook of Human Resources Management in Government by Stephen Condrey won
"Best Public Sector Human Resources Management Book" award of the American
Society for Public Administration. Lee Shulman, President of the Carnegie
Foundation for the Advancement of Teaching, won the prestigious Grawemeyer Award
in Education for 2006 for The Wisdom of Practice.
Acquisitions completed earlier in the fiscal year included substantially all the
publishing assets of Sybex Inc., a global publisher of technology titles.
Scientific, Technical, and Medical (STM)
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Wiley's U.S. STM business delivered consistently excellent results throughout
fiscal year 2006, growing revenue over prior year by 8% to $206 million. Direct
contribution to profit also rose by 8% for the year. Fourth quarter revenue of
$58 million advanced 7% over the previous year's fourth quarter. Direct
contribution to profit in the fourth quarter increased by 1% as higher revenue
was partially offset by higher selling and marketing costs principally due to
timing.
Subscription and non-subscription revenue from journal backfiles, advertising,
and commercial reprints contributed significantly to these results. The
reference book program completed its second year of strong growth driven by
strong title output and global market strength. STM also benefited from recent
acquisitions of Dialysis and Transplantation, a medical journal and InfoPOEMs, a
provider of evidence-based medicine content.
Wiley InterScience, the Company's online service, reached a milestone midway
through the fiscal year: more than one million journal articles are now
available online. The value of this growing body of literature to the global
research community can be quantified in the concurrent increase in the number of
users, as well as the number of manuscripts submitted for publication. In fiscal
year 2006, US STM received approximately 9% more journal manuscripts and
published 8% more journal pages than the previous year. During the fourth
quarter, over 16 million visits to Wiley InterScience were recorded,
representing a 30% increase over the same period in the previous year. In
addition, more people gained access to Wiley InterScience by taking advantage of
alternate purchasing programs, such as Pay-Per-View, which began offering
individual article sales from the growing backfile collection during this year.
At the end of the fiscal year, Wiley participated with Microsoft in the launch
of Windows Live Academic Search pilot, which improves the search capabilities of
journal content from Wiley and ten other major STM publishers.
Important publications during the fourth quarter include the inaugural issue of
a pharmaceutical-company sponsored Chinese-language digest version of
Hepatology; the Physics and Astronomy Backfile, which includes the oldest
journal published by Wiley, Annalen der Physik, founded in 1799; the first two
issues of the Journal of Hospital Medicine; and a refurbished Annals of
Neurology. Also released during the quarter were the new 18th edition of the
Merck Manual; the 8th edition of The Wiley Registry of Mass Spectral Data; and a
wide array of single and multi-volume reference works.
During the fourth quarter, the Company reached an agreement with the Institute
of Electrical and Electronics Engineers of Japan to publish a new
English-language journal, IEEJ Transactions; extended its long-term publishing
agreement for the Journal of Research in Science Teaching; and began publication
of the Journal of Orthopedic Research in partnership with the Orthopedic
Research Society.
Higher Education
- ----------------
Wiley's U.S. Higher Education business increased 4% to $156 million in fiscal
year 2006. Continuing to build on the strength experienced in the third quarter,
fourth quarter revenue advanced 15% to $23 million compared to the previous
year's quarter. Higher Education's direct contribution to profit for the year
and quarter improved $2 million over the prior year periods.
The mathematics, life sciences, engineering and computer science programs
performed extremely well during the quarter and year, with strong showings by
Tortora/Principles of Anatomy and Physiology; Black/Microbiology;
Voet/Fundamentals of Biochemistry; Hughes-Hallet/Calculus; Anton/Calculus;
Munson/Fluid Mechanics; and Horstman/Big Java.
WileyPLUS continued to gain traction during fiscal year 2006, as more students
and faculty around the world chose to use its customizable multi-format suite of
content, teaching and learning tools to help them do homework, study for tests,
assess coursework, and administer classes. During the fiscal year the number of
adoptions and units sold worldwide increased significantly over the previous
year.
Wiley has developed a wide array of products at varied price points. The Company
is now offering over 50 titles in Wiley Desktop Editions, which are in
downloadable e-text format, intended for students who want lower-priced versions
of textbooks. Wiley began to produce Desktop Editions in partnership with
VitalSource Technologies, Inc. during the second quarter and expects to nearly
double the number of titles in the program by calendar year-end.
Soon after the end of the fiscal year, Wiley became Microsoft's sole publishing
partner worldwide for all Microsoft Official Academic Course (MOAC) materials.
Microsoft and Wiley will collaborate on a new co-branded series of textbook and
e-learning products for the higher education market, to be released under
Wiley-Microsoft logos. Wiley will also assume responsibility for the sale of
existing MOAC titles. The new series will offer topics covering Windows Vista,
Microsoft Office Systems 2007, and the Windows Server codenamed "Longhorn." All
titles will be marketed globally and available in several languages. With
Microsoft's position as the world's leading software company and Wiley's global
presence in higher education, the alliance is an ideal strategic fit.
Earlier in the year, Higher Education extended its global alliance with the
National Geographic Society to create new products sold exclusively with Wiley
textbooks and WileyPLUS.
Europe
- ------
Fiscal year 2006 was another strong year for Wiley's European-based companies,
with revenues for the year advancing 9% over the prior year to $292 million, or
12% excluding foreign currency effects. Virtually all of Wiley Europe's
businesses, product lines, and markets contributed to the performance. Strong
performance was exhibited in P/T and STM book publishing, as well as journals.
Global sales from the Sudoku For Dummies series contributed to the increase in
P/T revenue.
Revenue for the fourth quarter was $80 million, an increase over the prior year
of 6%, or 11% excluding foreign currency effects. Direct contribution to profit
was consistent with revenue growth for the quarter and year, both including and
excluding foreign exchange effects.
Best-selling books included products as diverse as the second edition of
Encyclopedia of Inorganic Chemistry, edited by R. Bruce King, and the enormously
popular Sudoku For Dummies and Kakuro For Dummies. The power of the For Dummies
brand was evidenced by the publication of a six-figure print run of a custom
mini-book for the World Cup, Winning on Betfair For Dummies. The German For
Dummies program published 51 new titles and 49 reprints during fiscal year 2006.
The expansion of Wiley Europe's publishing portfolio has opened up new markets
and customer groups. The technology channel saw strong growth throughout the
year with a series of agreements with major telecommunications corporations. In
February, the Company entered a popular new market with the acquisition of
Fernhurst Books, a best-selling list of manuals and guides on sailing, boating,
and other nautical sports. The first seven titles of the Securities and
Investment Institute series published during fiscal year 2006.
Wiley Europe's new journals, small, an interdisciplinary journal on nanoscience
and nanotechnology embracing materials science, physics, chemistry and
biosciences and the related engineering areas; ChemMedChem; and the
Biotechnology Journal, all performed well. Chemistry-An Asian Journal, an
alliance between Wiley-VCH, the German Chemical Society, and a number of the
major Asian chemical societies, gained traction during the year as a number of
new societies signed on, including The Singapore National Institute of Chemistry
and the Chemical Society located in Taipei.
The Cochrane Library, an evidence-based medicine collection available through
Wiley InterScience, finished the year strongly reflecting Wiley's ability to
increase revenue through the Company's multiple sales channels. To extend
Wiley's product offering in evidence-based medicine, Wiley Europe and Duodecim
Medical Publications Limited of Helsinki, Finland announced an expanded
agreement to grant Wiley the exclusive publishing, sales, and distribution
rights of its English language version of Evidence-Based Medicine Guidelines
(EBM Guidelines). The guidelines are designed to be read on small screens, and
are available via the Internet and through Personal Digital Assistants (PDA)
devices.
Asia, Australia, and Canada
- ---------------------------
Wiley's revenue in Asia, Australia, and Canada advanced 14% over the previous
year to $124 million, or 12% excluding foreign currency effects. Higher
Education and School publishing in Australia and P/T sales in Asia and Canada
drove the improvement over the prior year. Direct contribution to profit for the
year increased 8%, or 3% excluding foreign currency effects. Revenue growth was
partially offset by product mix in Canada and Asia. Fourth quarter revenue
advanced 40% to $30 million, or 41% excluding foreign-currency effects. The
timing of School sales in Australia and higher P/T sales in Canada and Asia
contributed to the fourth quarter improvement.
Wiley Asia sustained growth across all product lines, particularly in India,
Japan and China. Wiley Canada's P/T performance was very strong and its Higher
Education program was solid. In Australia, all three businesses delivered strong
results.
At the end of the third quarter, Wiley Asia acquired the remaining outstanding
shares of Wiley Dreamtech (India) Private LTD. The acquisition is an important
step in the Company's plans to grow Wiley's presence in India, extending its
sales and marketing reach and building local publishing capabilities in an
important and rapidly growing market. Wiley acquired a majority interest in
Dreamtech in 2001 as part of its highly successful acquisition of Hungry Minds,
Inc.
Wiley Australia was once again named Secondary Publisher of the Year by the
Australian Publishers Association and Higher Education Publisher of the Year by
the Australian Campus Booksellers Association, for the 9th and 8th times,
respectively, during the last decade. Wiley Australia was also awarded, for the
fifth year in a row, the 'Employer of Choice for Women' citation by the Federal
Government's Equal Opportunity in the Workplace Agency. Wiley is the only
publisher to earn this honor during the program's entire five-year history.
Considerable success was achieved in Canada with the sale of WileyPLUS,
demonstrating the product's global appeal. The number of titles available with
WileyPLUS more than doubled from fiscal year 2005, giving the sales force
opportunity to sell it into more course areas. During fiscal year 2006, Wiley
Canada added to its indigenous P/T program by becoming a key publisher in the
regional real estate markets. Sales throughout the year in real estate
investing, home inspection, property management, tax, and other subcategories
were very strong, as the Company added a number of titles to its portfolio.
Conference Call Instructions
- ----------------------------
Wiley will hold a conference call on Thursday, June 15, at 3 p.m. (EDT) to
discuss its financial results for the fourth quarter and full year of fiscal
year 2006. 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) 310-1961
Callers outside the U.S. may participate by dialing: (719) 457-2692
A replay of the call will be available from Friday, June 16 through midnight
(EDT) on Wednesday, June 21 by dialing (888) 203-1112 or (719) 457-0820 and
entering Passcode 9145153.
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 FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2006 AND 2005
(in thousands, except per share amounts)
Fourth Quarter Ended Twelve Months Ended
ADJUSTED (A) April 30, April 30,
- ------------ ----------------------------------- ----------------------------------
2006 2005 % Change 2006 2005 % Change
---------- --------- --------- ---------- -------- ----------
Revenue $ 266,564 241,631 10% 1,044,185 974,048 7%
Costs and Expenses
Cost of Sales 87,697 78,877 11% 342,314 325,061 5%
Operating and Administrative Expenses 152,408 139,494 9% 535,694 496,726 8%
Amortization of Intangibles 3,508 3,205 9% 13,498 10,880 24%
-------- -------- ---------- --------
Total Costs and Expenses 243,613 221,576 10% 891,506 832,667 7%
-------- -------- ---------- --------
Operating Income 22,951 20,055 14% 152,679 141,381 8%
Operating Margin 8.6% 8.3% 14.6% 14.5%
Interest Expense and Other, Net 1,597 997 8,835 5,718
-------- -------- ---------- --------
Income Before Taxes 21,354 19,058 12% 143,844 135,663 6%
Adjusted Provision for Income Taxes (A) 6,836 6,875 -1% 47,768 44,346 8%
-------- -------- ---------- --------
Adjusted Net Income (A) $ 14,518 12,183 19% 96,076 91,317 5%
======== ======== ========== ========
Adjusted Income Per Share (A)
Diluted $ 0.25 0.20 25% 1.61 1.47 10%
Basic $ 0.25 0.20 1.65 1.50
Reconciliation of Non-GAAP Adjusted Financial Disclosure
- --------------------------------------------------------
Adjusted Net Income $ 14,518 12,183 96,076 91,317
Tax Benefits (A) - (7,476) 14,252 (7,476)
-------- -------- ---------- --------
Net Income - as Reported $ 14,518 4,707 208% 110,328 83,841 32%
======== ======== ========== ========
Adjusted Income Per Share - Diluted $ 0.25 0.20 1.61 1.47
Tax Benefits (A) - (0.12) 0.24 (0.12)
Income Per Share - Diluted as Reported $ 0.25 0.08 213% 1.85 1.35 37%
======== ======== ========== ========
Average Shares
Diluted 58,679 60,949 59,792 62,093
Basic 57,090 59,443 58,071 60,721
(A) For the fourth quarter ending April 30, 2005, the adjusted amounts above
exclude a $7.5 million, or $0.12 per diluted share, tax accrual recorded on
the repatriation of dividends from European subsidiaries in the fourth
quarter of fiscal year 2005. On May 10, 2005, the US Internal Revenue
Service issued Notice 2005-38. The notice provided for a tax benefit, which
was recorded by the Company in the first quarter of fiscal year 2006, that
fully offset the tax accrued by the Company on foreign dividends in the
fourth quarter of fiscal year 2005. Neither the first quarter fiscal year
2006 tax benefit nor the corresponding fourth quarter fiscal year 2005 tax
accrual had a cash impact to the Company.
For the twelve-month period ending April 30, 2006, the adjusted amounts
above also exclude a $6.8 million, or $0.11 per diluted share, tax benefit
recorded in the third quarter of fiscal year 2006 related to the settlement
of certain matters with tax authorities.
The Company's management evaluates performance excluding unusual and/or
nonrecurring events. The Company believes excluding such events provides a
more effective and comparable measure of performance. Since the adjusted
amounts are not measures calculated in accordance with GAAP, they should
not be considered as a substitute for other GAAP measures, including net
income and earnings per share, as reported, as an indicator of operating
performance.
JOHN WILEY & SONS, INC.
SEGMENT RESULTS
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2006 AND 2005
(in thousands, except per share amounts)
Fourth Quarter Ended Twelve Months Ended
April 30, April 30,
------------------------------------ -------------------------------------
2006 2005 % Change 2006 2005 % Change
---------- ---------- ---------- ---------- ---------- ----------
Revenue
- ----------------------------------------
US Segment
Professional/Trade $ 105,555 93,493 13% 380,191 350,338 9%
Scientific, Technical and Medical 57,975 54,380 7% 206,008 190,515 8%
Higher Education 22,537 19,561 15% 156,235 150,905 4%
---------- ---------- ---------- ----------
Total US 186,067 167,434 11% 742,434 691,758 7%
European Segment 79,684 75,165 6% 292,462 268,857 9%
Asia, Australia & Canada Segment 29,859 21,325 40% 123,950 108,649 14%
Intersegment Sales Eliminations (29,046) (22,293) 30% (114,661) (95,216) 20%
---------- ---------- ---------- ----------
Total Revenue $ 266,564 241,631 10% 1,044,185 974,048 7%
========== =========== ========== ==========
Direct Contribution to Profit
- ----------------------------------------
US Segment
Professional/Trade $ 29,962 29,682 1% 106,971 102,326 5%
Scientific, Technical and Medical 27,153 26,598 2% 96,009 88,899 8%
Higher Education (3,590) (5,442) 34% 40,065 38,221 5%
---------- ----------- ---------- ----------
Total US 53,525 50,838 5% 243,045 229,446 6%
European Segment 27,017 25,379 6% 93,415 86,226 8%
Asia, Australia & Canada Segment 4,267 3,074 39% 26,747 24,868 8%
---------- ----------- ---------- ----------
Total Direct Contribution to Profit 84,809 79,291 7% 363,207 340,540 7%
Shared Services and Administrative Costs
- ----------------------------------------
Distribution (13,925) (12,321) 13% (50,260) (47,631) 6%
Information Technology & Development (17,779) (17,115) 4% (62,732) (55,074) 14%
Finance (8,921) (9,635) -7% (32,594) (34,390) -5%
Other Administration (21,233) (20,165) 5% (64,942) (62,064) 5%
---------- ----------- ---------- ----------
Total Shared Services and Admin. Costs (61,858) (59,236) 4% (210,528) (199,159) 6%
Operating Income $ 22,951 20,055 152,679 141,381
========== =========== ========== ==========
JOHN WILEY & SONS, INC.
CONDENSED STATEMENTS OF FINANCIAL POSITION
(in thousands)
April 30, April 30,
2006 2005
----------- -----------
Current Assets
Cash & cash equivalents $ 60,757 89,401
Marketable securities - 10,000
Accounts receivable 158,275 137,787
Inventories 88,578 83,372
Deferred income tax benefit 5,536 5,921
Other current assets 13,162 12,437
----------- ------------
Total Current Assets 326,308 338,918
Product Development Assets 65,641 61,511
Property, Equipment and Technology 102,123 115,383
Intangible Assets 302,384 291,041
Goodwill 198,416 195,563
Deferred Income Tax Benefit 3,809 4,285
Other Assets 27,328 25,868
----------- ------------
Total Assets 1,026,009 1,032,569
=========== ============
Current Liabilities
Accounts and royalties payable 97,231 70,958
Deferred subscription revenues 143,923 142,766
Accrued income taxes 24,226 36,376
Other accrued liabilities 96,729 91,211
----------- ------------
Total Current Liabilities 362,109 341,311
Long-Term Debt 160,496 196,214
Accrued Pension Liability 56,068 62,116
Other Long-Term Liabilities 35,627 34,652
Deferred Income Taxes 9,869 1,702
Shareholders' Equity 401,840 396,574
----------- ------------
Total Liabilities & Shareholders' Equity $ 1,026,009 1,032,569
=========== ============
JOHN WILEY & SONS, INC.
STATEMENT OF FREE CASH FLOW
(in thousands)
Twelve Months Ended
April 30
------------------------------
2006 2005
---------- ----------
Operating Activities:
Net income $ 110,328 83,841
Amortization of intangibles 13,498 10,880
Amortization of composition costs 36,473 36,026
Depreciation of property, equipment and technology 32,031 31,447
Special non-cash tax (benefits)/provisions (14,252) 7,476
Reserves for returns, doubtful accounts, and obsolescence 12,961 1,250
Deferred income taxes 5,009 17,283
Pension expense, net of contributions 8,429 (3,914)
Earned royalty advances and other 26,545 25,036
Change in deferred subscription revenue 390 14,446
Net change in operating assets and liabilities 11,230 19,715
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Cash Provided by Operating Activities 242,642 243,486
Investments in organic growth:
Additions to product development assets (70,921) (64,407)
Additions to property, equipment and technology (21,355) (26,826)
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Free Cash Flow 150,366 152,253
Other Investing and Financing Activities:
Acquisitions, net of cash (31,354) (22,527)
Sale (Purchase) of marketable securities 10,000 (10,000)
Repayment of debt under old credit facility (336,298) (50,000)
Borrowings under new long-term credit facility 303,754 45,992
Purchase of treasury shares (108,867) (94,786)
Cash dividends (21,103) (18,125)
Proceeds from issuance of stock on option exercises and other 5,173 3,444
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Cash Used in Investing and Financing Activities (178,695) (146,002)
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Effects of Exchange Rate Changes on Cash (315) 1,123
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Decrease in Cash and Cash Equivalents for Period $ (28,644) 7,374
========== ==========
RECONCILIATION TO GAAP PRESENTATION
Investing Activities:
Additions to product development assets $ (70,921) (64,407)
Additions to property, equipment and technology (21,355) (26,826)
Acquisitions, net of cash (31,354) (22,527)
Sale (Purchase) of marketable securities 10,000 (10,000)
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Cash Used for Investing Activities $ (113,630) (123,760)
========== =========
Financing Activities:
Cash Used in Investing and Financing Activities $ (178,695) (146,002)
Less:
Acquisitions, net of cash (31,354) (22,527)
Sale (Purchase) of marketable securities 10,000 (10,000)
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Cash Used in Financing Activities $ (157,341) (113,475)
========== =========
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized
JOHN WILEY & SONS, INC.
Registrant
By /s/ William J. Pesce
-------------------------------------
William J. Pesce
President and Chief Executive Officer
By /s/ Ellis E. Cousens
-------------------------------------
Ellis E. Cousens
Executive Vice President and
Chief Financial & Operations Officer
Dated: June 15, 2006