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 21, 2007
(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
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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 18-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 21, 2007, 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 2007. 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 21, 2007 titled "John Wiley and Sons,
Inc., Reports Record Revenue in its Bicentennial Year"(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) 748-6534
John Wiley & Sons, Inc. Reports Record Revenue in its Bicentennial Year
Hoboken, N.J. June 21, 2007. John Wiley & Sons, Inc. (NYSE:JWa) (NYSE:JWb)
announced today that revenue for fiscal year 2007 of $1.2 billion increased 18%
from $1.0 billion in the previous year, including revenue from Blackwell
Publishing Ltd., which Wiley acquired on February 2, 2007. Excluding the
acquisition, Wiley's revenue grew 8% to $1.1 billion, which is a record high, or
7% excluding foreign exchange. On a U.S. GAAP basis, earnings per diluted share
for fiscal year 2007 was $1.71 compared to $1.85 in fiscal year 2006. On a
comparable basis to last year (excluding SFAS 123R, various tax benefits and the
Blackwell acquisition), EPS grew 9%. Fiscal year 2007 results include
incremental stock option costs associated with the adoption of SFAS 123R of $11
million, or $0.12 per diluted share, and a bad debt provision related to the
Advanced Marketing Services (AMS) bankruptcy of $4 million, or $0.05 per diluted
share.
Revenue for the fourth quarter increased to $390 million from $267 million in
the same period of the previous year. Excluding Blackwell, fourth quarter
revenue of $284 million increased 7%, or 4% excluding favorable foreign
exchange. Earnings per diluted share for the quarter was $0.25, or $0.27
excluding the dilutive impact of the acquisition, compared with $0.25 per share
in the prior year period. In the fourth quarter of fiscal year 2007, earnings
include the adverse effect of incremental stock option costs of $3 million, or
$0.03 per diluted share. On a comparable basis (excluding SFAS 123R and the
Blackwell acquisition), fourth quarter EPS grew 20% over the same period in the
prior year.
"Wiley finished an extraordinary year on a very positive note. Revenue reached a
new record," said William J. Pesce, Wiley's President and Chief Executive
Officer. "Our global businesses - Scientific, Technical and Medical,
Professional/Trade and Higher Education - contributed to the year-on-year growth
in fiscal year 2007 and outpaced industry performance. The Blackwell acquisition
exceeded our financial projections for the fourth quarter and the integration is
progressing according to plan. It pleases me greatly that Wiley and Blackwell
colleagues are collaborating effectively around the world to realize our
aspirations for this acquisition."
Noting that Wiley is celebrating its bicentennial year in 2007, Mr. Pesce
commented, "Wiley has entered its third century by embarking on a path of
expansion - fueled by organic growth in our core businesses and the Blackwell
acquisition. We will promote knowledge and understanding around the world by
providing more access to more content by more people than ever before in the
Company's 200-year history."
Based on leading indicators and market conditions, Wiley anticipates fiscal year
2008 revenue growth in the mid-to-high single digits and EPS growth in the
low-double digits, excluding the Blackwell acquisition. Revenue from the
Blackwell acquisition is projected to be approximately $450 million. In fiscal
year 2008, the acquisition is expected to have a dilutive impact on earnings per
share of less than $0.10.
Segment Highlights
Blackwell is reported below as a separate segment. As reported in the first
quarter of fiscal year 2007, the Company finalized a review of certain product
prices used to settle inter-segment sales. While the modification has no effect
on consolidated financial results, it does impact individual segment operating
results. The impact of the change, where significant to segment results, is
described below.
Professional/Trade (P/T)
Wiley's U.S. P/T revenue for fiscal year 2007 advanced 5% to $399 million from
$380 million in the previous year, or 7% after adjusting for the effect of the
change in inter-segment product prices. Fourth quarter revenue of $106 million
increased 1%, or 3% on the same adjusted basis. The results were driven by the
cooking, travel, business, and technology programs, as well as strong global
rights and advertising revenue. Acquisitions contributed $2 million to the
fiscal year 2007 revenue growth. Globally, P/T sales increased 9% for the full
year.
Direct contribution to profit increased 1% in fiscal year 2007, but improved 5%
in the fourth quarter. Adjusted for the effect of the change in inter-segment
product prices, direct contribution to profit improved 6% for the full year and
11% for the fourth quarter. Revenue growth and favorable product mix were
partially offset by stock option costs associated with the adoption of SFAS 123R
and a third quarter provision for the AMS bankruptcy of approximately $4
million.
A highlight of P/T's fourth quarter was the publication of Architectural Graphic
Standards, 11th edition (book and CD), marking the 75th year of a successful
partnership between Wiley and the American Institute of Architects. Frommer's
also reached a milestone during Wiley's bicentennial year, as the well known
travel-guide brand celebrated its 50th anniversary with the publication of new
editions and titles in its Day by Day and Pauline Frommer series.
Several finance, business, and leadership titles stood out among the year's
publications, including True North by Bill George, a follow-up to Authentic
Leadership; The Only Three Questions That Count by Ken Fisher, long-time Forbes
columnist and Chairman and CEO of Fisher Investments; the third book in the
best-selling Little Book series, Little Book of Common Sense Investing by John
Bogle; The Science of Success: How Market-Based Management Built the World's
Largest Private Company by Charles Koch, Chairman and CEO of Koch Industry; and
Chocolates on the Pillow Aren't Enough: Reinventing the Customer Experience by
the Chairman and CEO of Loewe's Hotels, Jonathan Tisch.
Previously published titles continued to build momentum, including Weight
Watchers New Complete Cookbook and The Bon Appetit Cookbook . Books featured on
major bestseller lists include Hedgehogging by Barton Biggs; The Little Book
That Beats The Market by Joel Greenblatt; Empire of Debt: The Rise of an Epic
Financial Crisis by William Bonner and Addison Wiggin; The Invisible Employee:
Realizing the Hidden Potential in Everyone by Adrian Gostick and Chester Elton;
and Stock Investing For Dummies, 2nd Edition by Paul Mladjenovic; along with
perennial Wiley bestsellers, Five Dysfunctions of a Team by Patrick Lencioni;
Investing For Dummies by Eric Tyson; J.K. Lasser's Income Tax 2006; and SuDoku
For Dummies by Andrew Heron and Andrew Stuart.
Several P/T titles were honored with awards during the fourth quarter. A Guide
to Forensic Accounting Investigation by Thomas W. Golden, Steven L. Skalak and
Mona M. Clayton won Business, Management & Accounting Honorable Mention at the
Association of American Publishers/Professional and Scholarly Publishing Annual
Meeting. Bruce R. Hopkins was named the 2007 recipient of the Outstanding
Nonprofit Lawyer-Vanguard/Lifetime Achievement Award by the Nonprofit
Corporation Committee of the Business Law section of the American Bar
Association. A Global History of Architecture by Frank Ching, Vikram Prakash,
and Marc Jarzombek was named to the New York Public Library's "Best of
Reference" list. Penny Bonda, author of Sustainable Commercial Interiors, was
named Designer of Distinction at the American Society of Interior Designers'
annual conference. Gail Vittori, coauthor of the forthcoming Sustainable
Healthcare Architecture was named a "green innovator" by Time magazine.
P/T's online business had an excellent quarter with strong advertising sales.
Wiley acquired Whatsonwhen.com, a U.K.-based provider of travel-related online
content, technology, and related services during the second quarter. The
acquisition is already enhancing Wiley's extensive travel-related content
business, which includes the integrated online and print Frommer's, For Dummies,
and Unofficial Guides brands.
Nearly 400 articles adapted from For Dummies text were delivered to Yahoo!
during the fourth quarter, in addition to the 1,000 articles posted earlier in
the year. Yahoo! Tech provides consumers with advice and information on
technology. Wiley significantly increased the number of Podcasts offered on its
websites during the fiscal year.
In March, Wiley acquired the publishing assets of Anker Publishing, including
approximately 100 backlist titles, a considerable number of forthcoming titles,
and a quarterly newsletter, Department Chair, in the area of professional
development for faculty and administrators in higher education.
During the year, Wiley signed an agreement with Microsoft to publish business
books under a Microsoft Executive Circle series. P/T also signed a multi-year
publishing agreement with the Lincoln Center for the Performing Arts, Inc. for a
minimum of 15 books that will draw on Lincoln Center's community of artists,
extensive archives, and educational expertise. Another alliance was formed
during the fall with Essential Learning Partnership, a provider of web-based
continuing education for clinical professionals in psychology, counseling, and
social work, to enable clinicians to purchase training courses using Wiley
titles to meet license requirements.
Scientific, Technical, and Medical (STM)
U.S. STM revenue for fiscal year 2007 increased 8% to $222 million from $206
million in the previous year. Revenue growth was driven by journal
subscriptions, non-subscription revenue, such as advertising and the sale of
journal reprints, and STM reference books. New businesses and publication rights
recently acquired such as InfoPOEMS, Dialysis & Transplantation, The
Hospitalist, the Journal of Orthopaedic Research, Clinical Cardiology and Carpe
Diem, contributed $5 million of the top-line growth for the year. Globally, STM
revenue increased 8% for the full year.
Direct contribution to profit for fiscal year 2007 increased 5% to $101 million.
The positive effect of revenue growth was partially offset by the higher cost of
imported products and higher royalties due to product mix. STM results were also
affected by costs associated with the adoption of SFAS 123R.
Fourth quarter revenue, driven by all STM programs, advanced 6% to $61 million
from the same period of the prior year. New businesses and publication rights
acquired during the year contributed $2 million to the top-line growth in the
quarter. Direct contribution to profit for the quarter increased 8% mainly due
to revenue growth, improved vendor contract terms, the timing of advertising,
and lower editorial costs, partially offset by higher royalties due to product
mix.
Customers continue to take advantage of Wiley InterScience's content
(www.interscience.wiley.com). The number of visits grew by nearly 24% during
fiscal year 2007 compared to the previous year. Pay Per View and Article Select
sales were strong around the world.
During the year, the Company embarked on an aggressive program to further
exploit its intellectual content by digitizing selected landmark STM books.
Consequently, the number of online books downloaded from Wiley InterScience grew
by 30% during the year. The program includes the digitization of more than 750
volumes from at least 21 book series. With most of the series going back to
Volume 1, users can access valuable content that is no longer published in
print. Series editors include such eminent and pioneering scientists as Nobel
Laureates Ilya Prigogine and Jean-Marie Lehn, and National Medal of Science
Winner Stuart Rice. The Book Series is available as individual volumes, complete
series, or multiple series, with discounts offered based on the number of
volumes purchased. Wiley currently publishes approximately 2,800 online books,
with approximately 40-50 new titles added every month. With the addition of the
750 back volumes, total online book content will comprise over one million
pages.
During the fourth quarter, a new multi-year agreement was signed with the
American Society of Transplant Surgeons and The American Society of
Transplantation to publish the American Journal of Transplantation. Wiley was
also selected by the Society of Academic Emergency Medicine to assume
publication of Academic Emergency Medicine effective January 2008.
Late in the quarter, Wiley announced an agreement with The American Association
of Anatomists (AAA) to launch Anatomical Sciences Education, a new international
journal covering developments in education in the anatomical sciences. The
journal will debut in early 2008 and will publish six times per year in print
and online via Wiley InterScience.
During the year, Wiley signed publishing agreements with several scholarly
societies, including the Mt. Sinai School of Medicine, the International Society
of Magnetic Resonance in Medicine, the Society of Biochemistry and Molecular
Biology, and the American College of Rheumatology. The Company also expanded its
partnership with Skyscape, Inc., a leading provider of interactive, intelligent
health solutions for desktop and mobile devices, to make InfoPOEMs
evidence-based medicine summaries available to Skyscape's customer base of more
than 575,000 medical professionals.
The inaugural issues of InfoPOEMs for Hospitalists, a newsletter developed in
collaboration with the Society of Hospital Medicine, and the Korean digest
edition of Hepatology, published during the quarter. The latter completes the
series of local language versions already launched in China and Japan. During
the fourth quarter the first online version of The Wiley Registry of Mass
Spectral Data, 8th edition, was published on Wiley InterScience.
Earlier in the year, Wiley signed an agreement with the New York Public Library
to provide public online access to over 300 peer-reviewed journals that until
now have been available principally through academic or corporate collections.
The objectives of this pilot project are to accumulate usage data on high-level
journal content in a public library setting. This is Wiley's first such license
for journal content with a major public library in North America.
Higher Education
Wiley's U.S. Higher Education revenue in fiscal year 2007 increased 4% to $162
million, or 7% after adjusting for the effect of the change in inter-segment
product prices. Strong growth in accounting, driven by new editions sold through
WileyPLUS, social sciences and sales of Microsoft Official Academic Course
(MOAC) titles were partially offset by softness in mathematics, science, and
engineering. Globally, Higher Education revenue increased 6% in fiscal year
2007.
Direct contribution to profit for fiscal year 2007 improved 3%, or 12% adjusted
for the effect of the change in inter-segment product prices. The improvement
was due to revenue growth and lower costs driven by off-shoring composition,
improved vendor terms and lower costs associated with the delivery of electronic
product. The fiscal year 2007 results include charges associated with the
adoption of SFAS 123R. Higher Education's direct contribution in the fourth
quarter is typically negative due to the seasonal nature of the business.
U.S. Higher Education fourth quarter revenue advanced 10% to $25 million, or 14%
after adjusting for the effect of the change in inter-segment product prices.
These strong results were driven by robust sales of MOAC products and healthy
growth in the sciences, mathematics, and accounting resulting from the continued
success of WileyPLUS. Direct contribution to profit for the fourth quarter
increased 8% over the prior year period, or 25% after excluding the effect of
inter-segment product prices.
WileyPLUS sales for fiscal year 2007 were nearly double the prior year amount.
Visits for the quarter approached one million. Digital-only, i.e., not
accompanied by a textbook, accounted for 20% of WileyPLUS sales. Marketing
programs in the UK and Asia are helping to establish a presence for WileyPLUS in
those regions. WileyPLUS Assignment Editions were officially launched in the
Australian and New Zealand markets.
Soon after the end of the fiscal year, Higher Education re-launched its
WileyPLUS online presence at www.wileyplus.com. Redesigned with intuitive
navigation and user-focused content, the site will offer introductory
information and demos, along with resources for current student and faculty
users. The Wiley Faculty Network, a peer-to-peer network to help instructors
better utilize technology, experienced a 50% increase in the number of attendees
to its Guest Lectures throughout the fiscal year.
Early in the year, Wiley became Microsoft's sole publishing partner worldwide
for all MOAC materials. Microsoft and Wiley are collaborating on a new
co-branded series of textbook and e-learning products on several topics. Sales
of MOAC titles have surpassed the expectations of both Wiley and Microsoft.
The National Geographic Collegiate Atlas, which Wiley publishes as part of its
alliance with the National Geographic Society (NGS), was awarded the Best
Book/Atlas at the American Congress on Surveying and Mapping design competition.
Earlier in the year, Higher Education launched Wiley Visualizing, a series of
introductory textbooks developed in exclusive partnership with the NGS that
integrate rich visuals and media with text to enhance learning. Marketplace
response to the new textbook series has been very positive. Higher Education
also announced partnerships with the CFA Institute, a global membership
organization of investment practitioners and educators, to publish finance
titles under the CFA Institute Investment Series brand. Earlier in the year,
Wiley and the George Lucas Educational Foundation, a non-profit organization
dedicated to innovation and improvement in education, signed an agreement to
co-produce a series of six textbooks employing "project-based" learning, which
has been demonstrated to increase self-direction and improve research and
problem-solving skills.
Europe
Wiley Europe's revenue for fiscal year 2007 increased 8% to $316 million, or 5%
after adjusting for the effect of the change in inter-segment product prices and
foreign exchange. Favorable foreign exchange contributed approximately 4% to the
annual revenue growth. The revenue growth was principally driven by journal
subscriptions and STM reference books. Direct contribution to profit for the
full year increased 12% over the prior year, or 4% after adjusting for the
effect of the change in inter-segment product prices and foreign exchange. The
fiscal year 2007 results include a charge associated with the adoption of SFAS
123R.
Wiley Europe's revenue for the fourth quarter increased 11% to $88 million, or
6% after adjusting for the effect of the change in inter-segment product prices
and foreign exchange. Direct contribution to profit for the fourth quarter
increased 8% over the prior period, or 1% after adjusting for the effect of the
change in inter-segment product prices and foreign exchange. Revenue growth was
offset by higher costs due to product mix, as a higher portion of revenue in the
current quarter was derived from the sale of books and society-owned journals
versus the fourth quarter of fiscal year 2006.
The year ended on a positive note with indigenous books showing strength. P/T
sales picked up momentum in continental Europe during the fourth quarter with
much of the growth coming from technology books. STM journal subscriptions
continued to increase in all disciplines, particularly chemistry, which includes
the Angewandte Chemie journals published on behalf of the German Chemical
Society.
Early in the year, Wiley Europe announced the formation of a multi-year
publishing partnership with the Dana Centre, an extension of the Science Museum
in London. Written by leading technology journalists and experts in the U.K.,
the books will examine technology-related news stories from around the world;
explore their implications on everyday life; and provide predictions for the
future. The Dana Centre is well-known for its innovative and thought-provoking
events and debates on contemporary science, technology, and culture.
Wiley Europe also signed a contract with the Strategic Management Society to
publish a new journal, Strategic Entrepreneurship, extending its relationship
with the Society. Wiley Europe signed a co-publishing agreement during the
fourth quarter for a new book series with the Royal Microscopy Society, aiming
to deliver three titles per year. Earlier in the year, an agreement was reached
with the Royal Meteorological Society (RMetS), a leading professional and
learned society, to publish all five of its journals. This agreement expands an
existing relationship, establishing Wiley as the exclusive publisher of all the
RMetS journals. Wiley and the RMetS have worked together since 1980, when they
launched the International Journal of Climatology.
Earlier in the year, Wiley Europe renewed its contract with National Health
Service in the U.K. for the Cochrane National Site License. In July, Wiley-VCH
re-launched the pro-physik.de portal with a number of new customer-oriented
features, such as enhanced search capabilities, that were well received by
members of the German Physical Society, as well as its other visitors.
During the second quarter, Wiley Europe also acquired the European Transactions
on Telecommunications journal, which it has been publishing under a
collaborative agreement for years. Wiley and the British Journal of Surgery
Society renewed their contract. The first webinar on SpectroscopyNOW took place
in March with Perkin Elmer as sponsor. This represents a new revenue stream for
the analytic chemistry portals and for Microscopy & Analysis.
Wiley Europe has been exploring new business opportunities with
telecommunications companies. As a result, it extended its publishing
partnership with Symbian to include the formation of a new Symbian Academy
program for accredited Higher Education institutions, drawing on content from
across all of Wiley's publishing programs.
Blackwell
Blackwell revenue and operating income for the fourth quarter of fiscal year
2007 was $106 million and $6 million, respectively, exceeding expectations.
Included in the fourth quarter results is nearly $6 million of amortization
charges for intangible assets related to the acquisition. Financing costs for
the acquisition were approximately $17 million in the quarter. The acquisition
was dilutive to EPS by approximately $0.02 in the quarter. Both Wiley's global
STM business and Blackwell grew faster than the market in fiscal year 2007.
Since completing the acquisition, we have made significant progress integrating
Blackwell with Wiley's global STM business. We have validated many of the key
assumptions that underlie our acquisition plan. During the fourth quarter of
fiscal year 2007, we announced the global organization structure for the merged
business, which will include Blackwell and Wiley colleagues on the leadership
team. Plans have been approved to merge global sales, marketing and content
management which will result in significant synergies. As planned, we are
capitalizing on Blackwell's successful off-shoring and outsourcing of various
content management, manufacturing and shared support services.
Our current priorities are to finalize plans for the implementation of a single
web platform; complete the integration of technology infrastructure resources;
and to complete the transition to a common financial reporting, distribution and
customer service infrastructure. By the end of fiscal year 2008, we expect to
have implemented the action plans and initiatives that will deliver the
synergies that underpin our acquisition plan.
Since the acquisition closed, Wiley and Blackwell have renewed society journal
contracts and announced the launch of new journals and new partnerships. New
publications include Clinical and Translational Science, which will focus on the
rapidly expanding field of translational studies, a complex medical discipline
emerging at the intersection of applied bench research and clinical medicine;
Regulation & Governance, a specialized international journal addressing the
world's most pressing audit and risk challenges; Asian Social Work and Policy
Review, the Korean Academy of Social Welfare's official publication; and
Archives of Drug Information, a new, freely available peer-reviewed journal
featuring the results of drug studies. This journal will help to address
requests for transparency voiced by societies, health care practitioners,
patients, media, and the government to disclose clinical trial information.
Asia, Australia, and Canada
Wiley's fiscal year 2007 revenue in Asia, Australia, and Canada advanced 7% to
$133 million, or 5% excluding favorable foreign exchange. Growth was driven by
strong P/T sales in all regions and the sale of rights, partially offset by
disappointing school sales in Australia. Direct contribution to profit for the
full year increased 2% to $27 million, but decreased 15% after adjusting for the
effect of the change in inter-segment product prices and foreign exchange. The
decline in direct contribution was principally due to product mix and
investments in the development of indigenous publishing programs.
For the fourth quarter, revenue declined nearly 2% to $29 million, or 3%
excluding foreign exchange. Lower indigenous title sales were partially offset
by higher sales of imported P/T books. Direct contribution to profit increased
slightly to nearly $5 million, but declined $1 million after adjusting for the
effect of the change in inter-segment product prices and foreign exchange. The
decline in direct contribution was mainly due to product mix and publishing
investments.
WileyPLUS gained ground with new adoptions across Asia, Australia, and Canada.
Microsoft Official Academic Course (MOAC) books are eliciting much interest,
especially in Malaysia and India.
Wiley Canada delivered mixed results throughout the year, showing strength in
its P/T business, but falling short in Higher Education. P/T's growth was driven
by demand for local real estate titles and front-list releases, as well as
strong demand for For Dummies titles. An indigenous title, Brodeeur: Beyond the
Crease by hockey player Martin Brodeur, has been selling well globally. Sales of
WileyPLUS have exceeded expectations in Canada.
Wiley Asia published several key P/T titles during the quarter. Strong retail
performance in many Asian markets boosted results.
Conference Call
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Wiley will hold a conference call today, Thursday, June 21, 2007, at 2:30 p.m.
(EDT) to discuss its financial results for the fourth quarter and full year of
fiscal year 2007. 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: (877) 545-1409
International callers may participate by dialing: (719) 325-4924
A replay of the call will be available from 5:30 p.m. (EDT) on Thursday, June 21
through midnight on Thursday, June 28 by dialing (888) 203-1112 or (719)
457-0820 and entering Pass code: 6498983.
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, publisher John Wiley & Sons, Inc., has been a valued source of
information and understanding for 200 years, helping people around the world
meet their needs and fulfill their aspirations. Our 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's global headquarters are located in Hoboken, New
Jersey, with operations in the U.S., Europe, Asia, Canada, and Australia, and a
Web site at http://www.wiley.com. The Company is listed on the New York Stock
Exchange under the symbols JWa and JWb.
JOHN WILEY & SONS, INC.
UNAUDITED SUMMARY OF OPERATIONS
FOR THE TWELVE MONTHS ENDED
APRIL 30, 2007 AND 2006
(in thousands, except per share amounts)
Adjusted - For Tax Benefits
- ---------------------------
2007 2007 2007 2006 % Change
Consolidated Blackwell Wiley (Excl. Blackwell)
-------------- --------------- ------------------------------------------
Revenue $ 1,234,936 105,761 1,129,175 1,044,185 8%
Costs and Expenses
Cost of Sales 420,952 55,092 365,860 342,314 7%
Operating and Administrative Expenses 632,029 38,657 593,372 535,694 11%
Amortization of Intangibles 20,676 5,518 15,158 13,498 12%
-------------- --------------- -------------- ----------
Total Costs and Expenses 1,073,657 99,267 974,390 891,506 9%
-------------- --------------- -------------- ----------
Operating Income 161,279 6,494 154,785 152,679 1%
Operating Margin 13.1% 6.1% 13.7% 14.6%
Interest Expense and Other, Net (B) 21,777 14,081 7,696 8,835
-------------- --------------- -------------- ----------
Income (Loss) Before Taxes 139,502 (7,587) 147,089 143,844 2%
Adjusted Provision for Income Taxes (B) 45,351 (6,340) 51,691 47,768
-------------- --------------- -------------- ----------
Adjusted Net Income (Loss) $ 94,151 (1,247) 95,398 96,076 -1%
============== =============== ============== ==========
Adjusted Income (Loss) Per Share - Diluted $ 1.62 (0.02) 1.64 1.61 2%
- Basic $ 1.65 (0.02) 1.68 1.65
Average Shares - Diluted 58,287 58,287 58,287 59,792
- Basic 56,932 56,932 56,932 58,071
Reconciliation of Non-GAAP Adjusted Financial Disclosure (Tax Benefit)
- ----------------------------------------------------------------------
Adjusted Net Income (Loss) $ 94,151 (1,247) 95,398 96,076
Tax Benefit (A) 5,468 - 5,468 14,252
-------------- --------------- -------------- ----------
Net Income (Loss) - GAAP $ 99,619 (1,247) 100,866 110,328 -9%
============== =============== ============== ==========
Adjusted Income (Loss) Per Diluted Share $ 1.62 (0.02) 1.64 1.61
Tax Benefit (A) 0.09 - 0.09 0.24
Income (Loss) Per Diluted Share - GAAP $ 1.71 (0.02) 1.73 1.85 -6%
============== ============== ============ ==========
(A) Fiscal year 2007 excludes a $5.5 million tax benefit, or $0.09 per diluted
share. Fiscal year 2006 excludes a tax benefit of $6.8 million, or $0.11
per diluted share. These benefits coincide with the resolution and
settlements of certain tax matters with authorities in the U.S. and abroad.
Fiscal year 2006 also excludes a $7.5 million, or $0.12 per diluted share
tax benefit associated with the reversal of a 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 that fully
offset the tax accrued by the Company on foreign dividends in the fourth
quarter of fiscal year 2005. Neither the tax benefit nor the corresponding
tax accrual had a cash impact on the Company.
(B) Interest expense reported for Blackwell includes acqusition financing
costs. Tax expense for Blackwell was computed on a stand-alone basis.
Note: The Company's management evaluates operating performance excluding unusual
and/or nonrecurring events, such as the acquisition of Blackwell. 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.
UNAUDITED SUMMARY OF OPERATIONS
FOR THE FOURTH QUARTER
APRIL 30, 2007 AND 2006
(in thousands, except per share amounts)
2007 2007 2007 2006 % Change
Consolidated Blackwell Wiley (Excl. Blackwell)
------------- ------------- ---------------------------------------
Revenue $ 390,194 105,761 284,433 266,564 7%
Costs and Expenses
Cost of Sales 145,659 55,092 90,567 87,697 3%
Operating and Administrative Expenses 201,388 38,657 162,731 152,408 7%
Amortization of Intangibles 9,525 5,518 4,007 3,508 14%
------------- ------------- ----------- ----------
Total Costs and Expenses 356,572 99,267 257,305 243,613 6%
------------- ------------- ----------- ----------
Operating Income 33,622 6,494 27,128 22,951 18%
Operating Margin 8.6% 6.1% 9.5% 8.6%
Interest Expense and Other, Net (B) 14,430 14,081 349 1,597
------------- ------------- ----------- ----------
Income (Loss) Before Taxes 19,192 (7,587) 26,779 21,354 25%
Provision for Income Taxes (B) 4,821 (6,340) 11,161 6,836
------------- ------------- ----------- ----------
Net Income (Loss) $ 14,371 (1,247) 15,618 14,518 8%
============= ============= =========== ==========
Income (Loss) Per Share - Diluted $ 0.25 (0.02) 0.27 0.25 8%
- Basic $ 0.25 (0.02) 0.27 0.25
Average Shares - Diluted 58,638 58,638 58,638 58,679
- Basic 57,218 57,218 57,218 57,090
JOHN WILEY & SONS, INC.
UNAUDITED SEGMENT RESULTS
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2007 AND 2006
(in thousands)
Fourth Quarter Ended Twelve Months Ended
April 30, April 30,
---------------------------------- ---------------------------------
2007 2006 % Change 2007 2006 % Change
---------- ---------- ---------- ----------- ----------- ---------
Revenue
- --------------------------------------------------
US Segment
Professional/Trade $ 106,144 105,555 1% 399,461 380,191 5%
Scientific, Technical and Medical 61,288 57,975 6% 222,050 206,008 8%
Higher Education 24,725 22,537 10% 162,480 156,235 4%
---------- ---------- ----------- -----------
Total US 192,157 186,067 3% 783,991 742,434 6%
European Segment 88,102 79,684 11% 316,125 292,462 8%
Blackwell Segment 105,761 - 100% 105,761 - 100%
Asia, Australia & Canada Segment 29,354 29,859 -2% 132,992 123,950 7%
Intersegment Sales Eliminations (25,180) (29,046) -13% (103,933) (114,661) -9%
---------- ---------- ----------- -----------
Total Revenue $ 390,194 266,564 46% 1,234,936 1,044,185 18%
========== ========== =========== ===========
Direct Contribution to Profit
- ------------------------------------------------
US Segment
Professional/Trade $ 31,485 29,962 5% 107,575 106,971 1%
Scientific, Technical and Medical 29,390 27,153 8% 101,070 96,009 5%
Higher Education (3,299) (3,590) 8% 41,173 40,065 3%
---------- ---------- ----------- -----------
Total US 57,576 53,525 8% 249,818 243,045 3%
European Segment 29,228 27,017 8% 104,796 93,415 12%
Blackwell Segment 29,699 - 100% 29,699 - 100%
Asia, Australia & Canada Segment 4,631 4,267 9% 27,217 26,747 2%
---------- ---------- ----------- -----------
Total Direct Contribution to Profit 121,134 84,809 43% 411,530 363,207 13%
Shared Services and Administrative Costs
- --------------------------------------------------
Wiley:
Distribution (13,303) (13,925) -4% (51,721) (50,260) 3%
Information Technology & Development (18,377) (17,779) 3% (64,525) (62,732) 3%
Finance (11,762) (8,921) 32% (38,168) (32,594) 17%
Other Administration (20,865) (21,233) -2% (72,632) (64,942) 12%
---------- ---------- ----------- -----------
(64,307) (61,858) 4% (227,046) (210,528) 8%
Blackwell:
Distribution (1,771) - (1,771) -
Information Technology & Development (7,410) - (7,410) -
Finance (7,593) - (7,593) -
Other Administration (6,431) - (6,431) -
---------- ---------- ----------- -----------
(23,205) - (23,205) -
Operating Income $ 33,622 22,951 46% 161,279 152,679 6%
========== ========== =========== ===========
JOHN WILEY & SONS, INC.
UNAUDITED CONDENSED STATEMENTS OF FINANCIAL POSITION
(in thousands)
April 30, April 30,
2007 2006
-------------- ------------
Current Assets
Cash & cash equivalents $ 55,750 60,757
Accounts receivable 201,407 158,275
Inventories 112,863 88,578
Deferred income tax benefit 16,734 5,536
Other current assets 18,683 13,162
-------------- ------------
Total Current Assets 405,437 326,308
Product Development Assets 79,830 65,641
Property, Equipment and Technology 126,712 102,123
Intangible Assets 1,166,289 302,384
Goodwill 704,143 198,416
Deferred Income Tax Benefit 16,568 3,809
Other Assets 32,136 27,328
-------------- ------------
Total Assets 2,531,115 1,026,009
============== ============
Current Liabilities
Accounts and royalties payable 125,824 97,231
Deferred revenue 305,405 143,923
Accrued income taxes 9,353 24,226
Other accrued liabilities 135,801 96,729
Current portion of long-term debt 22,500 -
-------------- ------------
Total Current Liabilities 598,883 362,109
Long-Term Debt 977,721 160,496
Accrued Pension Liability 112,271 56,068
Other Long-Term Liabilities 41,174 35,627
Deferred Income Taxes 271,558 9,869
Shareholders' Equity 529,508 401,840
-------------- ------------
Total Liabilities & Shareholders' Equity $ 2,531,115 1,026,009
============== ============
JOHN WILEY & SONS, INC.
UNAUDITED STATEMENTS OF FREE CASH FLOW
(in thousands)
Twelve Months Ended
April 30,
--------------------------------
2007 2006
------------- ----------
Operating Activities:
Net income $ 99,619 110,328
Amortization of intangibles 20,676 13,498
Amortization of composition costs 38,722 36,473
Depreciation of property, equipment and technology 28,926 32,031
Special non-cash tax benefits (5,468) (14,252)
Stock-based compensation (net of tax) 12,559 4,854
Excess tax benefits from stock-based compensation (4,455) -
Non-cash charges and other 59,568 48,387
Change in deferred revenue (15,872) 390
Net change in operating assets and liabilities (13,681) 10,933
------------ ----------
Cash provided by Operating Activities, excluding acquisitions 220,594 242,642
Investments in organic growth:
Additions to product development assets (76,225) (70,921)
Additions to property, equipment and technology (31,445) (21,355)
------------ ----------
Free Cash Flow 112,924 150,366
Other Investing and Financing Activities:
Acquisitions, net of cash (972,909) (31,354)
Sale of marketable securities 42,334 10,000
Repayment of long-term debt (216,980) (336,298)
Borrowings of long-term debt 1,054,702 303,754
Purchase of treasury shares (7,278) (108,867)
Payment of debt issuance costs (8,315) -
Cash dividends (22,839) (21,103)
Proceeds from issuance of stock on option exercises and other 6,462 5,173
Excess tax benefits from stock-based compensation 4,455 -
------------ ----------
Cash Provided by (Used for) in Investing and Financing Activities (120,368) (178,695)
------------ ----------
Effects of Exchange Rate Changes on Cash 2,437 (315)
------------ ----------
Decrease in Cash and Cash Equivalents for Period $ (5,007) (28,644)
============ ==========
RECONCILIATION TO GAAP PRESENTATION
Investing Activities:
Additions to product development assets $ (76,225) (70,921)
Additions to property, equipment and technology (31,445) (21,355)
Acquisitions, net of cash (972,909) (31,354)
Sale (Purchase) of marketable securities 42,334 10,000
------------ ----------
Cash Used for Investing Activities $ (1,038,245) (113,630)
============ ==========
Financing Activities:
Cash Provided by (Used for) Investing and Financing Activities $ (120,368) (178,695)
Less:
Acquisitions, net of cash (972,909) (31,354)
Sale of marketable securities 42,334 10,000
------------ ----------
Cash Provided by (Used for) Financing Activities $ 810,207 (157,341)
============ =========-
Note: The Company's management evaluates cash flow performance using free cash
flow. The Company believes free cash flow provides a more effective and
comparable measure of cash flow performance. Since free cash flow is not a
measure calculated in accordance with GAAP, it should not be considered as a
substitute for other GAAP measures, including cash used for investing activities
and financing activities, as reported, as an indicator of cash flow performance.
SIGNATURES
----------
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 21, 2007