JW.A - Earnings call transcript Q4 2019

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Operator

Good morning, and welcome to Wiley's Fourth Quarter and Fiscal Year 2019 Earnings Call.

As a reminder, this conference is being recorded.

At this time, I'd like to introduce Wiley's Vice President of Investor Relations, Brian Campbell. Please go ahead.

Brian Campbell

Hello, everyone and welcome to Wiley's fourth quarter and fiscal 2019 earnings update. start, forward-looking call statements. to and being reminders include may few first, is the recorded A

factors SEC You actual undertake statements materially to to results rely any may in shouldn't on or events differ and these obligations to reflect are revise does subsequent The company filings. statements update as discussed not our forward-looking subject circumstances. or

the comparability performance exclude non-GAAP to of EPS, flow evaluate adjusted profitability income EBITDA impact currency and on adjusted impact supplement items adjusted measures generally underlying and and profit, which a trends. a the acquisitions. constant as provides and metrics free Wiley less basis excluding Second, spending, Non-GAAP following; product margin, comprise that adjusted results to operating cash contribution development operating results

GAAP. abbreviate prescribed should do supplementary information of GAAP, our viewed alternatives the measures the calculation all measures not U.S. in Also explanations to may be by meanings used release. presented not This press measures standardized note, non-GAAP have other and comparable by as measures constant not performance CC. companies. be of included see to reconciliation therefore and These we as under financial the similar Please currency in

all in note presentation impact exclude the currency to Important variances unless this of otherwise noted.

prefer portion lower a and be recommend Relations you on the will you question. click that webcast left-hand well call background, who the playback over presentation in remove delays as prefer After gears to copy we webpage. any available slides, located ask will Live and the the the to if on viewing the select the a any those listen to to Investor This eliminate of side want on of a our For the as phone, the call, transitions potential slide but Phone. view still of icon window the

the CEO. and call Brian Napack, over I'll now turn to Wiley's President

Brian Napack

us for today. and Brian, joining thank you all Thanks,

of proud that team past our that, delivered this start year. me I'm fiscal they performance and Let saying by the

around is our the to mission education about I'm research and and globe, Our very support optimistic and drive future.

some quickly Let through end run the me as takeaways year. we

fiscal and revenue missed on cash We'll capital XXXX a fiscal years due our timing-related of little growth. We to First, to seeing returned we changes and to Test areas an notably nicely. touch strong and no see XXXX earnings working on and bit some achieved momentum. Assessment some build XXXX mainly and in and business target most of on Preparation revenue CrossKnowledge several performance. XXXX, Professional in growth we growth to We're is fiscal our critical We flow later. We businesses XXXX, accelerating growth this this the after intend businesses updated in growing business targets. the

savings improvement significant multi-year and is optimization efficiency Our program driving Wiley. business across

We the period be $XXX expect profitable to to drive approximately three-year reinvested over to revenue that although will sustain million, be growth. savings grow most of and

restructuring As this first be part will the initiative, quarter. recording charge of in we

in growth invest revenue fiscal up optimization. and an fiscal XXXX we XXXX Therefore, To see goals and dip profitability, our earnings for in will in earnings there. must achieve returns before growth we from and ramps

are and we're company. materializing are that seeing we the Overall, across momentum opportunities with the pleased the that

with Jersey. Analyst We our more X, Brian more Day New in will XXXX XXXX at Hoboken, will share details. Campbell for October fiscal scheduled out Friday, reach

now Education in sales Professional seeing House and was Courseware, areas Atypon, Open Subscriptions and by good includes Prep, had Publishing, on in which Services positive growth very and Learning of fourth the momentum improvement Test Assessment. in revenue and and We're earnings Research strong with which anticipated. quarter portfolio key in The Now Research results. to in we driven Access in strong

disciplines high-demand Publishing our in realigned forward. our and see delivery and We decline continue improvement to see but models businesses, going performance have we

Education this law, by highly signed as adding We university brand continues while spectrum. Northern is respected to as Illinois technology. and XX universities for and also be a a health partner care, Wiley new us. such area in across quarter, business, areas Tech-enabled The Services new strategic key the degree programs valued

coding In our software through launched need an online Software unit, we April, Guild to ever-growing for with skilled meet D'Youville College software developers. program the

developing we access provider is network affordable the employer XXX acquired a complete high-impact skill This leading to good who the Wiley Students education program Knewton, of example helps companies. assets of to how bridge universities that the and gap. adaptive technology. more well-known the a and year will is than closed, our and of delivering about corporations have After courseware

Formed XXXX, Knewton EdTech startup. ambitious was in a and high-profile

in of terms impact it an acquisition our education it a modest across should outsized have price, While is businesses.

affordable adopted its been growing our high-impact, the addition to fast. XXX learning colleges platform, powerful the courseware Knewton that universities. is very and to strategy content, In has it Alta market and by for in adaptive elevates already low-cost adaptive courseware addresses lead need over squarely Its

the the out back especially Research XX% with a The down third impact to Publishing growth to in represents quarter, X% quarter. is relatively in the X% contribution X% or decline X% up of Learning fastest-growing saw noteworthy. disruptive bounce we this of the one in And saw growth compared but education. model be in backing near-term House. segments revenue from We expected small, was good revenue significant revenue

growth in X%, and X% Publishing. and strong Double-digit growth Access grew Test X%. In in growth profit XX% quarter a Publishing, Research, driven WileyPLUS only difficult grew grew and in third and grew Publishing In double-digit by recovered Professional and Open the Research profit Journal while Preparation Subscription from Atypon quarter X%, STM X%. was XX%, revenue earnings rose declined

highlights the full from year. some Now,

a our versus and will growth adjusted performance, excluding was operations commitments revenue partial Learning compared earnings the fiscal primarily Cash walk flow of which year year As outlook changes noted, met working John due decline miss, to revenue down through. with anticipated to we X.X% XXXX, timing-related capital a mid-single-digit in X% an House. EPS from impact flat for at

to our profitable working Research, good largest that year delays to year to delivered fiscal important most another expect note It's recover performance. return more fiscal year XXXX. capital and and in we those XXXX in normalized business,

In to articles in announced us landmark Open the in solid addition that aligns growth, the Wiley publishing. agreement volume recording model the grow makes presents published. us Access the closely to deal This opportunity through a revenue market mixed Germany leader and we topline very with of with

the up Overall, X% Wiley's many of year. of published that, the reject On number of articles in Journals, these of articles thousands the elsewhere. over submitted were of and numbering we get this we hundreds articles received top XX% to

this authors At the articles throughout cascading more will our portfolio. optimize time, business processes. continue more we business, monetize maintain our will we subscription volume service forward, of our our and strong by to deliver same Going to

complementary Learning team. year a this highly These schools under in acquired focus Learning are strong together schools strong is integration a and Wiley We and in the is and brings education. House on nearly House come programs regional larger and smaller leadership have is The complete. teams businesses. strong two graduate-level undergraduate

combined like leverage Loyola and as university Angeles, Kentucky, Florida, Los the new of Since of business six State, University the schools Michigan well this institutional programs and in by and by acquisition and degree months to unique to programs the has services. Moreover, West our University our we add-on and footprint Illinois signed University partners, XX as School market new Northern partners continue by XXX Law leading opportunities over the of ago, Wiley's pipeline for be potential position energized reputation quarter. of

making three the years next adjusted mid significant business grow to rates We high with fiscal at expect of target over teens to by all this gains. while $XXX EBITDA million XXXX, a

three-fourth full House. the from is year over of factor Learning digital revenue of services; even tech-enabled a Finally, number if and higher now in you Wiley's comes products although,

expect already from business noted to We've continue saving to number We efficiencies cost and the initiatives. this our optimization climb. expected

is The due House improve for making and performance we and the the Learning amortization in see the of to are year. related growth you to to the Services acquisition. investments Here Education decline Research impact earnings

pass to the to now John through performance. segment over take call you I'll our

John Kritzmacher

Thank Brian. you,

growth driven Open constant and a growth business. the of As year, XX% research for research for full in finish with in X% by quarter to currency Access platforms X% the revenue the X% with the at Atypon you had our year and growth mentioned, year, strong

Our X% quarter was for year. and the stable the subscription in business rose

to continue steady Open environment we see ahead, a subscriptions, Looking for Access. in growth accompanied rapid by

services Atypon's see platform new for researcher continued advertising demand eight and corporate pipeline added opportunities we clients and products, databases, of continue to addition, year this new In for a strong business. including grow. Atypon and to

strength marketing in volume the unique upon the corporate build as year, Adjusted invested continued of but and growth clear X% our pleased the in researcher services sales. drive primarily additional opportunity quarter, for capabilities declined We're performance, revenue business with the X% foundational to and our CTP to Research strong new due we article and and advanced position. rose market to

third we education, decline was X% in as by with difficult anticipated, professional a year finished and modest X%. from for quarter, publishing rebounded and revenue as offset quarter, the with year, gains and portfolio. the largely X% in expected, down STM down for or technology Publishing professional the our a Dummies

print the down from continued was due mainly new Publishing XX% the away textbooks. Education year, shift to for

We to Knewton. more for high-demand of our Although, are better offering good with we recently a higher ahead, had note, signs our very see much also disciplines, frontlist adoptions. this and around we a Important business with year. an advanced expanded efforts education early stronger frontlist part performance fall and for addition of realigned had light on frontlist this to have a sharpening the and some the WileyPLUS focus

GMAT five growth, publishing renewed Test driven the double-digit by partnership to with and strong We another for our ACT Preparation continued ACT achieve programs. years. our

marketing is costs, both emphasis plan down due XX% year university performance. opportunities, quarter, the customers. with technology to CTP revenue was up in but new X% forward-looking on for due institutional and employment to and lower Adjusted the increase to Our finance our for and partnering exams corporate add

new to House, from or the most for added million Learning around continued partners, and although university Learning following regional XX six for both scale XX% grew $XX inorganic adding House the the Revenue brands including months. national Services which was that rapidly revenue year, of quarter, schools. XX% of in Education acquisition, growth

House, year. quarter, for Excluding revenue the Learning rose XX% or in X% the

growth the partners by reminder, has of our and Services a been Education muted organic in pruning recent As programs. underperforming

growth in We expect to to return ahead. year the double-digit

and reseller continued source reliable quarter pre-hire leadership the which year network. business, revenue we're and assessments, Assessment rose expanding development X%, our to Revenue Professional and growth momentum of in a be and and gaining X% the provides profit for respectively. by Our global

Nordisk our X% but Healthcare total Canada. in customers the around this learning was Novo the CrossKnowledge business, up quarter, the GE Bombardier, new corporate continued XX including important revenue year, to in X% new Telefônica year. decline customers sign for posted adding CrossKnowledge, a Brasil globe, France, and Primark,

Solutions for House down the CTP the student amortization million mostly from the the acquired of including diluted intangibles. near-term for or acquisition, million for investment Adjusted $XX the year, and was increased impact $X in quarter Learning acquisition of

for plan our cash underperformed flow this We year.

As cash This year, capital performance. fiscal we can and to in from $XXX XXXX million, changes working XXXX operations and you respectively. operations primarily cash of see by reported $XXX and driven graphs, million the million $XXX in our from declined timing-related

by that million cash year of to million of $XX were reflected than ERP in unfavorable Journal prior more in specifically, performance, payables approximately and Of More million Subscription month Journal We the respectively. that collection $XX the our collections recovered collections related May. shortfall transition. $XX half collections and management million unfavorable to partly were $XX delays

discretionary decline in the the House Learning factors other U.S. House earnings million, operations impact $XX costs, lower million $XX of of of related Other Learning onetime million. to and year-over-year the from contribution costs a $XX operating of and integration cash cash including include advantage to in plan pension tax transaction

Our recovery fiscal Subscription will XXXX the timing cash from clearly of collections. benefit from on the operations Journal expected

fiscal working into We substantially favorable XXXX. our the interim, year fundamentally In swings these strong. cash flow expect in reduce to timing-related remain capital characteristics headed

Our and provide continues plan. balance execute to flexibility to capacity sheet significant our strategic

billion, $X.X inclusive billion. recently Learning a that Our expands entered from credit capacity acquisition and of funding House we into at five-year leverage EBITDA one up our is $X.X times to agreement

are both on research opportunities business. on We continue education and pursue acquisition our and to active the we'll front sides the of

full share from repurchases. up continue we and in fiscal to buybacks share price dividends increased million, with return $XX to year repurchases Meanwhile, shareholders quarter XXXX in the in million the our of fourth cash in the $XX XXXX. We decline given form of

authorization. repurchase X.X have We current in remaining shares million share the

consecutive As dividend a reminder, at the year, increases of beginning The extended we coming weeks. Board's dividend the to decision streak occur of over XX years. will the next our

will who pass through our outlook. I'll Brian to that, call back with take And the you

Brian Napack

Thanks, John.

outlook three-year one-year our target. and Now on to

First, Services we of other remain slightly program the Access Open strong in lead we parts the in to results outstanding Education Publishing, our growth in Research our research rapid in this are and education our strategy focused growth on portfolio. seeing and of career-focused and momentum partner strategic in and

same the program company. the time, At across improvements to optimization starting drive is efficiency our business and savings

Our ramp touch to and after will and with strategic revenue, materially investments on of are XXXX will traction, later CAGRs EPS we fiscal beyond earnings from XXXX. adjusted gaining dip fiscal to and fiscal the to X% X%, which noted growth XXXX, X% fiscal EBITDA profitable in XXXX in X% X% respectively to X% and

boot which Publishing, Research technology are where strategic businesses reside. we which with our and forward, structure be will rapidly businesses Education service OPM and courseware Services, aligning our Professional and focus areas. our camps business, and growing Going Education our content other reporting is Publishing Platforms, and

the Publishing our terrific and will Research of current and will and plus Education corporate CrossKnowledge largest top-tier to be whereas and reputation the journal Professional our portfolio. Research, today, continues position, segment training most Professional essentially businesses Assessment. same a enjoy market a profitable consist business Publishing as

EBITDA expect output period, per strong steady performance drivers modestly growing of at development and here with investment in core Internally, global macro three-year we driver research the X% about the The research growth as our consistently our margins. Over remains revenue ever, of articles. start with year. as growing

publishable many building opportunity our As portfolio. in reject to growth and Open stated, to capacity which the are our same were monetized Wiley we just reputation received, time, we do are the of and year. this significant up augment strong Access portfolio across of X% volume journal With we articles submissions gains are that. there growing XX% through At to unit

research is R&D grows this our where We year There in we worldwide. a sales also saw growing to corporate need in customers. sales opportunity advertising good productized see and database good corporate research corporate content, for growth as

force grow our in research see and workflow. sectors. further authors content a and opportunities We they research building us the government workflow are empower and in support and corporate to good including platforms leading engraining that and remains footprint in the solutions researchers Atypon

workflows continue drive efficiencies and optimization improved times, our Finally program researcher to our business overall will across improved experiences portfolio cycle effectiveness. and enhanced with

significant savings the X-year expect We over time horizon.

demand to horizon. of to Above return Professional growth health for and companies. skill to content the is critical the There drivers today's growing of programs are long-term certification there traditional Publishing and and many a that expected over now gaps business. in necessity career-focused time all, Education Credentialing to address of needs economy. education is the this continuous learning a are the bridge

more most. skill are that focused and the we career on needs areas high-demand Therefore publishing the market in

broaden also across university are access scaling content business We corporate channels and our new to to models both the distribution the markets. and

we tools consumers. are access, inclusive content rental, to programs include our of and portfolio extensive digital and approaches and These increasingly subscription directly models low-cost selling

of across momentum good all seeing these are We programs.

our across high-demand and corporate publishing we Wiley's synergy many in our skills and As university we the against touch programs are and finding company careers increasing markets. points have in aligned

integrating are partners our For in we Prep to settings. Ed with education university Test more example, corporate our selling our career-focused content higher products courseware and

delivery. And we to cost the efficiency are content This in to year fiscal area this it our improving and and development meaningfully of is and expect continuing fiscal marginally is offsetting in across investments. 'XX. and also A now operations publishing 'XX focus we improving more particular savings grow find business

time well. the horizon, improve we as to expect Over EBITDA

camps marketing includes and as programs, growth training. technology degree teacher significant of and for enrollment such delivery Services short-term engine as and recruiting Education services, professional boot credentialing, the is a such Wiley online

include, The succeed services growing market. this rapidly going and market education forward education drivers for today's outcome-focused a that help online universities business competitive to of in highly

schools have Wiley, At will partners, and programs we a that of growing growth. fuel degree enrollment network

unmatched footprint to university is Wiley Our nicely. continues across and grow

skills offerings including gain programs the and this specific students certification with network, that and service Online career-focused Program the portfolio now to includes This and full-stack like they leverage that education our help need camps course and skill variety of universities To the demanding. the starts to boot market gap. wide knowledge continue scale to of bridge is Management that services we degrees

you this and acquisition as of student Finally expect do We're our the progress. continually and journey. to great making optimizing drive the reduce processes are to effectiveness we would We improving student enrollment structure. cost our

our over significant Given time our Education Services margin pipeline and at existing targeting base, with growth revenue we for gains least the horizon. mid-teens business are

EBITDA to there. continue We reach million XX% expect margin. to from fiscal 'XX a $XXX improve in with should margin EBITDA

will are the expect summary momentum profitable making company talk to to that set Here all to of because long-term investing Wiley from the along we gains across specific you for profitable we in in see growth long-term this covered of Wiley company opportunity won't are areas with for elsewhere. that I investments I these we've investments. of that the this details a our up will position growth. and the we reiterate support clear

X% the And in to EBITDA XXXX. targets repeat to We're for now these revenue, EPS and adjusted for of fiscal X% and fiscal from X%, XXXX X% To numbers. outlook fiscal growth yield to annual rates XXXX. confident X% compound and consolidated XXXX our to are respectively X% adjusted expected onto fiscal to

areas in recovery Education Revenue of is double-digit Wiley Publishing. Services, being driven Professional Research, growth Education and by growth growth with and in in all across steady growth

investments earnings mostly and dip our this As noted, related acquisitions. year, we significant will have to a

can But years and to the it we XXXX decline the in fiscal come. and in growth difference very $X.XX in interest in gets fact, and foundation a build a remaining expense. depreciation that on us higher XXXX. investments and to for of fiscal good profitable drive includes XXXX amortization The roughly place In incremental nearly in higher $X.XX EPS $X.XX

introducing can caused fiscal XXXX performance income operating depreciation EBITDA and adjusted you eliminates by see, our As acquired excluding and and noise XXXX XXXX defined good EBITDA of we adjusted targets as indicator and XXXX believe our fiscal the our fiscal of the outlook operating are in that We – adjusted is fiscal a amortization intangibles. amortization.

cash improve of million. delays flow Our recover projected year flow $XXX Note as on free that, the Subscriptions. next from reflects CapEx free around Journal cash we will collection

free million. By $XXX cash very has front at revenue EPS of career-focused and billion, $X Wiley million us assets a capture and in EBITDA of opportunities market fiscal adjusted the summary, $X.XX plan set education. strategy, in XXXX adjusted the our we them. at at capacity $XXX and flow to have in healthy with shows at research the financial team, the In

our our and seeing We fiscal This commitments make and are will against XXXX are our plans executing continue in the beyond. growth to benefits engines. well already team in

that, and your With we your welcome comments background, questions. as

Operator

you. Instructions] Crum Thank our We from of [Operator Stifel. ahead. Please will take Drew question go now first

open. is line Your

Drew Crum

morning, thanks. Okay, guys. Good

during to You submissions referenced compare XX% mentioned any that rejection rate going of How couple you change anticipate you the journal years? fiscal the increased to that forward? last would X% does XXXX. And

Brian Napack

Drew. great a That's Yeah. Thanks it. for asking question

these transition to through absolutely we're models, the critical, move this we volume and two mixed are where statistics As is moving price equation those so time’s critical.

articles We see many when First the highlights we that it are opportunity and the for the increasing us, of seeing all, that the those that is that published get elsewhere. XX% future equation. we continue critical rate, rejection if reason The not will believe that's most to of in we highlight to opportunity that submissions.

editorial in. in all most They so We we're investing have what many them at just the make of of the our outward capacity more quite, includes or approve our researchers, not terrific those places – portfolio, can our have part to journals this get and to for not that just journal by and they the we investing in that in portfolio journals, fit the journal but a not certainly journals portfolio. won't channeling in couple and submissions capitalize also to can publish them. reaching those top-tier them to by is top We're but articles of pyramid, a boards somewhere thousand,

Drew Crum

it. Got

the related organic to And just clarify, growth XXXX Education on Thanks. then want a you're And is that think mid-teens XXXX? to in business through is you Services just you that. I the profitable range, this be expect a that for period through expecting Okay. during fiscal note, the said to fiscal clarify

Brian Napack

Yeah.

answer part so the move period teens So, and expect teens clarity. to it? that the will profit in growth of the through we low-to-mid is perspective, start from high-to-mid handle you a to John, three-year provides the enough the

John Kritzmacher

period XX% efficiency have from we're we come advantage time, EBITDA expecting way one a So, scale are margin acquisition. we That's a the increasing 'XX. around important of our making gain profitability will areas in over investment of we toward and that Drew, going that significantly scale our student to fiscal as year that bit from of and that

Drew Crum

Got it.

fiscal restructuring more. related? million Okay, and expect fiscal during to the talk nature of that Is any $XX just charges anticipate 'XX? one quarter? first you then you cash of any to the about Thanks. $XX charges the more in And Can would million in you incur

John Kritzmacher

the -- facility. relates $XX There's to in in the $XX there about going exit of severance-related of quarter, to down with regard then the non-cash business, a and XX% and essentially so million our charge from the be is that charges balance Sure. to wind small first million to

the that's of it. so, And bulk

inside And in fiscal half order We'll been on of a of here. year $XX over that will of talking investment we first realize million some take savings we're the 'XX time. expecting about of charge that that those operating drive quarter program more savings -- against the in than the the little we've

we continue I of facilities-related offering. don't in restructuring may subsequent around have we're efficiency drive the you're that charges this to some where to that some see quarters for anticipate year; say we activity as additional going

into actions make say communicate this a optimization program, some our or multi-year we to so late as But further way will have business I this year is would we 'XX. fiscal in

Drew Crum

Okay. Thanks guys.

John Kritzmacher

Thank you.

Operator

from our Please Daniel [Operator Moore Instructions] We of now question Securities. will go next ahead. take CJS

open. is Your line

Daniel Moore

I want apology clarify of an to organic XXXX? Brian is really parts just Thanks question, last wanted fiscal I John. acquired recently sort to and am Services, the morning. growth if start on organic the for of breakout Education been Good between of the what's but what's to all and the XXXX taking from reiterating that with questions or

John Kritzmacher

that be would organic The described an growth rate we basis. on

Daniel Moore

now. From And the that we based then... on Great. hand in portfolio have

John Kritzmacher

continue partners, then yes. adding work to And we

Daniel Moore

Got you give kind of it. in that EBIT XX% we and John you the from XXXX? mentioned a where in where of And or now additional we margin EBIT EBITDA, any business fiscal terms can and be in of XXXX are terms cadence maybe walk margins for that might

John Kritzmacher

I the over specific in get acquisition what improvement that from we're get the of period. year-over-year plus walk business. cost levers terms to from quite revenue in that student generally come the going some around improvements we'll again, wouldn't of particular the to growth But doing is the

We're revenue a basis, apples-to-apples a we clear that be have an we growth way the basis, of about $XX as the of full effect in looking organic we're having as as pickup low-to-mid year an looking to -- through inorganic business. basis, that our in incremental of at at on said make though just And teens. consequence million in business we'll on the

So coming the the year a good but is comparison, up when plus the from of for is inorganic of that acquisition the related the we growth at million $XX million, Learning revenue House. year-over-year $XX look to

Daniel Moore

'XX the guide. Right. For fiscal

John Kritzmacher

Yes. That's correct.

Daniel Moore

in -- it. term? there us about an that? XX% a is Just -- the fiscal is or Got longer that 'XX then think target EBITDA help And that margin

John Kritzmacher

'XX. that in fiscal aiming target We're for

Daniel Moore

it willing be just bit trailing a EBITDA maybe what And terms anything a little And you'd Got and helpful? of be to then your Knewton, more offerings give how would little talk share it, price around WileyPLUS. to expands around in margins on purchase helpful. willing revenue of detail you're bit for capabilities

Brian Napack

Okay. I'll of that. strategic pick up parts the

to two Knewton So us brings things.

education the As EdTech one the among many is at learning highly very, our very and leading-edge an promising platform The know, point. highly adaptive all of best play, absolutely applicable marketplace Knewton in extremely technology, across is technology technologies it was adaptive businesses. funded so

will the rapidly spent effectiveness the to and -- improving and need student time of moving critical so efficiency process. is to students by we We -- the that rapidly we learning succeed

all -- learning we which a It differentiated of ahead So gets see in our many immediately up immediately our of year our applicability. technology, in applied to our in adding WileyPLUS applied us theoretic businesses, of competitors. education adaptive be will to offering, and this

news. great that's So

in bringing something is growth is addition the this that market adaptive courseware. low-cost, or part technology, also basis a learning a believe to significantly. should we growing a a now. frankly part we Wiley as to we And our be offering delivering that don't distribution through on idea This play points, core touch by is as demanding where the that net and capture able of to of But market bringing is that it areas that of market meaningful that even of right high-quality high-impact in

it's very thing. optimistic a So

most we which courseware also this which WileyPLUS, of high-impact market, known course as we technology, get platform. our business part in this immediately can Alta but of is small, low-cost disruptive but a We rapidly things. get what's the that's apply, in leading broadly very business a two get we adaptive and So courseware this growing to

Daniel Moore

Brian, but and I'm think going give color it's you'd be much me for you to good point. here, ask more really to to lastly willing you a as And it. Got gave because critical I as

say, Your that a years. headwind a just Services been to Publishing and calling -- you're next struggle the again the has should and in Education general or or start the I to two-plus grow Professional in obviously Publishing for

would to of traditional glide and growth we're two like business, text be and and what's toward just in maybe strategic of that ability -- decline that or the pivot talk the of what sort how the direction year rate left path looks So print next great. about Thanks. and the

Brian Napack

Sure.

look Learning have which things portfolio, you our our as Publishing Professional going as and on. we several businesses, said across are different Education So we Publishing

have business. We our courseware

Publishing STM business call business. Trade our business, our it We we have reference our and

-- important have also We to note pieces. the it's

also Test well. Prep They growing have our doing Training our Corporate We business nicely. and The very are Prep businesses and Test Corporate Training very are businesses.

meaningful aside, equation. And so that's we'll those leave part but of the

in large of it healthy. businesses print all pieces around ask the long-term three and to some segments reference make to health check and but from the believe XX% a of the the we We Wiley percentage of transition, part right, represents get represents sure the by John we now. the business have now. the signs runway. separate the trade of about in The me have on textbook the I'll the the part fact, have of business overall They have -- long-term our or other of courseware business right XX% business and that about of

We've see continued what the the happening. not seeing from to are forth we -- to free things some we declines, and models, the market. a as print allow we're cannibalization material in lot to is access the now We're those that -- us rental models, participating cannibalization -- models and good declines, so in deliver inclusive starting high-demand but of there's content

the So in attention, part of the note most which the business, that it's that are had part has is fine. actually unit sales to important that

and now bought are digital, company our digital not just products participating high-priced is we as hadn't lower we lower-priced print right? Other those. participated lower-priced before, delivery models. We're companies in happened The moved models but rented models and them a over What's over to again. from and rental in

high-quality of sub-segments So affordable; good and and runway Knewton, very, the it business. and markets through to published with reflected that the that part business A, market approach models we C, the in deliver an now through demand have content we business in can textbook of many even we the the from statistics that big we publishers; that in in to that continues very this content, modes truly the that, internal media, the the didn't in make have deliver we B, that is a a high-impact allow gives confidence play of that us low-cost that courseware us or XX% long-term see our that before to content the

What transition. So the way. through There now no seen in underlying our that's way this we're get we that an deteriorating where on market is we've evidence And our I from. that is demand transition. confidence is think

Daniel Moore

it. Excuse helpful. ahead. Go me. Very Appreciate

Brian Napack

leadership our complicated us concludes. will do position follow-up Okay. a very questions. Good. as transition to the Thank I'm any you. allow but It's happy take to market, well

Daniel Moore

Indeed.

Operator

Please next now from Sidoti. question Jacome our Dan ahead. of We'll go take

line Your is open.

Dan Jacome

fourth in the of you couple tough year your that bit look, the little the improve it's dig just -- two, us to I payables, little bit capital was that working a versus kind about the talk A to or a what what deeper Can you that. morning. for Good quarter? next for receivables, in have first of into Hi. initiatives questions. you shown place know acquisitions, in plans but, about thinking

John Kritzmacher

is Sure. John. This

here's would So what I say.

will, that our working say are wouldn't some I can we are to initiatives, but you major, of improve capital do certainly if capital. there management things First, there working

this Some actually of the the that things back play start that in working capital in in are reported period XXXX. we movements at fiscal

on that We had particularly XXXX the a making year low look we XXXX, benefited -- when with we position at year payables we're ended now outstanding fiscal is and which comparison fiscal that XXXX.

fiscal shift timing came XXXX in that a there was from way in happened uptick XXXX's XXXX. So results a payables substantial -- year's fiscal back

with then explained performance, And on in receivables, this we there strong XXXX. by gains degree as capital do in as payables made that comparison at some our so of performance we I least that the movements not fiscal saw, terms in are overall had on to working and around to what year's

of And transition. in had we Those in the our noted journal new pressure of we which, invoicing; bit issuing quoting in journal important again, the all subscriptions, the year a done of some implemented the our with the quite We that renewals, I third subscriptions customers little around the order as our has subscriptions. was collections cash timing bit well, of around out that put report a terms do, of as most the on signing for on had noted had of but to good our impact ERP pushed SAP and timing fiscal of quarter on and bit. issues us, a got

that time by fiscal actually late April we're and of pick then in at hoped normal way that up year end $XX the very into the confident of our about coming we'll collections. in course then as that we I of noted, ended up May had that the year. we made to we in -- XX, slid I'm fiscal and million So we're We the be along invoicing with had on the to late further collecting. that

capital effectively we financial And of and manage say, that team should to working management global transactions. I services and though finance regard that working manages a our unit forward, have management collections. ability global to our going capital to reorganized receivables includes with management shared that payables of and

line that the that. to of capital So owners, and more a performing global have ability business with much manage is with process implementation working on team effectively now, we sight how to great in global ERP our

see improve. working our So performance and you capital will management

more say there's and as around noted, doing way we XXXX, impact we're substantially we've from in better initiatives, able any implementation. way. our square but of unwind state that year swings a stable be a fiscal an make working big a as you'll performing transitional the ERP into operating on from our that be this tackling on won't get I getting particular fluctuations in we these more and the And after around without some how I job should timing-related capital to seen we level read blocking

Dan Jacome

And for I and press the break Okay. specific you purposes, the out it back if guidance 'XX? I D&A just Very in it? deck. helpful. missed or should for Or Can then just into I'm F housekeeping CapEx release sorry

John Kritzmacher

a Brian on did call will earnings the an year in out $X.XX. $XXX change D&A that of here an brings year-over-year us estimate about impact the fiscal there think didn't in that number. noted in some there increased I But We there's noted the expect Brian $X.XX the that share that per order we for is that -- note we and of comments order earnings. of CapEx be of million any to on coming D&A

Dan Jacome

$X.XX. All right. Great.

be to correct? organic, all the You're any on to the in right? factoring 'XX just CAGR target acquisitions that's Then clear, about just not other X% F is -- Okay. revenue, implied X% the

John Kritzmacher

additional correct. That's assumed acquisitions those no in numbers. are There

Dan Jacome

you much. very Okay. Thank

John Kritzmacher

you, Thank Dan.

Operator

de from next of Hilaire Bank take We now Saint our Adrien of question will America. ahead. Please go

is open. Your line

Adrien de Saint Hilaire

very them. the you Two thank Yes, questions for of taking much please.

assume all, between you're what secondly, some And you expect give in your guiding you Subscription, of Can you First terms XXXX. in granularity growth in Journal X% business different for in the Research of about for buckets us Open then Publishing Cengage can impacts the you. from you discuss that expect the that and Atypon? McGraw-Hill Education Thank Access if completed? and it's announced merger you fiscal

John Kritzmacher

to correct. expectations I'll respect you CAGRs the Research Publishing is the and speaking revenue referenced take So the small. follow up to with Atypon question business, can that Brian first comparison broader to revenue respect the by Cengage-McGraw growth, the on Relatively of are around merger. With growth then Journal sort

business are order on growth, we while Atypon revenue overall to growth big of they're the in factor So grow expect small they the the not base. call XX% rates at a because double-digit it relatively of

what business. Important expect the Journals business. insights us market around described progression the big to opportunities moving that inside that rates of in we with terms revenue overall around are of us provide they they're Broadly the the give they terms Research our the Publishing, in of factor you consistent a is but growth speaking, Research

subscriptions distinguish forward, Access. much associated it's not we're revenues Going to Open likely with versus as that going between

combination you revenue arrangements will will arrangements stability from that we most CAGRs subscriptions, with the see make think you these what our between place confusing distinction frankly, less to With we precisely I if see that the what clear. Open the to the X%, between to is is in as to the investors. you'll revenue look to of And growth publishing blended get transitional customers, all in expect describing. a only revenue trying going Access and be subscription that Access more is you But line with Open along and at become two just were X% the

Brian Napack

Hill up Cengage-McGraw I And will pick the question. Okay.

very operating which market as for in Wiley. will been merger in We've in of comments, Wiley been recall about listen, time. this as higher has Ed you a a represents So earlier my our XX% long business anticipated

compete in We've in course in underlying highlights focused And an as operating so places and in business long is been publisher. decades strength higher say tells content those forth. very that disciplines who we've a on where disciplines. for so accounting why to like background credit, required for the the smaller the a quantitative courseware able it this Ed as and concentrates disciplines gold player standard discipline, business for because are specific stem our I'd you as been courseware

the more is long business, courseware textbook and fact time decade. based we've a This volume you that, titles. Pearson, long, of competing over a than your a overall against Having been decade, for a This business. well or said for XX% lot win upon a a not competitor in where lose quite

or size – the You revenue your win line. of

in effectiveness by and based business the upon get product. this adopted win quality impact the a You winning, and where based of a now course-by-course professor upon you increasingly your

operating in a competitor. And so environment we've with XX% been an

operating then will, Now, will we have a be competitor. by XX% large that the approve the approved Department – Justice yet that roughly against competitor it's another it, gets speaking merger we will if think I

lines in those that and we are our that have titles. our their competitors, significant bottom levels on larger of focus businesses potentially the investing overall Both have prevented competitors pressures them investing from

confident future from certainly see and that very we in don't marketplace, company. the such many one We've professors in an business, already this outreach like impact in of having other a very, had authors our in are in who idea we idea our So the interesting like from and and concentration from authors, the who of marketplace. of our the –

we compete institutions the and well – and that professors we so institutions means will in which – done, want. produce we deliver what that doing modes students and and And believe best that, very possible have very, is and always the by content

Adrien de Saint Hilaire

Thank you very much.

Operator

this the in at are And queue questions time. there no further

Brian Napack

all to to say like joining for Okay. just I today. thank you –

have We are you. pleased to

We This well. our a to according plans. in great XXXX very, very in well We very confident fiscal company extremely with very, executed future. performed are our assets. We great

to forward. choose our lot going continue and you you about our Day markets have and all talk businesses will There's we attend more do to about will expect to be a so We hope could our great It Analyst in October. to that all we there.

pleased be we'll to have you. – are We

quarter. you thank next us, look for forward updating we to I that, with and So will joining you

Operator

call. the you for concludes participation. Thank that gentlemen, and your Ladies

disconnect. You may now

John Wiley & Sons (WLY) 11 Jun 192019 Q4 Earnings call transcript