(Commission File Number) | (IRS Employer Identification No.) | |||||||||||||
(Address of principal executive offices) | (Zip Code) | |||||||||||||
Registrant’s telephone number, including area code: | ( | |||||||||||||
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)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
JOHN WILEY & SONS, INC. | ||||||||||||||
(Registrant) | ||||||||||||||
By | /s/ Christina Van Tassell | |||||||||||||
Christina Van Tassell | ||||||||||||||
Executive Vice President and Chief Financial Officer | ||||||||||||||
Dated: December 6, 2023 |
Metric ($millions, except EPS) | Fiscal 2023 All Company | Fiscal 2023 Ex-Divestitures | Fiscal 2024 Outlook Ex-Divestitures | ||||||||
Adjusted Revenue* | $2,020 | $1,627 | $1,580 to $1,630 | ||||||||
Research | $1,080 | Flat to low-single digit decline (+2% excluding Hindawi) | |||||||||
Learning | $547 | Flat to low-single digit increase | |||||||||
Adjusted EBITDA* | $422 | $379 | $305 to $330 | ||||||||
Adjusted EPS* | $3.84 | $3.48 | $2.05 to $2.40 |
Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenue, net | $ | 492,808 | $ | 514,836 | $ | 943,821 | $ | 1,002,405 | |||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of sales | 155,614 | 170,302 | 312,715 | 344,333 | |||||||||||||||||||
Operating and administrative expenses | 252,282 | 253,029 | 508,083 | 535,780 | |||||||||||||||||||
Impairment of goodwill (3) | — | — | 26,695 | — | |||||||||||||||||||
Restructuring and related charges | 25,102 | 13,956 | 37,225 | 36,397 | |||||||||||||||||||
Amortization of intangible assets | 13,565 | 20,110 | 29,213 | 45,421 | |||||||||||||||||||
Total costs and expenses | 446,563 | 457,397 | 913,931 | 961,931 | |||||||||||||||||||
Operating income | 46,245 | 57,439 | 29,890 | 40,474 | |||||||||||||||||||
As a % of revenue | 9.4 | % | 11.2 | % | 3.2 | % | 4.0 | % | |||||||||||||||
Interest expense | (12,937) | (9,332) | (24,271) | (15,664) | |||||||||||||||||||
Foreign exchange transaction (losses) gains | (2,357) | 478 | (3,977) | (138) | |||||||||||||||||||
Impairment charge related to assets held-for-sale and loss on sale of a business (3) | (51,414) | — | (127,343) | — | |||||||||||||||||||
Other (expense) income, net | (1,567) | (255) | (3,052) | 271 | |||||||||||||||||||
(Loss) income before taxes | (22,030) | 48,330 | (128,753) | 24,943 | |||||||||||||||||||
(Benefit) provision for income taxes | (2,585) | 10,137 | (17,044) | 4,585 | |||||||||||||||||||
Effective tax rate | 11.7 | % | 21.0 | % | 13.2 | % | 18.4 | % | |||||||||||||||
Net (loss) income | $ | (19,445) | $ | 38,193 | $ | (111,709) | $ | 20,358 | |||||||||||||||
As a % of revenue | -3.9 | % | 7.4 | % | -11.8 | % | 2.0 | % | |||||||||||||||
(Loss) earnings per share | |||||||||||||||||||||||
Basic | $ | (0.35) | $ | 0.69 | $ | (2.02) | $ | 0.37 | |||||||||||||||
Diluted (4) | $ | (0.35) | $ | 0.68 | $ | (2.02) | $ | 0.36 | |||||||||||||||
Weighted average number of common shares outstanding | |||||||||||||||||||||||
Basic | 55,102 | 55,622 | 55,186 | 55,679 | |||||||||||||||||||
Diluted (4) | 55,102 | 56,195 | 55,186 | 56,326 |
Notes: | ||
(1) The supplementary information included in this press release for the three and six months ended October 31, 2023 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission. | ||
(2) All amounts are approximate due to rounding. | ||
(3) As previously announced, we are divesting non-core businesses, including University Services, Wiley Edge, and CrossKnowledge. These dispositions are expected to be completed during fiscal year 2024. As a result, we reorganized our segments in the first quarter of fiscal year 2024, and our new structure consists of three reportable segments which includes Research (no change), Learning, and Held for Sale or Sold, as well as a Corporate expense category (no change). As a result of this realignment, we were required to test goodwill for impairment immediately before and after the realignment. Prior to the realignment, we concluded that the fair value of the University Services reporting unit within the Held for Sale or Sold segment was below its carrying value which resulted in a pretax non-cash goodwill impairment of $11.4 million in the six months ended October 31, 2023. After the realignment, we concluded that the fair value of the CrossKnowledge reporting unit within the Held for Sale or Sold segment was below its carrying value which resulted in a pretax non-cash goodwill impairment of $15.3 million in the six months ended October 31, 2023. In addition, these three businesses met the held-for-sale criteria. We measured each business at the lower of carrying value or fair value less cost to sell. We recorded a held-for-sale pretax impairment charge of $51.9 million and $125.8 million in the three and six months ended October 31, 2023, respectively, related to University Services and CrossKnowledge. The total impairment charge for University Services in the six months ended October 31, 2023 was $75.4 million, which includes $34.8 million in the three months ended October 31, 2023. The total impairment charge for CrossKnowledge in the six months ended October 31, 2023 was $50.4 million, which includes $17.1 million in the three months ended October 31, 2023. In the three months ended October 31, 2023, there was a reduction in the pretax loss on the sale of our Tuition Manager business previously in our Held for Sale or Sold segment due to cash received after the closing of approximately $0.5 million, which resulted in a total net pretax loss of $1.5 million (net of tax loss of $1.1 million). | ||
(4) In calculating diluted net loss per common share for the three and six months ended October 31, 2023, our diluted weighted average number of common shares outstanding excludes the effect of unvested restricted stock units and other stock awards as the effect was antidilutive. This occurs when a US GAAP net loss is reported and the effect of using dilutive shares is antidilutive. |
Reconciliation of US GAAP EPS to Non-GAAP Adjusted EPS | |||||||||||||||||||||||
Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
US GAAP (Loss) Earnings Per Share - Diluted | $ | (0.35) | $ | 0.68 | $ | (2.02) | $ | 0.36 | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Impairment of goodwill | — | — | 0.43 | — | |||||||||||||||||||
Restructuring and related charges | 0.34 | 0.19 | 0.50 | 0.49 | |||||||||||||||||||
Foreign exchange losses on intercompany transactions, including the write off of certain cumulative translation adjustments (3) | 0.04 | 0.03 | 0.04 | 0.04 | |||||||||||||||||||
Amortization of acquired intangible assets (4) | 0.19 | 0.30 | 0.42 | 0.67 | |||||||||||||||||||
Impairment charge related to assets held-for-sale and loss on sale of a business (5) | 0.77 | — | 1.94 | — | |||||||||||||||||||
Held for Sale or Sold segment Adjusted Net Income (5) | (0.27) | (0.18) | (0.34) | (0.08) | |||||||||||||||||||
EPS impact of using weighted-average dilutive shares for adjusted EPS calculation (6) | 0.01 | — | 0.02 | — | |||||||||||||||||||
Non-GAAP Adjusted Earnings Per Share - Diluted | $ | 0.73 | $ | 1.02 | $ | 0.99 | $ | 1.48 | |||||||||||||||
Reconciliation of US GAAP (Loss) Income Before Taxes to Non-GAAP Adjusted Income Before Taxes | |||||||||||||||||||||||
(amounts in thousands) | Three Months Ended October 31, | Six Months Ended October 31, | |||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
US GAAP (Loss) Income Before Taxes | $ | (22,030) | $ | 48,330 | $ | (128,753) | $ | 24,943 | |||||||||||||||
Pretax Impact of Adjustments: | |||||||||||||||||||||||
Impairment of goodwill | — | — | 26,695 | — | |||||||||||||||||||
Restructuring and related charges | 25,102 | 13,956 | 37,225 | 36,397 | |||||||||||||||||||
Foreign exchange losses on intercompany transactions, including the write off of certain cumulative translation adjustments (3) | 3,223 | 2,654 | 3,217 | 3,320 | |||||||||||||||||||
Amortization of acquired intangible assets (4) | 14,303 | 21,185 | 30,971 | 47,570 | |||||||||||||||||||
Impairment charge related to assets held-for-sale and loss on sale of a business (5) | 51,414 | — | 127,343 | — | |||||||||||||||||||
Held for Sale or Sold segment Adjusted Income Before Taxes (5) | (19,099) | (13,230) | (24,133) | (5,636) | |||||||||||||||||||
Non-GAAP Adjusted Income Before Taxes | $ | 52,913 | $ | 72,895 | $ | 72,565 | $ | 106,594 | |||||||||||||||
Reconciliation of US GAAP Income Tax (Benefit) Provision to Non-GAAP Adjusted Income Tax Provision, including our US GAAP Effective Tax Rate and our Non-GAAP Adjusted Effective Tax Rate | |||||||||||||||||||||||
US GAAP Income Tax (Benefit) Provision | $ | (2,585) | $ | 10,137 | $ | (17,044) | $ | 4,585 | |||||||||||||||
Income Tax Impact of Adjustments (7) | |||||||||||||||||||||||
Impairment of goodwill | — | — | 2,697 | — | |||||||||||||||||||
Restructuring and related charges | 6,315 | 3,422 | 9,251 | 8,939 | |||||||||||||||||||
Foreign exchange losses on intercompany transactions, including the write off of certain cumulative translation adjustments (3) | 888 | 694 | 854 | 869 | |||||||||||||||||||
Amortization of acquired intangible assets (4) | 3,645 | 4,388 | 7,517 | 10,220 | |||||||||||||||||||
Impairment charge related to assets held-for-sale and loss on sale of a business (5) | 8,542 | — | 19,203 | — | |||||||||||||||||||
Held for Sale or Sold segment Adjusted Tax Provision (5) | (4,270) | (3,015) | (5,266) | (1,446) | |||||||||||||||||||
Non-GAAP Adjusted Income Tax Provision | $ | 12,535 | $ | 15,626 | $ | 17,212 | $ | 23,167 | |||||||||||||||
US GAAP Effective Tax Rate | 11.7 | % | 21.0 | % | 13.2 | % | 18.4 | % | |||||||||||||||
Non-GAAP Adjusted Effective Tax Rate | 23.7 | % | 21.4 | % | 23.7 | % | 21.7 | % |
Notes: | ||
(1) See Explanation of Usage of Non-GAAP Performance Measures included in this supplementary information for additional details on the reasons why management believes presentation of each non-GAAP performance measure provides useful information to investors. The supplementary information included in this press release for the three and six months ended October 31, 2023 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission. | ||
(2) All amounts are approximate due to rounding. | ||
(3) In fiscal year 2023 due to the closure of our operations in Russia, the Russia entity was deemed substantially liquidated. In the three and six months ended October 31, 2023, we wrote off an additional $0.1 million and $1.0 million, respectively, of cumulative translation adjustments in earnings. This amount is reflected in Foreign exchange transaction (losses) gains on our Condensed Consolidated Statements of Net (Loss) Income. | ||
(4) Reflects the amortization of intangible assets established on the opening balance sheet for an acquired business. This includes the amortization of intangible assets such as developed technology, customer relationships, tradenames, etc., which is reflected in the "Amortization of intangible assets" line in the Condensed Consolidated Statements of Net (Loss) Income. It also includes the amortization of acquired product development assets, which is reflected in Cost of sales in the Condensed Consolidated Statements of Net (Loss) Income. | ||
(5) We are divesting non-core businesses, including University Services, Wiley Edge, and CrossKnowledge. These three businesses met the held-for-sale criteria and we measured each business at the lower of carrying value or fair value less cost to sell. We recorded a held-for-sale pretax impairment charge of $34.8 million and $75.4 million, in the three and six months ended October 31, 2023, respectively, related to University Services. We recorded a held-for-sale pretax impairment charge of $17.1 million and $50.4 million, in the three and six months ended October 31, 2023, respectively, related to CrossKnowledge. In the three months ended October 31, 2023, there was a reduction in the pretax loss on the sale of our Tuition Manager business previously in our Held for Sale or Sold segment due to cash received after the closing of approximately $0.5 million, which resulted in a total net pretax loss of $1.5 million (net of tax loss of $1.1 million). In addition, our Adjusted EPS excludes the Adjusted Net Income of our Held for Sale or Sold segment. | ||
(6) Represents the impact of using diluted weighted-average number of common shares outstanding (55.6 million and 55.7 million shares for the three and six months ended October 31, 2023, respectively) included in the Non-GAAP Adjusted EPS calculation in order to apply the dilutive impact on adjusted net income due to the effect of unvested restricted stock units and other stock awards. This impact occurs when a US GAAP net loss is reported and the effect of using dilutive shares is antidilutive. | ||
(7) For the three and six months ended October 31, 2023 and 2022, substantially all of the tax impact was from deferred taxes. |
Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net (Loss) Income | $ | (19,445) | $ | 38,193 | $ | (111,709) | $ | 20,358 | |||||||||||||||
Interest expense | 12,937 | 9,332 | 24,271 | 15,664 | |||||||||||||||||||
(Benefit) provision for income taxes | (2,585) | 10,137 | (17,044) | 4,585 | |||||||||||||||||||
Depreciation and amortization | 40,174 | 52,421 | 83,902 | 110,700 | |||||||||||||||||||
Non-GAAP EBITDA | 31,081 | 110,083 | (20,580) | 151,307 | |||||||||||||||||||
Impairment of goodwill | — | — | 26,695 | — | |||||||||||||||||||
Restructuring and related charges | 25,102 | 13,956 | 37,225 | 36,397 | |||||||||||||||||||
Foreign exchange losses (gains), including the write off of certain cumulative translation adjustments | 2,357 | (478) | 3,977 | 138 | |||||||||||||||||||
Impairment charge related to assets held-for-sale and loss on sale of a business | 51,414 | — | 127,343 | — | |||||||||||||||||||
Other expense (income), net | 1,567 | 255 | 3,052 | (271) | |||||||||||||||||||
Held for Sale or Sold segment Adjusted EBITDA (2) | (19,100) | (18,089) | (25,621) | (15,654) | |||||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 92,421 | $ | 105,727 | $ | 152,091 | $ | 171,917 | |||||||||||||||
Adjusted EBITDA Margin | 22.7 | % | 25.7 | % | 19.7 | % | 21.3 | % |
Notes: | ||
(1) See Explanation of Usage of Non-GAAP Performance Measures included in this supplementary information for additional details on the reasons why management believes presentation of each non-GAAP performance measure provides useful information to investors. The supplementary information included in this press release for the three and six months ended October 31, 2023 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission. | ||
(2) Our Non-GAAP Adjusted EBITDA excludes the Held for Sale or Sold segment Non-GAAP Adjusted EBITDA. |
% Change | |||||||||||||||||||||||
Three Months Ended October 31, | Favorable (Unfavorable) | ||||||||||||||||||||||
2023 | 2022 (3) | Reported | Constant Currency | ||||||||||||||||||||
Research: | |||||||||||||||||||||||
Revenue, net | |||||||||||||||||||||||
Research Publishing | $ | 219,743 | $ | 232,641 | -6 | % | -7 | % | |||||||||||||||
Research Solutions | 37,927 | 38,718 | -2 | % | -3 | % | |||||||||||||||||
Total Revenue, net | $ | 257,670 | $ | 271,359 | -5 | % | -7 | % | |||||||||||||||
Contribution to Profit | $ | 54,101 | $ | 73,279 | -26 | % | -26 | % | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Restructuring charges | 4,755 | 1,179 | # | # | |||||||||||||||||||
Non-GAAP Adjusted Contribution to Profit | $ | 58,856 | $ | 74,458 | -21 | % | -21 | % | |||||||||||||||
Depreciation and amortization | 22,668 | 23,384 | 3 | % | 4 | % | |||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 81,524 | $ | 97,842 | -17 | % | -17 | % | |||||||||||||||
Adjusted EBITDA margin | 31.6 | % | 36.1 | % | |||||||||||||||||||
Learning: | |||||||||||||||||||||||
Revenue, net | |||||||||||||||||||||||
Academic | $ | 89,125 | $ | 82,256 | 8 | % | 8 | % | |||||||||||||||
Professional | 59,815 | 57,393 | 4 | % | 3 | % | |||||||||||||||||
Total Revenue, net | $ | 148,940 | $ | 139,649 | 7 | % | 6 | % | |||||||||||||||
Contribution to Profit | $ | 34,053 | $ | 29,912 | 14 | % | 14 | % | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Restructuring charges | 5,859 | 3,664 | -60 | % | -60 | % | |||||||||||||||||
Non-GAAP Adjusted Contribution to Profit | $ | 39,912 | $ | 33,576 | 19 | % | 19 | % | |||||||||||||||
Depreciation and amortization | 13,974 | 13,900 | -1 | % | 0 | % | |||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 53,886 | $ | 47,476 | 14 | % | 13 | % | |||||||||||||||
Adjusted EBITDA margin | 36.2 | % | 34.0 | % | |||||||||||||||||||
Held for Sale or Sold: | |||||||||||||||||||||||
Revenue, net | $ | 86,198 | $ | 103,828 | -17 | % | -18 | % | |||||||||||||||
Contribution to Profit | $ | 17,078 | $ | 6,581 | # | # | |||||||||||||||||
Adjustments: | |||||||||||||||||||||||
Restructuring charges | 2,022 | 281 | # | # | |||||||||||||||||||
Non-GAAP Adjusted Contribution to Profit | $ | 19,100 | $ | 6,862 | # | # | |||||||||||||||||
Depreciation and amortization | — | 11,227 | # | # | |||||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 19,100 | $ | 18,089 | 6 | % | 4 | % | |||||||||||||||
Adjusted EBITDA margin | 22.2 | % | 17.4 | % | |||||||||||||||||||
Corporate Expenses: | $ | (58,987) | $ | (52,333) | -13 | % | -12 | % | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Restructuring charges | 12,466 | 8,832 | -41 | % | -41 | % | |||||||||||||||||
Non-GAAP Adjusted Contribution to Profit | $ | (46,521) | $ | (43,501) | -7 | % | -6 | % | |||||||||||||||
Depreciation and amortization | 3,532 | 3,910 | 10 | % | 10 | % | |||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | (42,989) | $ | (39,591) | -9 | % | -8 | % | |||||||||||||||
Consolidated Results: | |||||||||||||||||||||||
Revenue, net | $ | 492,808 | $ | 514,836 | -4 | % | -6 | % | |||||||||||||||
Less: Held for Sale or Sold Segment (5) | (86,198) | (103,828) | -17 | % | -18 | % | |||||||||||||||||
Adjusted Revenue, net | $ | 406,610 | $ | 411,008 | -1 | % | -2 | % | |||||||||||||||
Operating Income | $ | 46,245 | $ | 57,439 | -19 | % | -19 | % | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Restructuring charges | 25,102 | 13,956 | -80 | % | -80 | % | |||||||||||||||||
Held for Sale or Sold Segment Adjusted Contribution to Profit (5) | (19,100) | (6,862) | # | # | |||||||||||||||||||
Non-GAAP Adjusted Operating Income | $ | 52,247 | $ | 64,533 | -19 | % | -18 | % | |||||||||||||||
Depreciation and amortization | 40,174 | 52,421 | 23 | % | 24 | % | |||||||||||||||||
Less: Held for Sale or Sold Segment depreciation and amortization (5) | — | (11,227) | # | # | |||||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 92,421 | $ | 105,727 | -13 | % | -13 | % | |||||||||||||||
Adjusted EBITDA margin | 22.7 | % | 25.7 | % |
Notes: | ||
(1) The supplementary information included in this press release for the three and six months ended October 31, 2023 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission. | ||
(2) All amounts are approximate due to rounding. | ||
(3) As previously announced, in the three months ended July 31, 2023 we changed our reportable segments. Our new segment reporting structure consists of three reportable segments which includes Research (no change), Learning, and Held for Sale or Sold, as well as a Corporate expense category (no change). Prior period segment results have been revised to the new segment presentation. There were no changes to our consolidated financial results. | ||
(4) On January 1, 2020, Wiley acquired mthree, a talent placement provider that addresses the IT skills gap by finding, training, and placing job-ready technology talent in roles with leading corporations worldwide. Its results of operations are included in our Held for Sale or Sold segment. In late May 2022, Wiley renamed the mthree talent development solution to Wiley Edge and discontinued use of the mthree trademark during the three months ended July 31, 2022. As a result of these actions, we determined that a revision of the useful life was warranted, and the intangible asset was fully amortized over its remaining useful life resulting in accelerated amortization expense of $4.6 million in the three months ended July 31, 2022. | ||
(5) Our Adjusted Revenue, Adjusted Operating Income and Adjusted EBITDA excludes the impact of our Held for Sale or Sold segment Revenue, Adjusted Operating Income or Loss and Adjusted EBITDA results. | ||
# Variance greater than 100% |
% Change | |||||||||||||||||||||||
Six Months Ended October 31, | Favorable (Unfavorable) | ||||||||||||||||||||||
2023 | 2022 (3) | Reported | Constant Currency | ||||||||||||||||||||
Research: | |||||||||||||||||||||||
Revenue, net | |||||||||||||||||||||||
Research Publishing | $ | 442,743 | $ | 472,164 | -6 | % | -7 | % | |||||||||||||||
Research Solutions | 72,731 | 74,108 | -2 | % | -3 | % | |||||||||||||||||
Total Revenue, net | $ | 515,474 | $ | 546,272 | -6 | % | -7 | % | |||||||||||||||
Contribution to Profit | $ | 105,681 | $ | 142,302 | -26 | % | -26 | % | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Restructuring charges | 6,702 | 1,260 | # | # | |||||||||||||||||||
Non-GAAP Adjusted Contribution to Profit | $ | 112,383 | $ | 143,562 | -22 | % | -22 | % | |||||||||||||||
Depreciation and amortization | 45,880 | 47,185 | 3 | % | 4 | % | |||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 158,263 | $ | 190,747 | -17 | % | -18 | % | |||||||||||||||
Adjusted EBITDA margin | 30.7 | % | 34.9 | % | |||||||||||||||||||
Learning: | |||||||||||||||||||||||
Revenue, net | |||||||||||||||||||||||
Academic | $ | 137,417 | $ | 141,004 | -3 | % | -3 | % | |||||||||||||||
Professional | 120,843 | 118,292 | 2 | % | 2 | % | |||||||||||||||||
Total Revenue, net | $ | 258,260 | $ | 259,296 | 0 | % | -1 | % | |||||||||||||||
Contribution to Profit | $ | 41,461 | $ | 30,522 | 36 | % | 36 | % | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Restructuring charges | 6,077 | 6,795 | 11 | % | 11 | % | |||||||||||||||||
Non-GAAP Adjusted Contribution to Profit | $ | 47,538 | $ | 37,317 | 27 | % | 28 | % | |||||||||||||||
Depreciation and amortization | 27,526 | 27,955 | 2 | % | 2 | % | |||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 75,064 | $ | 65,272 | 15 | % | 15 | % | |||||||||||||||
Adjusted EBITDA margin | 29.1 | % | 25.2 | % | |||||||||||||||||||
Held for Sale or Sold: | |||||||||||||||||||||||
Revenue, net | $ | 170,087 | $ | 196,837 | -14 | % | -15 | % | |||||||||||||||
Contribution to Profit | $ | (9,156) | $ | (15,613) | 41 | % | 39 | % | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Restructuring charges | 4,645 | 3,773 | -23 | % | -23 | % | |||||||||||||||||
Impairment of goodwill | 26,695 | — | # | # | |||||||||||||||||||
Accelerated amortization of an intangible asset (4) | — | 4,594 | # | # | |||||||||||||||||||
Non-GAAP Adjusted Contribution to Profit | $ | 22,184 | $ | (7,246) | # | # | |||||||||||||||||
Depreciation and amortization | 3,437 | 22,900 | 85 | % | 85 | % | |||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 25,621 | $ | 15,654 | 64 | % | 62 | % | |||||||||||||||
Adjusted EBITDA margin | 15.1 | % | 8.0 | % | |||||||||||||||||||
Corporate Expenses: | $ | (108,096) | $ | (116,737) | 7 | % | 8 | % | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Restructuring charges | 19,801 | 24,569 | 19 | % | 19 | % | |||||||||||||||||
Non-GAAP Adjusted Contribution to Profit | $ | (88,295) | $ | (92,168) | 4 | % | 5 | % | |||||||||||||||
Depreciation and amortization | 7,059 | 8,066 | 12 | % | 13 | % | |||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | (81,236) | $ | (84,102) | 3 | % | 4 | % | |||||||||||||||
Consolidated Results: | |||||||||||||||||||||||
Revenue, net | $ | 943,821 | $ | 1,002,405 | -6 | % | -7 | % | |||||||||||||||
Less: Held for Sale or Sold (5) | (170,087) | (196,837) | 14 | % | 15 | % | |||||||||||||||||
Adjusted Revenue, net | $ | 773,734 | $ | 805,568 | -4 | % | -5 | % | |||||||||||||||
Operating Income | $ | 29,890 | $ | 40,474 | -26 | % | -27 | % | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Restructuring charges | 37,225 | 36,397 | -2 | % | -2 | % | |||||||||||||||||
Impairment of goodwill | 26,695 | — | # | # | |||||||||||||||||||
Accelerated amortization of an intangible asset (4) | — | 4,594 | # | # | |||||||||||||||||||
Held for Sale or Sold Segment Adjusted Contribution to Profit (5) | (22,184) | 7,246 | # | # | |||||||||||||||||||
Non-GAAP Adjusted Operating Income | $ | 71,626 | $ | 88,711 | -19 | % | -19 | % | |||||||||||||||
Depreciation and amortization | 83,902 | 106,106 | 21 | % | 21 | % | |||||||||||||||||
Less: Held for Sale or Sold depreciation and amortization (5) | (3,437) | (22,900) | 85 | % | 85 | % | |||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 152,091 | $ | 171,917 | -12 | % | -12 | % | |||||||||||||||
Adjusted EBITDA margin | 19.7 | % | 21.3 | % |
# Variance greater than 100% |
October 31, 2023 | April 30, 2023 | ||||||||||
Assets: | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 83,218 | $ | 106,714 | |||||||
Accounts receivable, net | 147,253 | 310,121 | |||||||||
Inventories, net | 30,131 | 30,733 | |||||||||
Prepaid expenses and other current assets | 58,583 | 93,711 | |||||||||
Current assets held-for-sale (2) | 106,384 | — | |||||||||
Total current assets | 425,569 | 541,279 | |||||||||
Technology, property and equipment, net | 222,504 | 247,149 | |||||||||
Intangible assets, net | 630,562 | 854,794 | |||||||||
Goodwill | 1,081,517 | 1,204,050 | |||||||||
Operating lease right-of-use assets | 79,009 | 91,197 | |||||||||
Other non-current assets | 136,782 | 170,341 | |||||||||
Non-current assets held-for-sale (2) | 203,100 | — | |||||||||
Total assets | $ | 2,779,043 | $ | 3,108,810 | |||||||
Liabilities and shareholders' equity: | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | 48,512 | $ | 84,325 | |||||||
Accrued royalties | 105,552 | 113,423 | |||||||||
Short-term portion of long-term debt | 5,000 | 5,000 | |||||||||
Contract liabilities | 235,839 | 504,695 | |||||||||
Accrued employment costs | 82,935 | 80,458 | |||||||||
Short-term portion of operating lease liabilities | 17,804 | 19,673 | |||||||||
Other accrued liabilities | 72,331 | 87,979 | |||||||||
Current liabilities held-for-sale (2) | 42,277 | — | |||||||||
Total current liabilities | 610,250 | 895,553 | |||||||||
Long-term debt | 937,624 | 743,292 | |||||||||
Accrued pension liability | 76,005 | 86,304 | |||||||||
Deferred income tax liabilities | 94,278 | 144,042 | |||||||||
Operating lease liabilities | 101,816 | 115,540 | |||||||||
Other long-term liabilities | 78,169 | 79,052 | |||||||||
Long-term liabilities held-for-sale (2) | 13,625 | — | |||||||||
Total liabilities | 1,911,767 | 2,063,783 | |||||||||
Shareholders' equity | 867,276 | 1,045,027 | |||||||||
Total liabilities and shareholders' equity | $ | 2,779,043 | $ | 3,108,810 |
Notes: | ||
(1) The supplementary information included in this press release for October 31, 2023 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission. | ||
(2) As previously announced, we are divesting non-core businesses, including University Services, Wiley Edge and CrossKnowledge. These businesses met the held-for-sale criteria and were measured at the lower of carrying value or fair value less cost to sell. We recorded a pretax impairment of $125.8 million in the six months ended October 31, 2023 which is recorded as a contra asset account within Current assets held-for-sale and Non-current assets held-for-sale. |
Six Months Ended October 31, | |||||||||||
2023 | 2022 | ||||||||||
Operating activities: | |||||||||||
Net (loss) income | $ | (111,709) | $ | 20,358 | |||||||
Impairment of goodwill | 26,695 | — | |||||||||
Impairment charge related to assets held-for-sale and loss on sale of a business | 127,343 | — | |||||||||
Amortization of intangible assets | 29,213 | 45,421 | |||||||||
Amortization of product development assets | 12,937 | 16,452 | |||||||||
Depreciation and amortization of technology, property, and equipment | 41,752 | 48,827 | |||||||||
Other noncash charges | 31,699 | 56,601 | |||||||||
Net change in operating assets and liabilities | (241,416) | (263,855) | |||||||||
Net cash used in operating activities | (83,486) | (76,196) | |||||||||
Investing activities: | |||||||||||
Additions to technology, property, and equipment | (40,321) | (38,530) | |||||||||
Product development spending | (8,168) | (11,445) | |||||||||
Businesses acquired in purchase transactions, net of cash acquired | (1,500) | (96) | |||||||||
Proceeds related to the sale of a business | 1,025 | 40 | |||||||||
Acquisitions of publication rights and other | (2,953) | 1,738 | |||||||||
Net cash used in investing activities | (51,917) | (48,293) | |||||||||
Financing activities: | |||||||||||
Net debt borrowings | 198,231 | 228,386 | |||||||||
Cash dividends | (38,691) | (38,749) | |||||||||
Purchases of treasury shares | (22,500) | (17,500) | |||||||||
Other | (7,338) | (20,534) | |||||||||
Net cash provided by financing activities | 129,702 | 151,603 | |||||||||
Effects of exchange rate changes on cash, cash equivalents and restricted cash | (1,943) | (8,784) | |||||||||
Change in cash, cash equivalents and restricted cash for period | (7,644) | 18,330 | |||||||||
Cash, cash equivalents and restricted cash - beginning | 107,262 | 100,727 | |||||||||
Cash, cash equivalents and restricted cash - ending (2) | $ | 99,618 | $ | 119,057 | |||||||
CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT DEVELOPMENT SPENDING (3) | |||||||||||
Six Months Ended October 31, | |||||||||||
2023 | 2022 | ||||||||||
Net cash used in operating activities | $ | (83,486) | $ | (76,196) | |||||||
Less: Additions to technology, property, and equipment | (40,321) | (38,530) | |||||||||
Less: Product development spending | (8,168) | (11,445) | |||||||||
Free cash flow less product development spending | $ | (131,975) | $ | (126,171) |
Notes: | ||
(1) The supplementary information included in this press release for the six months ended October 31, 2023 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission. | ||
(2) Cash, cash equivalents and restricted cash as of October 31, 2023 includes held-for-sale cash, cash equivalents and restricted cash of $16.4 million. | ||
(3) See Explanation of Usage of Non-GAAP Performance Measures included in this supplemental information. |
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