001-11507 | 13-5593032 | |||||||||||||
(Commission File Number) | (IRS Employer Identification No.) | |||||||||||||
111 River Street, Hoboken New Jersey |
07030 |
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(Address of principal executive offices) | (Zip Code) | |||||||||||||
Registrant’s telephone number, including area code: | (201) 748-6000 |
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☐ |
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 | ||||||||||||
Class A Common Stock, par value $1.00 per share | WLY | New York Stock Exchange | ||||||||||||
Class B Common Stock, par value $1.00 per share | WLYB | New York Stock Exchange |
JOHN WILEY & SONS, INC. | ||||||||||||||
(Registrant) | ||||||||||||||
By | /s/ Christina Van Tassell | |||||||||||||
Christina Van Tassell | ||||||||||||||
Executive Vice President and Chief Financial Officer |
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Dated: June 13, 2024 |
Metric
($millions, except EPS)
|
Fiscal 2024 Results
Ex-Divestitures
|
Fiscal 2025 Outlook
Ex-Divestitures
|
||||||
Adj. Revenue* | $1,617 | $1,650 to $1,690 | ||||||
Research | $1,043 | Low to mid-single digit growth | ||||||
Learning | $574 | Low-single digit growth | ||||||
Adj. EBITDA* | $369 | $385 to $410 | ||||||
Adj. EPS* | $2.78 | $3.25 to $3.60 | ||||||
Free Cash Flow | $114 | Approx. $125 |
Three Months Ended April 30, |
Year Ended April 30, |
||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Revenue, net | $ | 468,461 | $ | 526,127 | $ | 1,872,987 | $ | 2,019,900 | |||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of sales | 123,345 | 174,157 | 579,722 | 692,541 | |||||||||||||||||||
Operating and administrative expenses | 252,062 | 245,821 | 1,013,520 | 1,037,399 | |||||||||||||||||||
Impairment of goodwill (3) |
— | — | 108,449 | 99,800 | |||||||||||||||||||
Restructuring and related charges | 11,008 | 4,185 | 63,041 | 49,389 | |||||||||||||||||||
Amortization of intangible assets | 13,264 | 19,492 | 55,994 | 84,881 | |||||||||||||||||||
Total costs and expenses | 399,679 | 443,655 | 1,820,726 | 1,964,010 | |||||||||||||||||||
Operating income | 68,782 | 82,472 | 52,261 | 55,890 | |||||||||||||||||||
As a % of revenue | 14.7 | % | 15.7 | % | 2.8 | % | 2.8 | % | |||||||||||||||
Interest expense | (11,411) | (10,560) | (49,003) | (37,745) | |||||||||||||||||||
Foreign exchange transaction gains (losses) | 530 | 611 | (2,959) | 894 | |||||||||||||||||||
(Losses) gains on sale of businesses and certain assets and impairment charges related to assets held-for-sale (3) |
(3,642) | 10,177 | (183,389) | 10,177 | |||||||||||||||||||
Other (expense) income, net | (257) | 2,908 | (3,957) | 3,884 | |||||||||||||||||||
Income (loss) before taxes | 54,002 | 85,608 | (187,047) | 33,100 | |||||||||||||||||||
Provision for income taxes | 28,737 | 17,264 | 13,272 | 15,867 | |||||||||||||||||||
Effective tax rate | 53.2 | % | 20.2 | % | -7.1 | % | 47.9 | % | |||||||||||||||
Net income (loss) | $ | 25,265 | $ | 68,344 | $ | (200,319) | $ | 17,233 | |||||||||||||||
As a % of revenue | 5.4 | % | 13.0 | % | -10.7 | % | 0.9 | % | |||||||||||||||
Earnings (loss) per share | |||||||||||||||||||||||
Basic | $ | 0.46 | $ | 1.23 | $ | (3.65) | $ | 0.31 | |||||||||||||||
Diluted (4) |
$ | 0.46 | $ | 1.22 | $ | (3.65) | $ | 0.31 | |||||||||||||||
Weighted average number of common shares outstanding | |||||||||||||||||||||||
Basic | 54,591 | 55,355 | 54,945 | 55,558 | |||||||||||||||||||
Diluted (4) |
55,356 | 56,137 | 54,945 | 56,355 | |||||||||||||||||||
Notes: | ||
(1) The supplementary information included in this press release for the three months and year ended April 30, 2024 is preliminary and subject to change prior to the filing of our upcoming Annual Report on Form 10-K 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 three businesses met the held-for-sale criteria starting in the first quarter of fiscal year 2024. We measured each disposal group at the lower of carrying value or fair value less costs to sell prior to its disposition. On January 1, 2024 we completed the sale of University Services. On January 8, 2024 we entered into an agreement to sell our Wiley Edge business, which closed on May 31, 2024, with the exception of its India operations. The sale of Wiley Edge's India operation will be finalized later in calendar year 2024. We expect to complete the sale of CrossKnowledge in the second quarter of fiscal year 2025. 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 noncash goodwill impairment of $11.4 million in the year ended April 30, 2024. 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 noncash goodwill impairment of $15.3 million in the year ended April 30, 2024. As a result of signing an agreement to sell Wiley Edge and the decrease in the fair value of the business which was impacted by a decline in placements in the third quarter of fiscal year 2024, we tested the goodwill of the Wiley Edge reporting unit within the Held for Sale or Sold segment for impairment. We concluded that the carrying value of the reporting unit was above its fair value which resulted in a pretax noncash goodwill impairment of $81.7 million in the year ended April 30, 2024. In the three months ended April 30, 2024, there was an increase in the pretax loss on the sale of University Services after the closing of approximately $5.6 million, which resulted in a total pretax loss of $107.0 million (net of tax loss of $80.5 million) in the year ended April 30, 2024. We also completed the sale of our Tuition Manager business previously in our Held for Sale or Sold segment, which resulted in a total net pretax loss of $1.5 million (net of tax loss of $1.1 million) in the year ended April 30, 2024. Wiley Edge and CrossKnowledge continue to be reported as held-for-sale. We recorded a held-for-sale pretax impairment release of $2.0 million and charges of $74.8 million in the three months and year ended April 30, 2024, respectively, related to Wiley Edge and CrossKnowledge. The total impairment charge for Wiley Edge in the year ended April 30, 2024 was $19.4 million, which includes a release of $1.2 million in the three months ended April 30, 2024. The total impairment charge for CrossKnowledge in the year ended April 30, 2024 was $55.4 million, which includes a release of $0.8 million in the three months ended April 30, 2024. | ||
(4) In calculating diluted net loss per common share for the year ended April 30, 2024, 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 Earnings (Loss) per Share to Non-GAAP Adjusted EPS | |||||||||||||||||||||||
Three Months Ended April 30, |
Year Ended
April 30,
|
||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
US GAAP Income (Loss) Per Share - Diluted | $ | 0.46 | $ | 1.22 | $ | (3.65) | $ | 0.31 | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Impairment of goodwill | — | 0.09 | 1.90 | 1.77 | |||||||||||||||||||
Legal settlement (3) |
— | — | — | 0.05 | |||||||||||||||||||
Pension income related to the wind up of the Russia plan (4) |
— | (0.02) | — | (0.02) | |||||||||||||||||||
Restructuring and related charges | 0.16 | 0.06 | 0.85 | 0.66 | |||||||||||||||||||
Foreign exchange losses (gains) on intercompany transactions, including the write off of certain cumulative translation adjustments (4) |
0.01 | (0.01) | 0.02 | 0.01 | |||||||||||||||||||
Amortization of acquired intangible assets (5) |
0.02 | 0.26 | 0.68 | 1.21 | |||||||||||||||||||
Losses (gains) on sale of businesses and certain assets and impairment charges related to assets held-for-sale (6) |
0.04 | (0.11) | 2.81 | (0.11) | |||||||||||||||||||
Held for Sale or Sold segment Adjusted Net Income (6) |
(0.03) | (0.26) | (0.42) | (0.36) | |||||||||||||||||||
Income tax adjustments | 0.55 | (0.04) | 0.54 | (0.04) | |||||||||||||||||||
EPS impact of using weighted-average dilutive shares for adjusted EPS calculation (7) |
— | — | 0.05 | — | |||||||||||||||||||
Non-GAAP Adjusted Earnings Per Share - Diluted | $ | 1.21 | $ | 1.19 | $ | 2.78 | $ | 3.48 | |||||||||||||||
Reconciliation of US GAAP Income (Loss) Before Taxes to Non-GAAP Adjusted Income Before Taxes | |||||||||||||||||||||||
(amounts in thousands) |
Three Months Ended April 30, |
Year Ended
April 30,
|
|||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
US GAAP Income (Loss) Before Taxes | $ | 54,002 | $ | 85,608 | $ | (187,047) | $ | 33,100 | |||||||||||||||
Pretax Impact of Adjustments: | |||||||||||||||||||||||
Impairment of goodwill | — | — | 108,449 | 99,800 | |||||||||||||||||||
Legal settlement (3) |
— | — | — | 3,671 | |||||||||||||||||||
Pension income related to the wind up of the Russia plan (4) |
— | (1,750) | — | (1,750) | |||||||||||||||||||
Restructuring and related charges | 11,008 | 4,185 | 63,041 | 49,389 | |||||||||||||||||||
Foreign exchange losses (gains) on intercompany transactions, including the write off of certain cumulative translation adjustments (4) |
815 | (449) | 1,903 | 457 | |||||||||||||||||||
Amortization of acquired intangible assets (5) |
13,324 | 20,566 | 57,874 | 89,177 | |||||||||||||||||||
Losses (gains) on sale of businesses and certain assets and impairment charges related to assets held-for-sale (6) |
3,641 | (10,177) | 183,389 | (10,177) | |||||||||||||||||||
Held for Sale or Sold segment Adjusted Income Before Taxes (6) |
(2,408) | (17,974) | (30,661) | (26,094) | |||||||||||||||||||
Non-GAAP Adjusted Income Before Taxes | $ | 80,382 | $ | 80,009 | $ | 196,948 | $ | 237,573 | |||||||||||||||
Reconciliation of US GAAP Income Tax 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 Provision | $ | 28,737 | $ | 17,264 | $ | 13,272 | $ | 15,867 | |||||||||||||||
Income Tax Impact of Adjustments (8) |
|||||||||||||||||||||||
Impairment of goodwill | 255 | (4,857) | 2,953 | — | |||||||||||||||||||
Legal settlement (3) |
— | — | — | 716 | |||||||||||||||||||
Pension income related to the wind up of the Russia plan (4) |
— | (437) | — | (437) | |||||||||||||||||||
Restructuring and related charges | 2,425 | 992 | 15,662 | 12,151 | |||||||||||||||||||
Foreign exchange losses (gains) on intercompany transactions, including the write off of certain cumulative translation adjustments (4) |
471 | (142) | 582 | 132 | |||||||||||||||||||
Amortization of acquired intangible assets (5) |
11,459 | 5,372 | 20,127 | 20,183 | |||||||||||||||||||
Losses (gains) on sale of businesses and certain assets and impairment charges related to assets held-for-sale (6) |
1,197 | (3,860) | 26,908 | (3,860) | |||||||||||||||||||
Held for Sale or Sold segment Adjusted Tax Provision (6) |
(622) | (3,555) | (7,140) | (5,533) | |||||||||||||||||||
Income Tax Adjustments: | |||||||||||||||||||||||
Impact of increase in UK statutory rate on deferred tax balances (9) |
— | 2,370 | — | 2,370 | |||||||||||||||||||
Impact of valuation allowance (10) |
(30,249) | — | (30,249) | — | |||||||||||||||||||
Non-GAAP Adjusted Income Tax Provision | $ | 13,673 | $ | 13,147 | $ | 42,115 | $ | 41,589 | |||||||||||||||
US GAAP Effective Tax Rate | 53.2 | % | 20.2 | % | -7.1 | % | 47.9 | % | |||||||||||||||
Non-GAAP Adjusted Effective Tax Rate | 17.0 | % | 16.4 | % | 21.4 | % | 17.5 | % |
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 months and year ended April 30, 2024 is preliminary and subject to change prior to the filing of our upcoming Annual Report on Form 10-K with the Securities and Exchange Commission. | |||||
(2) All amounts are approximate due to rounding. | |||||
(3) In the three months ended January 31, 2023, we settled a litigation matter related to consideration for a previous acquisition for $3.7 million. | |||||
(4) In fiscal year 2023 due to the closure of our operations in Russia, the Russia entity was deemed substantially liquidated. In the three months and year ended April 30, 2024, we wrote off an additional $0.2 million and $1.0 million, respectively, of cumulative translation adjustments in earnings. In the three months and year ended April 30, 2023, we wrote off $1.1 million of cumulative translation adjustments in earnings. This amount is reflected in Foreign exchange transaction gains (losses) on our Condensed Consolidated Statements of Net Income (Loss). In addition, in the three months and year ended April 30, 2023, there was a curtailment and settlement credit due to the wind up of the Russia Pension Plan of $1.8 million which is reflected in Other (expense) income, net on our Condensed Consolidated Statements of Net Income (Loss). | |||||
(5) 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 Income (Loss). It also includes the amortization of acquired product development assets, which is reflected in Cost of sales in the Condensed Consolidated Statements of Net Income (Loss). | |||||
(6) We are divesting non-core businesses, including University Services, Wiley Edge, and CrossKnowledge. On January 1, 2024 we completed the sale of University Services. Wiley Edge and CrossKnowledge continue to be reported as held-for-sale, and we measured each business at the lower of carrying value or fair value less costs to sell. The total impairment charge for Wiley Edge in the year ended April 30, 2024 was $19.4 million, which includes a release of $1.2 million in the three months ended April 30, 2024. The total impairment charge for CrossKnowledge in the year ended April 30, 2024 was $55.4 million, which includes a release of $0.8 million in the three months ended April 30, 2024. In the three months ended April 30, 2024, there was an increase in the pretax loss on the sale of University Services after the closing of approximately $5.6 million, which resulted in a total pretax loss of $107.0 million (net of tax loss of $80.5 million) in the year ended April 30, 2024. We also completed the sale of our Tuition Manager business previously in our Held for Sale or Sold segment, which resulted in a total net pretax loss of $1.5 million (net of tax loss of $1.1 million) in the year ended April 30, 2024. In addition, our Adjusted EPS excludes the Adjusted Net Income of our Held for Sale or Sold segment. | |||||
(7) Represents the impact of using diluted weighted-average number of common shares outstanding (55.7 million for the year ended April 30, 2024) 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. | |||||
(8) For the three months and year ended April 30, 2024 substantially all of the tax impact was from deferred taxes. For the three months ended April 30, 2023, the tax impact was $4.3 million of current tax benefit and $0.1 million of deferred taxes. For the year ended April 30, 2023, substantially all of the tax impact was from deferred taxes. | |||||
(9) In the three months ended July 31, 2021, the UK enacted legislation that increased its statutory rate from 19% to 25% effective April 1, 2023. For the three months and year ended April 30, 2023, we recorded a $2.4 million noncash deferred tax benefit related to pensions due to the UK statutory rate change. These adjustments impacted deferred taxes. | |||||
(10) In fiscal year 2024, due to temporary differences in the US, our deferred taxes reversed from a deferred tax liability position to a deferred tax asset position. Due to losses in the US resulting from impairments, restructuring, and acceleration of depreciation expense on capitalized software, we concluded it was more-likely-than-not that all or a portion of our deferred tax asset may not be realized. As a result, we increased the valuation allowance by $30.2 million. |
Three Months Ended April 30, |
Year Ended April 30, |
||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Net Income (Loss) | $ | 25,265 | $ | 68,344 | $ | (200,319) | $ | 17,233 | |||||||||||||||
Interest expense | 11,411 | 10,560 | 49,003 | 37,745 | |||||||||||||||||||
Provision for income taxes | 28,737 | 17,264 | 13,272 | 15,867 | |||||||||||||||||||
Depreciation and amortization | 47,613 | 50,111 | 176,989 | 213,253 | |||||||||||||||||||
Non-GAAP EBITDA | 113,026 | 146,279 | 38,945 | 284,098 | |||||||||||||||||||
Impairment of goodwill | — | — | 108,449 | 99,800 | |||||||||||||||||||
Legal settlement | — | — | — | 3,671 | |||||||||||||||||||
Restructuring and related charges | 11,008 | 4,185 | 63,041 | 49,389 | |||||||||||||||||||
Foreign exchange (gains) losses, including the write off of certain cumulative translation adjustments | (530) | (611) | 2,959 | (894) | |||||||||||||||||||
Losses (gains) on sale of businesses and certain assets and impairment charges related to assets held-for-sale | 3,642 | (10,177) | 183,389 | (10,177) | |||||||||||||||||||
Other expense (income), net | 257 | (2,908) | 3,957 | (3,884) | |||||||||||||||||||
Held for Sale or Sold segment Adjusted EBITDA (2) |
(2,409) | (19,698) | (32,148) | (42,677) | |||||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 124,994 | $ | 117,070 | $ | 368,592 | $ | 379,326 | |||||||||||||||
Adjusted EBITDA Margin | 28.3 | % | 27.6 | % | 22.8 | % | 23.3 | % |
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 months and year ended April 30, 2024 is preliminary and subject to change prior to the filing of our upcoming Annual Report on Form 10-K 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 April 30, |
Favorable (Unfavorable) | ||||||||||||||||||||||
2024 | 2023 (3) |
Reported | Constant Currency |
||||||||||||||||||||
Research: | |||||||||||||||||||||||
Revenue, net | |||||||||||||||||||||||
Research Publishing | $ | 233,455 | $ | 240,889 | -3 | % | -3 | % | |||||||||||||||
Research Solutions | 37,577 | 39,550 | -5 | % | -5 | % | |||||||||||||||||
Total Revenue, net | $ | 271,032 | $ | 280,439 | -3 | % | -3 | % | |||||||||||||||
Non-GAAP Adjusted Operating Income | $ | 68,282 | $ | 83,245 | -18 | % | -18 | % | |||||||||||||||
Depreciation and amortization | 25,513 | 22,700 | -12 | % | -12 | % | |||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 93,795 | $ | 105,945 | -11 | % | -12 | % | |||||||||||||||
Adjusted EBITDA margin | 34.6 | % | 37.8 | % | |||||||||||||||||||
Learning: | |||||||||||||||||||||||
Revenue, net | |||||||||||||||||||||||
Academic | $ | 98,908 | $ | 80,807 | 22 | % | 22 | % | |||||||||||||||
Professional | 71,237 | 63,049 | 13 | % | 13 | % | |||||||||||||||||
Total Revenue, net | $ | 170,145 | $ | 143,856 | 18 | % | 18 | % | |||||||||||||||
Non-GAAP Adjusted Operating Income | $ | 57,682 | $ | 32,915 | 75 | % | 75 | % | |||||||||||||||
Depreciation and amortization | 16,358 | 15,253 | -7 | % | -7 | % | |||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 74,040 | $ | 48,168 | 54 | % | 54 | % | |||||||||||||||
Adjusted EBITDA margin | 43.5 | % | 33.5 | % | |||||||||||||||||||
Held for Sale or Sold: | |||||||||||||||||||||||
Total Revenue, net | $ | 27,284 | $ | 101,832 | -73 | % | -74 | % | |||||||||||||||
Non-GAAP Adjusted Operating Income | $ | 2,409 | $ | 11,997 | -80 | % | -84 | % | |||||||||||||||
Depreciation and amortization | — | 7,701 | # | # | |||||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 2,409 | $ | 19,698 | -88 | % | -90 | % | |||||||||||||||
Adjusted EBITDA margin | 8.8 | % | 19.3 | % | |||||||||||||||||||
Non-GAAP Adjusted Corporate Expenses | $ | (48,583) | $ | (41,500) | -17 | % | -17 | % | |||||||||||||||
Depreciation and amortization | 5,742 | 4,457 | -29 | % | -29 | % | |||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | (42,841) | $ | (37,043) | -16 | % | -15 | % | |||||||||||||||
Consolidated Results: | |||||||||||||||||||||||
Revenue, net | $ | 468,461 | $ | 526,127 | -11 | % | -11 | % | |||||||||||||||
Less: Held for Sale or Sold Segment (4) |
(27,284) | (101,832) | -73 | % | -74 | % | |||||||||||||||||
Adjusted Revenue, net | $ | 441,177 | $ | 424,295 | 4 | % | 4 | % | |||||||||||||||
Operating Income | $ | 68,782 | $ | 82,472 | 17 | % | 17 | % | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Restructuring charges | 11,008 | 4,185 | # | # | |||||||||||||||||||
Held for Sale or Sold Segment Adjusted Operating Income (4) |
(2,409) | (11,997) | -80 | % | 76 | % | |||||||||||||||||
Non-GAAP Adjusted Operating Income | $ | 77,381 | $ | 74,660 | 4 | % | 4 | % | |||||||||||||||
Depreciation and amortization | 47,613 | 50,111 | 5 | % | 5 | % | |||||||||||||||||
Less: Held for Sale or Sold Segment depreciation and amortization (4) |
— | (7,701) | # | # | |||||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 124,994 | $ | 117,070 | 7 | % | 7 | % | |||||||||||||||
Adjusted EBITDA margin | 28.3 | % | 27.6 | % |
Notes: | ||
(1) The supplementary information included in this press release for the three months and year ended April 30, 2024 is preliminary and subject to change prior to the filing of our upcoming Annual Report on Form 10-K 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 recast to the new segment presentation. There were no changes to our consolidated financial results. | ||
(4) 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. | ||
(5) In the three months ended January 31, 2023, we settled a litigation matter related to consideration for a previous acquisition for $3.7 million. | ||
(6) We discontinued use of the mthree trademark that resulted in a change in the useful life and accelerated amortization expense of $4.6 million in the three months ended July 31, 2022. | ||
# Variance greater than 100% |
% Change | |||||||||||||||||||||||
Year Ended April 30, |
Favorable (Unfavorable) | ||||||||||||||||||||||
2024 | 2023 (3) |
Reported | Constant Currency |
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Research: | |||||||||||||||||||||||
Revenue, net | |||||||||||||||||||||||
Research Publishing | $ | 892,784 | $ | 926,773 | -4 | % | -5 | % | |||||||||||||||
Research Solutions | 149,921 | 153,538 | -2 | % | -3 | % | |||||||||||||||||
Total Revenue, net | $ | 1,042,705 | $ | 1,080,311 | -3 | % | -4 | % | |||||||||||||||
Non-GAAP Adjusted Operating Income | $ | 237,763 | $ | 283,984 | -16 | % | -16 | % | |||||||||||||||
Depreciation and amortization | 93,422 | 93,008 | 0 | % | 0 | % | |||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 331,185 | $ | 376,992 | -12 | % | -13 | % | |||||||||||||||
Adjusted EBITDA margin | 31.8 | % | 34.9 | % | |||||||||||||||||||
Learning: | |||||||||||||||||||||||
Revenue, net | |||||||||||||||||||||||
Academic | $ | 323,541 | $ | 304,633 | 6 | % | 6 | % | |||||||||||||||
Professional | 251,198 | 241,762 | 4 | % | 3 | % | |||||||||||||||||
Total Revenue, net | $ | 574,739 | $ | 546,395 | 5 | % | 5 | % | |||||||||||||||
Non-GAAP Adjusted Operating Income | $ | 142,733 | $ | 100,100 | 43 | % | 43 | % | |||||||||||||||
Depreciation and amortization | 57,696 | 57,698 | 0 | % | 0 | % | |||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 200,429 | $ | 157,798 | 27 | % | 27 | % | |||||||||||||||
Adjusted EBITDA margin | 34.9 | % | 28.9 | % | |||||||||||||||||||
Held for Sale or Sold: | |||||||||||||||||||||||
Total Revenue, net | $ | 255,543 | $ | 393,194 | -35 | % | -36 | % | |||||||||||||||
Non-GAAP Adjusted Operating Income | $ | 28,711 | $ | 1,186 | # | # | |||||||||||||||||
Depreciation and amortization | 3,437 | 41,491 | 92 | % | 92 | % | |||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 32,148 | $ | 42,677 | -25 | % | -27 | % | |||||||||||||||
Adjusted EBITDA margin | 12.6 | % | 10.9 | % | |||||||||||||||||||
Non-GAAP Adjusted Corporate Expenses | $ | (185,456) | $ | (171,926) | -8 | % | -7 | % | |||||||||||||||
Depreciation and amortization | 22,434 | 16,462 | -36 | % | -36 | % | |||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | (163,022) | $ | (155,464) | -5 | % | -4 | % | |||||||||||||||
Consolidated Results: | |||||||||||||||||||||||
Revenue, net | $ | 1,872,987 | $ | 2,019,900 | -7 | % | -8 | % | |||||||||||||||
Less: Held for Sale or Sold Segment (4) |
(255,543) | (393,194) | -35 | % | -36 | % | |||||||||||||||||
Adjusted Revenue, net | $ | 1,617,444 | $ | 1,626,706 | -1 | % | -1 | % | |||||||||||||||
Operating Income | $ | 52,261 | $ | 55,890 | -6 | % | -7 | % | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Restructuring charges | 63,041 | 49,389 | -28 | % | -28 | % | |||||||||||||||||
Impairment of goodwill | 108,449 | 99,800 | -9 | % | -9 | % | |||||||||||||||||
Legal settlement (5) |
— | 3,671 | # | # | |||||||||||||||||||
Accelerated amortization of an intangible asset (6) |
— | 4,594 | # | # | |||||||||||||||||||
Held for Sale or Sold Segment Adjusted Operating Income (4) |
(28,711) | (1,186) | # | # | |||||||||||||||||||
Non-GAAP Adjusted Operating Income | $ | 195,040 | $ | 212,158 | -8 | % | -8 | % | |||||||||||||||
Depreciation and amortization | 176,989 | 208,659 | 15 | % | 16 | % | |||||||||||||||||
Less: Held for Sale or Sold depreciation and amortization (4) |
(3,437) | (41,491) | 92 | % | 92 | % | |||||||||||||||||
Non-GAAP Adjusted EBITDA | $ | 368,592 | $ | 379,326 | -3 | % | -3 | % | |||||||||||||||
Adjusted EBITDA margin | 22.8 | % | 23.3 | % |
# Variance greater than 100% |
April 30, 2024 |
April 30, 2023 |
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Assets: | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 83,249 | $ | 106,714 | |||||||
Accounts receivable, net | 224,198 | 310,121 | |||||||||
Inventories, net | 26,219 | 30,733 | |||||||||
Prepaid expenses and other current assets | 85,954 | 93,711 | |||||||||
Current assets held-for-sale (2) |
34,422 | — | |||||||||
Total current assets | 454,042 | 541,279 | |||||||||
Technology, property and equipment, net | 192,438 | 247,149 | |||||||||
Intangible assets, net | 615,694 | 854,794 | |||||||||
Goodwill | 1,091,368 | 1,204,050 | |||||||||
Operating lease right-of-use assets | 69,074 | 91,197 | |||||||||
Other non-current assets | 283,719 | 170,341 | |||||||||
Non-current assets held-for-sale (2) |
19,160 | — | |||||||||
Total assets | $ | 2,725,495 | $ | 3,108,810 | |||||||
Liabilities and shareholders' equity: | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | 55,659 | $ | 84,325 | |||||||
Accrued royalties | 97,173 | 113,423 | |||||||||
Short-term portion of long-term debt | 7,500 | 5,000 | |||||||||
Contract liabilities | 483,778 | 504,695 | |||||||||
Accrued employment costs | 96,980 | 80,458 | |||||||||
Short-term portion of operating lease liabilities | 18,294 | 19,673 | |||||||||
Other accrued liabilities | 76,266 | 87,979 | |||||||||
Current liabilities held-for-sale (2) |
37,632 | — | |||||||||
Total current liabilities | 873,282 | 895,553 | |||||||||
Long-term debt | 767,096 | 743,292 | |||||||||
Accrued pension liability | 70,832 | 86,304 | |||||||||
Deferred income tax liabilities | 97,186 | 144,042 | |||||||||
Operating lease liabilities | 94,386 | 115,540 | |||||||||
Other long-term liabilities | 71,760 | 79,052 | |||||||||
Long-term liabilities held-for-sale (2) |
11,237 | — | |||||||||
Total liabilities | 1,985,779 | 2,063,783 | |||||||||
Shareholders' equity | 739,716 | 1,045,027 | |||||||||
Total liabilities and shareholders' equity | $ | 2,725,495 | $ | 3,108,810 |
Notes: | ||
(1) The supplementary information included in this press release for April 30, 2024 is preliminary and subject to change prior to the filing of our upcoming Annual Report on Form 10-K with the Securities and Exchange Commission. | ||
(2) As previously announced, we are divesting non-core businesses, including 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 costs to sell. We recorded a pretax impairment of $74.8 million in the year ended April 30, 2024 which is recorded as a contra asset account within Current assets held-for-sale and Non-current assets held-for-sale. |
Year Ended April 30, |
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2024 | 2023 | ||||||||||
Operating activities: | |||||||||||
Net (loss) income | $ | (200,319) | $ | 17,233 | |||||||
Impairment of goodwill | 108,449 | 99,800 | |||||||||
Losses (gains) on sale of businesses and certain assets and impairment charges related to assets held-for-sale | 183,389 | (10,217) | |||||||||
Amortization of intangible assets | 55,994 | 84,881 | |||||||||
Amortization of product development assets | 22,835 | 32,366 | |||||||||
Depreciation and amortization of technology, property, and equipment | 98,160 | 96,006 | |||||||||
Other noncash charges | 106,507 | 95,636 | |||||||||
Net change in operating assets and liabilities | (167,377) | (138,634) | |||||||||
Net cash provided by operating activities | 207,638 | 277,071 | |||||||||
Investing activities: | |||||||||||
Additions to technology, property, and equipment | (76,080) | (81,155) | |||||||||
Product development spending | (17,262) | (22,958) | |||||||||
Businesses acquired in purchase transactions, net of cash acquired | (3,116) | (7,292) | |||||||||
(Costs) proceeds related to the sale of businesses and certain assets | (1,771) | 15,585 | |||||||||
Acquisitions of publication rights and other | (8,414) | (2,578) | |||||||||
Net cash used in investing activities | (106,643) | (98,398) | |||||||||
Financing activities: | |||||||||||
Net debt borrowings (repayments) | 27,767 | (38,934) | |||||||||
Cash dividends | (76,964) | (77,298) | |||||||||
Purchases of treasury shares | (45,050) | (35,000) | |||||||||
Other | (12,974) | (17,336) | |||||||||
Net cash used in financing activities | (107,221) | (168,568) | |||||||||
Effects of exchange rate changes on cash, cash equivalents and restricted cash | (1,493) | (3,570) | |||||||||
Change in cash, cash equivalents and restricted cash for period | (7,719) | 6,535 | |||||||||
Cash, cash equivalents and restricted cash - beginning | 107,262 | 100,727 | |||||||||
Cash, cash equivalents and restricted cash - ending (2) |
$ | 99,543 | $ | 107,262 | |||||||
CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT DEVELOPMENT SPENDING (3) | |||||||||||
Year Ended April 30, |
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2024 | 2023 | ||||||||||
Net cash provided by operating activities | $ | 207,638 | $ | 277,071 | |||||||
Less: Additions to technology, property, and equipment | (76,080) | (81,155) | |||||||||
Less: Product development spending | (17,262) | (22,958) | |||||||||
Free cash flow less product development spending | $ | 114,296 | $ | 172,958 |
Notes: | ||
(1) The supplementary information included in this press release for the year ended April 30, 2024 is preliminary and subject to change prior to the filing of our upcoming Annual Report on Form 10-K with the Securities and Exchange Commission. | ||
(2) Cash, cash equivalents and restricted cash as of April 30, 2024 includes held-for-sale cash, cash equivalents and restricted cash of $16.2 million. | ||
(3) See Explanation of Usage of Non-GAAP Performance Measures included in this supplemental information. |