Wiley Reports Second Quarter 2018 Results

Wiley and Sons Inc. (NYSE:JWA)(NYSE:JWB), a global research and learning company, today announced results for the second quarter ending October 31, 2017.

HIGHLIGHTS
• Revenue increased 6% to $452 million; +3% at constant currency
• Adjusted EPS increased 32% to $1.03; +22% at constant currency. EPS on a GAAP basis at $1.04, up from ($0.20)
• Free Cash Flow less Product Development Spending for six months improved by $38 million
• Brian A. Napack named as President and CEO

Revenue increase was largely driven by growth in Research Journals (+3%), STM and Professional Publishing (+4%), and Education Services/Online Program Management (+6%), as well as growth from the Atypon acquisition (+$6 million).
• Adjusted Operating Income growth was mainly due to higher revenue and lower technology expenses, including ERP implementation costs. Adjusted Contribution to Profit (CTP) for Research, Publishing, and Solutions rose for all three segments. GAAP Operating Income increased 74% to $82.8 million, which also reflected the timing of restructuring charges and credits, as well as a settlement charge related to a pension distribution for terminated employees in the prior year.
• Adjusted EPS increase was due to higher operating income and lower interest expense. GAAP EPS growth (+$1.24) also reflected unfavorable items in the prior year, including an income tax settlement in Germany (-$0.83) and the pension settlement charge (-$0.10).
• Return to Shareholders: During the quarter, Wiley repurchased 285,599 shares for $15.2 million at an average cost of $53.37. Approximately 3.2 million shares remain in the repurchase program.

MANAGEMENT COMMENTARY
“The second quarter was highlighted by the announcement of Brian Napack as our new President and CEO and Ella Balagula as our new EVP of Publishing. We also realized improved growth in Research, better than expected results in Publishing, and significant progress in our operational excellence initiatives,” said Matthew Kissner, Chairman. “This month, we celebrate 210 years of enabling many of the world’s advances in research and learning. While we are immensely proud of our legacy, we are just as energized by the opportunities ahead of us.”

RESEARCH SEGMENT
• Revenue: $228.9 million (+11% GAAP; +5% constant currency). The increase was driven primarily by the contribution from the Atypon acquisition (+$6 million), strong Open Access growth (+25%), and higher Licensing, Reprints, Backfile and Other revenue (+11%).
• Adjusted Contribution to Profit: $70.8 million (+4% constant currency). Improved performance reflected higher revenue offset primarily by Atypon expenses and higher royalty costs. GAAP Contribution to Profit of $71.2 million (+18%) also reflected impacts from foreign exchange and the timing of restructuring charges and credits.
• Society Publishing Partnerships: Two new society contracts were signed in the quarter with combined annual revenue of $3.0 million and ten were renewed with combined annual revenue of $6.6 million. None were lost.
• Wiley Digital Archives: In October, Wiley launched a new program to enable institutional customers to purchase digital access to unique or rare historical primary sources, digitized from partner societies, libraries, and archives around the world.

PUBLISHING SEGMENT
• Revenue: $165.0 million (+1% GAAP; flat constant currency). Better than expected performance was driven by STM, Professional, and Educational Publishing (+2%) and growth in Test Preparation and Certification (+5%) and Licensing, Distribution, Advertising, and Other (+11%). Course Workflow (WileyPLUS) was down 18% in the quarter due to the timing of revenue recognition. Operationally, WileyPLUS sales (net of actual returns) rose 8% for the quarter and 4% for the six months. The timing differences for revenue recognition reflect longer sales amortization for subscription periods extending across two semesters.
• Adjusted Contribution to Profit: $42.5 million (+14% constant currency). Improved performance was primarily due to savings from operational excellence initiatives. GAAP Contribution to Profit of $42.5 million (+16%) also reflected impacts from foreign exchange and the timing of restructuring charges and credits.
• New Leadership: In October, Wiley announced Ella Balagula as the new Executive Vice President of Wiley’s Publishing segment. Prior to joining, Ms. Balagula was Senior Vice President and General Manager of Engineering Solutions at Elsevier, where she was responsible for commercial go-to-market, product management, software development and content acquisition and production in the engineering and academic segments.
• Partnership: In November, Wiley and Kortext, a digital textbook and personal study platform, announced a partnership with the Egyptian Knowledge Bank (EKB) to provide digital textbooks to every Egyptian citizen and all universities, empowering their students to learn anytime, anywhere.

SOLUTIONS SEGMENT
• Revenue: $57.9 million (+3% GAAP and +2% constant currency). Growth in Education Services/Online Program Management (+6%) more than offset a 4% decline in Corporate Learning (CrossKnowledge), where French government funding slowed for unemployment initiatives and blended learning programs, and a 2% decline in Professional Assessment, where our pre-hire assessment business has been shifting from enterprise direct sales to higher margin partner channels.
• Adjusted Contribution to Profit: Increased 14% to $6.7 million. Improvement driven by higher revenue and increased operating efficiency. GAAP Contribution to Profit of $7.3 million (+36%) also reflected impacts from foreign exchange and the timing of restructuring charges and credits.
• Education Services (OPM): Wiley signed four new programs and discontinued one this quarter. As of October 31, Wiley had 39 university partners and 254 programs under contract.
more detail at:  http://newsroom.wiley.com/press-release/all-corporate-news/wiley-reports-second-quarter-2018-results