John Wiley-Revenues Drop-In Fiscal Quarter

March 12, 2009
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MAIN NEWS HEADLINES
March 12 – March 19, 2009 Edition

John Wiley
Revenues Drop
In Fiscal Quarter

HOBOKEN, NJ/AUTHORLINK NEWS/03/11/09–John Wiley & Sons reported a 13% loss in revenues to $374 million for its third fiscal quarter ended January 31, partly as a result of unfavorable foreign exchange rates. But even without the effects of exchange rates, revenues declined 2%.

The decrease on a currency neutral basis is primarily due to market conditions affecting the Professional/Trade business and processing delays in the Scientific, Technical, Medical and Scholarly (STMS) division related to a troubles in journal subscription renewals, which management says will be resolved prior to fiscal year-end.

Operating income declined 7% to $63.3 million.

Global Professional/Trade (P/T) division revenue declined 19% to $100 million in the third quarter compared to $123 million in the prior year, or a 14% decrease, excluding unfavorable foreign exchange. The decline is attributed to a very weak retail environment, particularly in the US. Modest growth was recorded in Canada, Germany, and the UK.

Direct contribution to profit was $25 million compared to $38 million for the third quarter of last year, reflecting the revenue shortfall. The decline was partially mitigated by prudent expense management and lower accrued incentive compensation, the company said. Excluding unfavorable foreign exchange, direct contribution to profit declined 25% from the prior year.

For the first nine months, global P/T revenue declined 12% to $316 million, or a 10% decrease, excluding unfavorable foreign exchange. Year-to-date direct contribution to profit fell 26% to $77 million, or a 23% decrease on an exchange neutral basis. The decline is attributed to lower revenue, higher inventory provisions and a $2 million bad debt recovery in the prior year, partially offset by lower accrued incentive compensation and prudent expense management.

Company-wide, nine month revenue was down 3%, to $1.21 billion, and operating income was flat at just over $177 million.

William J. Pesce, President and CEO said, “As anticipated earlier in the year, the unfavorable effect of foreign exchange on Wiley’s revenue and earnings is significant and unprecedented. In addition, economic conditions have had an adverse effect on our Professional/Trade business, particularly in the US. While the results in Professional/Trade are disappointing, it is encouraging that we have increased market share in key publishing categories. Our global STMS and Higher Education businesses are performing well.”

Mr. Pesce concluded: “With one quarter to go in fiscal year 2009, we are reaffirming full-year EPS guidance of approximately 20% growth on a currency neutral basis and excluding the unusual tax benefit reported in the prior year. We are reducing revenue guidance from mid single digit growth to low single digit growth on a currency neutral basis, principally due to market conditions affecting our Professional/Trade business. Foreign exchange will continue to have a significant adverse affect on Wiley’s revenue and EPS in the fourth quarter.”

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