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September 11 – September 18, 2008 Edition John Wiley Posts
In First Quarter ’09
Hoboken, N.J., 9/9/2008—John Wiley & Sons, Inc. reported revenue of $402 million for the first quarter of fiscal year 2009 ended July 31, 2008, a 3% increase over the same period of fiscal year 2008, or 2% excluding favorable foreign exchange.
“Fiscal year 2009 began as expected. Scientific, Technical, Medical, and Scholarly and Higher Education reported year-on-year growth, while Professional/Trade was down from last year’s strong first quarter. Based on these results, leading indicators, and market conditions, we continue to expect fiscal year 2009 revenue growth to be in the mid-single digits and EPS growth to be approximately 20%, excluding one-time tax benefits,” said William J. Pesce, President and Chief Executive Officer.
Mr. Pesce added: “We have made significant progress implementing a new global organizational structure across Wiley’s three core businesses to leverage our content, services, and capabilities around the world. During the quarter, we migrated Blackwell’s content, customers, and licenses to the Wiley InterScience online platform, an important milestone in the integration process.”
As a result of the new global organizational structure, the Company is reporting global results for its three core businesses. Previously, the management structure was organized geographically. Blackwell is included in Scientific, Technical, Medical, and Scholarly and, therefore, is no longer reported as a separate segment. Prior year results have been restated for comparative purposes.
Shared Service and Administrative costs increased by 12%, or 7% excluding unfavorable foreign exchange and net integration costs related to Blackwell.
Scientific, Technical, Medical, and Scholarly (STMS)
Global STMS revenue for the first quarter increased by 6% to $240 million, or 5% excluding favorable foreign exchange. The year-on-year growth was driven by books and journals. Also contributing to the increase was a $6 million acquisition accounting adjustment that reduced revenue in the first quarter of the prior year. Growth in journal revenue was mainly due to subscriptions and advertising. Book revenue was particularly strong in Asia, Australia, and Canada, reflecting the combined effect of Wiley’s sales and marketing capabilities and Blackwell’s book publishing programs.
Direct contribution to profit advanced 15% to $97 million, compared to $84 million for the same period of the previous year, or 16% excluding the unfavorable effect of foreign exchange. The increase reflected top-line results and the collection of a 2003 journal agent bankruptcy settlement of $2 million.
Global P/T revenue for the first quarter was $102 million, a 3% decline from the $105 million reported in last year’s strong first quarter, or a 4% decrease excluding favorable foreign exchange. Strong revenue growth continued in Asia. A decrease in the U.S. compared to last year’s strong first quarter, including the effect of higher sales returns, offset a solid performance in Europe outside the U.K., the Middle East & Africa. The business publishing program and online advertising and services, led by Frommers.com and Whatsonwhen.com, showed strong results. Also affecting the comparison to last year was the termination of a publishing agreement in the culinary/hospitality publishing program.
Direct contribution to profit was $19 million compared to $26 million for the first quarter of fiscal year 2008, reflecting the top-line results and higher operating expenses. Expense growth reflected increases in advertising and marketing in anticipation of a strong fall frontlist, as well as employment costs.
Higher Education (HE)
Global HE revenue advanced 6% to $59 million, compared to $56 million for the first quarter of fiscal year 2008, or 4% excluding the effect of favorable foreign exchange. Global HE revenue, excluding the Australian Secondary School business, grew 7%. The results were driven by the continued success of the WileyPLUS digital learning suite; revenue from acquired titles of approximately $1.5 million; and organic growth in science, mathematics, engineering, and the social sciences. Markets around the world contributed to the growth, particularly North America, Asia, and Australia.
Direct contribution to profit advanced 4% to $19 million from $18 million in the first quarter of last year, reflecting the top-line results.
WileyPLUS, an interactive suite that includes access to online textbooks, homework management tools, grading, and presentation resources, continues to build momentum around the world, as reflected in the 43% growth in billings and the number of registered users jumping 55% over the same quarter of last year. WileyPLUS revenue is deferred and recognized over the course of the semester. Given the increased penetration of WileyPLUS, approximately $2 million of additional revenue was deferred this quarter as compared to the first quarter of fiscal 2008.
Notable books published during the quarter include Principles of Anatomy and Physiology, 12th Edition, by Gerard J. Tortora and Bryan H. Derrickson; Microbiology: Principles and Explorations, 7th Edition, by Jacquelyn G. Black; Biochemistry, 3rd Edition, by Donald J. Voet and Judith G. Voet; Elementary Differential Equations, 8th Edition, by William E. Boyce and Richard C. DiPrima; College Algebra by Cynthia Y. Young; Calculus: Multivariable, 8th Edition, by Howard Anton, Irl Bivens, and Stephen Davis; Calculus: Single and Multivariable, 4th Edition, by Deborah Hughes-Hallett, Andrew M. Gleason, et.al; Realms, Regions and Concepts, 13th Edition, by H. J. de Blij and Peter O. Muller; Dicho y hecho, 8th Edition, by Laila M. Dawson, Kim Potowski, and Silvia Sobral; ¡Con brío! by María Concepción, Lucas Murillo, and Laila M. Dawson; and Parliamo Italiano, 3rd Edition, by Suzanne Branciforte.
At the end of the first quarter, Wiley acquired a list of textbooks and learning materials from Cengage Learning. These market-leading books provide a strong complement to Wiley’s existing programs in business and modern languages. HE signed an agreement with WIMBA, a collaborative learning software applications and services company, to provide new voice-recording functionality to enhance its already strong WileyPLUS offerings in modern languages.
Earlier in the quarter, Wiley acquired a list of mathematics and statistics titles from Key College Publishing, the higher education business of California-based Key Curriculum Press. The acquisition brings to HE award-winning authors and educators. The acquired programs will strengthen Wiley’s current offerings and provide an excellent opportunity for targeted growth and expansion in mathematics.
In Australia, HE signed an agreement with Ernst & Young to publish, as an audit practice case study, its training manual for audit staff. Chemistry by Allan Blackman, et al., received a “highly commended” in the Best Designed Tertiary Book Category at the 56th Australian Book Design Awards. This textbook is an adaptation of three U.S. textbooks. In Canada, HE is partnering with Now Prepay to allow students to purchase a registration code for WileyPLUS directlythrough their accounts at more than 35 universities and colleges.
Founded in 1807, John Wiley & Sons, Inc. has been a valued source of information and understanding for 200 years; helping people around the world meet their needs and fulfill their aspirations. Since 1901, Wiley and its acquired companies have published the works of more than 350 Nobel laureates in all categories: Literature, Economics, Physiology/Medicine, Physics, Chemistry, and Peace.
The Company’s Web site can be accessed at http://www.wiley.com.