June 22 – June 29, 2006 Edition

John Wiley & Sons
Hits Billion-Dollar Mark
Reports Record Year

Hoboken, NJ/06/15/06—John Wiley & Sons, Inc. (NYSE: JWa) (NYSE: JWb) has announced record revenue, operating income, and EPS for fiscal year 2006. Full-year revenue increased 7% to $1.0 billion, or 8% excluding foreign currency effects. Operating income of $153 million advanced 8%, or 9% excluding foreign currency effects. Earnings per diluted share of $1.61 rose 10%, excluding certain favorable tax adjustments noted below. Including the tax adjustments, earnings per diluted share for the year rose 37% to $1.85 per diluted share. All of Wiley’s businesses around the world contributed to the year-on-year revenue and operating income growth.

“As Wiley approaches its bicentennial in 2007, I am proud to report that the Company reached another significant milestone in fiscal year 2006, revenue of $1 billion. This milestone and record levels of operating income and EPS, reflect Wiley’s competitive strengths­our highly regarded global brands and must-have content; our ability to adapt and innovate to serve customers better; and an effective blend of long-term vision and operational excellence,” said William J. Pesce, President and Chief Executive Officer.

“Wiley’s greatest strength is our unique culture, which enables us to attract and retain an extraordinary team of committed and creative colleagues. In a recent survey to which 97% of our colleagues around the world responded, they identified commitment, trust and respect, and teamwork as characteristics that distinguish Wiley. In addition, for the second consecutive year, Wiley was recognized by FORTUNE magazine in its list of 100 Best Companies to Work For,” he continued.

Mr. Pesce concluded, “We are pleased with our performance in fiscal year 2006 and well positioned to capitalize on growth opportunities. Based on leading indicators and market conditions, we anticipate fiscal year 2007 revenue growth in the mid-single digits and EPS growth in the high single digits, excluding tax adjustments.”

In fiscal year 2006, the Company generated $150 million in free cash flow. During the year, free cash flow of $109 million was used to acquire 2.8 million shares of Class A common stock; for the acquisition of publishing assets in several transactions aggregating to $31 million; for the payment of $21 million in cash dividends to shareholders; and $33 million for debt repayment.

The Company’s management evaluates performance based on several measures, including non-GAAP measure of free cash flow, as presented in the attached financial schedules. The Company believes free cash flow is an important measure of the financial strength of its business. Since free cash flow is not calculated in accordance with GAAP, it should not be considered as a substitute for other GAAP measures as an indicator of operating performance.

For the fourth quarter, revenue increased over the previous year by 10% to $267 million, or 12%, excluding foreign currency effects. Operating income improved 14% to $22.9 million, or 16% adjusted for foreign currency. All of Wiley’s businesses contributed to the strong fourth quarter. Fully diluted earnings per share for the fourth quarter advanced 25% to $0.25, excluding the tax adjustment noted below.

Segment Highlights

Professional/Trade (P/T): Revenue growth of Wiley’s U.S. P/T business accelerated throughout fiscal year 2006, culminating in a strong fourth quarter. Revenue for the full year advanced 9% to $380 million, while the fourth quarter’s revenue reached a record $106 million, 13% over the same period during the previous year. Virtually all of P/T’s publishing categories and sales channels contributed to the strong results, with standout performances by the technology, business, finance and architectural programs, as well as global rights and website advertising. P/T’s finance and leadership programs, as well as the Sybex acquisition and the popularity of the Sudoku for Dummies series, helped to deliver the record-setting results.

Direct contribution to profit was up 5% for the year and 1% for the quarter. The improvement in top-line results was partially offset by higher inventory costs and the timing of performance-based compensation in the fourth quarter.

A number of successful titles led the way, notably The Little Book That Beats the Market by Joel Greenblatt; Sudoku For Dummies, Volumes 1-3 by Andrew Herron and Edmund James; Weight Watcher’s New Complete Cookbook; Betty Crocker Cookbook: Everything You Need to Know to Cook Today; and Hedgehogging by Barton Biggs. Several perennial favorites and new titles also made significant contributions, including Five Dysfunctions of a Team by Patrick Lencioni; his new title, Silos, Politics, and Turf Wars; Automatic Wealth by Michael Masterson; and The Party of the Century: The Fabulous Story of Truman Capote and His Black and White Ball by Deborah Davis. A new series, Frommer’s Day by Day, and the first Podcast, successfully extended this key brand.

Media attention was particularly focused on a number of titles tied to current affairs (Bird Flu by Marc Siegel and The Global Class War by Jeff Faux); popular products (The Bear Necessities of Business: Building a Company with Heart by Maxine Clark and Amy Joyner at the flagship Build-a-Bear store); or movies (Party of the Century by Deborah Davis which capitalized on the success of the movie, Capote, as well as well-known authors (The Poker Face of Wall Street, Aaron Brown and Hedgehogging by Barton Biggs). Aggressive marketing kept Wiley brands and titles in the public eye, including a major advertising campaign for Little Book That Beats the Market in The Wall Street Journal and Bloomberg radio; the annual For Dummies month promotions; and a pay-per-view webcast with, featuring author Pat Lencioni.

More than 800 articles were adapted from the For Dummies text for licensing with Yahoo Tech, a new website that provides consumers with plain-English advice and information on technology. Another agreement with Microsoft was signed to license content from seven of Wiley’s top cookbooks, including How to Cook Everything by Mark Bittman, Cooking at Home with The Culinary Institute of America, and Mr. Boston: Official Bartender’s and Party Guide by Mr. Boston, Anthony Giglio and Steven McDonald.

Mark Bittman received a James Beard Foundation Media Broadcast Award in the category National Television Food Show for his work as host of the PBS series, How to Cook Everything, which is tied in with the Wiley title of the same name. The Handbook of Human Resources Management in Government by Stephen Condrey won “Best Public Sector Human Resources Management Book” award of the American Society for Public Administration. Lee Shulman, President of the Carnegie Foundation for the Advancement of Teaching, won the prestigious Grawemeyer Award in Education for 2006 for The Wisdom of Practice.

Acquisitions completed earlier in the fiscal year included substantially all the publishing assets of Sybex Inc., a global publisher of technology titles.

Scientific, Technical, and Medical (STM): Wiley’s U.S. STM business delivered consistently excellent results throughout fiscal year 2006, growing revenue over prior year by 8% to $206 million. Direct contribution to profit also rose by 8% for the year. Fourth quarter revenue of $58 million advanced 7% over the previous year’s fourth quarter. Direct contribution to profit in the fourth quarter increased by 1% as higher revenue was partially offset by higher selling and marketing costs principally due to timing.

Subscription and non-subscription revenue from journal backfiles, advertising, and commercial reprints contributed significantly to these results. The reference book program completed its second year of strong growth driven by strong title output and global market strength. STM also benefited from recent acquisitions of Dialysis & Transplantation, a medical journal and InfoPOEMs, a provider of evidence-based medicine content.

Wiley InterScience, the Company’s online service, reached a milestone midway through the fiscal year: more than one million journal articles are now available online. The value of this growing body of literature to the global research community can be quantified in the concurrent increase in the number of users, as well as the number of manuscripts submitted for publication. In fiscal year 2006, U.S. STM received approximately 9% more journal manuscripts and published 8% more journal pages than the previous year. During the fourth quarter, over 16 million visits to Wiley InterScience were recorded, representing a 30% increase over the same period in the previous year. In addition, more people gained access to Wiley InterScience by taking advantage of alternate purchasing programs, such as Pay-Per-View, which began offering individual article sales from the growing backfile collection during this year. At the end of the fiscal year, Wiley participated with Microsoft in the launch of Windows Live Academic Search pilot, which improves the search capabilities of journal content from Wiley and ten other major STM publishers.

Important publications during the fourth quarter include the inaugural issue of a pharmaceutical-company sponsored Chinese-language digest version of Hepatology; the Physics and Astronomy Backfile, which includes the oldest journal published by Wiley, Annalen der Physik, founded in 1799; the first two issues of the Journal of Hospital Medicine; and a refurbished Annals of Neurology. Also released during the quarter were the new 18th edition of the Merck Manual; the 8th edition of The Wiley Registry of Mass Spectral Data; and a wide array of single and multi-volume reference works.

During the fourth quarter, the Company reached an agreement with the Institute of Electrical and Electronics Engineers of Japan to publish a new English-language journal, IEEJ Transactions; extended its long-term publishing agreement for the Journal of Research in Science Teaching; and began publication of the Journal of Orthopedic Research in partnership with the Orthopedic Research Society.

Higher Education: Wiley’s U.S. Higher Education business increased 4% to $156 million in fiscal year 2006. Continuing to build on the strength experienced in the third quarter, fourth quarter revenue advanced 15% to $23 million compared to the previous year’s quarter. Higher Education’s direct contribution to profit for the year and quarter improved $2 million over the prior year periods.

The mathematics, life sciences, engineering and computer science programs performed extremely well during the quarter and year, with strong showings by Tortora/Principles of Anatomy and Physiology; Black/Microbiology; Voet/Fundamentals of Biochemistry; Hughes-Hallet/Calculus; Anton/Calculus; Munson/Fluid Mechanics; and Horstman/Big Java.

WileyPLUS continued to gain traction during fiscal year 2006, as more students and faculty around the world chose to use its customizable multi-format suite of content, teaching and learning tools to help them do homework, study for tests, assess coursework, and administer classes. During the fiscal year the number of adoptions and units sold worldwide increased significantly over the previous year.

Wiley has developed a wide array of products at varied price points. The Company is now offering over 50 titles in Wiley Desktop Editions, which are in downloadable e-text format, intended for students who want lower-priced versions of textbooks. Wiley began to produce Desktop Editions in partnership with VitalSource Technologies, Inc. during the second quarter and expects to nearly double the number of titles in the program by calendar year-end.

Soon after the end of the fiscal year, Wiley became Microsoft’s sole publishing partner worldwide for all Microsoft Official Academic Course (MOAC) materials. Microsoft and Wiley will collaborate on a new co-branded series of textbook and e-learning products for the higher education market, to be released under Wiley-Microsoft logos. Wiley will also assume responsibility for the sale of existing MOAC titles. The new series will offer topics covering Microsoft Windows Vista, Microsoft Office Systems 2007, and the Windows Server codenamed “Longhorn.” All titles will be marketed globally and available in several languages. With Microsoft’s position as the world’s leading software company and Wiley’s global presence in higher education, the alliance is an ideal strategic fit.

Earlier in the year, Higher Education extended its global alliance with the National Geographic Society to create new products sold exclusively with Wiley textbooks and WileyPLUS.

Europe: Fiscal year 2006 was another strong year for Wiley’s European-based companies, with revenues for the year advancing 9% over the prior year to $292 million, or 12% excluding foreign currency effects. Virtually all of Wiley Europe’s businesses, product lines, and markets contributed to the performance. Strong performance was exhibited in P/T and STM book publishing, as well as journals. Global sales from the Sudoku For Dummies series contributed to the increase in P/T revenue.

Revenue for the fourth quarter was $80 million, an increase over the prior year of 6%, or 11% excluding foreign currency effects. Direct contribution to profit was consistent with revenue growth for the quarter and year, both including and excluding foreign exchange effects.

Best-selling books included products as diverse as the second edition of Encyclopedia of Inorganic Chemistry, edited by R. Bruce King, and the enormously popular Sudoku For Dummies and Kakuro For Dummies. The power of the For Dummies brand was evidenced by the publication of a six-figure print run of a custom mini-book for the World Cup, Winning on Betfair For Dummies. The German For Dummies program published 51 new titles and 49 reprints during fiscal year 2006.

The expansion of Wiley Europe’s publishing portfolio has opened up new markets and customer groups. The technology channel saw strong growth throughout the year with a series of agreements with major telecommunications corporations. In February, the Company entered a popular new market with the acquisition of Fernhurst Books, a best-selling list of manuals and guides on sailing, boating, and other nautical sports. The first seven titles of the Securities and Investment Institute series published during fiscal year 2006.

Wiley Europe’s new journals, small, an interdisciplinary journal on nanoscience and nanotechnology embracing materials science, physics, chemistry and biosciences and the related engineering areas; ChemMedChem; and the Biotechnology Journal, all performed well. Chemistry-An Asian Journal, an alliance between Wiley-VCH, the German Chemical Society, and a number of the major Asian chemical societies, gained traction during the year as a number of new societies signed on, including The Singapore National Institute of Chemistry and the Chemical Society Located in Taipei.

The Cochrane Library, an evidence-based medicine collection available through Wiley InterScience, finished the year strongly reflecting Wiley’s ability to increase revenue through the Company’s multiple sales channels. To extend Wiley’s product offering in evidence-based medicine, Wiley Europe and Duodecim Medical Publications Limited of Helsinki, Finland announced an expanded agreement to grant Wiley the exclusive publishing, sales, and distribution rights of its English language version of Evidence-Based Medicine Guidelines (EBM Guidelines). The guidelines are designed to be read on small screens, and are available via the Internet and through Personal Digital Assistants (PDA) devices.

Asia, Australia, and Canada: Wiley’s revenue in Asia, Australia, and Canada advanced 14% over the previous year to $124 million, or 12% excluding foreign currency effects. Higher Education and School publishing in Australia and P/T sales in Asia and Canada drove the improvement over the prior year. Direct contribution to profit for the year increased 8%, or 3% excluding foreign currency effects. Revenue growth was partially offset by product mix in Canada and Asia. Fourth quarter revenue advanced 40% to $30 million, or 41% excluding foreign-currency effects. The timing of School sales in Australia and higher P/T sales in Canada and Asia contributed to the fourth quarter improvement.

Wiley Asia sustained growth across all product lines, particularly in India, Japan and China. Wiley Canada’s P/T performance was very strong and its Higher Education program was solid. In Australia, all three businesses delivered strong results.

At the end of the third quarter, Wiley Asia acquired the remaining outstanding shares of Wiley Dreamtech (India) Private LTD. The acquisition is an important step in the Company’s plans to grow Wiley’s presence in India, extending its sales and marketing reach and building local publishing capabilities in an important and rapidly growing market. Wiley acquired a majority interest in Dreamtech in 2001 as part of its highly successful acquisition of Hungry Minds, Inc.

Wiley Australia was once again named Secondary Publisher of the Year by the Australian Publishers Association and Higher Education Publisher of the Year by the Australian Campus Booksellers Association, for the 9th and 8th times, respectively, during the last decade. Wiley Australia was also awarded, for the fifth year in a row, the ‘Employer of Choice for Women’ citation by the Federal Government’s Equal Opportunity in the Workplace Agency. Wiley is the only publisher to earn this honor during the program’s entire five-year history.

Considerable success was achieved in Canada with the sale of WileyPLUS, demonstrating the product’s global appeal. The number of titles available with WileyPLUS more than doubled from fiscal year 2005, giving the sales force opportunity to sell it into more course areas. During fiscal year 2006, Wiley Canada added to its indigenous P/T program by becoming a key publisher in the regional real estate markets. Sales throughout the year in real estate investing, home inspection, property management, tax, and other subcategories were very strong, as the Company added a number of titles to its portfolio.