John Wiley & Sons(US:WLY)2021-12-08 20:08Financial Performance - Consolidated revenue for the three months ended October 31, 2021 was $533 million, representing a 9% increase compared to the prior year[141] - Adjusted EBITDA for the same period was $127 million, reflecting a 7% increase year-over-year[141] - Total revenue for the six months ended October 31, 2021, increased by $99.1 million, or 11%, reaching $1.0 billion[180] - For the six months ended October 31, 2021, the company reported a Non-GAAP Adjusted EBITDA of $222.4 million, an increase from $202.0 million in the prior year, representing a growth of approximately 10%[189] - Revenue from Research Publishing & Platforms increased by $57.8 million, or 12%, to $549.9 million for the six months ended October 31, 2021, with a constant currency increase of 10%[204] - The company experienced a 7% increase in total Academic & Professional Learning revenue, reaching $315.8 million, with a constant currency increase of 5%[207] - Education Services revenue increased by $21.8 million, or 16%, compared to the prior year, with a constant currency increase of 14%[212] Expenses and Costs - Cost of sales increased by $19.9 million, or 13%, primarily due to higher employee costs in the Education Services segment[144] - Operating and administrative expenses rose by $17 million, or 7%, driven by increased editorial, advertising, and technology costs[145] - Amortization of intangible assets increased by $4.3 million, or 25%, primarily due to the Hindawi acquisition[148] - Cost of sales for the same period increased by $41.1 million, or 14%, primarily due to higher employee costs in Education Services[182] - Corporate expenses rose by $3.4 million, or 8%, totaling $46.1 million, mainly due to increased employee-related costs[178] - Adjusted EBITDA for Education Services decreased by 35%, totaling $9.5 million, attributed to higher employee-related costs[176] Earnings and Taxation - Diluted EPS for the three months ended October 31, 2021 was $0.99, down from $1.22 in the prior year, largely due to a higher provision for income taxes[160] - The effective tax rate for the three months ended October 31, 2021 was 20.7%, compared to 0.1% in the same period of 2020[159] - The diluted EPS for the six months ended October 31, 2021, was $1.24, down from $1.51 in the prior year, primarily due to a higher provision for income taxes[200] - The US GAAP effective tax rate for the six months ended October 31, 2021, was 39.1%, significantly higher than 13.7% in the prior year, influenced by an increase in the UK statutory tax rate[197] - The US GAAP effective tax rate for the fiscal year 2021 was 39.1%, while the non-GAAP adjusted effective tax rate was 21.6%[222] Acquisitions and Investments - The company completed the acquisition of certain assets of J&J Editorial Services, LLC for $12 million on October 1, 2021, enhancing its Partner Solutions offerings[141] - Amortization of intangible assets increased by $8.6 million, or 25%, totaling $42.6 million, mainly due to the Hindawi acquisition[185] - The company experienced a net cash used in investing activities of $62.6 million for the six months ended October 31, 2021, primarily due to acquisitions and product development spending[240] Future Outlook - For Fiscal Year 2022, the company expects revenue between $2.07 billion and $2.1 billion, reflecting mid-to-high single-digit growth[218] - Adjusted EBITDA outlook for Fiscal Year 2022 is projected between $415 million and $435 million, with profit gains tempered by growth investments[218] - Adjusted EPS is expected to range from $4.00 to $4.25, excluding non-cash amortization of acquired intangible assets totaling $1.20 per share[218] - Free Cash Flow is anticipated to be between $200 million and $220 million, facing headwinds from higher capital expenditures and taxes[218] Shareholder Actions - Wiley increased its quarterly dividend to shareholders to $1.38 per share annualized, up from $1.37 per share annualized[243] - For the six months ended October 31, 2021, Wiley repurchased 312,000 shares of Class A and 1,000 shares of Class B common stock at an average price of $55.51[243] Cash Flow and Debt - As of October 31, 2021, the company had cash and cash equivalents of $100.9 million, with approximately 95% located outside the US[227] - The company had approximately $1,045.0 million of debt outstanding as of October 31, 2021, with $435.3 million of unused borrowing capacity under its credit facilities[229] - Net cash used in operating activities for the six months ended October 31, 2021, was $(75.6) million, a slight improvement from $(76.6) million in the prior year[231] - Net cash provided by financing activities increased to $147.0 million for the six months ended October 31, 2021, compared to $18.6 million in the same period of the previous year[242] Market and Customer Insights - Subscription agents account for approximately 20% of total annual consolidated revenue, with no single group accounting for more than 10%[254] - The top 10 book customers account for approximately 13% of total consolidated revenue and approximately 29% of accounts receivable at October 31, 2021[255] - Many customers have been adversely impacted by COVID-19, leading to expected delays in payments due to cash conservation behaviors[256]