Revenue Performance - Revenue for the three months ended October 31, 2023, decreased by $22.0 million, or 4%, compared to the prior year, with Adjusted Revenue decreasing by 2% on a constant currency basis [181]. - Revenue for the three months ended October 31, 2023, decreased by $17.6 million, or 17%, compared to the prior year, with placements declining by 40% and enrollments by 3% [220]. - For the six months ended October 31, 2023, consolidated revenue decreased by $58.6 million, or 6%, with Adjusted Revenue down 5% on a constant currency basis [225]. - Research revenue decreased by $13.7 million, or 5%, for the three months ended October 31, 2023, primarily due to the impact of the Hindawi publishing disruption [214]. - Research revenue decreased by $30.8 million, or 6%, for the six months ended October 31, 2023, compared to the prior year, with a constant currency decrease of 7% [258][259]. - Learning revenue increased by $9.3 million, or 7%, for the three months ended October 31, 2023, driven by growth in digital courseware and improved channel environment [217]. - Learning revenue was flat at $258.3 million for the six months ended October 31, 2023, compared to $259.3 million in 2022, with a constant currency decrease of 1% [261][262]. Operating Income and Expenses - Consolidated US GAAP Operating Income was $46.2 million, a decrease of 19% compared to the prior year, impacted by impairment charges of $51.9 million and restructuring charges totaling $25.1 million [185]. - Operating income for the six months ended October 31, 2023, decreased by $10.6 million, or 26%, primarily due to a decrease in revenue and goodwill impairment [239]. - Operating and administrative expenses were flat compared to the prior year, with a 2% decrease on a constant currency basis [186]. - Corporate expenses for the three months ended October 31, 2023, increased by $6.7 million, or 13%, primarily due to higher employee incentive compensation [223]. Impairment and Restructuring - The company recorded a pretax impairment charge of $51.9 million for assets held-for-sale, including $34.8 million for University Services and $17.1 million for CrossKnowledge, during the three months ended October 31, 2023 [200]. - The company recorded a pretax impairment of goodwill of $26.7 million for the six months ended October 31, 2023, due to adverse market conditions [231]. - The restructuring program aims to streamline operations and focus on profitable businesses, with a reduction in real estate square footage occupancy by approximately 28% overall [188]. - The company anticipates ongoing restructuring charges related to its Global Restructuring Program, which recorded pretax charges of $36.5 million for the six months ended October 31, 2023 [235]. Earnings and Tax Rates - US GAAP (Loss) Income Before Taxes for the three months ended October 31, 2023 was $(22,030) compared to $48,330 for the same period in 2022 [202]. - Non-GAAP Adjusted Income Before Taxes decreased to $52,913 for the three months ended October 31, 2023, down from $72,895 in the prior year [202]. - The US GAAP effective tax rate for the three months ended October 31, 2023 was 11.7%, down from 21.0% in the prior year, primarily due to held-for-sale impairments and US tax incentives [205]. - For the six months ended October 31, 2023, the US GAAP (Loss) Income Before Taxes was $(128.8) million, compared to $24.9 million in 2022, reflecting a significant decline [249]. - Non-GAAP Adjusted Income Before Taxes for the same period was $72.6 million, down from $106.6 million in 2022, indicating a decrease of approximately 32% [249]. - The US GAAP Effective Tax Rate decreased to 13.2% for the six months ended October 31, 2023, from 18.4% in 2022, primarily due to tax benefits from goodwill impairment [250][252]. Cash Flow and Debt - As of October 31, 2023, the company had cash and cash equivalents of $99.5 million, with approximately $97.3 million, or 98%, located outside the US [274]. - The company had approximately $942.6 million of debt outstanding and $552.7 million of unused borrowing capacity under its credit facilities as of October 31, 2023 [276]. - Net cash used in operating activities for the six months ended October 31, 2023 was $83.5 million, compared to $76.2 million in the prior year [278]. - Net cash used in investing activities increased to $51.9 million, primarily due to acquisitions of publication rights and technology [286]. - Net cash provided by financing activities was $129.7 million, a decrease from $151.6 million in the prior year, mainly due to reduced long-term debt borrowings [287]. Foreign Exchange and Inventory - The company reported foreign exchange transaction losses of $(2.4) million for the three months ended October 31, 2023, primarily due to losses on intercompany accounts [198]. - Foreign currency translation losses for the three and six months ended October 31, 2023, were approximately $(33.9) million and $(22.7) million, respectively, primarily due to fluctuations in the US dollar against the British pound sterling and euro [294]. - As of October 31, 2023, the company reported an increase in inventories to $7,603 million from $6,923 million as of April 30, 2023 [298]. Outlook and Projections - The company reaffirms its Fiscal Year 2024 outlook for Adjusted Revenue between $1,580 million to $1,630 million and Adjusted EBITDA between $305 million to $330 million [269]. - Adjusted EPS is projected to be between $2.05 to $2.40, reflecting lower adjusted operating income and higher interest expense [272]. - The company expects Hindawi revenue to decline by $35 million to $40 million for fiscal year 2024, with recovery anticipated in fiscal year 2025 [259].
John Wiley & Sons(WLYB) - 2024 Q2 - Quarterly Report