Financial Performance - Revenue for the three months ended July 31, 2023, decreased by $36.6 million, or 7%, compared to the prior year, with Adjusted Revenue of $367.1 million, down 8% on a constant currency basis [157][158]. - Operating loss for the same period was $16.4 million, compared to a loss of $17.0 million in the prior year, primarily due to lower operating and administrative expenses [160][172]. - Adjusted EBITDA for the three months ended July 31, 2023, was $59.7 million, down 10% compared to the prior year [160][177]. - Adjusted EBITDA decreased by 18% on a constant currency basis compared to the prior year, primarily due to revenue performance, while excluding Hindawi, it increased by 1% [194]. - Adjusted contribution to profit for the Learning segment increased significantly, with Adjusted EBITDA margin rising to 19.4% from 14.9% [195]. - Adjusted EPS for the three months ended July 31, 2023, was $0.27, down from $0.46 in the prior year, reflecting a decrease of 37% on a constant currency basis [190]. Expenses and Cost Management - Operating and administrative expenses decreased by $27.0 million, or 10%, compared to the prior year, reflecting lower employee costs from restructuring actions [161]. - Corporate expenses decreased by $15.3 million, or 24%, compared to the prior year, with a 15% decrease on a constant currency basis, mainly due to lower employee and occupancy costs [203]. - The company anticipates $10 million in in-year savings from restructuring actions taken in the first quarter, with annualized savings expected to reach approximately $12 million [168]. Impairments and Charges - The company recorded a goodwill impairment of $26.7 million, with $11.4 million attributed to University Services and $15.3 million to CrossKnowledge [162][164]. - A pretax impairment charge of $73.9 million was recorded for assets held-for-sale, including $40.6 million for University Services and $33.3 million for CrossKnowledge [181]. Revenue Breakdown - Over 80% of Wiley's revenue for fiscal year 2023 was generated by digital products, with 50% of revenue being recurring [151]. - Research revenue decreased by $17.1 million, or 6%, for the three months ended July 31, 2023, with a constant currency decrease of 7% primarily due to the Hindawi publishing disruption [192]. - Learning revenue decreased by $10.3 million, or 9%, for the three months ended July 31, 2023, with a constant currency decrease of 9% attributed to lower Academic print sales [196]. - Revenue for Held for Sale or Sold decreased by $9.1 million, or 10%, compared to the prior year, attributed to business dispositions and declines in placement revenues [200]. Cash Flow and Financing - Net cash used in operating activities for the three months ended July 31, 2023, was $(82.3) million, an improvement from $(89.9) million in the prior year [214]. - Net cash used in investing activities increased to $25.7 million from $21.8 million in the prior year, primarily due to higher technology and equipment additions [222]. - Net cash provided by financing activities was $105.8 million for the three months ended July 31, 2023, compared to $118.0 million in the prior year, mainly due to decreased long-term debt borrowings [223]. - The company had cash and cash equivalents of $107.2 million as of July 31, 2023, with approximately $104.8 million, or 98%, located outside the US [210]. Debt and Interest - As of July 31, 2023, the company had approximately $895.9 million of debt outstanding, with $600.6 million of unused borrowing capacity under its credit facilities [212]. - Interest expense increased to $11.3 million for the three months ended July 31, 2023, compared to $6.3 million in the prior year, due to a higher weighted average effective interest rate [178]. - As of July 31, 2023, the company has $395.9 million of unhedged variable rate debt, with a hypothetical one percent change in interest rates affecting net income and cash flow by approximately $3.0 million [228]. Foreign Exchange and Risk Management - Foreign exchange transaction losses amounted to $1.6 million for the three months ended July 31, 2023, primarily due to changes in average foreign exchange rates compared to the US dollar [179]. - During the three months ended July 31, 2023, the company recorded foreign currency translation gains of approximately $11.2 million, primarily due to fluctuations of the US dollar relative to the British pound sterling [230]. - The company is primarily exposed to fluctuations in the British pound sterling, euros, Canadian and Australian dollars, and certain currencies in Asia [229]. - The company may use derivative financial instruments to hedge against specific transactions, including foreign currency forward contracts [231]. Future Outlook - The company is divesting non-core businesses, including University Services, Wiley Edge, and CrossKnowledge, with completion expected during fiscal year 2024 [152]. - For fiscal year 2024, the company projects Adjusted Revenue to be between $1,580 million and $1,630 million, with Adjusted EBITDA expected to be between $305 million and $330 million [205]. - The company expects Hindawi revenue to decline to $20 million in fiscal year 2024, with recovery anticipated by fiscal year 2026 [192]. Shareholder Returns - The company increased its quarterly dividend to shareholders to $1.40 per share annualized, up from $1.39 per share in the prior year [224].
John Wiley & Sons(WLYB) - 2024 Q1 - Quarterly Report