Revenue Performance - For the three months ended July 31, 2024, consolidated revenue was $403.8 million, a decrease of 10% compared to the prior year, while adjusted revenue increased by 6% to $389.6 million on a constant currency basis [129][130]. - The company generated over 83% of its revenue from digital products and services for the year ended April 30, 2024, with 48% of revenue being recurring [124]. - Total Learning Revenue increased by $15.0 million, or 14%, compared to the prior year, driven by a $21 million content rights project for training GenAI models [165]. - Revenue for Held for Sale or Sold decreased by $69.7 million, or 83%, due to the sale of University Services and Wiley Edge businesses [169]. Profitability and Income - The operating income for the same period was $29.0 million, a significant improvement from the prior year operating loss of $16.4 million [129][139]. - Adjusted EBITDA for the three months ended July 31, 2024, was $72.6 million, reflecting a 22% increase compared to the prior year [129][142]. - Adjusted operating income increased by 83% on a constant currency basis compared to the prior year, driven by higher adjusted revenue [139]. - The company reported a diluted loss per share of $(0.03) for the three months ended July 31, 2024, a significant improvement from a loss of $(1.67) per share in the prior year [158]. - Non-GAAP Adjusted Income Before Taxes for the three months ended July 31, 2024, was $33.97 million, compared to $19.65 million in the prior year [153]. - The company’s Adjusted EPS increased by 74% on a constant currency basis, primarily due to an increase in Adjusted Operating Income [159]. Cost Management - Cost of sales decreased by 30% to $109.2 million, primarily due to the sale of non-core businesses, including University Services and Wiley Edge [132]. - The Global Restructuring Program is expected to yield annualized cost savings of approximately $75 million, with $70 million anticipated to be realized in the current fiscal year [136]. - Adjusted Corporate Expenses increased by 2% on a constant currency basis, mainly due to higher technology-related costs [171]. - Adjusted EBITDA rose by 60% on a constant currency basis, primarily due to revenue performance and reduced employee costs following restructuring [166]. Impairments and Charges - The company recorded a goodwill impairment of $26.7 million for the three months ended July 31, 2023, impacting prior year results [134]. - The company recognized cumulative impairment charges of $19.4 million related to the sale of Wiley Edge in the year ended April 30, 2024 [148]. - As of July 31, 2024, the total impairment charge for CrossKnowledge was $51.0 million, including a reduction of $4.4 million in the three months ended July 31, 2024 [150]. Cash Flow and Financing - Free cash flow less product development spending was $(106.6) million for the three months ended July 31, 2024, compared to $(106.2) million in the prior year [179]. - Net cash used in operating activities was $(88.7) million for the three months ended July 31, 2024, compared to $(82.3) million in the prior year [178]. - Net cash used in investing activities was $23.8 million for the three months ended July 31, 2024, a decrease from $25.7 million in the prior year [185]. - Net cash provided by financing activities decreased to $101.6 million for the three months ended July 31, 2024, from $105.8 million in the prior year, primarily due to a $2.5 million increase in cash used for share repurchases and a $1.7 million decrease in net borrowings [186]. - The company had approximately $918.6 million of debt outstanding as of July 31, 2024, with $388.1 million of unused borrowing capacity [176]. Tax and Interest - Interest expense for the three months ended July 31, 2024, was $12.8 million, an increase from $11.3 million in the prior year due to a higher effective interest rate [143]. - The US GAAP effective tax rate for the three months ended July 31, 2024, was 106.2%, significantly higher than 13.5% for the same period in 2023, primarily due to valuation allowance on deferred tax assets [156]. Foreign Exchange and Market Impact - The company experienced foreign exchange transaction losses of $1.6 million for the three months ended July 31, 2023, primarily due to changes in foreign exchange rates [145]. - Foreign currency translation gains were approximately $15.0 million for the three months ended July 31, 2024, compared to $11.2 million in the prior year, primarily due to fluctuations in the US dollar relative to the British pound sterling [191]. Inventory and Sales Returns - The increase in inventories was $7,578,000 as of July 31, 2024, down from $7,833,000 in April 2024 [194]. - Print book sales return reserve net liability balance decreased to $13,480,000 from $14,448,000 in the previous quarter [194]. - Estimated allowance for print book sales returns could affect net income by approximately $0.6 million with a one percent change in the estimated sales return rate [194]. Shareholder Returns - Quarterly dividend increased to $1.41 per share annualized compared to $1.40 per share annualized in the previous year [186]. - Class A shares repurchased totaled 295,000 at an average price of $42.34, compared to 301,000 shares at an average price of $33.25 in the prior year [186].
John Wiley & Sons(WLYB) - 2025 Q1 - Quarterly Report