HOBOKEN, N.J.--(BUSINESS WIRE)--Sep 6, 2018--John Wiley & Sons, Inc. (NYSE:JWA) (NYSE:JWB), a global research communications and education company, today announced results for the first quarter ended July 31, 2018.

Reported results (GAAP): Revenue of $411 million (-$1 million vs. prior year), Operating Income of $36 million (+$24 million) and EPS of $0.45 (+$0.29 primarily due to restructuring charges in the prior year) Non-GAAP results (constant currency): Revenue (-1%), Adjusted Operating Income (-27%) and Adjusted EPS (-29%) due to investments in growth initiatives and technology

MANAGEMENT COMMENTARY “First quarter performance was consistent with our expectations,” said Brian Napack, Wiley’s President and CEO. “We saw positive underlying developments across our research and education businesses. In research, we saw growth in article submissions, publication, and usage. Our share of journal citations continued to rise, and our share of research article distribution for the industry continued to grow through our Atypon platform. In education, our services business added two major university partners in the UK and extended a long-term US partnership in the quarter and another more recently, and we received strong customer response to our new WileyPLUS courseware platform. We also welcomed a new Chief Strategy Officer to the leadership team, continued to build out editorial and marketing footprints for China and India, and continued to develop important new partnerships and distribution models in both education and research.”

FINANCIAL SUMMARY Wiley provides non-GAAP financial measures and performance results such as “Adjusted EPS,” “Adjusted Operating Income,” “Adjusted CTP,” “Free Cash Flow less Product Development Spending,” and results on a Constant Currency basis to assess underlying business performance and trends. Management believes non-GAAP financial measures, which exclude the impact of restructuring charges and credits and certain other items, provide for a more comparable basis to analyze operating results and earnings. See the reconciliations of non-GAAP financial measures and explanations of the uses of non-GAAP measures in the supplementary information accompanying this press release.

Wiley recorded foreign currency variances in the quarter of $2.4 million favorable in revenue, $0.5 million unfavorable in operating income, and $0.01 favorable in EPS.

Revenue reflected steady momentum in Research (+1% reported, 0% constant currency) and growth in Solutions (+8% reported, +7% constant currency), offset by a decline in Publishing (-5% reported and constant currency). Research segment results were driven by continued double-digit growth in Open Access (+22%), which offset a modest decline in Journal Subscriptions mainly due to timing of publications.Publishing segment performance reflected growth in STM and Professional Publishing (+3%) offset by a decline in Education Publishing (-16%).Solutions segment growth included higher revenue in Education Services (+11%), Professional Assessment (+6%) and Corporate Learning (+2%). GAAP Operating Income increase reflected the timing of restructuring charges and credits, with a $6.1 million restructuring credit this period and a $25.7 million restructuring charge in the prior year period. Adjusted Operating Income declined mainly due to investment in growth initiatives and technology. Research CTP declined 6% on a reported basis and 13% on an adjusted basis at constant currency. Performance reflected investments in editorial and marketing resources to support increased journal publishing, and to a lesser extent, higher investment in technology.Publishing CTP increased substantially on a reported basis due to the timing of restructuring credits and charges, but declined 16% on an adjusted basis at constant currency due to lower revenue.Solutions CTP grew to $3.2 million on a reported basis from a loss of $2.0 million in the prior year. On an adjusted basis at constant currency, Solutions CTP grew to $3.0 million from $0.8 million due to higher revenue.Corporate Expenses decreased 25% on a reported basis due to the timing of restructuring credits and charges, but increased 6% on an adjusted basis at constant currency primarily due to professional fees associated with strategic planning. GAAP EPS growth reflected higher reported operating income and lower foreign exchange losses, which offset a higher effective tax rate. Adjusted EPS decline was primarily due to lower adjusted operating income. Net Cash Used in Operating Activities was $149.5 million compared to a net use of $81.2 million in the prior year period, primarily due to timing swings in working capital. Free Cash Flow less Product Development Spending was a use of $169.5 million compared to a use of $117.2 million in prior year primarily attributable to higher cash used in operating activities. Cash flow from operations is seasonally a use of cash in the first half of Wiley’s fiscal year principally due to the timing of collections for annual journal subscriptions. Capital expenditures, including Technology, Property, and Equipment and Product development spending, declined $16.0 million to $20.0 million due to the completion of Wiley’s headquarter renovations, an ERP release for journal subscriptions, and reporting changes from the adoption of ASC 606. Shareholder Return: In June, Wiley raised its annual dividend for the 25 th consecutive year to $0.33 per quarter (+3%). For the quarter, the Company utilized $19 million of cash for dividends and approximately $8 million for share repurchases with an average per share cost of $63.48.

FISCAL YEAR 2019 OUTLOOK The Company reaffirms its fiscal 2019 guidance.

Wiley anticipates low-single digit Revenue growth in Research and Solutions offset by a low-single digit Revenue decline in Publishing. Adjusted EPS is expected to decline primarily due to increased investment in revenue growth initiatives, particularly in Research and Education Services. Cash Provided by Operating Activities reflects the impact of growth investments and substantially lower gains in working capital. In addition, implementation of ASC 606 will move approximately $10 million of spending from Capital Expenditures to Cash from Operating Activities. Capital Expenditures expected to decline modestly with the completion of the Company’s headquarters transformation. Increased investment is expected in areas of product development and business optimization. Implementation of ASC 606 will move approximately $10 million of spending from Capital Expenditures to Cash from Operating Activities. Effective tax rate for the year is expected to be approximately 23-24%.

EARNINGS CONFERENCE CALL Scheduled for today, September 6 at 10:00 a.m. (ET). Access the webcast on Wiley.com, at https://www.wiley.com/en-us/investors. U.S. callers, please dial 888-394-8218 and enter the participant code 9097434#. International callers, please dial (323) 701-0225 and enter the participant code 9097434#.

ABOUT WILEY Wiley, a global research and education company, helps people and organizations develop the skills and knowledge they need to succeed. Our online scientific, technical, medical, and scholarly journals, combined with our digital learning, assessment and certification solutions help universities, academic societies, businesses, governments and individuals increase the academic and professional impact of their work. For more than 200 years, we have delivered consistent performance to our stakeholders. The Company's website can be accessed at  www.wiley.com.

FORWARD-LOOKING STATEMENTS This release contains certain forward-looking statements concerning the Company's Fiscal Year 2019 Outlook, operations, performance, and financial condition. Reliance should not be placed on forward-looking statements, as actual results may differ materially from those in any forward-looking statements. Any such forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to uncertainties and contingencies, many of which are beyond the control of the Company, and are subject to change based on many important factors. Such factors include, but are not limited to (i) the level of investment in new technologies and products; (ii) subscriber renewal rates for the Company's journals; (iii) the financial stability and liquidity of journal subscription agents; (iv) the consolidation of book wholesalers and retail accounts; (v) the market position and financial stability of key online retailers; (vi) the seasonal nature of the Company's educational business and the impact of the used book market; (vii) worldwide economic and political conditions; (viii) the Company's ability to protect its copyrights and other intellectual property worldwide (ix) the ability of the Company to successfully integrate acquired operations and realize expected opportunities and (x) other factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any such forward-looking statements to reflect subsequent events or circumstances.

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