Wiley Reports First Quarter Fiscal 2022 Results

John Wiley & Sons, Inc. (NYSE:JWA) (NYSE:JWB), a global leader in research and education, today announced results for the first quarter ended July 31, 2021.

SUMMARY

GAAP Results: Revenue of $488 million (+13%), Operating Income of $41 million (+36%), and EPS of $0.24 (-17%)
Adjusted Results (at constant currency): Revenue of $488 million (+9%), Adjusted EBITDA of $95 million (+12%), and Adjusted EPS of $0.54 (+17%)
Dividend: 28th consecutive raise in annualized dividend to $1.38 per share

MANAGEMENT COMMENTARY “Wiley’s steady execution of growth strategies in open research, online education, and talent development drove another quarter of strong revenue and profit gains,” said Brian Napack, President and CEO. “Our strategies continue to be tightly aligned with accelerating long-term trends across academic and corporate markets, and we are well-positioned to drive social impact by enabling discovery, powering education and shaping workforces.”

FIRST QUARTER PERFORMANCE

GAAP Measures

Unaudited ($millions except for EPS)

Q1 2022

Q1 2021

Change

Revenue

$488.4

$431.3

+13%

Operating Income

$41.0

$30.0

+36%

Diluted EPS

$0.24

$0.29

(17%)

Non-GAAP Measures

Q1 2022

Q1 2021

Change Constant Currency

Revenue

$488.4

$431.3

+9%

Adjusted EBITDA

$95.3

$81.8

+12%

Adjusted EPS

$0.54

$0.42

+17%

Excluding acquisitions and currency impact, revenue rose 7% for the quarter. Wiley recorded a favorable FX variance of $16.7 million in Revenue, $3.7 million in Adjusted EBITDA, and $0.05 in Adjusted EPS.

Revenue

Research Publishing & Platforms rose 14% as reported, 10% at constant currency and 5% excluding acquisitions, driven by strong growth in open research, platforms and corporate sales.
Academic & Professional Learning grew 10% as reported and 7% at constant currency, driven by strong growth in digital courseware and professional publishing, accompanied by further recovery in corporate training.
Education Services increased 16% as reported and 13% at constant currency, driven by growth in university services (formerly OPM) and talent development (formerly mthree).

Adjusted EBITDA

Research Publishing & Platforms rose 12% at constant currency primarily driven by revenue growth.
Academic & Professional Learning rose 37% at constant currency, reflecting revenue growth and continued business optimization gains.
Education Services declined 21% at constant currency due to higher marketing costs and investments in growth initiatives.
Adjusted Corporate Expenses were up 18% mainly due to higher unallocated benefit costs.

EPS

GAAP EPS was $0.24 as compared to $0.29 in the prior year period, primarily reflecting non-cash deferred tax expense of $21 million arising from an increase in the UK corporate income tax rate from 19% to 25% effective April 2023.
Adjusted EPS of $0.54 was up 17% at constant currency, driven by higher adjusted EBITDA and a lower adjusted effective tax rate.

Adjusted EPS Change Going forward, Wiley’s Adjusted EPS metric will exclude the impact of certain non-cash items directly related to acquisitions, most notably the amortization of acquired intangible assets. The Company does not consider these non-cash items to be indicative of its ongoing operating performance. For the first quarter, under the new measurement, Adjusted EPS (excluding the impact of amortization of intangibles) was $0.85 compared to $0.67 in the prior year period. See the Adjusted EPS reconciliation table toward the end of this release for more information.

Balance Sheet, Cash Flow, and Capital Allocation

Net debt-to-EBITDA ratio (trailing twelve months) at quarter-end was 2.0, even with the year-ago period.
Net Cash Used in Operating Activities was $85 million compared to $121 million in the prior year period, with the $36 million improvement driven by higher cash earnings and favorable changes in working capital. Note, Wiley’s regular use of cash in the first half of the fiscal year is driven by the timing of cash collections for annual journal subscriptions, which are concentrated in the third and fourth fiscal quarters.
Free Cash Flow less Product Development Spending was a use of $108 million as compared to a use of $145 million in the prior year, an improvement of $37 million.
Dividends: In June, Wiley raised its dividend for the 28th consecutive year. The current quarterly dividend is equivalent to an annual dividend of $1.38 per share, an increase from $1.37 per share in Fiscal 2021.
Share Repurchases: The Company utilized approximately $7.4 million to repurchase approximately 130,000 shares at an average cost per share of $56.88.

FISCAL YEAR 2022 OUTLOOK The Company is reaffirming its full year outlook and adding the newly defined Adjusted EPS metric. Going forward, Wiley will discontinue reporting on the former Adjusted EPS metric.

Metric ($millions, except EPS)

Fiscal 2021

Fiscal 2022 Outlook

Revenue

$1,942

$2,070 to $2,100

Adjusted EBITDA

$419

$415 to $435

Adjusted EPS - former

$2.92

$2.80 to $3.05

Adjusted EPS - newly defined

$4.00

$4.00 to $4.25

Free Cash Flow

$257

$200 to $220

EARNINGS CONFERENCE CALL Scheduled for today, September 2 at 10:00 am (ET). Access webcast at investors.wiley.com. or directly at https://event.on24.com/wcc/r/3384264/798549EF00EC73C2803C99A64C083AD2. US callers, please dial (844) 418-0103 and enter the participant code 9996020#. International callers, please dial (236) 714-3019 and enter the participant code 9996020#.

ABOUT WILEY Wiley (NYSE:JWA) (NYSE:JWB) is a global leader in research and education, unlocking human potential by enabling discovery, powering education, and shaping workforces. For over 200 years, Wiley has fueled the world’s knowledge ecosystem. Today, our high-impact content, platforms, and services help researchers, learners, institutions, and corporations achieve their goals in an ever-changing world. Visit us at Wiley.com, Like us on Facebook and Follow us on Twitter and LinkedIn.

NON-GAAP FINANCIAL MEASURES Wiley provides non-GAAP financial measures and performance results such as “Adjusted EPS,” “EBITDA”, “Adjusted EBITDA,” “Adjusted Contribution to Profit,” “Adjusted Income before Taxes,” “Adjusted Income Tax Provision,” “Adjusted Effective Tax Rate,” “Free Cash Flow less Product Development Spending,” “organic revenue,” 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, and the impact of acquisitions provide a useful 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. We have not provided our 2022 outlook for the most directly comparable US GAAP financial measures, as they are not available without unreasonable effort due to the high variability, complexity, and low visibility with respect to certain items, including restructuring charges and credits, gains and losses on foreign currency, and other gains and losses. These items are uncertain, depend on various factors, and could be material to our consolidated results computed in accordance with US GAAP.

FORWARD-LOOKING STATEMENTS This release contains certain forward-looking statements concerning the Company's 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 by Wiley 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 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; (x) the Company’s ability to realize operating savings over time and in fiscal year 2022 in connection with our multi-year Business Optimization Program; (xi) the impact of COVID-19 on our operations, performance, and financial condition; and (xii) 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.

Category: All Corporate News

Category: Earnings Releases

JOHN WILEY & SONS, INC. SUPPLEMENTARY INFORMATION (1)(2) CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME (Dollars in thousands, except per share information) (unaudited)

Three Months Ended

July 31,

2021

2020

Revenue, net

488,388

431,326

Costs and expenses: Cost of sales

165,956

144,809

Operating and administrative expenses

260,589

237,369

Restructuring and related (credits) charges

(276

)

2,218

Amortization of intangible assets

21,151

16,891

Total costs and expenses

447,420

401,287

Operating income

40,968

30,039

As a % of revenue

8.4

7.0

Interest expense

(4,639

)

(4,614

)

Foreign exchange transaction gains (losses)

370

(82

)

Gain on sale of certain assets

3,750

Other income, net

3,553

4,391

Income before taxes

44,002

29,734

Provision for income taxes

30,172

13,400

Effective tax rate

68.6

45.1

Net income

13,830

16,334

As a % of revenue

2.8

3.8

Earnings per share Basic

0.25

0.29

Diluted

0.24

0.29

Weighted average number of common shares outstanding Basic

55,869

55,912

Diluted

56,599

56,193

Notes: (1) The supplementary information included in this press release for the three months ended July 31, 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission. (2) All amounts are approximate due to rounding. JOHN WILEY & SONS, INC. SUPPLEMENTARY INFORMATION (1) (2) RECONCILIATION OF US GAAP MEASURES to NON-GAAP MEASURES (unaudited) Reconciliation of US GAAP EPS to Non-GAAP Adjusted EPS

Three Months Ended

July 31,

2021

2020

US GAAP Earnings Per Share - Diluted

0.24

0.29

Adjustments: Restructuring and related (credits) charges

(0.01

)

0.03

Foreign exchange gains on intercompany transactions

(0.01

)

(0.02

)

Gain on sale of certain assets (A)

(0.05

)

Income tax adjustments (B)

0.37

0.12

Non-GAAP Adjusted Earnings Per Share - Diluted

0.54

0.42

Reconciliation of US GAAP Income Before Taxes to Non-GAAP Adjusted Income Before Taxes

Three Months Ended

(amounts in thousands)

July 31,

2021

2020

US GAAP Income Before Taxes

44,002

29,734

Pretax Impact of Adjustments: Restructuring and related (credits) charges

(276

)

2,218

Foreign exchange gains on intercompany transactions

(795

)

(1,569

)

Gain on sale of certain assets (A)

(3,750

)

Non-GAAP Adjusted Income Before Taxes

39,181

30,383

Reconciliation of US GAAP Income Tax Provision to Non-GAAP Adjusted Income Tax Provision,including our US GAAP Effective Tax Rate and our Non-GAAP Adjusted Effective Tax Rate US GAAP Income Tax Provision

30,172

13,400

Income Tax Impact of Adjustments (C): Restructuring and related (credits) charges

743

Foreign exchange gains on intercompany transactions

(101

)

(612

)

Gain on sale of certain assets (A)

(936

)

Income Tax Adjustments: Impact of increase in UK statutory rate on deferred tax balances (B)

(20,726

)

(6,689

)

Non-GAAP Adjusted Income Tax Provision

8,454

6,842

US GAAP Effective Tax Rate

68.6

45.1

Non-GAAP Adjusted Effective Tax Rate

21.6

22.5

Notes: (A) The gain on sale of certain assets is due to the sale of our world languages product portfolio which was included in our Academic & Professional Learning segment and resulted in a pretax gain of approximately $3.8 million during the three months ended July 31, 2021. (B) On June 10, 2021, the UK officially increased its corporate tax rate from 19% to 25% effective April 1, 2023. This resulted in a $20.7 million non-cash deferred tax expense from the re-measurement of the Company’s applicable UK net deferred tax liabilities during the three months ended July 31, 2021. During the first quarter of fiscal 2021, the UK officially enacted legislation that increased its statutory rate from 17% to 19%. This resulted in a $6.7 million non-cash deferred tax expense from the re-measurement of the Company’s applicable UK net deferred tax liabilities during the three months ended July 31, 2020. (C) For the three months ended July 31, 2021, substantially all of the tax impact was from deferred taxes. For the three months ended July 31, 2020, the tax impact was $0.2 million from current taxes offset by $0.1 million from deferred taxes. (1) See Explanation of Usage of Non-GAAP Performance Measures included in this supplementary information for additional details on the reasons why management believes presentation of each non-GAAP performance measure provides useful information to investors. The supplementary information included in this press release for the three months ended July 31, 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission. (2) All amounts are approximate due to rounding. JOHN WILEY & SONS, INC. SUPPLEMENTARY INFORMATION (1) (2) RECONCILIATION OF NON-GAAP ADJUSTED EPS - FROM PREVIOUSLY REPORTED TO NEWLY DEFINED (Dollars in thousands, except per share information) (unaudited)

Fiscal Year 2022

Fiscal Year 2021

Fiscal Year

2020

Non-GAAP Adjusted Income Before Taxes (Previously Reported)

39,181

30,383

70,664

48,334

58,385

207,765

173,119

Plus: Amortization of acquired intangible assets (A)

22,284

18,149

18,381

20,163

22,728

79,421

68,269

Non-GAAP Adjusted Income Before Taxes (Newly Defined)

61,465

48,532

89,045

68,497

81,113

287,186

241,388

Less: Non-GAAP Adjusted Income Tax Provision (Newly Defined)

13,297

11,140

19,107

14,974

15,909

61,131

53,995

Non-GAAP Adjusted Net Income (Newly Defined)

48,168

37,392

69,938

53,523

65,204

226,055

187,393

Non-GAAP Adjusted Earnings Per Share - Diluted (Newly Defined)

0.85

0.67

1.25

0.95

1.15

4.00

3.30

Non-GAAP Adjusted Earnings Per Share - Diluted (Previously Reported)

0.54

0.42

1.00

0.68

0.84

2.92

2.40

Weighted average number of common shares outstanding (shares in 000's) Diluted (B)

56,599

56,193

56,165

56,332

56,616

56,461

56,729

Reconciliation of US GAAP EPS to Non-GAAP Adjusted EPS

Fiscal Year 2022

Fiscal Year 2021

Fiscal Year

2020

US GAAP Earnings (Loss) Per Share - Diluted

0.24

0.29

1.22

0.39

0.73

2.63

(1.32

)

Adjustments: Restructuring and related (credits) charges

(0.01

)

0.03

0.02

0.28

0.12

0.44

0.43

Foreign exchange (gains) losses on intercompany transactions

(0.01

)

(0.02

)

0.01

(0.01

)

(0.02

)

0.02

Gain on sale of certain assets

(0.05

)

Impairment of goodwill

1.94

Impairment of Blackwell trade name

1.31

Impairment of developed technology intangible

0.04

Income tax adjustments

0.37

0.12

(0.25

)

(0.13

)

(0.03

)

EPS impact of using weighted-average dilutive shares for adjusted EPS calculation (B)

0.01

Non-GAAP Adjusted Earnings Per Share - Diluted (Previously Reported)

0.54

0.42

1.00

0.68

0.84

2.92

2.40

Amortization of acquired intangible assets

0.31

0.25

0.27

0.31

1.08

0.90

Non-GAAP Adjusted Earnings Per Share - Diluted (Newly Defined)

0.85

0.67

1.25

0.95

1.15

4.00

3.30

Reconciliation of US GAAP Income (Loss) Before Taxes to Non-GAAP Adjusted Income Before Taxes US GAAP Income (Loss) Before Taxes

44,002

29,734

68,513

27,392

50,273

175,912

(63,092

)

Pretax Impact of Adjustments: Restructuring and related (credits) charges

(276

)

2,218

1,920

20,675

8,497

33,310

32,607

Foreign exchange (gains) losses on intercompany transactions

(795

)

(1,569

)

231

267

(385

)

(1,457

)

1,256

Gain on sale of certain assets

(3,750

)

Impairment of goodwill

110,000

Impairment of Blackwell trade name

89,507

Impairment of developed technology intangible

2,841

Non-GAAP Adjusted Income Before Taxes (Previously Reported)

39,181

30,383

70,664

48,334

58,385

207,765

173,119

Amortization of acquired intangible assets (A)

22,284

18,149

18,381

20,163

22,728

79,421

68,269

Non-GAAP Adjusted Income Before Taxes (Newly Defined)

61,465

48,532

89,045

68,497

81,113

287,186

241,388

Reconciliation of US GAAP Income Tax Provision to Non-GAAP Adjusted Income Tax Provision, including our US GAAP Effective Tax Rate and our Non-GAAP Adjusted Effective Tax Rate US GAAP Income Tax Provision

30,172

13,400

5,231

8,944

27,656

11,195

Income Tax Impact of Adjustments: (C) Restructuring and related (credits) charges

743

654

4,965

1,702

8,065

7,949

Foreign exchange (gains) losses on intercompany transactions

(101

)

(612

)

122

(363

)

242

Gain on sale of certain assets

(936

)

Impairment of goodwill

Impairment of Blackwell trade name

15,216

Impairment of developed technology intangible

686

Income Tax Adjustments: Impact of increase in UK statutory rate on deferred tax balances (D)

(20,726

)

(6,689

)

(83

)

3,261

(3,511

)

Impact of US CARES Act (E)

13,998

Impact of change in certain US state tax rates in 2021 and tax rates in France in 2020 (D)

(3,225

)

(3,225

)

1,887

Non-GAAP Adjusted Income Tax Provision (Previously Reported)

8,454

6,842

14,772

10,283

10,722

42,620

37,175

Amortization of acquired intangible assets (C)

4,843

4,298

4,335

4,691

5,187

18,511

16,820

Non-GAAP Adjusted Income Tax Provision (Newly Defined)

13,297

11,140

19,107

14,974

15,909

61,131

53,995

Non-GAAP Adjusted Net Income (Previously Reported)

30,727

23,541

55,892

38,051

47,663

165,145

135,944

Non-GAAP Adjusted Net Income (Newly Defined)

48,168

37,392

69,938

53,523

65,204

226,055

187,393

US GAAP Effective Tax Rate

68.6

45.1

0.1

19.1

17.8

15.7

-17.7

Non-GAAP Adjusted Effective Tax Rate (Previously Reported)

21.6

22.5

20.9

21.3

18.4

20.5

21.5

Non-GAAP Adjusted Effective Tax Rate (Newly Defined)

21.6

23.0

21.5

21.9

19.6

21.3

22.4

Notes: (A) Reflects the amortization of intangible assets established on the opening balance sheet for an acquired business. This includes the amortization of intangible assets such as developed technology, customer relationships, tradenames, etc., which is reflected in the "Amortization of intangible assets" line in the Condensed Consolidated Statements of Net Income. It also includes the amortization of acquired product development assets, which is reflected in "Cost of sales" in the Condensed Consolidated Statements of Net Income. (B) For Fiscal Year 2020, represents the impact of using diluted weighted-average number of common shares outstanding (56.7 million shares for the year ended April 30, 2020) included in the Non-US GAAP Adjusted EPS calculation in order to apply the dilutive impact on adjusted net income due to the effect of unvested restricted stock units and other stock awards. This impact occurs when a US GAAP net loss is reported and the effect of using dilutive shares is antidilutive. (C) These adjustments substantially impacted deferred taxes. (D) These adjustments impacted deferred taxes. (E) The tax impact was $8.4 million from current taxes and $5.6 million from deferred taxes in the three months ended October 31, 2020 and the year ended April 30, 2021. (1) See Explanation of Usage of Non-GAAP Performance Measures included in this supplementary information for additional details on the reasons why management believes presentation of each non-GAAP performance measure provides useful information to investors. The supplementary information included in this press release for the three months ended July 31, 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission. (2) All amounts are approximate due to rounding. JOHN WILEY & SONS, INC. SUPPLEMENTARY INFORMATION (1) RECONCILIATION OF US GAAP NET INCOME TO NON-GAAP EBITDA AND ADJUSTED EBITDA (unaudited)

Three Months Ended

July 31,

2021

2020

Net Income

13,830

16,334

Interest expense

4,639

4,614

Provision for income taxes

30,172

13,400

Depreciation and amortization

54,566

49,507

Non-GAAP EBITDA

103,207

83,855

Restructuring and related (credits) charges

(276

)

2,218

Foreign exchange transaction (gains) losses

(370

)

Gain on sale of certain assets

(3,750

)

Other income, net

(3,553

)

(4,391

)

Non-GAAP Adjusted EBITDA

95,258

81,764

Adjusted EBITDA Margin

19.5

19.0

Notes: (1) See Explanation of Usage of Non-GAAP Performance Measures included in this supplementary information for additional details on the reasons why management believes presentation of each non-GAAP performance measure provides useful information to investors. The supplementary information included in this press release for the three months ended July 31, 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission. JOHN WILEY & SONS, INC. SUPPLEMENTARY INFORMATION (1) SEGMENT RESULTS (in thousands) (unaudited)

% Change

Three Months Ended July 31,

Favorable (Unfavorable)

2021

2020

Reported

Constant Currency

Research Publishing & Platforms: Revenue, net Research Publishing

263,358

230,464

Research Platforms

11,398

10,346

Total Revenue, net

274,756

240,810

Contribution to Profit

78,808

69,818

Adjustments: Restructuring charges (credits)

216

(197

)

# # Non-GAAP Adjusted Contribution to Profit

79,024

69,621

Depreciation and amortization

23,762

19,701

-21

-18

Non-GAAP Adjusted EBITDA

102,786

89,322

Adjusted EBITDA margin

37.4

37.1

Academic & Professional Learning: Revenue, net Education Publishing (2)

66,380

63,603

Professional Learning

72,884

62,829

Total Revenue, net

139,264

126,432

Contribution to Profit

8,152

(278

)

# # Adjustments: Restructuring charges

171

# # Non-GAAP Adjusted Contribution to Profit

8,323

(245

)

# # Depreciation and amortization

18,364

18,804

Non-GAAP Adjusted EBITDA

26,687

18,559

Adjusted EBITDA margin

19.2

14.7

Education Services: Revenue, net University Services (3)

54,394

50,262

Talent Development Services (2) (4)

19,974

13,822

Total Revenue, net

74,368

64,084

Contribution to Profit

(1,827

)

456

# # Adjustments: Restructuring (credits) charges

(34

)

139

# # Non-GAAP Adjusted Contribution to Profit

(1,861

)

595

# # Depreciation and amortization

8,303

7,279

-14

-13

Non-GAAP Adjusted EBITDA

6,442

7,874

-18

-21

Adjusted EBITDA margin

8.7

12.3

Corporate Expenses:

(44,165

)

(39,957

)

-11

-9

Adjustments: Restructuring (credits) charges

(629

)

2,243

# # Non-GAAP Adjusted Contribution to Profit

(44,794

)

(37,714

)

-19

-17

Depreciation and amortization

4,137

3,723

-11

Non-GAAP Adjusted EBITDA

(40,657

)

(33,991

)

-20

-18

Consolidated Results: Revenue, net

488,388

431,326

Operating Income

40,968

30,039

Adjustments: Restructuring (credits) charges

(276

)

2,218

# # Non-GAAP Adjusted Contribution to Profit

40,692

32,257

Depreciation and amortization

54,566

49,507

-10

-12

Non-GAAP Adjusted EBITDA

95,258

81,764

Adjusted EBITDA margin

19.5

19.0

(1) The supplementary information included in this press release for the three months ended July 31, 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission. (2) In May 2021, we moved the WileyNXT product offering from Academic & Professional Learning – Education Publishing to Education Services – Talent Development Services. As a result, the prior period results related to the WileyNXT product offering have been included in Education Services - Talent Development Services. The Revenue, Adjusted Contribution to Profit and Adjusted EBITDA for WileyNXT was $0.5 million, $0.1 million, and $0.1 million, respectively, for the three months ended July 31, 2020. There were no changes to our total consolidated financial results. (3) University Services was previously referred to as Education Services OPM. (4) Talent Development Services was previously referred to as mthree. # Variance greater than 100% JOHN WILEY & SONS, INC. SUPPLEMENTARY INFORMATION (1) CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (in thousands) (unaudited)

July 31,

April 30,

2021

Assets: Current assets Cash and cash equivalents

82,982

93,795

Accounts receivable, net

284,579

311,571

Inventories, net

40,392

42,538

Prepaid expenses and other current assets

70,736

78,393

Total current assets

478,689

526,297

Product development assets, net

49,017

49,517

Royalty advances, net

27,668

39,582

Technology, property and equipment, net

273,306

282,270

Intangible assets, net

995,613

1,015,302

Goodwill

1,301,599

1,304,340

Operating lease right-of-use assets

122,334

121,430

Other non-current assets

114,574

107,701

Total assets

3,362,800

3,446,439

Liabilities and shareholders' equity: Current liabilities Accounts payable

62,230

95,791

Accrued royalties

90,064

78,582

Short-term portion of long-term debt

12,500

Contract liabilities

418,459

545,425

Accrued employment costs

66,771

144,744

Accrued income taxes

9,628

8,590

Short-term portion of operating lease liabilities

21,547

22,440

Other accrued liabilities

81,902

80,900

Total current liabilities

763,101

988,972

Long-term debt

952,020

809,088

Accrued pension liability

136,391

146,247

Deferred income tax liabilities

188,880

172,903

Operating lease liabilities

145,340

145,832

Other long-term liabilities

99,163

92,106

Total liabilities

2,284,895

2,355,148

Shareholders' equity

1,077,905

1,091,291

Total liabilities and shareholders' equity

3,362,800

3,446,439

(1) The supplementary information included in this press release for July 31, 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission. JOHN WILEY & SONS, INC. SUPPLEMENTARY INFORMATION (1) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)

Three Months Ended

July 31,

2021

2020

Operating activities: Net income

13,830

16,334

Amortization of intangible assets

21,151

16,891

Amortization of product development assets

9,058

9,148

Depreciation and amortization of technology, property, and equipment

24,357

23,468

Other noncash charges

35,856

25,932

Net change in operating assets and liabilities

(189,026

)

(212,556

)

Net cash used in operating activities

(84,774

)

(120,783

)

Investing activities: Additions to technology, property, and equipment

(17,910

)

(18,964

)

Product development spending

(5,670

)

(5,325

)

Businesses acquired in purchase transactions, net of cash acquired

(3,032

)

(136

)

Proceeds related to the sale of certain assets

3,375

Acquisitions of publication rights and other

(295

)

(3,855

)

Net cash used in investing activities

(23,532

)

(28,280

)

Financing activities: Net debt borrowings

142,703

67,356

Cash dividends

(19,307

)

(19,261

)

Purchases of treasury shares

(7,367

)

Other

(16,940

)

(4,611

)

Net cash provided by financing activities

99,089

43,484

Effects of exchange rate changes on cash, cash equivalents and restricted cash

(1,586

)

4,500

Change in cash, cash equivalents and restricted cash for period

(10,803

)

(101,079

)

Cash, cash equivalents and restricted cash - beginning

94,359

203,047

Cash, cash equivalents and restricted cash - ending

83,556

101,968

CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT DEVELOPMENT SPENDING

Three Months Ended

July 31,

2021

2020

Net cash used in operating activities

(84,774

)

(120,783

)

Less: Additions to technology, property, and equipment

(17,910

)

(18,964

)

Less: Product development spending

(5,670

)

(5,325

)

Free cash flow less product development spending

(108,354

)

(145,072

)

See Explanation of Usage of Non-GAAP Performance Measures included in this supplemental information. (1) The supplementary information included in this press release for the three months ended July 31, 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.

JOHN WILEY & SONS, INC. EXPLANATION OF USAGE OF NON-GAAP PERFORMANCE MEASURES

In this earnings release and supplemental information, management may present the following non-GAAP performance measures:

Adjusted Earnings Per Share (Adjusted EPS);
Free Cash Flow less Product Development Spending;
Adjusted Contribution to Profit and margin;
Adjusted Income Before Taxes;
Adjusted Income Tax Provision;
Adjusted Effective Tax Rate;
Adjusted Net Income;
EBITDA, Adjusted EBITDA and margin;
Organic revenue; and
Results on a constant currency basis.

Management uses these non-GAAP performance measures as supplemental indicators of our operating performance and financial position as well for internal reporting and forecasting purposes, when publicly providing its outlook, to evaluate the Company's performance and calculate incentive compensation.

The Company presents these non-GAAP performance measures in addition to US GAAP financial results because it believes that these non-GAAP performance measures provide useful information to certain investors and financial analysts for operational trends and comparisons over time. The use of these non-GAAP performance measures may also provide a consistent basis to evaluate operating profitability and performance trends by excluding items that we do not consider to be controllable activities for this purpose.

The performance metric used by our chief operating decision maker to evaluate performance of our reportable segments is Adjusted Contribution to Profit. We present both Adjusted Contribution to Profit and Adjusted EBITDA for each of our reportable segments since we believe Adjusted EBITDA provides additional useful information to certain investors and financial analysts for operational trends and comparisons over time as it removes the impact of depreciation and amortization expense, as well as a consistent basis to evaluate operating profitability and comparing our financial performance to that of our peer companies and competitors.

For example:

Adjusted EPS, Adjusted Contribution to Profit, Adjusted Income Before Taxes, Adjusted Income Tax Provision, Adjusted Effective Tax Rate, Adjusted Net Income, Adjusted EBITDA and organic revenue (excluding acquisitions) provide a more comparable basis to analyze operating results and earnings and are measures commonly used by shareholders to measure our performance.
Free Cash Flow less Product Development Spending helps assess our ability, over the long term, to create value for our shareholders as it represents cash available to repay debt, pay common stock dividends and fund share repurchases and acquisitions.
Results on a constant currency basis removes distortion from the effects of foreign currency movements to provide better comparability of our business trends from period to period. We measure our performance excluding the impact of foreign currency (or at constant currency), which means that we apply the same foreign currency exchange rates for the current and equivalent prior period.

In addition, the Company has historically provided these or similar non-GAAP performance measures and understand that some investors and financial analysts find this information helpful in analyzing the Company's operating margins and net income, and in comparing the Company's financial performance to that of its peer companies and competitors. Based on interactions with investors, we also believe that the Company's non-GAAP performance measures are regarded as useful to our investors as supplemental to our US GAAP financial results, and that there is no confusion regarding the adjustments or our operating performance to our investors due to the comprehensive nature of our disclosures.

We have not provided our 2022 outlook for the most directly comparable US GAAP financial measures, as they are not available without unreasonable effort due to the high variability, complexity, and low visibility with respect to certain items, including restructuring charges and credits, gains and losses on foreign currency, and other gains and losses. These items are uncertain, depend on various factors, and could be material to our consolidated results computed in accordance with US GAAP.

Non-GAAP performance measures do not have standardized meanings prescribed by US GAAP and therefore may not be comparable to the calculation of similar measures used by other companies and should not be viewed as alternatives to measures of financial results under US GAAP. The adjusted metrics have limitations as analytical tools, and should not be considered in isolation from, or as a substitute for, US GAAP information. It does not purport to represent any similarly titled US GAAP information, and is not an indicator of our performance under US GAAP. Non-US GAAP financial metrics that we present may not be comparable with similarly titled measures used by others. Investors are cautioned against placing undue reliance on these non-US GAAP measures.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210902005271/en/

Investors: Brian Campbell 201.748.6874 brian.campbell@wiley.com

Media: Katie Roberts 602.373.7233 karoberts@wiley.com

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