HOBOKEN, N.J.--(BUSINESS WIRE)-- Wiley (NYSE: WLY), one of the world's largest publishers and a global leader in scientific research and career-connected education, today announced results for the first quarter ended July 31, 2022.
FIRST QUARTER SUMMARY
- GAAP Results: Revenue of $488 million (-0% vs. prior year), Operating (loss) of -$17 million (-$58 million vs. prior year), and EPS (loss) of -$0.32 (-$0.56 vs. prior year)
- Adjusted Results at constant currency: Revenue of $488 million (+4% vs. prior year), Adjusted EBITDA of $64 million (-34% vs. prior year), and Adjusted EPS of $0.36 (-60% vs. prior year). Adjusted EBITDA and Adjusted EPS performance mainly due to investments in Research, higher employee costs, increased T&E spend related to the resumption of in-person activities, and market-related challenges in University Services
- Fiscal 2023 Outlook: Wiley reaffirms its full year outlook for Revenue, Adjusted EBITDA, Adjusted EPS, and Free Cash Flow
- Dividend Increase: Wiley raises quarterly dividend for 29th consecutive year
MANAGEMENT COMMENTARY
"Q1 unfolded largely as expected, and we are confident in the full year outlook based on our strong, continued momentum in Research Publishing, Research Solutions, and Corporate Talent Development and the execution of our cost savings program," said Brian Napack, President and CEO. "Our core growth strategies in open research and career-connected education are working, and they are supported by favorable long term market trends, consistent cash generation, and our sharp focus on operational excellence."
FIRST QUARTER PERFORMANCE
| GAAP Measures Unaudited ($millions except for EPS) |
Q1 2023 |
Q1 2022 |
Change |
|||||||||
| Revenue |
$ |
487.6 |
$ |
488.4 |
0 |
% |
||||||
| Operating (Loss) Income |
($ |
17.0 |
) |
$ |
41.0 |
# |
||||||
| Diluted EPS |
($ |
0.32 |
) |
$ |
0.24 |
# |
||||||
| Non-GAAP Measures |
Q1 2023 |
Q1 2022 |
Change |
Change Constant Currency |
||||||||
| Revenue |
$ |
487.6 |
$ |
488.4 |
0 |
% |
+4 |
% |
||||
| Adjusted EBITDA |
$ |
63.8 |
$ |
95.3 |
(33 |
%) |
(34 |
%) |
||||
| Adjusted EPS |
$ |
0.36 |
$ |
0.85 |
(58 |
%) |
(60 |
%) |
||||
Excluding acquisitions and currency impact, revenue rose 2% for the quarter.
# Variance greater than 100%
Unfavorable FX variance of $19 million in Revenue and a favorable variance of $0.8 million in Adjusted EBITDA and $0.02 in Adjusted EPS
Revenue
- Research was flat as reported, or up 4% at constant currency, driven by organic growth in Publishing and Solutions and contributions from recent acquisitions.
- Revenue by product type reporting change - Research is now reported as Research Publishing and Research Solutions. Research Solutions includes platforms, corporate solutions and services for societies and other publishers. It replaces the Research Platforms reporting line. Please see the tables below for more detail.
- Academic & Professional Learning revenue declined 5% as reported and 1% at constant currency. Education Publishing performance saw a decline in print course material offsetting growth in digital content and courseware. Professional Learning saw growth in corporate training offsetting a decline in professional publishing.
- Education Services increased 7% as reported and 11% at constant currency, with very strong double-digit growth in Talent Development offsetting a decline in University Services from market-related enrollment challenges.
Adjusted EBITDA
- Research was down 9% at constant currency with revenue growth more than offset by investment, higher employee costs, and increased T&E compared to prior year COVID period.
- Academic & Professional Learning declined 30% at constant currency due to revenue performance, timing of spend, higher employee costs, and higher T&E expenses compared to prior year COVID period
- Education Services reported a loss of $3 million due to the revenue decline in University Services and investments in Talent Development growth initiatives.
- Adjusted Corporate Expenses were $6 million higher at constant currency mainly due to higher employee costs and the timing of expenses.
EPS
- GAAP EPS was a loss of $0.32 as compared to +$0.24 in the prior year period, primarily reflecting a $0.30/share ($22 million) restructuring charge and accelerated amortization of intangibles of $0.07/share ($5 million) related to the discontinuation of the mthree brand.
- Adjusted EPS of $0.36was down 60% at constant currency, driven by lower adjusted EBITDA, lower pension income, and higher interest expense.
Balance Sheet, Cash Flow, and Capital Allocation
- Net Debt-to-EBITDA ratio (trailing twelve months) at quarter-end was 2.1 compared to 2.0 in the year-ago period, and 1.6 at year end (April 30).
- Net Cash Used in Operating Activities was a use of $90 million compared to $85 million in the prior year period. 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 Q3 and Q4.
- Free Cash Flow less Product Development Spending was a use of $114 million compared to a use of $108 million in the prior year.
- Dividends: In June, Wiley raised its dividend for the 29th consecutive year. The current quarterly dividend is equivalent to an annual dividend of $1.39 per share, an increase from $1.38 per share in Fiscal 2022.
- Share Repurchases: The Company utilized $10 million to repurchase approximately 212,200 shares at an average cost per share of $47.12.
FISCAL YEAR 2023 OUTLOOK
The Company is reaffirming its full year outlook.
| Metric ($millions, except EPS) |
Fiscal 2022* |
FY23 Outlook* At constant currency |
FX Impact** At Q1 average rates |
FY23 Outlook^ At Q1 average rates |
|||
| Revenue |
$2,083 |
$2,175 - $2,215 |
($50) |
$2,125 - $2,165 |
|||
| Adjusted EBITDA |
$433 |
$425 - $450 |
Immaterial |
$425 - $450 |
|||
| Adjusted EPS |
$4.16 |
$3.70 - $4.05 |
Immaterial |
$3.70 - $4.05 |
|||
| Free Cash Flow |
$223 |
$210 - $235 |
Immaterial |
$210 - $235 |
|||
*Based on Fiscal 2022 average rates of 1.15 euro and 1.36 British pound
**Variance between Fiscal 2022 average rates and Q1 average rates: 1.04 euro and 1.23 British pound
^Fiscal 2023 outlook at Q1 average rates
EARNINGS CONFERENCE CALL
Scheduled for today, September 7 at 10:00 am (ET). Access webcast at investors.wiley.com, or directly at https://events.q4inc.com/attendee/191702722. US callers, please dial (888) 210-3346 and enter the participant code 2521217#. International callers, please dial (646) 960-0253 and enter the participant code 2521217#.
ABOUT WILEY
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