Wiley Reports Fourth Quarter and Fiscal Year 2022 Results

HOBOKEN, N.J.--(BUSINESS WIRE)-- Wiley (NYSE: WLY), a global leader in scientific research and career-connected education, today announced results for the fourth quarter and fiscal year ended April 30, 2022.

FOURTH QUARTER SUMMARY

• GAAP Results: Revenue of $546 million (+2%), Operating Income of $58 million (+14%), and EPS of $0.76 (+4%)
• Adjusted Results (at constant currency): Revenue of $546 million (+4%), Adjusted EBITDA of $111 million (flat), and Adjusted EPS of $1.08 (-6%)

FULL YEAR SUMMARY

• Guidance: In line for Revenue, Adjusted EBITDA and Adjusted EPS. Exceeded for Free Cash Flow
• GAAP Results: Revenue of $2,083 million (+7%), Operating Income of $219 million (+18%), EPS of $2.62 (-0.4%), and Cash Provided by Operating Activities of $339 million (-6%)
• Adjusted Results (at constant currency): Revenue of $2,083 million (+7%), Adjusted EBITDA of $433 million (+3%), and Adjusted EPS of $4.16 (+1%)
• Free Cash Flow of$223 million, down 13% due to one-time items in prior year
• Digital Products and Tech-Enabled Services: 83% of total revenue
• Recurring Revenue: 58% of total revenue

MANAGEMENT COMMENTARY

"Wiley delivered another solid year in Fiscal 2022 as we materially accelerated organic growth, delivered on our financial targets, and surpassed $2 billion in revenue for the first time," said Brian Napack, President and CEO. "Our consistent strategy to lead in open scientific research and career-connected education, our strong cash flow, and our dedication to operational excellence position us well for the future."

FOURTH QUARTER PERFORMANCE

Revenue

• Research Publishing & Platforms rose 5% as reported and 6% at constant currency and excluding acquisitions, driven by growth in both publishing and platforms.
• Academic & Professional Learning declined 7% as reported and 5% at constant currency driven by declines in Education Publishing and trade publishing, offsetting a continued strong recovery in corporate training.
• Education Services rose 8% as reported and 6% at constant currency and excluding acquisition, with robust growth in Talent Development Services offsetting a decline in University Services.

Adjusted EBITDA

• Research Publishing & Platforms rose 12% mainly driven by revenue performance. Q4 Adjusted EBITDA margin of 34%.
• Academic & Professional Learning declined 3% at constant currency, with the revenue decline mitigated by lower employee costs. Q4 Adjusted EBITDA margin of 27%.
• Education Services was down 29% mainly due to investments to expand our corporate client relationships in Talent Development. Q4 Adjusted EBITDA margin of 12%.
• Adjusted Corporate Expenses rose 14% mainly due to higher technology and marketing expenses.

EPS

• GAAP EPS was $0.76 compared to $0.73 in the prior year period.
• Adjusted EPS decline primarily due Adjusted EBITDA decline.

FISCAL YEAR 2022 PERFORMANCE

• Revenue growth driven by Research Publishing & Platforms (+9% as reported and +5% at constant currency and excluding impact of acquisitions) and Education Services (+14% and +12% at constant currency and excluding acquisition impact), with modest growth delivered by Academic & Professional Learning (+1% as reported and at constant currency)
• GAAP EPS slight decline mainly due to a higher effective tax rate (29% compared to 16% in Fiscal 2021) and higher interest expense, offsetting higher operating income and prior year restructuring charges.
• Adjusted EPS and Adjusted EBITDA growth largely due to revenue growth and cost savings, partially offset by investments in Research and Education Services growth initiatives. Wiley's Adjusted EBITDA margin declined slightly from 21.6% in Fiscal 2021 to 20.8% in Fiscal 2022.
• Balance Sheet: net debt-to-EBITDA ratio at April end was 1.6, down from 1.7 in prior year.
• Free Cash Flow less Product Development Spending decline due to non-recurrence of a $21 million cash tax refund in Fiscal 2021, higher annual incentive compensation payments and higher capital expenditures in Fiscal 2022. Capex rose $13 million to $116 million largely due to reduced investment in Fiscal 2021 due to COVID-19.
• Acquisitions: The Company spent $76 million on acquisitions in Research Platforms and University Services. This was down from $300 million spent in Fiscal 2021.
• Returns to Shareholders: The Company raised its dividend for the 28^th consecutive year in Fiscal 2022. For the year, Wiley utilized $77 million for dividends and $30 million to repurchase approximately 544,000 shares at an average cost per share of $55.14.

FISCAL YEAR 2023 OUTLOOK

• Revenue: The Company anticipates mid-single digit revenue growth at constant currency driven by Research and Education Services.
• Earnings: Wiley expects gains fromrevenue growth to be offset by wage inflation and growth investments in Research and Corporate Talent Development. Adjusted EPS performance is expected to be adversely impacted by 35-cents of non-operational items such as higher interest expense, higher tax expense, and lower pension income. Wiley's adjusted effective tax rate is expected to be 22-23% in Fiscal 2023, up from 20% in Fiscal 2022. This is primarily due to an anticipated less favorable mix of earnings by country and an increase in the UK statutory rate. Fiscal 2022 also benefitted from certain non-recurring tax benefits.
• Free Cash Flow: Wiley expectspositive cash earnings and lower incentive payouts for Fiscal 2022 performance compared to prior year to be offset by higher cash taxes, interest and capex ($115 to $125 million vs. $116 million in Fiscal 2022).
• Foreign Exchange Impact: With Wiley generating 47% of its revenue from outside the US, the Company's reported results are adversely impacted by a strengthening US dollar, particularly in relation to the Euro and the British pound. Given volatility in exchange rates, there is now a material FX impact to our Fiscal 2023 outlook relative to our outlook at constant currency.

EARNINGS CONFERENCE CALL

Scheduled for today, June 15 at 10:00 am (ET). Access webcast at Investor Relations at investors.wiley.com, or directly at https://events.q4inc.com/attendee/828353638. U.S. 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

Wiley (NYSE: WLY) is a global leader in research and education, unlocking human potential by enabling discovery, powering education, and shaping workforces. For over two hundred 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 investors.wiley.com, Wiley.com, Like us on Facebook