HOBOKEN, N.J.--(BUSINESS WIRE)--John Wiley & Sons, Inc. (NYSE:JWA)(NYSE:JWB), a global leader in research and education, today announced results for the second quarter ended October 31, 2020.

SECOND QUARTER SUMMARY

• GAAP Results: Revenue of $491 million (+5%) and EPS of $1.22 (+54%)
• Adjusted Results (at constant currency): Revenue +4% to $491 million, EBITDA +7% to $120 million, and EPS +12% to $1.00
• Research Publishing & Platforms (at constant currency): Revenue +5% and Adjusted EBITDA +14% on strong double-digit growth in Open Access
• Academic & Professional Learning: Revenue for Education Publishing marginally ahead of prior year as accelerated growth in digital content and courseware more than offset decline in print books
• Education Services: Second Quarter and First Half Adjusted EBITDA margin of 21% and 17%, trending ahead of FY22 target of 15%

MANAGEMENT COMMENTARY

“Wiley’s consistent strategies in open research and online education continued to deliver strong returns with record research output and content consumption, robust online enrollment growth, and broad digital courseware adoption,” said Brian Napack, President and CEO. “The pandemic is accelerating important trends underlying our core strategies, including a global increase in the demand to publish and access high-quality research and a decisive shift to online learning and digital curriculums.”

SECOND QUARTER PERFORMANCE

• Research Publishing & Platforms rose 7% as reported and 5% at constant currency with strong growth in open access and content platforms driving results.
• Academic & Professional Learning declined 4% as reported and 5% at constant currency mainly due to COVID-19 impact on Professional Learning (-11% reported, -13% constant currency), particularly trade books and in-person corporate training. Within Education Publishing (+1%, 0% constant currency), digital content and courseware growth accelerated, more than offsetting the decline in print textbooks, while test prep continued its sharp decline due to COVID-related exam cancellations.
• Education Services increased 28% as reported and 27% at constant currency, driven by the three-month inorganic contribution from mthree (+$13 million) and organic constant currency growth of 6% in Online Program Management (OPM) services.

Adjusted EBITDA

• Research Publishing & Platforms grew 14% at constant currency, reflecting revenue growth, operational efficiencies, and COVID-related expense savings.
• Academic & Professional Learning declined 10% at constant currency, reflecting revenue performance partly offset by business optimization gains and COVID-related expense savings.
• Education Services rose 94% at constant currency from $8 million to $15 million, driven by revenue growth and business optimization initiatives, notably sustained improvement in student acquisition costs. Adjusted EBITDA margin for the quarter was 21%, up from 14% in the prior year.
• Corporate Expenses rose 10% to $41 million mainly due to the timing of annual incentive costs.

EPS

• GAAP EPS of $1.22 compared to $0.79 in the prior year period and primarily reflected higher Operating Income, lower restructuring charges and interest expense, and a $0.25 discrete tax benefit. In connection with the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), Wiley elected to carry back its fiscal year 2020 U.S. loss for tax purposes to its fiscal year 2015, resulting in a $14 million GAAP tax benefit this quarter.
• Adjusted EPS of $1.00 compared to $0.85 in the prior year and was driven by improved Adjusted Operating Income. The $0.25 discrete tax benefit related to the CARES Act was excluded from Adjusted EPS.

Balance Sheet and Liquidity

• Net debt-to-EBITDA ratio (trailing twelve months) at quarter-end was 1.9 as compared to 1.8 at the end of the year-ago period.
• Available liquidity was approximately $740 million at quarter-end, including $86 million of cash on hand and $655 million of undrawn credit capacity.

Cash Flow (Six Months)

• Net Cash Used in Operating Activities was $77 million compared to $100 million in the prior year period, primarily driven by improved earnings, partly offset by unfavorable timing of changes in working capital. Note, the Company’s use of cash in the first half of the fiscal year is driven by the timing of collections for annual journal subscriptions, which is concentrated in the third and fourth fiscal quarters.
• Free Cash Flow less Product Development Spending was a use of $124 million compared to a use of $156 million in the prior year, primarily reflecting the improvement in Net Cash Used in Operating Activities.

FISCAL YEAR 2021 OUTLOOK

Based on performance through the six months and leading indicators for the remainder of the year, Wiley is initiating annual guidance for fiscal year 2021. For Revenue, the Company anticipates low-single digit growth overall, which includes low-single digit growth in Research, a mid-single digit decline in Academic & Professional Learning, and double-digit growth in Education Services (mid-single digit growth on an organic basis). Projected performance ranges for consolidated Revenue, Adjusted EBITDA, Adjusted EPS and Free Cash Flow are as follows:

*Outlook reflects actual currency for results through Q2 and assumes current FX rates prevail for remainder of year.

ABOUT WILEY

Wiley drives the world forward with research and education. Through publishing, platforms and services, we help researchers, professionals, students, universities, and corporations to achieve their goals in an ever-changing world. And for more than 200 years, we have delivered consistent performance to all our stakeholders. The Company's website can be accessed at www.wiley.com.