JOHN WILEY & SONS, INC. (NYSE:JW.A) Files An 8-K Results of Operations and Financial Condition

Investor Contact:

Brian Campbell

Investor Relations

201.748.6874

brian.campbell@wiley.com

Wiley Reports Fourth Quarter and Fiscal 2017 Results

Full year revenue of $1,719 million, up 2% at constant currency and down 1% excluding the impacts of foreign exchange, shifting to time-based journal subscriptions, and contributions from acquisitions. GAAP revenue flat including a $43 million unfavorable foreign exchange impact.

Full year adjusted EPS of $3.00, up 13% at constant currency or up 1% (favorable to guidance of mid-single digit decline) excluding the impacts of foreign exchange, the journal subscription shift, dilution from acquisitions, and unusual charges and credits. GAAP EPS down 21% primarily due to an unfavorable tax decision in Germany.

Revenue from digital products and services now 68% of total revenue, up from 63% in the prior year.

Calendar year 2017 Journal Subscriptions up 1% on a constant currency basis with approximately 97% of targeted business under contract.

June 13, 2017 (Hoboken, NJ) John Wiley Sons, Inc. (NYSE: JWa and JWb), a global research and learning company, today announced the following results for the fourth quarter and fiscal year 2017, ending April 30:

					% Change
$ millions	FY17		FY16		Excluding FX		Including FX
Revenue:
Q4	$452.2	$434.3			6%	4%
Full Year	$1,718.5	$1,727.0			2%	0%
GAAP EPS:
Q4	$0.81	$0.59				38%
Full Year	$1.95	$2.48				(21%)
Adjusted EPS:
Q4	$0.82	$0.67			19%	22%
Full Year	$3.00	$2.70			13%	11%
Adjusted EPS exclude tax charges and credits, restructuring charges and credits, and pension settlement as more fully described in the attached financial schedules.

Management Commentary

We posted stronger revenue and earnings growth this quarter, largely due to growth in our Solutions business and the favorable timing of sales in Publishing, said Matthew Kissner, Wileys Interim CEO and Chairman. For the year, Research revenue growth was marginally positive and in line with expectations. The Solutions business, in addition to posting double-digit revenue growth, also reported substantial profit improvement. Overall, we ended the year with favorable operating momentum, a strong balance sheet, and reliable cash flow that will enable us to continue investing for growth while returning cash to shareholders through dividends and share repurchases.

Fiscal Year 2018 Outlook

Wileys financial outlook anticipates low-single digit revenue growth in Research and low-double digit revenue growth in Solutions offset by a high-single digit revenue decline in Publishing due to further erosion of print book markets.

Revenue at constant currency to be approximately even with FY17. In addition, at current FX rates, Wiley would report a FY18 positive FX variance of approximately $25 million in revenue due to functional currency gains.

Operating income at constant currency to be approximately even with FY17 primarily due to flat revenue. In addition, at current rates, Wiley would report a positive FX variance of approximately $20 million in operating income.

Adjusted EPS performance at constant currency down low-single digits mostly due to $0.12 in EPS non-recurring tax benefits in FY17. The positive FX variance mentioned above would be approximately $0.25 in EPS.

Cash from Operations expected to improve to $350 million or higher, from $315 million in FY17.

Capex (TPE + Composition and Product Development Spend) projected to be slightly lower than FY17.

Wiley will continue investing for revenue growth across its business segments. In FY18, the Company will near the completion of its ERP implementation and headquarters office transformation. Wiley is also in the process of a multi-year operational excellence initiative that focuses on achieving competitive benchmarks for quality, speed and customer service. Through organization simplification and process optimization, standardization and automation, the Company expects to meaningfully improve operating income, EPS, and Free Cash Flow in Fiscal Years 2019 and 2020. In the first quarter of fiscal 2018, Wiley will record a restructuring charge of approximately $25 million related to these activities, which will yield around $45 million in run rate savings starting in FY19, with roughly half of that realized in FY18. About half of the $45 million will be reinvested.

Adjusted Results

The Company provides financial measures referred to as adjusted contribution to profit and EPS, which exclude tax charges, restructuring charges, pension settlement charges related to voluntary lump sum buyouts, and certain deferred tax benefits as more fully described in the attached financial schedules. Variances to adjusted contribution to profit and EPS are on a constant currency basis unless otherwise noted. Management believes the exclusion of such items provides additional information to facilitate the analysis of results. These non-GAAP measures are not intended to replace the financial results reported in accordance with GAAP.

Foreign Exchange (FX)

Note that foreign exchange was adverse to FY17 revenue and EPS by $43 million and $0.04, respectively. Wiley generates approximately half of its revenue from outside the United States and is therefore exposed to foreign exchange rate fluctuations, particularly in relation to the euro and pound sterling. The weighted average rates for fiscal 2017 were 1.09 and 1.30, respectively. Throughout this report, references are made to variances excluding foreign exchange or on a constant currency basis; such amounts exclude both currency translation effects and transactional gains and losses.

CEO Announcement

In May, the Company announced the resignation of President and CEO Mark Allin. Matthew Kissner, Chairman of the Board, was named interim CEO. The Board has begun a search for Mr. Allins successor.

Fourth Quarter Summary

Revenue grew 4% on a US GAAP basis to $452.2 million, or 6% excluding the impact of currency. Year-over-year performance at constant currency was driven by growth in Solutions (+$8 million) and Publishing (+$10 million), and the revenue contribution from Atypon (+$9 million). Excluding that contribution, fourth quarter revenue on a constant currency basis was up 4% due to continued growth in Solutions and growth in Publishing, due to favorable timing of orders and lower returns.

EPS increased 38% on a US GAAP basis to $0.81, or 19% on an adjusted basis. Adjusted EPS excludes restructuring credits in the current quarter ($0.02) and charges in the prior year period ($0.08). The year-over-year increase is attributed to significant improvement in Contribution to Profit for Publishing (+117%) and Solutions (+27%), partially offset by dilution from the recent Atypon and Ranku acquisitions ($0.03). Excluding that dilution, fourth quarter adjusted EPS was up 24%.

Share Repurchases: Wiley repurchased 282,728 shares this quarter at a cost of $15.0 million, an average of $52.90 per share. Nearly 3.8 million shares remain in the current authorized repurchase program announced in June 2016.

Fiscal Year Summary

Revenue of $1,719 million was consistent with the prior year on a US GAAP basis, or up 2% excluding the adverse impact of foreign exchange (-$43 million). Performance was driven by the favorable impact of the shift to time-based Journal Subscriptions (+$34 million) and a partial year contribution from the Atypon acquisition (+$19 million). Excluding these items and the impact of currency, revenue was down 1% as steady performance in Journal Subscriptions and double-digit growth in Author-Funded Access (+26%), Online Test Preparation (+27%), and our Solutions segment (14%) did not fully offset declines in Education Books (-13%) and STM and Professional Development Books (-9%). Wileys percentage of revenue from digital content and services increased to 68% in FY17 (from 63% in FY16).

EPS declined 21% on a US GAAP basis to $1.95, or rose 13% on an adjusted basis to $3.00. Adjusted EPS excludes $1.04 and $0.22 in the current and prior year, respectively, to remove the impacts of currency, restructuring charges or credits, and unusual items. Details for these items can be found in the accompanying tables. Adjusted EPS growth is attributed to the favorable transitional impact of the shift to time-based journal subscriptions (+$0.38) and tax credits recorded in the third quarter (+$0.12), which offset dilution from the Atypon and Ranku acquisitions (-$0.08). Excluding the impact of the subscription revenue shift and the dilution of the acquisitions, adjusted EPS was up 1% primarily due to the aforementioned tax benefits and efficiency gains.

Cash from Operations of $314.5 million down from $350.0 million primarily due to unfavorable timing around working capital and an unbudgeted $7 million contribution to our UK pension just before year-end. The adverse working capital performance included the timing of end-of-year payments in fiscal 2017 as compared to fiscal 2016. Collections also lagged due to unexpectedly strong book sales in April. These impacts will unwind in fiscal 2018.

Free Cash Flow less Composition and Product Development Spend (identical FCF metric that has been reported previously) decreased to $166.2 million from $219.0 million primarily due to lower cash from operations and higher capex (+$17 million) primarily related to the office transformation.

Net Debt and Cash Position: Net debt (debt less cash and cash equivalents) at the end of April was $306.5 million compared to $241.2 million as of April 30, 2016. During fiscal year 2017, the company used approximately $120 million of cash to acquire Atypon. Cash and cash equivalents were $58.5 million compared to $363.8 million at end of the prior year primarily due to the repayment of debt with proceeds from the Companys actions to efficiently repatriate cash from foreign entities. The repatriation initiative also included $60 million in proceeds related to an associated inter-company transfer of GPB to USD, received in the fourth quarter.

RESEARCH (JOURNALS AND ATYPON)

Revenue: Fourth quarter revenue of $234.5 million rose 2% on a US GAAP basis, or 3% on a constant currency basis. Performance was driven by the contribution from the Atypon acquisition (+$9 million), and double-digit growth in Author-Funded Access (+26%), which offset a timing-related decline in Journal Subscription revenue. For the year, revenue on a GAAP basis rose 3% to $853.5 million, or 7% at constant currency. Excluding the subscription shift ($34 million) and the Atypon contribution ($19 million), Research revenue for the year was up modestly at constant currency. Results were mainly driven by steady performance from Journal Subscriptions and strong growth in Author-Funded Access, which offset an unusually large backfile sale of $10 million in the prior year.

Contribution to Profit: Fourth quarter contribution to profit (CTP) of $80.3 million was down 2% on a US GAAP basis and down 3% on an adjusted basis primarily due to costs associated with the Atypon acquisition (-$2 million) and other spending to support society journals. For the year, GAAP CTP was flat and adjusted was up 2% including the benefit from the shift to time-based journal subscriptions (+$29 million) and costs associated with the Atypon acquisition (-$4 million). Excluding those items, adjusted CTP was down 8% attributed to revenue performance, higher content and royalty costs and investment in new technology.

Calendar Year 2017 Journal Subscriptions: As of the end of April, calendar year 2017 Journal Subscriptions were up 1% on a constant currency basis with 97% of business contracted.

Society Publishing Agreements: Two new society contracts were signed in the quarter with combined annual revenue of $1.7 million; fifteen were renewed with combined annual revenue of $17.3 million; and one was not renewed with annual revenue of $0.4 million, for a net gain of $1.3 million. Note: the revenue cited in quarterly society contract signings is typically not achieved until the following calendar year. For calendar year 2017, six new society contracts were signed (+$9 million annual) and fifteen were not renewed (-$9 million). Additionally, calendar year 2017 includes renewals of 91 contracts with combined annual revenue of $67 million.

PUBLISHING (BOOKS, COURSE WORKFLOW, ONLINE TEST PREPARATION)

Revenue: Fourth quarter revenue increased 5% on a US GAAP basis to $153.7 million, or 7% at constant currency due to growth in Education Books (+28%), Online Test Preparation and Certification (+52%), and Course Workflow/WileyPLUS (+6%), offsetting a 2% decline in STM and Professional Books and a 2% decline in Licensing, Distribution, Advertising and Other. Education Books improved due to favorable timing of orders, lower returns, and growth in digital books. Publishing revenue for the year declined 9% on a GAAP basis or 7% on a constant currency basis, with declines in Books and Reference Material (-11%) offsetting growth in Online Test Preparation (+27%), Course Workflow/WileyPLUS (+7%), and Licensing, Distribution, Advertising, and Other (+3%).

Contribution to Profit: Fourth quarter CTP grew 111% on a US GAAP basis to $31.1 million, or 117% on an adjusted basis. Strong growth was driven by revenue performance and restructuring savings, including facility closures and expense rationalization. For the year, CTP was flat on both a US GAAP and adjusted basis.

SOLUTIONS (ONLINE PROGRAM MANAGEMENT, CORPORATE LEARNING AND ASSESSMENT)

Revenue: Fourth quarter revenue rose 13% on a US GAAP basis to $64.0 million, or 14% at constant currency. Solid growth occurred across all product areas, including Online Program Management (+14%), Corporate Learning (+21%), and Professional Assessment (+9%). For the year, Solutions revenue of $232 million was up 13% on a US GAAP basis, or 14% at constant currency.

Contribution to Profit: Fourth quarter CTP on a US GAAP basis rose 49% to $5.7 million, or 27% on an adjusted basis. Growth at constant currency was due to revenue growth and improved operating efficiency. For the year, CTP on a US GAAP basis was $14.8 million, or $16.6 million adjusted, as compared to $4.0 million and $5.0 million, respectively, in the prior year.

Online Program Management: In the quarter, Wiley signed eleven new programs and discontinued five. As of April 30, 2017, Wiley had 39 university partners (one partnership retired this quarter) and 250 programs under contract. In the year, Wiley signed important new partners including George Mason (VA), Seton Hall (NJ), St. Johns (NY), and Vlerick (Belgium) and added 24 net new programs.

Earnings Conference Call

Scheduled for today, June 13, at 10:00 a.m. (ET)

Access the webcast at www.wiley.com Investor Relations Events and Presentations, or http://www.wiley.com/WileyCDA/Section/id-370238.html

U.S. callers, please dial (888) 397-5350 and enter the participant code 1528095#.

International callers, please dial (719) 325-2142 and enter the participant code 1528095#.

An archive of the webcast will be available for a period of up to 14 days

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995

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 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.

About Wiley

Wiley is a global research and learning company. Through the Research segment, the Company provides scientific, technical, medical, and scholarly journals, as well as related content and services, for academic, corporate, and government libraries, learned societies, and individual researchers and other professionals. The Publishing segment provides scientific (STM), professional development, and education books and related content, as well as test preparation services and course workflow tools, to libraries, corporations, students, professionals, and researchers. In Solutions, Wiley provides online program management services for higher education institutions, and learning, development, and assessment services for businesses and professionals.

JOHN WILEY SONS, INC.
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2017 AND 2016
RECONCILIATION OF US GAAP TO ADJUSTED EPS – DILUTED (UNAUDITED)
		Fourth Quarter Ended						Twelve Months Ended
		April 30,						April 30,
US GAAP Earnings Per Share – Diluted		$	0.81		$	0.59		$	1.95		$	2.48
Adjusted to exclude the following:
	Restructuring (Credits) Charges (A)		(0.02)			0.08			0.15			0.32
	One-time – Pension Settlement (B)		–			–			0.09			–
	Unfavorable Tax Settlement (C)		0.03			–			0.85			–
	Deferred Income Tax Benefit on UK Rate Change (D)		–			–			(0.04)			(0.10)
Adjusted Earnings Per Share – Diluted		$	0.82		$	0.67		$	3.00		$	2.70
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Adjustments:
A	Restructuring Charges: The adjusted results for the three and twelve months ended April 30, 2017 exclude restructuring (credits) charges related to the Company’s Restructuring and Reinvestment Program of $(1.7) million or $(0.02) per share, and $13.4 million or $0.15 per share, respectively. The adjusted results for the three and twelve months ended April 30, 2016 exclude restructuring charges of $7.8 million or $0.08 per share, and $28.6 million or $0.32 per share, respectively.
B	In fiscal year 2017, the Company announced a voluntary, limited-time opportunity for terminated vested employees who were participants in the U.S. defined benefit retirement plan to elect a single lump sum payment of accumulated benefits. The aggregate amount of payments made under this one time election was $28.3 million. The total charge, recorded in the second quarter of fiscal year 2017, including a prorata portion of the unamortized net actuarial loss was $8.8 milion or $0.09 per share.
C	As previously disclosed and as reported in the Company’s SEC filings, the Company was appealing an unfavorable tax ruling in Germany related to tax benefits obtained through an increase in the tax deductible basis of certain merged German subsidiaries. In September 2016, the German Federal Fiscal Court issued an unfavorable final judgement in Wiley’s longstanding tax appeal. As a consequence, the Company reported a $49.1 million charge, or $0.85 per share in fiscal year 2017.
D	Deferred Income Tax Benefit on UK Rate Change: The adjusted results exclude deferred tax benefits of $2.6 million, or $0.04 per share, for the twelve months ended April 30, 2017, and $5.9 million, or $0.10 per share for the twelve months ended April 30, 2016. The benefits in these periods are associated with changes in tax legislation enacted in the United Kingdom which reduced the U.K. corporate income tax rates. The benefits reflect the remeasurement of the Company’s deferred tax balances to the new income tax rates and had no current cash tax impact. The fiscal year 2016 legislation reduced the U.K. income tax rates to 19% effective April 1, 2017 and 18% effective April 1, 2020, and the fiscal year 2017 legislation further reduced the April 1, 2020 statutory income tax rate to 17%.
Non-GAAP Financial Measures:
In addition to providing financial results in accordance with GAAP, the Company has provided adjusted financial results that exclude the impact of other nonrecurring items described in more detail throughout this press release. These non-GAAP financial measures are labeled as “Adjusted” and are used for evaluating the results of operations for internal purposes. These non-GAAP measures are not intended to replace the presentation of financial results in accordance with GAAP. Rather, the Company believes the exclusion of such items provides additional information to investors to facilitate the comparison of past and present operations. Unless otherwise noted, adjusted amounts in the attached schedules include foreign exchange.

JOHN WILEY SONS, INC.
UNAUDITED SEGMENT RESULTS
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2017 AND 2016
(in thousands)
FOURTH QUARTER ENDED APRIL 30,
																% Change
				US GAAP		Adjustments (A)		Adjusted		US GAAP		Adjustments (A)		Adjusted		US GAAP		Adjusted excl. FX
Revenue
Research			$	234,502		–		234,502		230,846		–		230,846		2%		3%
Publishing				153,748		–		153,748		147,072		–		147,072		5%		7%
Solutions				63,951		–		63,951		56,383		–		56,383		13%		14%
	Total		$	452,201		–		452,201		434,301		–		434,301		4%		6%
Direct Contribution to Profit
Research			$	112,578		1,272		113,850		113,884		(381)		113,503		-1%		-1%
Publishing				70,720		–		70,720		62,345		127		62,472		13%		16%
Solutions				12,811		168		12,979		12,121		657		12,778		6%		1%
	Total		$	196,109		1,440		197,549		188,350		403		188,753		4%		5%
Contribution to Profit (After Allocated Shared Services and Admin. Costs)
Research			$	78,993		1,272		80,265		80,753		(381)		80,372		-2%		-3%
Publishing				31,064		–		31,064		14,713		127		14,840		111%		117%
Solutions				5,725		168		5,893		3,832		657		4,489		49%		27%
	Total		$	115,782		1,440		117,222		99,298		403		99,701		17%		16%
Unallocated Shared Services and Admin. Costs				(52,360)		(3,130)		(55,490)		(55,978)		7,376		(48,602)		-6%		16%
Operating Income			$	63,422		(1,690)		61,732		43,320		7,779		51,099		46%		16%
Total Shared Services and Admin. Costs by Function
	Distribution and Operation Services		$	(15,754)		(3,113)		(18,867)		(25,921)		5,817		(20,104)		-39%		-3%
	Technology and Content Management			(66,839)		(204)		(67,043)		(68,156)		94		(68,062)		-2%		0%
	Finance			(12,437)		2		(12,435)		(13,140)		1,159		(11,981)		-5%		6%
	Other Administration			(37,657)		185		(37,472)		(37,813)		306		(37,507)		0%		2%
	Total		$	(132,687)		(3,130)		(135,817)		(145,030)		7,376		(137,654)		-9%		0%
TWELVE MONTHS ENDED APRIL 30,
																% Change
				US GAAP		Adjustments (A)		Adjusted		US GAAP		Adjustments (A)		Adjusted		US GAAP		Adjusted excl. FX
Revenue
Research			$	853,489		–		853,489		826,778		–		826,778		3%		7%
Publishing				633,449		–		633,449		695,728		–		695,728		-9%		-7%
Solutions				231,592		–		231,592		204,531		–		204,531		13%		14%
	Total		$	1,718,530		–		1,718,530		1,727,037		–		1,727,037		0%		2%
Direct Contribution to Profit
Research			$	397,486		1,949		399,435		383,499		2,982		386,481		4%		5%
Publishing				285,174		1,596		286,770		304,965		4,507		309,472		-6%		-5%
Solutions				47,673		1,787		49,460		36,975		1,042		38,017		29%		29%
	Total		$	730,333		5,332		735,665		725,439		8,531		733,970		1%		2%
Contribution to Profit (After Allocated Shared Services and Admin. Costs)
Research			$	252,228		1,949		254,177		252,110		2,982		255,092		0%		2%
Publishing				125,703		1,596		127,299		126,058		4,507		130,565		0%		0%
Solutions				14,822		1,787		16,609		3,992		1,042		5,034		271%		224%
	Total		$	392,753		5,332		398,085		382,160		8,531		390,691		3%		4%
Unallocated Shared Services and Admin. Costs				(186,600)		16,865		(169,735)		(194,047)		20,080		(173,967)		-4%		1%
Operating Income			$	206,153		22,197		228,350		188,113		28,611		216,724		10%		7%
Total Shared Services and Admin. Costs by Function
	Distribution and Operation Services		$	(82,474)		6,668		(75,806)		(90,180)		10,137		(80,043)		-9%		-1%
	Technology and Content Management			(268,259)		1,458		(266,801)		(262,178)		3,537		(258,641)		2%		5%
	Finance			(46,755)		(294)		(47,049)		(50,233)		3,474		(46,759)		-7%		3%
	One-time Pension Settlement			(8,842)		8,842		–		–		–		–
	Other Administration			(117,850)		191		(117,659)		(134,735)		2,932		(131,803)		-13%		-9%
	Total		$	(524,180)		16,865		(507,315)		(537,326)		20,080		(517,246)		-2%		0%
		(A) See the accompanying Notes to Unaudited Financial Statements for a description of the adjustment.

UNAUDITED ADJUSTED CONTRIBUTION TO PROFIT
INCLUDING ALLOCATED SHARED SERVICES AND ADMINISTRATIVE COSTS
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2017 AND 2016
(in thousands)
				Fourth Quarter Ended									Twelve Months Ended
				April 30,									April 30,
								% Change		% Change excl. FX							% Change		% Change excl. FX
Research:
	Direct Contribution to Profit		$	112,578		113,884		-1%		-3%		$	397,486		383,499		4%		6%
	Restructuring Charges (Credits) (A)			1,272		(381)							1,949		2,982
	Adjusted Direct Contribution to Profit			113,850		113,503		0%		-1%			399,435		386,481		3%		5%
	Allocated Shared Services and Admin. Costs			(33,585)		(33,131)		1%		3%			(145,258)		(131,389)		11%		13%
	Adjusted Contribution to Profit (after allocated		$	80,265		80,372		0%		-3%		$	254,177		255,092		0%		2%
		Shared Services and Admin. Costs)
Publishing:
	Direct Contribution to Profit		$	70,720		62,345		13%		16%		$	285,174		304,965		-6%		-5%
	Restructuring Charges (A)			–		127							1,596		4,507
	Adjusted Direct Contribution to Profit			70,720		62,472		13%		16%			286,770		309,472		-7%		-5%
	Allocated Shared Services and Admin. Costs			(39,656)		(47,632)		-17%		-15%			(159,471)		(178,907)		-11%		-9%
	Adjusted Contribution to Profit (after allocated		$	31,064		14,840		109%		117%		$	127,299		130,565		-3%		0%
		Shared Services and Admin. Costs)
				–		–							–		–
Solutions:
	Direct Contribution to Profit		$	12,811		12,121		6%		5%		$	47,673		36,975		29%		28%
	Restructuring Charges (A)			168		657							1,787		1,042
	Adjusted Direct Contribution to Profit			12,979		12,778		2%		1%			49,460		38,017		30%		29%
	Allocated Shared Services and Admin. Costs			(7,086)		(8,289)		-15%		-13%			(32,851)		(32,983)		0%		0%
	Adjusted Contribution to Profit (after allocated		$	5,893		4,489		31%		27%		$	16,609		5,034
		Shared Services and Admin. Costs)
Total Adjusted Contribution to Profit (after allocated Shared Services and Admin. Costs)			$	117,222		99,701		18%		16%		$	398,085		390,691		2%		4%
Unallocated Shared Services and Admin. Costs:
	Unallocated Shared Services and Admin. Costs		$	(52,360)		(55,978)		-6%		-5%		$	(186,600)		(194,047)		-4%		-1%
	Restructuring (Credits) Charges (A)			(3,130)		7,376							8,023		20,080
	One-time – Pension Settlement (B)			–		–							8,842		–
	Adjusted Unallocated Shared Services and Admin. Costs		$	(55,490)		(48,602)		14%		16%		$	(169,735)		(173,967)		-2%		1%
Adjusted Operating Income			$	61,732		51,099		21%		16%		$	228,350		216,724		5%		7%
		See the accompanying Notes to Unaudited Financial Statements for a description of the adjustment.

JOHN WILEY SONS, INC.
SEGMENT REVENUE by PRODUCT/SERVICE
FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED
APRIL 30, 2017 AND 2016
(in thousands)
				Fourth Quarter									Twelve Months
				Ended April 30,									Ended April 30,
								% of Revenue		% Change excl. FX							% of Revenue		% Change excl. FX
Research
	Journal Revenue
		Journal Subscriptions	$	167,319		171,335		71%		-3%		$	639,720		622,305		75%		6%
		Author-Funded Access		8,782		7,370		4%		26%			30,633		25,671		4%		26%
		Licensing, Reprints, Backfiles, and Other		49,775		52,141		21%		1%			164,070		178,802		19%		-3%
		Total Journal Revenue		225,876		230,846		96%		-1%			834,423		826,778		98%		4%
		Platform Services (Atypon)		8,626		–		4%					19,066		–		2%
		Total Research Revenue	$	234,502		230,846		100%		3%		$	853,489		826,778		100%		7%
Publishing
		STM and Professional Books	$	75,521		79,242		49%		-2%		$	291,255		330,984		46%		-9%
		Education Books		33,674		26,656		22%		28%			196,343		229,989		31%		-13%
		Total Books and Reference Material		109,195		105,898		71%		6%			487,598		560,973		77%		-11%
		Course Workflow (WileyPLUS)		18,178		17,160		12%		6%			62,348		58,519		10%		7%
		Online Test Preparation and Certification		10,024		6,643		7%		52%			35,609		28,115		6%		27%
		Licensing, Distribution, Advertising and Other		16,351		17,371		10%		-2%			47,894		48,121		7%		3%
		Total Publishing Revenue	$	153,748		147,072		100%		7%		$	633,449		695,728		100%		-7%
Solutions
	Online Program Management			30,443		26,715		48%		14%			111,638		96,469		48%		16%
	Professional Assessment			16,417		15,174		26%		9%			59,868		57,370		26%		5%
	Corporate Learning			17,091		14,494		26%		21%			60,086		50,692		26%		20%
		Total Solutions Revenue	$	63,951		56,383		100%		14%		$	231,592		204,531		100%		14%
Total Revenue			$	452,201		434,301				6%		$	1,718,530		1,727,037				2%

JOHN WILEY SONS, INC.
UNAUDITED STATEMENTS OF FINANCIAL POSITION
(in thousands)
			April 30,
Current Assets
Cash cash equivalents		$	58,516		363,806
Accounts receivable			188,679		167,638
Inventories			47,852		57,779
Prepaid and other			64,688		81,456
Total Current Assets			359,735		670,679
Product Development Assets			99,275		72,126
Technology, Property and Equipment			252,488		214,770
Intangible Assets			828,099		877,007
Goodwill			982,101		951,663
Income Tax Deposits			–		62,912
Other Assets			84,519		71,939
Total Assets			2,606,217		2,921,096
Current Liabilities
Accounts and royalties payable			139,206		166,222
Deferred revenue			436,235		426,489
Accrued employment costs			98,185		97,902
Accrued income taxes			22,222		9,450
Accrued pension liability			5,776		5,492
Other accrued liabilities			86,232		76,252
Total Current Liabilities			787,856		781,807
Long-Term Debt			365,000		605,007
Accrued Pension Liability			214,597		224,170
Deferred Income Tax Liabilities			160,491		189,868
Other Long-Term Liabilities			75,136		83,138
Shareholders’ Equity			1,003,137		1,037,106
Total Liabilities Shareholders’ Equity		$	2,606,217		2,921,096

JOHN WILEY SONS, INC.
UNAUDITED STATEMENTS OF FREE CASH FLOW
(in thousands)
			Twelve Months Ended
			April 30,
Operating Activities:
	Net income	$	113,643		145,782
	Amortization of intangibles		49,669		49,764
	Amortization of composition costs		40,209		39,658
	Depreciation of technology, property and equipment		66,683		66,427
	Restructuring charges		13,355		28,611
	Restructuring payments		(22,854)		(29,864)
	Deferred income tax benefit on UK rate change		(2,575)		(5,859)
	Unfavorable tax settlement		49,029		–
	One-time pension settlement		8,842		–
	Share-based compensation expense		17,552		16,105
	Excess tax benefits from share-based compensation		(414)		(1,027)
	Royalty advances		(112,370)		(110,135)
	Earned royalty advances		114,647		109,102
	Other non-cash charges and credits		6,298		15,786
	Change in deferred revenue		22,692		66,983
	Net change in operating assets and liabilities		(49,905)		(41,376)
	Cash Provided by Operating Activities		314,501		349,957
Investments in organic growth:
	Additions to technology, property and equipment		(110,700)		(93,705)
	Book composition and other product development spending		(37,559)		(37,272)
	Free Cash Flow less Book Composition and Other Product Development Spending		166,242		218,980
Other Investing and Financing Activities:
	Acquisitions, net of cash		(154,766)		(20,418)
	Proceeds from settlement of foreign exchange forward contract		60,417		–
	Repayment of long-term debt		(923,007)		(460,085)
	Repayment of short-term debt		–		(150,000)
	Borrowings of long-term debt		683,000		415,000
	Borrowings of short-term Debt		–		50,000
	Change in book overdrafts		(214)		1,725
	Cash dividends		(71,545)		(69,896)
	Purchase of treasury shares		(50,326)		(69,977)
	Debt issuance costs		–		(3,362)
	Proceeds from exercise of stock options and other		15,506		(95)
	Excess tax benefits from share-based compensation		414		1,027
	Cash Used for Investing and Financing Activities		(440,521)		(306,081)
Effects of Exchange Rate Changes on Cash			(31,011)		(6,534)
Decrease in Cash and Cash Equivalents for Period		$	(305,290)		(93,635)
RECONCILIATION TO GAAP PRESENTATION
Investing Activities:
	Book composition and other product development spending	$	(37,559)		(37,272)
	Additions to technology, property and equipment		(110,700)		(93,705)
	Proceeds from settlement of foreign exchange forward contract		60,417		–
	Acquisitions, net of cash		(154,766)		(20,418)
	Cash Used for Investing Activities	$	(242,608)		(151,395)
Financing Activities:
Cash Used for Investing and Financing Activities		$	(440,521)		(306,081)
Excluding:
	Acquisitions, net of cash		(154,766)		(20,418)
	Proceeds from settlement of FX forward contract		60,417		–
	Cash Used for Financing Activities	$	(346,172)		(285,663)
Free Cash Flow less Composition Spending:
The Company provides financial measures referred to as Free Cash Flow less Book Composition and Other Product Development Spending. Free Cash Flow less Book Composition and Other Product Development Spending is defined as cash flow from operating activities, less book composition and other product development and capital spending. Management believes this metric provides additional information to investors to facilitate the comparison of past and present results. This metric is also used internally by management in evaluating results. This non-GAAP measure is not intended to replace the financial results reported in accordance with US Generally Accepted Accounting Principles.

About JOHN WILEY & SONS, INC. (NYSE:JW.A)
John Wiley & Sons, Inc. provides knowledge and knowledge-enabled services in the areas of research, professional practice and education. The Company operates through three segments: Research, Professional Development and Education. Through the Research segment, the Company provides digital and print scientific, technical, medical and scholarly journals, reference works, books, database services and advertising. The Professional Development segment provides digital and print books, corporate learning solutions, employment talent solutions and training services, and test prep and certification. In the Education segment, the Company provides print and digital content, and education solutions, including online program management services for higher education institutions and course management tools for instructors and students. The Company is engaged in developing and cross-marketing products to its customer base of researchers, professionals, students and educators.

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