$WLY reports Q3 2023 earnings and announces strategic shift
Mar 9th 2023, 6:18 pm
Analyst Summary: John Wiley & Sons Inc. has reported its financial results for Q3 of fiscal year 2023, which ended on January 31, 2023. Despite being faced with challenging market conditions and an unplanned publishing pause at Hindawi, the company’s President and CEO, Brian Napack, announced a strategic shift to create a more focused company, with consistent growth and greater profitability. The company has also reorganized its Education lines of business into two new customer-centric segments, namely Academic and Talent segments, aimed at driving growth in training, sourcing, and upskilling solutions while addressing corporate and university customer groups. Academic-publishing segment revenue performance was primarily weighed down by print declines offsetting growth in digital courseware. University Services were also hit by lower fee-for-service revenue and online enrollment challenges. Conversely, Talent-segment revenue grew at constant currency fuelled by double-digit growth in placements and corporate training, while the Research-segment and Corporate Expense categories remained unchanged. The charge of $1.86 per share was reported for Education and University Services businesses, reflecting continued enrollment headwinds, a rising interest rate environment, and lower market multiples. The company made additional charges of $0.12 per share related to the closure of a tech development center in Russia, and $0.05 per share related to considerations for a previous acquisition. John Wiley & Sons INC reported a Net Debt-to-EBITDA ratio of 2.1 at quarter-end, attributable to working capital timing, lower cash earnings, and restructuring payments. Looking ahead, the company has provided a fiscal 2023 outlook with projected revenue and Adjusted EBITDA impacted by hindrances from numerous factors, including increased academic-market headwinds, the publishing pause in Hindawi special issues, and higher interest expense. Non-GAAP financial measures, which exclude the impact of restructuring charges and credits as well as impacts from acquisitions, remove distortion from foreign currency movement effects, and provide a comparable basis to analyze operating results and earnings while providing useful information to investors and financial analysts for operational trends and comparisons over time. The company’s goodwill is required to be tested for impairment immediately before and after segment realignment. The company has also noted that forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to uncertainties and contingencies beyond the company’s control and that actual results may differ materially from those in any forward-looking statements.