SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT 1934
For the quarterly period ended October 31, 1995 Commission File No. 1-11507
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES ACT OF 1934
For the transition period from to
JOHN WILEY & SONS, INC.
(Exact name of Registrant as specified in its charter)
NEW YORK 13-5593032
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
605 THIRD AVENUE, NEW YORK, NY 10158-0012
(Address of principal executive Zip Code
offices)
Registrant's telephone number, (212) 850-6000
including area code
NOT APPLICABLE
Former name, former address, and former fiscal year,
if changed since last report
Indicate by check mark, whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
The number of shares outstanding of each of the Registrant's
classes of common stock as of October 31, 1995 were:
Class A, par value $1.00 - 12,797,753
Class B, par value $1.00 - 3,290,700
This is the first of an eleven page document
<PAGE>
JOHN WILEY & SONS, INC.
INDEX
PART I - FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements.
Condensed Consolidated Statements of Financial Position -
Unaudited as of October 31, 1995 and April 30, 1995..........3
Condensed Consolidated Statements of Income - Unaudited
for the Six Months ended October 31, 1995 and 1994...........4
Condensed Consolidated Statements of Cash Flow - Unaudited
for the Six Months ended October 31, 1995 and 1994...........5
Notes to Unaudited Condensed Consolidated Financial...........6
Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................7-8
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders...........9
Item 6. Exhibits and Reports on Form 8-K..............................9
SIGNATURES...........................................................10
Exhibit 27 Financial Data Schedule...................................11
-2-
<PAGE>
JOHN WILEY & SONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - UNAUDITED
(In thousands)
<TABLE>
<CAPTION>
October 31, April 30,
1995 1994 1995
--------------------------------
<S> <C> <C> <C>
Assets
Current Assets
Cash and cash equivalents $ 2,078 15,871 34,410
Accounts receivable 62,484 54,304 52,562
Inventories 45,622 38,668 41,535
Deferred income tax benefits 7,981 8,160 8,004
Prepaid expenses 3,305 3,093 4,680
_______ _______ _______
Total Current Assets 121,470 120,096 141,191
Product Development Assets 27,460 21,575 24,509
Property and Equipment 21,737 19,081 21,244
Intangible Assets 51,452 49,106 53,351
Other Assets 7,655 7,927 7,186
_______ _______ _______
Total Assets $ 229,774 217,785 247,481
========= ======= =======
Liabilities & Shareholders' Equity
Current Liabilities
Notes payable and current portion of
long-term debt $ 15,355 6,263 621
Accounts and royalties payable 36,011 32,755 34,273
Deferred subscription revenues 20,635 22,556 65,749
Accrued income taxes 9,937 6,775 4,227
Other accrued liabilities 20,322 21,093 25,080
_______ ______ _______
Total Current Liabilities 102,260 89,442 129,950
Long-Term Debt --- 20,000 ---
Other Long-Term Liabilities 14,226 13,337 13,818
Deferred Income Taxes 5,293 3,652 4,881
Shareholders' Equity 107,995 91,354 98,832
_______ _______ _______
Total Liabilities & Shareholders' Equity $ 229,774 217,785 247,481
========= ======= =======
</TABLE>
The accompanying Notes are an integral part of the condensed consolidated
financial statements.
-3-
<PAGE>
JOHN WILEY & SONS, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands except per share information)
<TABLE>
<CAPTION>
Three Months Six Months
Ended October 31, Ended October 31,
1995 1994 1995 1994
----------------- -----------------
<S> <C> <C> <C> <C>
Revenues $ 86,831 78,558 174,923 159,345
Costs and Expenses
Cost of sales 29,329 26,254 58,201 52,644
Operating and administrative expenses 49,268 45,658 95,887 88,389
Amortization of intangibles 1,115 994 2,220 2,210
______ ______ _______ _______
Total Costs and Expenses 79,712 72,906 156,308 143,243
______ ______ _______ _______
Operating Income 7,119 5,652 18,615 16,102
Interest Income and Other 134 162 531 648
Interest Expense (187) (676) (216) (1,501)
______ ______ _______ _______
Interest Income (Expense) - Net (53) (514) 315 (853)
______ ______ _______ _______
Income Before Taxes 7,066 5,138 18,930 15,249
Provision For Income Taxes 2,826 2,056 7,572 6,100
________ _____ ______ _____
Net Income $ 4,240 3,082 11,358 9,149
======== ===== ====== =====
Net Income Per Share
Primary $ 0.26 0.19 0.69 0.56
Fully Diluted $ 0.26 0.19 0.69 0.56
Cash Dividends Per Share
Class A Common $ 0.0875 0.0775 0.1750 0.1550
Class B Common $ 0.0775 0.0688 0.1550 0.1375
Average Shares
Primary 16,538 16,250 16,496 16,242
Fully Diluted 16,568 16,282 16,517 16,276
</TABLE>
The accompanying Notes are an integral part of the condensed consolidated
financial statements.
-4-
<PAGE>
JOHN WILEY & SONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW - UNAUDITED
(In thousands)
Six Months
Ended October 31,
1995 1994
------------------
Operating Activities
Net income $ 11,358 9,149
Non-cash items 25,495 21,381
Net change in operating assets and liabilities (63,063) (48,648)
________ ________
Cash Used in Operating Activities (26,210) (18,118)
________ ________
Investing Activities
Additions to product development assets (11,909) (9,153)
Additions to property and equipment (4,153) (2,266)
Acquisition of publishing assets (1,467) (4,753)
Proceeds from sale of publishing lines --- ---
________ ________
Cash Used for Investing Activities (17,529) (16,172)
________ ________
Purchase of treasury shares (1,162) ---
Repayment of long-term debt --- (6,000)
Net borrowings of short-term debt 14,705 179
Cash dividends (2,748) (2,392)
Proceeds from exercise of stock options 840 180
_______ _______
Cash Provided by (Used for) Financial Activities 11,635 (8,033)
_______ _______
Effects of Exchange Rate Changes on Cash (228) 737
_______ _______
Cash and Cash Equivalents
Decrease for Period (32,332) (41,586)
Balance at Beginning of Period 34,410 57,457
________ _______
Balance at End of Period $ 2,078 15,871
======== =======
Cash Paid During the Period for
Interest $ 103 1,722
Income taxes $ 728 4,736
The accompanying Notes are an integral part of the condensed consolidated
financial statements.
-5-
<PAGE>
JOHN WILEY & SONS, INC., AND SUBSIDIARIES
NOTES TO UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 1995
1.In the opinion of management, the accompanying unaudited
condensed consolidated financial statements contain all
adjustments, consisting only of normal recurring adjustments,
necessary to present fairly the Company's consolidated
financial position as of October 31, 1995 and April 30, 1995,
and results of operations and cash flows for the periods ended
October 31, 1995 and 1994. These statements should be read in
conjunction with the most recent audited financial statements
contained in the Company's Form 10-K for the fiscal year ended
April 30, 1995.
2.The results for the six months ended October 31, 1995 are not
necessarily indicative of the results to be expected for the
full year. Certain prior period amounts have been
reclassified to conform to the current period's presentation.
Share data has been restated to reflect the 2-for-1 stock
split of October 5, 1995.
3.Income per share is determined by dividing income by the
weighted average number of common shares outstanding and
common stock equivalents resulting from the assumed exercise
of outstanding dilutive stock options and other stock awards,
less shares assumed to be repurchased with the related
proceeds at the average market price for the period for
primary earnings per share, and at the higher of the average
or end of period market price for fully diluted earnings per
share.
4.Inventories were as follows:
October 31, April 30,
1995 1994 1995
-------------------------------------------
(Thousands)
Finished goods $ 37,408 32,727 36,467
Work-in-process 6,494 5,201 5,762
Paper, cloth and other 5,983 3,429 2,769
______ ______ ______
49,885 41,357 44,998
LIFO reserve (4,263) (2,689) (3,463)
---------- ------- -------
Total inventories $ 45,622 38,668 41,535
========== ======= =======
-6-
<PAGE>
JOHN WILEY & SONS, INC., AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OCTOBER 31, 1995
FINANCIAL CONDITION
During this seasonal period of cash usage, operating
activities used $26.2 million of cash, or $8.1 million more
than the prior year's comparable period. The increase was
primarily due to the planned increase in expenses and to
higher inventory and receivable levels. The use of cash
during this period is consistent with the seasonality of the
journal subscription and the educational sector's receipts
cycle which occur, for the most part, in the second half of
the fiscal year.
Investing activities used $17.5 million during the current
quarter, or $1.4 million more than the prior year. Current
year acquisitions included the Preservation Press consisting
of architectural heritage books and technical preservation
guides.
Financing activities during the period primarily reflect short-
term borrowing needs as a result of prepaying long-term debt
at the end of last fiscal year, as well as dividend payments
and the purchase of treasury shares.
RESULTS OF OPERATIONS
SECOND QUARTER ENDED OCTOBER 31, 1995
Revenues for the second quarter advanced 11% to $86.8 million
compared with $78.6 million in the prior year. Operating
income for the current quarter was $7.1 million, a 26%
increase, compared with $5.7 million in the prior year. Net
income advanced 38%.
The improvement in revenues and operating income was driven
primarily by the Company's scientific, technical and medical
journals programs and its professional and trade business and
computer book lines. College division results for the quarter,
although still below expectations, benefited from the shift in
ordering patterns from the first quarter into the second
quarter as previously communicated. European and Asian
operations continued to reflect healthy revenue gains.
Cost of sales as a percentage of revenues increased from 33.4%
in the prior year to 33.8%, due to higher paper costs which
were anticipated. Operating expenses as a percentage of
revenues improved from 58.1% to 56.7%, as operating costs grew
at a slower rate than revenue growth due to cost containment
measures.
Interest expense declined by $.5 million due to the prepayment
of $26 million of high-cost debt at the end of last fiscal
year. The effective tax rate of 40% was the same for both
periods.
-7-
<PAGE>
RESULTS OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1995
Revenues for the first six months of fiscal 1996 were $174.9
million, or 10% ahead of the $159.3 million in the comparable
prior year period. Operating income was $18.6 million, or 16%
above the $16.1 million of the prior year period. Net income
was $11.4 million, an increase of $2.2 million, or 24% over
the prior year period. The improvements in revenues and
income for the period are attributable to the same factors
noted in the results of operations for the second quarter.
For the year-to-date, cost of sales as a percentage of
revenues increased from 33.0% to 33.3%, and operating expenses
declined from 55.5% to 54.8%.
The effective tax rate was 40% in both years.
-8-
<PAGE>
PART II - OTHER INFORMATION
Item 4.Submission of Matters to a Vote of Security Holders
The following matters were voted upon at the annual
meeting of shareholders of the Company on September 21, 1995.
Election of Directors
Fourteen directors as indicated in the Proxy Statement
were elected to the Board, five of whom were elected by
the holders of Class A Common Stock, and nine by the
holders of Class B Common Stock
Ratification of Appointment of Arthur Andersen LLP, as
Independent Public Accountants for the Fiscal Year Ending
April 30, 1996
The appointment was ratified as follows:
Votes for 1,984,900
Votes Against 76
Abstentions 219
Amendment to the Certificate of Incorporation to Increase
the Number of Authorized Shares of Capital Stock
The amendment to increase the total number of authorized
shares of capital stock of the company from 16 million to
44 million, to increase the number of authorized shares
of Class A stock from 10 million to 30 million, and to
increase the number of authorized shares of Class B stock
from 4 million to 12 million was approved as follows:
Votes for 1,770,157
Votes Against 206,568
Abstentions 7,062
Amendment to the 1990 Director's Stock Plan
The amendment to permit Directors to receive stock in
lieu of all or a portion of eligible cash compensation
was approved as follows:
Votes for 1,958,800
Votes Against 10,243
Abstentions 15,036
Item 6.Exhibits and Reports on Form 8-K
(a)Exhibits
27 - Financial Data Schedule
(b)Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
October 31, 1995.
-9-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
JOHN WILEY & SONS, INC.
Registrant
By/s/ Charles R. Ellis
______________
Charles R. Ellis
President and
Chief Executive Officer
By/s/ Robert D. Wilder
______________
Robert D. Wilder
Senior Vice President and
Chief Financial Officer
Dated: December 14, 1995
-10-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND THE CONSOLIDATED STATEMENT
OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000107140
<NAME> JOHN WILEY & SONS, INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-START> MAY-01-1995
<PERIOD-END> OCT-31-1995
<CASH> 2,078
<SECURITIES> 0
<RECEIVABLES> 92,599
<ALLOWANCES> 30,115
<INVENTORY> 45,622
<CURRENT-ASSETS> 121,470
<PP&E> 53,439
<DEPRECIATION> 31,702
<TOTAL-ASSETS> 229,774
<CURRENT-LIABILITIES> 102,260
<BONDS> 0
<COMMON> 20,392
0
0
<OTHER-SE> 87,603
<TOTAL-LIABILITY-AND-EQUITY> 229,774
<SALES> 0
<TOTAL-REVENUES> 174,923
<CGS> 0
<TOTAL-COSTS> 58,201
<OTHER-EXPENSES> 98,107
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 216
<INCOME-PRETAX> 18,930
<INCOME-TAX> 7,572
<INCOME-CONTINUING> 11,358
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,358
<EPS-PRIMARY> .69
<EPS-DILUTED> .69
</TABLE>
