<PAGE>
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 January 31, 1995 Commission File No. 0-2538
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 offices) Zip Code
Registrant's telephone number, including area code (212) 850-6000
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 January 31, 1995 were:
Class A, par value $1.00 - 6,297,043
Class B, par value $1.00 - 1,648,718
This is the first of a ten page document
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JOHN WILEY & SONS, INC.
INDEX
PART I - FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements.
Condensed Consolidated Statements of Financial Position - Unaudited
as of January 31, 1995 and April 30, 1994 3
Condensed Consolidated Statements of Income - Unaudited
for the Nine Months ended January 31, 1995 and 1994 4
Condensed Consolidated Statements of Cash Flow - Unaudited
for the Nine Months ended January 31, 1995 and 1994 5
Notes to Unaudited Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-8
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 9
SIGNATURES 10
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JOHN WILEY & SONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - UNAUDITED
(In thousands)
January 31, April 30,
1995 1994
--------- ---------
Assets
Current Assets
Cash $ 5,591 2,191
Short-term investments 73,617 55,266
Accounts receivable 65,441 45,998
Inventories 37,555 37,281
Deferred income tax benefits 8,151 9,246
Prepaid expenses 3,004 3,642
--------- ---------
Total Current Assets 193,359 153,624
Product Development Assets 22,091 20,433
Property and Equipment 19,245 19,623
Intangible Assets 49,726 43,701
Other Assets 8,203 6,559
--------- ---------
Total Assets $ 292,624 243,940
========= =========
Liabilities & Shareholders' Equity
Current Liabilities
Notes payable and current portion of
long-term debt $ 7,313 6,079
Accounts and royalties payable 40,463 25,619
Deferred subscription revenues 76,180 56,420
Accrued income taxes 7,218 4,607
Other accrued liabilities 27,528 25,840
--------- ---------
Total Current Liabilities 158,702 118,565
Long-Term Debt 20,000 26,000
Other Long-Term Liabilities 13,580 12,953
Deferred Income Taxes 3,696 4,092
Shareholders' Equity 96,646 82,330
--------- ---------
Total Liabilities & Shareholders' Equity $ 292,624 243,940
========= =========
The accompanying Notes are an integral part of the
condensed consolidated financial statements.
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JOHN WILEY & SONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands except per share information)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended January 31, Ended January 31,
--------------------- ---------------------
1995 1994 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues $ 91,930 79,480 251,275 221,770
Costs and Expenses
Cost of sales 32,530 27,428 85,174 75,292
Operating and administrative expenses 48,285 43,180 136,674 122,613
Amortization of intangibles 875 1,594 3,085 4,376
--------- --------- --------- ---------
Total Costs and Expenses 81,690 72,202 224,933 202,281
--------- --------- --------- ---------
Unusual Items - Income (Charge) - (1,901) - 174
--------- --------- --------- ---------
Operating Income 10,240 5,377 26,342 19,663
Interest Income and Other 489 527 1,137 1,241
Interest Expense (689) (769) (2,190) (2,758)
--------- --------- --------- ---------
Interest Income (Expense) - Net (200) (242) (1,053) (1,517)
--------- --------- --------- ---------
Income Before Taxes 10,040 5,135 25,289 18,146
Provision For Income Taxes 3,510 1,632 9,610 6,796
--------- --------- --------- ---------
Net Income $ 6,530 3,503 15,679 11,350
========= ========= ========= =========
Net Income Per Share
Primary $ 0.80 0.44 1.93 1.43
Fully Diluted $ 0.80 0.44 1.92 1.42
Cash Dividends Per Share
Class A Common $ 0.1550 0.1375 0.4650 0.4125
Class B Common $ 0.1375 0.1225 0.4125 0.3675
Average Shares
Primary 8,152 8,048 8,133 7,914
Fully Diluted 8,189 8,084 8,180 8,018
</TABLE>
The accompanying Notes are an integral part of the
condensed consolidated financial statements.
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JOHN WILEY & SONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW - UNAUDITED
(In thousands)
Nine Months
Ended January 31,
---------------------
1995 1994
--------- ---------
Operating Activities
Net Income $ 15,679 11,350
Non-cash items 34,825 33,683
Net change in operating assets and liabilities 4,497 2,597
--------- ---------
Cash Provided by Operating Activities 55,001 47,630
--------- ---------
Investing Activities
Additions to product development assets (13,894) (12,105)
Additions to property and equipment (4,291) (4,480)
Acquisition of publishing assets (7,424) (5,332)
Proceeds from sale of publishing lines - 9,210
--------- ---------
Cash Used for Investing Activities (25,609) (12,707)
--------- ---------
Financing Activities
Repayment of long-term debt (6,000) (4,000)
Net borrowings of short-term debt 1,209 84
Cash dividends (3,591) (3,119)
Proceeds from exercise of stock options 273 2,082
--------- ---------
Cash Used for Financing Activities (8,109) (4,953)
--------- ---------
Effects of Exchange Rate Changes on Cash 468 (664)
--------- ---------
Cash and Short-Term Investments
Increase for Period 21,751 29,306
Balance at Beginning of Period 57,457 46,315
--------- ---------
Balance at End of Period $ 79,208 75,621
========= =========
Cash Paid During the Period for
Interest $ 3,102 3,629
Income taxes $ 7,460 3,464
The accompanying Notes are an integral part of the
condensed consolidated financial statements.
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JOHN WILEY & SONS, INC., AND SUBSIDIARIES
NOTES TO UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 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 January 31, 1995
and April 30, 1994, and results of operations and cash
flows for the periods ended January 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,
1994.
2.The results for the nine months ended January 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.
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:
January 31, 1995 April 30, 1994
(Thousands)
Finished Goods $30,115 $31,536
Work-in-process 5,772 6,795
Paper, cloth and other 5,347 1,539
-------- -------
41,234 39,870
LIFO reserve (3,679) (2,589)
-------- --------
Total inventories $37,555 $37,281
======== ========
5.Net income for the third quarter of the prior fiscal year
included an unusual charge of $1.9 million pre-tax, or
$1.1 million after taxes, equal to $.13 per share
relating primarily to the restructuring and consolidation
of certain distribution and information technology
support functions. Net income for the prior fiscal year-
to-date also includes an unusual gain recorded in the
second quarter of $2.1 million pre-tax, or $1.3 million
after taxes, equal to $.16 per share, relating primarily
to the divestiture of the company's Canadian high school
and Australian primary school publishing lines. The net
effect of these unusual items amounted to a gain of $.2
million, or $.03 per share in the prior fiscal year-to-
date.
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JOHN WILEY & SONS, INC., AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
JANUARY 31, 1995
FINANCIAL CONDITION
Operating activities for the first nine months of fiscal
1995 provided $55.0 million of cash, or $7.4 million more
than the prior year's comparable period. The increase
was primarily attributable to higher earnings and journal
receipts. The generation of cash during this period is
consistent with the seasonality of the journal
subscription receipts cycle which occurs, for the most
part, in the third quarter of the fiscal year.
Investing activities used $25.6 million during the
current period, or $12.9 million more than the prior
year. The increase was primarily due to the $9.2 million
of proceeds received in the prior year on the divestiture
of certain publishing lines as discussed in Note 5.
Investing activities in the current year include $7.4
million for the following acquisitions: Houghton
Mifflin's college engineering list; ValuSource, which
produces specialized business valuation software for
accountants, entrepreneurs, and corporations; and the
publishing business of Executive Enterprises, Inc.
consisting of books, journals and newsletters for
environmental management, accounting, law and human
resource professionals.
Financing activities primarily reflect dividends and the
scheduled repayment of long-term debt.
RESULTS OF OPERATIONS
THIRD QUARTER ENDED JANUARY 31, 1995
Revenues for the third quarter advanced 16% to $91.9
million compared with $79.5 million in the prior year.
Operating income for the current quarter was $10.2
million, or a 40% increase, compared with $7.3 million
excluding the unusual charge in the prior year. Net
income advanced 42% for the quarter, excluding the
unusual charge.
The improvement in revenues and operating income was
primarily attributable to strong performances in the
Company's professional and trade book lines and in its
scientific, technical and medical publishing program.
The college division also reflected improvement over the
prior year as it continued to gain market share. Revenue
gains were also noteworthy in the Company's European and
Asian operations.
Cost of sales as a percentage of revenues was 35.4% for
the third quarter of the current year compared with 34.5%
in the prior year, reflecting increased paper costs.
Operating expenses as a percentage of revenues decreased
from 54.3% in the prior year to 52.5% primarily due to
the containment of support expenses.
Interest expense declined due to the reduction in debt
outstanding.
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RESULTS OF OPERATIONS
NINE MONTHS ENDED JANUARY 31, 1995
Revenues for the first nine months of fiscal 1995 were
$251.3 million, or 13% ahead of the $221.8 million in the
comparable prior year period. Operating income was $26.3
million, or 34% above the $19.7 million of the prior year
period. Net income was $15.7 million, an increase of
$4.3 million, or 38% over the prior year. The
improvements in revenues and income for the period are
attributable to the same factors noted in the results of
operations for the third quarter.
For the year-to-date, cost of sales as a percentage of
revenues was approximately 34% in both years. Operating
expenses declined from 55.3% to 54.4% of revenues due to
the containment of support expenses.
The effective tax rate was approximately 38% in both
years.
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<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter
ended January 31, 1995.
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<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: March 10, 1995
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FORM 10-Q 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> 9-MOS
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-START> MAY-01-1994
<PERIOD-END> JAN-31-1995
<CASH> 5,591
<SECURITIES> 73,617
<RECEIVABLES> 96,062
<ALLOWANCES> 30,621
<INVENTORY> 37,555
<CURRENT-ASSETS> 193,359
<PP&E> 50,756
<DEPRECIATION> 31,511
<TOTAL-ASSETS> 292,624
<CURRENT-LIABILITIES> 158,702
<BONDS> 20,000
<COMMON> 10,153
0
0
<OTHER-SE> 86,493
<TOTAL-LIABILITY-AND-EQUITY> 292,624
<SALES> 244,874
<TOTAL-REVENUES> 251,275
<CGS> 72,152
<TOTAL-COSTS> 85,174
<OTHER-EXPENSES> 139,759
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,190
<INCOME-PRETAX> 25,289
<INCOME-TAX> 9,610
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<NET-INCOME> 15,679
<EPS-PRIMARY> 1.93
<EPS-DILUTED> 1.92
</TABLE>
