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, 1996 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
incorporation or organization) Identification No.)
605 THIRD AVENUE, NEW YORK, NY 10158-0012
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(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 January 31, 1996 were:
Class A, par value $1.00 - 12,808,196
Class B, par value $1.00 - 3,268,060
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 January 31, 1996 and 1995,
and April 30, 1995 3
Condensed Consolidated Statements of Income
- Unaudited for the Nine Months ended
January 31, 1996 and 1995 4
Condensed Consolidated Statements of Cash Flow
- Unaudited for the Nine Months ended
January 31, 1996 and 1995 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
Exhibit 27 Financial Data Schedule 11
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<PAGE>
JOHN WILEY & SONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION -
UNAUDITED
(In thousands)
<TABLE>
<CAPTION>
January 31, April 30,
------------------- ---------
1996 1995 1995
--------- --------- --------
<S> <C> <C> <C>
Assets
Current Assets
Cash and cash equivalents $ 66,235 79,208 34,410
Accounts receivable 73,515 65,441 52,562
Inventories 46,968 37,555 41,535
Deferred income tax benefits 8,672 8,151 8,004
Prepaid expenses 2,948 3,004 4,680
Total Current Assets 198,338 193,359 141,191
--------- -------- --------
Product Development Assets 28,781 22,091 24,509
Property and Equipment 21,177 19,245 21,244
Intangible Assets 51,024 49,726 53,351
Other Assets 8,098 8,203 7,186
--------- -------- --------
Total Assets $ 307,418 292,624 247,481
--------- -------- --------
Liabilities & Shareholders' Equity
Current Liabilities
Notes payable and current portion $ 1,477 7,313 621
of long-term debt
Accounts and royalties payable 46,046 40,463 34,273
Deferred subscription revenues 86,684 76,180 65,749
Accrued income taxes 9,690 7,218 4,227
Other accrued liabilities 24,178 27,127 25,080
--------- -------- --------
Total Current Liabilities 168,075 158,301 129,950
Long-Term Debt -- 20,000 --
Other Long-Term Liabilities 14,749 13,981 13,818
Deferred Income Taxes 9,519 3,696 4,881
Shareholders' Equity 115,075 96,646 98,832
--------- -------- --------
Total Liabilities & $ 307,418 292,624 247,481
Shareholders'Equity --------- --------- ---------
</TABLE>
The accompanying Notes are an integral part of the condensed
consolidated financial statements.
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<PAGE>
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,
------------------ ------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues $ 97,409 91,930 272,332 251,275
Costs and Expenses
Cost of sales 35,838 32,530 94,039 85,174
Operating and admin. expenses 49,728 48,285 145,615 136,674
Amortization of intangibles 1,133 875 3,353 3,085
-------- -------- -------- --------
Total Costs and Expenses 86,699 81,690 243,007 224,933
-------- -------- -------- --------
Operating Income 10,710 10,240 29,325 26,342
Interest Income and Other 4,838 489 5,369 1,137
Interest Expense (127) (689) (343) (2,190)
-------- -------- -------- --------
Interest Income (Expense)-Net 4,711 (200) 5,026 (1,053)
-------- -------- -------- --------
Income Before Taxes 15,421 10,040 34,351 25,289
Provision For Income Taxes 5,586 3,510 13,158 9,610
-------- -------- -------- --------
Net Income $ 9,835 6,530 21,193 15,679
-------- -------- -------- --------
Net Income Per Share
Primary $ 0.59 0.40 1.28 0.96
Fully Diluted $ 0.59 0.40 1.28 0.96
Cash Dividends Per Share
Class A Common $ 0.0875 0.0775 0.2625 0.2325
Class B Common $ 0.0775 0.0688 0.2325 0.2063
Average Shares
Primary 16,604 16,304 16,542 16,266
Fully Diluted 16,616 16,378 16,576 16,360
</TABLE>
The accompanying Notes are an integral part of the condensed
consolidated financial statements.
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<PAGE>
JOHN WILEY & SONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW - UNAUDITED
(In thousands)
Nine Months
Ended January 31,
---------------------
1996 1995
--------- ---------
Operating Activities
Net income $ 21,193 15,679
Non-cash items 38,493 34,825
Net change in operating assets and liabilities 3,892 4,497
--------- ---------
Cash Provided by Operating Activities 63,578 55,001
--------- ---------
Investing Activities
Additions to product development assets (19,231) (13,894)
Additions to property and equipment (5,658) (4,291)
Acquisition of publishing assets (1,975) (7,424)
--------- ---------
Cash Used for Investing Activities (26,864) (25,609)
--------- ---------
Financing Activities
Purchase of treasury shares (2,292) -
Repayment of long-term debt - (6,000)
Net borrowings of short-term debt 847 1,209
Cash dividends (4,125) (3,591)
Proceeds from exercise of stock options 1,112 273
--------- ---------
Cash Used for Financing Activities (4,458) (8,109)
--------- ---------
Effects of Exchange Rate Changes on Cash (431) 468
--------- ---------
Cash and Cash Equivalents
Increase for Period 31,825 21,751
Balance at Beginning of Period 34,410 57,457
--------- ---------
Balance at End of Period $ 66,235 79,208
--------- ---------
Cash Paid During the Period for
Interest $ 487 3,102
Income taxes $ (2,468) 7,460
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
JANUARY 31, 1996
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, 1996 and 1995, and April 30, 1995, and results of
operations and cash flows for the periods ended January 31, 1996
and 1995. 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 nine months ended January 31, 1996 are not
necessarily indicative of the results to be expected for the full
year. 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:
January 31, April 30,
-------------------------- -----------
1996 1995 1995
----------- ----------- -----------
(Thousands)
Finished goods $ 39,664 30,115 36,467
Work-in-process 5,458 5,772 5,762
Paper, cloth and other 6,209 5,347 2,769
----------- ----------- -----------
51,331 41,234 44,998
LIFO reserve (4,363) (3,679) (3,463)
----------- ----------- -----------
Total inventories $ 46,968 37,555 41,535
----------- ----------- -----------
5. Net income for the third quarter of the current fiscal year
includes interest income after taxes of $2.6 million, equal to
$0.16 per share, relating to interest received on the favorable
resolution of amended tax return claims.
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<PAGE>
JOHN WILEY & SONS, INC., AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
JANUARY 31, 1996
FINANCIAL CONDITION
Operating activities for the first nine months of fiscal 1996 provided
$63.6 million of cash, or $8.6 million more than the prior year's
comparable period. Approximately $6 million of the increase was
attributable to tax refunds and interest received on the favorable
resolution of amended tax return claims. The remaining improvement
was due to higher journal receipts compared with the prior year. 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 $26.9 million during the current period,
compared with $25.6 million in the prior year. Investments in product
development assets of $19.2 million increased $5.3 million over the
prior year in support of the higher volume of business.
Financing activities primarily reflect dividends and the purchase of
treasury shares.
RESULTS OF OPERATIONS
THIRD QUARTER ENDED JANUARY 31, 1996
Revenues for the third quarter advanced 6% to $97.4 million compared
with $91.9 million in the prior year. Operating income for the
current quarter was $10.7 million, or a 5% increase, compared with
$10.2 million in the prior year. Net income advanced 51% for the
quarter, or 10% excluding the effects of the interest received on the
tax settlement as mentioned in Note 5 of the Notes to the Financial
Statements.
The improvement in revenues and operating income was primarily
attributable to strong performances in the Company's scientific,
technical and medical journal programs and in its professional/trade
computer book line. The college division, although reflecting revenue
gains for the quarter better than industry averages, is operating in a
market that is showing only slight growth overall. Revenue gains were
also noteworthy in the Company's European and Asian operations.
Cost of sales as a percentage of revenues was 36.8% for the third
quarter of the current year compared with 35.4% in the prior year,
reflecting higher paper costs which were anticipated. Operating
expenses as a percentage of revenues decreased from 52.5% in the prior
year to 51.1%, as operating costs grew at a slower rate than revenue
growth due to cost containment measures.
Interest income increased as a result of the favorable tax settlement.
Interest expense declined by $.6 million for the quarter and $1.8
million for the year-to-date due to the prepayment of $26 million of
high-cost debt at the end of last fiscal year. The effective tax rate
was 36% compared with 35% in the prior years' third quarter.
-7-
<PAGE>
RESULTS OF OPERATIONS
NINE MONTHS ENDED JANUARY 31, 1996
Revenues for the first nine months of fiscal 1996 were $272.3 million,
or 8% ahead of the $251.3 million in the comparable prior year period.
Operating income was $29.3 million, or 11% above the $26.3 million of
the prior year period. Net income was $21.2 million, an increase of
$5.5 million, or 35% over the prior year. Excluding the effects of
the interest received on the tax settlement, net income increased 18%
over the prior year.
For the year-to-date, cost of sales as a percentage of revenues
increased from 33.9% to 34.5%, and operating expenses declined from
54.4% to 53.5% of revenues.
The improvements in revenues and income for the period, as well as the
variances in the expense ratios, are attributable to the same factors
noted in the results of operations for the third quarter.
The effective tax rate was approximately 38% in both years.
-8-
<PAGE>
PART II - OTHER INFORMATION
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
January 31, 1996.
-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: March 11, 1996
-10-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND THE CONOLIDATED 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> 9-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-START> MAY-01-1995
<PERIOD-END> JAN-31-1996
<CASH> 66,235
<SECURITIES> 0
<RECEIVABLES> 73,515
<ALLOWANCES> 0
<INVENTORY> 46,968
<CURRENT-ASSETS> 198,338
<PP&E> 54,131
<DEPRECIATION> 32,954
<TOTAL-ASSETS> 307,418
<CURRENT-LIABILITIES> 168,075
<BONDS> 0
<COMMON> 20,404
0
0
<OTHER-SE> 94,671
<TOTAL-LIABILITY-AND-EQUITY> 307,418
<SALES> 0
<TOTAL-REVENUES> 272,332
<CGS> 94,039
<TOTAL-COSTS> 148,968
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 343
<INCOME-PRETAX> 34,351
<INCOME-TAX> 13,158
<INCOME-CONTINUING> 21,193
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,193
<EPS-PRIMARY> 1.28
<EPS-DILUTED> 1.28
</TABLE>
