UNITED STATES
|
SECURITIES AND EXCHANGE COMMISSION
|
OF THE SECURITIES EXCHANGE ACT 1934
|
OR
|
OF THE SECURITIES ACT OF 1934
|
NEW YORK
|
13-5593032
|
|
(State of other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
111 RIVER STREET, HOBOKEN NJ
|
07030
|
|
(Address of principal executive offices)
|
Zip Code
|
|
Registrant’s telephone number, including area code
|
(201) 748-6000
|
|
NOT APPLICABLE
|
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 [ ]
|
Indicate by check mark, whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [x] No [ ]
|
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
|
Large accelerated filer [X] Accelerated filer [ ] Non-accelerated filer [ ]
Smaller reporting company [ ]
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
|
YES [ ] NO [X]
|
PART I
|
-
|
FINANCIAL INFORMATION
|
PAGE NO.
|
|
Item 1.
|
Financial Statements
|
|||
Condensed Consolidated Statements of Financial Position - Unaudited as of October 31, 2014 and 2013, and April 30, 2014
|
3
|
|||
Condensed Consolidated Statements of Income - Unaudited for the three and six months ended October 31, 2014 and 2013
|
4
|
|||
Condensed Consolidated Statements of Comprehensive Income - Unaudited for the three and six months ended October 31, 2014 and 2013
|
5
|
|||
Condensed Consolidated Statements of Cash Flows – Unaudited for the six months ended October 31, 2014 and 2013
|
6
|
|||
Notes to Unaudited Condensed Consolidated Financial Statements
|
7-17
|
|||
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
18-38
|
||
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
39-41
|
||
Item 4.
|
Controls and Procedures
|
41
|
||
PART II
|
-
|
OTHER INFORMATION
|
||
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
42
|
||
Item 6.
|
Exhibits and Reports on Form 8-K
|
43
|
||
SIGNATURES AND CERTIFICATIONS
|
44-48
|
|||
|
JOHN WILEY & SONS, INC. AND SUBSIDIARIES
|
||||||
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
||||||
(In thousands)
|
||||||
October 31,
|
April 30,
|
|||||
2014
|
2013
|
2014
|
||||
(Unaudited)
|
(Unaudited)
|
|||||
Assets:
|
||||||
Current Assets
|
||||||
Cash and cash equivalents
|
$
|
198,912
|
$
|
149,662
|
$
|
486,377
|
Accounts receivable
|
204,424
|
180,175
|
149,733
|
|||
Inventories
|
70,941
|
81,368
|
75,495
|
|||
Prepaid and other
|
66,233
|
52,377
|
78,057
|
|||
Total Current Assets
|
540,510
|
463,582
|
789,662
|
|||
Product Development Assets
|
58,851
|
67,149
|
82,940
|
|||
Technology, Property & Equipment
|
190,811
|
184,050
|
188,718
|
|||
Intangible Assets
|
992,618
|
961,588
|
984,661
|
|||
Goodwill
|
1,003,290
|
851,309
|
903,665
|
|||
Income Tax Deposits
|
64,036
|
61,001
|
64,037
|
|||
Other Assets
|
62,659
|
61,782
|
63,682
|
|||
Total Assets
|
$
|
2,912,775
|
$
|
2,650,461
|
$
|
3,077,365
|
Liabilities & Shareholders' Equity:
|
||||||
Current Liabilities
|
||||||
Short-term debt
|
$
|
50,000
|
$
|
-
|
$
|
-
|
Accounts and royalties payable
|
|
180,033
|
161,649
|
142,534
|
||
Deferred revenue
|
163,902
|
138,354
|
385,654
|
|||
Accrued employment costs
|
66,737
|
83,738
|
118,503
|
|||
Accrued income taxes
|
10,127
|
7,804
|
13,324
|
|||
Accrued pension liability
|
4,625
|
4,389
|
4,671
|
|||
Other accrued liabilities
|
52,976
|
44,579
|
64,901
|
|||
Total Current Liabilities
|
528,400
|
440,513
|
729,587
|
|||
Long-Term Debt
|
749,513
|
647,900
|
700,100
|
|||
Accrued Pension Liability
|
155,497
|
203,266
|
164,634
|
|||
Deferred Income Tax Liabilities
|
234,685
|
194,639
|
222,482
|
|||
Other Long-Term Liabilities
|
82,278
|
77,773
|
78,314
|
|||
Shareholders’ Equity
|
||||||
Class A & Class B Common Stock
|
83,190
|
83,190
|
83,190
|
|||
Additional paid-in-capital
|
345,082
|
306,356
|
327,588
|
|||
Retained earnings
|
1,542,082
|
1,430,295
|
1,489,069
|
|||
Accumulated other comprehensive loss
|
(250,490)
|
(235,463)
|
(190,291)
|
|||
Treasury stock
|
(557,462)
|
(498,008)
|
(527,308)
|
|||
Total Shareholders’ Equity
|
1,162,402
|
1,086,370
|
1,182,248
|
|||
Total Liabilities & Shareholders' Equity
|
$
|
2,912,775
|
$
|
2,650,461
|
$
|
3,077,365
|
The accompanying notes are an integral part of the condensed consolidated financial statements.
|
JOHN WILEY & SONS, INC. AND SUBSIDIARIES
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED
|
||||||||
(In thousands except per share information)
|
||||||||
For The Three Months
|
For The Six Months
|
|||||||
Ended October 31,
|
Ended October 31,
|
|||||||
2014
|
2013
|
2014
|
2013
|
|||||
Revenue
|
$
|
476,972
|
$
|
449,153
|
$
|
914,889
|
$
|
860,173
|
Costs and Expenses
|
||||||||
Cost of sales
|
134,541
|
130,352
|
258,594
|
250,143
|
||||
Operating and administrative expenses
|
253,328
|
237,526
|
505,062
|
474,521
|
||||
Restructuring charges (credits)
|
-
|
15,316
|
(155)
|
23,071
|
||||
Impairment charges
|
-
|
4,786
|
-
|
4,786
|
||||
Amortization of intangibles
|
13,099
|
10,986
|
25,754
|
21,901
|
||||
Total Costs and Expenses
|
400,968
|
398,966
|
789,225
|
774,422
|
||||
Operating Income
|
76,004
|
50,187
|
125,634
|
85,751
|
||||
Interest Expense
|
(4,506)
|
(3,392)
|
(8,650)
|
(6,863)
|
||||
Foreign Exchange Transaction Gain (Loss)
|
210
|
(581)
|
45
|
300
|
||||
Interest Income and Other
|
1,108
|
491
|
1,418
|
1,629
|
||||
|
||||||||
Income Before Taxes
|
72,816
|
46,705
|
118,447
|
80,817
|
||||
Provision For Income Taxes
|
19,039
|
10,508
|
31,024
|
8,687
|
||||
Net Income
|
$
|
53,777
|
$
|
36,197
|
$
|
87,423
|
$
|
72,130
|
Earnings Per Share
|
||||||||
Diluted
|
$
|
0.90
|
$
|
0.61
|
$
|
1.46
|
$
|
1.22
|
Basic
|
$
|
0.91
|
$
|
0.62
|
$
|
1.48
|
$
|
1.23
|
Cash Dividends Per Share
|
||||||||
Class A Common
|
$
|
0.29
|
$
|
0.25
|
$
|
0.58
|
$
|
0.50
|
Class B Common
|
$
|
0.29
|
$
|
0.25
|
$
|
0.58
|
$
|
0.50
|
Average Shares
|
||||||||
Diluted
|
59,756
|
59,416
|
59,777
|
59,294
|
||||
Basic
|
58,962
|
58,535
|
58,960
|
58,487
|
||||
|
|
|||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
|
JOHN WILEY & SONS, INC. AND SUBSIDIARIES
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME – UNAUDITED
|
||||||||
(In thousands)
|
||||||||
For The Three Months
|
For The Six Months
|
|||||||
Ended October 31,
|
Ended October 31,
|
|||||||
2014
|
2013
|
2014
|
2013
|
|||||
Net Income
|
$ |
53,777
|
$ |
36,197
|
$ |
87,423
|
$ |
72,130
|
Other Comprehensive Income (Loss):
|
||||||||
Foreign currency translation adjustment
|
(63,930)
|
50,940
|
(66,788)
|
41,137
|
||||
Unamortized retirement costs, net of tax provision (benefit) of $1,877, $(253), $2,266 and $881, respectively
|
5,428
|
(1,106)
|
6,550
|
1,699
|
||||
Unrealized gain on interest rate swaps, net of tax (benefit) provision of $(144), $35, $24 and $198, respectively
|
(227)
|
57
|
39
|
333
|
||||
Total Other Comprehensive Income (Loss)
|
(58,729)
|
49,891
|
(60,199)
|
43,169
|
||||
Comprehensive Income (Loss)
|
$ |
(4,952)
|
$ |
86,088
|
$ |
27,224
|
$ |
115,299
|
The accompanying notes are an integral part of the condensed consolidated financial statements.
|
JOHN WILEY & SONS, INC. AND SUBSIDIARIES
|
||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW – UNAUDITED
|
||||
(In thousands)
|
||||
For The Six Months
|
||||
|
Ended October 31,
|
|||
2014
|
2013
|
|||
Operating Activities
|
||||
Net income
|
$
|
87,423
|
$
|
72,130
|
Adjustments to reconcile net income to cash used for operating activities:
|
||||
Amortization of intangibles
|
25,754
|
21,901
|
||
Amortization of composition costs
|
20,810
|
22,827
|
||
Depreciation of technology, property and equipment
|
30,510
|
28,909
|
||
Restructuring and impairment charges (credits)
|
(155)
|
27,857
|
||
Restructuring payments
|
(16,267)
|
(12,453)
|
||
Deferred tax benefits on U.K. rate changes
|
-
|
(10,634)
|
||
Stock-based compensation expense
|
8,118
|
7,305
|
||
Excess tax (benefit) charge from stock-based compensation
|
(1,774)
|
1,672
|
||
Royalty advances
|
(47,997)
|
(44,005)
|
||
Earned royalty advances
|
64,939
|
59,926
|
||
Other non-cash charges
|
20,436
|
29,651
|
||
Change in deferred revenue
|
(223,731)
|
(229,572)
|
||
Income tax deposit
|
(3,783)
|
(10,433)
|
||
Net change in operating assets and liabilities, excluding acquisitions
|
(58,419)
|
(31,579)
|
||
Cash Used for Operating Activities
|
(94,136)
|
(66,498)
|
||
Investing Activities
|
||||
Composition spending
|
(16,934)
|
(19,290)
|
||
Additions to technology, property and equipment
|
(29,584)
|
(26,199)
|
||
Acquisitions, net of cash acquired
|
(172,145)
|
(739)
|
||
Escrowed proceeds from sale of consumer publishing programs
|
1,100
|
-
|
||
Cash Used for Investing Activities
|
(217,563)
|
(46,228)
|
||
Financing Activities
|
||||
Repayment of long-term debt
|
(228,051)
|
(293,500)
|
||
Borrowings of long-term debt
|
275,070
|
268,400
|
||
Borrowings of short-term debt
|
50,000
|
-
|
||
Change in book overdrafts
|
(8,123)
|
(23,836)
|
||
Cash dividends
|
(34,402)
|
(29,347)
|
||
Purchase of treasury stock
|
(41,534)
|
(18,533)
|
||
Proceeds from exercise of stock options and other
|
18,876
|
24,900
|
||
Excess tax benefit (charge) from stock-based compensation
|
1,774
|
(1,672)
|
||
Cash Provided by (Used for) Financing Activities
|
33,610
|
(73,588)
|
||
Effects of Exchange Rate Changes on Cash and Cash Equivalents
|
(9,376)
|
1,836
|
||
Cash and Cash Equivalents
|
||||
Decrease for the Period
|
(287,465)
|
(184,478)
|
||
Balance at Beginning of Period
|
486,377
|
334,140
|
||
Balance at End of Period
|
$
|
198,912
|
$
|
149,662
|
Cash Paid During the Period for:
|
||||
Interest
|
$
|
7,483
|
$
|
6,136
|
Income taxes, net
|
$
|
28,159
|
$
|
35,623
|
|
|
|||
|
||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
|
|
1.
|
Basis of Presentation
|
|
2.
|
Recent Accounting Standards
|
|
3.
|
Share-Based Compensation
|
For the Six Months
Ended October 31,
|
||||
2014
|
2013
|
|||
Restricted Stock:
|
||||
Awards granted (in thousands)
|
294
|
375
|
||
Weighted average fair value of grant
|
$59.70
|
$40.75
|
||
Stock Options:
|
||||
Awards granted (in thousands)
|
188
|
322
|
||
Weighted average fair value of grant
|
$16.97
|
$10.12
|
For the Six Months
Ended October 31,
|
||||
2014
|
2013
|
|||
Expected life of options (years)
|
7.2
|
7.4
|
||
Risk-free interest rate
|
2.2%
|
2.1%
|
||
Expected volatility
|
30.9%
|
30.5%
|
||
Expected dividend yield
|
1.9%
|
2.5%
|
||
Fair value of common stock on grant date
|
$59.70
|
$39.53
|
Foreign
|
Unamortized
|
Interest
|
||||||
Currency
|
Retirement
|
Rate
|
||||||
Translation
|
Costs
|
Swaps
|
Total
|
|||||
Balance at July 31, 2014
|
$(69,522)
|
$(121,903)
|
$(336)
|
$(191,761)
|
||||
Other comprehensive income (loss) before reclassifications
|
(63,930)
|
3,917
|
(497)
|
(60,510)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
-
|
1,511
|
270
|
1,781
|
||||
Total other comprehensive income (loss)
|
(63,930)
|
5,428
|
(227)
|
(58,729)
|
||||
Balance at October 31, 2014
|
$(133,452)
|
$(116,475)
|
$(563)
|
$(250,490)
|
Foreign
|
Unamortized
|
Interest
|
||||||
Currency
|
Retirement
|
Rate
|
||||||
Translation
|
Costs
|
Swaps
|
Total
|
|||||
Balance at April 30, 2014
|
$(66,664)
|
|
$(123,025)
|
|
$(602)
|
|
$(190,291)
|
|
Other comprehensive income (loss) before reclassifications
|
(66,788)
|
3,441
|
(423)
|
(63,770)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
-
|
3,109
|
462
|
3,571
|
||||
Total other comprehensive income (loss)
|
(66,788)
|
6,550
|
39
|
(60,199)
|
||||
Balance at October 31, 2014
|
$(133,452)
|
|
$(116,475)
|
|
$(563)
|
|
$(250,490)
|
Foreign
|
Unamortized
|
Interest
|
||||||
Currency
|
Retirement
|
Rate
|
||||||
Translation
|
Costs
|
Swaps
|
Total
|
|||||
Balance at July 31, 2013
|
$(144,342)
|
$(140,319)
|
$(693)
|
$(285,354)
|
||||
Other comprehensive income (loss) before reclassifications
|
50,940
|
(3,704)
|
(127)
|
47,109
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
-
|
2,598
|
184
|
2,782
|
||||
Total other comprehensive income (loss)
|
50,940
|
(1,106)
|
57
|
49,891
|
||||
Balance at October 31, 2013
|
$(93,402)
|
$(141,425)
|
$(636)
|
$(235,463)
|
Foreign
|
Unamortized
|
Interest
|
||||||
Currency
|
Retirement
|
Rate
|
||||||
Translation
|
Costs
|
Swaps
|
Total
|
|||||
Balance at April 30, 2013
|
$(134,539)
|
$(143,124)
|
|
$(969)
|
$(278,632)
|
|||
Other comprehensive income (loss) before reclassifications
|
41,137
|
(3,394)
|
(29)
|
37,714
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
-
|
5,093
|
362
|
5,455
|
||||
Total other comprehensive income
|
41,137
|
1,699
|
333
|
43,169
|
||||
Balance at October 31, 2013
|
$(93,402)
|
$(141,425)
|
|
$(636)
|
$(235,463)
|
For the Three Months
Ended October 31,
|
For the Six Months
Ended October 31,
|
|||||||
2014
|
2013
|
2014
|
2013
|
|||||
Weighted average shares outstanding
|
59,215
|
58,846
|
59,205
|
58,765
|
||||
Less: Unearned restricted shares
|
(253)
|
(311)
|
(245)
|
(278)
|
||||
Shares used for basic earnings per share
|
58,962
|
58,535
|
58,960
|
58,487
|
||||
Dilutive effect of stock options and other stock awards
|
794
|
881
|
817
|
807
|
||||
Shares used for diluted earnings per share
|
59,756
|
59,416
|
59,777
|
59,294
|
For the Three
|
Cumulative
|
|||||||
Months Ended
|
For the Six Months
|
Charges
|
||||||
October 31,
|
Ended October 31,
|
Incurred to Date
|
||||||
2013
|
2014
|
2013
|
||||||
Charges (Credits) by Segment:
|
||||||||
Research
|
$3,401
|
$(185)
|
$5,372
|
$10,485
|
||||
Professional Development
|
2,114
|
245
|
5,667
|
18,389
|
||||
Education
|
210
|
51
|
258
|
2,059
|
||||
Shared Services
|
9,591
|
(266)
|
11,774
|
36,086
|
||||
Total Restructuring Charges
|
$15,316
|
$(155)
|
$23,071
|
$67,019
|
||||
Charges (Credits) by Activity:
|
||||||||
Severance
|
$9,900
|
$641
|
$14,931
|
$46,309
|
||||
Process reengineering consulting
|
3,100
|
(145)
|
5,611
|
11,029
|
||||
Other activities
|
2,316
|
(651)
|
2,529
|
9,681
|
||||
Total Restructuring Charges
|
15,316
|
$(155)
|
$23,071
|
$67,019
|
Foreign
|
||||||
April 30,
|
Charges
|
Translation &
|
October 31,
|
|||
2014
|
(Credits)
|
Payments
|
Reclassifications
|
2014
|
||
Severance
|
$29,255
|
$641
|
$(14,027)
|
$(85)
|
$15,784
|
|
Process reengineering consulting
|
722
|
(145)
|
(577)
|
-
|
-
|
|
Other activities
|
4,995
|
(651)
|
(1,663)
|
(63)
|
2,618
|
|
Total
|
$34,972
|
$(155)
|
$(16,267)
|
$(148)
|
$18,402
|
For the Three Months
|
For the Six Months
|
|||||||
Ended October 31,
|
Ended October 31,
|
|||||||
2014
|
2013
|
2014
|
2013
|
|||||
RESEARCH
|
||||||||
Revenue
|
$264,825
|
$252,947
|
$519,695
|
$498,735
|
||||
Direct Contribution to Profit
|
$121,577
|
$112,854
|
$235,428
|
$222,861
|
||||
Allocated Shared Services and Administrative Costs: | ||||||||
Distribution and Operation Services
|
(11,449)
|
(11,828)
|
(23,419)
|
(23,395)
|
||||
Technology and Content Management
|
(25,314)
|
(24,843)
|
(51,186)
|
(51,081)
|
||||
Occupancy and Other
|
(6,061)
|
(6,519)
|
(12,219)
|
(12,972)
|
||||
Contribution to Profit
|
$78,753
|
$69,664
|
$148,604
|
$135,413
|
||||
PROFESSIONAL
DEVELOPMENT
|
||||||||
Revenue
|
$105,667
|
$92,545
|
$197,994
|
$176,631
|
||||
Direct Contribution to Profit
|
$36,799
|
$34,972
|
$69,140
|
$61,189
|
||||
Allocated Shared Services and Administrative Costs: | ||||||||
Distribution and Operation Services
|
(7,991)
|
(9,503)
|
(16,270)
|
(19,156)
|
||||
Technology and Content Management
|
(11,953)
|
(12,969)
|
(22,797)
|
(26,038)
|
||||
Occupancy and Other
|
(7,130)
|
(4,996)
|
(12,750)
|
(9,761)
|
||||
Contribution to Profit (Loss)
|
$9,725
|
$7,504
|
$17,323
|
$6,234
|
||||
EDUCATION
|
||||||||
Revenue
|
$106,480
|
$103,661
|
$197,200
|
$184,807
|
||||
Direct Contribution to Profit
|
$40,154
|
$40,484
|
$68,306
|
$64,630
|
||||
Allocated Shared Services and Administrative Costs: | ||||||||
Distribution and Operation Services
|
(3,226)
|
(3,848)
|
(6,545)
|
(7,889)
|
||||
Technology and Content Management
|
(13,828)
|
(11,407)
|
(26,815)
|
(23,044)
|
||||
Occupancy and Other
|
(3,595)
|
(3,044)
|
(6,770)
|
(6,046)
|
||||
Contribution to Profit
|
$19,505
|
$22,185
|
$28,176
|
$27,651
|
||||
Total Contribution to Profit
|
$107,983
|
$99,353
|
$194,103
|
$169,298
|
||||
Unallocated Shared Services and Administrative Costs
|
(31,979)
|
(49,166)
|
(68,469)
|
(83,547)
|
||||
Operating Income
|
$76,004
|
$50,187
|
$125,634
|
$85,751
|
For the Three Months
|
For the Six Months
|
|||||||
Ended October 31,
|
Ended October 31,
|
|||||||
Total Shared Services and Administrative Costs:
|
2014
|
2013
|
2014
|
2013
|
||||
Distribution & Operation Services
|
$22,443
|
$25,281
|
$46,119
|
$50,516
|
||||
Technology & Content Management
|
59,452
|
59,820
|
121,831
|
119,707
|
||||
Finance
|
12,817
|
13,457
|
26,552
|
26,242
|
||||
Other Administration
|
27,814
|
25,188
|
53,004
|
49,904
|
||||
Restructuring Charges (Credits) (see Note 7)
|
-
|
14,377
|
(266)
|
16,560
|
||||
Total
|
$122,526
|
$138,123
|
$247,240
|
$262,929
|
For the Three Months
|
For the Six Months
|
|||||||
Ended October 31,
|
Ended October 31,
|
|||||||
Total Revenue by Product/Service:
|
2014
|
2013
|
2014
|
2013
|
||||
Research Communications
|
$209,807
|
$191,510
|
$410,521
|
$380,624
|
||||
Books and Custom Print Products
|
170,541
|
183,550
|
342,106
|
350,392
|
||||
Education Services (Deltak)
|
19,699
|
16,551
|
35,935
|
31,251
|
||||
Talent Solutions
|
26,440
|
8,554
|
43,616
|
15,141
|
||||
Course Workflow Solutions (WileyPlus)
|
18,397
|
15,916
|
19,711
|
17,012
|
||||
Other
|
32,088
|
33,072
|
63,000
|
65,753
|
||||
Total
|
$476,972
|
$449,153
|
$914,889
|
$860,173
|
|
10.
|
Inventories
|
As of October 31,
|
As of April 30,
|
|||||
2014
|
2013
|
2014
|
||||
Finished goods
|
$54,766
|
$63,801
|
$62,071
|
|||
Work-in-process
|
7,132
|
6,430
|
6,041
|
|||
Paper, cloth and other
|
4,640
|
7,421
|
5,476
|
|||
$66,538
|
$77,652
|
$73,588
|
||||
Inventory value of estimated sales returns
|
9,420
|
9,418
|
6,774
|
|||
LIFO reserve
|
(5,017)
|
(5,702)
|
(4,867)
|
|||
Total inventories
|
$70,941
|
$81,368
|
$75,495
|
|
11.
|
Intangible Assets
|
As of October 31,
|
As of April 30,
|
|||||
2014
|
2013
|
2014
|
||||
Intangible assets with indefinite lives:
|
||||||
Brands and trademarks
|
$159,266
|
$159,557
|
$164,202
|
|||
Content and publishing rights
|
98,261
|
106,644
|
106,898
|
|||
|
$257,527
|
$266,201
|
$271,100
|
|||
Net intangible assets with determinable lives:
|
||||||
Content and publishing rights
|
$521,416
|
$529,218
|
$535,827
|
|||
Customer relationships
|
193,969
|
152,392
|
162,295
|
|||
Brands and trademarks
|
18,845
|
12,888
|
14,716
|
|||
Covenants not to compete
|
861
|
889
|
723
|
|||
|
$735,091
|
$695,387
|
$713,561
|
|||
Total
|
$992,618
|
$961,588
|
$984,661
|
|
13.
|
Retirement Plans
|
For the Three Months
Ended October 31,
|
For the Six Months
Ended October 31,
|
|||||||
2014
|
2013
|
2014
|
2013
|
|||||
Service Cost
|
$1,588
|
$2,004
|
$3,141
|
$3,962
|
||||
Interest Cost
|
7,638
|
7,326
|
15,189
|
14,664
|
||||
Expected Return on Plan Assets
|
(9,112)
|
(8,977)
|
(17,977)
|
(17,888)
|
||||
Net Amortization of Prior Service Cost
|
(30)
|
31
|
(3)
|
61
|
||||
Recognized Net Actuarial Loss
|
1,946
|
3,602
|
3,838
|
7,059
|
||||
Net Pension Expense
|
$2,030
|
$3,986
|
$4,188
|
$7,858
|
|
14.
Debt and Available Credit Facilities
|
|
15.
|
Derivative Instruments and Hedging Activities
|
|
16.
|
Corporate Headquarters Lease Renewal
|
For the Three Months
|
Cumulative Charges
|
|||
Ended October 31, 2013
|
Incurred to Date
|
|||
Charges by Segment:
|
||||
Research
|
$3,401
|
$10,485
|
||
Professional Development
|
2,114
|
18,389
|
||
Education
|
210
|
2,059
|
||
Shared Services
|
9,591
|
36,086
|
||
Total Restructuring Charges
|
$15,316
|
$67,019
|
||
Charges by Activity:
|
||||
Severance
|
$9,900
|
$46,309
|
||
Process reengineering consulting
|
3,100
|
11,029
|
||
Other activities
|
2,316
|
9,681
|
||
Total Restructuring Charges
|
$15,316
|
$67,019
|
For the Three Months
|
||||||
Ended October 31,
|
% change
|
|||||
RESEARCH:
|
2014
|
2013
|
% change
|
w/o FX (a)
|
||
Revenue:
|
||||||
Research Communication:
|
|
|
|
|
||
Journal Subscriptions
|
$168,315
|
$164,119
|
3%
|
2%
|
||
Funded Access
|
5,067
|
3,857
|
31%
|
30%
|
||
Other Journal Revenue
|
36,425
|
23,534
|
55%
|
55%
|
||
209,807
|
191,510
|
10%
|
9%
|
|||
Books and References:
|
||||||
Print Books
|
26,843
|
31,069
|
-14%
|
-14%
|
||
Digital Books
|
9,957
|
9,383
|
6%
|
6%
|
||
36,800
|
40,452
|
-9%
|
-9%
|
|||
Other Research Revenue
|
18,218
|
20,985
|
-13%
|
-13%
|
||
Total Revenue
|
$264,825
|
$252,947
|
5%
|
5%
|
||
Cost of Sales
|
(72,542)
|
(68,935)
|
5%
|
4%
|
||
Gross Profit
|
$192,283
|
$184,012
|
4%
|
5%
|
||
Gross Profit Margin
|
72.6%
|
72.7%
|
||||
Direct Expenses
|
(63,509)
|
(60,793)
|
4%
|
4%
|
||
Amortization of Intangibles
|
(7,197)
|
(6,964)
|
3%
|
1%
|
||
Restructuring Charges (see Note 7)
|
-
|
(3,401)
|
||||
Direct Contribution to Profit
|
$121,577
|
$112,854
|
8%
|
5%
|
||
Direct Contribution Margin
|
45.9%
|
44.6%
|
||||
Shared Services and Administrative Costs:
|
||||||
Distribution and Operational Services
|
(11,449)
|
(11,828)
|
-3%
|
-4%
|
||
Technology and Content Management
|
(25,314)
|
(24,843)
|
2%
|
1%
|
||
Occupancy and Other
|
(6,061)
|
(6,519)
|
-7%
|
-7%
|
||
Contribution to Profit
|
$78,753
|
$69,664
|
13%
|
9%
|
||
Contribution Margin
|
29.7%
|
27.5%
|
·
|
3 new society journals were signed during the quarter with combined annual revenue of approximately $0.9 million
|
·
|
3 renewals/extensions were signed with approximately $0.8 million in combined annual revenue
|
·
|
2 journals were not renewed with combined annual revenue of approximately $0.4 million
|
For the Three Months
|
|||||
Ended October 31,
|
% change
|
||||
PROFESSIONAL DEVELOPMENT (PD):
|
2014
|
2013
|
% change
|
w/o FX (a)
|
|
Revenue:
|
|||||
Knowledge Services:
|
|
|
|
|
|
Print Books
|
$52,685
|
$59,794
|
-12%
|
-12%
|
|
Digital Books
|
14,465
|
13,980
|
3%
|
3%
|
|
Online Test Preparation and Certification
|
5,538
|
4,275
|
30%
|
30%
|
|
Other
|
6,539
|
5,942
|
10%
|
10%
|
|
|
79,227
|
83,991
|
-6%
|
-6%
|
|
Talent Solutions:
|
|||||
Assessment
|
15,187
|
8,554
|
78%
|
78%
|
|
Online Learning and Training
|
11,253
|
-
|
-
|
-
|
|
|
26,440
|
8,554
|
209%
|
209%
|
|
Total Revenue
|
$105,667
|
$92,545
|
14%
|
14%
|
|
Cost of Sales
|
(30,172)
|
(29,410)
|
3%
|
2%
|
|
Gross
Profit
|
$75,495
|
$63,135
|
20%
|
20%
|
|
Gross Profit Margin
|
71.4%
|
68.2%
|
|||
Direct Expenses
|
(35,175)
|
(24,409)
|
44%
|
44%
|
|
Amortization of Intangibles
|
(3,521)
|
(1,640)
|
115%
|
115%
|
|
Restructuring Charges (see Note 7)
|
-
|
(2,114)
|
|||
Direct Contribution to Profit
|
$36,799
|
$34,972
|
5%
|
-1%
|
|
Direct Contribution Margin
|
34.8%
|
37.8%
|
|||
Shared Services and Administrative Costs:
|
|||||
Distribution and Operational Services
|
(7,991)
|
(9,503)
|
-16%
|
-16%
|
|
Technology and Content Management
|
(11,953)
|
(12,969)
|
-8%
|
-9%
|
|
Occupancy and Other
|
(7,130)
|
(4,996)
|
43%
|
43%
|
|
Contribution to Profit
|
$9,725
|
$7,504
|
30%
|
2%
|
|
Contribution Margin
|
9.2%
|
8.1%
|
For the Three Months
|
|||||
Ended October 31,
|
% change
|
||||
EDUCATION:
|
2014
|
2013
|
% change
|
w/o FX (a)
|
|
Revenue:
|
|||||
Books:
|
|
|
|
|
|
Print Textbooks
|
$41,778
|
$45,202
|
-8%
|
-6%
|
|
Digital Books
|
8,450
|
9,360
|
-10%
|
-10%
|
|
|
50,228
|
54,562
|
-8%
|
-7%
|
|
Custom Products
|
16,363
|
14,762
|
11%
|
11%
|
|
Course Workflow Solutions (WileyPLUS)
|
18,397
|
15,916
|
17%
|
16%
|
|
Education Services (Deltak)
|
19,699
|
16,551
|
19%
|
19%
|
|
Other Education Revenue
|
1,793
|
1,870
|
-4%
|
-4%
|
|
Total Revenue
|
$106,480
|
$103,661
|
3%
|
3%
|
|
Cost of Sales
|
(31,826)
|
(32,007)
|
-1%
|
0%
|
|
Gross Profit
|
74,654
|
71,654
|
4%
|
5%
|
|
Gross Profit Margin
|
70.1%
|
69.1%
|
|||
Direct Expenses
|
(32,119)
|
(28,579)
|
12%
|
12%
|
|
Amortization of Intangibles
|
(2,381)
|
(2,381)
|
0%
|
0%
|
|
Restructuring Charges (see Note 7)
|
-
|
(210)
|
|
|
|
Direct Contribution to Profit
|
$40,154
|
$40,484
|
-1%
|
0%
|
|
Direct Contribution Margin
|
37.7%
|
39.1%
|
|||
Shared Service Costs:
|
|||||
Distribution and Operational Services
|
(3,226)
|
(3,848)
|
-16%
|
-16%
|
|
Technology and Content Management
|
(13,828)
|
(11,407)
|
21%
|
21%
|
|
Occupancy and Other
|
(3,595)
|
(3,044)
|
18%
|
18%
|
|
Contribution to Profit
|
$19,505
|
$22,185
|
-12%
|
-11%
|
|
Contribution Margin
|
18.3%
|
21.4%
|
(a)
|
Adjusted to exclude the fiscal year 2014 Restructuring Charges
|
For the Three Months
|
|||||
Ended October 31,
|
% change
|
||||
2014
|
2013
|
% change
|
w/o FX (a)
|
||
Distribution and Operation Services
|
$22,443
|
$25,281
|
-11%
|
-12%
|
|
Technology and Content Management
|
59,452
|
59,820
|
-1%
|
-1%
|
|
Finance
|
12,817
|
13,457
|
-5%
|
-5%
|
|
Other Administration
|
27,814
|
25,188
|
10%
|
10%
|
|
Restructuring Charges (see Note 7)
|
-
|
14,377
|
|||
Total
|
$122,526
|
$138,123
|
-11%
|
-1%
|
For the Six Months
|
Cumulative Charges
|
|||||
Ended October 31,
|
Incurred to Date
|
|||||
2014
|
2013
|
|||||
Charges (Credits) by Segment:
|
||||||
Research
|
$(185)
|
$5,372
|
$10,485
|
|||
Professional Development
|
245
|
5,667
|
18,389
|
|||
Education
|
51
|
258
|
2,059
|
|||
Shared Services
|
(266)
|
11,774
|
36,086
|
|||
Total Restructuring (Credits) Charges
|
$(155)
|
$23,071
|
$67,019
|
|||
Charges (Credits) by Activity:
|
||||||
Severance
|
$641
|
$14,931
|
$46,309
|
|||
Process reengineering consulting
|
(145)
|
5,611
|
11,029
|
|||
Other activities
|
(651)
|
2,529
|
9,681
|
|||
Total Restructuring (Credits) Charges
|
$(155)
|
$23,071
|
$67,019
|
For the Six Months
|
||||||
Ended October 31,
|
% change
|
|||||
RESEARCH:
|
2014
|
2013
|
% change
|
w/o FX (a)
|
||
Revenue:
|
||||||
Research Communication:
|
|
|
|
|
||
Journal Subscriptions
|
$337,138
|
$324,339
|
4%
|
2%
|
||
Funded Access
|
10,496
|
7,191
|
46%
|
41%
|
||
Other Journal Revenue
|
62,887
|
49,094
|
28%
|
26%
|
||
410,521
|
380,624
|
8%
|
6%
|
|||
Books and References:
|
||||||
Print Books
|
52,915
|
58,493
|
-10%
|
-11
|
||
Digital Books
|
19,213
|
18,952
|
1%
|
-1%
|
||
72,128
|
77,445
|
-7%
|
-9%
|
|||
Other Research Revenue
|
37,046
|
40,666
|
-9%
|
-10%
|
||
Total Revenue
|
$519,695
|
$498,735
|
4%
|
2%
|
||
Cost of Sales
|
(141,538)
|
(135,543)
|
4%
|
2%
|
||
Gross Profit
|
$378,157
|
$363,192
|
4%
|
2%
|
||
Gross Profit Margin
|
72.8%
|
72.8%
|
||||
Direct Expenses
|
(128,354)
|
(121,149)
|
6%
|
3%
|
||
Amortization of Intangibles
|
(14,560)
|
(13,810)
|
5%
|
1%
|
||
Restructuring Credits (Charges) (see Note 7)
|
185
|
(5,372)
|
||||
Direct Contribution to Profit
|
$235,428
|
$222,861
|
6%
|
2%
|
||
Direct Contribution Margin
|
45.3%
|
44.7%
|
||||
Shared Services and Administrative Costs:
|
||||||
Distribution and Operational Services
|
(23,419)
|
(23,395)
|
0%
|
-3%
|
||
Technology and Content Management
|
(51,186)
|
(51,081)
|
0%
|
-2%
|
||
Occupancy and Other
|
(12,219)
|
(12,972)
|
-6%
|
-8%
|
||
Contribution to Profit
|
$148,604
|
$135,413
|
10%
|
5%
|
||
Contribution Margin
|
28.6%
|
27.2%
|
·
|
5 new society journals were signed with combined annual revenue of approximately $1.2 million
|
·
|
10 renewals/extensions were signed with approximately $12.2 million in combined annual revenue
|
·
|
6 journals were not renewed with combined annual revenue of approximately $2.7 million
|
For the Six Months
|
|||||
Ended October 31,
|
% change
|
||||
PROFESSIONAL DEVELOPMENT (PD):
|
2014
|
2013
|
% change
|
w/o FX (a)
|
|
Revenue:
|
|||||
Knowledge Services:
|
|
|
|
|
|
Print Books
|
$108,612
|
$116,102
|
-6%
|
-7%
|
|
Digital Books
|
24,964
|
25,637
|
-3%
|
-3%
|
|
Online Test Preparation and Certification
|
8,487
|
7,121
|
19%
|
19%
|
|
Other
|
12,315
|
12,630
|
-2%
|
-3%
|
|
|
154,378
|
161,490
|
-4%
|
-5%
|
|
Talent Solutions:
|
|||||
Assessment
|
28,309
|
15,141
|
87%
|
87%
|
|
Online Learning and Training
|
15,307
|
-
|
-
|
-
|
|
|
43,616
|
15,141
|
188%
|
188%
|
|
Total Revenue
|
$197,994
|
$176,631
|
12%
|
12%
|
|
Cost of Sales
|
(57,197)
|
(56,039)
|
2%
|
2%
|
|
Gross
Profit
|
$140,797
|
$120,592
|
17%
|
16%
|
|
Gross Profit Margin
|
71.1%
|
68.3%
|
|||
Direct Expenses
|
(64,981)
|
(50,409)
|
29%
|
28%
|
|
Amortization of Intangibles
|
(6,431)
|
(3,327)
|
93%
|
93%
|
|
Restructuring Charges (see Note 7)
|
(245)
|
(5,667)
|
|||
Direct Contribution to Profit
|
$69,140
|
$61,189
|
13%
|
3%
|
|
Direct Contribution Margin
|
34.9%
|
34.6%
|
|||
Shared Services and Administrative Costs:
|
|||||
Distribution and Operational Services
|
(16,270)
|
(19,156)
|
-15%
|
-16%
|
|
Technology and Content Management
|
(22,797)
|
(26,038)
|
-12%
|
-13%
|
|
Occupancy and Other
|
(12,750)
|
(9,761)
|
31%
|
31%
|
|
Contribution to Profit
|
$17,323
|
$6,234
|
0%
|
48%
|
|
Contribution Margin
|
8.7%
|
3.5%
|
For the Six Months
|
|||||
Ended October 31,
|
% change
|
||||
EDUCATION:
|
2014
|
2013
|
% change
|
w/o FX (a)
|
|
Revenue:
|
|||||
Books:
|
|
|
|
|
|
Print Textbooks
|
$86,313
|
$86,574
|
0%
|
0%
|
|
Digital Books
|
14,154
|
13,560
|
4%
|
4%
|
|
|
100,467
|
100,134
|
0%
|
1%
|
|
Custom Products
|
35,935
|
31,074
|
16%
|
16%
|
|
Course Workflow Solutions (WileyPLUS)
|
19,711
|
17,012
|
16%
|
16%
|
|
Education Services (Deltak)
|
35,935
|
31,251
|
15%
|
15%
|
|
Other Education Revenue
|
5,152
|
5,336
|
-3%
|
-3%
|
|
Total Revenue
|
$197,200
|
$184,807
|
7%
|
7%
|
|
Cost of Sales
|
(59,859)
|
(58,561)
|
2%
|
3%
|
|
Gross Profit
|
137,341
|
126,246
|
9%
|
9%
|
|
Gross Profit Margin
|
69.6%
|
68.3%
|
|||
Direct Expenses
|
(64,221)
|
(56,595)
|
13%
|
13%
|
|
Amortization of Intangibles
|
(4,763)
|
(4,763)
|
0%
|
0%
|
|
Restructuring Charges (see Note 7)
|
(51)
|
(258)
|
|
|
|
Direct Contribution to Profit
|
$68,306
|
$64,630
|
6%
|
6%
|
|
Direct Contribution Margin
|
34.6%
|
35.0%
|
|||
Shared Service Costs:
|
|||||
Distribution and Operational Services
|
(6,545)
|
(7,889)
|
-17%
|
-17%
|
|
Technology and Content Management
|
(26,815)
|
(23,044)
|
16%
|
16%
|
|
Occupancy and Other
|
(6,770)
|
(6,046)
|
12%
|
12%
|
|
Contribution to Profit
|
$28,176
|
$27,651
|
2%
|
2%
|
|
Contribution Margin
|
14.3%
|
15.0%
|
(a)
|
Adjusted to exclude the fiscal year 2015 and 2014 Restructuring Charges
|
For the Six Months
|
|||||
Ended October 31,
|
% change
|
||||
2014
|
2013
|
% change
|
w/o FX (a)
|
||
Distribution and Operation Services
|
$46,119
|
$50,516
|
-12%
|
-10%
|
|
Technology and Content Management
|
121,831
|
119,707
|
2%
|
1%
|
|
Finance
|
26,552
|
26,242
|
1%
|
0%
|
|
Other Administration
|
53,004
|
49,904
|
6%
|
5%
|
|
Restructuring (Credits) Charges (see Note 7)
|
(266)
|
16,560
|
|||
Total
|
$247,240
|
$262,929
|
-6%
|
-1%
|
(a)
|
Adjusted to exclude the fiscal year 2015 and 2014 Restructuring (Credits) Charges
|
October 31, 2014
|
October 31, 2013
|
April 30, 2014
|
||||
Accounts Receivable
|
$(57,647)
|
$(61,218)
|
$(41,102)
|
|||
Inventories
|
9,420
|
9,418
|
6,774
|
|||
Accounts and Royalties Payable
|
(8,368)
|
(8,594)
|
(5,695)
|
|||
Decrease in Net Assets
|
$(39,859)
|
$(43,206)
|
$(28,633)
|
Total Number of Shares Purchased
|
Average Price Paid Per Share
|
Total Number of Shares Purchased as part of a Publicly Announced Program
|
Maximum Number of Shares that May be Purchased Under the Program
|
|||||
August 2014
|
-
|
-
|
-
|
3,061,130
|
||||
September 2014
|
208,906
|
57.54
|
208,906
|
2,852,224
|
||||
October 2014
|
323,104
|
53.67
|
323,104
|
2,529,120
|
||||
Total
|
532,010
|
55.19
|
532,010
|
(a)
|
Exhibits
|
|
(b)
|
The following reports on Form 8-K were submitted to the Securities and Exchange Commission since the filing of the Company’s 10-Q on September 9, 2014:
|
|
i.
|
Earnings release on the second quarter fiscal year 2015 results issued on Form 8-K dated December 9, 2014 which included the condensed financial statements of the Company.
|
|
ii.
|
Results of Vote of Security Holders at the annual meeting of the Company’s shareholders held on September 18, 2014, issued on Form 8-K filed September 23, 2014.
|
|
iii.
|
Announcement of leadership changes for Research business segment issued on Form 8-K filed November 13, 2014.
|
JOHN WILEY & SONS, INC.
|
|
Registrant
|
By
|
/s/ Stephen M. Smith
|
||
Stephen M. Smith
|
|||
President and
|
|||
Chief Executive Officer
|
By
|
/s/ John A. Kritzmacher
|
||
John A. Kritzmacher
|
|||
Executive Vice President and
|
|||
Chief Financial Officer
|
By
|
/s/ Edward J. Melando
|
||
Edward J. Melando
|
|||
Senior Vice President, Controller and
|
|||
Chief Accounting Officer
|
Dated: December 10, 2014
|
1.
|
PURPOSE OF THE PLAN
|
2.
|
DEFINITIONS
|
2.29.
|
“Restricted Stock Unit Award”
shall have the meaning set forth in Section 7.1
|
7.
|
RESTRICTED STOCK AND RESTRICTED STOCK UNITS
|
8.
|
OTHER SHARE-BASED AWARDS
|
1.
|
PURPOSE. The principal purposes of the John Wiley & Sons, Inc. 2014 Executive Annual Incentive Plan (the "Plan") are to enable John Wiley & Sons, Inc. (the "Company") to reinforce and sustain a culture devoted to excellent performance, reward significant contributions to the success of the Company, and attract and retain highly qualified executives.
|
2.
|
ADMINISTRATION OF
THE PLAN. The Plan will be administered by a committee (the "Committee") appointed by the Board of Directors of the Company from among its members (which may be the Executive Compensation and Development Committee or a subcommittee thereof) and shall be comprised solely of no fewer than two members, all of whom shall be “outside directors" within the meaning of Treasury Regulation Section 1.162-27(e)(3) under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code").
|
|
The Committee shall have all the powers vested in it by the terms of this Plan, including the authority (within the limitations described herein) to select participants in the Plan and determine the terms and conditions for the cash target awards, including without limitation, to determine the time when cash target awards will be granted, to determine whether objectives and conditions for achieving cash target awards have been met, to determine whether awards will be paid out at the time set forth in Section 4(c) below or deferred, and to determine whether a cash target award or payout of an award should be reduced or eliminated. Unless otherwise determined by the Committee, it is intended that any cash target awards under the Plan satisfy all requirements for “performance-based compensation” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, where applicable.
|
|
The Committee shall have full power and authority to administer and interpret the Plan and to adopt such rules, regulations, agreements, guidelines and instruments for the administration of the Plan and for the conduct of its business as the Committee deems necessary or advisable. The Committee's interpretations of the Plan, and all actions taken and determinations made by the Committee pursuant to the powers vested in it hereunder, shall be conclusive and binding on all parties concerned, including the Company, its shareholders and any person granted a cash target award under the Plan.
|
|
Unless otherwise determined by the Committee, the provisions of this Plan shall be administered and interpreted in accordance with Section 162(m) of the Code to ensure the deductibility by the Company of the payment of awards. The failure of any aspect of the Plan to satisfy Section 162(m) shall not void any action taken by the Committee under the Plan.
|
3.
|
ELIGIBILITY. The Committee, in its discretion, may grant cash target awards to executive officers for each fiscal year of the Company as it shall determine. Those executive officers who are selected by the Committee and granted cash target awards for a fiscal year of the Company are referred to as "participants" for such fiscal year.
|
4.
|
AWARDS.
|
a.
|
Granting of Cash Target Awards.
For each fiscal year of the Company, each participant shall be granted a cash target award under the Plan as soon as practicable and no later than 90 days after the commencement of such fiscal years,
provided, however,
that if an individual first becomes eligible to participate after such 90 day period, that individual may be granted a cash target award after no more than 25% of the period of service to which the cash target award relates has elapsed.
|
b.
|
Performance Targets.
|
i.
|
For each fiscal year of the Company, the performance targets for each cash target award shall be determined by the Committee in writing, by resolution of the Committee or other appropriate action, not later than 90 days after the commencement of such fiscal year. The performance targets shall state, in terms of an objective formula or standard, the method for computing the amount of compensation payable to the applicable participant if such performance targets are attained. If an individual first becomes eligible to participate after such 90 day period, that individual's performance targets may be determined by the Committee in writing, by resolution of the Committee or other appropriate action, after no more than 25% of the period of service to which the performance targets relate has elapsed.
|
ii.
|
The annual performance targets for each cash target award shall be based on achievement of hurdle rates and/or growth in one or more business criteria that apply to the individual participant, including one or more business units, subsidiaries or the Company as a whole. The business criteria shall be as follows, individually or in combination:
(A)
net income; (B) earnings per share; (C) revenue; (D) net revenue growth; (E) market share; (F) operating income; (G) expenses; (H) working capital; (I) operating margin; (J) return on equity; (K) return on assets; (L) market price per share; (M) total return to stockholders; (N) cash flow; (0) free cash flow; (P) return on investment; (Q) earnings before interest, taxes, depreciation and amortization; (R) earnings before interest, taxes and amortization; (S) contribution to profit; (T) economic value added; and (U) objectively quantifiable customer or constituency satisfaction. In addition, the performance targets may include comparisons to performance of other companies or indices, using one or more of the foregoing business criteria.
The Committee may provide in any cash target award that any evaluation of performance exclude the impact of any or all of the following:
(1) asset write-downs; (2) litigation or claim judgments or settlements; (3)
the effect of changes in tax law, accounting principles or methodology, or other laws or provisions affecting reported results; (4) accruals for reorganization and restructuring programs; (5) any non-recurring items as described in management's discussion and analysis of financial condition and results of operations appearing in the Company's annual report to shareholders or other filings for the applicable year; (6) acquisitions or divestitures; (7) any non-required contributions to the Company pension plan; (8) foreign exchange gains and losses; and (9) cash capital expenditures for facilities acquisition or construction.
|
c.
|
Payout of Awards.
Payout of an award granted under the Plan may either be in cash or in the form of an equity award under the Company’s 2014 Key Employee Stock Plan (as amended from time to time, and any successor or replacement thereof). As a condition to the right of a participant to receive a payout of an award granted under this Plan, the Committee shall first be required to certify in writing, by resolution of the Committee or other appropriate action, that achievement of the award has been determined in accordance with the provisions of this Plan. Awards for a fiscal year shall be payable following the certification thereof by the Committee for such fiscal year and, subject to Section 4(e) below, by not later than the 15
th
day of the third month following the later of (i) the end of such fiscal year or (ii) the end of the participant’s taxable year in which occurs the end of the fiscal year.
|
d.
|
Discretion.
After a cash target award has been granted, the Committee shall not increase such cash target award, and after a performance target has been determined, the Committee shall not revise such performance target in a manner that would increase the amount of compensation otherwise payable in respect of the award. Notwithstanding the attainment by the Company and a participant of the applicable targets, the Committee has the discretion, by participant, to reduce, prior to the confirmation of the award, some or all of an award that otherwise would be paid.
|
e.
|
Deferral.
The Committee may determine to mandatorily defer or authorize participants to voluntarily defer the payout of an award or a portion of an award, in such manner as is consistent with the intent to comply with the rules under Code Section 409A. The Committee may determine the periods of such deferrals and any interest, not to exceed a reasonable rate, to be paid in respect of deferred payments. The Committee may also define such other conditions of payouts of awards as it may deem desirable in carrying out the purposes of the Plan, in such manner as is consistent with the intent to comply with the rules under Code Section 409A.
|
f.
|
Maximum Payout per Fiscal Year.
No individual participant may receive a cash target award or a payout of an award under the Plan which is more than $6 million with respect to any fiscal year, excluding deferred amounts from prior years.
|
5.
|
MISCELLANEOUS PROVISIONS.
|
a.
|
Withholding Taxes.
The Company (or the relevant subsidiary or affiliate) shall have the right to deduct from all payouts of awards hereunder any federal, state, local or foreign taxes required by law to be withheld with respect to such payouts.
|
b.
|
No Rights to Cash Target Awards.
Except as set forth herein, no person shall have any claim or right to be granted a cash target award under the Plan. Neither the Plan nor any action taken hereunder shall be construed as giving any person any right to be retained in the employ of the Company or any of its subsidiaries, divisions or affiliates.
|
c.
|
Funding of Plan.
The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payout of any award under the Plan.
|
d.
|
Awards are Subject to Clawback
. All awards under the Plan are subject to the Company’s clawback policy as in effect from time to time. Without limiting the generality of the foregoing, in the event that the Company is required to file a restatement of its financial results due to fraud, gross negligence or intentional misconduct by one or more employees, and/or material non-compliance with securities laws, the Company may require reimbursement of any Award in the amount by which the payment under the Award exceeded any lower payment that would have been made based on the restated financial results, for the fiscal year in which the restatement was required, to the full extent required or permitted by law. If a participant is directly responsible for or involved in fraud, gross negligence or intentional misconduct that causes the Company to file a restatement of its financial results, the Company may require reimbursement of all annual incentive compensation awarded to such participant, for the fiscal year in which the restatement was required, to the full extent required or permitted by law.
|
e.
|
Non-Transferability of Awards
. No award under the Plan shall be transferable other than by will or the laws of descent and distribution. Upon any attempt to sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any such award, such award and all rights thereunder shall immediately become null and void.
|
f.
|
Effect on Other Plans
. Payments pursuant to the Plan shall not be treated as compensation for purposes of any other compensation or benefit plan, program or arrangement of the Company or any of its subsidiaries, unless either (a) such other plan provides that compensation such as payments made pursuant to the Plan are to be considered as compensation thereunder or (b) the Board or the Committee so determines in writing. Neither the adoption of the Plan nor the submission of the Plan to the Company’s shareholders for their approval shall be construed as limiting the power of the Board or the Committee to adopt such other incentive arrangements as it may otherwise deem appropriate.
|
g.
|
Binding Effect
. The Plan shall be binding upon the Company and its successors and assigns and the Participants and their beneficiaries, personal representatives and heirs. If the Company becomes a party to any merger, consolidation or reorganization, then the Plan shall remain in full force and effect as an obligation of the Company or its successors in interest, unless the Plan is amended or terminated pursuant to Section 6.
|
6.
|
EFFECTIVE DATE, AMENDMENTS AND TERMINATION.
|
a.
|
Effective Date.
The Plan shall be effective as of July 31, 2014, the date on which it was adopted by the Committee and ratified by the Board (the "Effective Date"), provided that the Plan is approved by the shareholders of the Company at an annual meeting or any special meeting of shareholders of the Company within 12 months of the Effective Date, and such approval of shareholders shall be a condition to the right of each participant to receive any awards or payouts hereunder. Any awards granted under the Plan prior to such approval of shareholders shall be effective as of the date of grant (unless, with respect to any award, the Committee specifies otherwise at the time of grant), but no such award may be paid out prior to such shareholder approval, and if shareholders fail to approve the Plan as specified hereunder, any such award shall be cancelled.
|
b.
|
Amendments.
The Committee may at any time terminate or from time to time amend the Plan in whole or in part, but no such action shall materially adversely affect any rights or obligations with respect to any cash target awards theretofore granted under the Plan without the participant’s consent.
|
|
Unless the shareholders of the Company shall have first approved thereof, no amendment of the Plan shall be effective which would: (i) increase the maximum amount which can be paid to any participant under the Plan; (ii) change the types of business criteria on which performance targets are to be based under the Plan; or (iii) modify the requirements as to eligibility for participation in the Plan.
|
c.
|
Termination.
No cash target awards shall be granted under the Plan after the Annual Meeting of Shareholders in September 2019 (but any awards granted prior thereto may be paid out in accordance with their terms).
|
1.
|
Purposes.
The purposes of the 2014 Director Stock Plan (the “Director Plan”) are to (a) attract and retain highly qualified individuals to serve as directors of John Wiley & Sons, Inc. (the “Company”) and (b) to increase the Non-Employee Directors’ (as defined below) stock ownership in the Company.
|
2.
|
Effective Date.
Provided that it is approved by the shareholders,
the Director Plan shall be effective as of September 18, 2014. Following such approval, no further grants shall be made pursuant to the 2009 Director Stock Plan.
|
3.
|
Participation.
Only Non-Employee Directors shall be eligible to participate in the Director Plan. A “Non-Employee Director” is a person who is serving as a director of the Company and who is not an employee of the Company or any subsidiary or affiliate of the Company.
|
4.
|
Shares Subject to the Plan.
Subject to adjustment as provided in Section 8 below, no more than an aggregate of 100,000 shares of Class A Common Stock (the “Common Stock”) shall be delivered to Non-Employee Directors or their beneficiaries under the Director Plan, which shall be treasury shares. All shares awarded under the Director Plan will be charged against the total available for grant.
|
5.
|
Restricted Stock Grant.
Beginning with the Annual Meeting held in September 2014, and as soon as practicable after every subsequent Annual Meeting, each Non-Employee Director shall receive shares of the Company’s Common Stock, rounded upward or downward to the nearest whole share, equal in value to $100,000. If a Non-Employee Director becomes a director between Annual Meetings, the value of the shares shall be proportionately reduced to reflect the Non-Employee Director’s actual days of service during this period. If a Non-Employee Director has elected to defer receipt of the shares under the Deferred Compensation Plan for Directors (or any successor plan), the grant will be in the form of deferred stock rather than shares of the Company’s Common Stock. The value of the Common Stock or deferred stock for purposes of this paragraph shall be determined as of the date of the just concluded Annual Meeting and shall be equal to the closing price for the Common Stock as reported by any primary exchange on which the Common Stock may be listed on such date or, if no shares of the Common Stock were traded on such date, on the next preceding date on which the Common Stock was traded. The grant shares may not be sold or transferred during the time the Non-Employee Director remains a Director, but may be sold or transferred in the case of death or disability of the Non-Employee Director. Notwithstanding the first sentence of this Section 5, prior to the grant date at Annual Meetings following the 2014 Annual Meeting, the Governance Committee shall have the right to make adjustments to the amount of the grant share value, so long as the aggregate value of such shares granted with respect to any Annual Meeting does not exceed $300,000 (excluding for this purpose the value of any dividend equivalents credited on deferred stock and the value of any grants pursuant to an election to receive shares in lieu of cash as described in Section 6 below).
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6.
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Election to Receive Stock in Lieu of Eligible Cash Fees.
Subject to the terms and conditions of the Director Plan, each Non-Employee Director may elect to receive shares of Common Stock or deferred stock (rounded upward or downward to the nearest whole share) in lieu of all or a portion of the cash compensation otherwise payable for services to be rendered by such Non-Employee Director during each calendar year that begins after the date on which such election is made. This election may be made in increments of 25%, 50%, 75% or 100% of such compensation, as determined in accordance with Section 7 below. An election under this Section 6 to have cash compensation paid in shares of Stock shall be valid only if it is in writing, signed by the Non-Employee Director, and filed with the Corporate Secretary of the Company. The election must be irrevocable with respect to the calendar year to which it applies and must be made no later than the last day of the previous calendar year and, to the extent Sections 409A of the Internal Revenue Code applies, in accordance with the requirements thereof. Common Stock to be received by a Non-Employee Director pursuant to his or her election shall be distributed to such Non-Employee Director on each cash payment date. For purposes of this paragraph, cash compensation shall mean the Non-Employee Director’s annual retainer fee and the additional retainer fee received by committee chairmen.
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7.
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Equivalent Amount of Stock.
The number of whole shares of Common Stock to be distributed or allocated (if deferred stock) to a Non-Employee Director in accordance with the Non-Employee Director’s election made under Section 6 above shall be equal to:
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8.
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Change in Capital Stock
. The total number of shares of Common Stock that may be issued under the Director Plan shall be appropriately adjusted for any change in the outstanding shares of Common Stock through recapitalization, stock split, stock dividend, extraordinary cash dividend or other change in the corporate structure, or through merger or consolidation in which the Company is the surviving corporation. The Board in its discretion will determine such adjustments and the manner of application.
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9.
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Nonassignability.
No rights under the Director Plan shall be assignable or transferable by a Non-Employee Director other than by will or the laws of descent and distribution
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10.
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Legal Requirements
. The issuance of shares pursuant to the Director Plan and the subsequent transfer of such shares shall be conditioned upon compliance with the listing requirements of any securities exchange upon which the Stock may be listed, the requirements of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the requirements of applicable state laws relating to authorization, issuance or sale of securities. The Board may take such measures as it deems desirable to secure compliance with the foregoing.
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11.
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Administration
. The Board shall administer and interpret the Director Plan in its sole discretion.
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12.
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Construction; Amendment; Termination
. The Director Plan shall be construed in accordance with the laws of the State of New York, and may be amended by action of the Board and approval of the shareholders (to the extent such approval is required by applicable law or the rules of the stock market or exchange, if any, on which the shares of Common Stock are principally quoted or traded), or terminated at any time by action of the Board.
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Approved by the Board of Directors—June 18, 2014
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Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and
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Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented.
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The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the Company and we have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
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d.
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Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
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The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the board of directors:
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a.
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all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
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b.
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls.
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By
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/s/ Stephen M. Smith
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Stephen M. Smith
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President and
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Chief Executive Officer
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December 10, 2014
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Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and
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Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented
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|
|
The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the Company and we have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
|
Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
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|
d.
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Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
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|
The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the board of directors:
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a.
|
all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
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b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls.
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By
|
/s/ John A. Kritzmacher
|
||
John A. Kritzmacher
|
|||
Executive Vice President and
|
|||
Chief Financial Officer
|
|||
December 10, 2014
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(1)
|
The Report fully complies with the requirements of section 13(a) or 15 (d) of the Securities Exchange Act of 1934 (as amended), as applicable; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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By
|
/s/ Stephen M. Smith
|
||
Stephen M. Smith
|
|||
President and
|
|||
Chief Executive Officer
|
|||
December 10, 2014
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15 (d) of the Securities Exchange Act of 1934 (as amended), as applicable; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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By
|
/s/ John A. Kritzmacher
|
||
John A. Kritzmacher
|
|||
Executive Vice President and
|
|||
Chief Financial Officer
|
|||
December 10, 2014
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