☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
New York
|
13-5593032
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
111 River Street, Hoboken, New Jersey
|
07030
|
|
(Address of principal executive offices)
|
Zip Code
|
(201) 748-6000
|
||
Registrant’s telephone number, including area code
|
Not Applicable
|
||
Former name, former address and former fiscal year, if changed since last report
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
||
Class A Common Stock, par value $1.00 per share
|
JW.A
|
New York Stock Exchange
|
||
Class B Common Stock, par value $1.00 per share
|
JW.B
|
New York Stock Exchange
|
Large accelerated filer ☒
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company ☐
|
Emerging growth company ☐
|
Item 1.
|
Financial Statements
|
|||
5
|
||||
6
|
||||
7
|
||||
8
|
||||
9
|
||||
Notes to Unaudited Condensed Consolidated Financial Statements
|
||||
11
|
||||
11
|
||||
13
|
||||
17
|
||||
18
|
||||
20
|
||||
20
|
||||
21
|
||||
22
|
||||
24
|
||||
25
|
||||
25
|
||||
26
|
||||
26
|
||||
27
|
||||
28
|
||||
29
|
||||
30
|
||||
Item 2.
|
31
|
|||
Item 3.
|
45
|
|||
Item 4.
|
46
|
|||
PART II - OTHER INFORMATION
|
||||
Item 1.
|
47
|
|||
Item 1A.
|
47
|
|||
Item 2.
|
47
|
|||
Item 6.
|
48
|
|||
● |
Adjusted Earnings Per Share (“Adjusted EPS”);
|
● |
Free Cash Flow less Product Development Spending;
|
● |
Adjusted Revenue;
|
● |
Adjusted Operating Income and margin;
|
● |
Adjusted Contribution to Profit and margin;
|
● |
EBITDA, Adjusted EBITDA and margin;
|
● |
Organic revenue; and
|
● |
Results on a constant currency basis.
|
● |
Adjusted EPS, Adjusted Revenue, Adjusted Operating Income, Adjusted Contribution to Profit, Adjusted EBITDA, and organic revenue provide a more comparable basis to analyze operating results and earnings and are measures commonly used by shareholders to measure our performance.
|
● |
Free Cash Flow less Product Development Spending helps assess our ability, over the long term, to create value for our shareholders as it represents cash available to repay debt, pay common stock dividends and fund share repurchases and acquisitions.
|
● |
Results on a constant currency basis removes distortion from the effects of foreign currency movements to provide better comparability of our business trends from period to period. We measure our performance excluding the impact of foreign currency (or at “constant currency”), which means that we apply the same foreign currency exchange rates for the current and equivalent prior period.
|
|
January 31, 2021
|
April 30, 2020
|
||||||
Assets:
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$
|
91,321
|
$
|
202,464
|
||||
Accounts receivable, net
|
278,939
|
309,384
|
||||||
Inventories, net
|
40,685
|
43,614
|
||||||
Prepaid expenses and other current assets
|
84,765
|
59,465
|
||||||
Total Current Assets
|
495,710
|
614,927
|
||||||
Product Development Assets, net
|
48,528
|
53,643
|
||||||
Royalty Advances, net
|
43,755
|
36,710
|
||||||
Technology, Property and Equipment, net
|
284,638
|
298,005
|
||||||
Intangible Assets, net
|
1,024,887
|
807,405
|
||||||
Goodwill
|
1,297,059
|
1,116,790
|
||||||
Operating Lease Right-of-Use Assets
|
125,287
|
142,716
|
||||||
Other Non-Current Assets
|
106,501
|
98,598
|
||||||
Total Assets
|
$
|
3,426,365
|
$
|
3,168,794
|
||||
Liabilities and Shareholders' Equity:
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$
|
72,937
|
$
|
93,691
|
||||
Accrued royalties
|
143,884
|
87,408
|
||||||
Short-term portion of long-term debt
|
12,500
|
9,375
|
||||||
Contract liabilities
|
398,477
|
520,214
|
||||||
Accrued employment costs
|
103,223
|
108,448
|
||||||
Accrued income taxes
|
9,168
|
13,728
|
||||||
Short-term portion of operating lease liabilities
|
20,965
|
21,810
|
||||||
Other accrued liabilities
|
80,922
|
72,595
|
||||||
Total Current Liabilities
|
842,076
|
927,269
|
||||||
Long-Term Debt
|
948,241
|
765,650
|
||||||
Accrued Pension Liability
|
167,881
|
187,969
|
||||||
Deferred Income Tax Liabilities
|
164,583
|
119,127
|
||||||
Operating Lease Liabilities
|
153,031
|
159,782
|
||||||
Other Long-Term Liabilities
|
86,751
|
75,373
|
||||||
Total Liabilities
|
2,362,563
|
2,235,170
|
||||||
Shareholders’ Equity
|
||||||||
Preferred Stock, $1 par value: Authorized – 2 million, Issued - 0
|
—
|
—
|
||||||
Class A Common Stock, $1 par value: Authorized - 180 million, Issued 70,208 and 70,166 as of January 31, 2021 and April 30, 2020, respectively
|
70,208
|
70,166
|
||||||
Class B Common Stock, $1 par value: Authorized - 72 million, Issued 12,974 and 13,016 as of January 31, 2021 and April 30, 2020, respectively
|
12,974
|
13,016
|
||||||
Additional paid-in-capital
|
441,403
|
431,680
|
||||||
Retained earnings
|
1,827,866
|
1,780,129
|
||||||
Accumulated other comprehensive loss, net of tax
|
(499,529
|
)
|
(575,497
|
)
|
||||
Less Treasury shares at cost (Class A – 23,394 and 23,405 as of January 31, 2021 and April 30, 2020, respectively; Class B – 3,921 and 3,920 as of January 31, 2021 and April 30, 2020, respectively)
|
(789,120
|
)
|
(785,870
|
)
|
||||
Total Shareholders’ Equity
|
1,063,802
|
933,624
|
||||||
Total Liabilities and Shareholders' Equity
|
$
|
3,426,365
|
$
|
3,168,794
|
|
Three Months Ended
January 31,
|
Nine Months Ended
January 31,
|
||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Revenue, net
|
$
|
482,912
|
$
|
467,131
|
$
|
1,405,249
|
$
|
1,356,866
|
||||||||
Costs and Expenses
|
||||||||||||||||
Cost of sales
|
157,636
|
153,924
|
457,298
|
440,433
|
||||||||||||
Operating and administrative expenses
|
251,242
|
245,683
|
735,778
|
736,233
|
||||||||||||
Restructuring and related charges
|
20,675
|
3,298
|
24,813
|
18,034
|
||||||||||||
Amortization of intangibles
|
19,032
|
15,732
|
53,089
|
45,722
|
||||||||||||
Total Costs and Expenses
|
448,585
|
418,637
|
1,270,978
|
1,240,422
|
||||||||||||
Operating Income
|
34,327
|
48,494
|
134,271
|
116,444
|
||||||||||||
Interest Expense
|
(4,853
|
)
|
(6,309
|
)
|
(13,928
|
)
|
(19,173
|
)
|
||||||||
Foreign Exchange Transaction Losses
|
(5,694
|
)
|
(1,745
|
)
|
(6,473
|
)
|
(1,761
|
)
|
||||||||
Other Income
|
3,612
|
4,232
|
11,769
|
9,602
|
||||||||||||
Income Before Taxes
|
27,392
|
44,672
|
125,639
|
105,112
|
||||||||||||
Provision for Income Taxes
|
5,231
|
9,229
|
18,712
|
21,355
|
||||||||||||
Net Income
|
$
|
22,161
|
$
|
35,443
|
$
|
106,927
|
$
|
83,757
|
||||||||
Earnings Per Share
|
||||||||||||||||
Basic
|
$
|
0.40
|
$
|
0.63
|
$
|
1.91
|
$
|
1.49
|
||||||||
Diluted
|
$
|
0.39
|
$
|
0.63
|
$
|
1.90
|
$
|
1.48
|
||||||||
Weighted Average Number of Common Shares Outstanding
|
||||||||||||||||
Basic
|
55,984
|
56,073
|
55,967
|
56,312
|
||||||||||||
Diluted
|
56,332
|
56,503
|
56,230
|
56,698
|
|
Three Months Ended
January 31,
|
Nine Months Ended
January 31,
|
||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Net Income
|
$
|
22,161
|
$
|
35,443
|
$
|
106,927
|
$
|
83,757
|
||||||||
Other Comprehensive Income:
|
||||||||||||||||
Foreign currency translation adjustment
|
48,305
|
7,895
|
83,532
|
10,675
|
||||||||||||
Unamortized retirement (costs) credits, net of tax benefit (expense) of $1,912, $41, $2,621, and $(317), respectively
|
(6,774
|
)
|
(816
|
)
|
(9,036
|
)
|
776
|
|||||||||
Unrealized gain (loss) on interest rate swaps, net of tax (expense) benefit of $(184), $132, $(436) and $412, respectively
|
582
|
(393
|
)
|
1,472
|
(1,053
|
)
|
||||||||||
Total Other Comprehensive Income
|
42,113
|
6,686
|
75,968
|
10,398
|
||||||||||||
Comprehensive Income
|
$
|
64,274
|
$
|
42,129
|
$
|
182,895
|
$
|
94,155
|
|
Nine Months Ended
January 31,
|
|||||||
2021
|
2020
|
|||||||
Operating Activities
|
||||||||
Net income
|
$
|
106,927
|
$
|
83,757
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Amortization of intangibles
|
53,089
|
45,722
|
||||||
Amortization of product development assets
|
25,323
|
26,653
|
||||||
Depreciation and amortization of technology, property and equipment
|
68,841
|
56,163
|
||||||
Restructuring and related charges
|
24,813
|
18,034
|
||||||
Stock-based compensation expense
|
14,744
|
15,662
|
||||||
Employee retirement plan expense
|
9,080
|
4,771
|
||||||
Royalty advances
|
(101,534
|
)
|
(96,618
|
)
|
||||
Earned royalty advances
|
101,163
|
90,320
|
||||||
Foreign exchange transaction losses
|
6,473
|
1,761
|
||||||
Other non-cash charges
|
29,256
|
17,506
|
||||||
Net change in operating assets and liabilities
|
(183,349
|
)
|
(174,844
|
)
|
||||
Net Cash Provided By Operating Activities
|
154,826
|
88,887
|
||||||
Investing Activities
|
||||||||
Product development spending
|
(17,103
|
)
|
(17,770
|
)
|
||||
Additions to technology, property and equipment
|
(58,176
|
)
|
(65,924
|
)
|
||||
Businesses acquired in purchase transactions, net of cash acquired
|
(298,590
|
)
|
(200,642
|
)
|
||||
Acquisitions of publication rights and other
|
(18,524
|
)
|
(1,548
|
)
|
||||
Net Cash Used In Investing Activities
|
(392,393
|
)
|
(285,884
|
)
|
||||
Financing Activities
|
||||||||
Repayment of long-term debt
|
(452,927
|
)
|
(253,006
|
)
|
||||
Borrowing of long-term debt
|
627,097
|
572,423
|
||||||
Payment of debt issuance costs
|
—
|
(4,006
|
)
|
|||||
Purchase of treasury shares
|
(7,063
|
)
|
(35,000
|
)
|
||||
Change in book overdrafts
|
7,929
|
(301
|
)
|
|||||
Cash dividends
|
(57,802
|
)
|
(57,632
|
)
|
||||
Impact of tax withholding on stock-based compensation and other
|
(1,391
|
)
|
(1,596
|
)
|
||||
Net Cash Provided By Financing Activities
|
115,843
|
220,882
|
||||||
Effects of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash
|
10,631
|
530
|
||||||
Cash Reconciliation:
|
||||||||
Cash and Cash Equivalents
|
202,464
|
92,890
|
||||||
Restricted cash included in Prepaid expenses and other current assets
|
583
|
658
|
||||||
Balance at Beginning of Period
|
203,047
|
93,548
|
||||||
(Decrease)/Increase for the Period
|
(111,093
|
)
|
24,415
|
|||||
Cash and cash equivalents
|
91,321
|
117,355
|
||||||
Restricted cash included in Prepaid expenses and other current assets
|
633
|
608
|
||||||
Balance at End of Period
|
$
|
91,954
|
$
|
117,963
|
||||
Cash Paid During the Period for:
|
||||||||
Interest
|
$
|
12,697
|
$
|
18,292
|
||||
Income taxes, net of refunds
|
$
|
46,148
|
$
|
39,397
|
|
Common Stock
Class A
|
Common Stock
Class B
|
Additional
Paid-in Capital
|
Retained
Earnings
|
Accumulated Other Comprehensive Loss
|
Treasury Stock
|
Total
Shareholders' Equity
|
|||||||||||||||||||||
Balance at October 31, 2020
|
$
|
70,179
|
$
|
13,003
|
$
|
435,851
|
$
|
1,825,025
|
$
|
(541,642
|
)
|
$
|
(782,203
|
)
|
$
|
1,020,213
|
||||||||||||
Restricted Shares Issued Under Stock-Based Compensation Plans
|
—
|
—
|
(128
|
)
|
2
|
—
|
193
|
67
|
||||||||||||||||||||
Impact of Tax Withholding on Stock-Based Compensation and Other
|
—
|
—
|
2
|
—
|
—
|
(47
|
)
|
(45
|
)
|
|||||||||||||||||||
Stock-based Compensation Expense
|
—
|
—
|
5,678
|
—
|
—
|
—
|
5,678
|
|||||||||||||||||||||
Purchase of Treasury Shares
|
—
|
—
|
—
|
—
|
—
|
(7,063
|
)
|
(7,063
|
)
|
|||||||||||||||||||
Class A Common Stock Dividends ($0.3425 per share)
|
—
|
—
|
—
|
(16,220
|
)
|
—
|
—
|
(16,220
|
)
|
|||||||||||||||||||
Class B Common Stock Dividends ($0.3425 per share)
|
—
|
—
|
—
|
(3,102
|
)
|
—
|
—
|
(3,102
|
)
|
|||||||||||||||||||
Common Stock Class Conversions
|
29
|
(29
|
)
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||
Comprehensive Income, Net of Tax
|
—
|
—
|
—
|
22,161
|
42,113
|
—
|
64,274
|
|||||||||||||||||||||
Balance at January 31, 2021
|
$
|
70,208
|
$
|
12,974
|
$
|
441,403
|
$
|
1,827,866
|
$
|
(499,529
|
)
|
$
|
(789,120
|
)
|
$
|
1,063,802
|
|
Common Stock
Class A
|
Common Stock
Class B
|
Additional
Paid-in Capital
|
Retained
Earnings
|
Accumulated Other
Comprehensive Loss
|
Treasury Stock
|
Total
Shareholders' Equity
|
|||||||||||||||||||||
Balance at October 31, 2019
|
$
|
70,149
|
$
|
13,033
|
$
|
429,968
|
$
|
1,940,902
|
$
|
(505,026
|
)
|
$
|
(770,030
|
)
|
$
|
1,178,996
|
||||||||||||
Restricted Shares Issued Under Stock-based Compensation Plans
|
—
|
—
|
(2,512
|
)
|
—
|
—
|
2,597
|
85
|
||||||||||||||||||||
Impact of Tax Withholding on Stock-Based Compensation and Other
|
—
|
—
|
189
|
—
|
—
|
(391
|
)
|
(202
|
)
|
|||||||||||||||||||
Stock-based Compensation Expense
|
—
|
—
|
5,373
|
—
|
—
|
—
|
5,373
|
|||||||||||||||||||||
Purchase of Treasury Shares
|
—
|
—
|
—
|
—
|
—
|
(10,000
|
)
|
(10,000
|
)
|
|||||||||||||||||||
Class A Common Stock Dividends ($0.34 per share)
|
—
|
—
|
—
|
(16,049
|
)
|
—
|
—
|
(16,049
|
)
|
|||||||||||||||||||
Class B Common Stock Dividends ($0.34 per share)
|
—
|
—
|
—
|
(3,097
|
)
|
—
|
—
|
(3,097
|
)
|
|||||||||||||||||||
Common Stock Class Conversions
|
7
|
(7
|
)
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||
Comprehensive Income, Net of Tax
|
—
|
—
|
—
|
35,443
|
6,686
|
—
|
42,129
|
|||||||||||||||||||||
Balance at January 31, 2020
|
$
|
70,156
|
$
|
13,026
|
$
|
433,018
|
$
|
1,957,199
|
$
|
(498,340
|
)
|
$
|
(777,824
|
)
|
$
|
1,197,235
|
|
Common Stock
Class A
|
Common Stock
Class B
|
Additional
Paid-in Capital
|
Retained
Earnings
|
Accumulated Other Comprehensive Loss
|
Treasury Stock
|
Total
Shareholders' Equity
|
|||||||||||||||||||||
Balance at April 30, 2020
|
$
|
70,166
|
$
|
13,016
|
$
|
431,680
|
$
|
1,780,129
|
$
|
(575,497
|
)
|
$
|
(785,870
|
)
|
$
|
933,624
|
||||||||||||
Cumulative Effect of Change in Accounting Principle, Net of Tax
|
—
|
—
|
—
|
(1,390
|
)
|
—
|
—
|
(1,390
|
)
|
|||||||||||||||||||
Restricted Shares Issued Under Stock-Based Compensation Plans
|
—
|
—
|
(5,392
|
)
|
2
|
—
|
5,575
|
185
|
||||||||||||||||||||
Impact of Tax Withholding on Stock-Based Compensation and Other
|
—
|
—
|
371
|
—
|
—
|
(1,762
|
)
|
(1,391
|
)
|
|||||||||||||||||||
Stock-based Compensation Expense
|
—
|
—
|
14,744
|
—
|
—
|
—
|
14,744
|
|||||||||||||||||||||
Purchase of Treasury Shares
|
—
|
—
|
—
|
—
|
—
|
(7,063
|
)
|
(7,063
|
)
|
|||||||||||||||||||
Class A Common Stock Dividends ($1.0275 per share)
|
—
|
—
|
—
|
(48,477
|
)
|
—
|
—
|
(48,477
|
)
|
|||||||||||||||||||
Class B Common Stock Dividends ($1.0275 per share)
|
—
|
—
|
—
|
(9,325
|
)
|
—
|
—
|
(9,325
|
)
|
|||||||||||||||||||
Common Stock Class Conversions
|
42
|
(42
|
)
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||
Comprehensive Income, Net of Tax
|
—
|
—
|
—
|
106,927
|
75,968
|
—
|
182,895
|
|||||||||||||||||||||
Balance at January 31, 2021
|
$
|
70,208
|
$
|
12,974
|
$
|
441,403
|
$
|
1,827,866
|
$
|
(499,529
|
)
|
$
|
(789,120
|
)
|
$
|
1,063,802
|
|
Common Stock
Class A
|
Common Stock
Class B
|
Additional
Paid-in Capital
|
Retained
Earnings
|
Accumulated Other Comprehensive Loss
|
Treasury Stock
|
Total
Shareholders' Equity
|
|||||||||||||||||||||
Balance at April 30, 2019
|
$
|
70,127
|
$
|
13,055
|
$
|
422,305
|
$
|
1,931,074
|
$
|
(508,738
|
)
|
$
|
(746,476
|
)
|
$
|
1,181,347
|
||||||||||||
Restricted Shares Issued Under Stock-based Compensation Plans
|
—
|
—
|
(5,304
|
)
|
—
|
—
|
5,603
|
299
|
||||||||||||||||||||
Impact of Tax Withholding on Stock-Based Compensation and Other
|
—
|
—
|
355
|
—
|
—
|
(1,951
|
)
|
(1,596
|
)
|
|||||||||||||||||||
Stock-based Compensation Expense
|
—
|
—
|
15,662
|
—
|
—
|
—
|
15,662
|
|||||||||||||||||||||
Purchase of Treasury Shares
|
—
|
—
|
—
|
—
|
—
|
(35,000
|
)
|
(35,000
|
)
|
|||||||||||||||||||
Class A Common Stock Dividends ($1.02 per share)
|
—
|
—
|
—
|
(48,331
|
)
|
—
|
—
|
(48,331
|
)
|
|||||||||||||||||||
Class B Common Stock Dividends ($1.02 per share)
|
—
|
—
|
—
|
(9,301
|
)
|
—
|
—
|
(9,301
|
)
|
|||||||||||||||||||
Common Stock Class Conversions
|
29
|
(29
|
)
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||
Comprehensive Income, Net of Tax
|
—
|
—
|
—
|
83,757
|
10,398
|
—
|
94,155
|
|||||||||||||||||||||
Balance at January 31, 2020
|
$
|
70,156
|
$
|
13,026
|
$
|
433,018
|
$
|
1,957,199
|
$
|
(498,340
|
)
|
$
|
(777,824
|
)
|
$
|
1,197,235
|
|
Provision for
Credit Losses
|
|||
Balance as of April 30, 2020
|
$
|
18,335
|
||
Adjustment due to adoption of new credit losses standard recorded as an adjustment to retained earnings
|
1,776
|
|||
Current period provision
|
5,910
|
|||
Amounts written off, less recoveries
|
(3,186
|
)
|
||
Foreign exchange translation adjustments and other
|
(1,425
|
)
|
||
Balance as of January 31, 2021
|
$
|
21,410
|
Preliminary
Allocation
|
||||
Total preliminary consideration transferred
|
$
|
300,086
|
||
Assets:
|
||||
Current Assets
|
2,902
|
|||
Technology, Property and Equipment, net
|
844
|
|||
Intangible Assets, net
|
194,400
|
|||
Goodwill
|
141,775
|
|||
Operating Lease Right-of-Use Assets
|
3,716
|
|||
Other Non-Current Assets
|
177
|
|||
Total Assets
|
$
|
343,814
|
||
Liabilities:
|
||||
Current Liabilities
|
3,657
|
|||
Deferred Income Tax Liabilities
|
36,936
|
|||
Operating Lease Liabilities
|
3,135
|
|||
Total Liabilities
|
$
|
43,728
|
Estimated
Fair Value
|
Weighted-Average Useful Life (in Years)
|
|||||||
Content and Publishing Rights
|
$
|
188,500
|
15
|
|||||
Developed Technology
|
4,500
|
5
|
||||||
Trademarks
|
1,000
|
2
|
||||||
Customer Relationships
|
400
|
15
|
||||||
Total
|
$
|
194,400
|
Preliminary Allocation
as of April 30, 2020
|
Measurement
Period Adjustments
|
Final Allocation
as of January 31, 2021
|
||||||||||
Total cash consideration at the acquisition date and cash to be paid
|
$
|
122,242
|
$
|
1,289
|
$
|
123,531
|
||||||
Assets
|
||||||||||||
Current Assets
|
8,750
|
473
|
9,223
|
|||||||||
Technology, Property and Equipment, net
|
484
|
—
|
484
|
|||||||||
Intangible Assets, net
|
56,836
|
—
|
56,836
|
|||||||||
Goodwill
|
82,561
|
—
|
82,561
|
|||||||||
Operating Lease Right-of-Use Assets
|
3,710
|
—
|
3,710
|
|||||||||
Total Assets
|
$
|
152,341
|
$
|
473
|
$
|
152,814
|
||||||
Liabilities:
|
||||||||||||
Current Liabilities
|
14,380
|
(816
|
)
|
13,564
|
||||||||
Deferred Income Tax Liabilities
|
12,722
|
—
|
12,722
|
|||||||||
Operating Lease Liabilities
|
2,692
|
—
|
2,692
|
|||||||||
Other Long-Term Liabilities
|
305
|
—
|
305
|
|||||||||
Total Liabilities
|
$
|
30,099
|
$
|
(816
|
)
|
$
|
29,283
|
Fair Value
|
Weighted-Average
Useful Life (in Years)
|
|||||||
Customer Relationships
|
$
|
48,792
|
12
|
|||||
Trademarks
|
6,725
|
10
|
||||||
Content
|
1,319
|
4
|
||||||
Total
|
$
|
56,836
|
|
Three Months Ended
January 31,
|
Nine Months Ended
January 31,
|
||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Research Publishing & Platforms:
|
||||||||||||||||
Research Publishing
|
$
|
229,327
|
$
|
223,393
|
$
|
700,482
|
$
|
668,405
|
||||||||
Research Platforms
|
10,523
|
10,163
|
31,512
|
29,235
|
||||||||||||
Total Research Publishing & Platforms
|
239,850
|
233,556
|
731,994
|
697,640
|
||||||||||||
Academic & Professional Learning:
|
||||||||||||||||
Education Publishing
|
98,160
|
100,982
|
265,349
|
268,246
|
||||||||||||
Professional Learning
|
75,955
|
77,296
|
206,269
|
232,615
|
||||||||||||
Total Academic & Professional Learning
|
174,115
|
178,278
|
471,618
|
500,861
|
||||||||||||
Education Services:
|
||||||||||||||||
Education Services OPM (1)
|
56,725
|
50,263
|
163,248
|
151,200
|
||||||||||||
mthree (1)
|
12,222
|
5,034
|
38,389
|
7,165
|
||||||||||||
Total Education Services
|
68,947
|
55,297
|
201,637
|
158,365
|
||||||||||||
Total Revenue
|
$
|
482,912
|
$
|
467,131
|
$
|
1,405,249
|
$
|
1,356,866
|
(1) |
In May 2020, we moved the IT bootcamp business acquired as part of The Learning House acquisition from Education Services Online Program Management (“OPM”) to mthree. As a result, the prior period revenue related to the IT bootcamp business has been included in mthree. There were no changes to our total Education Services or our consolidated financial results.
|
|
January 31, 2021
|
April 30, 2020
|
Increase/
(Decrease)
|
|||||||||
Balances from contracts with customers:
|
||||||||||||
Accounts receivable, net
|
$
|
278,939
|
$
|
309,384
|
$
|
(30,445
|
)
|
|||||
Contract liabilities (1)
|
398,477
|
520,214
|
(121,737
|
)
|
||||||||
Contract liabilities (included in Other Long-Term Liabilities)
|
$
|
18,145
|
$
|
14,949
|
$
|
3,196
|
(1) |
The sales return reserve recorded in Contract Liabilities is $43.4 million and $32.8 million, as of January 31, 2021 and April 30, 2020, respectively. This increase was primarily driven by the negative impact of COVID-19 and the expected increase in print book returns.
|
|
January 31, 2021
|
April 30, 2020
|
||||||
Operating lease right-of-use assets
|
$
|
125,287
|
$
|
142,716
|
||||
Short-term portion of operating lease liabilities
|
20,965
|
21,810
|
||||||
Operating lease liabilities, non-current
|
$
|
153,031
|
$
|
159,782
|
|
Three Months Ended
January 31,
|
Nine Months Ended
January 31,
|
||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Operating lease cost
|
$
|
5,652
|
$
|
6,286
|
$
|
18,898
|
$
|
19,346
|
||||||||
Variable lease cost
|
449
|
1,004
|
1,700
|
3,122
|
||||||||||||
Short-term lease cost
|
34
|
—
|
214
|
—
|
||||||||||||
Sublease income
|
(181
|
)
|
(180
|
)
|
(526
|
)
|
(519
|
)
|
||||||||
Total net lease cost (1)
|
$
|
5,954
|
$
|
7,110
|
$
|
20,286
|
$
|
21,949
|
(1) |
Total net lease cost does not include those costs included in Restructuring and Related Charges on our Unaudited Condensed Consolidated Statements of Income. See Note 9, “Restructuring and Related Charges” for more information on these programs.
|
|
Nine Months Ended
January 31,
|
|||||||
2021
|
2020
|
|||||||
Weighted-average remaining contractual lease term (years)
|
9
|
10
|
||||||
Weighted-average discount rate
|
5.89
|
%
|
5.91
|
%
|
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
||||||||
Operating cash flows from operating leases
|
$
|
24,563
|
$
|
22,029
|
Fiscal Year
|
Operating Lease
Liabilities
|
|||
2021 (remaining 3 months)
|
$
|
8,081
|
||
2022
|
29,957
|
|||
2023
|
26,722
|
|||
2024
|
24,681
|
|||
2025
|
23,191
|
|||
Thereafter
|
115,451
|
|||
Total future undiscounted minimum lease payments
|
228,083
|
|||
Less: Imputed interest
|
54,087
|
|||
Present Value of Minimum Lease Payments
|
173,996
|
|||
Less: Current portion
|
20,965
|
|||
Noncurrent portion
|
$
|
153,031
|
|
Nine Months Ended
January 31,
|
|||||||
2021
|
2020
|
|||||||
Restricted Stock:
|
||||||||
Awards granted
|
691
|
738
|
||||||
Weighted average fair value of grant
|
$
|
41.26
|
$
|
44.85
|
|
Foreign
Currency
Translation
|
Unamortized
Retirement
Costs
|
Interest
Rate Swaps
|
Total
|
||||||||||||
Balance at October 31, 2020
|
$
|
(305,476
|
)
|
$
|
(230,182
|
)
|
$
|
(5,984
|
)
|
$
|
(541,642
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
48,305
|
(8,237
|
)
|
(381
|
)
|
39,687
|
||||||||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
1,463
|
963
|
2,426
|
||||||||||||
Total other comprehensive income (loss)
|
48,305
|
(6,774
|
)
|
582
|
42,113
|
|||||||||||
Balance at January 31, 2021
|
$
|
(257,171
|
)
|
$
|
(236,956
|
)
|
$
|
(5,402
|
)
|
$
|
(499,529
|
)
|
||||
Balance at April 30, 2020
|
$
|
(340,703
|
)
|
$
|
(227,920
|
)
|
$
|
(6,874
|
)
|
$
|
(575,497
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
83,532
|
(13,527
|
)
|
(1,302
|
)
|
68,703
|
||||||||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
4,491
|
2,774
|
7,265
|
||||||||||||
Total other comprehensive income (loss)
|
83,532
|
(9,036
|
)
|
1,472
|
75,968
|
|||||||||||
Balance at January 31, 2021
|
$
|
(257,171
|
)
|
$
|
(236,956
|
)
|
$
|
(5,402
|
)
|
$
|
(499,529
|
)
|
|
Foreign
Currency
Translation
|
Unamortized
Retirement
Costs
|
Interest
Rate Swaps
|
Total
|
||||||||||||
Balance at October 31, 2019
|
$
|
(309,327
|
)
|
$
|
(194,465
|
)
|
$
|
(1,234
|
)
|
$
|
(505,026
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
7,895
|
(2,063
|
)
|
(271
|
)
|
5,561
|
||||||||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
1,247
|
(122
|
)
|
1,125
|
|||||||||||
Total other comprehensive income (loss)
|
7,895
|
(816
|
)
|
(393
|
)
|
6,686
|
||||||||||
Balance at January 31, 2020
|
$
|
(301,432
|
)
|
$
|
(195,281
|
)
|
$
|
(1,627
|
)
|
$
|
(498,340
|
)
|
||||
Balance at April 30, 2019
|
$
|
(312,107
|
)
|
$
|
(196,057
|
)
|
$
|
(574
|
)
|
$
|
(508,738
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
10,675
|
(2,893
|
)
|
(424
|
)
|
7,358
|
||||||||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
3,669
|
(629
|
)
|
3,040
|
|||||||||||
Total other comprehensive income (loss)
|
10,675
|
776
|
(1,053
|
)
|
10,398
|
|||||||||||
Balance at January 31, 2020
|
$
|
(301,432
|
)
|
$
|
(195,281
|
)
|
$
|
(1,627
|
)
|
$
|
(498,340
|
)
|
|
Three Months Ended
January 31,
|
Nine Months Ended
January 31,
|
||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Weighted average shares outstanding
|
55,984
|
56,083
|
55,968
|
56,328
|
||||||||||||
Less: Unvested restricted shares
|
—
|
(10
|
)
|
(1
|
)
|
(16
|
)
|
|||||||||
Shares used for basic earnings per share
|
55,984
|
56,073
|
55,967
|
56,312
|
||||||||||||
Dilutive effect of unvested restricted stock units and other stock awards
|
348
|
430
|
263
|
386
|
||||||||||||
Shares used for diluted earnings per share
|
56,332
|
56,503
|
56,230
|
56,698
|
|
Three Months Ended
January 31,
|
Nine Months Ended
January 31,
|
Total Charges
|
|||||||||||||||||
2021
|
2020
|
2021
|
2020
|
Incurred to Date
|
||||||||||||||||
Charges (Credits) by Segment:
|
||||||||||||||||||||
Research Publishing & Platforms
|
$
|
83
|
$
|
66
|
$
|
(217
|
)
|
$
|
2,731
|
$
|
3,329
|
|||||||||
Academic & Professional Learning
|
314
|
1,556
|
1,628
|
5,098
|
12,103
|
|||||||||||||||
Education Services
|
71
|
4
|
294
|
1,721
|
4,068
|
|||||||||||||||
Corporate Expenses
|
20,193
|
2,167
|
23,247
|
8,267
|
38,265
|
|||||||||||||||
Total Restructuring and Related Charges
|
$
|
20,661
|
$
|
3,793
|
$
|
24,952
|
$
|
17,817
|
$
|
57,765
|
||||||||||
Charges (Credits) by Activity:
|
||||||||||||||||||||
Severance and termination benefits
|
$
|
825
|
$
|
2,313
|
$
|
3,618
|
$
|
13,600
|
$
|
30,482
|
||||||||||
Impairment of operating lease ROU assets and property and equipment
|
14,924
|
—
|
14,924
|
161
|
15,085
|
|||||||||||||||
Acceleration of expense related to operating lease ROU assets and property and equipment
|
3,378
|
—
|
3,378
|
—
|
3,378
|
|||||||||||||||
Facility related charges
|
1,614
|
1,480
|
3,112
|
2,720
|
7,098
|
|||||||||||||||
Other activities
|
(80
|
)
|
—
|
(80
|
)
|
1,336
|
1,722
|
|||||||||||||
Total Restructuring and Related Charges
|
$
|
20,661
|
$
|
3,793
|
$
|
24,952
|
$
|
17,817
|
$
|
57,765
|
•
|
impairment charges of $14.9 million, which included the impairment of operating lease ROU assets of $10.6 million related to certain leases that will be subleased, and the related property and equipment of $4.3 million described further below, and
|
•
|
acceleration of expense of $3.4 million, which included the acceleration of rent expense associated with operating lease ROU assets of $2.9 million related to certain leases that will be abandoned or terminated and the related depreciation and amortization of property and equipment of $0.5 million.
|
|
April 30, 2020
|
Charges (Credits)
|
Payments
|
Foreign
Translation
& Other Adjustments
|
January 31, 2021
|
|||||||||||||||
Severance and termination benefits
|
$
|
17,632
|
$
|
3,618
|
$
|
(16,825
|
)
|
$
|
589
|
$
|
5,014
|
|||||||||
Other activities
|
430
|
(80
|
)
|
(262
|
)
|
(88
|
)
|
—
|
||||||||||||
Total
|
$
|
18,062
|
$
|
3,538
|
$
|
(17,087
|
)
|
$
|
501
|
$
|
5,014
|
|
Three Months Ended
January 31,
|
Nine Months Ended
January 31,
|
Total Charges
|
|||||||||||||||||
2021
|
2020
|
2021
|
2020
|
Incurred to Date
|
||||||||||||||||
Charges (Credits) by Segment:
|
||||||||||||||||||||
Research Publishing & Platforms
|
$
|
—
|
$
|
(26
|
)
|
$
|
(135
|
)
|
$
|
655
|
$
|
26,749
|
||||||||
Academic & Professional Learning
|
14
|
(15
|
)
|
274
|
48
|
43,108
|
||||||||||||||
Education Services
|
—
|
—
|
—
|
(103
|
)
|
3,764
|
||||||||||||||
Corporate Expenses
|
—
|
(454
|
)
|
(278
|
)
|
(383
|
)
|
95,662
|
||||||||||||
Total Restructuring and Related Charges (Credits)
|
$
|
14
|
$
|
(495
|
)
|
$
|
(139
|
)
|
$
|
217
|
$
|
169,283
|
||||||||
Charges (Credits) by Activity:
|
||||||||||||||||||||
Severance and termination benefits
|
$
|
14
|
$
|
(324
|
)
|
$
|
(139
|
)
|
$
|
173
|
$
|
115,870
|
||||||||
Consulting and contract termination costs
|
—
|
(171
|
)
|
—
|
(171
|
)
|
20,984
|
|||||||||||||
Other activities
|
—
|
—
|
—
|
215
|
32,429
|
|||||||||||||||
Total Restructuring and Related Charges (Credits)
|
$
|
14
|
$
|
(495
|
)
|
$
|
(139
|
)
|
$
|
217
|
$
|
169,283
|
|
April 30, 2020
|
(Credits)
|
Payments
|
Foreign
Translation &
Other Adjustments
|
January 31, 2021
|
|||||||||||||||
Severance and termination benefits
|
$
|
1,360
|
$
|
(139
|
)
|
$
|
(888
|
)
|
$
|
69
|
$
|
402
|
||||||||
Other activities
|
230
|
—
|
(145
|
)
|
345
|
430
|
||||||||||||||
Total
|
$
|
1,590
|
$
|
(139
|
)
|
$
|
(1,033
|
)
|
$
|
414
|
$
|
832
|
|
Three Months Ended
January 31,
|
Nine Months Ended
January 31,
|
||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Revenue:
|
||||||||||||||||
Research Publishing & Platforms
|
$
|
239,850
|
$
|
233,556
|
$
|
731,994
|
$
|
697,640
|
||||||||
Academic & Professional Learning
|
174,115
|
178,278
|
471,618
|
500,861
|
||||||||||||
Education Services
|
68,947
|
55,297
|
201,637
|
158,365
|
||||||||||||
Total Revenue
|
$
|
482,912
|
$
|
467,131
|
$
|
1,405,249
|
$
|
1,356,866
|
||||||||
Contribution to Profit:
|
||||||||||||||||
Research Publishing & Platforms
|
$
|
60,782
|
$
|
63,861
|
$
|
204,688
|
$
|
182,798
|
||||||||
Academic & Professional Learning
|
32,606
|
28,793
|
62,104
|
68,754
|
||||||||||||
Education Services
|
5,427
|
(5,166
|
)
|
13,410
|
(9,782
|
)
|
||||||||||
Total Contribution to Profit
|
$
|
98,815
|
$
|
87,488
|
$
|
280,202
|
$
|
241,770
|
||||||||
Corporate Expenses
|
(64,488
|
)
|
(38,994
|
)
|
(145,931
|
)
|
(125,326
|
)
|
||||||||
Operating Income
|
$
|
34,327
|
$
|
48,494
|
$
|
134,271
|
$
|
116,444
|
||||||||
Adjusted Contribution to Profit: (1)
|
||||||||||||||||
Research Publishing & Platforms
|
$
|
60,865
|
$
|
63,901
|
$
|
204,336
|
$
|
186,184
|
||||||||
Academic & Professional Learning
|
32,934
|
30,334
|
64,006
|
73,900
|
||||||||||||
Education Services
|
5,498
|
(5,162
|
)
|
13,704
|
(8,164
|
)
|
||||||||||
Total Adjusted Contribution to Profit
|
$
|
99,297
|
$
|
89,073
|
$
|
282,046
|
$
|
251,920
|
||||||||
Adjusted Corporate Expenses
|
(44,295
|
)
|
(37,281
|
)
|
(122,962
|
)
|
(117,442
|
)
|
||||||||
Total Adjusted Operating Income
|
$
|
55,002
|
$
|
51,792
|
$
|
159,084
|
$
|
134,478
|
||||||||
Depreciation and Amortization:
|
||||||||||||||||
Research Publishing & Platforms
|
$
|
20,997
|
$
|
17,056
|
$
|
60,463
|
$
|
51,246
|
||||||||
Academic & Professional Learning
|
17,233
|
17,806
|
53,757
|
51,679
|
||||||||||||
Education Services
|
7,493
|
5,987
|
21,982
|
17,007
|
||||||||||||
Total Depreciation and Amortization
|
$
|
45,723
|
$
|
40,849
|
$
|
136,202
|
$
|
119,932
|
||||||||
Corporate Depreciation and Amortization
|
3,593
|
2,832
|
11,051
|
8,606
|
||||||||||||
Total Depreciation and Amortization
|
$
|
49,316
|
$
|
43,681
|
$
|
147,253
|
$
|
128,538
|
||||||||
Adjusted EBITDA: (2)
|
||||||||||||||||
Research Publishing & Platforms
|
$
|
81,862
|
$
|
80,957
|
$
|
264,799
|
$
|
237,430
|
||||||||
Academic & Professional Learning
|
50,167
|
48,140
|
117,763
|
125,579
|
||||||||||||
Education Services
|
12,991
|
825
|
35,686
|
8,843
|
||||||||||||
Total Segment Adjusted EBITDA
|
$
|
145,020
|
$
|
129,922
|
$
|
418,248
|
$
|
371,852
|
||||||||
Corporate Adjusted EBITDA
|
(40,702
|
)
|
(34,449
|
)
|
(111,911
|
)
|
(108,836
|
)
|
||||||||
Total Adjusted EBITDA
|
$
|
104,318
|
$
|
95,473
|
$
|
306,337
|
$
|
263,016
|
(1) |
Adjusted Contribution to Profit is calculated as Contribution to Profit adjusted for restructuring and related charges. See Note 9, “Restructuring and Related Charges” for these charges by segment.
|
(2) |
Adjusted EBITDA is calculated as Adjusted Contribution to Profit with depreciation and amortization added back.
|
|
Three Months Ended
January 31,
|
Nine Months Ended
January 31,
|
||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Net Income
|
$
|
22,161
|
$
|
35,443
|
$
|
106,927
|
$
|
83,757
|
||||||||
Interest expense
|
4,853
|
6,309
|
13,928
|
19,173
|
||||||||||||
Provision for income taxes
|
5,231
|
9,229
|
18,712
|
21,355
|
||||||||||||
Depreciation and amortization
|
49,316
|
43,681
|
147,253
|
128,538
|
||||||||||||
Non-GAAP EBITDA
|
$
|
81,561
|
$
|
94,662
|
$
|
286,820
|
$
|
252,823
|
||||||||
Restructuring and related charges
|
20,675
|
3,298
|
24,813
|
18,034
|
||||||||||||
Foreign exchange transaction losses
|
5,694
|
1,745
|
6,473
|
1,761
|
||||||||||||
Other income
|
(3,612
|
)
|
(4,232
|
)
|
(11,769
|
)
|
(9,602
|
)
|
||||||||
Non-GAAP Adjusted EBITDA
|
$
|
104,318
|
$
|
95,473
|
$
|
306,337
|
$
|
263,016
|
|
January 31, 2021
|
April 30, 2020
|
||||||
Finished Goods
|
$
|
29,996
|
$
|
36,014
|
||||
Work-in-Process
|
1,660
|
1,398
|
||||||
Paper and Other Materials
|
269
|
331
|
||||||
Total Inventories Before Estimated Sales Returns and LIFO Reserve
|
$
|
31,925
|
$
|
37,743
|
||||
Inventory Value of Estimated Sales Returns
|
11,800
|
8,686
|
||||||
LIFO Reserve
|
(3,040
|
)
|
(2,815
|
)
|
||||
Total Inventories
|
$
|
40,685
|
$
|
43,614
|
|
April 30, 2020
|
Acquisitions (1)
|
Foreign
Translation
Adjustment
|
January 31, 2021
|
||||||||||||
Research Publishing & Platforms
|
$
|
448,130
|
$
|
130,864
|
$
|
30,090
|
$
|
609,084
|
||||||||
Academic & Professional Learning
|
501,091
|
—
|
11,871
|
512,962
|
||||||||||||
Education Services
|
167,569
|
—
|
7,444
|
175,013
|
||||||||||||
Total
|
$
|
1,116,790
|
$
|
130,864
|
$
|
49,405
|
$
|
1,297,059
|
(1) |
Refer to Note 3, “Acquisitions,” for more information related to the acquisition that occurred in fiscal year 2021 and the revisions that were made to the allocation of the consideration transferred to the assets acquired and liabilities assumed during the nine months ended January 31, 2021 related to the fiscal year 2020 acquisitions.
|
|
January 31, 2021
|
April 30, 2020
|
||||||
Intangible Assets with Definite Lives, net:
|
||||||||
Content and Publishing Rights (1)
|
$
|
561,888
|
$
|
362,106
|
||||
Customer Relationships (1)
|
274,398
|
290,418
|
||||||
Developed Technology (1)
|
37,248
|
13,111
|
||||||
Brands and Trademarks (1)
|
20,331
|
20,188
|
||||||
Covenants not to Compete
|
98
|
246
|
||||||
Total
|
893,963
|
686,069
|
||||||
Intangible Assets with Indefinite Lives:
|
||||||||
Brands and Trademarks
|
37,000
|
37,000
|
||||||
Publishing Rights
|
93,924
|
84,336
|
||||||
Total
|
130,924
|
121,336
|
||||||
Total Intangible Assets, Net
|
$
|
1,024,887
|
$
|
807,405
|
(1) |
Refer to Note 3, “Acquisitions,” for more information related to the acquisition that occurred in fiscal year 2021 and the revisions that were made to the allocation of the consideration transferred to the assets acquired and liabilities assumed during the nine months ended January 31, 2021 related to the fiscal year 2020 acquisitions.
|
|
Three Months Ended
January 31,
|
Nine Months Ended
January 31,
|
||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Service cost
|
$
|
356
|
$
|
283
|
$
|
1,036
|
$
|
1,600
|
||||||||
Interest cost
|
4,564
|
5,919
|
13,695
|
18,103
|
||||||||||||
Expected return on plan assets
|
(9,853
|
)
|
(10,217
|
)
|
(28,880
|
)
|
(30,162
|
)
|
||||||||
Amortization of prior service cost
|
(23
|
)
|
(18
|
)
|
(72
|
)
|
(56
|
)
|
||||||||
Amortization of net actuarial loss
|
1,944
|
1,623
|
5,964
|
4,804
|
||||||||||||
Net pension income
|
$
|
(3,012
|
)
|
$
|
(2,410
|
)
|
$
|
(8,257
|
)
|
$
|
(5,711
|
)
|
|
January 31, 2021
|
April 30, 2020
|
||||||
Short-term portion of long-term debt (1)
|
$
|
12,500
|
$
|
9,375
|
||||
Term loan A - Amended and Restated RCA (2)
|
226,013
|
235,263
|
||||||
Revolving credit facility - Amended and Restated RCA
|
722,228
|
530,387
|
||||||
Total long-term debt, less current portion
|
948,241
|
765,650
|
||||||
Total Debt
|
$
|
960,741
|
$
|
775,025
|
(1) |
Relates to our term loan A under the Amended and Restated RCA.
|
(2) |
Amounts are shown net of unamortized issuance costs of $0.6 million as of January 31, 2021 and $0.7 million as of April 30, 2020.
|
Date of Declaration by
Board of Directors
|
Quarterly Cash
Dividend
|
Total Dividend
|
Class of Common
Stock
|
Dividend
Paid Date
|
Shareholders of
Record as of Date
|
|||||
June 25, 2020
|
$0.3425 per common share
|
$19.2 million
|
Class A and
Class B
|
July 22, 2020
|
July 7, 2020
|
|||||
September 23, 2020
|
$0.3425 per common share
|
$19.2 million
|
Class A and
Class B
|
October 21, 2020
|
October 6, 2020
|
|||||
December 16, 2020
|
$0.3425 per common share
|
$19.2 million
|
Class A and
Class B
|
January 13, 2021
|
December 30, 2020
|
Changes in Common Stock A:
|
2021
|
2020
|
|||
Number of shares, beginning of year
|
70,166
|
70,127
|
|||
Common stock class conversions
|
42
|
29
|
|||
Number of shares issued, end of period
|
70,208
|
70,156
|
|||
Changes in Common Stock A in treasury:
|
|||||
Number of shares held, beginning of year
|
23,405
|
22,634
|
|||
Purchase of treasury shares
|
146
|
757
|
|||
Restricted shares issued under stock-based compensation plans – non-PSU Awards
|
(100)
|
(154)
|
|||
Restricted shares issued under stock-based compensation plans – PSU Awards
|
(88)
|
(43)
|
|||
Shares issued under the Director Stock Plan to Directors
|
(6)
|
—
|
|||
Restricted shares, forfeited
|
—
|
1
|
|||
Restricted shares issued from exercise of stock options
|
(33)
|
(34)
|
|||
Shares withheld for taxes
|
70
|
63
|
|||
Number of shares held, end of period
|
23,394
|
23,224
|
|||
Number of Common Stock A outstanding, end of period
|
46,814
|
46,932
|
Changes in Common Stock B:
|
2021
|
2020
|
|||
Number of shares, beginning of year
|
13,016
|
13,055
|
|||
Common stock class conversions
|
(42)
|
(29)
|
|||
Number of shares issued, end of period
|
12,974
|
13,026
|
|||
Changes in Common Stock B in treasury:
|
|||||
Number of shares held, beginning of year
|
3,920
|
3,918
|
|||
Purchase of treasury shares
|
1
|
—
|
|||
Number of shares held, end of period
|
3,921
|
3,918
|
|||
Number of Common Stock B outstanding, end of period
|
9,053
|
9,108
|
● |
On December 31, 2020, we completed the acquisition of Hindawi. Its results of operations are included in our Research Publishing & Platforms segment. See Note 3, “Acquisitions” for more details on this transaction.
|
● |
U.S. GAAP Results: Consolidated revenue of $482.9 million (+3%, compared to prior year) and EPS of $0.39 (-$0.24 compared to prior year), due to restructuring charges for real estate actions taken as part of the Business Optimization Program;
|
● |
Adjusted Results (at constant currency compared to prior year): Revenue +2%, EBITDA +7%, and EPS +6%;
|
● |
Full Year Outlook raised for Revenue, Adjusted EBITDA, Adjusted EPS and Free Cash Flow.
|
● |
an increase in Education Services, due to the contributions from mthree, which was acquired in January 2020 and growth in online program management services; and
|
● |
an increase in Research Publishing & Platforms, which included the contributions from Hindawi which was acquired on December 31, 2020.
|
● |
impairment charges of $14.9 million, which included the impairment of operating lease right-of-use (“ROU”) assets of $10.6 million related to certain leases that will be subleased, and the related property and equipment of $4.3 million; and
|
● |
acceleration of expense of $3.4 million, which included the acceleration of rent expense associated with operating lease ROU assets of $2.9 million related to certain leases that will be abandoned or terminated, and the related depreciation and amortization of property and equipment of $0.5 million.
|
|
Three Months Ended
January 31,
|
|||||||
2021
|
2020
|
|||||||
U.S. GAAP EPS
|
$
|
0.39
|
$
|
0.63
|
||||
Adjustments:
|
||||||||
Restructuring and related charges
|
0.28
|
0.04
|
||||||
Foreign exchange losses on intercompany transactions
|
0.01
|
0.01
|
||||||
Non-GAAP Adjusted EPS
|
$
|
0.68
|
$
|
0.68
|
|
Three Months Ended
January 31,
|
Constant Currency
|
||||||||||||||
RESEARCH PUBLISHING & PLATFORMS:
|
2021
|
2020
|
% Change
Favorable
(Unfavorable)
|
% Change
Favorable
(Unfavorable)
|
||||||||||||
Revenue:
|
||||||||||||||||
Research Publishing
|
$
|
229,327
|
$
|
223,393
|
3
|
%
|
1
|
%
|
||||||||
Research Platforms
|
10,523
|
10,163
|
4
|
%
|
4
|
%
|
||||||||||
Total Research Publishing & Platforms Revenue
|
239,850
|
233,556
|
3
|
%
|
1
|
%
|
||||||||||
Cost of Sales
|
66,883
|
62,515
|
(7
|
)%
|
(5
|
)%
|
||||||||||
Operating Expenses
|
102,628
|
99,911
|
(3
|
)%
|
(1
|
)%
|
||||||||||
Amortization of Intangibles
|
9,474
|
7,229
|
(31
|
)%
|
(29
|
)%
|
||||||||||
Restructuring Charges (see Note 9)
|
83
|
40
|
#
|
#
|
||||||||||||
Contribution to Profit
|
60,782
|
63,861
|
(5
|
)%
|
(6
|
)%
|
||||||||||
Restructuring Charges (see Note 9)
|
83
|
40
|
||||||||||||||
Adjusted Contribution to Profit
|
60,865
|
63,901
|
(5
|
)%
|
(6
|
)%
|
||||||||||
Depreciation and amortization
|
20,997
|
17,056
|
||||||||||||||
Adjusted EBITDA
|
$
|
81,862
|
$
|
80,957
|
1
|
%
|
—
|
|||||||||
Adjusted EBITDA Margin
|
34.1
|
%
|
34.7
|
%
|
● |
2 new society contracts were signed with a combined annual revenue of approximately $0.9 million,
|
● |
66 society contracts were renewed with a combined annual revenue of approximately $28.3 million,
|
● |
4 society contracts were not renewed with a combined annual revenue of approximately $2.2 million.
|
|
Three Months Ended
January 31,
|
Constant Currency
|
||||||||||||||
ACADEMIC & PROFESSIONAL LEARNING:
|
2021
|
2020
|
% Change
Favorable
(Unfavorable)
|
% Change
Favorable
(Unfavorable)
|
||||||||||||
Revenue:
|
||||||||||||||||
Education Publishing
|
$
|
98,160
|
$
|
100,982
|
(3
|
)%
|
(4
|
)%
|
||||||||
Professional Learning
|
75,955
|
77,296
|
(2
|
)%
|
(4
|
)%
|
||||||||||
Total Academic & Professional Learning
|
174,115
|
178,278
|
(2
|
)%
|
(4
|
)%
|
||||||||||
Cost of Sales
|
48,400
|
51,352
|
6
|
%
|
7
|
%
|
||||||||||
Operating Expenses
|
88,655
|
92,240
|
4
|
%
|
5
|
%
|
||||||||||
Amortization of Intangibles
|
4,126
|
4,352
|
5
|
%
|
7
|
%
|
||||||||||
Restructuring Charges (see Note 9)
|
328
|
1,541
|
79
|
%
|
79
|
%
|
||||||||||
Contribution to Profit
|
32,606
|
28,793
|
13
|
%
|
11
|
%
|
||||||||||
Restructuring Charges (see Note 9)
|
328
|
1,541
|
||||||||||||||
Adjusted Contribution to Profit
|
32,934
|
30,334
|
9
|
%
|
6
|
%
|
||||||||||
Depreciation and amortization
|
17,233
|
17,806
|
||||||||||||||
Adjusted EBITDA
|
$
|
50,167
|
$
|
48,140
|
4
|
%
|
2
|
%
|
||||||||
Adjusted EBITDA Margin
|
28.8
|
%
|
27.0
|
%
|
|
Three Months Ended
January 31,
|
Constant Currency
|
||||||||||||||
EDUCATION SERVICES:
|
2021
|
2020
|
% Change
Favorable
(Unfavorable)
|
% Change
Favorable
(Unfavorable)
|
||||||||||||
Revenue:
|
||||||||||||||||
Education Services OPM (1)
|
$
|
56,725
|
$
|
50,263
|
13
|
%
|
13
|
%
|
||||||||
mthree (1)
|
12,222
|
5,034
|
#
|
#
|
||||||||||||
Total Education Services Revenue
|
68,947
|
55,297
|
25
|
%
|
24
|
%
|
||||||||||
Cost of Sales
|
42,355
|
40,057
|
(6
|
)%
|
(5
|
)%
|
||||||||||
Operating Expenses
|
15,663
|
16,250
|
4
|
%
|
4
|
%
|
||||||||||
Amortization of Intangibles
|
5,431
|
4,152
|
(31
|
)%
|
(30
|
)%
|
||||||||||
Restructuring Charges (see Note 9)
|
71
|
4
|
#
|
#
|
||||||||||||
Contribution to Profit
|
5,427
|
(5,166
|
)
|
#
|
#
|
|||||||||||
Restructuring Charges (see Note 9)
|
71
|
4
|
||||||||||||||
Adjusted Contribution to Profit
|
5,498
|
(5,162
|
)
|
#
|
#
|
|||||||||||
Depreciation and amortization
|
7,493
|
5,987
|
||||||||||||||
Adjusted EBITDA
|
$
|
12,991
|
$
|
825
|
#
|
#
|
||||||||||
Adjusted EBITDA Margin
|
18.8
|
%
|
1.5
|
%
|
(1)
|
In May 2020, we moved the IT bootcamp business acquired as part of The Learning House acquisition from Education Services OPM to mthree. As a result, the prior period revenue related to the IT bootcamp business has been included in mthree. There were no changes to our total Education Services or our consolidated financial results. The inorganic revenue from mthree in the three months ended January 31, 2021 was $7.7 million.
|
● |
an increase in Education Services, primarily due to the contributions from mthree, which was acquired in January 2020; and
|
● |
an increase in Research Publishing & Platforms.
|
|
Nine Months Ended
January 31,
|
|||||||
2021
|
2020
|
|||||||
U.S. GAAP EPS
|
$
|
1.90
|
$
|
1.48
|
||||
Adjustments:
|
||||||||
Restructuring and related charges
|
0.33
|
0.24
|
||||||
Foreign exchange (gains) losses on intercompany transactions
|
(0.01
|
)
|
0.02
|
|||||
Impact of increase in U.K. statutory rate on deferred tax balances
|
0.12
|
—
|
||||||
Impact of U.S. CARES Act
|
(0.25
|
)
|
—
|
|||||
Non-GAAP Adjusted EPS
|
$
|
2.09
|
$
|
1.74
|
|
Nine Months Ended
January 31,
|
Constant Currency
|
||||||||||||||
RESEARCH PUBLISHING & PLATFORMS:
|
2021
|
2020
|
% Change
Favorable
(Unfavorable)
|
% Change
Favorable
(Unfavorable)
|
||||||||||||
Revenue:
|
||||||||||||||||
Research Publishing
|
$
|
700,482
|
$
|
668,405
|
5
|
%
|
4
|
%
|
||||||||
Research Platforms
|
31,512
|
29,235
|
8
|
%
|
8
|
%
|
||||||||||
Total Research Publishing & Platforms Revenue
|
731,994
|
697,640
|
5
|
%
|
4
|
%
|
||||||||||
Cost of Sales
|
201,599
|
190,721
|
(6
|
)%
|
(4
|
)%
|
||||||||||
Operating Expenses
|
300,894
|
299,001
|
(1
|
)%
|
—
|
|||||||||||
Amortization of Intangibles
|
25,165
|
21,734
|
(16
|
)%
|
(15
|
)%
|
||||||||||
Restructuring (Credits) Charges (see Note 9)
|
(352
|
)
|
3,386
|
#
|
#
|
|||||||||||
Contribution to Profit
|
204,688
|
182,798
|
12
|
%
|
11
|
%
|
||||||||||
Restructuring (Credits) Charges (see Note 9)
|
(352
|
)
|
3,386
|
|||||||||||||
Adjusted Contribution to Profit
|
204,336
|
186,184
|
10
|
%
|
9
|
%
|
||||||||||
Depreciation and amortization
|
60,463
|
51,246
|
||||||||||||||
Adjusted EBITDA
|
$
|
264,799
|
$
|
237,430
|
12
|
%
|
11
|
%
|
||||||||
Adjusted EBITDA Margin
|
36.2
|
%
|
34.0
|
%
|
● |
6 new society contracts were signed with a combined annual revenue of approximately $14.6 million,
|
● |
120 society contracts were renewed with a combined annual revenue of approximately $72.9 million,
|
● |
11 society contracts were not renewed with a combined annual revenue of approximately $2.9 million.
|
|
Nine Months Ended
January 31,
|
Constant Currency
|
||||||||||||||
ACADEMIC & PROFESSIONAL LEARNING:
|
2021
|
2020
|
% Change
Favorable
(Unfavorable)
|
% Change
Favorable
(Unfavorable)
|
||||||||||||
Revenue:
|
||||||||||||||||
Education Publishing
|
$
|
265,349
|
$
|
268,246
|
(1
|
)%
|
(2
|
)%
|
||||||||
Professional Learning
|
206,269
|
232,615
|
(11
|
)%
|
(12
|
)%
|
||||||||||
Total Academic & Professional Learning
|
471,618
|
500,861
|
(6
|
)%
|
(7
|
)%
|
||||||||||
Cost of Sales
|
130,733
|
139,027
|
6
|
%
|
7
|
%
|
||||||||||
Operating Expenses
|
264,503
|
275,514
|
4
|
%
|
4
|
%
|
||||||||||
Amortization of Intangibles
|
12,376
|
12,420
|
—
|
2
|
%
|
|||||||||||
Restructuring Charges (see Note 9)
|
1,902
|
5,146
|
63
|
%
|
63
|
%
|
||||||||||
Contribution to Profit
|
62,104
|
68,754
|
(10
|
)%
|
(12
|
)%
|
||||||||||
Restructuring Charges (see Note 9)
|
1,902
|
5,146
|
||||||||||||||
Adjusted Contribution to Profit
|
64,006
|
73,900
|
(13
|
)%
|
(15
|
)%
|
||||||||||
Depreciation and amortization
|
53,757
|
51,679
|
||||||||||||||
Adjusted EBITDA
|
$
|
117,763
|
$
|
125,579
|
(6
|
)%
|
(8
|
)%
|
||||||||
Adjusted EBITDA Margin
|
25.0
|
%
|
25.1
|
%
|
|
Nine Months Ended
January 31,
|
Constant Currency
|
||||||||||||||
EDUCATION SERVICES:
|
2021
|
2020
|
% Change
Favorable
(Unfavorable)
|
% Change
Favorable
(Unfavorable)
|
||||||||||||
Revenue:
|
||||||||||||||||
Education Services OPM (1)
|
$
|
163,248
|
$
|
151,200
|
8
|
%
|
8
|
%
|
||||||||
mthree (1)
|
38,389
|
7,165
|
#
|
#
|
||||||||||||
Total Education Services Revenue
|
201,637
|
158,365
|
27
|
%
|
27
|
%
|
||||||||||
Cost of Sales
|
124,967
|
110,685
|
(13
|
)%
|
(12
|
)%
|
||||||||||
Operating Expenses
|
47,419
|
44,276
|
(7
|
)%
|
(6
|
)%
|
||||||||||
Amortization of Intangibles
|
15,547
|
11,568
|
(34
|
)%
|
(34
|
)%
|
||||||||||
Restructuring Charges (see Note 9)
|
294
|
1,618
|
82
|
%
|
82
|
%
|
||||||||||
Contribution to Profit
|
13,410
|
(9,782
|
)
|
#
|
#
|
|||||||||||
Restructuring Charges (see Note 9)
|
294
|
1,618
|
||||||||||||||
Adjusted Contribution to Profit
|
13,704
|
(8,164
|
)
|
#
|
#
|
|||||||||||
Depreciation and amortization
|
21,982
|
17,007
|
||||||||||||||
Adjusted EBITDA
|
$
|
35,686
|
$
|
8,843
|
#
|
#
|
||||||||||
Adjusted EBITDA Margin
|
17.7
|
%
|
5.6
|
%
|
(1)
|
In May 2020, we moved the IT bootcamp business acquired as part of The Learning House acquisition from Education Services OPM to mthree. As a result, the prior period revenue related to the IT bootcamp business has been included in mthree. There were no changes to our total Education Services or our consolidated financial results. The inorganic revenue from mthree in the nine months ended January 31, 2021 was $32.6 million.
|
Metric
|
Fiscal Year 2020
Actual
|
Fiscal Year 2021
Previous Outlook
|
Fiscal Year 2021
Current Outlook
|
|||
Revenue
|
$1,831
|
$1,865-$1,885
|
Raised, $1,900 - $1,920
|
|||
Adjusted EBITDA
|
$356
|
$380-$395
|
Raised, $395 - $410
|
|||
Adjusted EPS
|
$2.40
|
$2.50-$2.70
|
Raised, $2.60 - $2.75
|
|||
Free Cash Flow
|
$173
|
$175-$200
|
Raised, $200 - $225
|
|
Three Months Ended
January 31,
|
Nine Months Ended
January 31,
|
||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Net Income
|
$
|
22,161
|
$
|
35,443
|
$
|
106,927
|
$
|
83,757
|
||||||||
Interest expense
|
4,853
|
6,309
|
13,928
|
19,173
|
||||||||||||
Provision for income taxes
|
5,231
|
9,229
|
18,712
|
21,355
|
||||||||||||
Depreciation and amortization
|
49,316
|
43,681
|
147,253
|
128,538
|
||||||||||||
Non-GAAP EBITDA
|
$
|
81,561
|
$
|
94,662
|
$
|
286,820
|
$
|
252,823
|
||||||||
Restructuring and related charges
|
20,675
|
3,298
|
24,813
|
18,034
|
||||||||||||
Foreign exchange transaction losses
|
5,694
|
1,745
|
6,473
|
1,761
|
||||||||||||
Other income
|
(3,612
|
)
|
(4,232
|
)
|
(11,769
|
)
|
(9,602
|
)
|
||||||||
Non-GAAP Adjusted EBITDA
|
$
|
104,318
|
$
|
95,473
|
$
|
306,337
|
$
|
263,016
|
|
Nine Months Ended
January 31,
|
|||||||
2021
|
2020
|
|||||||
Net Cash Provided By Operating Activities
|
$
|
154,826
|
$
|
88,887
|
||||
Net Cash Used In Investing Activities
|
(392,393
|
)
|
(285,884
|
)
|
||||
Net Cash Provided By Financing Activities
|
115,843
|
220,882
|
||||||
Effect of Foreign Currency Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash
|
10,631
|
530
|
|
Nine Months Ended
January 31,
|
|||||||
2021
|
2020
|
|||||||
Net Cash Provided By Operating Activities
|
$
|
154,826
|
$
|
88,887
|
||||
Less: Additions to Technology, Property and Equipment
|
(58,176
|
)
|
(65,924
|
)
|
||||
Less: Product Development Spending
|
(17,103
|
)
|
(17,770
|
)
|
||||
Free Cash Flow less Product Development Spending
|
$
|
79,547
|
$
|
5,193
|
Net Cash Provided By Operating Activities – Nine Months Ended January 31, 2020
|
$
|
88.9
|
||
Higher net income adjusted for items to reconcile net income to net cash provided by operating activities, including the non-cash change in deferred taxes primarily related to the CARES Act
|
74.4
|
|||
Working Capital Changes:
|
|
|||
Inventories – due to lower purchases
|
9.9
|
|||
Accounts receivable, net and contract liabilities - due to the timing of customer payments
|
(4.6
|
)
|
||
Accounts payable and royalties payable - primarily due to the timing of payments
|
(7.8
|
)
|
||
Income taxes
|
(12.7
|
)
|
||
Other working capital items
|
6.7
|
|||
Net Cash Provided By Operating Activities – Nine Months Ended January 31, 2021
|
$
|
154.8
|
|
January 31, 2021
|
April 30, 2020
|
||||||
Increase in Inventories, net
|
$
|
11,800
|
$
|
8,686
|
||||
Decrease in Accrued royalties
|
$
|
(5,756
|
)
|
$
|
(4,441
|
)
|
||
Increase in Contract liabilities
|
$
|
43,446
|
$
|
32,769
|
||||
Print book sales return reserve net liability balance
|
$
|
(25,890
|
)
|
$
|
(19,642
|
)
|
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
|
Maximum Dollar
Value of Shares
that May be Purchased
Under Additional Plans or Programs
(Dollars in millions)
|
||||||||||||||||
November 2020
|
—
|
$
|
—
|
—
|
806,758
|
$
|
200
|
|||||||||||||
December 2020
|
—
|
—
|
—
|
806,758
|
$
|
200
|
||||||||||||||
January 2021
|
146,852
|
48.09
|
146,852
|
659,906
|
$
|
200
|
||||||||||||||
Total
|
146,852
|
$
|
48.09
|
146,852
|
659,906
|
$
|
200
|
JOHN WILEY & SONS, INC.
|
|||
Registrant
|
|||
By
|
/s/ Brian A. Napack
|
||
Brian A. Napack
|
|||
President and Chief Executive Officer
|
|||
By
|
/s/ John A. Kritzmacher
|
||
John A. Kritzmacher
|
|||
Executive Vice President and Chief Financial Officer
|
|||
By
|
/s/ Christopher F. Caridi
|
||
Christopher F. Caridi
|
|||
Senior Vice President, Corporate Controller and Chief Accounting Officer
|
|||
Dated: March 5, 2021
|
1. |
I have reviewed this quarterly report on Form 10-Q of John Wiley & Sons, Inc.;
|
2. |
Based on my knowledge, this 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 report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this 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 in this report;
|
4. |
The registrant’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 registrant and 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 registrant, 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;
|
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;
|
c. |
Evaluated the effectiveness of the registrant’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
|
d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ Brian A. Napack
|
||
Brian A. Napack
|
|||
President and Chief Executive Officer
|
|||
March 5, 2021
|
1. |
I have reviewed this quarterly report on Form 10-Q of John Wiley & Sons, Inc.;
|
2. |
Based on my knowledge, this 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 report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this 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 in this report;
|
4. |
The registrant’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 registrant and 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 registrant, 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;
|
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;
|
c. |
Evaluated the effectiveness of the registrant’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
|
d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
By:
|
/s/ John A. Kritzmacher
|
||
John A. Kritzmacher
|
|||
Executive Vice President and Chief Financial Officer
|
|||
March 5, 2021
|
(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
/s/ Brian A. Napack
|
||
Brian A. Napack
|
|||
President and Chief Executive Officer
|
|||
March 5, 2021
|
(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
/s/ John A. Kritzmacher
|
||
John A. Kritzmacher
|
|||
Executive Vice President and Chief Financial Officer
|
|||
March 5, 2021
|
Section
|
Subject
|
Page
|
I.
|
Definitions
|
2
|
II.
|
Plan Objectives
|
3
|
III.
|
Eligibility
|
3
|
IV.
|
Performance Targets and Measurement
|
4
|
V.
|
Performance Evaluation
|
4
|
VI.
|
Performance Share Unit Award Provisions
|
5
|
VII.
|
Restricted Share Units
|
6
|
VIII.
|
Payouts
|
6
|
IX.
|
Administration and Other Matters
|
7
|
A.
|
Performance
targets, comprising one or more financial goals, are defined for each business unit. Each
financial goal is assigned a weight, such that the sum of the weights of all financial goals for a business unit equals 100%.
|
B.
|
Each participant
is assigned performance targets for one or more business units, based on the participant’s position, responsibilities, and his/her ability to affect the
results of the assigned business unit. For each participant, each business unit is assigned a weight, such that the sum of the weights of all business units for a participant equals 100%. Collectively,
all business unit performance targets constitute the participant’s plan period objectives.
|
C.
|
Each financial
goal is assigned performance levels (threshold, target and outstanding).
|
A.
|
Financial Results
|
1.
|
At the end of the plan
period, the financial results for each business unit are compared with that unit’s financial goals to determine the payout for each participant.
|
2.
|
In determining the attainment of financial goals, the impact of any of the events (1) through (9) listed in Section 10.2 of the shareholder plan will be excluded from the financial results for any affected business unit.
|
3.
|
Award Determination
|
•
|
Achievement of threshold
performance of at least one financial goal of a performance target is necessary for a participant to receive a payout for that performance target.
|
•
|
The unweighted payout
factor for each financial goal is determined as follows:
|
o
|
For performance below the threshold
level, the payout factor is zero.
|
o
|
For performance at the threshold
level, the payout factor is 50%.
|
o
|
For performance between the threshold
and target levels, the payout factor is between 50% and 100%, determined on a pro-rata basis.
|
o
|
For performance between the target
and outstanding levels, the payout factor is between 100% and 200%, determined on a pro-rata basis.
|
o
|
For performance at or above the outstanding level, the payout factor is 200%.
|
•
|
A participant’s plan-end
adjusted performance share unit award is determined as follows:
|
o
|
Each financial goal’s unweighted payout factor determined above times the weighting of that financial goal equals the weighted payout factor for that financial goal
|
o
|
The sum of the weighted payout
factors for a business unit’s financial goals equals the payout
factor for that performance target.
|
o
|
The participant’s target
award
|
o
|
The sum of the payouts for all the business units assigned to a participant equals the participant’s total plan-end adjusted performance share unit award.
|
•
|
The Committee may,
in its sole discretion, reduce a participant’s payout to any level it deems appropriate.
|
A.
|
Normal Payout. Plan-end adjusted performance share units awards will be made within 2-1/2 months after the end of the plan period.
|
B.
|
Resignation or Termination with or without
Cause. Except as otherwise provided in this Section VIII or in a written agreement approved by the Committee, a participant who resigns, or whose employment is terminated by the Company, with or without cause before the award is vested, will forfeit the right to receive an award.
|
C.
|
Death or Disability. Solely to
the extent provided by the Committee in the award summary or in a written agreement, in the event of a participant’s death or disability while in employment prior to the end of the plan period, the participant (or, in the event of death, his or her estate) will receive a prorated plan-end adjusted performance share unit award which shall be paid out in shares based upon actual performance upon the conclusion of the
plan period, within 2-1/2 months after the end of the plan period. “Disability” for this purpose will be determined by the Committee
under a definition permitted under Code Section 409A.
|
D.
|
Retirement. Except as otherwise
provided in this Section VIII or in a written agreement approved by the Committee, in the event of a participant’s retirement as that term is defined in the shareholder
plan, prior to the end of the plan period, the participant will receive a prorated plan-end adjusted performance share unit award (as determined by the
Committee) which shall be paid out in shares based upon actual performance upon the conclusion of the plan period, within 2-1/2 months after the end of the plan period.
|
E.
|
Change of Control. In the event
of a Change of Control, as that term is defined in the shareholder plan, in cases where:
|
•
|
the acquiring company is not publicly traded, or
|
•
|
where the acquiring company is publicly traded and the company does not assume or replace the outstanding equity, or
|
•
|
participant’s
employment is terminated due to a "without cause termination" or "constructive discharge" within twenty-four months following a change of control,
|
F.
|
Performance Share Units Earned for Completed Plan Periods. In the event of the participant’s death, Disability, or retirement as that term is defined in the shareholder plan or performance share unit grant agreement, following the end of the plan period but prior to full vesting of the plan-end adjusted performance share unit awards, such
performance share units shall immediately become fully vested.
|
G.
|
Change in Position. A participant who is hired or promoted into an eligible position during the plan period may receive a prorated plan-end adjusted performance share unit award as
determined by the Committee, in its sole discretion.
|
A.
|
The plan will be
administered by the Committee, which shall have authority in its sole discretion to interpret and administer this plan, including, without limitation, all questions regarding eligibility and status of any participant, and no participant shall have any right to receive a payout
or payment of any kind whatsoever, except as determined by the Committee hereunder.
|
B.
|
The Company will
have no obligation to reserve or otherwise fund in advance any amount which may become payable under the plan.
|
C.
|
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 will cancel the unvested performance share units
previously granted to all participants in the amount by which such shares exceeded any lower number of shares that would have been
earned based on the restated financial results, for the plan cycle in which the restatement was required, and if applicable, any gain associated with the award for that plan cycle will be repaid to the Company by the participant in the amount by which such gain exceeded any lower gain that would have been made based on the restated financial results, to the full
extent required or permitted by law. This provision extends beyond the clawback requirements under Sarbanes-Oxley that are limited to our Chief Executive Officer and Chief Financial Officer.
|
D.
|
This plan may not
be modified or amended except with the approval of the Committee, in accordance with the provisions of the shareholder plan.
|
E.
|
In the event of a conflict between the provisions of this plan and the provisions of the shareholder plan, the provisions of the shareholder plan shall apply.
|
F.
|
In the event that any provision of this plan shall be considered illegal or invalid for any reason, such illegality and invalidity shall not affect the remaining provisions of the plan, but shall be fully severable, and the plan shall be construed and enforced as if such
illegal or invalid provision had never been contained therein.
|
G.
|
No awards of any type under this plan shall be considered as compensation for purposes of defining compensation for retirement, savings or supplemental executive retirement plans, statutory indemnity or any other benefit.
|
3.
|
Termination of Employment.
|
a.
|
Resignation or Termination with Cause.
Except as otherwise provided in this Section or in a written agreement approved by the Executive Compensation and Development Committee (Committee),
if you resign, or if your employment is terminated by the Company with Cause before the Award is vested, you shall forfeit the right to receive an Award (whether or not the performance criteria have been met).
|
d.
|
Change in Control. In the event of a Change in Control, as that term is defined in the Plan, in cases where:
|
i.
|
the acquiring company is not publicly traded, or
|
ii.
|
where the acquiring company is publicly traded and the company does not assume or replace
the outstanding equity, or
|
iii.
|
your employment is terminated without Cause or Constructive Discharge within twenty-four
(24) months following a change in control where the awards were assumed or replaced,
|
4.
|
Restrictions.
Except as otherwise provided for in this Agreement or in the Plan, the performance share units or rights granted hereunder may not be sold, pledged or otherwise transferred.
|
5.
|
Non-Compete, Non-Solicitation
|
a.
|
During your employment with the Company, you have and will become familiar with the Company’s trade secrets, information
related to the operations, products and services of the Company, and with other Confidential Information concerning the Company, its subsidiaries, affiliates, and companies acquired by the Company. Therefore, during your employment period
and for a period of one year thereafter, you agree that you shall not directly or indirectly own any interest in, manage, control, participate in, consult with, or render services for any Competing Business.
|
b.
|
During your employment and for a period of one year thereafter, you agree that you shall not directly, or indirectly through
another entity, (i) induce or attempt to induce any employee of the Company or any affiliate to leave the employ of the Company or such affiliate, or in any way interfere with the relationship between the Company or any affiliate and any
employee thereof, (ii) hire any person who was an employee of the Company or any affiliate at any time during the last twelve (12) months, or (iii) induce or attempt to induce any customer, supplier, licensee, licensor, franchisee or other
business relation of the Company or any affiliate to cease doing business with the Company or such affiliate, or in any way interfere with the relationship between any such customer, supplier, licensee, licensor, franchisee or business
relation and the Company or any affiliate (including, without limitation, making any negative statements or communications about the Company or its affiliates).
|
6.
|
Clawback.
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
shall cancel the unvested performance share units previously granted to you in the amount by which such performance share units exceed any lower number of performance share units that would have been earned based on the restated financial
results, for the performance period in which the restatement was required, and if applicable, any gain associated with the Award for that performance period shall be repaid to the Company by you in the amount by which such gain exceeds any
lower gain that would have been made based on the restated financial results, to the full extent required or permitted by law.
|
7.
|
Taxes.
|
a.
|
Generally. You
are ultimately liable and responsible for all taxes owed in connection with the Award, regardless of any action the Company or UBS takes with respect to any tax withholding obligations that arise in connection with the Award. Neither the
Company nor UBS makes any representation or undertaking regarding the treatment of any tax withholding in connection with the grant or vesting of the Award or the subsequent sale of Shares issuable pursuant to the Award. The Company does
not commit and is under no obligation to structure the Award to reduce or eliminate your tax liability. The Company may refuse to issue any Shares to you until you satisfy the tax withholding obligation. For purposes hereof, “UBS”
includes the Plan third party administrator and any successor thereto.
|
b.
|
Payment of Withholding Taxes.
Prior to each vesting date in connection with the Award that results in any domestic or foreign tax withholding obligation, whether national, federal, state or local, including any social tax obligation, you must arrange for the
satisfaction of the minimum amount of such tax withholding obligation, as required, in a manner acceptable to the Company. You are responsible for obtaining professional advice as appropriate. Prior to the vesting dates in connection with
the Award, you shall be notified by UBS of any minimum tax withholding obligation. You have the option of satisfying your minimum tax withholding obligation in one of two ways:
|
i.
|
By
Surrendering Shares. Unless you choose to satisfy the minimum tax withholding obligation by some other means in accordance with clause (ii) below, your acceptance of this Award constitutes your instruction and authorization
to the Company and UBS to withhold a whole number of Shares from those Shares issuable to you as the Company and UBS determine to be appropriate to satisfy your minimum tax withholding obligation on each vesting date.
|
ii.
|
By Check (U.S. participants only), Wire Transfer or Other Means. You
may elect to satisfy your minimum tax withholding obligation by remitting to UBS as instructed an amount that the Company and UBS determine is sufficient to satisfy the minimum tax withholding obligation.
|
8.
|
Plan Information. You
acknowledge that you have received the Fiscal Year 2021-2023 (May 1, 2020-April 30, 2023) performance criteria and the Program summary from the Company, and you agree to receive stockholder information, including copies of any annual
report, proxy statement and other periodic reports, from the Investor Relations section of http://www.wiley.com. You acknowledge that
copies of the Plan and stockholder information are available upon written or telephonic request to the Corporate Secretary.
|
9.
|
Limitation on
Rights; No Right to Future Grants; Extraordinary Item. By entering into this Agreement and accepting the Award, you acknowledge that: (a) the Plan is discretionary and may be modified, suspended or terminated by the Company at any
time as provided in the Plan; (b) the grant of the Award is a one-time benefit and does not create any contractual or other right to receive future grants of awards or benefits in lieu of awards; (c) all determinations with respect to any
such future grants, including, but not limited to, the times when awards shall be granted, the number of shares subject to each award, the award price, if any, and the time or times when each award shall be settled, shall be at the sole
discretion of the Company; (d) your participation in the Plan is voluntary; (e) the value of this Award on an ongoing basis is an extraordinary item which is outside the scope of your terms of employment or your employment contract, if any;
(f) the Award is not part of normal or expected compensation for any purpose, including without limitation for calculating any benefits, severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards,
pension or retirement benefits or similar payments; (g) the future value of the Common Stock subject to the Award is unknown and cannot be predicted with certainty, (h) neither the Plan, the Award nor the issuance of the Shares confers upon
you any right to continue in the employ of (or any other relationship with) the Company or any Subsidiary, nor do they limit in any respect the right of the Company or any Subsidiary to terminate your employment or other relationship with
the Company or any Subsidiary, as the case may be, at any time.
|
10.
|
Acceptance and Acknowledgment. I accept and agree to the terms of the Performance Share Unit Award described in this Agreement and in the Plan, acknowledge receipt of a copy of this Agreement, the Plan and the applicable
Program Summary, and acknowledge that I have read them carefully and that I fully understand their contents.
|