Foreign Exchange, Professional/Trade Softness Dent 2009 Wiley Results
By Jim Milliot -- Publishers Weekly, 6/18/2009 7:21:00 AM
Hurt by the negative effect of foreign exchange and a weak performance in its professional/trade division, total revenue at John Wiley & Sons fell 3.7% in the year ended April 30, to $1.61 billion. Adjusted net income, which excludes a $18.7 million tax benefit in fiscal 2008, was flat at $128.3 million. Excluding the $120 million in foreign exchange declines, revenue at the publisher would have increased 3.4%. The company reported adjusted earnings per share of $2.15, a figure that excludes the impact of foreign exchange. In a statement, Wiley CEO Will Pesce said he was pleased with the company’s performance given the difficult economic environment, noting that two of Wiley’s three operating segments met or exceeded expectations.
The one unit that performed below forecast was the professional/trade division where revenue fell 13%, to $412.7 million. Excluding the impact of foreign exchange, revenue was down 10%. The decline was attributed to the weak retail environment in the U.S., while international operations showed modest growth. During the year, the professional/trade group continued to push digital initiatives, among them making 9,000 titles available for the Kindle. In its online initiatives, the new Dummies.com site had 29 million page views, up 23%, while Cliffs Notes.com pages views rose 5%. Frommers.com had 137 million page views, a decline from 2008. During the fourth quarter, in addition to its deal with Meredith, Wiley renewed its publishing agreement with General Mills to publish cookbooks under a variety of brands including Betty Crocker and Pillsbury.
In its higher education division, revenue rose 1%, to $229.4 million, or 6% excluding unfavorable foreign exchange. Gains were reported in every geographical region and most subject areas. The acquisition titles from Cengage and Key College Publishing added $7 million to revenue and sales from WileyPlus continued to grow and now account for 9% of global higher education sales. Revenue from custom publishing rose 25%.
Revenue in the global Scientific/Technical/Medical/Scholarly group, which now accounts for well over half of Wiley’s revenue, fell 1%, to $969.2 million; excluding foreign exchange, revenue would have increased 9%. The group had increased revenue from journal subscription renewals, new business, global rights and STMS books, partially offset by lower sales of backfiles, reprints and custom publishing.
Looking ahead to fiscal 2010, Pesce said Wiley expects revenue growth without factoring in the impact of foreign exchange, noting that “top-line results will be highly dependent on economic conditions around the world.”
