John Wiley & Sons is the first large publicly-traded publisher to detail what it believes to be the immediate financial impact the new coronavirus will have on its businesses. The company has reduced its earlier outlook for revenues and profits for the fiscal year ending April 30 and withdrew its cash flow expectations, “given very limited visibility into the timing of collections from customers.”
Wiley estimated the coronavirus outbreak will drop revenues by about $50 million from its previous expectations, while adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) is expected to be $25 million lower than original forecasts.
In announcing the revised outlook, Wiley said the global measures enacted to stop the spread of the coronavirus “will have a significant adverse impact on fourth quarter results." The company cited the following factors that led it to reduce its forecast:
- Declines in print book sales due to indefinite closings of retail bookstores
- Declines in businesses that rely on in-person engagement, primarily test prep and corporate training
- Delays in closing annual journal subscription agreements in certain parts of Europe and Asia due to challenges of remote selling and university disruption
- Delays in customer payments due to widespread disruption and pervasive cash conservation behaviors in the face of uncertainty
Wiley further estimated that approximately one-quarter of the fourth quarter revenue and earnings impact from the coronavirus is timing related, primarily in its research group, adding that “recovery is expected in subsequent periods.” And while Wiley pointed to its strong balance sheet and ample liquidity, it said that given the uncertainty surrounding the coronavirus, it is suspending its share repurchase program.
"Looking beyond the current disruption, we remain confident in our team, our strategy, and our ability to deliver strong performance in the long term by taking advantage of inexorable growth trends in research, online education, and digital courseware," Wiley president and CEO Brian Napack said in a statement. "Wiley’s mission to support research and education has never been more critical, and we are working hard to support our customers and communities as they wrestle with this unprecedented crisis.”