Coming off a demanding year that was unlike any he has experienced, John Wiley CEO Will Pesce was mildly optimistic about the prospects for the fiscal year ending next April. Pesce told analysts in a year-end conference call that he expects all three of Wiley's businesses—scientific/technical/medical/scholarly, professional/trade and higher education—to increase this year, excluding the impact of currency translations. “Unprecedented” changes in foreign exchange in fiscal 2009 lowered revenue by $120 million last year, Pesce said. Without the impact of currency fluctuations, sales would have increased 3.4% last year, rather than declining 3.7%.
In fiscal 2009, the professional/trade group had a 12.5% decline in sales, with its profit falling 31%. Weakness in the U.S. retail markets, due to a combination of lower consumer spending and tighter inventory management by major retailers, was the major factor for the decline, Pesce said. The inventory correction, Pesce believes, has been completed, and he expects orders from the chains to return to more normal levels. Improvement in the professional/trade market will be gradual in fiscal 2010, improving more in the second half of the year, Pesce said. In response to a question, CFO Ellis Cousins said Wiley is in regular contact with Borders and is confident over the short term in the retailer's financial position as Wiley continues to extend Borders credit. Pesce added that the professional/trade segment should also benefit this year from releasing the first titles in its publishing partnership with Meredith as well as the first books as part of its agreement to be the official publisher of the Graduate Management Admission Test study guides.
In its other segments, Pesce said he expects the American college market to increase in the mid-single digits this year, with a “pick up” in the transition from print texts to electronic materials. In the current year, Wiley will be adding text to the new Kindle DX this summer. The STMS market will be negatively affected by tighter library budgets, but Pesce said the strength of Wiley/Blackwell in the journal market should ensure that Wiley gets its share of library business.
John Wiley & Sons
2008—2009 Result ($ in millions)
|Segment||2008||2009||% Change||%Change excluding FX*|
|*Excludes unfavorable impact of foreign exchange** Net income in fiscal 2008 included tax benefit of $18.7 million.|
|Scientific, Technical Medical and Scholarly||$975.8||$969.2||-0.7%||9%|