John Wiley Publishing released their Q4 and FY 2013 earnings today.
Numbers and company analysis in this earnings announcement.
Also available is the complete transcript of a conference call that took place after the earnings were released. Wiley leadership including CEO, Stephen M. Smith, offered details about the earning report and took questions from analysts.
Highlights from the Conference Call Transcript
- Journal subscriptions account for approximately 60% of [Wiley’s] research business.
- The declines in print books and other revenues for this segment reflect the priorities of our library customers who, when faced with constrained acquisition budgets, choose to protect their journal collections at the expense of books, backfiles and other products and services.
- Print book declines in the year were also affected by destocking in the distribution channel, with major intermediaries moving to lower inventory and just-in-time ordering practices. Customers in important book markets in the Middle East faced significant challenges in fiscal year 2013; and in India, the decline in the value of the rupee was a major inhibiting factor to imported book sales.
- Digital book growth was lower in fiscal ’13 as a result of a large onetime sale made to a customer in Saudi Arabia in the fourth quarter of the prior year. The sharp decline in advertising revenue stems from a falloff in demand from pharmaceutical manufacturers for print advertising collateral for their declining sales forces, partially offset by increased revenue from online advertising on Wiley Online Library and elsewhere.
- Subscription and license growth is strong overall, with robust growth in the Americas and Asia Pacific, somewhat offset by more anemic growth in EMEA, in Europe, Middle East and Africa, especially Southern Europe and some parts of the Middle East. The proportion of our journal subscription revenue under license continues to grow, up 2% to 81% at the end of April 2013.
- In addition to the encouraging subscription performance, we continue to see significant growth in online usage of journals and other products on Wiley Online Library and also continue to add new revenue and content to our portfolio through our success in winning new society clients. In fiscal year ’13, we’ve signed contracts to publish 42 new journals with combined annual revenues of $31 million. We renewed or extended contracts to publish 81 journals with combined revenues of $52 million, and we lost 4 journals with combined annual revenues of $7 million.
- Ebooks continue to be a source of growth, especially outside the U.S. where the device penetration remains at a lower level but growing quickly. The impact of our 2 acquisitions, Inscape and ELS, has been significant, bringing new capabilities and dramatically accelerating business development. Inscape in its first full year achieved 8% revenue growth and met or surpassed the financial goals for the acquisition. ELS was also on target for the stub year and performed in line with the acquisition model.
- The percentage of education revenue coming from traditional print textbooks is down to a little over 50%, while digital revenue now makes up almost 1/3 of overall revenues. The U.S. market continues to contract due to declining enrollments, especially in the for-profit sector, increased demand for rentals of print texts and lower inventory held by bookstores due to uncertainty of demand. The decline in demand for traditional printed textbooks has accelerated, reaching 15% in the current fiscal year compared to a slight increase in fiscal ’12. Wiley’s core business continues to perform slightly above industry trends over the last 12 months.
- …library budgets remain under pressure. And faced with difficult choices, librarians are choosing to retain their journal collections and often at the expense of buying books and more [indiscernible] in buying digital books as well.