☒ | 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 | ||||
18 | ||||
19 | ||||
24 | ||||
25 | ||||
Item 2. | ||||
Item 3. | ||||
Item 4. | ||||
PART II - OTHER INFORMATION | ||||
Item 1. | ||||
Item 1a. | ||||
Item 2. | ||||
Item 6. | ||||
39 |
● | 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 |
● | 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 before 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. |
October 31, 2019 | April 30, 2019 | July 31, 2020 | April 30, 2020 | |||||||||||||
Assets: | ||||||||||||||||
Current Assets | ||||||||||||||||
Cash and cash equivalents | $ | 107,744 | $ | 92,890 | $ | 101,385 | $ | 202,464 | ||||||||
Accounts receivable, net | 235,466 | 294,867 | 282,412 | 309,384 | ||||||||||||
Inventories, net | 45,032 | 35,582 | 45,051 | 43,614 | ||||||||||||
Prepaid expenses and other current assets | 58,926 | 67,441 | 59,155 | 59,465 | ||||||||||||
Total Current Assets | 447,168 | 490,780 | 488,003 | 614,927 | ||||||||||||
Product Development Assets, net | 57,394 | 62,470 | 52,088 | 53,643 | ||||||||||||
Royalty Advances, net | 16,473 | 36,185 | 28,682 | 36,710 | ||||||||||||
Technology, Property and Equipment, net | 294,761 | 289,021 | 295,457 | 298,005 | ||||||||||||
Intangible Assets, net | 880,613 | 865,572 | 829,231 | 807,405 | ||||||||||||
Goodwill | 1,143,197 | 1,095,666 | 1,133,610 | 1,116,790 | ||||||||||||
Operating Lease Right-of-Use Assets | 145,886 | — | 139,798 | 142,716 | ||||||||||||
Other Non-Current Assets | 97,279 | 97,308 | 102,077 | 98,598 | ||||||||||||
Total Assets | $ | 3,082,771 | $ | 2,937,002 | $ | 3,068,946 | $ | 3,168,794 | ||||||||
Liabilities and Shareholders' Equity: | ||||||||||||||||
Current Liabilities | ||||||||||||||||
Accounts payable | $ | 74,425 | $ | 90,980 | $ | 52,556 | $ | 93,691 | ||||||||
Accrued royalties | 91,438 | 78,062 | 82,691 | 87,408 | ||||||||||||
Short-term portion of long-term debt | 6,250 | — | 10,938 | 9,375 | ||||||||||||
Contract liabilities | 248,653 | 507,365 | 408,954 | 520,214 | ||||||||||||
Accrued employment costs | 74,727 | 97,230 | 70,211 | 108,448 | ||||||||||||
Accrued income taxes | 3,294 | 21,025 | 181 | 13,728 | ||||||||||||
Short-term portion of operating lease liabilities | 18,409 | — | 20,647 | 21,810 | ||||||||||||
Other accrued liabilities | 68,446 | 75,900 | 69,958 | 72,595 | ||||||||||||
Total Current Liabilities | 585,642 | 870,562 | 716,136 | 927,269 | ||||||||||||
Long-Term Debt | 788,360 | 478,790 | 835,763 | 765,650 | ||||||||||||
Accrued Pension Liability | 152,707 | 166,331 | 183,284 | 187,969 | ||||||||||||
Deferred Income Tax Liabilities | 137,295 | 143,775 | 124,184 | 119,127 | ||||||||||||
Operating Lease Liabilities | 164,622 | — | 156,644 | 159,782 | ||||||||||||
Other Long-Term Liabilities | 75,149 | 96,197 | 79,190 | 75,373 | ||||||||||||
Total Liabilities | 1,903,775 | 1,755,655 | 2,095,201 | 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 70,149 and 70,127 as of October 31, 2019 and April 30, 2019, respectively | 70,149 | 70,127 | ||||||||||||||
Class B Common Stock, $1 par value: Authorized - 72 million, Issued 13,033 and 13,055 as of October 31, 2019 and April 30, 2019, respectively | 13,033 | 13,055 | ||||||||||||||
Preferred Stock, $1 par value: Authorized – 2 million, Issued - 0 | 0 | 0 | ||||||||||||||
Class A Common Stock, $1 par value: Authorized - 180 million, Issued 70,177 and 70,166 as of July 31, 2020 and April 30, 2020, respectively | 70,177 | 70,166 | ||||||||||||||
Class B Common Stock, $1 par value: Authorized - 72 million, Issued 13,005 and 13,016 as of July 31, 2020 and April 30, 2020, respectively | 13,005 | 13,016 | ||||||||||||||
Additional paid-in-capital | 429,968 | 422,305 | 431,241 | 431,680 | ||||||||||||
Retained earnings | 1,940,902 | 1,931,074 | 1,775,813 | 1,780,129 | ||||||||||||
Accumulated other comprehensive loss | (505,026 | ) | (508,738 | ) | ||||||||||||
Treasury stock (Class A - 23,107 and 22,634 as of October 31, 2019 and April 30, 2019, respectively; Class B - 3,918 and 3,918 as of October 31, 2019 and April 30, 2019, respectively) | (770,030 | ) | (746,476 | ) | ||||||||||||
Accumulated other comprehensive loss, net of tax | (534,118 | ) | (575,497 | ) | ||||||||||||
Less Treasury Shares At Cost (Class A - 23,259 and 23,405 as of July 31, 2020 and April 30, 2020, respectively; Class B - 3,920 and 3,920 as of July 31, 2020 and April 30, 2020, respectively) | (782,373 | ) | (785,870 | ) | ||||||||||||
Total Shareholders’ Equity | 1,178,996 | 1,181,347 | 973,745 | 933,624 | ||||||||||||
Total Liabilities and Shareholders' Equity | $ | 3,082,771 | $ | 2,937,002 | $ | 3,068,946 | $ | 3,168,794 |
Three Months Ended October 31, | Six Months Ended October 31, | Three Months Ended July 31, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2020 | 2019 | |||||||||||||||||||
Revenue, net | $ | 466,205 | $ | 448,622 | $ | 889,735 | $ | 859,523 | $ | 431,326 | $ | 423,530 | ||||||||||||
Costs and Expenses | ||||||||||||||||||||||||
Cost of sales | 143,413 | 132,577 | 286,509 | 260,315 | 144,809 | 143,096 | ||||||||||||||||||
Operating and administrative expenses | 240,380 | 236,207 | 490,550 | 476,633 | 237,369 | 250,170 | ||||||||||||||||||
Restructuring and related charges | 4,001 | 9,996 | 14,736 | 3,910 | 2,218 | 10,735 | ||||||||||||||||||
Amortization of intangibles | 15,020 | 12,367 | 29,990 | 25,050 | 16,891 | 14,970 | ||||||||||||||||||
Total Costs and Expenses | 402,814 | 391,147 | 821,785 | 765,908 | 401,287 | 418,971 | ||||||||||||||||||
Operating Income | 63,391 | 57,475 | 67,950 | 93,615 | 30,039 | 4,559 | ||||||||||||||||||
Interest Expense | (6,787 | ) | (3,608 | ) | (12,864 | ) | (6,404 | ) | (4,614 | ) | (6,077 | ) | ||||||||||||
Foreign Exchange Transaction Losses | (2,668 | ) | (54 | ) | (16 | ) | (1,783 | ) | ||||||||||||||||
Foreign Exchange Transaction (Losses) Gains | (82 | ) | 2,652 | |||||||||||||||||||||
Interest and Other Income | 2,537 | 2,509 | 5,370 | 4,975 | 4,391 | 2,833 | ||||||||||||||||||
Income Before Taxes | 56,473 | 56,322 | 60,440 | 90,403 | 29,734 | 3,967 | ||||||||||||||||||
Provision for Income Taxes | 11,783 | 12,538 | 12,126 | 20,324 | 13,400 | 343 | ||||||||||||||||||
Net Income | $ | 44,690 | $ | 43,784 | $ | 48,314 | $ | 70,079 | $ | 16,334 | $ | 3,624 | ||||||||||||
Earnings Per Share | ||||||||||||||||||||||||
Basic | $ | 0.79 | $ | 0.76 | $ | 0.86 | $ | 1.22 | $ | 0.29 | $ | 0.06 | ||||||||||||
Diluted | $ | 0.79 | $ | 0.76 | $ | 0.85 | $ | 1.21 | $ | 0.29 | $ | 0.06 | ||||||||||||
Weighted Average Number of Common Shares Outstanding | ||||||||||||||||||||||||
Basic | 56,326 | 57,379 | 56,431 | 57,392 | 55,912 | 56,536 | ||||||||||||||||||
Diluted | 56,664 | 57,870 | 56,791 | 57,955 | 56,193 | 56,905 |
Three Months Ended October 31, | Six Months Ended October 31, | Three Months Ended July 31, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2020 | 2019 | |||||||||||||||||||
Net Income | $ | 44,690 | $ | 43,784 | $ | 48,314 | $ | 70,079 | $ | 16,334 | $ | 3,624 | ||||||||||||
Other Comprehensive Income (Loss): | ||||||||||||||||||||||||
Foreign currency translation adjustment | 38,319 | (20,424 | ) | 2,780 | (60,749 | ) | 46,853 | (35,539 | ) | |||||||||||||||
Unamortized retirement costs, net of tax benefit (provision) of $1,822, $(1,229), $(358), and $(3,717), respectively | (6,576 | ) | 4,387 | 1,592 | 13,198 | |||||||||||||||||||
Unrealized (loss) gain on interest rate swaps, net of tax benefit of $236, $245, $280 and $449, respectively | (745 | ) | (781 | ) | (660 | ) | (1,433 | ) | ||||||||||||||||
Unamortized retirement (costs) credits, net of tax benefit (expense) of $1,705 and $(2,180), respectively | (5,665 | ) | 8,168 | |||||||||||||||||||||
Unrealized gain on interest rate swaps, net of tax (expense) benefit of $(30) and $44, respectively | 191 | 85 | ||||||||||||||||||||||
Total Other Comprehensive Income (Loss) | 30,998 | (16,818 | ) | 3,712 | (48,984 | ) | 41,379 | (27,286 | ) | |||||||||||||||
Comprehensive Income | $ | 75,688 | $ | 26,966 | $ | 52,026 | $ | 21,095 | ||||||||||||||||
Comprehensive Income (Loss) | $ | 57,713 | $ | (23,662 | ) |
Six Months Ended October 31, | Three Months Ended July 31, | |||||||||||||||
2019 | 2018 | 2020 | 2019 | |||||||||||||
Operating Activities | ||||||||||||||||
Net income | $ | 48,314 | $ | 70,079 | $ | 16,334 | $ | 3,624 | ||||||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||||||||||
Amortization of intangibles | 29,990 | 25,050 | 16,891 | 14,970 | ||||||||||||
Amortization of product development assets | 17,616 | 18,928 | 9,148 | 8,714 | ||||||||||||
Depreciation and amortization of technology, property and equipment | 37,251 | 35,845 | 23,468 | 18,535 | ||||||||||||
Restructuring and related charges | 14,736 | 3,910 | 2,218 | 10,735 | ||||||||||||
Stock-based compensation expense | 10,289 | 8,882 | 4,314 | 4,604 | ||||||||||||
Employee retirement plan expense | 4,054 | 3,369 | 4,033 | 1,841 | ||||||||||||
Royalty advances | (48,250 | ) | (50,580 | ) | (28,952 | ) | (25,687 | ) | ||||||||
Earned royalty advances | 67,814 | 71,317 | 40,125 | 33,886 | ||||||||||||
Foreign exchange transaction losses | 16 | 1,783 | ||||||||||||||
Foreign exchange transaction losses (gains) | 82 | (2,652 | ) | |||||||||||||
Other non-cash charges | 10,643 | 4,328 | 15,285 | 3,750 | ||||||||||||
Changes in Operating Assets and Liabilities | ||||||||||||||||
Accounts receivable, net | 60,836 | 1,921 | ||||||||||||||
Accounts payable | (17,765 | ) | (13,856 | ) | ||||||||||||
Contract liabilities | (263,665 | ) | (255,890 | ) | ||||||||||||
Other accrued liabilities | (34,612 | ) | (54,437 | ) | ||||||||||||
Other assets and liabilities | (36,788 | ) | 12,790 | |||||||||||||
Net change in operating assets and liabilities | (223,729 | ) | (166,488 | ) | ||||||||||||
Net Cash Used In Operating Activities | (99,521 | ) | (116,561 | ) | (120,783 | ) | (94,168 | ) | ||||||||
Investing Activities | ||||||||||||||||
Product development spending | (11,686 | ) | (12,351 | ) | (5,325 | ) | (6,211 | ) | ||||||||
Additions to technology, property and equipment | (44,531 | ) | (34,560 | ) | (18,964 | ) | (24,202 | ) | ||||||||
Businesses acquired in purchase transactions, net of cash acquired | (74,169 | ) | — | (136 | ) | (73,209 | ) | |||||||||
Acquisitions of publication rights and other | (4,045 | ) | (2,795 | ) | (3,855 | ) | (2,270 | ) | ||||||||
Net Cash Used in Investing Activities | (134,431 | ) | (49,706 | ) | ||||||||||||
Net Cash Used In Investing Activities | (28,280 | ) | (105,892 | ) | ||||||||||||
Financing Activities | ||||||||||||||||
Repayment of long-term debt | (65,680 | ) | (65,800 | ) | (139,331 | ) | (10,400 | ) | ||||||||
Borrowing of long-term debt | 383,151 | 245,075 | 206,687 | 264,248 | ||||||||||||
Payment of debt issuance costs | (4,006 | ) | — | 0 | (3,957 | ) | ||||||||||
Purchase of treasury shares | (25,000 | ) | (24,994 | ) | 0 | (10,000 | ) | |||||||||
Change in book overdrafts | 681 | (3,066 | ) | (3,292 | ) | (6,169 | ) | |||||||||
Cash dividends | (38,486 | ) | (38,033 | ) | (19,261 | ) | (19,252 | ) | ||||||||
Net (payments) proceeds from exercise of stock options and other | (1,393 | ) | 7,283 | |||||||||||||
Net Cash Provided by Financing Activities | 249,267 | 120,465 | ||||||||||||||
Net payments from exercise of stock options and other | (1,319 | ) | (1,137 | ) | ||||||||||||
Net Cash Provided By Financing Activities | 43,484 | 213,333 | ||||||||||||||
Effects of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash | (461 | ) | (8,368 | ) | 4,500 | (2,138 | ) | |||||||||
Cash Reconciliation: | ||||||||||||||||
Cash and Cash Equivalents | 92,890 | 169,773 | 202,464 | 92,890 | ||||||||||||
Restricted cash included in Prepaid expenses and other current assets | 658 | 484 | 583 | 658 | ||||||||||||
Balance at Beginning of Period | 93,548 | 170,257 | 203,047 | 93,548 | ||||||||||||
Increase/(Decrease) for the Period | 14,854 | (54,170 | ) | |||||||||||||
(Decrease)/Increase for the Period | (101,079 | ) | 11,135 | |||||||||||||
Cash and cash equivalents | 107,744 | 115,603 | 101,385 | 104,025 | ||||||||||||
Restricted cash included in Prepaid expenses and other current assets | 658 | 484 | 583 | 658 | ||||||||||||
Balance at End of Period | $ | 108,402 | $ | 116,087 | $ | 101,968 | $ | 104,683 | ||||||||
Cash Paid During the Period for: | ||||||||||||||||
Interest | $ | 12,125 | $ | 5,713 | $ | 4,221 | $ | 5,410 | ||||||||
Income taxes, net of refunds | $ | 30,170 | $ | 18,404 | $ | 25,704 | $ | 11,484 |
Common Stock Class A | Common Stock Class B | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total Shareholder’s Equity | ||||||||||||||||||||||
Balance at July 31, 2019 | $ | 70,139 | $ | 13,043 | $ | 424,904 | $ | 1,915,445 | $ | (755,501 | ) | $ | (536,024 | ) | $ | 1,132,006 | ||||||||||||
Restricted Shares Issued under Stock-based Compensation Plans | — | — | (681 | ) | 1 | 787 | — | 107 | ||||||||||||||||||||
Net (Payments) Proceeds from Exercise of Stock Options and Other | — | — | 60 | — | (316 | ) | — | (256 | ) | |||||||||||||||||||
Stock-based Compensation Expense | — | — | 5,685 | — | — | — | 5,685 | |||||||||||||||||||||
Purchase of Treasury Shares | — | — | — | — | (15,000 | ) | — | (15,000 | ) | |||||||||||||||||||
Class A Common Stock Dividends ($0.34 per share) | — | — | — | (16,130 | ) | — | — | (16,130 | ) | |||||||||||||||||||
Class B Common Stock Dividends ($0.34 per share) | — | — | — | (3,104 | ) | — | — | (3,104 | ) | |||||||||||||||||||
Common Stock Class Conversions | 10 | (10 | ) | — | — | — | — | — | ||||||||||||||||||||
Comprehensive Income (Loss), Net of Tax | — | — | — | 44,690 | — | 30,998 | 75,688 | |||||||||||||||||||||
Balance at October 31, 2019 | $ | 70,149 | $ | 13,033 | $ | 429,968 | $ | 1,940,902 | $ | (770,030 | ) | $ | (505,026 | ) | $ | 1,178,996 |
Common Stock Class A | Common Stock Class B | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total Shareholder’s Equity | ||||||||||||||||||||||
Balance at July 31, 2018 | $ | 70,115 | $ | 13,067 | $ | 413,488 | $ | 1,845,811 | $ | (696,727 | ) | $ | (471,746 | ) | $ | 1,174,008 | ||||||||||||
Restricted Shares Issued under Stock-based Compensation Plans | — | — | (828 | ) | 4 | 877 | — | 53 | ||||||||||||||||||||
Net (Payments) Proceeds from Exercise of Stock Options and Other | — | — | 106 | — | (703 | ) | — | (597 | ) | |||||||||||||||||||
Stock-based Compensation Expense | — | — | 4,952 | — | — | — | 4,952 | |||||||||||||||||||||
Purchase of Treasury Shares | — | — | — | — | (17,000 | ) | — | (17,000 | ) | |||||||||||||||||||
Class A Common Stock Dividends ($0.33 per share) | — | — | — | (15,974 | ) | — | — | (15,974 | ) | |||||||||||||||||||
Class B Common Stock Dividends ($0.33 per share) | — | — | — | (3,016 | ) | — | — | (3,016 | ) | |||||||||||||||||||
Common Stock Class Conversions | 10 | (10 | ) | — | — | — | — | — | ||||||||||||||||||||
Adjustment Due to Adoption of New Revenue Standard | — | — | — | — | — | — | — | |||||||||||||||||||||
Comprehensive Income (Loss), Net of Tax | — | — | — | 43,784 | — | (16,818 | ) | 26,966 | ||||||||||||||||||||
Balance at October 31, 2018 | $ | 70,125 | $ | 13,057 | $ | 417,718 | $ | 1,870,609 | $ | (713,553 | ) | $ | (488,564 | ) | $ | 1,169,392 |
Common Stock Class A | Common Stock Class B | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total Shareholder’s Equity | ||||||||||||||||||||||
Balance at April 30, 2019 | $ | 70,127 | $ | 13,055 | $ | 422,305 | $ | 1,931,074 | $ | (746,476 | ) | $ | (508,738 | ) | $ | 1,181,347 | ||||||||||||
Restricted Shares Issued under Stock-based Compensation Plans | — | — | (2,793 | ) | — | 3,006 | — | 213 | ||||||||||||||||||||
Net (Payments) Proceeds from Exercise of Stock Options and Other | — | — | 167 | — | (1,560 | ) | — | (1,393 | ) | |||||||||||||||||||
Stock-based Compensation Expense | — | — | 10,289 | — | — | — | 10,289 | |||||||||||||||||||||
Purchase of Treasury Shares | — | — | — | — | (25,000 | ) | — | (25,000 | ) | |||||||||||||||||||
Class A Common Stock Dividends ($0.34 per share) | — | — | — | (32,278 | ) | — | — | (32,278 | ) | |||||||||||||||||||
Class B Common Stock Dividends ($0.34 per share) | — | — | — | (6,208 | ) | — | — | (6,208 | ) | |||||||||||||||||||
Common Stock Class Conversions | 22 | (22 | ) | — | — | — | — | — | ||||||||||||||||||||
Comprehensive Income (Loss), Net of Tax | — | — | — | 48,314 | — | 3,712 | 52,026 | |||||||||||||||||||||
Balance at October 31, 2019 | $ | 70,149 | $ | 13,033 | $ | 429,968 | $ | 1,940,902 | $ | (770,030 | ) | $ | (505,026 | ) | $ | 1,178,996 |
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 | 0 | 0 | 0 | (1,390 | ) | 0 | 0 | (1,390 | ) | |||||||||||||||||||
Restricted Shares Issued under Stock-based Compensation Plans | 0 | 0 | (5,121 | ) | 1 | 0 | 5,184 | 64 | ||||||||||||||||||||
Net Proceeds (Payments) from Exercise of Stock Options and Other | 0 | 0 | 368 | 0 | 0 | (1,687 | ) | (1,319 | ) | |||||||||||||||||||
Stock-based Compensation Expense | 0 | 0 | 4,314 | 0 | 0 | 0 | 4,314 | |||||||||||||||||||||
Class A Common Stock Dividends ($0.3425 per share) | 0 | — | 0 | (16,149 | ) | 0 | 0 | (16,149 | ) | |||||||||||||||||||
Class B Common Stock Dividends ($0.3425 per share) | — | 0 | 0 | (3,112 | ) | 0 | 0 | (3,112 | ) | |||||||||||||||||||
Common Stock Class Conversions | 11 | (11 | ) | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Comprehensive Income, Net of Tax | 0 | 0 | 0 | 16,334 | 41,379 | 0 | 57,713 | |||||||||||||||||||||
Balance at July 31, 2020 | $ | 70,177 | $ | 13,005 | $ | 431,241 | $ | 1,775,813 | $ | (534,118 | ) | $ | (782,373 | ) | $ | 973,745 |
Common Stock Class A | Common Stock Class B | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total Shareholder’s Equity | ||||||||||||||||||||||
Balance at April 30, 2018 | $ | 70,111 | $ | 13,071 | $ | 407,120 | $ | 1,834,057 | $ | (694,222 | ) | $ | (439,580 | ) | $ | 1,190,557 | ||||||||||||
Restricted Shares Issued under Stock-based Compensation Plans | — | — | (2,984 | ) | 3 | 3,080 | — | 99 | ||||||||||||||||||||
Net Proceeds (Payments) from Exercise of Stock Options and Other | — | — | 4,700 | — | 2,583 | — | 7,283 | |||||||||||||||||||||
Stock-based Compensation Expense | — | — | 8,882 | — | — | — | 8,882 | |||||||||||||||||||||
Purchase of Treasury Shares | — | — | — | — | (24,994 | ) | — | (24,994 | ) | |||||||||||||||||||
Class A Common Stock Dividends ($0.33 per share) | — | — | — | (31,996 | ) | — | — | (31,996 | ) | |||||||||||||||||||
Class B Common Stock Dividends ($0.33 per share) | — | — | — | (6,037 | ) | — | — | (6,037 | ) | |||||||||||||||||||
Common Stock Class Conversions | 14 | (14 | ) | — | — | — | — | — | ||||||||||||||||||||
Adjustment Due to Adoption of New Revenue Standard | — | — | — | 4,503 | — | — | 4,503 | |||||||||||||||||||||
Comprehensive Income (Loss), Net of Tax | — | — | — | 70,079 | — | (48,984 | ) | 21,095 | ||||||||||||||||||||
Balance at October 31, 2018 | $ | 70,125 | $ | 13,057 | $ | 417,718 | $ | 1,870,609 | $ | (713,553 | ) | $ | (488,564 | ) | $ | 1,169,392 |
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 | 0 | 0 | (2,112 | ) | (1 | ) | 0 | 2,219 | 106 | |||||||||||||||||||
Net Proceeds (Payments) from Exercise of Stock Options and Other | 0 | 0 | 107 | 0 | 0 | (1,244 | ) | (1,137 | ) | |||||||||||||||||||
Stock-based Compensation Expense | 0 | 0 | 4,604 | 0 | 0 | 0 | 4,604 | |||||||||||||||||||||
Purchase of Treasury Shares | 0 | 0 | 0 | 0 | 0 | (10,000 | ) | (10,000 | ) | |||||||||||||||||||
Class A Common Stock Dividends ($0.34 per share) | 0 | — | 0 | (16,148 | ) | 0 | 0 | (16,148 | ) | |||||||||||||||||||
Class B Common Stock Dividends ($0.34 per share) | — | 0 | 0 | (3,104 | ) | 0 | 0 | (3,104 | ) | |||||||||||||||||||
Common Stock Class Conversions | 12 | (12 | ) | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Comprehensive Income (Loss), Net of Tax | 0 | 0 | 0 | �� | 3,624 | (27,286 | ) | 0 | (23,662 | ) | ||||||||||||||||||
Balance at July 31, 2019 | $ | 70,139 | $ | 13,043 | $ | 424,904 | $ | 1,915,445 | $ | (536,024 | ) | $ | (755,501 | ) | $ | 1,132,006 |
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 | 2,678 | |||
Amounts written off, less recoveries | (1,327 | ) | ||
Foreign exchange translation adjustments and other | (1,398 | ) | ||
Balance as of July 31, 2020 | $ | 20,064 |
Preliminary Allocation as of July 1, 2019 | ||||
Total cash consideration transferred at the acquisition date | $ | 55,884 | ||
Assets: | ||||
Current Assets | 2,280 | |||
Technology, Property and Equipment, net | 28 | |||
Intangible Assets, net | 24,500 | |||
Goodwill | 37,246 | |||
Total Assets | $ | 64,054 | ||
Liabilities: | ||||
Current Liabilities | 2,581 | |||
Deferred Income Tax Liabilities | 5,589 | |||
Total Liabilities | $ | 8,170 |
Estimated Fair Value | Weighted-Average Useful Life (in Years) | |||||||
Developed Technology | $ | 10,400 | 7 | |||||
Customer Relationships | 6,800 | 10 | ||||||
Content | 4,400 | 10 | ||||||
Trademarks | 2,900 | 10 | ||||||
Total | $ | 24,500 |
Three Months Ended October 31, | Six Months Ended October 31, | Three Months Ended July 31, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2020 | 2019 | |||||||||||||||||||
Research Publishing & Platforms: | ||||||||||||||||||||||||
Research Publishing | $ | 225,085 | $ | 219,710 | $ | 445,012 | $ | 436,424 | $ | 230,464 | $ | 219,927 | ||||||||||||
Research Platforms | 9,624 | 9,365 | 19,072 | 17,968 | 10,346 | 9,448 | ||||||||||||||||||
Total Research Publishing & Platforms | 234,709 | 229,075 | 464,084 | 454,392 | 240,810 | 229,375 | ||||||||||||||||||
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Academic & Professional Learning: | ||||||||||||||||||||||||
Education Publishing | 101,741 | 107,474 | 167,264 | 181,508 | 64,084 | 65,523 | ||||||||||||||||||
Professional Learning | 75,984 | 82,196 | 155,319 | 164,586 | 62,829 | 79,335 | ||||||||||||||||||
Total Academic & Professional Learning | 177,725 | 189,670 | 322,583 | 346,094 | 126,913 | 144,858 | ||||||||||||||||||
Education Services: | ||||||||||||||||||||||||
Education Services | 53,771 | 29,877 | 103,068 | 59,037 | 50,262 | 48,156 | ||||||||||||||||||
mthree (1) | 13,341 | 1,141 | ||||||||||||||||||||||
Total Education Services | 53,771 | 29,877 | 103,068 | 59,037 | 63,603 | 49,297 | ||||||||||||||||||
Total Revenue | $ | 466,205 | $ | 448,622 | $ | 889,735 | $ | 859,523 | $ | 431,326 | $ | 423,530 |
(1) | In May 2020, we moved the IT bootcamp business acquired as part of The Learning House acquisition from Education Services 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. |
October 31, 2019 | April 30, 2019 | Increase/ (Decrease) | July 31, 2020 | April 30, 2020 | Increase/ (Decrease) | |||||||||||||||||||
Balances from contracts with customers: | ||||||||||||||||||||||||
Accounts receivable, net | $ | 235,466 | $ | 294,867 | $ | (59,401 | ) | $ | 282,412 | $ | 309,384 | $ | (26,972 | ) | ||||||||||
Contract liabilities (1) | 248,653 | 507,365 | (258,712 | ) | 408,954 | 520,214 | (111,260 | ) | ||||||||||||||||
Contract liabilities (included in Other Long-Term Liabilities) | $ | 19,622 | $ | 10,722 | $ | 8,900 | $ | 15,357 | $ | 14,949 | $ | 408 |
(1) | The sales return reserve recorded in Contract Liabilities is |
October 31, 2019 | ||||
Operating Lease Right-of-Use Assets | $ | 145,886 | ||
Short-term portion of operating lease liabilities | 18,409 | |||
Operating Lease Liabilities, non-current | $ | 164,622 |
July 31, 2020 | April 30, 2020 | |||||||
Operating lease right-of-use assets | $ | 139,798 | $ | 142,716 | ||||
Short-term portion of operating lease liabilities | 20,647 | 21,810 | ||||||
Operating lease liabilities, non-current | $ | 156,644 | $ | 159,782 |
Three Months Ended October 31, 2019 | Six Months Ended October 31, 2019 | |||||||
Operating lease cost | $ | 6,199 | $ | 13,060 | ||||
Variable lease cost | 915 | 2,118 | ||||||
Sublease income | 184 | (339 | ) | |||||
Total net lease cost | $ | 7,298 | $ | 14,839 |
Three Months Ended July 31, | ||||||||
2020 | 2019 | |||||||
Operating lease cost | $ | 6,635 | $ | 6,861 | ||||
Variable lease cost | 521 | 1,203 | ||||||
Short-term lease cost | 88 | 0 | ||||||
Sublease income | (170 | ) | (523 | ) | ||||
Total net lease cost (1) | $ | 7,074 | $ | 7,541 |
(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. |
Weighted-Average Remaining Contractual Lease Term (Years) | Six Months Ended October 31, 2019 | |||||||
Operating leases | 10 | |||||||
Weighted-average discount rate: | ||||||||
Operating leases | 5.91 | % | ||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
Operating cash flows from operating leases | $ | 14,716 |
Three Months Ended July 31, | ||||||||
2020 | 2019 | |||||||
Weighted-average remaining contractual lease term (years) | 10 | 10 | ||||||
Weighted-average discount rate | 5.89 | % | 5.82 | % | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
Operating cash flows from operating leases | $ | 8,974 | $ | 7,300 |
Fiscal Year | Operating Lease Liabilities | |||
2020 (remaining 6 months) | $ | 16,758 | ||
2021 | 28,073 | |||
2022 | 25,085 | |||
2023 | 22,683 | |||
2024 | 21,791 | |||
Thereafter | 134,823 | |||
Total undiscounted lease payments | 249,213 | |||
Less: Imputed interest | 66,182 | |||
Present Value of Minimum Lease Payments | 183,031 | |||
Less: Current portion | 18,409 | |||
Noncurrent portion | $ | 164,622 |
Fiscal Year | Operating Lease Liabilities | |||
2021 (remaining 9 months) | $ | 23,531 | ||
2022 | 27,903 | |||
2023 | 25,038 | |||
2024 | 23,526 | |||
2025 | 22,233 | |||
Thereafter | 114,078 | |||
Total future undiscounted minimum lease payments | 236,309 | |||
Less: Imputed interest | 59,018 | |||
Present Value of Minimum Lease Payments | 177,291 | |||
Less: Current portion | 20,647 | |||
Noncurrent portion | $ | 156,644 |
Six Months Ended October 31, | Three Months Ended July 31, | |||||||||||||||
2019 | 2018 | 2020 | 2019 | |||||||||||||
Restricted Stock: | ||||||||||||||||
Awards granted | 716 | 397 | 358 | 500 | ||||||||||||
Weighted average fair value of grant | $ | 44.75 | $ | 63.33 | $ | 38.88 | $ | 45.31 |
Foreign Currency Translation | Unamortized Retirement Costs | Interest Rate Swaps | Total | |||||||||||||
Balance at July 31, 2019 | $ | (347,646 | ) | $ | (187,889 | ) | $ | (489 | ) | $ | (536,024 | ) | ||||
Other comprehensive income (loss) before reclassifications | 38,319 | (7,960 | ) | (481 | ) | 29,878 | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | 1,384 | (264 | ) | 1,120 | |||||||||||
Total other comprehensive income (loss) | 38,319 | (6,576 | ) | (745 | ) | 30,998 | ||||||||||
Balance at October 31, 2019 | $ | (309,327 | ) | $ | (194,465 | ) | $ | (1,234 | ) | $ | (505,026 | ) | ||||
Balance at April 30, 2019 | $ | (312,107 | ) | $ | (196,057 | ) | $ | (574 | ) | $ | (508,738 | ) | ||||
Other comprehensive income (loss) before reclassifications | 2,780 | (830 | ) | (153 | ) | 1,797 | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | 2,422 | (507 | ) | 1,915 | |||||||||||
Total other comprehensive income (loss) | 2,780 | 1,592 | (660 | ) | 3,712 | |||||||||||
Balance at October 31, 2019 | $ | (309,327 | ) | $ | (194,465 | ) | $ | (1,234 | ) | $ | (505,026 | ) |
Foreign Currency Translation | Unamortized Retirement Costs | Interest Rate Swaps | Total | |||||||||||||
Balance at April 30, 2020 | $ | (340,703 | ) | $ | (227,920 | ) | $ | (6,874 | ) | $ | (575,497 | ) | ||||
Other comprehensive income (loss) before reclassifications | 46,853 | (7,190 | ) | (669 | ) | 38,994 | ||||||||||
Amounts reclassified from Accumulated Other Comprehensive Loss | 0 | 1,525 | 860 | 2,385 | ||||||||||||
Total other comprehensive (loss) income | 46,853 | (5,665 | ) | 191 | 41,379 | |||||||||||
Balance at July 31, 2020 | $ | (293,850 | ) | $ | (233,585 | ) | $ | (6,683 | ) | $ | (534,118 | ) | ||||
Balance at April 30, 2019 | $ | (312,107 | ) | $ | (196,057 | ) | $ | (574 | ) | $ | (508,738 | ) | ||||
Other comprehensive (loss) income before reclassifications | (35,539 | ) | 7,130 | 328 | (28,081 | ) | ||||||||||
Amounts reclassified from Accumulated Other Comprehensive Loss | 0 | 1,038 | (243 | ) | 795 | |||||||||||
Total other comprehensive (loss) income | (35,539 | ) | 8,168 | 85 | (27,286 | ) | ||||||||||
Balance at July 31, 2019 | $ | (347,646 | ) | $ | (187,889 | ) | $ | (489 | ) | $ | (536,024 | ) |
Foreign Currency Translation | Unamortized Retirement Costs | Interest Rate Swaps | Total | |||||||||||||
Balance at July 31, 2018 | $ | (291,898 | ) | $ | (182,215 | ) | $ | 2,367 | $ | (471,746 | ) | |||||
Other comprehensive income (loss) before reclassifications | (20,424 | ) | 3,273 | 543 | (16,608 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | 1,114 | (1,324 | ) | (210 | ) | ||||||||||
Total other comprehensive income (loss) | (20,424 | ) | 4,387 | (781 | ) | (16,818 | ) | |||||||||
Balance at October 31, 2018 | $ | (312,322 | ) | $ | (177,828 | ) | $ | 1,586 | $ | (488,564 | ) | |||||
Balance at April 30, 2018 | $ | (251,573 | ) | $ | (191,026 | ) | $ | 3,019 | $ | (439,580 | ) | |||||
Other comprehensive income (loss) before reclassifications | (60,749 | ) | 10,993 | 613 | (49,143 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | 2,205 | (2,046 | ) | 159 | |||||||||||
Total other comprehensive income (loss) | (60,749 | ) | 13,198 | (1,433 | ) | (48,984 | ) | |||||||||
Balance at October 31, 2018 | $ | (312,322 | ) | $ | (177,828 | ) | $ | 1,586 | $ | (488,564 | ) |
Three Months Ended October 31, | Six Months Ended October 31, | Three Months Ended July 31, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2020 | 2019 | |||||||||||||||||||
Weighted average shares outstanding | 56,339 | 57,426 | 56,451 | 57,451 | 55,916 | 56,564 | ||||||||||||||||||
Less: Unvested restricted shares | (13 | ) | (47 | ) | (20 | ) | (59 | ) | (4 | ) | (28 | ) | ||||||||||||
Shares used for basic earnings per share | 56,326 | 57,379 | 56,431 | 57,392 | 55,912 | 56,536 | ||||||||||||||||||
Dilutive effect of stock options and other stock awards | 338 | 491 | 360 | 563 | ||||||||||||||||||||
Dilutive effect of unvested restricted stock units and other stock awards | 281 | 369 | ||||||||||||||||||||||
Shares used for diluted earnings per share | 56,664 | 57,870 | 56,791 | 57,955 | 56,193 | 56,905 |
Three Months Ended October 31, | Six Months Ended October 31, | Three Months Ended July 31, | Total Charges | |||||||||||||||||
2019 | 2019 | 2020 | 2019 | Incurred to Date | ||||||||||||||||
Charges (Credits) by Segment: | ||||||||||||||||||||
Research Publishing & Platforms | $ | 29 | $ | 2,665 | $ | (197 | ) | $ | 2,636 | $ | 3,349 | |||||||||
Academic & Professional Learning | 765 | 3,542 | (227 | ) | 2,777 | 10,248 | ||||||||||||||
Education Services | (475 | ) | 1,717 | 139 | 2,192 | 3,913 | ||||||||||||||
Corporate Expenses | 2,835 | 6,100 | 2,470 | 3,265 | 17,488 | |||||||||||||||
Total Restructuring and Related Charges | $ | 3,154 | $ | 14,024 | $ | 2,185 | $ | 10,870 | $ | 34,998 | ||||||||||
Charges by Activity: | ||||||||||||||||||||
Severance and termination benefits | $ | 578 | $ | 11,287 | $ | 1,110 | $ | 10,709 | $ | 27,974 | ||||||||||
Operating lease right-of-use asset impairment | — | 161 | 0 | 161 | 161 | |||||||||||||||
Facility related charges | 1,240 | 1,240 | 1,075 | 0 | 5,061 | |||||||||||||||
Other Activities | 1,336 | 1,336 | ||||||||||||||||||
Other activities | 0 | 0 | 1,802 | |||||||||||||||||
Total Restructuring and Related Charges | $ | 3,154 | $ | 14,024 | $ | 2,185 | $ | 10,870 | $ | 34,998 |
April 30, 2019 | Charges | Payments | Foreign Translation & Other Adjustments | October 31, 2019 | ||||||||||||||||
Severance and termination benefits | $ | — | $ | 11,287 | $ | (2,760 | ) | $ | (168 | ) | $ | 8,359 | ||||||||
Other Activities | — | 1,336 | — | (365 | ) | 971 | ||||||||||||||
Total | $ | — | $ | 12,623 | $ | (2,760 | ) | $ | (533 | ) | $ | 9,330 |
April 30, 2020 | Charges | Payments | Foreign Translation & Other Adjustments | July 31, 2020 | ||||||||||||||||
Severance and termination benefits | $ | 17,632 | $ | 1,110 | $ | (6,966 | ) | $ | 478 | $ | 12,254 | |||||||||
Other activities | 430 | 0 | (206 | ) | (2 | ) | 222 | |||||||||||||
Total | $ | 18,062 | $ | 1,110 | $ | (7,172 | ) | $ | 476 | $ | 12,476 |
Three Months Ended October 31, | Six Months Ended October 31, | Total Charges | ||||||||||||||||||
2019 | 2018 (1) | 2019 | 2018 (1) | Incurred to Date | ||||||||||||||||
Charges (Credits) by Segment: | ||||||||||||||||||||
Research Publishing & Platforms | $ | 697 | $ | 2,282 | $ | 681 | $ | 1,302 | $ | 27,225 | ||||||||||
Academic & Professional Learning | 35 | 2,194 | 63 | 1,477 | 42,902 | |||||||||||||||
Education Services | — | 310 | (103 | ) | 102 | 3,764 | ||||||||||||||
Corporate Expenses | 115 | 5,210 | 71 | 1,029 | 96,449 | |||||||||||||||
Total Restructuring and Related Charges | $ | 847 | $ | 9,996 | $ | 712 | $ | 3,910 | $ | 170,340 | ||||||||||
Charges by Activity: | ||||||||||||||||||||
Severance and termination benefits | $ | 847 | $ | 8,672 | $ | 497 | $ | 2,894 | $ | 116,756 | ||||||||||
Consulting and Contract Termination Costs | — | 90 | — | 225 | 21,155 | |||||||||||||||
Other Activities | — | 1,234 | 215 | 791 | 32,429 | |||||||||||||||
Total Restructuring and Related Charges | $ | 847 | $ | 9,996 | $ | 712 | $ | 3,910 | $ | 170,340 |
Three Months Ended July 31, | Total Charges | |||||||||||
2020 | 2019 | Incurred to Date | ||||||||||
Charges (Credits) by Segment: | ||||||||||||
Research Publishing & Platforms | $ | 0 | $ | (16 | ) | $ | 26,884 | |||||
Academic & Professional Learning | 260 | 28 | 43,094 | |||||||||
Education Services | 0 | (103 | ) | 3,764 | ||||||||
Corporate Expenses | (227 | ) | (44 | ) | 95,713 | |||||||
Total Restructuring and Related Charges (Credits) | $ | 33 | $ | (135 | ) | $ | 169,455 | |||||
Charges (Credits) by Activity: | ||||||||||||
Severance and termination benefits | $ | 33 | $ | (350 | ) | $ | 116,042 | |||||
Consulting and contract termination costs | 0 | — | 20,984 | |||||||||
Other activities | 0 | 215 | 32,429 | |||||||||
Total Restructuring and Related Charges (Credits) | $ | 33 | $ | (135 | ) | $ | 169,455 |
April 30, 2019 | Charges | Payments | Adoption of New Lease Standard (1) | Foreign Translation & Other Adjustments | October 31, 2019 | |||||||||||||||||||
Severance and termination benefits | $ | 4,887 | $ | 497 | $ | (3,125 | ) | $ | — | $ | 203 | $ | 2,462 | |||||||||||
Consulting and Contract Termination Costs | 303 | — | — | — | — | 303 | ||||||||||||||||||
Other Activities | 2,544 | — | — | (2,258 | ) | (34 | ) | 252 | ||||||||||||||||
Total | $ | 7,734 | $ | 497 | $ | (3,125 | ) | $ | (2,258 | ) | $ | 169 | $ | 3,017 |
April 30, 2020 | Charges | Payments | Foreign Translation & Other Adjustments | July 31, 2020 | ||||||||||||||||
Severance and termination benefits | $ | 1,360 | $ | 33 | $ | (888 | ) | $ | 62 | $ | 567 | |||||||||
Other activities | 230 | 0 | 0 | 128 | 358 | |||||||||||||||
Total | $ | 1,590 | $ | 33 | $ | (888 | ) | $ | 190 | $ | 925 |
Three Months Ended October 31, | �� | Six Months Ended October 31, | Three Months Ended July 31, | |||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2020 | 2019 | |||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Research Publishing & Platforms | $ | 234,709 | $ | 229,075 | $ | 464,084 | $ | 454,392 | $ | 240,810 | $ | 229,375 | ||||||||||||
Academic & Professional Learning | 177,725 | 189,670 | 322,583 | 346,094 | 126,913 | 144,858 | ||||||||||||||||||
Education Services | 53,771 | 29,877 | 103,068 | 59,037 | 63,603 | 49,297 | ||||||||||||||||||
Total Revenue | $ | 466,205 | $ | 448,622 | $ | 889,735 | $ | 859,523 | $ | 431,326 | $ | 423,530 | ||||||||||||
Contribution to Profit: | ||||||||||||||||||||||||
Research Publishing & Platforms | $ | 63,291 | $ | 59,210 | $ | 118,937 | $ | 116,527 | $ | 69,818 | $ | 55,646 | ||||||||||||
Academic & Professional Learning | 35,050 | 47,078 | 39,961 | 68,845 | (380 | ) | 4,911 | |||||||||||||||||
Education Services | 2,583 | (867 | ) | (4,616 | ) | (5,886 | ) | 558 | (7,199 | ) | ||||||||||||||
Total Contribution to Profit | $ | 100,924 | $ | 105,421 | $ | 154,282 | $ | 179,486 | 69,996 | 53,358 | ||||||||||||||
Corporate Expenses | (37,533 | ) | (47,946 | ) | (86,332 | ) | (85,871 | ) | (39,957 | ) | (48,799 | ) | ||||||||||||
Operating Income | $ | 63,391 | $ | 57,475 | $ | 67,950 | $ | 93,615 | $ | 30,039 | $ | 4,559 | ||||||||||||
Adjusted Contribution to Profit: (1) | ||||||||||||||||||||||||
Research Publishing & Platforms | $ | 64,017 | $ | 61,492 | $ | 122,283 | $ | 117,829 | $ | 69,621 | $ | 58,266 | ||||||||||||
Academic & Professional Learning | 35,850 | 49,272 | 43,566 | 70,322 | (347 | ) | 7,716 | |||||||||||||||||
Education Services | 2,108 | (557 | ) | (3,002 | ) | (5,784 | ) | 697 | (5,110 | ) | ||||||||||||||
Total Adjusted Contribution to Profit | $ | 101,975 | $ | 110,207 | $ | 162,847 | $ | 182,367 | 69,971 | 60,872 | ||||||||||||||
Adjusted Corporate Expenses | (34,583 | ) | (42,736 | ) | (80,161 | ) | (84,842 | ) | (37,714 | ) | (45,578 | ) | ||||||||||||
Total Adjusted Operating Income | $ | 67,392 | $ | 67,471 | $ | 82,686 | $ | 97,525 | $ | 32,257 | $ | 15,294 | ||||||||||||
Depreciation and Amortization: | ||||||||||||||||||||||||
Research Publishing & Platforms | $ | 17,037 | $ | 15,422 | $ | 34,190 | $ | 30,787 | $ | 19,701 | $ | 17,153 | ||||||||||||
Academic & Professional Learning | 17,349 | 17,473 | 33,873 | 35,050 | 18,804 | 16,524 | ||||||||||||||||||
Education Services | 5,522 | 3,045 | 11,020 | 6,512 | 7,279 | 5,498 | ||||||||||||||||||
Total Depreciation and Amortization | $ | 39,908 | $ | 35,940 | $ | 79,083 | $ | 72,349 | 45,784 | 39,175 | ||||||||||||||
Corporate Depreciation and Amortization | 2,730 | 3,712 | 5,774 | 7,474 | 3,723 | 3,044 | ||||||||||||||||||
Total Depreciation and Amortization | $ | 42,638 | $ | 39,652 | $ | 84,857 | $ | 79,823 | $ | 49,507 | $ | 42,219 | ||||||||||||
Adjusted EBITDA: (2) | ||||||||||||||||||||||||
Research Publishing & Platforms | $ | 81,054 | $ | 76,914 | $ | 156,473 | $ | 148,616 | $ | 89,322 | $ | 75,419 | ||||||||||||
Academic & Professional Learning | 53,199 | 66,745 | 77,439 | 105,372 | 18,457 | 24,240 | ||||||||||||||||||
Education Services | 7,630 | 2,488 | 8,018 | 728 | 7,976 | 388 | ||||||||||||||||||
Total Segment Adjusted EBITDA | $ | 141,883 | $ | 146,147 | $ | 241,930 | $ | 254,716 | 115,755 | 100,047 | ||||||||||||||
Corporate Adjusted EBITDA | (31,853 | ) | (39,024 | ) | (74,387 | ) | (77,368 | ) | (33,991 | ) | (42,534 | ) | ||||||||||||
Total Adjusted EBITDA | $ | 110,030 | $ | 107,123 | $ | 167,543 | $ | 177,348 | $ | 81,764 | $ | 57,513 |
(1) | Adjusted Contribution to Profit is Contribution to Profit adjusted for restructuring charges (credits). See Note 9, “Restructuring and Related Charges” for these charges (credits) by segment. |
(2) | Adjusted EBITDA is Adjusted Contribution to Profit with depreciation and amortization added back. |
Three Months Ended October 31, | Six Months Ended October 31, | Three Months Ended July 31, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2020 | 2019 | |||||||||||||||||||
Net Income | $ | 44,690 | $ | 43,784 | $ | 48,314 | $ | 70,079 | $ | 16,334 | $ | 3,624 | ||||||||||||
Interest expense | 6,787 | 3,608 | 12,864 | 6,404 | 4,614 | 6,077 | ||||||||||||||||||
Provision for income taxes | 11,783 | 12,538 | 12,126 | 20,324 | 13,400 | 343 | ||||||||||||||||||
Depreciation and amortization | 42,638 | 39,652 | 84,857 | 79,823 | 49,507 | 42,219 | ||||||||||||||||||
Non-GAAP EBITDA | $ | 105,898 | $ | 99,582 | $ | 158,161 | $ | 176,630 | $ | 83,855 | $ | 52,263 | ||||||||||||
Restructuring and related charges | 4,001 | 9,996 | 14,736 | 3,910 | 2,218 | 10,735 | ||||||||||||||||||
Foreign exchange transaction losses | 2,668 | 54 | 16 | 1,783 | ||||||||||||||||||||
Foreign exchange transaction losses (gains) | 82 | (2,652 | ) | |||||||||||||||||||||
Interest and other income | (2,537 | ) | (2,509 | ) | (5,370 | ) | (4,975 | ) | (4,391 | ) | (2,833 | ) | ||||||||||||
Non-GAAP Adjusted EBITDA | $ | 110,030 | $ | 107,123 | $ | 167,543 | $ | 177,348 | $ | 81,764 | $ | 57,513 |
October 31, 2019 | April 30, 2019 | July 31, 2020 | April 30, 2020 | |||||||||||||
Finished Goods | $ | 36,258 | $ | 33,736 | $ | 34,975 | $ | 36,014 | ||||||||
Work-in-Process | 2,637 | 2,094 | 1,688 | 1,398 | ||||||||||||
Paper and Other Materials | 344 | 373 | 312 | 331 | ||||||||||||
$ | 39,239 | $ | 36,203 | |||||||||||||
Total Inventories Before Estimated Sales Returns and LIFO Reserve | $ | 36,975 | $ | 37,743 | ||||||||||||
Inventory Value of Estimated Sales Returns | 9,889 | 3,739 | 10,967 | 8,686 | ||||||||||||
LIFO Reserve | (4,096 | ) | (4,360 | ) | (2,891 | ) | (2,815 | ) | ||||||||
Total Inventories | $ | 45,032 | $ | 35,582 | $ | 45,051 | $ | 43,614 |
April 30, 2019 | Acquisitions (1) | Foreign Translation Adjustment | October 31, 2019 | April 30, 2020 | Acquisitions (1) | Foreign Translation Adjustment | July 31, 2020 | |||||||||||||||||||||||||
Research Publishing & Platforms | $ | 438,511 | $ | 844 | $ | 640 | $ | 439,995 | $ | 448,130 | $ | (11,212 | ) | $ | 15,490 | $ | 452,408 | |||||||||||||||
Academic & Professional Learning | 458,145 | 45,752 | 134 | 504,031 | 501,091 | 0 | 8,794 | 509,885 | ||||||||||||||||||||||||
Education Services | 199,010 | 161 | — | 199,171 | 167,569 | 0 | 3,748 | 171,317 | ||||||||||||||||||||||||
Total | $ | 1,095,666 | $ | 46,757 | $ | 774 | $ | 1,143,197 | $ | 1,116,790 | $ | (11,212 | ) | $ | 28,032 | $ | 1,133,610 |
(1) | Refer to Note 3, “Acquisitions,” for more information related to the acquisitions that occurred in fiscal year 2020, and the revisions that were made to the |
October 31, 2019 | April 30, 2019 | July 31, 2020 | April 30, 2020 | |||||||||||||
Intangible Assets with Determinable Lives, net: | ||||||||||||||||
Intangible Assets with Definite Lives, net: | ||||||||||||||||
Content and Publishing Rights (1) | $ | 384,364 | $ | 389,172 | $ | 366,888 | $ | 362,106 | ||||||||
Customer Relationships (1) | 245,822 | 245,830 | 284,433 | 290,418 | ||||||||||||
Developed Technology (1) | 28,734 | 13,111 | ||||||||||||||
Brands and Trademarks (1) | 11,753 | 12,993 | 20,371 | 20,188 | ||||||||||||
Covenants not to Compete | 345 | 445 | 197 | 246 | ||||||||||||
Developed Technology (1) | 17,989 | — | ||||||||||||||
Total | 660,273 | 648,440 | 700,623 | 686,069 | ||||||||||||
Intangible Assets with Indefinite Lives: | ||||||||||||||||
Brands and Trademarks | 134,005 | 130,909 | 37,000 | 37,000 | ||||||||||||
Content and Publishing Rights | 86,335 | 86,223 | ||||||||||||||
Publishing Rights | 91,608 | 84,336 | ||||||||||||||
Total | 220,340 | 217,132 | 128,608 | 121,336 | ||||||||||||
Total Intangible Assets, Net | $ | 880,613 | $ | 865,572 | $ | 829,231 | $ | 807,405 |
(1) | Refer to Note 3, “Acquisitions,” for more information related to the acquisitions that occurred in fiscal year 2020 and the revisions that were made to the |
Three Months Ended October 31, | Six Months Ended October 31, | Three Months Ended July 31, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2020 | 2019 | |||||||||||||||||||
Service cost | $ | 1,093 | $ | 229 | $ | 1,317 | $ | 462 | $ | 333 | $ | 224 | ||||||||||||
Interest cost | 6,350 | 6,169 | 12,184 | 12,381 | 4,521 | 5,834 | ||||||||||||||||||
Expected return on plan assets | (9,886 | ) | (9,720 | ) | (19,945 | ) | (19,622 | ) | (9,378 | ) | (10,059 | ) | ||||||||||||
Net amortization of prior service cost | (19 | ) | (24 | ) | (38 | ) | (48 | ) | ||||||||||||||||
Unrecognized net actuarial loss | 1,581 | 1,474 | 3,181 | 2,908 | ||||||||||||||||||||
Amortization of prior service cost | (25 | ) | (19 | ) | ||||||||||||||||||||
Amortization of net actuarial loss | 1,987 | 1,600 | ||||||||||||||||||||||
Net pension income | $ | (881 | ) | $ | (1,872 | ) | $ | (3,301 | ) | $ | (3,919 | ) | $ | (2,562 | ) | $ | (2,420 | ) |
July 31, 2020 | April 30, 2020 | |||||||
Short-term portion of long-term debt (1) | $ | 10,938 | $ | 9,375 | ||||
Term loan A - Amended and Restated RCA (2) | 232,179 | 235,263 | ||||||
Revolving credit facility - Amended and Restated RCA | 603,584 | 530,387 | ||||||
Total long-term debt, less current portion | 835,763 | 765,650 | ||||||
Total Debt | $ | 846,701 | $ | 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 July 31, 2020 and $0.7 million as of April 30, 2020. |
Three Months Ended October 31, | Six Months Ended October 31, | |||||||||||||||||||
2019 | 2018 | 2019 | 2018 | Three Months Ended July 31, 2019 | ||||||||||||||||
Shares Repurchased | 334,336 | 299,188 | 551,847 | 425,120 | 217,511 | |||||||||||||||
Average Price | $ | 44.87 | $ | 56.82 | $ | 45.30 | $ | 58.79 | $ | 45.97 |
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 | $ | $19.2 million | Class A and Class B | July | July | |||||
Changes in Common Stock A: | 2019 | 2018 | 2020 | 2019 | ||||||||||||
Number of shares, beginning of year | 70,127 | 70,111 | 70,166 | 70,127 | ||||||||||||
Common stock class conversions | 22 | 14 | 11 | 12 | ||||||||||||
Number of shares issued, end of period | 70,149 | 70,125 | 70,177 | 70,139 | ||||||||||||
Changes in Common Stock A in treasury: | ||||||||||||||||
Number of shares held, beginning of year | 22,634 | 21,853 | 23,405 | 22,634 | ||||||||||||
Purchase of treasury shares | 552 | 425 | 0 | 218 | ||||||||||||
Restricted shares issued under stock-based compensation plans - non-PSU Awards | (63 | ) | (54 | ) | (94 | ) | (36 | ) | ||||||||
Restricted shares issued under stock-based compensation plans - PSU Awards | (43 | ) | (59 | ) | (86 | ) | (43 | ) | ||||||||
Restricted shares, forfeited | — | — | 0 | 1 | ||||||||||||
Restricted shares issued from exercise of stock options | (17 | ) | (224 | ) | (33 | ) | (12 | ) | ||||||||
Shares withheld for taxes | 44 | 53 | 67 | 33 | ||||||||||||
Other | — | 6 | ||||||||||||||
Number of shares held, end of period | 23,107 | 22,000 | 23,259 | 22,795 | ||||||||||||
Number of Common Stock A outstanding, end of period | 47,042 | 48,125 | 46,918 | 47,344 |
Changes in Common Stock B: | 2019 | 2018 | 2020 | 2019 | ||||||||||||
Number of shares, beginning of year | 13,055 | 13,071 | 13,016 | 13,055 | ||||||||||||
Common stock class conversions | (22 | ) | (14 | ) | (11 | ) | (12 | ) | ||||||||
Number of shares issued, end of period | 13,033 | 13,057 | 13,005 | 13,043 | ||||||||||||
Changes in Common Stock B in treasury: | ||||||||||||||||
Number of shares held, beginning of year | 3,918 | 3,918 | 3,920 | 3,918 | ||||||||||||
Number of shares held, end of period | 3,918 | 3,918 | 3,920 | 3,918 | ||||||||||||
Number of Common Stock B outstanding, end of period | 9,115 | 9,139 | 9,085 | 9,125 |
● | an increase of |
● | an increase of |
Three Months Ended July 31, | ||||||||
2020 | 2019 | |||||||
U.S. GAAP EPS | $ | 0.29 | $ | $ $ 0.06 | ||||
Adjustments: | ||||||||
Restructuring and related charges | 0.03 | 0.14 | ||||||
Foreign exchange (gains) losses on intercompany transactions | (0.02 | ) | 0.01 | |||||
Impact of increase in U.K. statutory rate on deferred tax balances in fiscal year 2021 | 0.12 | — | ||||||
Non-GAAP Adjusted EPS | $ | 0.42 | $ | $ $ 0.21 |
Three Months Ended October 31, | ||||||||
2019 | 2018 | |||||||
GAAP EPS | $ | 0.79 | $ | 0.76 | ||||
Adjustments: | ||||||||
Restructuring and related charges | 0.06 | 0.13 | ||||||
Non-GAAP Adjusted EPS | $ | 0.85 | $ | 0.89 |
Three Months Ended October 31, | Constant Currency | |||||||||||||||
RESEARCH PUBLISHING & PLATFORMS: | 2019 | 2018 | % Change Favorable (Unfavorable) | % Change Favorable (Unfavorable) | ||||||||||||
Revenue: | ||||||||||||||||
Research Publishing | $ | 225,085 | $ | 219,710 | 2 | % | 4 | % | ||||||||
Research Platforms | 9,624 | 9,365 | 3 | % | 3 | % | ||||||||||
Total Research Publishing & Platforms Revenue | 234,709 | 229,075 | 2 | % | 4 | % | ||||||||||
Cost of Sales | 64,109 | 63,040 | (2 | )% | (4 | )% | ||||||||||
Operating Expenses | 99,542 | 97,576 | (2 | )% | (4 | )% | ||||||||||
Amortization of Intangibles | 7,041 | 6,967 | (1 | )% | (4 | )% | ||||||||||
Restructuring Charges (see Note 9) | 726 | 2,282 | 68 | % | 68 | % | ||||||||||
Contribution to Profit | 63,291 | 59,210 | 7 | % | 7 | % | ||||||||||
Restructuring Charges (see Note 9) | 726 | 2,282 | ||||||||||||||
Adjusted Contribution to Profit | 64,017 | 61,492 | 4 | % | 4 | % | ||||||||||
Depreciation and amortization | 17,037 | 15,422 | ||||||||||||||
Adjusted EBITDA | $ | 81,054 | $ | 76,914 | 5 | % | 6 | % |
Three Months Ended October 31, | Constant Currency | |||||||||||||||
ACADEMIC & PROFESSIONAL LEARNING: | 2019 | 2018 | % Change Favorable (Unfavorable) | % Change Favorable (Unfavorable) | ||||||||||||
Revenue: | ||||||||||||||||
Education Publishing | $ | 101,741 | $ | 107,474 | (5 | )% | (4 | )% | ||||||||
Professional Learning | 75,984 | 82,196 | (8 | )% | (6 | )% | ||||||||||
Total Academic & Professional Learning | 177,725 | 189,670 | (6 | )% | (5 | )% | ||||||||||
Cost of Sales | 43,860 | 49,813 | 12 | % | 11 | % | ||||||||||
Operating Expenses | 93,745 | 86,401 | (8 | )% | (10 | )% | ||||||||||
Amortization of Intangibles | 4,270 | 4,184 | (2 | )% | (3 | )% | ||||||||||
Restructuring Charges (see Note 9) | 800 | 2,194 | 64 | % | 63 | % | ||||||||||
Contribution to Profit | 35,050 | 47,078 | (26 | )% | (24 | )% | ||||||||||
Restructuring Charges (see Note 9) | 800 | 2,194 | ||||||||||||||
Adjusted Contribution to Profit | 35,850 | 49,272 | (27 | )% | (26 | )% | ||||||||||
Depreciation and amortization | 17,349 | 17,473 | ||||||||||||||
Adjusted EBITDA | $ | 53,199 | $ | 66,745 | (20 | )% | (19 | )% |
Three Months Ended October 31, | Constant Currency | |||||||||||||||
EDUCATION SERVICES: | 2019 | 2018 | % Change Favorable (Unfavorable) | % Change Favorable (Unfavorable) | ||||||||||||
Revenue: | ||||||||||||||||
Total Education Services Revenue | $ | 53,771 | $ | 29,877 | 80 | % | 80 | % | ||||||||
Cost of Sales | 35,444 | 19,724 | (80 | )% | (80 | )% | ||||||||||
Operating Expenses | 12,511 | 9,495 | (32 | )% | (32 | )% | ||||||||||
Amortization of Intangibles | 3,708 | 1,215 | # | # | ||||||||||||
Restructuring (Credits) Charges (see Note 9) | (475 | ) | 310 | # | # | |||||||||||
Contribution to Profit | 2,583 | (867 | ) | # | # | |||||||||||
Restructuring (Credits) Charges (see Note 9) | (475 | ) | 310 | |||||||||||||
Adjusted Contribution to Profit | 2,108 | (557 | ) | # | # | |||||||||||
Depreciation and amortization | 5,522 | 3,045 | ||||||||||||||
Adjusted EBITDA | $ | 7,630 | $ | 2,488 | # | # |
Six Months Ended October 31, | ||||||||
2019 | 2018 | |||||||
GAAP EPS | $ | 0.85 | $ | 1.21 | ||||
Adjustments: | ||||||||
Restructuring and related charges | 0.20 | 0.05 | ||||||
Foreign exchange losses on intercompany transactions | 0.01 | 0.05 | ||||||
Non-GAAP Adjusted EPS | $ | 1.06 | $ | 1.31 |
Six Months Ended October 31, | Constant Currency | Three Months Ended July 31, | Constant Currency | |||||||||||||||||||||||||||||
RESEARCH PUBLISHING & PLATFORMS: | 2019 | 2018 | % Change Favorable (Unfavorable) | % Change Favorable (Unfavorable) | 2020 | 2019 | % Change Favorable (Unfavorable) | % Change Favorable (Unfavorable) | ||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||
Research Publishing | $ | 445,012 | $ | 436,424 | 2 | % | 4 | % | $ | 230,464 | $ | 219,927 | 5 | % | 5 | % | ||||||||||||||||
Research Platforms | 19,072 | 17,968 | 6 | % | 6 | % | 10,346 | 9,448 | 10 | % | 10 | % | ||||||||||||||||||||
Total Research Publishing & Platforms Revenue | 464,084 | 454,392 | 2 | % | 4 | % | 240,810 | 229,375 | 5 | % | 6 | % | ||||||||||||||||||||
Cost of Sales | 128,206 | 124,594 | (3 | )% | (6 | )% | 65,701 | 64,097 | (3 | )% | (3 | )% | ||||||||||||||||||||
Operating Expenses | 199,090 | 197,906 | (1 | )% | (2 | )% | 97,821 | 99,548 | 2 | % | 1 | % | ||||||||||||||||||||
Amortization of Intangibles | 14,505 | 14,063 | (3 | )% | (6 | )% | 7,667 | 7,464 | (3 | )% | (4 | )% | ||||||||||||||||||||
Restructuring Charges (see Note 9) | 3,346 | 1,302 | # | # | ||||||||||||||||||||||||||||
Restructuring (Credits) Charges (see Note 9) | (197 | ) | 2,620 | # | # | |||||||||||||||||||||||||||
Contribution to Profit | 118,937 | 116,527 | 2 | % | 2 | % | 69,818 | 55,646 | 25 | % | 26 | % | ||||||||||||||||||||
Restructuring Charges (see Note 9) | 3,346 | 1,302 | ||||||||||||||||||||||||||||||
Restructuring (Credits) Charges (see Note 9) | (197 | ) | 2,620 | |||||||||||||||||||||||||||||
Adjusted Contribution to Profit | 122,283 | 117,829 | 4 | % | 4 | % | 69,621 | 58,266 | 19 | % | 20 | % | ||||||||||||||||||||
Depreciation and amortization | 34,190 | 30,787 | 19,701 | 17,153 | ||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 156,473 | $ | 148,616 | 5 | % | 6 | % | $ | 89,322 | $ | 75,419 | 18 | % | 19 | % | ||||||||||||||||
Adjusted EBITDA Margin | 37.1 | % | 32.9 | % |
● |
● |
● |
Six Months Ended October 31, | Constant Currency | Three Months Ended July 31, | Constant Currency | |||||||||||||||||||||||||||||
ACADEMIC & PROFESSIONAL LEARNING: | 2019 | 2018 | % Change Favorable (Unfavorable) | % Change Favorable (Unfavorable) | 2020 | 2019 | % Change Favorable (Unfavorable) | % Change Favorable (Unfavorable) | ||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||
Education Publishing | $ | 167,264 | $ | 181,508 | (8 | )% | (7 | )% | $ | 64,084 | $ | 65,523 | (2 | )% | (2 | )% | ||||||||||||||||
Professional Learning | 155,319 | 164,586 | (6 | )% | (4 | )% | 62,829 | 79,335 | (21 | )% | (20 | )% | ||||||||||||||||||||
Total Academic & Professional Learning | 322,583 | 346,094 | (7 | )% | (5 | )% | 126,913 | 144,858 | (12 | )% | (12 | )% | ||||||||||||||||||||
Cost of Sales | 87,674 | 94,711 | 7 | % | 6 | % | 36,788 | 43,814 | 16 | % | 16 | % | ||||||||||||||||||||
Operating Expenses | 183,275 | 172,504 | (6 | )% | (8 | )% | 86,334 | 89,530 | 4 | % | 3 | % | ||||||||||||||||||||
Amortization of Intangibles | 8,068 | 8,557 | 6 | % | 5 | % | 4,138 | 3,798 | (9 | )% | (9 | )% | ||||||||||||||||||||
Restructuring Charges (see Note 9) | 3,605 | 1,477 | # | # | 33 | 2,805 | 99 | % | 99 | % | ||||||||||||||||||||||
Contribution to Profit | 39,961 | 68,845 | (42 | )% | (41 | )% | (380 | ) | 4,911 | # | # | |||||||||||||||||||||
Restructuring Charges (see Note 9) | 3,605 | 1,477 | 33 | 2,805 | ||||||||||||||||||||||||||||
Adjusted Contribution to Profit | 43,566 | 70,322 | (38 | )% | (37 | )% | (347 | ) | 7,716 | # | # | |||||||||||||||||||||
Depreciation and amortization | 33,873 | 35,050 | 18,804 | 16,524 | ||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 77,439 | $ | 105,372 | (27 | )% | (26 | )% | $ | 18,457 | $ | 24,240 | (24 | )% | (23 | )% | ||||||||||||||||
Adjusted EBITDA Margin | 14.5 | % | 16.7 | % |
Three Months Ended July 31, | Constant Currency | |||||||||||||||
EDUCATION SERVICES: | 2020 | 2019 | % Change Favorable (Unfavorable) | % Change Favorable (Unfavorable) | ||||||||||||
Revenue: | ||||||||||||||||
Education Services (1) | $ | 50,262 | $ | 48,156 | 4 | % | 4 | % | ||||||||
mthree (1) | 13,341 | 1,141 | # | # | ||||||||||||
Total Education Services Revenue | 63,603 | 49,297 | 29 | % | 29 | % | ||||||||||
Cost of Sales | 42,318 | 35,185 | (20 | )% | (21 | )% | ||||||||||
Operating Expenses | 15,501 | 15,514 | — | — | ||||||||||||
Amortization of Intangibles | 5,087 | 3,708 | (37 | )% | (38 | )% | ||||||||||
Restructuring Charges (see Note 9) | 139 | 2,089 | 93 | % | 93 | % | ||||||||||
Contribution to Profit | 558 | (7,199 | ) | # | # | |||||||||||
Restructuring Charges (see Note 9) | 139 | 2,089 | ||||||||||||||
Adjusted Contribution to Profit | 697 | (5,110 | ) | # | # | |||||||||||
Depreciation and amortization | 7,279 | 5,498 | ||||||||||||||
Adjusted EBITDA | $ | 7,976 | $ | 388 | # | # | ||||||||||
Adjusted EBITDA Margin | 12.5 | % | 0.8 | % |
(1) | In May 2020, we moved the IT bootcamp business acquired as part of The Learning House acquisition from Education Services 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 July 31, 2020 was $12.4 million. |
Six Months Ended October 31, | Constant Currency | |||||||||||||||
EDUCATION SERVICES: | 2019 | 2018 | % Change Favorable (Unfavorable) | % Change Favorable (Unfavorable) | ||||||||||||
Revenue: | ||||||||||||||||
Total Education Services Revenue | $ | 103,068 | $ | 59,037 | 75 | % | 75 | % | ||||||||
Cost of Sales | 70,628 | 41,010 | (72 | )% | (72 | )% | ||||||||||
Operating Expenses | 28,025 | 21,381 | (31 | )% | (31 | )% | ||||||||||
Amortization of Intangibles | 7,417 | 2,430 | # | # | ||||||||||||
Restructuring Charges (see Note 9) | 1,614 | 102 | # | # | ||||||||||||
Contribution to Profit | (4,616 | ) | (5,886 | ) | 22 | % | 21 | % | ||||||||
Restructuring Charges (see Note 9) | 1,614 | 102 | ||||||||||||||
Adjusted Contribution to Profit | (3,002 | ) | (5,784 | ) | 48 | % | 48 | % | ||||||||
Depreciation and amortization | 11,020 | 6,512 | ||||||||||||||
Adjusted EBITDA | $ | 8,018 | $ | 728 | # | # |
Item | Original Fiscal Year 2020 Outlook (1) | zyBooks Impact | Updated Fiscal Year 2020 Outlook (1) | |||||||||
Revenue | $ | 1,840-1,870 | $ | 15 | $ | 1,855-1,885 | ||||||
Adjusted EBITDA | $ | 360-375 | $ | (3 | ) | $ | 357-372 | |||||
Adjusted EPS | $ | 2.45-2.55 | $ | (0.10 | ) | $ | 2.35-2.45 | |||||
Free Cash Flow | $ | 210-230 | Insignificant | Unchanged |
Three Months Ended October 31, | Six Months Ended October 31, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net Income | $ | 44,690 | $ | 43,784 | $ | 48,314 | $ | 70,079 | ||||||||
Interest expense | 6,787 | 3,608 | 12,864 | 6,404 | ||||||||||||
Provision for income taxes | 11,783 | 12,538 | 12,126 | 20,324 | ||||||||||||
Depreciation and amortization | 42,638 | 39,652 | 84,857 | 79,823 | ||||||||||||
Non-GAAP EBITDA | $ | 105,898 | $ | 99,582 | $ | 158,161 | $ | 176,630 | ||||||||
Restructuring and related charges | 4,001 | 9,996 | 14,736 | 3,910 | ||||||||||||
Foreign exchange transaction losses | 2,668 | 54 | 16 | 1,783 | ||||||||||||
Interest and other income | (2,537 | ) | (2,509 | ) | (5,370 | ) | (4,975 | ) | ||||||||
Non-GAAP Adjusted EBITDA | $ | 110,030 | $ | 107,123 | $ | 167,543 | $ | 177,348 |
Three Months Ended July 31, | ||||||||
2020 | 2019 | |||||||
Net Income | $ | 16,334 | $ | 3,624 | ||||
Interest expense | 4,614 | 6,077 | ||||||
Provision for income taxes | 13,400 | 343 | ||||||
Depreciation and amortization | 49,507 | 42,219 | ||||||
Non-GAAP EBITDA | $ | 83,855 | $ | 52,263 | ||||
Restructuring and related charges | 2,218 | 10,735 | ||||||
Foreign exchange transaction losses (gains) | 82 | (2,652 | ) | |||||
Interest and other income | (4,391 | ) | (2,833 | ) | ||||
Non-GAAP Adjusted EBITDA | $ | 81,764 | $ | 57,513 |
Six Months Ended October 31, | Three Months Ended July 31, | |||||||||||||||
2019 | 2018 | 2020 | 2019 | |||||||||||||
Net Cash Used In Operating Activities | $ | (99,521 | ) | $ | (116,561 | ) | $ | (120,783 | ) | $ | (94,168 | ) | ||||
Net Cash Used In Investing Activities | (134,431 | ) | (49,706 | ) | (28,280 | ) | (105,892 | ) | ||||||||
Net Cash Provided by Financing Activities | 249,267 | 120,465 | ||||||||||||||
Net Cash Provided By Financing Activities | 43,484 | 213,333 | ||||||||||||||
Effect of Foreign Currency Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash | (461 | ) | (8,368 | ) | 4,500 | (2,138 | ) |
Six Months Ended October 31, | Three Months Ended July 31, | |||||||||||||||
2019 | 2018 | 2020 | 2019 | |||||||||||||
Net Cash Used In Operating Activities | $ | (99,521 | ) | $ | (116,561 | ) | $ | (120,783 | ) | $ | (94,168 | ) | ||||
Less: Additions to Technology, Property and Equipment | (44,531 | ) | (34,560 | ) | (18,964 | ) | (24,202 | ) | ||||||||
Less: Product Development Spending | (11,686 | ) | (12,351 | ) | (5,325 | ) | (6,211 | ) | ||||||||
Free Cash Flow less Product Development Spending | $ | (155,738 | ) | $ | (163,472 | ) | $ | (145,072 | ) | $ | (124,581 | ) |
Net Cash Used In Operating Activities – Six Months Ended October 31, 2018 | $ | (116.6 | ) | |
Working Capital Changes: | ||||
Accounts receivable, net and contract liabilities - due to the timing of collections, including collections from the delayed calendar year 2019 journal subscription billing into fiscal year 2020 | 51.1 | |||
Accounts payable and other accrued liabilities - due to the timing of payments and lower incentive payments in the six months ended October 31, 2019 | 15.9 | |||
Income tax payments primarily due to the timing of certain international tax payments | (19.0 | ) | ||
Other working capital items | (17.4 | ) | ||
Lower net income adjusted for items to reconcile net income to net cash used in operating activities | (13.5 | ) | ||
Net Cash Used In Operating Activities – Six Months Ended October 31, 2019 | $ | (99.5 | ) |
Net Cash Used In Operating Activities – Three Months Ended July 31, 2019 | $ | (94.2 | ) | |
Working Capital Changes: | ||||
Accounts payable and royalties payable - primarily due to the timing of payments | (31.1 | ) | ||
Accrued income taxes - primarily due to the timing of certain international and U.S. tax payments and refunds | (7.1 | ) | ||
Accounts receivable, net and contract liabilities - due to the timing of customer payments, including customers payments that were delayed due to the economic downturn | (6.0 | ) | ||
Other working capital items – primarily due to an increase in restructuring and employee related payments partially offset by lower inventory purchases | (13.1 | ) | ||
Higher net income adjusted for items to reconcile net income to net cash used in operating activities | 30.7 | |||
Net Cash Used In Operating Activities – Three Months Ended July 31, 2020 | $ | (120.8 | ) |
October 31, 2019 | April 30, 2019 | |||||||
Increase in Inventories, net | $ | 9,889 | $ | 3,739 | ||||
Decrease in Accrued royalties | $ | (5,285 | ) | $ | (3,653 | ) | ||
Increase in Contract liabilities | $ | 37,699 | $ | 25,934 | ||||
Print book sales return reserve net liability balance | $ | (22,525 | ) | $ | (18,542 | ) |
July 31, 2020 | April 30, 2020 | |||||||
Increase in Inventories, net | $ | 10,967 | $ | 8,686 | ||||
Decrease in Accrued royalties | $ | (5,277 | ) | $ | (4,441 | ) | ||
Increase in Contract liabilities | $ | 39,384 | $ | 32,769 | ||||
Print book sales return reserve net liability balance | $ | (23,140 | ) | $ | (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) | ||||||||||||||||
May 2020 | — | $ | — | — | 806,758 | $ | 200 | |||||||||||||
June 2020 | — | — | — | 806,758 | $ | 200 | ||||||||||||||
July 2020 | — | — | — | 806,758 | $ | 200 | ||||||||||||||
Total | — | $ | — | — | 806,758 | $ | 200 |
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 | |||||||||||||
August 2019 | — | $ | — | — | 1,671,464 | |||||||||||
September 2019 | 245,315 | 45.40 | 245,315 | 1,426,149 | ||||||||||||
October 2019 | 89,021 | 43.40 | 89,021 | 1,337,128 | ||||||||||||
Total | 334,336 | $ | 44.87 | 334,336 | 1,337,128 |
Form of the Fiscal Year 2021 Qualified Executive Annual Incentive Plan. | |
Form of the Fiscal 2021 Restricted Share Unit Grant Agreement under the Executive Long-Term Incentive Plan, under the Business Officer Equity Program, pursuant to the 2014 Key Employee Stock Plan. | |
Form of the Fiscal 2021 Restricted Share Unit Grant Agreement with Matthew S. Kissner under the Executive Long-Term Incentive Plan, under the Business Officer Equity Program, pursuant to the 2014 Key Employee Stock Plan. | |
Employment Letter dated April 20, 2018 between Aref Matin, Executive Vice President and Chief Technology Officer, and the Company. | |
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
Certification of | |
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, | |
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, | |
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). |
101.SCH | Inline XBRL Taxonomy Extension Schema Document. |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
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, Chief Financial Officer, and | ||
Dated: |