John Wiley & Sons, Inc., a global leader in research and education, is providing an update regarding business impacts of the COVID-19 pandemic.
Subsequent to Wiley’s reporting of third quarter 2020 results on March 4, the global economy has experienced a sudden and unprecedented downturn due to the COVID-19 pandemic. Wiley’s financial position is fundamentally strong and the Company will continue to benefit from its leadership positions in research and education. However, the global isolation measures aimed at halting the COVID-19 spread will have a significant adverse impact on fourth quarter results, including 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; and delays in customer payments due to widespread disruption and pervasive cash conservation behaviours in the face of uncertainty.
As a result, Wiley is reducing its fiscal year 2020 outlook for Revenue, Adjusted EBITDA and Adjusted EPS, and withdrawing its Free Cash Flow outlook given very limited visibility into the timing of collections from customers.
Updated outlook reflects actual currency impact to date and current exchange rates sustained through Q4 (Euro at $1.10 and Pound Sterling at $1.23). Since March 4, COVID-19 volatility has resulted in an incremental adverse FX impact to Wiley’s revenue, Adjusted EBITDA and Adjusted EPS forecast of $7 million, $2 million, and $0.03, respectively.
Wiley estimates that approximately one-quarter of the fourth quarter revenue and earnings impact from COVID-19 is timing related, primarily in Research, and recovery is expected in subsequent periods.
The Company has a strong balance sheet and ample liquidity, with a $1.5 billion credit agreement not maturing until May 2024. As of January 31, Wiley had $118 million of cash on hand and undrawn revolving credit totalling $700 million. The Company’s net debt-to-EBITDA ratio was 1.8.
Wiley’s Board of Directors recently declared a quarterly cash dividend of $0.34 per share on its Class A and Class B Common Stock and approved a $200 million share repurchase authorization. Given the COVID-19 uncertainty, the Company has decided to suspend share repurchases.
Wiley continues to invest in its global workforce and implement preventive measures while also meeting the needs of customers and partners. Measures include company-wide ‘work from home’ policies, cancellation of in-person events, and sanitation of facilities. Consistent with its mission to advance knowledge and understanding for a healthy and prosperous society, the organisation is supporting their research and education communities in the following ways:
Scientific, Technical, and Medical Research – Wiley has made, and will continue to make research content and data on COVID-19 readily available, including thousands of related studies and articles.
Digital Learning – To support instructors and students in this sudden shift to remote learning, Wiley is enabling free access to its digital courseware solutions, WileyPLUS, Knewton Alta and zyBooks; its CPA, CMA, and CFA test prep solutions; and the bestselling title, The Year Without Pants, about leading a remote team and navigating a work-from-home culture.
Online Education – Wiley is offering expanded partner support to universities during this rapid transition to online, including additional technology support and assistance with course production. Wiley recently launched a free micro-course, Launching Online Learning , for K-12 educators to quickly ramp-up online learning in their environments.
More information on Wiley’s COVID-19 response and community support can be found at https://newsroom.wiley.com/covid-19.