John Wiley & Sons Executive Insights: New Journal Signings, WileyPLUS 5.0
On Tuesday, John Wiley & Sons, Inc. A (NYSE:JW-A) reported its fourth quarter earnings and discussed the following topics in its earnings conference call. Here’s what executives shared with analysts and investors.
New Journal Signings
Daniel Moore – CJS Securities: First in STMS, the pace of new journal signings slowed a bit in Q4, anything to read into that or is it simply lumpy and a function of timing?
Stephen M. Smith – President and CEO: Yeah. Dan, it’s really there isn’t a distinct seasonality to the period when we sign up those new journals, so we look at the deal flow throughout the course of the year, and it really depends when existing contracts come up for renewal, particularly those who are obviously with other publishers, or when societies may take a decision to move to an outsourced model rather than to sell publishing. So, I wouldn’t read anything very much into a single quarter. In fact, I think, the fourth quarter of last year was similarly one of the lower quarters. We have most of these contracts start from January 1, because it’s a calendar year subscription business. So, I don’t think there’s anything to read there in a single quarter.
Daniel Moore – CJS Securities: Maybe shifting over to professional/trade, if you adjust out for the Inscape acquisition, revenue in Q4 essentially flat after a pretty sharp decline in Q3. What’s driving the change there, any more detail you might provide us, and what type of organic revenue growth in professional/trade should we be thinking about embedded in your fiscal ’13 guidance?
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Stephen M. Smith – President and CEO: So, as far as the fourth quarter is concerned, it was a very strong publication quarter for P/T. So, we had – from the very beginning of the year, we had projected that P/T was going to have a stronger back-end this year. That said, we’re also seeing some – continue to see some really nice pickup in e-book sales, and so e-book growth continues to drive growth in the fourth quarter compared with the fourth quarter of the prior year. We’re looking forward – we’ve given revenue guidance of mid-single digit revenue growth across the whole business. We are not expecting sharp variations amongst the three businesses. If you back out Inscape, we would expect P/T probably to be in the mid single-digit range as well, and based on a number of the initiatives that we’ve put in place, investments that we made in previous years where we’re diversifying that business to serve our professional customers in particular more directly.
Daniel Moore – CJS Securities: WileyPLUS obviously, pretty natural reversal and very positive growth trends in Q4, maybe any more details as far as what’s driving the improvement, what you’re seeing in post secondary there, and then I’ll jump back in?
Stephen M. Smith – President and CEO: So, on a full year basis, the decline in WileyPLUS sales is really primarily a result of lower enrollments into profit schools. Our reading is that the declining for profit enrollments is leveled out in 2012, although we are not expecting that to rebound into rapid growth. Another factor though earlier in the year has been that, relating to some technology issues we had some WileyPLUS customers. In the fall, we took some customer retention initiatives in order to retain customers and that involved us giving free access to certain number of customers. That’s now watched through the system, so we are seeing back to more normal conditions again.
David Pang – Stifel Nicolaus: Stephen, can you talk about your expectations for WileyPLUS 5.0, where are we? Do you expect that to be coming in on the coming fall?
Stephen M. Smith – President and CEO: David, we are still working through that right now. We have – we are in the middle of building courses for the fall. We have most of our WileyPLUS products already ready to go to market. We are not necessarily referring to that as WileyPLUS 5.0. There’s a lot of innovation and new functionality and new features within that, so it’s not a major product launch, but we have our courses ready to go with full WileyPLUS functionality, and we feel good about the prospects and the feedback we’re getting from the marketplace.
David Pang – Stifel Nicolaus: If we shift over to P&T, how are feeling about the front list for this upcoming season, and…?
Stephen M. Smith – President and CEO: For the full year of fiscal ’13?
David Pang – Stifel Nicolaus: Yeah.
Stephen M. Smith – President and CEO: As always we have a very strong front list, particularly in our core categories of business, technology, as well as in accounting and psychology and architecture. It’s a strong list of ’13. I couldn’t give you a sense of the timing of that. Our business, particularly as we deemphasize the consumer categories, there have been a strength of P&T in the past, we become less seasonally based, so we’re not expecting to be driven by very large holiday season, it might have been for consumer products. That said, as more and more – there is more and more penetration of eReader devices into the marketplace, that fuels continuing demands for our product, and it’s a strong list, and we expect that to play out throughout the course of the year.