John Wiley & Sons, Inc. (WLY) Earnings Call Transcript & Summary

Welcome to the 2020 Annual Meeting for John Wiley & Sons, Inc. Our host for today's call is Jesse Wiley, Chairman of the Board. [Operator Instructions] I will now turn the call over to your host. Mr. Wiley, you may begin.

Good morning. Thank you for attending John Wiley & Sons 57th Annual Shareholders Meeting. I'm Jesse Wiley, Chairman of the Board. It's now 8:00 a.m. Eastern standard time so I'm calling this meeting to order. First, I want to welcome those of you joining us. The polls are now open. Any shareholder that has already voted online or by proxy card does not need to do so again. However, any shareholder that has not voted or wishes to change their vote may do so now. Those online who wish to vote will need the control number contained on your proxy card. Please then follow the instructions online on how to vote your shares. Welcome to the 213th year of advancing knowledge and understanding in education, learning and research. This has been a trying year. In light of the COVID-19 pandemic and our priority to place the safety of our colleagues and shareholders first, we are conducting this annual meeting completely virtually. I hope that you are all staying safe. I have some sad news to share. As we noted in our press release from last week, Bill Pence, one of our directors who was up for renomination this year, passed away earlier this month. Bill was a champion of transformation who held multiple leadership positions in technology, health care and media companies. Bill joined our Board in 2016 and instantly established himself as an invaluable asset, a voice of wisdom, insight and expertise, from culture to strategy and innovation. He was appointed Chair of our technology committee last year here and provided impactful guidance to our Wiley technology team, our leadership and our Board. Bill is survived by his wife and their 2 kids. We do not have a replacement director at this time, but we are kicking off a search for one. Bill will be missed tremendously, and we will honor his legacy and lasting impact. At this time, I would like to introduce the following incumbent directors seeking reelection at this annual meeting: Mari Baker; George Bell; Beth Birnbaum; David Dobson; Mariana Garavaglia; Laurie Leshin; Brian Napack; Raymond McDaniel, William Pesce; and myself, Jesse Wiley. Also present is the inspector of election, Christopher J. Woods, duly appointed by the Board; and representatives of KPMG, our independent public accountants. Now to the business at hand. Our General Counsel, Deirdre Silver, has informed me that we have a quorum for the meeting. There are 3 proposals to be voted on today by our shareholders. Any shareholders who wish to comment on or ask a question relating specifically to one or more of the proposals may do so by clicking on the question mark box and typing in your question. I ask that you please state your name and affiliation in the box provided online when asking a question. The first proposal concerns the election of 10 directors as called for by the company's bylaws. Under our bylaws and charter, the Class A common shareholders voting as a class will vote for 3 directors. The Class B common shareholders voting as a class will vote for 7 directors. The second proposal is the ratification of the appointment of KPMG as our independent public accountants. The third proposal is for approval, on an advisory basis, of the compensation of our named executive officers. The holders of Class A and Class B stock vote together as a single class on proposals 2 and 3, with each outstanding share of Class A stock entitled to 1/10 of 1 vote and each outstanding share of Class B stock entitled to 1 vote. Again, if any shareholders wish to comment on or ask a question relating specifically to one or more of the proposals we have just heard, please do so now. We will answer any questions after we hear from Brian Napack, our President and CEO.

Thanks, Jesse, and thanks to our directors and to all of our colleagues around the world. My very warmest thoughts go out to the Pence family. The past 6 months have reminded us of how important community is in addressing the challenges of our time. We've been inspired and uplifted by the essential workers, by the health care professionals on the front lines, by those fighting for social justice through peaceful protest and by everyone who has lent a hand during this profoundly trying period. At Wiley, we continue to see our customer communities in action: the scientists and researchers working to develop vaccines, address climate change, answer social inequities; and the educators innovating and adapting their approaches to ensure that learners continue their journeys toward personal development and career success. Today's public health, economic, environmental and social challenges only reinforce the importance of Wiley's mission. Since this crisis began, we've moved faster to validate and publish more research than ever before and have made critical COVID-related research freely available. This helped students, teachers and administrators in countless universities, schools and corporations to quickly and effectively migrate from in-person to virtual learning, using powerful technology and best practices in online education. We've continued to drive toward increased access and affordability in education and to enhance the openness and discoverability in research. We are speaking out and supporting causes that address persistent injustice. We are taking concrete actions to improve diversity at all levels of the organization, ensuring that our internal processes and practices promote equity and that our culture embodies inclusivity. As I said on our recent earnings call, our team takes great pride in the fact that Wiley is directly helping the world to heal, to recover and to thrive. At this moment of profound change for our world and for so many organizations, I want to remind you of where Wiley is headed. Wiley is about research that brings forth new knowledge and discovery and education that changes lives for the better. At Wiley, we know that research and education are the twin engines that drive growth in the global knowledge economy. In our Research business, we have multiyear strategies in place to drive publishing volume and to be a leader in key growth areas such as open research and content distribution. These strategies are paying off. We've seen unprecedented growth in article submissions and publishing output. We continue to sign landmark comprehensive published agreements in Northern Europe and to expand our #1 position in society publishing. Our market-leading research content platform, which generates over 3 billion user sessions a year, is seeing record usage through the pandemic and adding to its dominant market share. We recently landed one of the world's largest academic societies as a client. Over the past 12 months, we have bolstered our corporate solutions area with new product launches and acquisitions that enhance our offerings for our partners, including adding career center platforms and laboratory data solutions in the pharmaceutical, environmental and other industries. In education, our strategy continues to focus on the delivery of tech-enabled content, courseware and education services that enable high-demand careers and learning in growing disciplines such as information technology, business and accounting and teacher training. As such, we are supporting teaching and learning in the increasingly digital and hybrid classroom, enabling our many university partners to develop and deliver online degree programs and grow their enrollments and addressing the global skills gap by providing cost-effective job-aligned education solutions that help learners navigate their careers and advance toward their goals. Our focus and investments are bearing fruit, with meaningful market share gains in education publishing, exceptional growth in digital courseware and strong enrollment growth and new partnerships in online degree services. We acquired M3 this year specifically to help us fix the global disconnect between supply and demand for tech talent. Through our programs, Wiley now works with some of the world's leading corporations to find, train and place job-ready talent to fill their most pressing hiring needs and to ensure their employees succeed by providing ongoing training and support. While we see favorable trends providing some tailwinds in key strategic areas, like open research and online learning, there is, of course, the near-term uncertainty to manage through. The pandemic continues to disrupt the global economy, and this has put strain on universities while directly impacting some of our traditional brick-and-mortar revenue sources such as physical book sales, test preparation and in-person training. However, Wiley is today primarily a digital company, delivering essential content, platforms and tech-enabled services that help learners, researchers, universities and corporations to succeed even in these trying times. Internally, we're taking advantage of this moment to drive further operational improvements so we can best serve our customers and deliver strong financial returns. We are currently executing a multiyear company-wide set of process optimization and efficiency initiatives that will mitigate the impact of the economic downturn and improve our overall agility and performance. Wiley is fundamentally strong, and the trends in our markets are increasingly favorable and aligned with our strategic direction. Looking ahead, we will move forward in research and education as we have for over 200 years, with foresight, innovation, discipline and a dedication to the advancement of our global community. Finally, a word about our Wiley colleagues across the globe who have demonstrated such great creativity and commitment through this challenging period and our transition to work from home. Their passion, focus and resolve have enabled Wiley to continue executing for all of its stakeholders without missing a beat. I am grateful for their tireless work and remarkable accomplishments and for the care and concern they consistently demonstrate for each other for our many customers and partners and for our communities. Thank you for joining us today. I wish you and your families good health and good fortune.

Thanks, Brian. At this time, in the absence of questions that relate specifically to the proposals, I now declare the polls closed. The inspector of elections has advised us that the preliminary results indicate that all proposals have passed by the necessary majority. Final results will be posted online with the SEC as a Form 8-K. Since we have concluded the business of the meeting, I thank you again for attending. Be well and take care. I now declare this meeting adjourned.

This now concludes the meeting. Thank you for joining, and have a pleasant day.