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

Hello, and welcome to the Wiley 2021 Annual Meeting of Shareholders. It is now my pleasure to turn today's meeting over to Jesse Wiley, Chairman of the Board. The floor is yours.

Thank you. Good morning, and thank you for attending Wiley's 58th Annual Shareholders Meeting. I'm Jesse Wiley, Chair of the Board. It's now 10 a.m. Eastern Time, and I call 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 our 214th year of advancing knowledge and learning, unlocking human potential. Considering the ongoing COVID-19 pandemic, our priority to place the safety of our colleagues and shareholders first, we are conducting this annual meeting virtually again. As many are still suffering from the impact of the pandemic, I hope you all are staying safe and doing well as we work through it together. 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. [Operator Instructions] 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 at the class will vote for 3 directors. The Class B common shareholders voting at the class will vote for 7 directors. The second proposal is the ratification of the appointment of KPMG as our independent public accountant. 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. Take it away, Brian.

Thanks, Jesse, and thank you, directors, and welcome to all of our Wiley shareholders. For 214 remarkable years, Wiley has unlocked human potential by advancing knowledge and learning throughout the world. Today, Wiley's driving impact in laboratories, workplaces, classrooms and family rooms, and we're achieving this impact by enabling scientific discovery by powering life-changing education and by shaping today's workforces. Wiley is enabling discovery through our global leadership in research, publishing and platforms. Our accelerating growth in research is based on the enduring draw of our journal brands, our online research platforms, the execution of our open research strategy and our strong momentum in delivering outcome-focused solutions that range from science databases to career centers. Wiley is powering education by delivering high-impact learning experiences, including online degrees and career credential programs that connect education directly to career outcomes. This is driving consistent growth in our university services and digital courseware offerings. Wiley is shaping workforces by partnering with leading corporations to source, train, grow and retain the specific talent that they need in the face of a widening skill gap and the escalating war for talent. Our high-impact career accelerating content and education programs help professionals and their companies to achieve their strategic objectives and differentiate themselves in a highly competitive marketplace. These 3 areas of impact are essential to human advancement with significant sustained opportunity and strong growth coming from each. Fiscal year '21 was an important year for Wiley. The COVID pandemic demonstrated yet again the underlying persistent strength of the research and education markets. The demand to publish and consume peer-reviewed research in our high-impact journals continued to grow with research output up 15% and usage of our content up 25%. And the need for learning experiences and credentials that connect people directly to good jobs was never more urgent. In fiscal '21, our markets started to emerge from multiyear transition periods, and demand accelerated for digital content, tools and services and for innovative business models that lower cost and increase access, benefiting both Wiley and our customers. Enrollment in our online degree programs was up 14% and digital courseware activations were up 23%. Through the challenges of the past year, key long-term trends, such as open access and digital education were pulled forward, strengthening our growth outlook. Our global colleagues executed exceptionally well this year, adapting to both a virtual work environment and rapidly advancing market conditions. Already strong, our employee engagement scores rose even higher during this period. One reason for this is our mission and our colleagues' deep connection with it and their pride in the impact that Wiley is having on society. Simply stated, the more researchers and learners we help to succeed, the greater the societal impact. And there was a lot of opportunity for impact this past year. In research, we delivered more leading-edge knowledge to more people faster and more openly than ever, resulting in a broader social impact. Through our Research For Life initiative, we provided free or low-cost access to all of our content in developing countries. Our work in enabling a vibrant research ecosystem continued to advance our contribution to the achievement of the UN's Sustainable Development Goals for good health and well-being and for climate action. In education, the growing reach of our career connected offerings unlocked career potential for millions of learners, many of whom would never have had access to the life-changing opportunity that education delivers. Our career programs in India, for example, specifically targeted at-risk populations, such as people who are the first in their families to access higher education and also those from households earning less than $500 a month. Notably, over half of our credential candidates in India are women. In Talent Development, we train underrepresented populations and help them secure high-paying jobs with leading corporations. By actively targeting impact in this way, Wiley continues to fulfill the UN Sustainable Development Goals for quality education and reduced inequalities. Overall, we continue to be highly motivated by our environmental and social responsibilities as a global corporate citizen. In February, we signed the UN Global Compact, a pledge to drive business action in support of achieving specific sustainable development goals by 2030. We achieved carbon neutral certification for fiscal '20. Our fiscal '21 measurements are now underway, and we're in the process of committing to science-based targets. During the year, I signed the CEO Action for Diversity & Inclusion, a commitment to sustained concrete action to advance thinking, behavior and business practices in the workplace. Wiley also proudly received an A grade in the MSCI ESG ratings report and a perfect score from the Human Rights Foundation for LGBTQ workplace equality. I'll touch briefly on our performance in fiscal '21, which we reported in June. I'll be excluding the impact of currency in that discussion. For the year, Wiley reported strong growth across all key financial metrics. Revenue was up 4% to $1.94 billion, adjusted EBITDA was up 16% to $419 million, and adjusted EPS was up 27% to $2.92. Free cash flow for the year was up 48% to $257 million. Overall revenue performance was driven by solid growth in Research and Education Services and a strong recovery in Academic and Professional Learning. Earnings growth was driven by revenue growth, cost structure improvements and COVID-related T&E savings. Looking ahead, the long-term favorable trends that have been defining our markets will continue to accelerate, driving opportunity for Wiley. These consistent trends include the shift to open research, the migration to digital education in both university and corporate settings and the ever-growing need of corporations to fill critical skill and talent gaps. Our well-established strategies continue to be directly aligned with these trends. The result is a fiscal '22 outlook that has revenue growing by mid- to high single digits to over $2 billion, a first for the company. To summarize, Wiley remains a strong company with a rich history and an opportunity-rich future built on our exceptional brands, solid financial position and powerful growth engines. As an impact company, we are powering discovery and learning worldwide. And through this, we are unlocking human potential. All of us at Wiley are personally connected to our purpose, and this drives us to work tirelessly to expand our impact by doing whatever we can to increase the success of the world's learners and researchers. Wiley's success and our strong momentum is built on the remarkable accomplishments, resolve and compassion of our Wiley colleagues worldwide in what has been a very trying period for humanity. I'm very proud to work with each and every one of them, and I'm grateful for the care and concern that they consistently demonstrate for each other, for our customers, for our partners and for our global community. Thank you very much for joining us today. I wish you and your families good health and happiness.

Thank you, Brian. I'll pause to see if there's any questions related specifically to the proposals. At this time, in absence of any 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.

Thank you. And this concludes today's meeting. You may now disconnect.