All three of John Wiley & Sons' domestic operating segments reported gains for the first quarter ended July 31, 2001. Revenues in the STM and professional/trade group both rose by approximately 7%, to $40.1 million and $39.4 million, respectively. Revenues in the higher education group increased 4%, to $42.3 million. Operating profit in all three segments also increased in the period. For the entire company, total first-quarter sales increased 4.6%, to $161 million, and net income rose 18.2%, to $19.5 million.
Wiley attributed gains in the STM group to stronger journal subscription renewal rates and higher book revenues due to its publishing alliance with IEEE. Strong backlist sales, particularly in the architecture, culinary, general interest and finance programs, led the revenue increase in the professional/trade group. The higher education group enjoyed strong adoption orders from professors, but sell-through has been sluggish, Wiley president Will Pesce said, adding that the conservative buying pattern by college bookstores should result in higher re0rders in the coming weeks and lower returns.
Commenting on the pending purchase of Hungry Minds, the largest acquisition in Wiley history, Pesce said the company sees "significant opportunity" to leverage both the Hungry Minds and Wiley brands in global markets in print and online formats. Once the deal is completed, the Hungry Minds assets will be aligned with the professional/trade group under the direction of Stephen Kippur.
The approximately $182 million Wiley will pay for Hungry Minds far exceeds the $10.1 million the company spent on smaller acquisitions in fiscal 2001. Among the niche purchases in the last fiscal year were deals for EnviroGlobe, a majority interest in Capstone and an investment in LapBook.
Pesce also provided an update on Wiley's upcoming move to Hoboken, N.J. He said the relocation process is on track and that he expects the company to make the move next summer as planned. Wiley has allocated $16 million in capital expenditures associated with the move in the current fiscal year, and will take a one-time charge in fiscal 2003.
