Aided by its acquisition of Hungry Minds, total revenues at John Wiley & Sons rose 9.7%, to $176.2 million, for the second quarter ended October 31, 2001. Net income in the period increased 5.9%, to $17.9 million. Excluding Hungry Minds, which was officially acquired September 21, total sales were flat in the quarter. The company expects Hungry Minds to add between $75 million to $80 million in sales for the fiscal year ended April 30, 2002. (Wiley reported that Hungry Minds had sales of about $179 million for the fiscal year ended September 30, 2001.)
Wiley's domestic professional/trade division received the biggest boost from the Hungry Minds purchase, with sales up 31.5%, to $57.6 million; without Hungry Minds, sales in the segment were down slightly. Profit contribution rose to $15.0 million from $10.9 million. Wiley president Will Pesce said the events of September 11 made for a "difficult" quarter for the professional/trade division, with sales to both retail and corporate accounts experiencing some softness. Sales of business and travel books were down and demand for computer books remained soft in the quarter, although the culinary, architecture, psychology and general interest areas performed well. Pesce also noted that sales through Internet retailers were flat in the quarter.
Wiley's domestic higher education division struggled in the quarter, with revenues down 7.6%, to $34.9 million, and profit contribution off 6%, to $11 million. Wiley attributed the decline to higher used-textbook sales and lower enrollments in engineering courses, a major Wiley segment. Pesce observed that, while used textbooks have been a longstanding issue in the college market, college bookstores promoted their sales more aggressively this fall. Student price resistance to new texts and higher margins for stores were cited by Pesce as the reasons behind the used-textbook push. To broaden its base in the college field, Wiley acquired 47 titles from Thomson in business, science, foreign languages, math, nutrition and psychology.
In Wiley's domestic STM division, sales rose 5.5%, to $41.8 million, led by strong journal renewal rates. Its profit contribution moved up 2.2% to $18.7 million.
In the international markets, revenues from Europe were up 4%, led by journal sales. Sales gains in Australia and Canada were offset by softness throughout Asia.
For the current fiscal year, total revenue growth is forecasted to be in the high teens with an earnings increase in the mid-single digits. The bottom line will be helped by new cost savings associated with the integration of Hungry Minds, which should save about $10 million by the end of the year.
For the first six months of fiscal 2002, total revenues were up 7.2%, to $337.2 million, and net income rose 12%, to $37.4 million.
