Revenues Jump 20% at John Wiley in Fiscal 2002

Several niche acquisitions, plus the purchase of Hungry Minds—whose performance exceeded projections—helped increase revenues by 20%, to $734.4 million, at John Wiley & Sons for the fiscal year ended April 30. Excluding Hungry Minds, sales were up 5%. Net income fell 2.8%, to $57.3 million, a figure that includes an unusual charge of $12.2 million related to relocation expenses. Wiley began moving to Hoboken, N.J., last week.

The Hungry Minds purchase had the greatest impact on Wiley's professional/trade division, pushing revenues up 56%, to $253.1 million, with Hungry Minds contributing sales of $91.4 million. Segment operating profit jumped 75%, to $62.1 million. In addition to Hungry Minds, the division benefited from steady sales of its culinary, architecture, psychology and general nonfiction titles, which helped offset weakness in travel and business, the segments most affected by September 11. Wiley noted that business picked up significantly in the last four months of the fiscal year, helped by the success of Martha Inc. and Martin Weiss's Ultimate Safe Money Guide. Several tax preparation titles also did well as did several titles from Wiley's various publishing alliances, such as The Professional Chef, seventh edition, done in conjunction with the Culinary Institute of America.

The Hungry Minds purchase also made the professional/trade division Wiley's largest domestic operating segment by far, with the unit representing about 32% of revenues. As recently as fiscal 1999, professional/trade accounted for 21% of sales. Barring a significant acquisition by the STM or higher education divisions, the professional/trade division will increase its share of Wiley's total revenues with the addition of a full year of Hungry Minds' sales.

In Wiley's domestic scientific, technical, medical division, sales rose 6%, to $164.9 million, although operating profit fell 5%, to $67.7 million, due to write-offs of two minor investments. Sales growth was created by an 8% increase in journal revenues, which resulted from strong subscription renewals and the addition of three society journals. Growth of the Wiley InterScience online service also contributed to the division's gains. Sales of books were flat.

Revenues in the higher education group rose 6%, to $141.3 million, and operating profit also increased 6%, to $44.3 million. Strong performances in psychology and geography subjects offset softness in engineering. Sales were also given a boost by the acquisition of 47 titles from Thomson Corp. Company president Will Pesce observed that after several years of little movement, used book sales in the higher education market appeared to have increased over the last year.

Internationally, sales in Europe were up 6%, to $164.1 million, led by STM journal operations and steady gains in higher education. Revenues in other international operations increased 6%, to $68.3 million. Wiley's Canadian and Australian subsidiaries had solid performances, but its Asian operations were hurt by weak economic conditions.

Pesce told analysts that the leading indicators for fiscal 2003 are very positive and that he expects double-digit gains in sales and earnings in the year. He projected organic growth of 5%—7% in the higher education segment and mid-single-digit growth for the domestic STM division. Organic sales growth in the professional/trade division will beat industry averages, Pesce said. Hungry Minds is expected to contribute $165 million to revenues, and the professional/trade segment will also benefit from the recent purchase of 250 education titles from Prentice Hall Direct, for which Wiley paid $6.5 million. Pesce said Wiley will continue to look for acquisitions in its core areas.

John Wiley & Sons Segment Performance 2001—2002
($ in millions)