Third quarter sales at Wiley rose 5 percent to $472 million, as operating income of $83.6 million rose 7 percent and adjusted net income of $55.9 million (or 93 cents a share) was up 4.3 percent. (Adjusted results reflect the trade publishing properties sold to Google and Houghton Mifflin Harcourt, which comprised $12 million of sales in the quarter.)
That performance beat analysts’ expectations of $456 million in sales of 83 cents per share of profits. At the same time, Wiley advised that they expect to take a $25 million restructuring charge in the current quarter, and “at least one additional charge” in fiscal 2014. The charges will primarily cover unspecified layoffs: “The charges will be related principally to severance and other employee separation-related benefits as well as other business transition-related costs.” The cuts are part of an “ongoing program to restructure and realign its cost base with current and anticipated future market conditions.” The company has been working since January with a restructuring firm “to realize approximately $80 million in cost savings” annually. Wiley shares, which have been in a slump, rose about 7 percent in early trading Thursday morning.
Wiley’s remaining trade and professional books are now reported through the “professional development” segment, which had sales of $113 million for the quarter and contribution to profit of $11.8 million. Book sales declined $0.9 million, with print sales down $3.1 million (or 4 percent) as ebook sales rose $2.2 million (or 20 percent). Overall digital book sales for the quarter were $12.9 million. The company said “professional book sales were up modestly and digital content sales, including digital books and WileyPLUS, showed solid growth.”