John Wiley and Sons FY 4Q13 Earnings Call Notes

posted in: Notes | 0

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“Wiley’s core business has faced strong headwind throughout fiscal year ’13. Print book revenues continue to be under pressure across all 3 segments as a result of tight library budgets, changes in student purchasing behavior, shrinking sales in brick-and-mortar sales channels and the continuing migration to digital.”

“Digital books continued to grow, but the dollar growth is not yet offsetting the pace of decline of print books. Digital book revenues are growing very rapidly in Asia and Europe, although growth rates have moderated a little in the U.S.”

“Print book declines in the year were also affected by destocking in the distribution channel, with major intermediaries moving to lower inventory and just-in-time ordering practices”

“The percentage of education revenue coming from traditional print textbooks is down to a little over 50%, while digital revenue now makes up almost 1/3 of overall revenues. The U.S. market continues to contract due to declining enrollments, especially in the for-profit sector, increased demand for print texts and lower inventory held by bookstores due to uncertainty of demand. The decline in demand for traditional printed textbooks has accelerated, reaching 15% in the current fiscal year compared to a slight increase in fiscal ’12”

“you asked specifically about the education segment, really, what we’re seeing there is continued student reluctance to pay the full price of a traditional textbook”

“library budgets remain under pressure. And faced with difficult choices, librarians are choosing to retain their journal collections and often at the expense of buying books and more in buying digital books as well.”

“we work closely with for-profit schools as our customers have frequent dialogue with them. The issue really around enrollment at this point for the for-profit schools seems to be one of student value and return on investment. So as I mentioned in my remarks, students are an increasingly savvy customer. They are looking at the cost of education and comparing that to the value of their education in terms of return on investment, and related to future employment needs. I think that the more forward-looking for-profit schools have already begun to make significant changes to their operations to offer more flexibility, to offer lower-priced qualifications that better meet the needs of employers.”

“the for-profit sector has probably predicted a bottoming for about 2, 3 years now and that continue to decline, albeit somewhat more modestly. So take that with that.”