Wiley Reports First Quarter

Wiley reported first quarter revenue of $389 million an increase of 48% from $263 million in the previous year. The revenue growth included $116 million from Blackwell Publishing Ltd. (Blackwell), which Wiley acquired on February 2, 2007. Revenue excluding Blackwell increased 3% over last year's strong first quarter to $273 million, or 2% excluding favorable foreign exchange. Earnings per diluted share for the first quarter was $0.68 compared to $0.38 in the same period of fiscal year 2007. Earnings per diluted share excluding Blackwell and the aforementioned tax benefit was $0.37, flat with last year's strong first quarter, after adjusting for unfavorable foreign exchange

"The Blackwell acquisition exceeded our expectations in the first quarter. The integration process is proceeding smoothly and the business is performing well. Our global Professional /Trade business reported solid results. Revenue for global Scientific, Technical and Medical, excluding Blackwell, was up 4% from the prior year, including the favorable effect of foreign exchange. After a strong performance in fiscal year 2007, Higher Education reported soft sales in the first quarter, partially due to some conservative fall semester ordering by college bookstores," said William J. Pesce, Wiley's President and Chief Executive Officer. "Based on first quarter results and market conditions, we continue to anticipate revenue growth in the mid-to-high single digits and EPS growth in the low-double digits, excluding the Blackwell acquisition and the aforementioned tax benefit."

Other highlights:

• Professional/Trade (P/T): U.S. revenue advanced 7% to $90 million. First quarter performance led by sales in technology, finance and architecture. Globally, P/T revenue increased 6%
• Scientific, Technical, and Medical (STM): STM revenue of $56 million was flat versus last year due to the timing of journal, book and backfile releases
• U.S. Higher Education revenue of $44 million declined $4 million from last year’s strong first quarter. The negative comparison was also compounded by conservative college bookstores sales for the fall semester
• Wiley Europe’s revenue of $76 million was up 5% for first quarter all but 1% due to favorable foreign exchange
• Blackwell revenue and operating income for the first quarter fiscal year 2008 were $116 million and $15 million, respectively. Included in these results is $6 million of amortization charges for intangible assets related to the acquisition
• Wiley’s revenue in Asia, Australia, and Canada advanced 14% to $32 million, or 9% excluding favorable foreign currency. Strong sales across all businesses in Asia, Higher Education sales in Australia, and P/T results in Canada contributed to the first quarter growth. Direct contribution to profit as a percent of revenue increased slightly.
• India was a significant contributor to first quarter results in Asia. Through the acquisition of Wiley Dreamtech (India) Private Ltd. in fiscal year 2006, the Company established direct access to the retail higher education market in India

Status of the Blackwell Acquisition:

• During the quarter, the merger of Wiley’s STM business and Blackwell continued with particular emphasis on the integration of systems, processes, policies and procedures
• Since July 1st, all Blackwell books and reference works are being sold and promoted by Wiley’s sales forces throughout the Asia/Pacific and Europe, Middle East and Africa regions. We have also consolidated the institutional and corporate sales forces
• Critical decisions concerning publishing technology systems have been made and we are in the process of harmonizing financial management systems and reporting, content management, customer service and fulfillment and customer databases
• The company will shortly announce a plan and timeline for the integration of the Wiley and Blackwell online journals platforms