* Revenue categories other than print newspaper advertising grew to 68.9% of Q3 2015 total revenues * Free cash flow of $68.8 million over 12-month period ended Q3 2015 vs $53.7 million in fiscal 2014 * Reduced debt by $25.0 million in Q3 2015 * Repurchased 1.35 million shares of Class A Common stock in Q3 2015 * Received dividend distribution of $7.5 million from CareerBuilder in Q3 2015 * Received distribution of $23.3 million from CV sale proceeds in October 2015
Second Quarter and First Half Summary
Second quarter revenue declined 5% on a constant currency basisto $433.4 million due to a $10 million journal backfile sale in the prior year period and declines in book revenue across the three segments. Together, Journal Subscriptions and Author-Funded Access were flat compared to prior year, including the trailing effects of the Swets bankruptcy. Online Program Management and Online Test Preparation grew 18% and 13%, respectively. Second quarter revenue on a US GAAP basis declined 9% primarily due to an adverse currency impact of $19 million. First half revenue declined 2% on a constant currency basis to $856.3 million, or 6% on a US GAAP basis.
Second quarter adjusted earnings per share (EPS) declined 10% on a constant currency basis to $0.78 due to the high-margin journal backfile sale in the prior year period, higher technology expense related to ERP planning and deployment, and investment in online program management, partially offset by incremental cost savings from restructuring programs. Adjusted EPS excludes restructuring charges and credits, as further described in the attached reconciliation of US GAAP to Adjusted EPS. Second quarter EPS on a US GAAP basis declined 18% to $0.74. US GAAP EPS includes a $0.03 adverse impact from foreign exchange and a $0.04 per share restructuring charge in the quarter. First half adjusted EPS declined 1% on a constant currency basis to $1.36, or 12% on a US GAAP basis.
Free Cash Flow was a use of $192.7 million for the first half of the year as compared to a use of $140.7 million in the prior year period due to lower net income, working capital timing, and higher capital spending related to the ERP and related systems deployment. Note that free cash flow is seasonally negative in the first half of Wiley’s fiscal year principally due to the timing of annual journal subscription cash collections.
Restructuring Charge: Wiley recorded a $3.7 million pre-tax restructuring charge in the quarter ($0.04 per share) principally related to process re-engineering consulting costs. After the quarter closed, Wiley completed an agreement to move its US-based print textbook fulfilment operations to Cengage Learning, with the aim of closing its New Jersey distribution facility by April 2016. The exit from the facility will result in near-term restructuring charges as activities progress.
Share Repurchases: Wiley repurchased 637,717 shares this quarter at a cost of $32.0 million, an average of $50.15 per share. Approximately 1.3 million shares remain in the current authorization program.
Revenue of $433 million, down 5% over prior year on a constant currency basis, including the impact of a $10 million journal backfile sale in the prior year period
Journal subscription revenue of $163 million, down 1% on a constant currency basis, including the trailing effects of the Swets subscription agency bankruptcy
Adjusted EPS of $0.78, down 10% on a constant currency basis, including the $0.10 impact of the large journal backfile sale in the prior year period
First half revenue and adjusted EPS down 2% and 1%, respectively, on a constant currency basis