Welcome to the John Wiley & Sons Quarterly Earnings Call. Before introducing Steve Smith, President and Chief Executive Officer, I would like to remind this call is being recorded and may include forward-looking statements. You should not rely on such statements as actual results may differ materially and are subject to factors that are discussed in detail in the company's 10-K and 10-Q filings with the SEC. The company does not undertake any obligations to update or revise forward-looking statements to reflect subsequent events or circumstances. Mr. Smith, please go ahead.

Good afternoon. Thank you for participating in Wiley's Fiscal Year 2012 Fourth Quarter Investor Conference Call. I'm with Ellis Cousens, Executive Vice President and Chief Financial Operations Officer; and Brian Campbell, Director of Investor Relations. I'll take a few moments to provide an overview of Wiley's performance in the fourth quarter and full fiscal year. We will then respond to your questions and comments. My overview of Wiley's performance will refer to financial variations excluding the effects of foreign exchange, unless otherwise noted. Challenging market conditions persisted in the fourth quarter. Against a sluggish economic backdrop, Wiley achieved revenue growth of 2%, or 3%, excluding the unfavorable effect of foreign exchange All 3 global businesses reported revenue growth in the fourth quarter. Revenue grew by 2% in STMS, 4% for P/T and 2% for Global Education. EPS grew $0.34 to $0.80 in the quarter. Higher revenues, improved margins and a 9% reduction in operating and administrative expenses contributed to the result. Reduction in expenses is mainly due to cost savings initiatives, lower accrued incentive compensation and lower bad debt provisions. For the full year, revenue of $1,783,000,000 was up 1% on a currency-neutral basis but grew 2%, including the positive foreign exchange impacts. Adjusted EPS for the fiscal year, which excludes non-recurring one-off tax benefits from the prior year Borders provision, grew 13% to $3.21, including favorable foreign exchange. Excluding favorable foreign exchange, adjusted EPS grew by 11%. Gross profit margin increased 0.3% for the year to 69.5%, reflecting increased sales of digital products, partially offset by higher composition costs. STMS and P/T reported gross margin improvement, whereas Global Education margins declined as a result of higher composition and royalty costs. Year-to-date, direct operating expenses, excluding the Borders bad debt provision, decreased by 2%. Expense savings were achieved across all…

[Operator Instructions] Our first question is from Daniel Moore with CJS Securities.

First in STMS, the pace of new journal signings slowed a bit in Q4. Anything to read into that? Or is it simply lumpy and a function of timing?

Dan, it's really -- there isn't a distinct seasonality to the period when we signed up those new journals. Though we look at the deal flow throughout the course of the year, it really depends when existing contracts come up for renewal, particularly those who are obviously without the publishers or when societies may take a decision to move to an outsource model rather than self-publishing. So I wouldn't read anything very much into a single quarter. In fact, I think the fourth quarter of last year was similarly one of the lower quarters. We have -- most of these contracts start from January 1, because it's a calendar year subscription, isn't it? So yes, I don't think there's anything to read there in a single quarter.

Very helpful. And maybe shifting over to Professional and Trade. If you adjust out for the Inscape acquisition, revenue in Q4 essentially flat after a pretty sharp decline in Q3. What's driving the change there? Any more detail you might provide us? And what type of organic revenue growth in Professional/Trade should we be thinking about embedded in your fiscal '13 guidance?

So as far as the fourth quarter is concerned, it was a very strong publication quarter for P/T. So we had -- from the very beginning of the year, we had projected that P&T was going to have a stronger back end to it here. That said, we're also seeing some -- continues to see some really nice pickup in E-Book Sales. And so E-Book growth continued to drive growth in the fourth quarter compared with the fourth quarter of the prior year. We -- when we -- looking forward, we've given revenue guidance of mid-single-digit revenue growth across all business. We're not expecting sharp variations amongst the 3 businesses. If you back out Inscape, we will expect P&T probably to be in the mid-single-digit range as well. And based on a number of initiatives that we put in place, investments that we made in previous years where we diversified in that business to serve our professional customers, in particular, or directly.

Okay. I'll speak one more and I'll jump back into queue. In WileyPLUS, obviously, a pretty nice reversal and very positive growth trends in Q4. Maybe any more details as far as what's driving the improvement, what you're seeing in post-secondary there and then I'll jump back in.

So the -- on a full year basis, the decline in WileyPLUS sales is really primarily a result of lower enrollments in for-profit schools. Our reading is that the decline in for-profit enrollments has leveled out in 2012, although we're not expecting that to rebound into rapid growth. Another factor, though, earlier in the year has been that relating to some technology issues we had with some WileyPLUS customers in the fall. We took some customer retention initiatives in order to retain customers, and that involved us giving free access to certain number of customers. That's now washed through the system. So we're seeing it back to more normal conditions again.

[Operator Instructions] We have a question from David Pang with Stephen Nichols (sic) [Stifel, Nicolaus].

Stifel, Nicolaus. Stephen, can you talk about your expectations for WileyPLUS 5.0? Where are we? Do you expect that to be coming in the coming fall?

David, we're still working through that. Right now, we have -- we're in the middle of building courses for the fall. We have most of our WileyPLUS products already ready to go to market. We're not necessarily referring to that as WileyPLUS 5.0. They are -- there's a lot of innovation and new functionality and new features within that. So it's not a major product launch. We have our courses ready to go with WileyPLUS functionality and feel very good about the prospects and the feedback we're getting from the marketplace.

Okay. And if we shift over to P&T, how are you feeling about the front list for this upcoming season and...

For the full year of fiscal '13?

Yes.

As always, we have a very strong front list, particularly in our core categories of business, technology, as well as in accounting and psychology and architecture. It's a strong list of '13. I couldn't give you a sense of the timing of that. Our business, particularly as we emphasized, the consumer categories that have been a strength of P&T in the past, we become less seasonally based. So we're not expecting to be driven by very large holiday season, as we might've been for consumer products. That said, as more and more penetration of eReader devices into the marketplace, that fuels continuing demand for our products. So it's a strong list, and we expect that to play out throughout the course of the year.

Our next question is from Daniel Moore with CJS Securities.

Right back at it. As far as Inscape is concerned, what have you seen so far? Any surprises there? And maybe provide us a little bit more detail on the types of opportunities that acquisition opens up for you.

Sure. We're thrilled with the -- in the first 3 months or so since the acquisition of Inscape. The acquisition, as a whole, is performing at least in line with our acquisition model and actually, I would say, a little better. We have made really good progress in terms of bringing together the leadership team of Inscape with the leadership team of our Professional/Trade business, and particularly the Pfeiffer Training business that's run [ph] out of our San Francisco office where we have a significant number of online and print training products in areas such as leadership and management development. One of the things that attracted to us about Inscape was a very strong distribution network. Globally, they sell in 30 different languages. And around the world, they have a very strong distributor network. We've met with many of those key distributors and are seeing great opportunities to leverage that capability across a broader range of Wiley's content. We're also looking at Inscape's technology platform. They have a very nice proprietary platform that delivers the Inscape DiSC assessments to corporate customers around the world, and we see opportunities to build on that capability as well.

Okay. And one of their -- obviously, you've stepped up share repurchase activity in recent quarters. Can you remind us what's left in the current authorization? And what are your thoughts around a more significant dividend increase or perhaps a special versus continued stepped-up share repurchases?

I'm going to bounce back to Ellis because he's got his finger on that pulse.

So we have something in excess of 1 million shares remaining in the program that currently is in place. In the past, we've gone back to the board and asked for authorization of new programs. We've not had issues with that in the past to the extent that we feel like we might be getting close. Within the quarter, we'll certainly go back to the board and have that discussion. We can't provide any signals at this stage. The board meets -- makes decisions on dividend policy. That will be happening later this week. So you should look forward to some announcement regarding dividend going forward later this week.

We have a question from Michael Corty of Morningstar.

In relation to your guidance for fiscal 2013, I understand that you don't go into each segments. And you've already kind of touched on Professional/Trade a little bit, but I was hoping you could talk generally about how you think of next year and perhaps like a longer-term outlook for STMS and higher Ed just in terms of opportunities for growth and then any potential headwinds, including perhaps the current economic environment in those businesses.

Sure. So Michael, let me start with STMS. So we aren't going into numbers, specifically. Obviously, one of the things that we build on every year is the renewal rate for our subscription journals business -- the license for journals business. That's a pretty strong leading indicator, and I mentioned that we were seeing at the end of April about 3% growth versus prior year in that license business. That covers 2/3 of our fiscal year because that's the fiscal year 2012 renewals. But that's pretty consistent with previous years as well. And then building on to that, we have a number of new initiatives in place but we're also -- we continue to win new society relationships, which adds potential growth. We've made significant investments in areas like online advertising and corporate sales. We're making investments and releasing new initiatives based on enriching our content to make it more valuable to our customers and providing more useful solutions at the point of need for researchers and practicing professionals. So we recognize our STMS business, like all 3 of our businesses, has made a really successful transition with digital business, which has been very good for that business. The next phase of our growth is going to come from our ability to transform those digital products into a content-enabled service kind of environment, where we're able to provide a much deeper relationship with the customers, where we add a lot more value to that content and engage with our customers in a much more in-depth and multi-dimensional way. I would say, before I go into about Global Ed, STMS and all 3 of our businesses will also see accelerated growth continuing to come from emerging markets, so particularly India where we've had a very strong year and we continue to…

Great. And then following up on response to the question, how in terms of profitability, I just had a few questions as well. How -- when you talk about emerging markets growth, how will that impact profitability for the business? And then second hand, maybe Ellis can address this, in terms of -- you've done a great job of growing earnings per share faster than sales. Kind of looking ahead in terms of gross margin line versus like below the gross margin line, how should we think about further opportunities to improve margins?

Let me take the first half of that question, Michael, around how emerging market growth might affect margins. And I'll leave Ellis to pick up the second half of that. It's true that in some emerging markets, we need to price to market, reflecting the lower purchasing power, particularly in education. But where we do that, the thesis is that volume will make up for any unit margin decline. And around, there's no reason to think that growth in emerging markets will have any significant effects on margins overall. Our STMS business sells at a pretty consistent pricing around the world, and we see the opportunities in emerging markets as being really accretive to growth but also accretive to overall gross profit and not having a dramatic effect on percentage margins.

And regarding the cost structure question that you had. So gross margins are being favorably affected by both the transition to and transformation of the business from print to digital. And also, there are some direct expense opportunities as well. We've mentioned some of those in the earnings release, sort of what is manifesting itself in a charge in the first quarter of fiscal '13 but that arising from some of the legacy aspects and activities associated with print business that we need fewer of those kinds of resources and can leverage those investments, some of those investments better against some of our digital initiatives and also, at the same time, mentioned that we're looking at and have looked at the structure of where we do, in fact, carry certain activities and look to opportunities to move those to lower-cost locations, both in stores. Wiley is a global company. We have a significant presence in parts of Asia, particularly in Singapore and have operations in India. So this is not in all cases outsourcing. This is moving to Wiley locations that are not based in higher cost areas like the United States and Western Europe but in some cases as well, sort of outsourcing. So we're taking a, and have taken a pretty good look at what we are doing, how we're doing what we're doing, where we need resources -- greater resources, trying to fund some of the technology investment that we know has been made and is to come and find some of those investments coming out of existing costs, so that we can restructure some of the costs to improve margins. I know we've talked about this over the last several quarters about when we would begin to see some of the margin improvement coming from the…

At this time, we do not have any further questions.

In that case, I'd like to thank you for joining our fourth quarter and fiscal 2012 investor conference call. And we look forward to talking to you at the end of our first quarter in September. Thank you.

Thank you for joining today's conference call. This conference call has now been concluded.