Good morning, and welcome to Wiley's Fiscal Year 2014 First Quarter Earnings Conference Call. As a reminder, this conference is being recorded. At this time, I would like to introduce Wiley's Director of Investor Relations, Brian Campbell. Please go ahead, sir.

Thank you. Hello, everyone, and thank you for participating on our call today. Before introducing Steve Smith, President and Chief Executive Officer, I would like to remind you that 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. For those who prefer to listen to the call over the phone but would still like to view the slides, we recommend clicking on the gears icon located on the lower portion of the left-hand side window and selecting Live Phone. This will eliminate any delays you may experience in viewing the slide transitions, as well as remove any potential background noise should you ask a question on the call. A copy of this presentation will be available on our Investor Relations page at the conclusion of this call. Thank you. I now like to turn the call over to Steve.

Good morning. Before we discuss results, I'd like introduce John Kritzmacher, Wiley's new Chief Financial Officer. John was appointed as CFO on July 1, so this is his first Wiley earnings call. John brings a wealth of experience and accomplishment to Wiley from his previous roles at AT&T, Lucent, later Alcatel-Lucent, Global Crossing and WebMD. Wiley will benefit greatly from his experience leading strategy and operations at global companies that have delivered technology-enabled growth. I'd like to, once again, thank Ellis Cousens for his extraordinary leadership in guiding Wiley to become the global knowledge company it is today. Wiley will -- Ellis will continue to serve Wiley in his role as Chief of Operations and will lead our restructuring program until his retirement in June 2014. We are quite pleased with the results this quarter, which reflects the significant progress we've made in transitioning to a digital knowledge and services company. Today, I'm proud to report that more than 50% of Wiley revenue comes from digital content or services, up from 45% last year at this time. Disposal of consumer publishing assets, the acquisitions of Deltak and ELS and the continued growth in journal licenses, digital books and WileyPLUS all contributed to this achievement. We expect this transformation to accelerate over the next 2 to 3 years. Adjusted revenue growth for the quarter was solid, driven by journal subscriptions and contributions from Deltak and ELS. Adjusted EPS was up slightly, excluding the impact of foreign exchange with revenue performance, higher gross margin rates in all 3 businesses, lower distribution costs and share repurchases offsetting an increase in technology expense related to our transformation initiatives. Adjusted operating income was down 1%, excluding the impact of foreign exchange. Our restructuring program is well on track. As of July 31, we'd initiated actions…

[Operator Instructions] And we will take our first question from Daniel Moore with CJS Securities.

First question, is there any benefit from the restructuring in your fiscal Q1 results?

Dan, this is John Kritzmacher. In the first quarter as you know, we were just beginning the implementation of our restructuring program. So there's not any material savings reflected in the first quarter results. We'll begin to see savings associated with restructuring appear in the second quarter and they'll ramp as we make our way through the third and the fourth.

Very good, and a follow-up on that, Steve, in his prepared remarks, mentioned 60 million kind of run rate benefit going into fiscal '15. Is that still consistent with the total $80 million benefit that you expected to receive over time?

Yes, Dan, the $60 million, that's our progress to date reflecting the impact of the charges that we've already announced, so the $32 million in total. As we complete our plans, we would expect to go, obviously, beyond the $60 million. So we feel that we're very well placed to achieve our target of $80 million as a run-rate basis for the end of the fiscal year.

Very good, and the charges that will be incurred, are those still in the same ballpark as you had, had expected at the time of the announcement?

Yes, that's correct. So we're anticipating an additional charge in the second fiscal quarter. It will be approximately $8 million, and then likely some smaller charges over the balance of the year but generally on the order of what we have previously projected in terms of the total restructuring charges.

Very good, I'll ask one more and then jump back in queue. Given the solid performance in Q1, some of the upfront investment spending that Deltak requires and the fact that most of the benefit of the restructuring will come later in the year or start to come later in the year, I realize it's early, but just maybe characterize Q1 relative to your expectations, and whether you might see some upside to the guidance range given the performance you've seen so far.

Sure, Dan, so it's John again. So if we go back to the underlying trends in the guidance that we provided for the year, there are a couple of key elements to it. First, we said that we expected that the incremental savings over the course of the year from restructuring would be roughly offset by incremental accruals for incentive compensation, as in fiscal '13, we accrued well below the targeted incentive rate. And so we'd be restoring that in fiscal '14. And then beyond that, the underlying trends were that we would see the improvements in margin coming from revenue growth around the core of the business being largely offset by incremental investments in the business, principally in technology spending. And so what we're seeing are those trends beginning to unfold exactly as we described them in the first quarter; principally in the first quarter, incremental revenue growth being significantly offset by incremental spending on technology. And then the trend that remains in front of us for the balance of the year is incremental savings, as I said, beginning to ramp on restructuring. And those will be largely offset by incremental accruals for incentive compensation as compared to the year-ago period, and that will pick up a bit in the second quarter, and then again into the third quarter. So the guidance that we provided is very much consistent with the results that we have delivered for the first quarter, and we expect that the trends I just described will continue to prevail in line with what we just guided -- described as guidance for the year.

And next, we go to Drew Crum with Stifel. Andrew E. Crum - Stifel, Nicolaus & Co., Inc., Research Division: Steve, I know it's probably a little early to start talking about calendar '14 journal renewals, but could you offer any commentary in terms of what you're seeing with funding for journals by geography? And just a point of clarification on the EMBO deal, is that a new business or new society journal for the company or is that a renewal? And if it is a renewal, what is the $7 million comparison to?

Yes, I'll take the second piece first, Drew, because it is quick answer. EMBO's new business for us. We won it away from another publisher. We had a couple of titles with EMBO but this is all new business, so this is an incremental $7 million for calendar year 2014. As I say, it's a win from another publisher, and it's a very prestigious relationship, so we're very happy about that. In terms of 2014, you're right, it is early. So we don't really begin the renewals process for 2014 for another couple of months. Looking ahead at -- first of all, let me say we're quite encouraged by the resilience of our journal subscription business for calendar year 2013. Some of that growth, of course, reflects net society gains in the calendar year, but also reflects the fact that subscriptions are holding up well around the world, particularly in the U.S. and Asia. There's some softness in some parts of Europe. Looking into 2014, without a crystal ball, we would expect that subscription rates should -- they should hold up again, and will, again, have an increase in the size of our portfolio from new society business won, so that will benefit us in 2014. There are some projections that library spending on content is anticipated to continue to grow at a pretty modest low-single-digit rate, 1% to 2%, out over the next 3 years. If that turns out to be true, that will be encouraging for us. So we'll, obviously, we'll know much more as we get to end of this calendar year as we begin to see renewals coming for '14. But right now, we don't see any reason to suspect that '14 will be dramatically different from the kind of performance we've seen in '13. Andrew E. Crum - Stifel, Nicolaus & Co., Inc., Research Division: Okay, very helpful. And then, Steve, on the college textbook publishing business, I think going into the fall semester, there were some cautious optimism that there might be replenishment on the part of the physical renters. Any additional update there? Any other further read you have on the performance or the behavior on the part of the renters?

Yes, rental business continues to hold up well, and we see rental -- our estimate is that it continues to represent something like 10% to 15% growth over the next 2 to 3 years. And it has an impact, of course, on our print business. It's been the primary driver of the decline in print, and we believe that this year, print books will continue to decline. But we're very encouraged by what we see as the increasing resilience of digital sales with ebooks, just e versions of textbooks, flat eTextbooks continuing to grow, as well as the growth of WileyPLUS and the growth in custom. That, we believe in this fiscal year, will get close to offsetting the decline in print. Whether or not we see major replenishment orders for rental print, we've not anticipated that in our forecast in any significant scale. But what we're definitely seeing is a movement in terms of seasonality of this business. We've been observing it now for the last few years. The July-August cutoff has always been a particularly difficult period for us. Reporting on first quarter has always required some pretty intensive analysis to try and understand whether there are changes in the overall flow of the business or whether there are timely changes across our critical July-August month cutoff. It's pretty clear to us that the bricks-and-mortar bookstores are holding back a little bit on the traditional print orders, because they're finding it difficult to predict student behavior between buying rental, buying new, buying used books and buying digital and custom versions. We're also seeing that digital revenues come later in the season because we -- either if it's WileyPLUS, we defer that revenue if it's an ebook sale. Those tend to be made on the day that the students actually start the course, and so they fall back into August and September. So there was definitely, we believe, some movement of revenue from first to second quarter from the point of Wiley's fiscal year. Andrew E. Crum - Stifel, Nicolaus & Co., Inc., Research Division: Okay, one last question from me, guys. Just any comments on the pipeline of new universities you see for Deltak, so separate from the 101 revenue generating programs you currently have with the business.

So we have 101 revenue generating, and I said 48 that are pre-revenue. The pipeline, the potential pipeline is very significant. More and more universities are looking at the relationships of this kind with online program management vendors, seeing them as a great opportunity to expand their reach and to launch new programs. So we have more potential business, frankly, than we have the bandwidth or capacity to transact with. And our focus is still on quality, so looking for the right kind of relationships that can build lasting, sustainable value for us and for our partners and that really lead to improved educational outcomes, employability and job prospects for our students. So we expect to continue to expand both the number of partners, as well as the number of universities. We have ramped up an investment program to take more market share in that space, but we will do it very selectively based on a full return on investment-based model to make sure that we're launching programs that have legs and sustainability. So I think you can expect to see us continue to launch new programs and that, of course, has somewhat of a dilutive effect on earnings in the short-term but, we believe, has the potential to really add value for Wiley in the medium- and longer-term.

And next, we go to Michael Corty with Morningstar.

I had a few questions. First, the print books and the Professional Development business, are there any special headwinds or things that have -- kind of we should know about as a kind of a onetime thing? Or is that an issue that you're working on? And then secondarily, following up on that Deltak question, in terms of -- should we expect when you add new programs to universities, is that to be lumpy? Like what kind of lead time do you have in the scene? How these courses and universities are going to come online on a quarterly basis? Could we see more in some quarters and less in other? What's -- kind of maybe walk through what the lead time is from when you first to engage to try to get one of those programs, to getting that signed up.

So, Michael, your first question on print books and Professional, there are a couple of things that we've been faced with in the first quarter. There are still some significant movement. Actually, well let me first say that, although it's in our Professional Development segment, there are still large numbers of print products produced by our Professional Development segment that are actually used as textbooks. So exactly the same factors that I just mentioned that have caused shifts of ordering patents from first to second quarter, also have some impact on Professional Development business. So we've seen some major vendors who place large orders in the first quarter of fiscal '13 and those orders, we expect now, will come into the second quarter of '14. One specific category-based factor that I mentioned earlier, our technology business had a really strong start to fiscal '13 because of the release of Windows 8, major software release that opened up a lot of opportunity for technology publishing. There haven't been in fiscal '14 a similar-scale, new product releases, but we do expect those businesses -- that business to come back closer to its '13 performance over the rest of the year. And financial accounting being the other major category, we've got some very strong front list publishing coming up in the pipeline later in the year. So we don't expect the trend in the first quarter to be -- to necessarily posses into the rest of the year for Professional Development print books. On your question about Deltak, there's no real seasonality to the rate at which new partners are launched. Most of the courses that we've launched with our partners are graduate courses, and they run multiple -- in multiple instances throughout the course of the calendar year. So no -- there's no particular time for that. The negotiations with new partners can last anything from 6 months to a year, and then take further time to build those courses before they're actually launched and become revenue producing, probably averaging out something like 18 months from the first point of contact to the launch of the new course. So we do have some foresight into what the impact of that will be on a quarterly basis. It's really a question of how much opportunity we see there and how much we want to invest to continue to move that forward. And of course, we have some control over that. So we'll be careful to balance long-term growth with short-term earning projection -- protection, rather, as we go forward.

[Operator Instructions] And next, we go to Daniel Moore with CJS Securities.

Sorry to beat a dead horse on Deltak, but any color you might give us with regards to the earnings contribution that's embedded in your fiscal '14 guidance? And given some of the upfront investment spend and lead times that were just talked about, what that might look like in '15?

Yes, sure, I'll cover '14 for you. With regard to our expectations for the year, we've said that given the pace at which we're investing in Deltak in order to expand our footprint, as the market here is emerging, we're anticipating that Deltak will be about $0.10 dilutive to earnings for the year. And it's relatively evenly spread over the course of the year. '15 is yet a plan ahead of us, but we'll come back to you when we have more information.

And one other quick follow-up. Looking at the Professional Development business, given all the changes that have taken place, post-restructuring, some sense of what operating margins on a fully loaded basis you might expect or might look like in that segment?

I think we -- our expectation is that we will improve the operating margins as we make our way into '15. We saw a good bit of work to do there, as you know, in terms of stabilizing the base, which we expect to do through a combination of expanding our digital business -- our digital print business, as well as expanding into complementary services around assessment training and so forth. At this point in time, I would not be specific about operating margins for the segment, but we'll continue to provide you with additional color on the evolution of profitability there, as we make our way through the year.

And lastly, just any update or comments on open access in general as a, both an opportunity, obviously, you're coming off a low base, but how you see that opportunity growing, as well as any update in terms of risk around open access as well.

Sure, so there has been -- we saw a lot of movement over the course of the year on the open-access policy front. The White House Office of Science and Technology Policy issued a memorandum requiring all federal funding agencies with a research spending budget of over $100 million to announce and implement an open-access policy within the next -- well, actually to provide their plans back to the OSTP by August, that's now. That deadline has now passed, and so those agencies have submitted their plans. We have, in collaboration with other industry partners, launched some initiatives to help facilitate open access to so many journal publishers after an embargo period that satisfies the requirements of publishers and helps sustain existing subscription business. We are encouraged by research that indicates that the subscription model is expected to continue to hold up. We are encouraged by the maturity of the debate around open access that recognizes that whatever happens, peer review is vitally important, that it needs to be paid for, there needed to be sustainable business model that supports peer review. We expect for the coming 3 to 5 years that we will live in a mixed economy, a mixed economy between green open-access mandates with satisfactory embargo periods, allowing us to continue to grow subscription revenue, combined within Europe, more of an appetite for so-called gold-road open access. That's where a fee is paid for publication in advance. We have launched a number of gold-road, open-access journals that allow us to derive incremental revenues. And I mentioned the $3 million in the first quarter that we have earned from gold-road, open-access article contributions. We can see out for a period of time that would indicate to us that there is no immediate downturn -- downsize threat from open access. And we continue to work with all members of the scientific community to make sure that we help widen public access, but on a basis of a business model that is sustainable, and it doesn't break a system of peer review and scholarly communication that has served so well for many hundreds of years.

And it appears there are no further questions in queue. At this time, I would like to turn the conference back to Mr. Smith for any closing or additional remarks.

Well, we thank you for your attendance at our conference today. We thank you for your comments and questions. We look forward to meeting many of you, hopefully, at our forthcoming Investor Meeting in September and, of course, to addressing you again at the end of our second quarter in December. Thank you.

And that does conclude today's conference. We do thank you for your participation. You may now disconnect.