Please standby, we are about to begin. Good morning. And welcome to Wiley's First Quarter Earnings Call. As a reminder, this conference is being recorded. At this time, I’d like to introduce Wiley’s Vice President of Investor Relations, Brian Campbell. Please go ahead.

Thank you, Noah. Good morning, everyone. And welcome to the first quarter fiscal 2016 earnings call. Before I kick -- pass the call over Mark Allin, Wiley's President and CEO, I’d like to remind you that this has been recorded and may include some 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. Company does not undertake any obligations to update or revise forward-looking statements to reflect subsequent events or circumstances. Those who prefer to listen to the call over the phone, would like to still view the slides, we recommend clicking on the Gears icon located on the lower portion on 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 the presentation and the playback of the webcast will be available on our Investor Relations page. Thank you. Now I’d like to turn the call over to Mark.

Thank you, Brian. Good morning, everyone. I will begin the call by discussing business performance, John Kritzmacher will follow with an update on operations, finance and our cost reduction initiatives, and I will finish the summary before taking your questions. Unless otherwise noted, I will be excluding the impact of foreign exchange when commenting on all variances to give a consistent measure of operational performance. Before I do, however, note that, foreign exchange was a substantial headwind for us this quarter as expected, with about half of our revenue generated outside the United States, our results are adversely impacted by a stronger U.S. dollar, particularly with respect to the euro and the British pound. In the quarter, the unfavorable impact to revenue and EPS was approximately $22 million and $0.04, respectively, as compared to the year ago period. First quarter revenue rose 2%, driven by strong organic growth in our solutions businesses and stable journal performance, although, first quarter, journal revenue was muted by the trailing effects of the Swets bankruptcy. As a reminder, Swets Information Services, a Journal Subscription agent, declared bankruptcy in September 2015, negatively impacting calendar year 2015 Journal Subscription revenue by about $5 million. Also contributing to overall results was inorganic growth from the CrossKnowledge Corporate Learning business, which reporting one-month of revenue in the prior year. Operationally, CrossKnowledge continues to perform well. Adjusted earnings per share grew 11% on a combination of revenue growth, cost reductions and lower tax expense. Partially offsetting the strong earnings growth, was continued investment in the online program management opportunity and investment in our ERP program. Our Online Program Management and Online Test Preparation businesses performed well this quarter, with organic revenue up 26% and 40%, respectively. Finally, calendar year 2015 Journal Subscription billings are up modestly, with 98% targeted…

Thank you, Mark. Moving on adjusted shared services costs were 2% higher than prior year primarily due to the including of two additional months of CrossKnowledge expenses as compared to prior year as well as increased investment in our ERP implementation. Continued efficiency gains from outsourcing led to a 9% decline in distribution and operation services costs and an 18% decline in content management costs. Technology costs increased 7% for the quarter, reflecting the two additional months of CrossKnowledge expense and higher ERP investment. Finally, an increase in other administration expenses was mainly due to one-time employment related costs. Our balance sheet continues to provide us with the ability to pursue strategic acquisitions and return cash to shareholders in the form of dividends and share repurchases. Net debt to EBITDA on a trailing 12-month basis was 1.1 at the end of July compared to 1.3 in the year ago period and 0.7 at our April fiscal year-end. The short-term debt on our balance sheet represents $250 million revolving credit agreements implemented in fiscal 2015 to lower our overall interest expense. On August 6, 2015, the company amended one of these two agreements to increase the facility to $100 million, raising our total short-term debt capacity to $150 million. Turning to our cash flow performance, free cash flow was the use of $155 million in the quarter as compared to use of $123 million in the year ago period, with capital investment increasing by $8 million. The decline in cash from operations as compared to the first quarter of fiscal year 2015 was primarily due to timing differences in working capital, including receivables and payables, partially offset by lower annual incentive compensation payments which are issued each year in July. As a reminder, free cash flow is seasonally negative in the…

Thank you, John. In summary then, we are pleased with our first quarter performance of 2% revenue growth and 11% adjusted EPS growth. Journal revenue was stable, excluding the trailing effects of the Swets bankruptcy. Our strategic growth areas performed well, including Online Program Management and Online Test Preparations. We continued to deliver on our core mission to enable the skills and knowledge that researchers, professionals and students worldwide need in order to be successful. We are embarking on a program to achieve competitive cost benchmarks in shared services and to align our expenses with our revolving revenue profile, all enabled by a multi-year ERP investment. We anticipate run rate savings to approximately $25 million by fiscal 2018, with some benefit realized in fiscal 2017. We will continue to evaluate additional savings opportunities as we advanced our efficiency initiatives. Finally then, we reaffirm our fiscal 2016 guidance of low single-digit revenue growth and flat EPS, excluding the impact of foreign exchange and the journal revenue shift. With that as background, we welcome your comments and questions.

[Operator Instructions] And we will take our first question from Drew Crum with Stifel.

Okay. Thanks. Good morning, everyone. Guys, I wonder if you could comment on any impact you experienced in China, or anything you’re anticipating? Believe you have a fairly substantial research business in that market. And amid all the market turmoil, just curious as to what you’re seeing or what you’re anticipating? Thanks.

Hi, Drew. It’s Mark. We have a fairly substantial journal business in China. We’re currently not experiencing any disruption to that. It’s a business that we transact in dollars through government agencies. It’s solid, and we have good visibility into that going forward. We have a strong team on the ground. We have very close relationships with universities. And the funding for scientific research for education institutions in China shows no real -- have had no real impact from the turmoil in financial markets. It continues to be a government commitment. So right now, we don’t see any significant adverse impact.

And I would add is the government there tries to stimulate activity a bit and actually works to our advantage to support a bit of the economic activity that they would like to stimulate as it relates to research and growth in technology. So generally speaking, the environment is stable to positive I would say for our business.

Okay. Good. And then just sticking with the research business, you guys had a very strong quarter with society wins and one of the better quarters you guys have had in recent memory. Noting that the net impact for the year in terms of wins versus losses will kind of be neutral. But were you guys more aggressive during the quarter in terms of getting for these new societies? And if so, what are the implications for royalty expenses for that segment?

Hi, Drew. It’s Mark again. The one -- it’s hard to form an opinion from one quarter. We’ve been consistent in the way that we approach society business. We are the largest society publisher. So we have a lot of fitness out there for us to both retain and to win. But we have been consistent in our financial offers over time. It is very competitive and critical society relationships we evaluate very carefully in terms of their long-term financial performance. But we didn’t change our behavior in the quarter. It’s simply due to the timing of when those particular agreements will reach.

Okay. And then just one last question. On education, very strong growth for Deltak, could you provide an update in terms of the progress or ramp to profitability for that business?

So I will comment a little bit on business development. John may want to add a comment on profitability as well, Drew. So I think we mentioned over a couple of calls, our focus in the Online Program Management business is now firmly on adding the right number and the right kind of programs in order to drive high student -- highest student enrollments. That’s what will drive long-term growth in the business. As we do that, then we start to work towards a mix of programs and partners, which begins to migrate that business towards profitability and we do expect it to be EBITDA positive within this fiscal year.

And Drew just to add bit more to that fact, your note before our call this morning commented it appeared that Deltak was more dilutive in this quarter. In fact, our expectation for the year is that we are investing substantially early in the year and they were more dilutive than a typical quarter to our results in this quarter. And then we will earn our way back over the course of the year all part of our growth plan for the year. We do still expect that on an EPS basis that will be dilutive for the year, but they are moving squarely in the direction of improving profitability and we expect them to be, as Mark said, EBITDA positive for the year.

That’s great. Thanks, guys.

Thank you.

[Operator Instructions] We will take our next question from Daniel Moore with CJS Securities.

Good morning. Thank you. Could you provide a little bit more detail around the $25 million projected cost savings in fiscal '18? How much of that might flow into '17? And then in the past, when you had these types of restructurings, you’ve taken a significant portion and reinvested it, how much of those cost savings might actually drop to the bottomline in '18 and beyond?

Okay. So good morning, Dan. In terms of our current expectations, as you noted overall, we’re expecting to achieve run rate savings of $25 million in fiscal '18. We’re anticipating that about half of that will actually flow through results in '17, as we build over time the efficiency gains that we plan to implement. In terms of flow through to savings, these are savings that we anticipate driving out of our shared service functions, some of which including finance are you can think of it’s being relatively fixed in their nature at least in the short term. And as we take down the cost in these functions and realized savings, we’re expecting those to flow through to the bottomline. So, most of the $25 million that we’re anticipating in run rate savings in '18 will flow through to the bottomline.

Okay. Very helpful. And then obviously continue to invest heavily, both in online education capabilities as well as general technology of ERP implementation. Do you have line of sight to potential inflection point when revenue growth might start to begin to outpace investment growth in these areas and start to show more meaningful margin improvement?

I think if you look across the different parts of the business, we think that each has slightly different characteristics. In fact, we talked a bit about the profile business that we acquired a little over a year ago actually managing some decline in revenue in that business in order to manage for long-term profitability, so that one is actually -- while revenue as we go through the transition has been declined somewhat, we’re actually increasing earnings in that acquisition straight along the way. So that one is on the move. And as we now -- the basin and begin to build that business again, our profitability there will continue to grow. CrossKnowledge is while dilutive as we noted last year, its profitability will improve substantially this year and it’s on a substantial march for very strong double-digit growth. So that one is on the move. I wouldn’t say perhaps that there really no inflection point, it’s just a matter of that business continuing to grow to scale. And then finally where the real where you may think of there being an inflection point, the real period for change eventually comes with the Deltak business, which has required, as our competitors have required, substantial investment in order to build position in that business. We're still in an investment mode. But as I commented earlier, we also expect that we’re now going to start to accelerate the improvement in profitability of that business. We’ll be in EBITDA positive territory this year. And then, as we make our way along, I think we’ll be able to talk more about when we’re accretive to earnings, but we’re not quite prepared to discuss that yet. We’re still investing for growth.

Just remind me, how much -- what is the projected -- EPS impact to earnings this year of Deltak?

I have to go back, frankly, and look, I can’t quite recall exactly what we said on the fourth quarter call, but it will be somewhere in -- give or take it will be somewhere in the zone of 10% dilutive.

Got it. Okay. And the Swets, how much of that -- what was the impact on revenues this quarter roughly?

Roughly…

I know its estimation roughly I know…

Roughly a million and overall on our calendar year basis, it’s a loss of about $5 million from that bankruptcy.

Got it.

Over the calendar year.

Okay. Then lastly just remind me, how much you have on the current repurchase authorization remaining and maybe just any updated thoughts on the M&A pipeline in general?

Mark, maybe you comment first on the M&A pipeline and then I can comment on the repurchase.

Sure. Sure. Yeah. Hi, Dan. Yeah. We continue to be very focused and disciplined around our acquisition strategy. We are focusing two areas. We, one is, education to employment marketplace both, potentially adding scales to our Online Program Management and Education Services business, but also adding to our Corporate Learning business and continue to invest across that whole continuum from the university to the workplace. And the other is we remain interested in the right opportunities to add both content, scale and potentially publishing technologies to our research business. So we continue -- we feel focused on those two areas with nothing immediate.

And Dan on your question with respect to the repurchase authorization, we still have available just under 2 million shares to repurchased under the existing authorization.

Okay. I’ll sneak one more and get out of the way. But just in terms of the Deltak business, it grew 10 new program wins. Maybe just give a little bit more tenor around the -- how much of the -- how many of the programs are currently profitable and what your expectations for that number might look like 12 months out? Just trying to get a sense of the programs that are, that have been ramping, how those are progressing?

So, Dan, when you dig deeper into the profile of this business, the age of the programs has a substantial impact on where they are in terms of their profitability cycle. So, what matters most in terms of where our programs on the path to profitability is not per se, do we have a successful program or not but really where is in the maturity cycle. And typically, the programs don’t reach a point of being profitable until they are somewhere around in their third-year. They typically are -- our relationship is typically or partnership I should say is typically a payback period from the initiation of partnership to the launch of this program and on through about four years to breakeven or almost in four years to breakeven. So, it’s really around that cycle and the pace at which we are growing and in the 210 program base that we have today frankly, we still have a large number of programs that are very early in their maturity cycle as we add new programs and we will continue to add new programs this year. So it’s a mix. Those that are more mature, those especially that are out beyond the third and fourth years to start, generally speaking at substantial margins. Frankly, programs that once they get out to that level of maturity, if they are not demonstrating that they’ve got market receptivity, we wind them down or we adjust them, or combined with other programs that will provide for better results for our partner institution. Does that help?

Yeah, it does.

All right.

Appreciate the color.

All right, Dan. Thank you.

[Operator Instructions] We will take our next question from John Helmer with Caldwell Securities, Incorporated.

Hi. Good morning. The WileyPLUS numbers look really small to me and they are declining. Can you comment on WileyPLUS?

Sure, John I will and then Mark can add comments if you like. This first quarter for us is probably I would call it actually in terms of results not a meaningful period when looking at WileyPLUS. The WileyPLUS digital platform is course delivery, course management platform. And the revenue that we earn from that platform gets recognized ratably over the school period. Summertime being a very, very light period here in the U.S. principally where the product is sold. It just does not generate a meaningful amount of revenue. So I wouldn't read much of anything at all into the first quarter results. It is truly not a meaningful period in terms of revenue recognition on that platform. I mean that said we do continue to believe that that product will grow -- that product line will deliver strong double-digit growth for the business and we’re still looking into that for the coming year.

Okay. Thank you.

[Operator Instructions] And with no further questions. I'd like to turn the call back over to Mark Allin for any additional or closing remarks.

Thank you. So, thank you everyone for joining us on the call today. We look forward to speaking with you again at our Investor Day in late September and then in December for second quarter earnings.

And that does conclude today's conference. Thank you for your participation.