Good morning, and welcome to Wiley’s Fourth Quarter and Fiscal Year 2017 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.

Good morning, everyone, and welcome to our fourth quarter fiscal 2017 earnings call. First some housekeeping items to be consider. The call is being recorded and may include forward-looking statements. You shouldn’t rely on these statements, as actual results may differ materially and are subject to factors discussed in our filings with the SEC. The company does not undertake any obligations to update or revise forward-looking statements to reflect any subsequent events or circumstances. For those who prefer to listen to the call over the phone, but still want to view the slides, we recommend that you click on the Gears icon located on the lower portion of the left-hand side window and select Live Phone. This will eliminate any delays in viewing the slide transitions, as well as remove any potential background noise if you prefer to ask a question. After the call, a copy of the presentation and a playback of the webcast will be available on our Investor Relations page. Presenting our results today will be Matthew Kissner, Interim CEO and Chairman, and John Kritzmacher, CFO and Executive Vice President Technology and Operations. As announced back on May, the Mark Allin President and CEO resigns from the company. And Wiley's Board of Directors is conducting a thorough search for his successor. As a 14 year veteran of the board and is current Chairman Matt will lead the company during this transition period. Working closely with John and rest of the executive team to execute on its long-term plan and achieve short-term objectives. I’ll now turn the call over to Matthew Kissner, Wiley’s Interim CEO and Chairman.

Thank you, Brian and good morning everyone. I’d like to take this opportunity to thank Mark Allin for his 20 years of service and dedication to Wiley and the enormous contribution he had made as a leader in the different process of business, from his time as Managing Director of the Asia Pacific region to his role as Head of the Professional Development segment and of course as President and CEO. Mark was always a driving force of change, [indiscernible] acquisitions, divestitures and major internal improvements like our ERP and deployment and office transformation. We wish him the very best. A quick background on me. I join the Board of Directors in 2003 and was named Chairman in 2015, during my Wiley tenure, I have had the privilege of chairing the executive governance, audits and compensation committees of the Board. Prior to Wiley, I was an Executive Vice President and Group President at Pitney Bowes and I've held a number of leadership positions in the financial services industry. To say that I'm deeply honored to be a part of Wiley is an understatement, from our people to our lasting worldwide contributions to scientific, technical, medical and educational progress, to the opportunities to grow and thrive for another 200 years it is truly something special. John and I and the leadership team have been working very closely and diligently to execute on our strategic plans and operational excellence initiatives. There're things to celebrate, things to reinvest in and things to improve. The search for a permanent CEO is underway and is being managed by a Search Committee of the Board. Before jumping into results note that I will be excluding impact of foreign exchange when commenting on all variances. Foreign exchange was a headwind yet again this year. The unfavorable impact…

Thank you, Matt. Overall, adjusted shared services cost were even with prior year. Other administration cost declined 9% primarily due to the certain onetime employment costs and higher legal provisions in the prior year. Distribution and operations cost declined 1% primarily due to facilities consolidations. These savings effectively offset a 5% increase in technology and content management spending related to our ERP and other systems. Operationally, we are making real progress in improving the effectiveness and efficiency of our shared services functions and we still have considerable opportunity ahead. Our balance sheet continues to provide us with the capacity to invest in the business while also returning capital to shareholders. Net debt at yearend was $307 million compared to $241 million in the prior year. On a trailing 12-month basis, net debt-to-EBITDA was 0.8 compared to 0.7 at the end of prior year. Our lower cash position was due to repayment of debt using proceeds from the repatriation of cash from some of our foreign entities. During the fiscal year we repatriated more than $500 million with effectively no incremental tax impact. At yearend outstanding debt was $365 million, and our non-U.S. cash balances were reduced to only $47 million. As part of the repatriation activity we realized a $60 million cash benefit on a hedge covering a pound sterling denominated intercompany loan that originated few months prior to Brexit. The proceeds from that hedge were received in the fourth quarter of fiscal 2016 and are recorded on our cash flow statement under other investing and financing activities. Our acquisition strategy remains -- targeted at adding businesses or capabilities in our core areas of expertise, particularly research and digital and online learning. Atypon which we acquired this year for approximately $120 million is a good example of our focused interest.…

Thank you. [Operator Instructions] And we'll go to Daniel Moore with CJS Securities.

I wanted to ask a couple of quick ones if I might, I just want to clarify the guidance for fiscal '18, the adjusted operating income, flat, I'm assuming that's off the base of roughly 228 million excluding currency, is that correct?

Yes, that's our reported result, that correct.

And in the prepared remarks you mentioned you're typically naturally hedged to some extent and yet at current FX rates you could see a $25 million revenue benefit and the $20 million operating income benefit in fiscal '18 and just wondering what the decoupling of that, it's sort of typically naturally hedged, why that might be the case?

So, that’s a good question, Dan. So, the nature of the benefit we're anticipating from foreign exchange had specifically to do our journals business and the nature of that business being the subscription are paid in advance. What we'll see in actually calendar 2017 is that the benefit of the dollar appreciating against the pounds sterling, making its way back into journal revenues earned in our UK entity where the pound sterling is the functional currency. So, this impact that we’re just driving for the coming fiscal year has actually begun to realize part of itself in the tail end of fiscal 2017 and it will carry through into next year, but it is an element of the functional currency specific to earning U.S. denominated journal revenue in the UK.

That’s helpful. I appreciate it. And when you report adjusted for fiscal '18, will you actually back that out?

We will.

Okay. And then last one -- last housekeeping I apologize, but tax rate continues to come in lower, what was the effective tax rate used for the $3 adjusted EPS this year and what do you expect for fiscal 2018?

The effective tax rate for the year was above 18% and for fiscal '18 we're expecting that the tax rate will be somewhere around 23% to 24%.

Got it. Okay. More interesting topics. Online program management, what was the contribution in '17, and what should the ramp look like towards either breakeven or profitability in fiscal '18 and even any comments that you might have on fiscal '19?

Since we’ve talked about the relatively recent acquisitions commonly I'll speak to, Dan, both the OPM business as well as our e-Learning business and cross knowledge. We have said for fiscal 2017 that we expected the two combines to be diluted to earnings by about $0.20 and so they each peak somewhere around $0.10. We came in a little bit below that combines, but the dilution for '17 was $0.18. And as we look into fiscal '18 and we’re expecting that dilution to come down to something closer to $0.10, combined.

Got it.

Yeah.

Very helpful. And you touched upon the cost savings, John you mentioned maybe roughly half of the $45 million projected cost savings would be targeted for reinvestment. So, that does give some color, just want to -- getting a better sense of how much of that you are targeting to drop to the bottom line in '18 and '19?

So, I think Dan you should think about this as we described. We’re going at reinvest about half back into the business. I would say that the remainder of that that we take through savings you have to be thinking of as also than offsetting cost of inflation and cost of compensation programs and so forth over the course of the time. So, in terms of flow through reduction to our ongoing expense, I don’t think you should expecting a reduction, you should be expecting to see that we’re essentially flattening as I described in my comments, flattening the progress of operating expense across the business.

Perfect. Lastly, John just any comments, update, et cetera. on timing expectations as far as the CEO search goes?

This is Matt, I'll comment on that. As I mentioned in my prepared remarks we've a Board Search Committee, a subset of the Board, managing the search. We're working with leading search firm in that regard. We are under no time pressure here, we're going to get this right and find the right individual, so we're going to take our time and do it in the usual thorough way that Wiley does things.

Thank you. And we'll go next to Allen Klee from Sidoti.

You just answered that you thought that some of the growth areas would go to $0.10 dilutive from $0.18 in last year, a similar question on Atypon of that would go to in '18 and then what the cost are also related to in '18 for the headquarters transformation and operational excellence?

So, let me start with that and then I'll go through the investment programs. So Atypon turned out to be less dilutive in fiscal '17 then we initially anticipated, of course we're still working our way through all of the purchase accounting and so forth for the initial integration, but Atypon was just under $0.10 dilutive to the business, $0.08 dilutive actually for the year. And we're expecting its dilution in fiscal '18 will be about the same and then in '19 we expect it to be neutral to positive, '18 is the period where we'll complete, as I was describing earlier, the migration from our proprietary Wiley Online Library platform over to Literatum and then that's a big part of this step over for the acquisition then to be accretive to Wiley in the future. So '19 is the point where we cross that period. With respect to investment, the investment in headquarters in 2017 was mostly CapEx, not so much of impact on OpEx, the net impact CapEx was about $17 million in the year and then we've got follow on spend, the total spend on the facility is about $30 million for the balance of that $30 million from '17 will occur inside of our fiscal 2018.

And then in terms of your journal business how do you think -- I'm sorry, your research business, excluding Atypon for everything else prior to that, how do you think about what the growth rate would be in '18 and kind of how the transformation to the Atypon business, maybe if you can explain a little how you think that accelerates the growth longer term?

So, a little bit of context, so fiscal 2017 our journals business if you will ex-Atypon just the core journals business and research, from a revenue perspective was marginally positive, as Matt noted in his commentary. Underneath that we've pointed a couple of times, important to note this in the prior year fiscal '16 there was a very unusual $10 million back-file sale, so we had a 10 million unfavorable comparison, otherwise we would have seen revenue growth in the research business that went something slightly north of 1%. For the coming fiscal year, we're expecting to see in the research business revenue growth is in the 1% to 2% range. So, we’re anticipating some improvement and of course we know or have the difficult comparison to the year with a large back-file sale. So we expect this time around the growth that's naturally occurring in the business that will -- that it will flow through. With respect to Atypon, it is a complementary to our business not only with respect to the capabilities that it brings to the delivery of our entire online library, but it also -- it has tool sets our particularly efficient with respect to billing websites, which is a common area for demand in support our journals and our society partners. We also are, with Atypon, building new capabilities that will provide services, researches and societies, among the important services we’re preparing to offer are services with respect to peer review that we believe will be highly attractive to researchers and will continue to draw researchers to Atypon and Wiley for their publishing needs and interest.

Okay. And on the books segment, you mentioned that due to some timing that it is a little better than expected. Could you maybe elaborate on that? And then kind of just maybe a little bit also on the strategic review and what -- how that can be maybe make things look different in the future? Thank you.

So, sure. As you noted the number of times in the prior calls, we know again when we think about the publishing business and its performance of publishing business principally being our -- the center of our books business, that really need to look at that business over a period of time, typically look at trends over a couple of quarters or a year to really see how things unfold, because events that occur just prior the quarter end can have a significant impact events in particular being significant quarters happening during the quarter. We saw a number of orders come in in the fourth quarter that were unusual, not sort of typical ebb and flow, some transactions that we’ve been working on for some time around old books sales for example. So, we thought the quarter was lumpy and it was particularly positive by comparison to prior periods. We also saw lower returns in the period and returns have an important impact on the performance and revenue from quarter-to-quarter. So, timing around orders favorited the fourth quarter for us, timing around returns similarly seem to favor the quarter and we see just that you look for the trends and the performance of that business over a longer of period of time for the year our publishing segment revenue was down 7% and as we said you should anticipate high single-digit revenue decline in that segment for the coming period that’s all we’re projecting.

In terms of the strategic work going on, overtime the profile of that business will change you'll see much stronger digital presence and we’re building our digital capabilities in that regard as well as a more cost-effective infrastructure.

Thank you. And then for your testing business, that have very strong growth. Could you kind of go into what was behind that and kind of your outlook there? Thanks.

I would say the overall rate of growth for the test front business which includes a number of finance disappointments, it continues to be steady. I don’t think there are any particular events that were unique to this quarter that caused it to be higher, but the growth rates that we're seeing in the 25% to 30% kind of range have been pretty consistent for this business and we expect that to continue going forward.

[Operator Instructions] And we'll go back to Daniel Moore from CJS Securities.

Just one or two follow-ups, in regards to this strategic review, I'm hearing more on this call about sort of fixing the businesses rather than divestments of potential partnerships, has there been any change in your view or outlook, or is that still very much influx?

So Dan, I would say that what we've discussed in the past has been the need for us to take a careful review a portfolio inside of our publishing business given what we've seen as a pretty steady phase of decline and determine if in fact there are other opportunities to leverage those assets with partners or perhaps they'd be of more value to others and so we've been working on that review. But all along I think we've been reasonably clear that the intellectual property that we have in the part of the business and the skill sets that we have publishing those disciplines are really valuable and as we've worked our way through the review and we're continuing to do that; we're finding that there are significant opportunities to continue to realize value of that portfolio to be successful in the publishing space we need to introduce new capabilities around digital content production and delivery that'll enable us to deliver content in different formats, not just books, but really with an emphasis on digital consumption and so we're working on plans to do that, but we believe certainly in the near term that there is still a lot of value in those assets and that frankly we can do a better job realizing the value of those assets by focusing in particular on our digital capabilities.

And lastly the cadence of guidance, down high single-digits as far as print publishing is concerned. Last couple of years we've seen a bigger drop in the beginning of the year, or at least this past year certainly followed by a little bit more of an offset as returns normalize, do you think that's the new normal or is that just reading too much into it?

Dan, I would again suggest that we not read too much into individual quarters given how things may flow from and slip if you will forward or backward from one quarter to next when it comes to the publishing business. I've looked again over the longer-term trends and I wouldn't begin to try to predict seasonality. There are events aside from what might be normal seasonality in this business such as consolidation among retailers and their efforts to effectively manage their inventory, we saw some destocking happening during the past fiscal year that caused swings in revenue. So there are so many variables to drive it, I think you really have the sort of smooth it out over a period of time in terms of guiding your expectations for what will continue to be a decline in that business, hopefully one that moderates a bit, but we still see a decline there.

At this time we will turn the conference back over to Matthew Kissner for any additional or closing remarks

Well, we thank you for joining us on the call today. And look forward to speaking with you again on the first quarter of fall in September. Thank you.