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 3 businesses as a result of lower accrued incentive compensation and prudent expense management. Year-to-date, shared service and administrative expenses were 3% higher than prior year, reflecting increases in technology spending, offset by reduced distribution expense and lower accrued incentive costs. Free cash flow for fiscal 2012 of $260 million was $10 million lower than prior year but $5 million better than we expected, reflecting the combined effect of increased cash earnings, offset by the timing of journal subscription cash collections and increased capital spending driven by cost related to new lease facilities, investments in digital products and infrastructure. Days sales outstanding improved by 4 days, while inventory decreased from a year ago due to smaller programs resulting from the growth in E-Book sales and lower returns in P/T. Net debt, that's long-term debt less cash and cash equivalents, was reduced from prior year by $37 million to $215 million, including approximately $85 million of new debt to fund the Inscape acquisition. In addition, we returned $48 million to shareholders in the form of dividend and repurchased $87 million worth of treasury shares during the year. At the end of April, cash on hand was approximately $260 million. Now I'd like to provide some information regarding the performance of Wiley's global businesses. STMS revenue for the quarter was up 2% to $291 million, mainly due to strong digital book sales, pay-per-view research revenue and the sale of journal rights, partially offset by lower journal reprint and backfile revenue. Direct contribution to profit grew 7% to $140 million in the quarter due to top line result, lower accrued incentive compensation and prudent expense management. For the full year, STMS revenue increased 2% on a currency-neutral basis to $1,041,000,000 and was up 4%, including the positive effect of foreign exchange. Revenue growth was driven by increased journal subscriptions, new journal society business, book growth and journal reprint revenue. Digital book growth was partially offset by a decline in print book sales. Digital book sales, including digital licensing, now account for 21% of total STMS book sales, up from 16% a year ago. Total digital revenue accounted for 61% of full year STMS revenue, up from 59% a year ago. Journal subscription receipts for calendar year 2012 were showing roughly 3% growth, with 95% of targeted business closed. Growth in Asia Pacific, EMEA and an improving picture in the Americas contributed to the results. Direct contribution to profit for the 12 months rose 4% to $452 million. In the fourth quarter, STMS signed new contracts with societies to publish 2 new journals and renewed or extended contracts to publish 16 journals. Only one journal contract with modest revenue was not renewed. In fiscal year 2012, the Wiley STMS platform delivered 236 million full-text accesses to customers, up [ph] 26% compared with fiscal year 2011. Usage for online books grew 45% to 6.5 million. This growth is attributed to the launch of Wiley Online Library, which dramatically improved user experience, functionality and search. Growth of our license customer base, new society business and expansion of our digital product offerings also contributed to higher use. Fourth quarter Professional/Trade revenue of $114 million grew 4%, including approximately $3 million from Inscape. In February, we completed the acquisition of Inscape Publishing, a leading provider of assessment-based training products, based in Minneapolis, Minnesota and Copenhagen, Denmark. Integration with existing assets, including the Pfeiffer training line, gives Wiley a significantly larger presence in the workplace assessment and learning market. Growth in digital book sales drove gross margin improvements, both in the quarter and for the full year. Direct contribution to profit for P/T grew 27% to $30 million for the quarter, reflecting top line results, improved margins due to higher digital revenue and lower bad debt provisions. P/T revenue for the full year fell 1% to $434 million. The shortfall was due to the consolidation or closure of retail stores in the United States and around the world. After Borders filed for bankruptcy, print sales through other retailers were negatively affected as a result of aggressive inventory sell-off as stores closed. As retail space contracted, Wiley inventory held by key U.S. accounts has fallen over 1 million units in the past 12 months and by 3 million units over the 2 years proceeding, representing approximately $34 million worth of revenue. For the same 2-year period, underlying sell-through has remained flat. This shifts to a non-inventory business, while reducing returns has meant digital sales growth did not fully offset decline in print in the short term. Overall, digital Products and services accounted for $66 million, an increase over prior year of 65%, including a 71% increase in E-Book revenue. Digital products and services represent 15% of total P/T revenue. Despite the difficult market, Wiley maintained or improved its strong market share positions in technology, business, finance, accounting, education, architecture and training. P/T direct contribution to profit for the year grew 6% to $112 million, excluding a $9 million bad debt charge for Borders in fiscal year 2011. Including the charge, direct contribution to profit for the year grew 17% over prior year. Improved gross margins, prudent cost management, lower bad debt provisions and lower accrued incentive costs contributed to performance. In March, Wiley announced that we would explore the sale of a number of our consumer assets, including travel publishing under the Frommer's brand and culinary. At this point, we have no further detail to provide other than to say that we are fully engaged in the process of finding a right buyer and situation for our consumer assets. In appropriate time in the future, we will make further announcement. Global Education grew 2% in the fourth quarter to $49 million. The growth of 9% in the United States revenue to $33 million was driven largely by E-Book sales and offset by weaknesses in EMEA and Asia Pacific. Direct contribution to profit for the quarter improved by $6 million, reflecting lower accrued incentive compensation, lower bad debt provisions and cost containment initiatives. Global Education full year revenue of $308 million was 1% lower than prior year, or 1% higher, including foreign exchange. Declining enrollments in the for-profit segment and the impact of prior year buildup for the rental market pipeline contributed to this decline. Full year revenue from WileyPLUS fell 2% to $32 million, while sales from E-Books grew by 37% to $17 million. Declining WileyPLUS sales was largely associated with the decline in enrollments in for-profit institutions. Direct contribution to profit for the year improved by 2% to $104 million, reflecting lower accrued incentive costs, partially offset by higher selling costs. In April, Wiley announced that 31 institutions are evaluating a new integration for using digital learning content from WileyPLUS with Blackboard Inc.'s learning management system. The field trial gives students and faculty access to Wiley's rich collection of learning content and tools directly within their online course environment. The field trial involves students and campus administrators across 42 courses at 2- and 4-year higher education institutions in the U.S. and Canada. The integration is expected to be completed and available globally in the summer of 2012. Wiley and Blackboard Inc. announced the new global partnership last summer. In conclusion, despite the significant challenges of fiscal year 2012, we're encouraged by our progress and pleased to have delivered on our overall cash flow and profitability guidance. We've carefully managed operating costs to deliver exchange rate-neutral 11% adjusted EPS growth from 1% revenue growth, while continuing to invest in the future business growth. We are gaining share in the markets we serve. We're making steady progress in the transition to digital business models, which remain critical to our ability to serve the needs of our customers. Part of our business transformation from print to digital includes the identification and elimination of legacy costs associated with the print business to optimize margins on digital products. Accordingly, we have identified certain activities that will be discontinued, outsourced or relocated to lower-cost regions. In the first quarter of fiscal year 2013, Wiley will record an approximate $4.5 million charge for redundancy and related separation benefits associated with these activities. These charges are expected to be fully recovered within 18 months. Based on our momentum from 2012, market conditions and leading indicators, we are providing fiscal year 2013 guidance of mid-single-digit revenue growth, excluding foreign exchange and EPS in a range of $3.50 to $3.55, including foreign exchange but excluding all one-off tax benefits and the first quarter fiscal year '13 redundancy charge. With that as background, we welcome your comments and questions.

[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 see very strong leading indicators. We continue to push forward, especially with our STMS business in China, which is a rapidly accelerating market in terms of both the supply of content through our publications but also the usage and to revenue growth. We put down a marker in Brazil, where we opened an office, and we expect to see growth coming out of Latin America in the years ahead, as well as the Middle East. And that segues nicely to talk a little bit about Global Education. We've actually invested in a Arabic front end to WileyPLUS, and we've been going through some pilots for universities in Saudi Arabia. We see some great opportunities to tap into the rapid growth in higher education investment in the Middle East, particularly in the Gulf countries. Overall, Global Education will continue to benefit from the very strong demand for -- that continues for higher education globally, both in the for-profit and in the not-for-profit sector. We need to continue to refine our offering to provide products that really help improve outcomes in education, particularly investing in areas like adaptive learning, mobile learning, social learning. With a strong front list to come, particularly for the spring of 2013 -- or we've got a strong list this fall but a particularly strong front list that will begin to impact sales from January of next year, we expect -- we believe we've got the ingredients in place to really restore growth in our Global Ed business.

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 transition to digital showing up at the bottom line. And I think in response to that, we talked about timelines related to 2 things. One of them having to do with when would our rate of technology spend mitigate somewhat or lessen somewhat. And my response to that has been unchanged and will be, and I think it's an appropriate one, is that to the extent that we continue to see opportunities to invest in transforming the business, we'll continue to invest against that and need to spend in technology to accomplish that. And we've seen -- look at the numbers, we've seen a lot of success there. We continue to see opportunity, again, not to be too repetitive about that to transition to digital. And then also said that to the extent that we could -- we'd look for opportunities to reduce costs elsewhere, we will offset some of that investment and improve margins through that. And I think I pegged about a year ago that, that would be about 2 years from then. So here we are sort of somewhere on that timeline. We'll recover those costs related to separation benefits in about 18 months. It's being a little bit conservative, actually slightly less than that, but to be fair, let's say 18 months. And there'll probably be some more talk about that in the future.

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.