Wiley continues to deliver consistently strong results, even in sluggish markets. For the past decade, we have grown organically, consummated and executed financially sound acquisitions, and leveraged technology to better serve customers. As a result, we have achieved one of the best performance records in the publishing industry, while maintaining the highest standards of integrity and ethical behavior in all that we do. We continued to achieve strong growth in fiscal year 2003, which was a record year for the Company.

Vital Role of Collaboration
Wiley serves attractive markets in which we possess leading competitive positions. We have a deep reservoir of must-have content and a formidable collection of highly regarded brands. Compelling opportunities exist in each of our three core businesses - Professional/Trade; Scientific, Technical, and Medical; and Higher Education. We are capitalizing on these opportunities through effective collaboration — the theme of this annual report.

Long-term collaborative relationships, built on a solid foundation of respect, trust, and integrity, are central to our leadership philosophy and Wiley's culture. By collaborating across organizational and geographic boundaries, as well as with authors, customers, and partners, our colleagues are exploiting the connections among our businesses to drive growth and gain market share. Our culture of collaboration helps differentiate Wiley and is a source of competitive advantage.

Revenue and Earnings Growth in Fiscal Year 2003
Wiley performed well in fiscal year 2003 despite a difficult market environment, achieving record revenue, earnings, and operating cash flow.

Earnings per diluted share increased 18% to $1.22 in fiscal year 2003, excluding a one-time tax benefit in fiscal year 2003 and an unusual charge in both fiscal year 2003 and fiscal year 2002 related to the Company's relocation.

EBITA (earnings before interest, taxes, and amortization of intangible assets) before unusual items was $132 million, advancing 12% over fiscal year 2002.

Revenues reached $854 million, up 16% from fiscal year 2002 including foreign currency translation effects, or 14% excluding those effects. Excluding Hungry Minds, acquired in fiscal year 2002 — the largest acquisition in Wiley's history — revenues increased 8%.

Return on investment before unusual items was 15.5% in fiscal year 2003, while operating cash flow was $169 million, improving from $140 million in fiscal year 2002.

During the year, we relocated three of our operations to new offices. Our global headquarters was moved across the Hudson River to a waterfront site in Hoboken, New Jersey, while our European operations were relocated to new spaces in Chichester in the U.K. and Weinheim, Germany. In each case, the new facilities have been designed to promote collaboration and productivity

Solid Results in Each of Our Core Businesses
Results in fiscal year 2003 reflected the solid performance of each of our three core businesses. All Wiley operations worldwide contributed to these results through a combination of organic growth and acquisitions.

Professional/Trade: Our global Professional/Trade business occupies leading positions in targeted categories. According to industry data, we are the number one U.S. publisher in technology and travel, as well as in the professional segments of psychology, architecture, and culinary. We have become the second largest in cooking and business and third largest in consumer reference and education.

Global revenue of our Professional/Trade business advanced 26% over fiscal year 2002, reflecting the combined effects of the Hungry Minds acquisition and organic growth. While the first half of the year was very strong, growth slowed in the second half due to the war in Iraq, as customer traffic at brick-and-mortar bookstores plummeted.

We did especially well in the business category, in which we had many books on national business bestseller lists all year long, as well as in architecture, culinary, psychology, and consumer reference. Although sales of technology titles declined in a weak market, we gained share and believe this publishing category will strengthen as the economy improves.

Our top-selling Professional/Trade titles spanned many subject areas and included Lencioni: Five Dysfunctions of a Team: A Leadership Fable; Betty Crocker's Ultimate Cake Mix Cookbook; Rathbone: Windows XP For Dummies; Mitnick/Simon: The Art of Deception: Controlling the Human Element of Security; and our two perennial market-leading tax guides, The Ernst & Young Tax Guide 2003 and JK Lasser's Your Income Tax 2003.

During the year, we successfully completed the integration of Hungry Minds, and are leveraging our infrastructure and capabilities to increase the sales of its strong franchise products. These products include premier brands such as the For Dummies series, CliffsNotes, Webster's New World dictionaries, Frommer's travel guides, Betty Crocker cookbooks, and the Bible and Visual series in technology. The acquisition is exceeding expectations and was accretive to earnings in both fiscal year 2003 and fiscal year 2002.

Scientific, Technical, and Medical: Wiley is one of the world's largest primary journal publishers and a leading publisher of STM reference works and books. Global revenues increased by 12% over fiscal year 2002, reflecting the combined effects of the GIT Verlag and A&M Publishing acquisitions in Europe in April 2002 and worldwide journal revenue growth.

Our STM business is moving rapidly into the digital world through the growth of Wiley InterScience, our online service. More than 60% of our global journal subscription revenues are now generated by Wiley InterScience licenses. We continue to add content and functionality to Wiley InterScience to meet customer needs and grow revenues. The new Pay-Per-View service takes Wiley InterScience beyond the library market to customers who can now purchase individual article access by credit card, generating incremental revenue.

More than half a dozen major reference works were added to Wiley InterScience during fiscal year 2003, including the new sixth edition of the 40-volume Ullman's Encyclopedia of Industrial Chemistry.

We had an excellent year in the continued development of our society journal program, adding several important journals, such as the British Journal of Surgery, Hepatology, Liver Transplantation, and Ultrasound in Obstetrics and Gynecology. Each is available in print as well as online. In addition, we successfully renewed our publishing contract for Cancer, a publication of the American Cancer Society. We extended our publishing contracts for Annals of Neurology, Journal of Magnetic Resonance Imaging, and Magnetic Resonance in Medicine.

Although some key frontlist books, including Considine: Van Nostrand Scientific Encyclopedia, exceeded expectations, overall STM book sales were sluggish due to tight library budgets.

In January 2003, a major journal subscription agent, Rowecom, Inc., filed for bankruptcy. We worked with other publishers and library customers to protect the interests of our customers and the Company.

Higher Education: Our Higher Education business holds important market positions in the "hardside" disciplines, such as accounting, mathematics, physics, anatomy and physiology, chemistry, and engineering. Global revenues advanced 6% in fiscal year 2003 due principally to the strength of our sciences program, including anatomy and physiology, and chemistry. Sales of engineering titles were soft, reflecting sluggish industrywide sales in that segment.

We launched our biggest frontlist ever in Higher Education, publishing more than 230 new and revised titles worldwide. Examples include Hughes-Hallett: Applied Calculus, second edition, and Tortora and Grabowski: Principles of Anatomy and Physiology, tenth edition. Important first editions included deBlij: Concepts of World Regional Geography, Kieso: Fundamentals of Intermediate Accounting, Horstmann: Big Java, and Irwin: A Brief Introduction to Circuit Analysis.

Technology is creating new opportunities, with increasing demand for Web-based products and course management tools. We are capitalizing on these opportunities and meeting the evolving needs of students and teachers. As an example, we worked with a partner to develop Wiley Business Extra Select, which enables professors to create customized business courses with material from Wiley textbooks and other sources such as The Wall Street Journal, Harvard Business School, Ivey Cases, and Fortune Inc. We are also developing a suite of new products for distance learning, a growth market.

The Faculty Resource Network continues to distinguish Wiley from the competition. It is a peer-to-peer network of faculty who help teachers integrate Wiley technology into their curricula, tailoring its use to the needs of each course. Demand for the networks' virtual courses and for one-on-one peer assistance continued to grow in fiscal year 2003.

Our performance in fiscal year 2003 provides tangible evidence of the competitive strength of Wiley's highly regarded brands and our ability to execute our strategies effectively. We expect another year of growth in fiscal year 2004, based on continued worldwide demand for must-have information; the quality of our content and services; and our ability to leverage our global sales and marketing network.

Ultimately, Wiley's success is the result of the collaborative efforts of our colleagues around the world. We thank them for their inspired efforts on the Company's behalf.

Wiley has been built, over a course of nearly 200 years, on a solid foundation of trust and integrity. We think this is a great time to be associated with a company like Wiley. It is a time in which we can continue to distinguish Wiley from other companies not only by our consistently strong performance, but also by our deeply ingrained values. We look ahead with enthusiasm and confidence.

William J. Pesce
President and Chief Executive Officer

Peter Booth Wiley
Chairman of the Board

June 18, 2003

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