SOURCE: Thomas Nelson, Inc.

August 09, 2005 06:30 ET

Thomas Nelson Posts $0.05 Net Income per Share for First Quarter of Fiscal Year 2006

NASHVILLE, TN -- (MARKET WIRE) -- August 9, 2005 -- Thomas Nelson, Inc. (NYSE: TNM) today announced its financial results for the first quarter of FY 2006, the period ended June 30, 2005:

Net revenues were $45.6 million in the three months through June 30, 2005, compared $49.0 million in the prior year's comparable period, a 7% decline.

Net income was $0.7 million, compared to $1.9 million in the same quarter a year ago.

Diluted earnings per share were $0.05 in the recent period, compared to $0.12 last year.

Thomas Nelson's balance sheet includes total debt of $1.2 million and a cash and cash equivalent balance of $23.3 million as of June 30, 2005, compared to $3.5 million and $23.6 million as of June 30, 2004, respectively. Shareholders' equity is $125.7 million, compared to $105.3 million a year ago, a 19% gain.

"Our first fiscal quarter is, in most years, our slowest," noted Sam Moore, Thomas Nelson's Chairman and Chief Executive Officer, "which tends to magnify the impact of events -- either good or bad."

Mr. Moore continued: "There are three primary factors contributing to the decline in net revenues for this quarter. First, the Company had no major new releases during the first quarter. Most of our major new releases this year are scheduled in the second half of the fiscal year. Secondly, Women of Faith hosted one less event in the first quarter compared to the prior year. Additionally, as trade sources and government statistics indicate, the book retailing market is down over all for the calendar year to date, which causes our direct customers to be slow in re-ordering and quick to return slow moving merchandise."

"If there's good news in the quarter's poor performance it's that we are holding or even gaining share of our key markets, plus, the steps we've taken in recent years to focus on our core business and improve operating margins have helped cushion the impact of the disappointing sales results on our overall performance," said Mr. Moore.

Commenting on the outlook for the balance of the year, Mike Hyatt, Thomas Nelson's President and Chief Operating Officer, stated: "Based on our product release schedule, I am cautiously optimistic that our comparisons will improve as the year progresses. Comparisons in the current September-ending quarter will be challenging, as the major trade release from Max Lucado will ship in the third quarter this year versus the second quarter last year. Expected gains in fiscal 2006 will likely come in the second half. We believe that the full year results will exceed last year's performance."

Thomas Nelson, Inc. will host a conference call related to this earnings release at 1:30 p.m. CDT on Tuesday August 9, 2005. Individuals may listen to the call by dialing (866) 234-7470. The conference I.D. number for the call is 7881710. The live broadcast of Thomas Nelson's quarterly conference call will be available online by going to www.thomasnelson.com/news and at www.streetevents.com. The online replay will be available shortly after the call and continue through August 17, 2005.

This news release includes certain forward-looking statements (all statements other than those made solely with respect to historical fact) and the actual results may differ materially from those contained in the forward-looking statements due to known and unknown risks and uncertainties. Any one or more of several risks and uncertainties could account for differences between the forward-looking statements that are made here and the actual results, including with respect to our sales, profits, liquidity and capital position. These factors include, but are not limited to: softness in the general retail environment or in the markets for our products; the timing and acceptance of products being introduced to the market; the level of product returns experienced; the level of margins achievable in the marketplace; the collectibility of accounts receivable; the recoupment of royalty advances; the effects of acquisitions or dispositions; the financial condition of our customers and suppliers; the realization of inventory values at carrying amounts; our access to capital; the outcome of any Internal Revenue Service audits; and the realization of income tax and intangible assets. These conditions cannot be predicted reliably, and the Company may adjust its strategy in light of changed conditions or new information. Thomas Nelson disclaims any obligation to update forward-looking statements.

Thomas Nelson, Inc. is a leading publisher and distributor of products emphasizing Christian, inspirational and family value themes and believes it is the largest publisher of Bibles and inspirational products. For more information, visit our website www.thomasnelson.com.

Thomas Nelson's Common stock and Class B Common stock are listed on the New York Stock Exchange (NYSE: TNM).


                 THOMAS NELSON, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                      (000's omitted, unaudited)

                                                   Three Months Ended
                                                         June 30,
                                                  2005             2004
                                              -----------      -----------
ASSETS
     Current assets:
          Cash and cash equivalents           $    23,275      $    23,634
          Accounts receivable, less allowances
           of $7,386 and $7,200, respectively      44,285           44,616
          Inventories                              40,156           36,104
          Prepaid expenses                         22,491           16,094
          Deferred tax assets                       4,797            4,470
                                              -----------      -----------
     Total current assets                         135,004          124,918
     Property, plant and equipment, net            15,888           13,068
     Other assets and deferred charges             13,572            9,892
     Intangible assets                              2,054              805
     Goodwill, net                                 29,304           29,304
                                              -----------      -----------
TOTAL ASSETS                                  $   195,822      $   177,987
                                              ===========      ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
          Accounts payable                    $    24,939      $    23,299
          Accrued expenses                          6,321            7,145
          Deferred revenue                         11,637           12,437
          Dividends payable                           744              581
          Income taxes currently payable            1,108            2,808
          Current portion of long-term debt         1,154            2,308
                                              -----------      -----------
     Total current liabilities                     45,903           48,578

     Long-term debt, less current portion               -            1,154
     Deferred tax and other liabilities            24,232           22,969
     Minority interest                                 14               10

     Shareholders' equity                         125,673          105,276
                                              -----------      -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY    $   195,822      $   177,987
                                              ===========      ===========


                 THOMAS NELSON, INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF INCOME
           (000's omitted, except per share data, unaudited)

                                                   Three Months Ended
                                                         June 30,
                                                  2005             2004
                                              -----------      -----------

NET REVENUES                                  $    45,559      $    49,008
COSTS AND EXPENSES:
     Cost of goods sold                            27,289           28,938
     Selling, general and administrative           16,504           16,286
     Depreciation and amortization                    727              588
                                              -----------      -----------
               Total costs and expenses            44,520           43,812
                                              -----------      -----------
OPERATING INCOME                                    1,039            3,196
Other income                                          287               67
Interest expense                                      139              220
                                              -----------      -----------
Income before income taxes                          1,187            3,043
Provision for income taxes                            449            1,171
Minority interest                                       1                1
                                              -----------      -----------
Income from continuing operations                     737            1,871

Discontinued operations:
     Gain (loss) on disposal,
      net of applicable taxes                         (41)               -
                                              -----------      -----------
Net income                                    $       696      $     1,871
                                              ===========      ===========

Weighted average number of shares outstanding:
          Basic                                    14,821           14,495
                                              ===========      ===========
          Diluted                                  15,270           15,297
                                              ===========      ===========
NET INCOME PER SHARE:
          Basic                               $      0.05      $      0.13
                                              ===========      ===========
          Diluted                             $      0.05      $      0.12
                                              ===========      ===========

Contact Information

  • Contact:
    Joe L. Powers
    Executive Vice President
    P.O. Box 141000
    Nashville, TN 37214-1000
    Phone: (615) 902-1300
    Fax: (615) 883-6353
    Website: www.thomasnelson.com