EX-99 3 ex991105038k.txt EXHIBIT 99.1 FOR 11/05/2003 FORM 8-K EXHIBIT 99.1 NEWS RELEASE ------------ Date: August 13, 2003 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 THOMAS NELSON REPORTS 61% GAIN IN NET INCOME FOR SECOND FISCAL QUARTER AND 74% FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2003 Nashville, TN-November 5, 2003. Thomas Nelson, Inc. (NYSE: TNM) today announced its financial results for the second quarter and first six months of fiscal 2004: Net revenue grew 3% in the quarter, reaching $63.8 million in the three months through September 30, 2003, compared with $62.1 million in the same period of the prior year. For the six months, net revenue advanced to $105.7 million, a 2% gain from the prior year's comparable period. Net revenues from publishing products increased 7% over the prior year's quarter, due to a strong product line-up, and revenues from conferences declined 15% from the prior year's quarter due to having one less scheduled event. Net income gained 61%, and was $6.6 million, compared to $4.1 million in the corresponding quarter a year ago. For the six months, net income rose to $7.7 million, up 74% from last year's $4.4 million. Basic income per share for the quarter was $0.46, a 59% increase from last year's corresponding $0.29. For the six months, basic income per share was $0.53, compared to $0.31 for the corresponding period last year. Diluted income per share was $0.45, compared to $0.28 for the corresponding quarter last year, and $0.52, compared to $0.30 for the corresponding six months in FY 2003. Results for the current quarter include a $0.01 per share loss from discontinued operations. The Company's financial position continued to be strong. Total debt declined to $6.5 million, compared to $47.9 million a year ago, and $25.9 million as of the end of last fiscal year. As previously reported, the Company received an income tax refund of $18.7 million in April 2003. This refund resulted from losses realized on the disposal of our C.R. Gibson gift operation in October 2001. The funds have been used to repay debt. Until such time that we conclude that the position taken on our income tax returns will ultimately be sustained by the taxing authorities, the refund will be recorded as a non-current tax liability. If sustained, the Company will record the refund as income from discontinued operations. "Our results in the second quarter were solid. Business conditions continue to improve, and our strong competitive position has allowed us to advance at least in step with sales improvements in our primary markets," noted Sam Moore, Chairman and Chief Executive. "The Nelson Book and Nelson Bible segments performed particularly well," added Mr. Moore, "and we are pleased to see strong acceptance of our products by the general-market book retailers. Religious books have, as a category, grown within this retail channel, which is an obvious plus for us. In addition, we have broadened our offerings to include self-help and inspirational fiction, two genres that have particular appeal in the secular market." According to Mr. Moore, "our top-selling book in the second quarter was NEXT DOOR SAVIOR, by Max Lucado, one of our all-time best-selling authors. Great results with terrific products from Max Lucado are very much in character for Thomas Nelson. But it is significant that our second-best seller in the period - and within a hair's breadth of being number one - was TOTAL MONEY MAKEOVER, by Dave Ramsey, pointing to the success we've been having with our expanded product line." "Also noteworthy," according to Mr. Moore, "is the strong market acceptance of REVOLVE, a complete version of the New Testament, designed and styled in a magazine format that has found very good acceptance among teenage girls. Revolve has received more newspaper, magazine and television coverage than any product we've introduced - virtually all of it favorable -- and we've benefited from the publicity." "While I'm pleased to report the quarter's results, let me point out that there are still segments of our business that have room for improvement" said Mr. Moore. "Our mass-merchandiser customers are reporting that store traffic has improved, but people are still doing more looking than buying in our product categories. I think it's a matter of fine-tuning our product mix before we see gains in that market channel. Our results there for the recent quarter were virtually flat." This news release includes certain forward-looking statements. Actual results could differ materially from those reflected by the forward-looking statements and a number of factors may affect future results, liquidity and capital resources. These factors include, but are not limited to, softness in the general retail environment, 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 and the realization of income tax (including the outcome of any future Internal Revenue Service audits) and intangible assets. Future revenue and margin trends cannot be reliably predicted and may cause the Company to adjust its business strategy during the remaining portion of the 2004 fiscal year. The Company disclaims any intent or obligation to update forward-looking statements. Thomas Nelson, Inc. is a leading publisher and distributor of books emphasizing Christian, inspirational and family value themes, and believes it is the largest publisher of Bibles and inspirational books in the English language. For more information, visit our website www.thomasnelson.com. Thomas Nelson's stock is listed on the New York Stock Exchange (TNM-NYSE). ### THOMAS NELSON, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (000's omitted, unaudited)
Three Months Ended Six Months Ended September 30, September 30, ------------------ ------------------ 2003 2002 2003 2002 ------- ------- -------- -------- Net revenues $63,829 $62,074 $105,660 $103,243 Costs and expenses: Cost of goods sold 36,176 37,656 62,051 62,594 Selling, general & administrative 15,984 16,795 29,649 30,988 Depreciation & amortization 558 588 1,118 1,123 ------- ------- -------- -------- Total expenses 52,718 55,039 92,818 94,705 ------- ------- -------- -------- Operating income 11,111 7,035 12,842 8,538 Other expense (income) 12 18 (179) (74) Interest expense 243 536 487 1,589 ------- ------- -------- -------- Income from continuing operations before income taxes 10,856 6,481 12,534 7,023 Provision for income taxes 4,071 2,365 4,700 2,563 Minority interest 11 16 3 38 ------- ------- -------- -------- Income from continuing operations 6,774 4,100 7,831 4,422 Discontinued operations: Loss on disposal, net of taxes (156) - (156) - ------- ------- -------- -------- Net income (loss) $ 6,618 $ 4,100 $ 7,675 $ 4,422 ======= ======= ======== ======== Weighted average number of shares Basic 14,393 14,369 14,387 14,368 ======= ======= ======== ======== Diluted 14,761 14,649 14,667 14,665 ======= ======= ======== ======== Net income (loss) per share, Basic: Income from continuing operations $ 0.47 $ 0.29 $ 0.54 $ 0.31 Loss from discontinued operations (0.01) - (0.01) - ------- ------- -------- -------- Net income (loss) per share $ 0.46 $ 0.29 $ 0.53 $ 0.31 ======= ======= ======== ======== Net income (loss) per share, Diluted: Income from continuing operations $ 0.46 $ 0.28 $ 0.53 $ 0.30 Loss from discontinued operations (0.01) - (0.01) - ------- ------- -------- -------- Net income (loss) per share $ 0.45 $ 0.28 $ 0.52 $ 0.30 ======= ======= ======== ========
Thomas Nelson, Inc. & Subsidiaries Consolidated Balance Sheets (000's omitted)
September 30, September 30, 2003 2002 ------------- ------------- (unaudited) (unaudited) ASSETS Current assets: Cash and cash equivalents $ 4,909 $ 363 Accounts receivable, less allowances of $7,798 and $7,425, respectively 56,501 55,700 Inventories 39,623 41,236 Prepaid expenses 13,294 15,597 Assets held for sale 1,615 2,500 Refundable income taxes - 7,266 Deferred tax assets 5,085 7,966 ------------- ------------- Total current assets 121,027 130,628 Property, plant and equipment, net 11,961 9,582 Other assets 7,611 7,333 Deferred charges 2,421 1,992 Intangible assets 861 512 Goodwill 29,304 29,304 ------------- ------------- Total Assets $173,185 $179,351 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 23,773 $ 23,772 Accrued expenses 10,247 13,067 Deferred revenue 9,435 8,981 Dividends payable 576 - Income taxes currently payable 5,243 1,825 Current portion of long-term debt 3,022 3,322 ------------- ------------- Total current liabilities 52,296 50,967 Long-term debt 3,461 44,641 Deferred tax liabilities 721 792 Other liabilities 21,578 898 Minority interest 46 38 Shareholders' equity 95,083 82,015 ------------- ------------- Total Liabilities and Shareholders' Equity $173,185 $179,351 ============= =============