EX-99 3 ex990212048k.txt EXHIBIT 99.1 FOR FEBRUARY 12, 2004 FORM 8-K EXHIBIT 99.1 NEWS RELEASE ------------ Date: February 12, 2004 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 POSTS 59% GAIN IN NET INCOME FOR THE THIRD QUARTER, UP 68% FOR THE NINE MONTHS THROUGH DECEMBER 31, 2003 Net Revenue increased by 4% in the quarter, reaching $56.0 million, compared With $53.8 million in the comparable period of the prior fiscal year. Nine-month net revenue was $161.7 million, compared with $157.0 million in the first nine months of the prior year, a gain of 3%. Publishing revenue increased 2% in the quarter, primarily due to the acquisition of World Publishing. Revenues from conferences grew 21% in the quarter primarily due to better attendance and higher levels of product sales at the events. Net Income scored a 59% gain in the quarter, at $3.9 million vs. last year's comparable $2.5 million. A nine-month net income of $11.6 million represented a 68% gain from the year before; at the nine-month mark of fiscal 2004, Thomas Nelson has earned more than it did for the entire fiscal year 2003, when earnings were $10.2 million. Basic Income per share grew to $0.27 in the recent quarter, compared to $0.17 a year ago, a 59% improvement. For fiscal year to date, basic earnings per share were $0.81 vs. $0.48 for the prior year, a 69% improvement. The Company's financial condition is strong. Total debt is $5.3 million and the cash position stood at $6.3 million as of December 31st. Receivables are virtually flat, year to year, notwithstanding the increase in sales, and the Company's investment in inventory has declined 6% from its year-ago level, again despite the increase in sales and the acquisition of World Publishing. "Our progress continues," stated Sam Moore, Chairman and Chief Executive. "I am pleased to report that our revenues, margins, and profits all showed increases in the recent quarter." "Some of our more recent ventures - in particular WND Books, our expanded line of inspirational works of fiction, and a growing list of titles in the business category - have enjoyed encouraging receptions in the marketplace," stated Mr. Moore. "Total Money Makeover, by Dave Ramsey, is one of our top sellers so far this year, and The Enemy Within, the second book by Michael Savage, is off to a good start as we saw with Savage Nation a year ago." "At the same time," Mr. Moore continued, "some of our established best-sellers, such as Wild at Heart, by John Eldredge, and I Hope You Dance, by Mark D. Sanders and Tia Sillers, are going strong after three years in release. We try to keep a good balance between strong new releases on our front list and established perennial favorites on our backlist. When we achieve such a balance, as we did in the third fiscal quarter, we believe we can generate very satisfactory margins and profits even if sales growth is moderate." Mr. Moore continued: "I am pleased to report that Revolve, a complete New Testament designed in a magazine format, continues to exhibit strong sales, primarily amongst teenaged girls. We have two follow-up products in development: Refuel, designed to appeal to teenaged boys, and Becoming, a counterpart treatment for women. Both of these will be released later in calendar year 2004." "We are wrapping up what may well be our most profitable year ever. I am encouraged by the fact that our good results reflect a mix of established products and new ones, aimed at traditional and new markets, and that our strategy of compounding the Company's success based on top-quality products and conservative fiscal policies is proving to be valid," Mr. Moore declared. "Investors should also note that we have made, and previously announced, a number of changes in our management, such as the promotion of Mike Hyatt to President, Jerry Park to Executive Vice President and Group Publisher for the Nelson Christian Books Group, and Pete Nikolai to Senior Vice President and Group Publisher of the Nelson Specialty Books Group. These steps, too, give me cause for optimism about our Company's outlook." 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 Nine Months Ended December 31, December 31, ------------------ ------------------ 2003 2002 2003 2002 ------- ------- -------- -------- Net revenues $56,045 $53,774 $161,705 $157,020 Costs and expenses: Cost of goods sold 32,200 32,646 94,251 95,240 Selling, general & administrative 16,352 15,986 46,001 46,974 Depreciation & amortization 563 444 1,681 1,567 ------- ------- -------- -------- Total expenses 49,115 49,076 141,933 143,781 ------- ------- -------- -------- Operating income 6,930 4,698 19,772 13,239 Other expense (income) 439 (27) 260 (102) Interest expense 229 792 716 2,382 ------- ------- -------- -------- Income from continuing operations before income taxes 6,262 3,933 18,796 10,959 Provision for income taxes 2,349 1,436 7,049 4,000 Minority interest (37) 11 (34) 49 ------- ------- -------- -------- Income from continuing operations 3,950 2,486 11,781 6,910 Discontinued operations: Loss on disposal, net of taxes - - (156) - ------- ------- -------- -------- Net income (loss) $ 3,950 $ 2,486 $ 11,625 $ 6,910 ======= ======= ======== ======== Weighted average number of shares Basic 14,403 14,369 14,393 14,368 ======= ======= ======== ======== Diluted 15,140 14,475 14,777 14,613 ======= ======= ======== ======== Net income (loss) per share, Basic: Income from continuing operations $ 0.27 $ 0.17 $ 0.82 $ 0.48 Loss from discontinued operations - - (0.01) - ------- ------- -------- -------- Net income (loss) per share $ 0.27 $ 0.17 $ 0.81 $ 0.48 ======= ======= ======== ======== Net income (loss) per share, Diluted: Income from continuing operations $ 0.26 $ 0.17 $ 0.80 $ 0.47 Loss from discontinued operations - - (0.01) - ------- ------- -------- -------- Net income (loss) per share $ 0.26 $ 0.17 $ 0.79 $ 0.47 ======= ======= ======== ========
Thomas Nelson, Inc. & Subsidiaries Consolidated Balance Sheets (000's omitted)
December 31, December 31, 2003 2002 ------------- ------------- (unaudited) (unaudited) ASSETS Current assets: Cash and cash equivalents $ 6,319 $ 1,959 Accounts receivable, less allowances of $9,459 and $8,863, respectively 55,552 54,873 Inventories 35,557 37,987 Prepaid expenses 12,828 13,423 Assets held for sale 1,615 2,500 Deferred tax assets 5,085 7,966 ------------- ------------- Total current assets 116,956 118,708 Property, plant and equipment, net 12,188 11,203 Other assets 6,440 7,890 Deferred charges 2,080 1,727 Intangible assets 840 531 Goodwill 29,304 29,304 ------------- ------------- Total Assets $167,808 $169,363 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 20,305 $ 23,318 Accrued expenses 9,991 9,453 Deferred revenue 7,171 6,805 Dividends payable 576 - Income taxes currently payable 3,452 3,330 Current portion of long-term debt 3,022 3,322 ------------- ------------- Total current liabilities 44,517 46,228 Long-term debt 2,308 36,930 Deferred tax liabilities 721 792 Other liabilities 21,705 863 Minority interest 9 49 Shareholders' equity 98,548 84,501 ------------- ------------- Total Liabilities and Shareholders' Equity $167,808 $169,363 ============= =============