EX-99.1 2 x9910809048k.txt EXHIBIT 99.1 TO FORM 8-K DATED 8/09/2004 EXHIBIT 99.1 NEWS RELEASE ------------ Date: August 9, 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 77% INCREASE IN NET INCOME FOR 1ST QUARTER OF FISCAL YEAR 2005 Nashville, TN. August 9, 2004 - Thomas Nelson, Inc. (NYSE: TNM) today announced its financial results for the first quarter of fiscal 2005: Net revenue increased to $49.0 million in the three months through June 30, 2004 compared $41.8 million in the prior year's comparable period, a 17% gain. Net income grew to $1.9 million compared to $1.1 million in the same quarter a year ago, a 77% increase. Earnings per share were up in the recent period to $0.13 (basic) compared to $0.07 last year, and $0.12 compared to $0.07, diluted, which represents increases of 86% and 71%, respectively. Thomas Nelson's balance sheet improved, showing total debt of $3.5 million and a cash and cash equivalent balance of $23.6 million as of June 30, 2004, compared to $7.1 million and $8.9 million as of June 30, 2003, respectively. "Two products launched late in the last fiscal year were our top performers in this year's first quarter," noted Sam Moore, Chairman and Chief Executive Officer. "Breaking the DaVinci Code, a work of popular scholarship by Darrell L. Bock, Ph.D., examines the Biblical evidence underpinning the best-selling work of fiction. Dr. Bock's book enjoyed a strong market reception, and we have introduced a Spanish-language translation." "Refuel, from Nelson Bibles, is our latest Biblezine(TM). This is a full-text version of the New Testament in a magazine format designed to appeal to teen boys. It, too, was introduced late last fiscal year. We originated this publishing concept with Revolve, created for teen girls, which continues to sell well a year after its launch. I am pleased to report," Mr. Moore continued, "that we introduced our third entry in this series, Becoming, designed to appeal to women, in mid-June." "Our financial results for the period demonstrate continued progress and reflect growth, although the year-to-year percentage increases are obviously affected by the smallness of the absolute numbers. Sales increased, year over year across each of our major distribution channels. We believe there are signs that business is starting to rebound in the religious book store market after several years of pressure. Our share of this market has increased in recent years, and we expect to benefit from any sustained recovery in this channel. Additionally," Mr. Moore noted, "our categories, Christian and inspirational, are among the fastest growing at general bookstores, and, here, too, we are benefiting from the market trend." "We're coming off our best year ever," noted Michael Hyatt, President and Chief Operating Officer. "Our oldest operation, Bible publishing, saw an increase in unit sales of almost 20% in fiscal 2004, which demonstrates the power of a creative and market-sensitive approach to spreading an old yet thoroughly contemporary message." "Our newest division, WestBow Press, publishes works of Christian-centered fiction and is less than a year old. Already it is making an important contribution to our product line and our bottom line," said Mr. Hyatt. "Works of fiction account for about 50% of adult book sales in the general market and approximately 20% of sales in the Christian market. When we consolidated all of Nelson's fiction works into WestBow last year, the genre accounted for less than 5% of our sales. We see great potential here over time." Mr. Hyatt declared: "Our business has momentum in the marketplace right now. I think this is due in part to our strategy of focusing on our core businesses of Bible and book publishing. I am pleased that our best-selling books can come from a variety of our publishing divisions, authors, product formats, and market channels." 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 today 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 future 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. will host a conference call related to this earnings release at 1:30 p.m. CDT on Monday, August 9, 2004. Individuals may listen to the call by dialing (800) 310-1961. The confirmation number for the call is 224077. 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, 2004. Thomas Nelson, Inc. is a leading publisher, producer 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 (TNM-NYSE). ### THOMAS NELSON, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (000's omitted, except per share data, unaudited)
Three Months Ended June 30, ------------------- 2004 2003 -------- -------- NET REVENUES $ 49,008 $ 41,831 COSTS AND EXPENSES: Cost of goods sold 28,938 25,875 Selling, general and administrative 16,286 13,665 Depreciation and amortization 588 560 -------- -------- Total expenses 45,812 40,100 -------- -------- OPERATING INCOME 3,196 1,731 Other income 67 191 Interest expense 220 244 -------- -------- Income before income taxes 3,043 1,678 Provision for income taxes 1,171 629 Minority interest 1 (8) -------- -------- Net income $ 1,871 $ 1,057 ======== ======== Weighted average number of shares outstanding: Basic 14,495 14,382 ======== ======== Diluted 15,297 14,607 ======== ======== NET INCOME PER SHARE: Basic $ 0.13 $ 0.07 ======== ======== Diluted $ 0.12 $ 0.07 ======== ========
THOMAS NELSON, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (000's omitted, unaudited)
Three Months Ended June 30, ------------------- 2004 2003 -------- -------- ASSETS Current assets: Cash and cash equivalents $ 23,634 $ 8,943 Accounts receivable, less allowances of $7,200 and $7,190, respectively 44,616 42,999 Inventories 36,104 37,924 Prepaid expenses 16,094 15,567 Assets held for sale - 1,785 Deferred tax assets 4,923 5,085 -------- -------- Total current assets 125,371 112,303 Property, plant and equipment, net 13,068 11,444 Other assets and deferred charges 9,892 8,178 Intangible assets 805 882 Goodwill, net 29,304 29,304 -------- -------- TOTAL ASSETS $178,440 $162,111 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 23,299 $ 19,910 Accrued expenses 7,145 9,930 Deferred revenue 12,437 12,703 Dividends payable 581 - Income taxes currently payable 2,808 3,393 Current portion of long-term debt 2,308 3,622 -------- -------- Total current liabilities 48,578 49,558 Long-term debt, less current portion 1,154 3,461 Deferred tax and other liabilities 23,422 20,115 Minority interest 10 35 -------- -------- Shareholders' equity 105,276 88,942 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $178,440 $162,111 ======== ========