EX-99.1 2 x991110820058k.txt EXHIBIT 99.1 FOR FORM 8-K, DATED 11/9/05 EXHIBIT 99.1 Date: November 8, 2005 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 ANNOUNCES SECOND QUARTER (FY2006) AND SIX MONTH RESULTS Nashville, TN. November 8, 2005. Thomas Nelson, Inc. (NYSE: TNM) today announced its financial results for the second quarter of FY 2006, the period ended September 30, 2005: Net revenue for the three months ended September 30, 2005 was $67.7 million compared to $61.9 million in the prior year. This 9% gain brought net revenue for the fiscal year's first six months to $113.3 million versus $110.9 million a year ago, for a 2% increase year-to-date. Net income for the quarter was $6.9 million compared to $6.4 million in the prior year, up 8%. For the six months, net income was $7.6 million compared to $8.3 million in the prior year's comparable period, a decline of 8%. Earnings per share in the second fiscal quarter were $0.46 basic and $0.45 diluted compared to $0.44 and $0.43, respectively, in the prior year. For the six months through September 30, 2005 earnings per share were $0.51 basic and $0.50 diluted compared to $0.57 and $0.55 respectively, in the prior year. Commenting on the period's results, Michael S. Hyatt, Chief Executive Officer, noted: "We remain on track to deliver stronger financial results as the year progresses. Our product release schedule is heavily weighted toward the third and fourth quarters of this year, and, to a great extent, our results will be shaped by that. The 9% revenue gain in the second quarter shows, I believe, that we're establishing some good sales momentum, and I think we can build on that in the coming quarters." "While I am confident that we will do our part in producing improved results this year, there are several factors beyond our control that may exert some pressure on us. Without question, the unusually punishing hurricane season - which still has a few weeks to go - had an impact on consumer behavior in a geographic market that's important to us. We lost several weeks of sales opportunity in the region, but we're seeing a strong rebound. Perhaps because some people turn to faith in times of adversity, there is also a need to replace Bibles and other important items that may have been lost or damaged in the storms." "A second consideration," according to Mr. Hyatt "is higher energy prices. This will likely result in people making fewer shopping trips, as well as depress the amount of discretionary income available. This appears not to have been a major problem for us to date. Our sales through general-market book stores and, separately, through religious book stores, are holding up. But it's something we're watching with interest." "Our Women of Faith conference and merchandise sector gives us a direct insight into consumer sentiment," noted Mr. Hyatt. "This business requires participants to travel - typically by car, to tap into their discretionary-spending budgets, and to consider purchasing books and other materials almost on impulse. So far this year, our results here show solid gains, plus, our newest conference series, called 'Revolve,' the same as our 'Biblezine' for young women, is off to a good start." "The quarter's strong sales performance reflects several very successful titles from our Nelson Books imprint," stated Mr. Hyatt. "'The Total Money Makeover,' by Dave Ramsey, was released two years ago but got a big boost in the recent quarter, thanks to the author's appearance on 'Oprah' and '60 Minutes.' This was our best selling work in the period, and it was one of three Nelson titles that appeared simultaneously on the New York Times bestseller list." Mr. Hyatt continued: "Titles such as this, as well as 'Here's Johnny!,' Ed McMahon's recollections of the late-night TV icon, have helped us increase our presence in secular bookstores. In fact, our Rutledge Hill imprint, which is aimed squarely at the general market, had a terrific quarter, thanks in large measure to 'Here's Johnny!' I am convinced we can continue to show good gains in the general market while keeping our primary position as the leading supplier to the Christian bookselling industry." "Looking ahead," said Mr. Hyatt, "We expect Max Lucado's 'Cure for the Common Life' will perform well in our traditional markets, and 'The Great Physician's Rx,' by Jordan Rubin, which is the author's fourth book, and his first with us, will find broad appeal across all our markets. Our relatively new business imprint is about to release John Maxwell's '360 Degree Leader,' his first leadership-focused book since 'Leadership 101,' three years ago," noted Mr. Hyatt. "Those are among the strongest titles from our release schedule for the third quarter." "We're especially excited about the recently announced fourth-quarter release of 'The Journey: Living by Faith in an Uncertain World,' by Billy Graham," said Mr. Hyatt. "Dr. Graham is, without question, the most renowned and influential evangelist over the past 100 years, and Thomas Nelson is proud to have the trade-book rights to many of his works, including this one, which may be his most important." Thomas Nelson, Inc. will host a conference call related to this earnings release at 1:30 p.m. CST on Tuesday, November 8, 2005. Individuals may listen to the call by dialing (800) 474-8920. The conference I.D. number for the call is 4555578. 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 November 16, 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 (TNM-NYSE). ### THOMAS NELSON, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (000's omitted, except per share data, unaudited)
Three Months Ended Six Months Ended September 30, September 30, ------------------ ------------------ 2005 2004 2005 2004 ------- ------- -------- -------- Net revenues $67,697 $61,902 $113,256 $110,910 Costs and expenses: Cost of goods sold 38,649 35,133 65,938 64,071 Selling, general & administrative 17,342 15,541 33,846 31,826 Depreciation & amortization 727 626 1,454 1,215 ------- ------- -------- -------- Total costs and expenses 56,718 51,300 101,238 97,112 ------- ------- -------- -------- Operating income 10,979 10,602 12,018 13,798 Other income (expense) 115 82 402 149 Interest expense 27 182 165 402 ------- ------- -------- -------- Income from continuing operations before income taxes 11,067 10,502 12,255 13,545 Provision for income taxes 4,110 4,044 4,559 5,215 Minority interest 2 1 3 2 ------- ------- -------- -------- Income from continuing operations 6,955 6,457 7,693 8,328 Discontinued operations: Loss on disposal, net of applicable taxes (42) (33) (83) (33) ------- ------- -------- -------- Net income $ 6,913 $ 6,424 $ 7,610 $ 8,295 ======= ======= ======== ======== Weighted average number of shares Basic 14,890 14,619 14,855 14,679 ======= ======= ======== ======== Diluted 15,266 15,056 15,259 15,175 ======= ======= ======== ======== Net income per share, Basic: Income from continuing operations $ 0.47 $ 0.44 $ 0.52 $ 0.57 Loss from discontinued operations - - (0.01) - ------- ------- -------- -------- Net income per share $ 0.46 $ 0.44 $ 0.51 $ 0.57 ======= ======= ======== ======== Net income (loss) per share, Diluted: Income from continuing operations $ 0.46 $ 0.43 $ 0.50 $ 0.55 Loss from discontinued operations - - (0.01) - ------- ------- -------- -------- Net income per share $ 0.45 $ 0.43 $ 0.50 $ 0.55 ======= ======= ======== ========
THOMAS NELSON, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (000's omitted, unaudited)
Three Months Ended September 30, ------------------- 2005 2004 -------- -------- ASSETS Current assets: Cash and cash equivalents $ 25,310 $ 22,344 Accounts receivable, less allowances of $7,382 and $7,383, respectively 55,142 49,755 Inventories 40,928 39,153 Prepaid expenses 23,782 17,467 Deferred tax assets 4,797 4,923 -------- -------- Total current assets 149,959 133,642 Property, plant and equipment, net 18,682 13,117 Other assets 11,700 9,665 Deferred charges 1,614 1,486 Intangible assets 2,013 814 Goodwill 29,304 29,304 -------- -------- TOTAL ASSETS $213,272 $188,028 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 26,795 $ 23,859 Accrued expenses 10,748 9,284 Deferred revenue 12,045 9,429 Dividends payable 748 734 Income taxes currently payable 4,955 5,176 Current portion of long-term debt 1,154 2,308 -------- -------- Total current liabilities 56,445 50,790 Long-term debt, less current portion - 1,154 Long-term taxes payable 22,592 21,290 Deferred tax liabilities 911 1,021 Other liabilities 487 844 Minority interest 16 11 Shareholders' equity 132,821 112,918 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $213,272 $188,028 ======== ========