EX-99.1 3 x991021020068k.txt EXHIBIT 99.1 TO FORM 8-K DATED FEBRUARY 10, 2006 EXHIBIT 99.1 Date: February 9, 2006 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 26% INCOME GAIN FOR FY 2006 THIRD QUARTER Nashville, TN. February 9, 2006. Thomas Nelson, Inc. (NYSE:TNM) today announced its financial results for the third quarter and first nine months of fiscal 2006, the period ending December 31, 2005: Net Revenue advanced 12% in the quarter, reaching $70.7 million. This compares with $63.4 million in the same period of the prior fiscal year. Nine-month net revenue was $183.9 million vs. $174.3 million, a gain of 6%. Publishing revenue, which accounted for 82% of the consolidated total in the quarter, expanded by 8%, and conference revenue grew by more than 28%, year over year. Nelson achieved a net income gain of 26% in the quarter, earning $6.9 million vs. last year's comparable $5.5 million. Nine-month net income of $14.5 million was a 5% increase from the $13.8 million of the year before. Diluted Income per Share reached $0.45 in the recent quarter, an advance of 25% from $0.36 a year ago. For this year's first nine months, earnings per share were $0.95, an increase of 4% from the $0.91 in the comparable year-prior period. "As we noted on prior occasions, our publishing schedule for fiscal year 2006 is heavily weighted toward the second half," said Michael S. Hyatt, Chief Executive Officer. "This is one reason why our publishing results were so strong in the third quarter. "Cure for the Common Life," by Max Lucado, "The Great Physician's Rx for Health and Wellness," by Jordan Rubin, and "The 360-Degree Leader," by John Maxwell, were among our top five sellers in the quarter and among our top ten for the year to date. These books were all released during the third quarter." Mr. Hyatt said: "With Billy Graham's newest work due this month; a collaborative work by Frank Peretti and Ted Dekker; and Michael Savage's fourth book with us also on the current docket, the outlook for our publishing business for the balance of this fiscal year remains good." "I am also pleased to note that our business volume with the mass merchandiser class of trade is responding to management efforts and renewed sales-force focus. We are finding ways to broaden our penetration in this important market segment, while ensuring that we offer the most attractive and compelling products," Mr. Hyatt continued. "This was a very strong quarter for Women of Faith," noted Mr. Hyatt. "We hosted seven Women of Faith conferences in the third quarter this year, the same number as in fiscal 2005's third quarter. Attendance was up, which boosted our revenue. Additionally, the third quarter's four Revolve conferences, a new series designed for younger women and teenagers, drew more participants and had stronger merchandise sales than we expected." Mr. Hyatt continued: "We are seeing some pressure at the more conventional bookselling establishments, both religious bookstores and secular. Government statistics show that book store sales were off by 2% for calendar year 2005 through November, even as retail sales in general were up. We're holding our own despite the pressure, and I believe we are gaining market share. Additionally, we are increasing our business through non-traditional channels. Still, the business environment for bookselling remains less than ideal." Thomas Nelson, Inc. will host a conference call related to this earnings release at 10:00 A.M. CST on Friday, February 10, 2006. Individuals may listen to the call by dialing (800) 946-0705. The confirmation number for the call is 4092289. 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 February 18, 2006. 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; implementation of new processes and systems; 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 BALANCE SHEETS (000's omitted, except share amounts, unaudited)
December 31, March 31, December 31, 2005 2005 2004 ------------- ------------- ------------ (unaudited) (unaudited) ASSETS Current assets: Cash and cash equivalents $ 18,194 $ 23,999 $ 21,007 Accounts receivable, less allowances of $10,085, $8,539 and $9,147, respectively 62,254 60,907 57,992 Inventories 37,596 36,678 36,850 Prepaid expenses 20,985 18,037 16,527 Deferred tax assets 4,797 4,797 4,923 ------------- ------------- ------------ Total current assets 143,826 144,418 137,299 Property, plant and equipment, net 19,589 14,618 13,018 Other assets 12,030 12,181 9,197 Deferred charges 1,591 1,353 1,317 Intangible assets 2,440 1,085 1,123 Goodwill 29,304 29,304 29,304 ------------- ------------- ------------ Total Assets $208,780 $202,959 $191,258 ============= ============= ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 25,461 $ 25,304 $ 22,457 Accrued expenses 8,373 12,699 10,113 Deferred revenue 5,512 9,784 6,394 Dividends payable 749 740 737 Income taxes currently payable 3,190 3,160 6,989 Current portion of long-term debt - 2,308 2,308 ------------- ------------- ------------ Total current liabilities 43,285 53,995 48,998 Long-term taxes payable 23,213 22,592 21,890 Deferred tax liabilities 911 911 1,021 Other liabilities 1,924 827 852 Minority interest 18 13 12 Shareholders' equity: Preferred stock, $1.00 par value, authorized 1,000,000 shares; none issued - - - Common stock, $1.00 par value, authorized 20,000,000 shares; Issued 14,029,192; 13,875,108 and 13,819,043 shares, respectively 14,029 13,875 13,819 Class B stock, $1.00 par value, authorized 5,000,000 shares; Issued 956,728; 923,762 and 924,662 shares, respectively 957 924 925 Additional paid-in capital 51,344 48,978 48,211 Retained earnings 73,099 60,844 55,530 ------------- ------------- ------------ Total sharesholders' equity 139,429 124,621 118,485 ------------- ------------- ------------ Total Liabilities and Shareholders' Equity $208,780 $202,959 $191,258 ============= ============= ============ (See Notes to Condensed Consolidated Financial Statements)
THOMAS NELSON, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (000's omitted, except per share data, unaudited)
Three Months Ended Nine Months Ended December 31, December 31, ------------------ ------------------ 2005 2004 2005 2004 ------- ------- -------- -------- Net revenues $70,654 $63,355 $183,912 $174,265 Costs and expenses: Cost of goods sold 39,887 34,983 105,825 99,054 Selling, general and administrative 19,157 18,818 53,003 50,644 Depreciation and amortization 699 649 2,153 1,864 ------- ------- -------- -------- Total costs and expenses 59,743 54,450 160,981 151,562 ------- ------- -------- -------- Operating income 10,911 8,905 22,931 22,703 Other income 203 118 605 267 Interest expense 33 148 198 550 ------- ------- -------- -------- Income from continuing operations before income taxes 11,081 8,875 23,338 22,420 Provision for income taxes 4,122 3,417 8,681 8,632 Minority interest 2 1 5 3 ------- ------- -------- -------- Income from continuing operations 6,957 5,457 14,652 13,785 Discontinued operations: Loss on disposal, net of applicable taxes (71) 11 (154) (22) ------- ------- -------- -------- Net income $ 6,886 $ 5,468 $ 14,498 $ 13,763 ======= ======= ======== ======== Weighted average number of shares outstanding Basic 14,969 14,720 14,893 14,612 ======= ======= ======== ======== Diluted 15,384 15,206 15,229 15,087 ======= ======= ======== ======== Net income per share, Basic: Income from continuing operations $ 0.46 $ 0.37 $ 0.98 $ 0.94 Loss from discontinued operations - - (0.01) - ------- ------- -------- -------- Net income per share $ 0.46 $ 0.37 $ 0.97 $ 0.94 ======= ======= ======== ======== Net income per share, Diluted: Income from continuing operations $ 0.45 $ 0.36 $ 0.96 $ 0.91 Loss from discontinued operations - - (0.01) - ------- ------- -------- -------- Net income (loss) per share $ 0.45 $ 0.36 $ 0.95 $ 0.91 ======= ======= ======== ======== (See Notes to Condensed Consolidated Financial Statements)