EX-99.1 2 x9910518068k.txt EXHIBIT 99.1 TO CURRENT REPORT ON FORM 8-K, DATED MAY 18, 2006 EXHIBIT 99.1 Date: May 17, 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 Announces FY 2006 Fourth Quarter and Year-End Results Nashville, TN. May 17, 2006. Thomas Nelson, Inc. (NYSE: TNM) today announced its financial results for the fiscal year and for the fourth quarter ended March 31, 2006: Net revenue increased 6% in fiscal 2006, reaching $253.1 million, compared to $237.8 million in the prior year. The fourth-quarter increase was 9%, with revenue reaching $69.1 million in the period versus $63.6 million a year ago. The fourth quarter increase was primarily due to a strong performance from the Company's trade book groups. Net billings from the top ten titles were up 22% over the prior year. Net income advanced 6% for the full fiscal year. The Company earned $21.0 million for the year compared with $19.8 million in the previous year. Fourth-quarter net income was $6.5 million, a 7% gain from the $6.1 million in the prior year. Basic earnings per share, at $1.41, were 4% ahead of last year's $1.35. Diluted earnings per share posted a 5% year-over-year gain, growing from $1.31 to $1.37 for the full fiscal year. Fourth-quarter basic earnings per share were $0.43, compared with $0.41 a year ago, which is a 5% increase, and diluted income per share reached $0.42, up 5% from the $0.40 of the prior year's quarter. Discussion of Non-GAAP Financial Measures ----------------------------------------- Included in Selling, General and Administrative Expenses are $2.5M in costs related to the Company's pursuit of strategic alternatives, primarily related to a proposed merger agreement. The agreement, entered into on February 20, 2006, provides for the acquisition of Thomas Nelson by Faith Media, which is controlled by InterMedia Partners VII, LP, a private equity investment firm that makes mid- to large-size investments in media companies. Proforma earnings per share would have been $1.51 (basic) and $1.47 (diluted) if the transaction expenses had not been incurred. This would have represented a 12% increase over the prior year. This adjustment to our GAAP financial results is made with the intention of providing a better understanding of our financial results and how they compare to the prior year. This adjustment to our GAAP financial results is not meant to be considered in isolation or construed as a substitute for earnings per share prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for purposes of analyzing our profitability. 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: risks relating to our ability to satisfy regulatory requirements with respect to our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002, which requires us to perform an evaluation of our internal control over financial reporting and have our auditor attest to such evaluation; 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 BALANCE SHEETS (000's omitted, unaudited)
March 31, ------------------- 2006 2005 -------- -------- ASSETS Current assets: Cash and cash equivalents $ 25,791 $ 23,999 Accounts receivable (net) 69,622 61,342 Inventories 34,944 36,678 Prepaid expenses 24,922 18,037 Deferred tax assets 5,116 4,797 -------- -------- Total current assets 160,395 144,853 Property, plant and equipment, net 19,999 14,618 Other assets 12,122 12,181 Deferred charges 2,094 1,353 Intangible assets 2,398 1,085 Goodwill 29,304 29,304 -------- -------- TOTAL ASSETS $226,312 $203,394 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 27,713 $ 25,739 Accrued expenses 13,013 12,699 Deferred revenue 10,336 9,784 Dividends payable - 740 Income taxes currently payable 11,300 3,160 Current portion of long-term debt - 2,308 -------- -------- Total current liabilities 62,362 54,430 Long-term taxes payable 14,473 22,592 Deferred tax liabilities 1,024 911 Other liabilities 2,084 827 Minority interest 18 13 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 14,066,327 and 13,875,108 shares, respectively 14,066 13,875 Class B stock, $1.00 par value, authorized 5,000,000 shares; issued 948,228 and 923,762 shares, respectively 948 924 Additional paid-in capital 51,760 48,978 Retained earnings 79,577 60,844 -------- -------- Total shareholders' equity 146,351 124,621 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $226,312 $203,394 ======== ========
THOMAS NELSON, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (000's omitted, except per share data, unaudited)
Three Months Ended Twelve Months Ended March 31, March 31, ------------------ ------------------ 2006 2005 2006 2005 ------- ------- -------- -------- Net revenues $69,145 $63,553 $253,057 $237,817 Costs and expenses: Cost of goods sold 35,032 35,004 140,857 134,057 Selling, general & administrative 23,037 18,821 76,040 69,465 Depreciation & amortization 911 722 3,064 2,587 ------- ------- -------- -------- Total costs and expenses 58,980 54,547 219,961 206,109 ------- ------- -------- -------- Operating income 10,165 9,006 33,096 31,708 Other income 220 86 825 354 Interest expense 54 94 252 644 ------- ------- -------- -------- Income from continuing operations before income taxes 10,331 8,998 33,669 31,418 Provision for income taxes 3,843 3,015 12,524 11,647 Minority interest - 1 5 4 ------- ------- -------- -------- Income from continuing operations 6,488 5,982 21,140 19,767 Discontinued operations: Income (loss) on disposal, net of applicable taxes (10) 72 (163) 50 ------- ------- -------- -------- Net income $ 6,478 $ 6,054 $ 20,977 $ 19,817 ======= ======= ======== ======== Weighted average number of shares Basic 15,007 14,761 14,921 14,649 ======= ======= ======== ======== Diluted 15,498 15,231 15,344 15,107 ======= ======= ======== ======== Net income per share, Basic: Income from continuing operations $ 0.43 $ 0.41 $ 1.42 $ 1.35 Loss from discontinued operations - - (0.01) - ------- ------- -------- -------- Net income per share $ 0.43 $ 0.41 $ 1.41 $ 1.35 ======= ======= ======== ======== Net income per share, Diluted: Income from continuing operations $ 0.42 $ 0.40 $ 1.38 $ 1.31 Loss from discontinued operations - - (0.01) - ------- ------- -------- -------- Net income (loss) per share $ 0.42 $ 0.40 $ 1.37 $ 1.31 ======= ======= ======== ========