-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NGvePd4S0RFSvZGIGl++wOT76rlEKcVi0yySGw2IFaZQoZywBlCvZsRwuHxYvJgc jpiwHLNY1MUny344jUiGYw== 0000071023-98-000003.txt : 19980223 0000071023-98-000003.hdr.sgml : 19980223 ACCESSION NUMBER: 0000071023-98-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980213 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NELSON THOMAS INC CENTRAL INDEX KEY: 0000071023 STANDARD INDUSTRIAL CLASSIFICATION: 2731 IRS NUMBER: 620679364 STATE OF INCORPORATION: TN FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-13788 FILM NUMBER: 98539457 BUSINESS ADDRESS: STREET 1: P O BOX 141000 CITY: NASHVILLE STATE: TN ZIP: 37214-1000 BUSINESS PHONE: 6158899000 MAIL ADDRESS: STREET 1: P O BOX 141000 CITY: NASHVILLE STATE: TN ZIP: 37214-1000 FORMER COMPANY: FORMER CONFORMED NAME: ROYAL PUBLISHERS INC DATE OF NAME CHANGE: 19721019 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-4095 THOMAS NELSON, INC. (Exact name of Registrant as specified in its charter) Tennessee 62-0679364 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification number) 501 Nelson Place, Nashville, Tennessee 37214-1000 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (615)889-9000 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] At February 12, 1998 the Registrant had outstanding 16,002,817 shares of Common Stock and 1,111,924 shares of Class B Common Stock. Part I Item 1. Financial Statements THOMAS NELSON, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
December 31, March 31, December 31, 1997 1997 1996 ----------- ------------ ------------- (Unaudited) (Unaudited) ASSETS Current assets Cash and cash equivalents $ 41,023 $ 43,471 $ 2,150 Accounts receivable, less allowances of $8,102, $7,000 and $7,513, respectively 58,567 64,626 67,555 Income tax refunds receivable - - 3,604 Inventories 66,220 71,550 71,456 Prepaid expenses 7,437 9,421 8,494 Deferred tax asset 8,310 8,310 14,970 Net assets of discontinued operations - - 68,657 ---------- ---------- ---------- Total current assets 181,557 197,378 236,886 Property, plant and equipment 32,740 32,843 33,308 Other assets 10,062 10,466 12,209 Deferred charges 1,990 2,785 2,949 Goodwill 56,929 58,099 59,262 ---------- ---------- ---------- TOTAL ASSETS $ 283,278 $ 301,571 $ 344,614 ========== ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 11,369 $ 18,880 $ 16,935 Accrued expenses 19,446 22,740 16,839 Dividends payable 685 685 685 Income taxes currently payable 8,023 19,974 4,996 Current portion of long-term debt & capital lease obligations 3,257 3,247 3,322 ---------- ---------- ---------- Total current liabilities 42,780 65,526 42,777 Long-term debt 80,725 83,162 168,239 Capital lease obligations 156 377 349 Deferred tax liability 3,640 3,640 3,127 Other liabilities 1,556 2,054 1,093 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 16,002,817, 16,001,178 and 16,003,971 shares, respectively 16,003 16,001 16,004 Class B common stock, $1.00 par value, authorized 5,000,000 shares; issued 1,111,924, 1,112,071 and 1,112,071 shares, respectively 1,112 1,112 1,112 Additional paid-in capital 79,057 79,409 79,320 Retained earnings 58,249 50,290 32,858 Deferred compensation - - ( 265) ---------- ---------- ---------- Total shareholders' equity 154,421 146,812 129,029 ---------- ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 283,278 $ 301,571 $ 344,614 ========== ========== ========== See Accompanying Notes
THOMAS NELSON, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data)
Nine Months Ended Three Months Ended December 31, December 31, 1997 1996 1997 1996 ----------- ----------- ----------- ----------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) NET REVENUES $ 187,735 $ 183,942 $ 64,658 $ 63,557 COST AND EXPENSES: Cost of goods sold 102,568 98,977 35,164 35,599 Selling, general and administrative 64,137 65,107 20,760 19,622 Amortization of goodwill and non-compete agreements 1,433 1,485 437 496 ---------- ---------- ---------- --------- Total expenses 168,138 165,569 56,361 55,717 ---------- ---------- ---------- --------- OPERATING INCOME 19,597 18,373 8,297 7,840 Other income 1,085 312 277 104 Interest expense 4,568 7,021 1,483 2,391 ---------- ---------- ---------- --------- Income from continuing operations before income taxes 16,114 11,664 7,091 5,553 Provision for income taxes 6,103 4,432 2,674 2,110 ---------- ---------- ---------- --------- Income from continuing operations, net 10,011 7,232 4,417 3,443 Income from discontinued operations, net - 728 - 803 ---------- ---------- ---------- --------- NET INCOME $ 10,011 $ 7,960 $ 4,417 $ 4,246 ========== ========== ========== ========= Weighted average number of shares outstanding: Basic 17,112 17,121 17,112 17,121 ========== ========== ========== ========= Diluted 20,384 20,373 20,392 20,371 ========== ========== ========== ========= NET INCOME PER SHARE: Basic-- Income from continuing operations $ 0.59 $ 0.42 $ 0.26 $ 0.20 Income from discontinued operations - 0.04 - 0.05 ---------- ---------- ---------- --------- $ 0.59 $ 0.46 $ 0.26 $ 0.25 ========== ========== ========== ========= Diluted-- Income from continuing operations $ 0.57 $ 0.42 $ 0.24 $ 0.19 Income from discontinued operations - 0.04 - 0.04 ---------- ---------- ---------- --------- $ 0.57 $ 0.46 $ 0.24 $ 0.23 ========== ========== ========== ========= DIVIDENDS DECLARED PER SHARE $ 0.12 $ 0.12 $ 0.04 $ 0.04 ========== ========== ========== ========= See Accompanying Notes
THOMAS NELSON, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands)
Nine Months Ended December 31, ------------------------------ 1997 1996 ---------- ---------- (Unaudited) (Unaudited) CASH FLOWS FROM CONTINUING OPERATING ACTIVITIES: Income from continuing operations $ 10,011 $ 7,232 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 6,213 8,257 Loss on sale of fixed assets - ( 22) Deferred compensation - 563 Changes in assets and liabilities, net of acquisitions and disposals: Accounts receivable, net 6,059 4,446 Income tax refunds receivable - 836 Inventories 5,330 7,852 Prepaid expenses 1,984 2,727 Accounts payable and accrued expenses ( 8,846) ( 10,915) Income taxes currently payable and deferred ( 11,951) 4,996 ----------- ----------- Net cash provided by continuing operations 8,800 25,972 ----------- ----------- Discontinued operations: Income from discontinued operations - 728 Changes in discontinued assets 524 801 Cash used in discontinued operations ( 2,483) ( 7,259) ----------- ----------- Net cash used in discontinued operations ( 1,959) ( 5,730) ----------- ----------- Net cash provided by operating activities 6,841 20,242 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ( 2,938) ( 1,290) Proceeds from sale of business and discontinued assets - 139 Purchase of net assets of acquired companies - net of cash received - ( 170) Changes in other assets and deferred charges ( 803) ( 4,369) ----------- ----------- Net cash used in investing activities ( 3,741) ( 5,690) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under line of credit - ( 9,025) Payments under capital lease obligation ( 256) ( 198) Payments on long-term debt ( 2,392) ( 1,508) Dividends paid ( 2,052) ( 2,055) Proceeds from issuance of common stock 14 651 Common stock retired ( 4) ( 156) Other financing activities ( 858) ( 783) ----------- ----------- Net cash used in financing activities ( 5,548) ( 13,074) ----------- ----------- Net increase (decrease) in cash and cash equivalents ( 2,448) 1,478 Cash and cash equivalents at beginning of period 43,471 672 ----------- ----------- Cash and cash equivalents at end of period $ 41,023 $ 2,150 =========== =========== Supplemental disclosures of non-cash investing and financing activities: Dividends accrued and unpaid $ 685 $ 685 Capital lease obligations incurred to lease new equipment $ - $ 50
THOMAS NELSON, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note A - Basis of Presentation The accompanying unaudited consolidated financial statements reflect all adjustments (which are of a normal recurring nature) that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to SEC rules and regulations. The statements should be read in conjunction with the Summary of Significant Accounting Policies and notes to the consolidated financial statements included in the Company's annual report for the year ended March 31, 1997. The balance sheet and related information in these notes as of March 31, 1997, have been taken from the audited consolidated financial statements as of that date. Certain reclassifications have been made to conform presentation of the fiscal 1997 Financial Statements with fiscal 1998 presentation. Note B - New Pronouncements Computation of Net Income Per Share: Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS 128") has been issued effective for interim and annual fiscal periods ending after December 15, 1997. SFAS 128 establishes standards for computing and presenting earnings per share. The Company adopted the provisions of SFAS 128 in the third quarter of fiscal 1998 and restated earnings per share for all periods presented. Such adoption did not have a material effect on the Company's results of operations or financial position. Basic net income per share is computed by dividing net income by the weighted average number of common and Class B common shares outstanding during the year. Diluted earnings per share reflects the dilutive effect of stock options outstanding during the period and common shares contingently issuable upon conversion of convertible debt securities in periods in which such exercise would cause dilution and the effect on net income of converting the debt securities. Disclosure of Information about Capital Structure: In February 1997, the FASB issued Statement of Financial Accounting Standards No. 129, "Disclosure of Information about Capital Structure" ("SFAS 129"). SFAS 129 establishes standards for disclosing information about an entity's capital structure. The Company adopted SFAS 129 in the third quarter of fiscal 1998. Note C - Inventories Components of inventories consisted of the following (in thousands):
December 31, March 31, December 31, 1997 1997 1996 ----------- --------- ----------- Finished goods $ 54,032 $ 53,634 $ 55,450 Raw materials and work in process 12,188 17,916 16,006 ----------- --------- ----------- $ 66,220 $ 71,550 $ 71,456 =========== ========= ===========
Note D - Cash Dividend On May 23, 1997, the Company's directors declared a cash dividend of $.04 per share of Common and Class B Common Stock. The dividend was paid August 18, 1997, to shareholders of record on August 4, 1997. On August 21, 1997, the Company's directors declared a cash dividend of $.04 per share of Common and Class B Common Stock. The dividend was paid November 17, 1997, to shareholders of record on November 3, 1997. On November 20, 1997, the Company's directors declared a cash dividend of $.04 per share of Common and Class B Common Stock. The dividend is payable February 16, 1998, to shareholders of record on February 2, 1998. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations OVERVIEW On January 6, 1997, the Company sold the assets, subject to certain liabilities, of the music division ("Music Business"). The operating results of the Music Business for the three and nine month periods ended December 31, 1996, are reported as income from discontinued operations. The following table sets forth for the periods indicated certain selected statements of operations data of the Company expressed as a percentage of net revenues and the percentage change in dollars in such data from the prior fiscal year.
Nine Months Ended December 31, Fiscal Year-to-Year ------------------- Increase 1997 1996 (Decrease) ------- ------- ---------- (%) (%) (%) Net revenues Publishing 65.7 63.5 5.7 Gift 34.3 36.5 ( 4.2) ------ ------ Total net revenues 100.0 100.0 2.1 ------ ------ Expenses Cost of goods sold 54.6 53.8 3.6 Selling, general and administrative 34.2 35.4 ( 1.5) Amortization of goodwill and non-compete agreements 0.8 0.8 ( 3.5) ------ ------ Total expenses 89.6 90.0 1.6 ------ ------ Operating income 10.4 10.0 6.7 ====== ====== Income from continuing operations 5.3 3.9 38.4 Income from discontinued operations, net of taxes -- 0.4 ( 100.0) ------ ------ Net income 5.3 4.3 25.8 ====== ======
The Company's net revenues fluctuate seasonally, with net revenues in the first fiscal quarter historically being lower than those for the remainder of the year. This seasonality is the result of increased consumer purchases of the Company's products during the traditional holiday periods. In addition, the Company's quarterly operating results may fluctuate significantly due to the seasonality of new product introductions, the timing of selling and marketing expenses and changes in sales and product mixes. The following discussion 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 softness in the general retail environment, the timing of products being introduced to the market, the level of returns experienced by operating divisions, the level of margins achievable in the marketplace and the ability to minimize operating expenses. Although the Company believes it has the business strategy and resources needed for improved operations, future revenue and margin trends cannot be reliably predicted and may cause the Company to adjust its business strategy during the remainder of fiscal 1998. Results of Operations Net revenues for the first nine months of fiscal 1998 increased by $3.8 million, or 2.1%, over the same period in fiscal 1997. The publishing product net revenues increased $6.6 million, or 5.7%, primarily due to favorable acceptance of new product offerings and reductions in product returns. Net revenues from gift products decreased $2.8 million, or 4.2%, compared to the prior year primarily due to reduced sales of the stationery category to mass merchandisers. Net revenues for the third quarter of fiscal 1998 increased $1.1 million, or 1.7%, over the same period in fiscal 1997. The publishing product net revenues increased $3.7 million, or 8.3%, for the third quarter compared to the prior year quarter, primarily due to new product introductions. Net revenues from gift products decreased $2.6 million, or 13.5%, primarily due to the above mentioned reduction in sales to mass merchandisers. Price increases did not have a material effect on net revenues. The Company's cost of goods sold for the first nine months of fiscal 1998 increased by $3.7 million, or 3.6%, over the same period in fiscal 1997 and, as a percentage of net revenues, increased to 54.6% from 53.8% in the comparable period of fiscal 1997. Cost of goods sold for the third quarter of fiscal 1998 decreased by $0.4 million, or (1.2)%, over the same period in fiscal 1997 and, as a percentage of net revenues, decreased to 54.4% from 56.0% in the comparable period in fiscal 1997. The increase in cost of goods sold, as a percentage of net revenues, for the first nine months resulted primarily from the impact of the prior year's licensing revenue. In the first nine months of fiscal 1997 the Company had higher licensing revenues which have minimal associated cost of goods sold. The Company periodically receives licensing revenues from companies that request permission to reprint the Company's publishing products and market them through a channel that might not currently be served. The decrease in cost of goods sold, as a percentage of net revenues, for the third quarter of fiscal 1997 was primarily due to a change in product mix. Within the publishing products division, for the third quarter of fiscal 1998, the Company experienced a lesser percentage of revenues from Bible products, which have higher costs of goods sold than other publishing products. Selling, general and administrative expenses for the first nine months of fiscal 1998 decreased by $1.1 million, or 1.5%, and for the third quarter decreased by $1.2 million, or 5.8%, from the same periods in fiscal 1997. These expenses, expressed as a percentage of net revenues, decreased to 34.2% for the first nine months of fiscal 1998 from 35.4% in the same period in fiscal 1997 due to reductions in general expenditures. For the quarter, these expenses, expressed as a percentage of net revenues, increased to 32.1% from 30.9% in the same period of fiscal 1997 primarily due to increases in freight costs from new programs introduced this year and timing of certain marketing expenditures. Interest expense for the first nine months of fiscal 1998 decreased by $2.4 million, or 34.9%, and decreased for the third quarter by $0.9 million, or 38.0%, over the same period in fiscal 1997 due to decreased borrowings as a result of the use of a portion of the proceeds from the sale of the Music Business to repay indebtedness and decreased working capital assets. Liquidity and Capital Resources At December 31, 1997, the Company had $41.0 million in cash and cash equivalents. The primary sources of liquidity to meet the Company's future obligations and working capital needs are cash generated from operations and borrowings available under bank credit facilities. At December 31, 1997, the Company had working capital of $138.8 million. Net cash provided by operating activities was $6.8 million and $20.2 million for the first nine months of fiscal 1998 and 1997, respectively. Cash provided by operations during the first nine months of fiscal 1998 was principally attributable to income from continuing operations and decreases in accounts receivable and inventories. Cash provided by operations during the first nine months of fiscal 1997 was principally attributable to income from continuing operations and a decrease in inventories. During the first nine months of fiscal 1998, capital expenditures totaled approximately $2.9 million, which was used primarily to purchase computer, warehousing and manufacturing equipment. During the remainder of fiscal 1998, the Company anticipates capital expenditures of approximately $1.0 million primarily consisting of additional computer, warehousing and manufacturing equipment. The Company's bank credit facilities are unsecured and consist of a $75 million credit facility and a $10 million credit facility (collectively, the "Credit Agreements"). The $75 million credit facility bears interest at either the prime rate or, at the Company's option, LIBOR plus a percentage, subject to adjustment based on certain financial ratios, and matures on December 13, 2002. The $10 million credit facility bears interest at the prime rate and matures on July 31, 1999. At December 31, 1997, the Company had no borrowings outstanding under the Credit Agreements, and $85 million available for borrowing. Due to the seasonality of the Company's business, borrowings under the Credit Agreements typically peak during the third quarter of the fiscal year. At December 31, 1997, the Company had outstanding $24 million of unsecured senior notes ("Senior Notes"). The Senior Notes bear interest at rates from 6.68% to 9.50% due through fiscal 2008. Under the terms of the Credit Agreements and the Senior Notes, the Company has agreed to limit the payment of dividends and to maintain certain interest coverage and debt-to-total- capital ratios which are similarly calculated for each debt agreement. At December 31, 1997, the Company was in compliance with all covenants of these debt agreements, as amended. The Company also has outstanding $55 million of 5.75% convertible subordinated notes ("Convertible Subordinated Notes") due November 30, 1999. The Convertible Subordinated Notes presently are convertible into common stock at $17.00 per share and are redeemable at the Company's option after November 30, 1995, at 103.29% of the principal amount, declining annually thereafter to 100% on November 30, 1999. Management believes cash generated by operations and borrowings available under the Credit Agreements will be sufficient to fund anticipated working capital requirements for existing operations through the remainder of fiscal 1998. Year 2000 Conversion The Company has established a task force to coordinate the identification, evaluation, and implementation of changes to computer systems and applications necessary to achieve a year 2000 date conversion with no effect on customers or disruption to business operations. These actions are necessary to ensure that the systems and applications will recognize and process the year 2000 and beyond. The Company is also evaluating non-system issues relative to the year 2000. Major areas of potential business impact have been identified and are being evaluated, and initial conversion efforts are underway. The Company also is communicating with suppliers, customers, financial institutions and others with which it does business to coordinate year 2000 conversion. The total cost of compliance and its effect on the Company's future results of operations is being determined as part of the detailed conversion planning. PART II Item 6. Exhibits and Reports on Form 8-K (a) Exhibits required by Item 601 of Regulation S-K Exhibit 11- Statement Re Computation of Per Share Earnings Exhibit 27- Financial Data Schedule (b) No Form 8-K was filed by the Company during the quarter ended December 31, 1997. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Thomas Nelson, Inc. (Registrant) February 13, 1998 BY /s/ Joe L. Powers - - ------------------------------ ---------------------- Joe L. Powers Executive Vice President (Principal Financial and Accounting Officer) EX-27 2
5 This schedule contains summary financial information extracted from the Company's 10-Q for the period ended December 31, 1997, and is qualified in its entirety by reference to such financial statements and the notes thereto. 1,000 9-MOS MAR-31-1998 APR-01-1997 DEC-31-1997 41,023 0 66,669 8,102 66,220 181,557 60,425 27,685 283,278 42,780 80,881 0 0 17,115 137,306 283,278 185,476 187,735 102,568 166,705 1,433 1,556 4,568 16,114 6,103 10,011 0 0 0 10,011 0.59 0.57
EX-11 3 EXHIBIT 11 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS (Dollars in thousands, except per share data)
Nine Months Ended Three Months Ended December 31, December 31, 1997 1996 1997 1996 ---------- ----------- ---------- ---------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) BASIC EARNINGS PER SHARE: Weighted average shares outstanding 17,112 17,121 17,112 17,121 ========== ========== ========== ========= Income from continuing operations $ 10,011 $ 7,232 $ 4,417 $ 3,443 Income from discontinued operations - 728 - 803 ---------- ---------- ---------- --------- Net income $ 10,011 $ 7,960 $ 4,417 $ 4,246 ========== ========== ========== ========= Income per share from continuing operations $ 0.59 $ 0.42 $ 0.26 $ 0.20 Income per share from discontinued operations - 0.04 - 0.05 ---------- ---------- ---------- --------- Net income per share $ 0.59 $ 0.46 $ 0.26 $ 0.25 ========== ========== ========== ========= DILUTED EARNINGS PER SHARE: Weighted average shares outstanding 17,149 17,138 17,157 17,136 Convertible notes 3,235 3,235 3,235 3,235 ---------- ---------- ---------- --------- Total shares 20,384 20,373 20,392 20,371 ========== ========== ========== ========= Income from continuing operations $ 11,542 $ 8,815 $ 4,925 $ 3,971 Income from discontinued operations - 728 - 803 ---------- ---------- ---------- --------- Net income $ 11,542 $ 9,543 $ 4,925 $ 4,774 ========== ========== ========== ========= Income per share from continuing operations $ 0.57 $ 0.42 $ 0.24 $ 0.19 Income per share from discontinued operations - 0.04 - 0.04 ---------- ---------- ---------- --------- Net income per share $ 0.57 $ 0.46 $ 0.24 $ 0.23 ========== ========== ========== ========= Adjusted for interest on convertible debt Anti-dilutive; use basic earnings per share
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