Augsburg Fortress, the publishing arm of the Evangelical Lutheran Church of America, had a net loss of $3 million in 2000 compared to net income of $1.1 million in 1999. Sales in the year inched ahead by $289,000 to $54.2 million. The current year has had a rocky beginning, with the publishing house reporting a net loss of $2.3 million in the first quarter, nearly $1 million higher than budgeted.
Rev. Marvin Roloff, president and CEO of Augsburg, called the results "sobering." To cope with its financial difficulties, Augsburg will cut general and administrative costs, review its personnel structure and consider pursuing affordable short-term projects as well as suspending its acquisition program for the near term, Roloff said.
Much of Augsburg's current financial problem stems from an 18-month reorganization that broke the publisher into a number of small units focusing on specific markets. Augsburg board chair Richard Lodmill said the new operating structure has not reached its full potential. "The unfortunate part is that sales have not responded to the investment we have made to this point," Lodmill said, adding that the slowing economy has also hurt revenues. Sales need to hit $60 million for the company to break even in 2001.
To complicate matters, Augsburg has become involved in a dispute with the Division for Congregational Ministries, another unit of the ELCA. The DCM board believes its publishing partnership with Augsburg is "inefficient" and "ineffective" and has authorized DCM directors to look for alternative means of publishing materials for congregations.
