Revenues from continuing operations at Thomas Nelson for the first quarter ended June 30, 2001, fell to $64.2 million from $67.3 million in last year's first quarter, and net income dropped to $294,000 from $1.3 million.
The company has restated its results to reflect its Ceres Candle and Remuda Ranch units as discontinued operations. Nelson sold Remuda in July for $7.2 million in cash plus a $2-million note, and hopes to sell Ceres by the end of the second quarter. In addition, Nelson chairman Sam Moore said he expects the review process concerning the options for its C.R. Gibson gift division to be "substantially completed" in the current quarter.
During the first quarter, revenues in the gift division increased 4% to $18.8 million, and its operating loss was cut to $700,000 from $823,000. The sales gain was attributed to the "aggressive" sales of excess inventory at or below cost as the company looks to eliminate certain gift areas and to reduce inventory from ongoing product lines. Sales in the publishing division declined 7.7% in the quarter to $45.4 million, while operating income was cut in half to $2.3 million. The drop in results was due to the timing of new product releases, a soft retail market and higher returns.
Moore told analysts that sales to the general market were satisfactory—"good, not great"—but said retailers in the CBA market were "under pressure." He said that many of the 20 jobs eliminated earlier this year were in the product development area for the CBA market. Rutledge Hill and Bibles did well in the quarter, Moore said, but sales at both J. Countryman and Tommy Nelson, while ahead of plan, were below revenues in last year's first quarter.
Moore said that in a bid to conserve cash, management will recommend to the company's board that its dividend be temporarily discontinued.
Following the cuts in its publishing division, Nelson continues to streamline the group's management structure, consolidating nine publishing divisions into three. Michael Hyatt, executive v-p and publisher of Thomas Nelson Publishers, will oversee Rutledge Hill and the recently acquired Cool Springs Press. W Publishing Group executive v-p and publisher David Moberg added responsibility for J. Countryman and Tommy Nelson, while Phil Stoner, publisher of the reference and Spanish publishing units, will also head Nelson Bibles. Among those leaving Nelson is Fran Salamon; Salamon joined Nelson late last year from Spring Arbor as chief operating officer for Gibson. (News, Dec. 4, 2000).
