Thomas Nelson has completed the sale of its C.R. Gibson gift division to CRG Acquisition Corp. for $30.5 million. The sale ends Nelson's disastrous attempt to broaden its presence in the gift market, which began with the 1995 purchase of Gibson for $67 million. At the time of the 1995 acquisition, Gibson had sales of just under $67 million, compared to revenues of $83.8 million in fiscal 2001. As a result of the divestiture, Nelson recorded a loss from discontinued operations of $55.7 million for the second quarter ended September 30, 2001. Nelson chairman Sam Moore said the company will use the proceeds from the sale to repay debt.
The downsized Nelson reported that revenues from ongoing operations in the quarter rose 5.4%, to $58.7 million, and net income from continuing operations increased 9.4%, to $3.3 million. Moore said the sales gain was "broadly based," although sales at the W publishing group "were a little behind last year's." During the quarter, the Tommy Nelson children's division had the company's second highest seller with The Prayer of Jabez for Kids, while the Rutledge Hill imprint title I Hope You Dance was the company's fourth most popular title in the period.
Moore said that the upsurge in sales of Bibles and other inspirational titles that began after September 11 carried through into October. He said that, while ordering and shipping rates in September, October and November were "satisfactory," he remained cautious about the outlook for the holiday season because of the decline in consumer confidence and the slowing economy.
For the first six months of the year, revenues fell 0.7%, to $104.1 million, and income from continuing operations declined to $3.8 million from $5 million.
