A soft fourth quarter capped a difficult year for Thomas Nelson for the fiscal year ended March 31. Although income from continuing operations rose 14.5%, to $2.1 million, sales fell 8.4%, to $50.2 million, in the quarter. Nelson chairman Sam Moore said the revenue decline was due to the lack of a "mega-hit" to match last year's fourth-quarter bestsellers The Evangelist and Mind Siege; one less conference in its Women of Faith operation; and an increase in its reserve for returns that lowered net sales by $2 million in the quarter (one reason for the higher reserve was the poor sell-through of Evangelist and Siege).
For the full year, revenues inched up to $215.5 million from $214.1 million, and income from continuing operations fell from $9.0 million to $7.8 million. Operating income was affected by the $4.4-million charge taken because of the bankruptcy of Kmart. During the fourth quarter, Nelson sold its Kmart receivable for $900,000. "It was a challenging year," Moore acknowledged. In addition to the Kmart bankruptcy, Moore said Nelson was hurt by the recession, the events of September 11 and the restructuring of the company, which featured the sale of the gift division. Moore said the restructuring of the company "is largely completed" and that Nelson is once again focused on book publishing and related areas.
In discussing some successes of the year, Moore said the decision by the Nelson Books imprint to focus on fewer titles paid dividends; the list was cut from 77 titles to 54, but sales increased 20% and profits also had a strong increase. I Hope You Dance, published by the Rutledge Hill imprint, is closing in on one million copies in print and has helped the company improve its standing in the ABA market, as has the addition of the Cool Springs imprint. The children's division had success with several brand name efforts including titles by Max Lucado that were adapted for children.
Bible sales were soft as the company began focusing on lowering the number of titles it releases by concentrating on proprietary product. Sales in the reference and electronic publishing market were also down as were sales through the ministries channel, which Moore said was affected by the change in charitable donations after September 11.
Moore said that with the company's focus back on books, he expects Nelson to have a "very good" fiscal 2003.
