Following a strong first quarter, sales and earnings at Thomas Nelson dipped in the second quarter ended September 30, but company president Michael Hyatt said he didn't think the soft quarter would prevent the publisher from having a solid fiscal 2005. Revenue in the period fell 3%, to $61.9 million, and net income declined 3%, to $6.4 million. Publishing sales were down 7%, to $50.2 million, partially offset by a 16% increase in conference sales.
Nelson chairman Sam Moore said the soft sales in the quarter were due to a soft retail environment, high returns and a publishing schedule geared toward the second half of the fiscal year. He said Nelson had only one major new hit in the quarter, Max Lucado's Come Thirsty, which sold about 244,000 copies (generating $2.2 million). The company's Bible unit did well in the quarter, as did its backlist, led by Wild at Heart ($974,000 in sales) and Breaking the Da Vinci Code ($660,000). Moore said Nelson is becoming more "hit driven" and that he hoped to have more to brag about in the second half of the year. Among the books set for release over the next six months are Winning with People by John Maxwell; Clay Aiken's Learning to Sign; Monster by Frank Peretti; Captivating by Wild at Heart author John Eldredge; and Michael Savage's Savage Solution.
In a conference call, Hyatt elaborated on the reasons behind Nelson's recent reorganization, explaining that the new structure will result in faster decisions made by people closer to the market. He also told analysts that while Nelson is willing to make an acquisition, it continues to be "picky." Hyatt said he thinks consolidation in the industry will eventually result in opportunities to acquire well-run smaller publishers. In response to a question, Hyatt said Nelson is considering repurposing some of its content to make it available to other companies such as Barnes & Noble.
