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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2000 Commission file number 0-4095
THOMAS NELSON, INC.
(Exact name of Registrant as specified in its charter)
Tennessee 62-0679364
(State or other jurisdiction of (I.R.S. employer identification number)
ncorporation or organization)
501 Nelson Place, Nashville, Tennessee 37214-1000
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (615) 889-9000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- -------------------------
Common Stock, Par Value $1.00 per share New York Stock Exchange
Class B Common Stock, Par Value $1.00 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirement for the past 90 days. YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the Registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
As of June 26, 2000, the Registrant had outstanding 13,144,794 shares
of Common stock and 1,085,801 shares of Class B common stock. On such date
the aggregate market value of shares of common stock and Class B common
stock held by nonaffiliates was approximately $124.2 million. The market
value calculation was determined using the closing sale price of the
Registrant's common stock and Class B common stock on June 26, 2000, as
reported on The New York Stock Exchange, and assumes that all shares
beneficially held by executive officers and the directors of the Registrant
and shares held in the Thomas Nelson Employee Stock Ownership Plan are
shares owned by "affiliates," a status which each of such officers and
directors individually disclaims.
DOCUMENTS INCORPORATED BY REFERENCE
Documents from which portions
Part of Form 10-K are incorporated by reference
- - - ---------------------------------------------------------------------------
PART I
Business Page 29 of Annual Report to Shareholders
for year ended March 31, 2000
PART II
Item 5 - Market for Company's Page 30 of Annual Report to Shareholders
Common Equity and Related for year ended March 31, 2000 (market
Matters price and dividend information only)
Item 6 - Selected Financial Data Page 9 of Annual Report to Shareholders
for year ended March 31, 2000
Item 7 - Management's Discussion and Pages 10 to 13 of Annual Report to
Analysis of Financial Shareholders for year ended
Condition and Results of March 31, 2000
Operations
Item 7A- Quantitative and Qualitative Page 13 of Annual Report to Shareholders
Disclosures about Market Risk for year ended March 31, 2000
Item 8 - Financial Statements and Pages 14 to 29 of Annual Report to
Supplementary Data Shareholders for year ended
March 31, 2000
PART III
Item 10- Directors and Executive To be included in Company's Proxy
Officers of the Company Statement for the Annual Meeting
of Shareholders to be held
August 17, 2000, to be filed with
the Securities and Exchange
Commission pursuant to Regulation
14A under the Securities Exchange
Act of 1934, as amended.
Item 11- Executive Compensation To be included in Company's Proxy
Statement for the Annual Meeting
of Shareholders to be held
August 17, 2000, to be filed with
the Securities and Exchange
Commission pursuant to Regulation
14A under the Securities Exchange
Act of 1934, as amended.
Item 12-Security Ownership of To be included in Company's Proxy
Certain Beneficial Owners Statement for the Annual Meeting of
and Management Shareholders to be held August 17,
2000, to be filed with the
Securities and Exchange Commission
pursuant to Regulation 14A under
the Securities Exchange Act of
1934, as amended.
Item 13- Certain Relationships To be included in Company's Proxy
and Related Transactions Statement for the Annual Meeting
of Shareholders to be held
August 17, 2000, to be filed with
the Securities and Exchange
Commission pursuant to Regulation
14A under the Securities Exchange
Act of 1934, as amended.
PART I
Item 1. Business
Thomas Nelson, Inc. (the "Company") is a leading publisher, producer and
distributor of books emphasizing Christian, inspirational and family value
themes, and believes it is the largest commercial publisher of the Bible in
English language translations. The Company also designs and markets a broad
line of gift and stationery products. The Company believes it is the largest
publisher of Christian and inspirational books in the United States and is a
major supplier of gift and stationery items.
During fiscal 2000, the Company completed three business acquisitions. On
June 24, 1999, the Company acquired substantially all of the assets of
Ceres LLC ("Ceres") for approximately $6.2 million which included the
assumption of certain liabilities. Ceres manufactures and markets high
quality candles to specialty and department store markets and is
headquartered in San Francisco, California. On December 30, 1999, the
Company acquired substantially all of the assets of Rutledge Hill Press for
approximately $4.5 million including the assumption of certain liabilities.
Rutledge Hill Press is a Nashville, Tennessee-based publisher that
specializes in cooking, quilting, regional interest and Civil War titles.
On January 28, 2000, the Company acquired approximately 70% of the outstanding
shares of New Life Treatment Centers ("NLTC") from a group of investors for
approximately $15.4 million in cash. NLTC, headquartered in Dallas, Texas,
operates two primary businesses. One hosts inspirational conferences for
women at venues throughout the United States, and the other operates
therapeutic centers in Arizona for women with eating disorders. At the date
of acquisition, the Company declared its intent to sell certain assets of
NLTC.
During fiscal 1999, the Company recorded a restructuring charge,
including related asset write-downs of $4.7 million ($3 million or $0.19 per
basic share, on an after-tax basis). The restructuring initiatives involved
the Company's gift manufacturing operations located in Connecticut and
included two plant closings and reduction of certain administrative functions.
During fiscal 1999, management decided to cease all manufacturing activities
in Connecticut. The restructuring resulted in workforce reductions of
approximately 300 employees. The products formerly produced at these
manufacturing facilities have continued to be designed and distributed by the
Company, but are now being manufactured by outside vendors. The
restructuring was essentially completed during fiscal 2000, except for the
sale of land and buildings, which is expected to occur by March 31, 2001.
The following table sets forth the net revenues (in thousands) and the
percentage of total net revenues for each of the Company's principal product
segments for the periods indicated:
Years Ended March 31,
-----------------------------------------------
2000 1999 1998
-----------------------------------------------
Amount % Amount % Amount %
-----------------------------------------------
Publishing $173,965 66.4 $168,325 64.3 $163,480 64.6
Gift 87,857 33.6 93,320 35.7 89,478 35.4
------------------------------------------------
$261,822 100.0 $261,645 100.0 $252,958 100.0
================================================
Additional information regarding the Company's product segments is
incorporated by reference to Note S on page 29 of the Annual Report to
Shareholders for the year ended March 31, 2000.
PUBLISHING
The Company's book publishing division publishes and distributes hardcover
and trade paperback books emphasizing Christian, inspirational and family
value themes. The Company believes it is the largest publisher of Christian
and inspirational books in the United States. Books are published by the
Company under several imprints including Thomas Nelson, Word, J. Countryman,
Tommy Nelson(TM), and Rutledge Hill Press, and consist generally of
inspirational, trade, gift, children's and reference books emphasizing
Christian and family value themes. The Company distributes books primarily
through Christian bookstores, general bookstores, mass merchandisers and
direct sales to consumers. Occasionally, the Company also distributes books
published by other companies to complement their marketing and distribution
capabilities. In fiscal 2000, publishing net revenues realized from the
distribution of books published by other companies was immaterial.
In fiscal 2000, 1999 and 1998, the Company released over 200 new book
titles annually. The Company publishes some of the most well-known
communicators in the Christian and inspirational field, including Henry
Blackaby, T. Davis Bunn, Larry Burkett, James Dobson, Billy Graham, John
Hagee, Barbara Johnson, Tim LaHaye, Ann Graham Lotz, Max Lucado, John
MacArthur, John Maxwell, Frank Peretti, Robert Schuller, Gwen Shamblin, Gary
Smalley, Charles Stanley and Charles Swindoll. The Company also publishes
books emphasizing positive and inspirational themes by famous athletes and
celebrities, such as Evander Holyfield, artist Thomas Kinkade, Deion Sanders,
Reggie White and Zig Ziglar. In addition, the Company maintains a backlist of
approximately 1,100 titles which provide a stable base of recurring revenues
as many popular titles continue to generate significant sales from year to
year. Backlist titles accounted for approximately 38% of the book division's
net revenues in fiscal 2000. Authors and titles are supported through the
use of radio, television, cooperative advertising, author appearances,
in-store promotions, print advertising and other means.
The Company's book publishing business is enhanced by the breadth and
development of its marketing and distribution channels. In addition to
enhancing sales of its products, the Company believes its ability to sign
and renew contracts with popular authors is improved because the Company's
marketing and distribution capabilities provide exposure for the authors'
books to a broader audience than its competitors. See "Marketing,
Distribution and Production."
The Company believes it is the largest commercial publisher of English
translations of the Bible. The Bible is based on ancient manuscripts,
which are the surviving reproductions of the original writings. These
manuscripts, written in Hebrew, Aramaic or Greek, have been translated into
English and other modern languages by biblical scholars and theologians,
generally under the auspices of a major Bible society or translation
organization. Each of the many English translations available differs in
some degree from the others, primarily because of different translation
guidelines and principles used as the basis for each translation. The
distinctiveness of each translation is also, in part, a result of the
evolution of the meaning and use of words within the English language.
Virtually all Bibles and Bible products currently published in the United
States are based on one of 13 major translations. Of these 13 translations,
12 are protected by copyright laws, which grant the copyright owner the
exclusive right, for a limited term, to control the publication of such
translation. The Company publishes Bibles and Bible products based on nine
of the 13 major translations, of which three are exclusive to the Company as
a result of copyright ownership or licensing arrangements. See "Copyrights
and Royalty Agreements." Approximately 71% of the Company's net revenues
from Bible publishing in fiscal 2000 were generated through sales of its
proprietary Bible products.
The following table sets forth the nine major Bible translations currently
published by the Company:
Date First Proprietary
Translation Published to the Company
- - - ------------- ---------- --------------
King James Version (KJV) 1611 No
New American Bible (NAB) 1970 No
New American Standard Bible (NAS) 1972 No
Today's English Version (TEV) 1976 Yes
New King James Version (NKJV) 1982 Yes
New Century Version (NCV) 1984 Yes
New Revised Standard Version (NRSV) 1990 No
Contemporary English Version (CEV) 1995 No
New Living Translation (NLT) 1996 No
The KJV, currently published in its fourth revision, is the most widely
distributed of all English translations of the Bible. In 1975, the Company
commissioned the fifth revision of the KJV resulting in the publication of
the NKJV in 1982. During March 2000, the Company reverted the exclusive
rights to the CEV back to the American Bible Society. The Company intends
to continue publishing certain CEV titles, under a licensing arrangement with
the American Bible Society.
Electronic Bibles and biblical reference books are published under the
Nelson Electronic Publishing imprint. These products include electronic
collections centered on Bible study; electronic libraries featuring
well-known authors, such as Jack Hayford, John MacArthur, John Maxwell and
Charles Stanley; and software for preparing Bible study lessons. The
Company has achieved a leadership position in the industry with its
electronic publications, and is aggressively pursuing new digital formats
of publication and distribution as they develop, such as the Internet, and
emerging portable book technologies.
The Company continually seeks to expand its Bible product line by
developing or aiding in the development of new translations and editions and
seeking new publishing opportunities. The Company also continually makes
editorial, design and other changes to its existing line of Bibles and other
Bible products in an effort to increase their marketability. The Company
currently publishes over 1,100 different Bibles and biblical reference
products such as commentaries, study guides and other popular Bible help
texts. Styles range from inexpensive paperbacks to deluxe leather-bound
Bibles to CD-Rom. Different editions of a particular Bible translation are
created by incorporating extra material, such as study helps, concordances,
indices and Bible outlines, or artwork, into the biblical text. These
editions (which are generally proprietary to the Company regardless of
whether or not the Company holds proprietary rights to the underlying Bible
translation) are targeted to the general market or positioned for sale to
specific market segments.
GIFT
The Company's Gift Division designs, produces and distributes journals and
gift books, photo albums, baby and wedding memory books, scrapbooks, kitchen
accessories, stationery and candles.
Products are marketed under the C.R. Gibson(R), Ceres(R), Creative Papers(R),
C.R. Gibson(R) Kids Kollection(TM), Toccata(R), Tomorrow's Treasures(TM),
Stepping Stones(TM) and Inspirations(R) brand names, the latter of which
incorporates Christian and inspirational text or themes. Certain product
lines are marketed as collections, with each collection including a variety
of products featuring a common design or theme. Designs include original
artwork designed in-house, as well as artwork licensed from artists or
design groups such as Dena, Beatrix Potter, Carter's Infant Apparel, Echo
and Warner Brothers.
MARKETING, DISTRIBUTION AND PRODUCTION
The principal market channels through which the Company markets its
products domestically are Christian bookstores, which are primarily
independently owned; general bookstores, including national chains such as
Barnes & Noble and Borders; specialty gift and department stores, such as
SteinMart and May Company; mass merchandisers such as Target, K-Mart,
Wal-Mart and Sam's Wholesale Club; and directly to consumers through direct
mail, telemarketing, inspirational seminars and the Internet. The Company
services these market channels through its sales force and through
wholesalers or jobbers servicing bookstores, gift stores, other retail
outlets and libraries. In addition, the Company sells certain of its products
for promotional purposes and sells specially designed or imprinted products
to certain customers.
The Company's direct marketing operations sell publishing products directly
to approximately 100,000 customers consisting of churches, other religious
organizations, pastors and other individuals by direct mail and
telemarketing. Retail sales also are made during the summer months on a
door-to-door, cash sales basis through a student sales organization operated
by the Company.
As of March 31, 2000, the Company employed a sales force of approximately
223 people and maintained 24-hour-a-day telemarketing capability. These
employees service over 44,000 retail accounts and 48,000 church related
accounts. Customer orders are usually shipped through a variety of common
carriers, as well as by UPS, RPS and parcel post. No single customer
accounted for more than 10% of net revenues during fiscal 2000.
The Company contracts with a number of foreign publishers to translate the
Company's English titles into foreign languages. The Company typically
retains ownership rights to the titles translated.
The Company distributes its products internationally in South America,
Europe, Australia, New Zealand, South Africa, the Far East, Mexico and
Canada. In fiscal 2000, the Company's export operations accounted for
approximately $19 million, or 6%, of the Company's total net revenues.
Substantially all of the Company's products are manufactured by domestic
and foreign commercial printers, binders and manufacturers which are selected
on the basis of competitive bids. The Company may contract separately for
paper and certain other supplies used by its manufacturers.
COPYRIGHTS AND ROYALTY AGREEMENTS
The Company customarily secures copyrights on its books and Bible editions
in order to protect its publishing rights. Almost all of the Company's book
products are published under royalty agreements with their respective authors
or other copyright proprietors. Many of the Company's gift products
incorporate copyrighted artwork, which is licensed directly from the artist
or the owning entity under a royalty agreement.
COMPETITION
The Company believes that it is the largest publisher of Christian and
inspirational books, the largest commercial publisher of Bibles in English
language translations and a major designer of gift and stationery items.
The publishing and gift divisions each compete with numerous other companies
that publish and distribute Christian and inspirational books or design and
distribute gift products, many of which have significantly longer operating
histories and larger revenue bases than the Company and certain of which are
tax-exempt organizations. While the Company's prices are comparable to those
of its competitors, the Company believes that its breadth of product line,
established market channels, established sales forces and customer service
give it a competitive advantage.
The most important factor with respect to the competitive position of the
Company's publishing division is the contractual relationships it establishes
and maintains with authors. The Company competes with other book publishing
companies, both Christian and secular, for signing top authors. The Company's
ability to sign and re-sign popular authors depends on a number of factors,
including distribution and marketing capabilities, the Company's management
team and the royalty and advance arrangements offered. The Company believes
its relationships with its authors, which are based on its reputation in the
book publishing industry, its marketing experience and its management
expertise give it a competitive advantage in signing and maintaining
contracts with top Christian and inspirational authors.
The Company's gift division has many competitors with respect to certain
of its product lines, but the Company believes there are few competitors who
distribute all of the Company's gift product lines. The gift division also
competes with numerous religious publishers and suppliers, including
tax-exempt church-owned organizations, in connection with the sale of its
church supply products, and with numerous large and small companies in
the sale of stationery products, gift wrap and paper tableware.
EMPLOYEES
As of March 31, 2000, the Company employed approximately 850 persons. The
Company has not suffered any work stoppages as a result of labor disputes in
recent years and considers relations with its employees to be good.
EXECUTIVE OFFICERS
Officers of the Company are elected by the Board of Directors
and serve at the pleasure of the Board of Directors. Following
is certain information regarding the executive officers of the
Company:
Name Age Position with the Company
----------------------------------------------------------------------
Sam Moore 70 Chairman of the Board,
Chief Executive Officer,
President and Director
S. Joseph Moore 37 Executive Vice President
and Director; President,
Thomas Nelson Gift Division
Joe L. Powers 54 Executive Vice President and
Secretary
Ray Capp 47 Senior Vice President of the
Company; Executive Vice
President of the Thomas
Nelson Direct Group of
Companies
Charles Z. Moore 66 Senior Vice President
Vance Lawson 41 Senior Vice President,
Finance and Operations
Group
Eric Heyden 46 Vice President and General
Counsel
Except as indicated below, each executive officer has been an employee of
the Company as his/her principal occupation for more than the past five years.
Sam Moore has been Chairman of the Board, Chief Executive Officer,
President and a Director of the Company since its founding in 1961. Sam
Moore is the father of S. Joseph Moore and the brother of Charles Z. Moore.
S. Joseph Moore was appointed Executive Vice President and Director of the
Company in 1995 and President of the Thomas Nelson Gift Division in 1996, and
prior to such appointments, he served as Divisional Vice President of the
Company in various capacities since 1991. S. Joseph Moore is the son of Sam
Moore and the nephew of Charles Z. Moore.
Joe L. Powers was appointed Executive Vice President of the Company in
1995. Previously, Mr. Powers served as a Vice President of the Company since
1980.
Ray Capp was appointed Senior Vice President of the Company in 1995 and was
appointed Executive Vice President of the Thomas Nelson Direct Group of
Companies in 2000. Prior to joining the Company, Mr. Capp was the President
and Chief Operating Officer of Ingram Merchandising Services and Assistant to
the Chairman of Ingram Distribution, Inc. since 1992 and Executive Vice
President and Chief Operating Officer of Ingram Entertainment from 1987 to
1992.
Charles Z. Moore has been a Vice President of the Company since 1983 and
was appointed Senior Vice President in 1986. Charles Moore is the brother of
Sam Moore and the uncle of S. Joseph Moore.
Vance Lawson has been the Vice President, Finance of the Company since 1993
and was appointed Senior Vice President, Finance and Operations Group in
2000. Mr. Lawson was formerly Senior Vice President of Finance and
Operations at Word since 1988.
Eric Heyden has been the Vice President and General Counsel of the Company
since 1998, Vice President and Deputy General Counsel of the Company since
1997 and Assistant General Counsel of the Company since 1995. Mr. Heyden was
previously Vice President and General Counsel with Knoedler Publishing, Inc.
from 1985 to 1995.
Item 2. Properties
The Company's executive, editorial, sales and production offices are
primarily located at its corporate headquarters at 501 Nelson Place in
Nashville, Tennessee. These facilities are housed in a 74,000 square foot
building completed in 1981, which is owned by the Company subject to a
mortgage securing a debt with an outstanding balance at March 31, 2000 of
$1,325,000.
The Company's major warehouse facilities for its publishing division are
located in a building containing approximately 215,000 square feet adjacent
to its corporate headquarters in Nashville, Tennessee. This building, which
was completed in fiscal 1978, is owned by the Company. An addition to the
warehouse and distribution center of approximately 120,000 square feet was
completed during fiscal 1993. This addition was financed by a $5,000,000
construction and term loan secured by a mortgage with an outstanding balance
of $1,000,000 at March 31, 2000. The Company maintains offices and other
warehousing facilities for its gift division in Beacon Falls, Guilford and
Norwalk, Connecticut (of approximately 112,000, 74,000 and 147,000 square
feet, respectively) which are owned by the Company. The Company anticipates
selling its Norwalk and Guilford facilities during fiscal 2001 due to the
restructuring at C.R. Gibson.
The Company leases properties as described below:
Square Annual Lease
Location Use/Segment Feet Rent Expiration
- - - ---------------------------------------------------------------------------
Bentonville, AR Display showroom 1,000 $ 12,650 04/2002
Miami, FL Editorial office/publishing 1,400 $ 11,400 08/2000
Atlanta, GA Editorial office/publishing 1,000 $ 7,000 10/2000
Atlanta, GA Display showrooms 4,600 $145,000 04/2002
Carmel, IN Retail store/gift 12,500 $ 88,000 09/2004
Clifton, NJ Manufacturing/gift 11,000 $ 49,500 10/2001
New York, NY Display showroom 2,100 $ 70,000 10/2002
Nashville, TN Creative and sales office/ 47,350 $821,000 11/2001
publishing and gift
Nashville, TN Retail store/gift 3,804 $106,000 05/2007
Nashville, TN Creative office/publishing 13,700 $267,000 09/2002
Nashville, TN Warehousing/publishing 84,700 $248,000 11/2002
Nashville, TN Warehousing/publishing 84,700 $278,000 12/2003
Shelton, CT Warehousing/gift 152,000 $645,000 03/2002
Monroe, CT Warehousing/gift 114,000 $404,000 09/2005
San Marcos, TX Retail store/gift 2,777 $ 65,000 05/2010
Ontario (Canada) Warehousing and office/gift 28,900 $175,000 08/2003
San Francisco, CA Manufacturing/offices 18,000 $115,200 04/2002
Hayward, CA Manufacturing/offices 54,600 $358,000 05/2005
All building improvements on the properties are brick veneer, metal or
block construction and are considered adequate and suitable by the Company
for the purposes for which they are used.
The Company's machinery and equipment are located in Nashville, Tennessee
and Guilford and Norwalk, Connecticut and consist primarily of computer
equipment, warehousing and shipping racks, conveyors and other material
handling equipment located at the various warehousing facilities and office
equipment. Such machinery and equipment are in good repair and adequate for
the Company's present operations. All such equipment, other than a portion
of the computer equipment that is leased under capital leases, is owned by
the Company.
The Company's properties are operated at near capacity. Additional
personnel are employed as required.
Item 3. Legal Proceedings
The Company is subject to various legal proceedings, claims and liabilities
which arise in the ordinary course of its business. In the opinion of
management, the amount of ultimate liability with respect to these actions
will not materially affect the financial position or results of operations
of the Company.
Item 4. Submission of Matters to a Vote of Security Holders
The Company did not submit any matter to a vote of its security holders
during the last quarter of its fiscal year ended March 31, 2000.
PART II
Item 5. Market for the Company's Common Equity and Related Shareholder Matters
Incorporated by reference to the Annual Report to Shareholders for the year
ended March 31, 2000 (the "Annual Report").
Item 6. Selected Financial Data
Incorporated by reference to the Annual Report.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Incorporated by reference to the Annual Report.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Incorporated by reference to the Annual Report.
Item 8. Financial Statements and Supplementary Data
Incorporated by reference to the Annual Report. Includes selected
unaudited quarterly financial data for the years ended March 31, 2000 and
1999.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Company
Information regarding the directors of the Company and compliance with
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), is incorporated by reference to the Company's Proxy
Statement for the Annual Meeting of Shareholders to be held on
August 17, 2000 (the "Proxy Statement"), to be filed within 120 days of
March 31, 2000 with the Securities and Exchange Commission (the "Commission")
pursuant to Regulation 14A under the Exchange Act. Information regarding
the Company's executive officers is contained in Part 1, Item 1 herein.
Item 11. Executive Compensation
Incorporated by reference to the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Incorporated by reference to the Proxy Statement.
Item 13. Certain Relationships and Related Transactions
Incorporated by reference to the Proxy Statement.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a) Documents filed as part of Report
1. Financial Statements
The following consolidated financial statements of the Company included in
the Annual Report are incorporated herein by reference as set forth in
Part II, Item 8:
Statements of income -- years ended March 31, 2000, 1999 and 1998
Balance sheets -- March 31, 2000 and 1999
Statements of shareholders' equity -- years ended March 31, 2000, 1999 and 1998
Statements of cash flow -- years ended March 31, 2000, 1999 and 1998
Notes to consolidated financial statements
Report of Arthur Andersen LLP, Independent Public Accountants
2. Financial Statement Schedules
The following consolidated financial statement schedule is included herein:
Page
----
Report of Arthur Andersen LLP, Independent Public Accountants 18
Schedule II -- Valuation and Qualifying Accounts and Reserves 19
Schedules not listed above have been omitted because they are not required,
are inapplicable or the required information has been given in the
consolidated financial statements or notes thereto.
3. Exhibits
The following exhibits are included herein or incorporated by reference as
indicated. Exhibit numbers refer to Item 601 of Regulation S-K.
Exhibit
Number
- - - -------
3.1 -- Thomas Nelson, Inc. Amended and Restated Charter (filed as
Exhibit 4.1 to the Company's Registration Statement on Form S-8
(No. 33-80086) and incorporated herein by reference)
3.2 -- Thomas Nelson, Inc. Amended Bylaws (filed as Exhibit 3.2 to the
Company's Annual Report on Form 10-K for the year ended March 31,
1999 and incorporated herein by reference)
4.1 -- Loan Agreement dated May 18, 1990, between the Company and The
Industrial Development Board of The Metropolitan Government of
Nashville and Davidson County (filed as Exhibit 4(e) to the
Company's Annual Report on Form 10-K for the year ended
March 31, 1990 and incorporated herein by reference)
4.2 -- Promissory Note dated May 18, 1990, of the Company payable to The
Industrial Development Board of the Metropolitan Government of
Nashville and Davidson County (filed as Exhibit 4(f) to the
Company's Annual Report on Form 10-K for the year ended
March 31, 1990 and incorporated herein by reference)
4.3 -- Deed of Trust and Security Agreement dated May 18, 1990, from the
Company to SunTrust Bank, Nashville, N.A. (filed as Exhibit 4.6 to
the Company's Annual Report on Form 10-K for the year ended
March 31, 1991 and incorporated herein by reference)
4.4 -- Construction and Term Loan Agreement dated March 31, 1992, between
the Company and SunTrust Bank, Nashville, N.A. (filed as Exhibit 4.7
to the Company's Annual Report on Form 10-K for the year ended
March 31, 1992 and incorporated herein by reference)
4.5 -- Promissory Note dated March 31, 1992, of the Company payable to
SunTrust Bank, Nashville, N.A. (filed as Exhibit 4.8 to the
Company's Annual Report on Form 10-K for the year ended
March 31, 1992 and incorporated herein by reference)
4.6 -- Deed of Trust and Security Agreement dated March 31, 1992, from the
Company to SunTrust Bank, Nashville, N.A. (filed as Exhibit 4.9 to
the Company's Annual Report on Form 10-K for the year ended
March 31, 1992 and incorporated herein by reference)
4.7 -- Amended and Restated Credit Agreement dated as of December 13, 1995,
and as amended January 3, 1996, among the Company, SunTrust Bank,
Nashville, N.A., National City Bank of Louisville, First American
National Bank in Nashville, Nationsbank of Texas, N.A. in Dallas,
and Creditanstalt Corporate Finance, Inc. (formerly Creditanstalt-
Bankverein) in New York (filed as Exhibit 4.1 to the Company's
Form 10-Q for the quarter ended December 31, 1995 and incorporated
herein by reference)
4.8 -- June 1996 Amendment and Waiver with Respect to Amended and Restated
Credit Agreement Dated as of December 13, 1995, among the Company,
SunTrust Bank, Nashville, N.A., National City Bank of Louisville,
First American National Bank in Nashville, Nationsbank of
Texas, N.A. in Dallas, and Creditanstalt Corporate Finance, Inc.
(formerly Creditanstalt-Bankverein) in New York (filed as Exhibit
4.12 to the Company's Annual Report on Form 10-K for the year ended
March 31, 1996 and incorporated herein by reference)
4.9 -- Second Amendment to Credit Agreement dated as of November 15, 1996,
among the Company, SunTrust Bank, Nashville, N.A., National City
Bank of Louisville, First American National Bank in Nashville,
Nationsbank of Texas, N.A. in Dallas, and Creditanstalt Corporate
Finance, Inc. (formerly Creditanstalt-Bankverein) in New York
(filed as Exhibit 4.1 to the Company's Current Report on Form 8-K
dated January 6, 1997 and incorporated herein by reference)
4.10 -- Third Amendment to Credit Agreement dated as of January 7, 1997,
among the Company, SunTrust Bank, Nashville, N.A., National City
Bank of Louisville, First American National Bank in Nashville,
Nationsbank of Texas, N.A. in Dallas, and Creditanstalt Corporate
Finance, Inc. (formerly Creditanstalt-Bankverein) in New York
(filed as Exhibit 4.2 to the Company's Current Report on Form 8-K
dated January 6, 1997 and incorporated herein by reference)
4.11 -- Fourth Amendment to Credit Agreement dated as of March 31, 1998,
among the Company, SunTrust Bank, Nashville, N.A., National City
Bank of Louisville, First American National Bank in Nashville,
Nationsbank of Texas, N.A. in Dallas, and Creditanstalt Corporate
Finance, Inc. (formerly Creditanstalt-Bankverein) in New York (filed
as Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q dated
September 30, 1998 and incorporated herein by reference)
4.12 -- Fifth Amendment to Credit Agreement dated as of November 30, 1998,
among the Company, SunTrust Bank, Nashville, N.A., National City
Bank of Louisville, First American National Bank in Nashville,
Nationsbank of Texas, N.A. in Dallas, and Creditanstalt Corporate
Finance, Inc. (formerly Creditanstalt-Bankverein) in New York (filed
as Exhibit 4.1 to the Company's Form 10-Q dated December 31, 1998
and incorporated herein by reference)
4.13 -- Note Purchase Agreement dated January 3, 1996, among the Company and
Metropolitan Life Insurance Company (filed as Exhibit 4.1 to the
Company's Form 10-Q for the quarter ended December 31, 1995 and
incorporated herein by reference)
4.14 -- Letter Amendment No. 1 dated June 28, 1996, to Note Purchase
Agreement dated January 3, 1996, among the Company and
Metropolitan Life Insurance Company and related waiver, dated as of
March 31, 1996 (filed as Exhibit 4.14 to the Company's Annual Report
on Form 10-K for the year ended March 31, 1996 and incorporated
herein by reference)
4.15 -- Assumption and Amendment Agreement dated as of May 30, 1996, and as
amended June 28, 1996, between the Company and Metropolitan Life
Insurance Company (filed as Exhibit 4.15 to the Company's Annual
Report on Form 10-K for the year ended March 31, 1996 and
incorporated herein by reference)
4.16 -- Loan Agreement dated as of September 21, 1989 between C.R. Gibson and
Metropolitan Life Insurance Company (filed by C.R. Gibson as
Exhibit 4(c) to The C.R. Gibson Company's Registration Statement on
Form S-2 (No. 33-43644) dated November 4, 1991 and incorporated
herein by reference)
4.17 -- Loan Agreement dated as of June 23, 1994 between C.R. Gibson and
Metropolitan Life Insurance Company (filed by C.R. Gibson
(Commission File No. 0-4855) as Exhibit 4(b) to C.R. Gibson's Annual
Report on Form 10-K for the fiscal year ended December 31, 1994,
filed with the Commission on March 14, 1995 and incorporated herein
by reference)
10.1 -- Thomas Nelson, Inc. Amended and Restated 1990 Deferred Compensation
Option Plan for Outside Directors (filed as Exhibit 4.5 to the
Company's Registration Statement on Form S-8 (No. 33-80086) dated
June 13, 1994 and incorporated herein by reference)*
10.2 -- Thomas Nelson, Inc. Amended and Restated 1992 Employee Stock
Incentive Plan (filed as Exhibit 4.6 to the Company's Proxy
Statement dated July 26, 1995, for the Annual Meeting of
Shareholders held on August 24, 1995 and incorporated herein by
reference)*
10.3 -- Severance Agreement dated as of May 17, 1991, between the Company
and Sam Moore (filed as Exhibit 10.6 to the Company's Annual Report
on Form 10-K for the year ended March 31, 1991 and incorporated
herein by reference)*
10.4 -- Employment Agreement dated as of May 13, 1996, between the Company
and Sam Moore (filed as Exhibit 10.7 to the Company's Annual Report
on Form 10-K for the year ended March 31, 1996 and incorporated
herein by reference)*
10.5 -- Employment Agreement dated as of May 10, 1996, between the Company
and S. Joseph Moore (filed as Exhibit 10.8 to the Company's Annual
Report on Form 10-K for the year ended March 31, 1996 and
incorporated herein by reference)*
10.6 -- Employment Agreement dated as of May 10, 1996, between the Company
and Joe L. Powers (filed as Exhibit 10.9 to the Company's Annual
Report on Form 10-K for the year ended March 31, 1996 and
incorporated herein by reference)*
10.7 -- Employment Agreement dated as of May 13, 1996, between the Company
and Charles Z. Moore (filed as Exhibit 10.10 to the Company's Annual
Report on Form 10-K for the year ended March 31, 1996 and
incorporated herein by reference)*
10.8 -- Employment Agreement dated as of December 22, 1994, between the
Company and Raymond T. Capp (filed as Exhibit 10.15 to the Company's
Annual Report on Form 10-K for the year ended March 31, 1995 and
incorporated herein by reference)*
10.9 -- Employment Agreement dated as of June 23, 1993, between the Company
and Vance Lawson (filed as Exhibit 10.13 to the Company's Annual
Report on Form 10-K for the year ended March 31, 1994 and
incorporated herein by reference)*
10.10 -- Employment Agreement dated as of July 10, 1995, between the Company
and Eric Heyden (filed as Exhibit 10.14 to the Company's Annual
Report on Form 10-K for the year ended March 31, 1998 and
incorporated herein by reference)*
10.11 -- Asset Purchase Agreement, dated as of November 21, 1996 by and among
the Company, Word, Incorporated and Word Direct Partners, L.P. as
Sellers and Gaylord Entertainment Company as Buyer (filed as
Exhibit 2.1 to the Company's Form 8-K dated January 6, 1997 and
incorporated herein by reference)
10.12 -- Amendment No. 1 to the Asset Purchase Agreement dated as of
January 6, 1997, by and among the Company, Word, Incorporated and
Word Direct Partners, L.P. as Sellers and Gaylord Entertainment
Company as Buyer (filed as Exhibit 2.2 to the Company's Form 8-K
dated January 6, 1997 and incorporated herein by reference)
10.13 -- Asset Purchase Agreement dated as of January 6, 1997, by and between
Nelson Word Limited and Word Entertainment Limited (filedas
Exhibit 2.3 to the Company's Form 8-K dated January 6, 1997 and
incorporated herein by reference)
10.14 -- Subsidiary Asset Purchase Agreement executed on January 6, 1997, and
dated as of November 21, 1996, between Word Communications, Ltd.
and Word Entertainment (Canada), Inc. (filed as Exhibit 2.4 to the
Company's Current Report on Form 8-K dated January 6, 1997 and
incorporated herein by reference)
10.15 -- Addendum to Employment Agreement dated as of May 13, 1996, between
the Company and Sam Moore (executed on June 22, 2000)*
10.16 -- Addendum to Employment Agreement dated as of May 10, 1996, between
the Company and S. Joseph Moore (executed on June 22, 2000)*
10.17 -- Addendum to Employment Agreement dated as of May 10, 1996, between
the Company and Joe L. Powers (executed on June 22, 2000)*
10.18 -- Thomas Nelson, Inc. 1997 Deferred Compensation Plan for Non-employee
Directors (adopted on May 22, 1997)*
11 -- Statement re Computation of Per Share Earnings
13 -- Thomas Nelson, Inc. Annual Report to Shareholders for the year ended
March 31, 2000 (to the extent of portions specifically incorporated
by reference)
21 -- Subsidiaries of the Company
23 -- Consent of Independent Public Accountants
27 -- Financial Data Schedule (for SEC use only)
*Management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during fiscal 2000.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
THOMAS NELSON, INC.
By: /s/ Sam Moore
---------------------------
Sam Moore, Chief
Executive Officer and President
Date: June 28, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Company and in the capacities and on the dates indicated.
Signature Title Date
----------- ---------- ----------
/s/ Sam Moore Chairman of the Board of June 28, 2000
------------------- Directors, Chief Executive
Sam Moore Officer and President
(Principal Executive
Officer)
/s/ S. Joseph Moore Executive Vice President June 28, 2000
-------------------- and Director
S. Joseph Moore
/s/ Joe L. Powers Executive Vice President June 28, 2000
--------------------- Secretary (Principal
Joe L. Powers Financial and Accounting
Officer)
/ s / Brownlee O.
Currey, Jr. Director June 28, 2000
----------------------
Brownlee O. Currey, Jr.
/s/ W. Lipscomb
Davis, Jr. Director June 28, 2000
----------------------
W. Lipscomb Davis, Jr.
/s/ Robert J. Niebel Director June 28, 2000
-----------------------
Robert J. Niebel
/s/ Millard V. Oakley Director June 28, 2000
-----------------------
Millard V. Oakley
/s/ Andrew Young Director June 28, 2000
-----------------------
Andrew Young
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Thomas Nelson, Inc.:
We have audited, in accordance with auditing standards generally accepted
in the United States, the consolidated financial statements included in
Thomas Nelson's annual report to shareholders incorporated by reference in
this Form 10-K, and have issued our report thereon dated May 19, 2000. Our
audit was made for the purpose of forming an opinion on those consolidated
statements taken as a whole. The schedule listed in the index is the
responsibility of the Company's management and are presented for purposes of
complying with the Securities and Exchange Commission's rules and are not
part of the basic consolidated financial statements. These schedules have
been subjected to the auditing procedures applied in the audit of the basic
consolidated financial statements and, in our opinion, fairly state in all
material respects the financial data required to be set forth therein in
relation to the basic consolidated financial statements taken as a whole.
/s/ Arthur Andersen LLP
Nashville, Tennessee
May 19, 2000
THOMAS NELSON, INC. AND SUBSIDIARIES
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
March 31, 2000 March 31, 1900 March 31, 1998
-------------------------------------------------
Reserve for Sales Returns:
Balance at beginning
of period $4,844,000 $3,934,000 $4,773,000
Additions:
1. Charged to costs
and expenses 227,000 910,000 -
2. Charged to other
accounts - - -
Deductions: charge-offs - - 839,000
------------------------------------------------
Balance at end of
period $5,071,000 $4,844,000 $3,934,000
================================================
Reserve for Doubtful
Accounts:
Balance at beginning
of period $2,138,000 $2,228,000 $2,227,000
Additions:
1. Charged to costs
and expenses 2,369,000 2,027,000 1,778,000
2. Charged to other
accounts 336,000 - -
Deductions: charge-offs 2,743,000 2,117,000 1,777,000
-----------------------------------------------
Balance at end of
period $2,100,000 $2,138,000 $2,228,000
===============================================
Discontinued Operations:
Balance at beginning
of period $2,705,000 $5,197,000 $9,101,000
Additions:
1. Charged to costs
and expenses - - -
2. Charged to other
accounts - - -
Deductions: charge-offs 281,000 2,492,000 3,904,000
-----------------------------------------------
Balance at end of
period $2,424,000 $2,705,000 $5,197,000
===============================================
Restructuring:
Balance at beginning
of period $3,067,000 $ - $ -
Additions:
1. Charged to costs
and expenses - 4,666,000 -
2. Charged to other
accounts - - -
Deductions: charge-offs 3,067,000 1,599,000 -
----------------------------------------------
Balance at end of
period $ - $3,067,000 $ -
==============================================
INDEX TO EXHIBITS
Exhibit Page
Number Number
- - - ------- ------
10.15 -- Addendum to Employment Agreement for Sam Moore 21
10.16 -- Addendum to Employment Agreement for S. Joseph Moore 22
10.17 -- Addendum to Employment Agreement for Joe L. Powers 23
10.18 -- Thomas Nelson, Inc. 1997 Deferred Compensation Plan
for Non-employee Directors 24
11 -- Statement re Computation of Per Share Earnings 28
13 -- Thomas Nelson, Inc. Annual Report to Shareholders for
the year ended March 31, 2000 (to the extent of portions
specifically incorporated by reference)
21 -- Subsidiaries of the Company 29
23 -- Consent of Independent Public Accountants 30
27 -- Financial Data Schedule (for SEC purposes only)