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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, 2001 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)
incorporation 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. [ ]
As of June 25, 2001, the Registrant had outstanding 13,285,827 shares of
Common stock and 1,057,401 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 $101.2 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 25, 2001, 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.
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DOCUMENTS INCORPORATED BY REFERENCE
Documents from which portions
Part of Form 10-K are incorporated by reference
- - ------------------------------------- -------------------------------------
PART I
- - ------
Business Page 30 of Annual Report to
Shareholders for year ended
March 31, 2001
PART II
- - -------
Item 5 - Market for Company's Common Page 31 of Annual Report to
Equity and Related Shareholders for year ended
Shareholder Matters March 31, 2001 (market price
and dividend on only)
Item 6 - Selected Financial Data Page 9 of Annual Report to
Shareholders for year ended
March 31, 2001
Item 7 - Management's Discussion and Pages 10 to 13 of Annual Report to
Analysis of Financial Shareholders for year ended
Condition and Results March 31, 2001
of Operations
Item 7A - Quantitative and Qualitative Page 13 of Annual Report to
Disclosures about Market Shareholders for year ended
Risk March 31, 2001
Item 8 - Financial Statements and Pages 14 to 31 of Annual Report to
Supplementary Data Shareholders for year ended
March 31, 2001
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 23, 2001, 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 23, 2001, 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
and Management Meeting of Shareholders to be
held August 23, 2001, 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 and To be included in Company's Proxy
Related Transactions Statement for the Annual
Meeting of Shareholders to be
held August 23, 2001, 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.
On April 23, 2001, the Company announced that it is actively exploring
various strategic alternatives, including the possible merger, sale or
recapitalization of its wholly-owned subsidiary, The C.R. Gibson Company.
This subsidiary includes the Company's gift product segment.
In December, 2000, the Company discontinued its Ceres Candles and Gifts,
Inc. ("Ceres") subsidiary and has reported the results from that unit as a
discontinued operation. Ceres designs and manufactures high quality candles,
primarily under private labels for the specialty and department store markets.
It was determined that the full integration of this newly-acquired division
was too much of a distraction from the current focus of improving the gift
division's long-term profitability. The consolidated financial statements
for fiscal years 2001 and 2000 have been restated to show the results of Ceres
as a discontinued operation. For fiscal year 2001, the loss from discontinued
0perations (net of tax), including estimated loss on disposal was $8.6 million,
compared to an operating loss of $1.0 million for fiscal 2000.
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 Hayward, California. On December 30, 1999, the Company acquired
substantially all of the assets of Rutledge Hill Press, Inc. 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, Inc. ("NLTC") from a group of investors for approximately
$15.4 million in cash. NLTC, headquartered in Plano, Texas, operates two
primary businesses. One, Women of Faith, hosts inspirational conferences
for women at venues throughout the United States, and the other, Remuda
Ranch Center for Anorexia and Bulimia, Inc. ("Remuda Ranch"), operates
therapeutic centers in Arizona for women with eating disorders. At the NLTC
acquisition date, Remuda Ranch was designated as assets held for sale. During
fiscal 2001, the Company paid approximately $0.8 million in cash and issued
approximately 108,000 shares of the Company's common stock to acquire an
additional 10% of the outstanding shares of NLTC, and, as of March 31, 2001,
accepted additional shares of NLTC in lieu of notes receivable from a third
party affiliate. At March 31, 2001, the Company owned approximately 95% of
the outstanding shares 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 was
completed 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,
---------------------------------------------------
2001 2000 1999
---------------------------------------------------
Amount % Amount % Amount %
---------------------------------------------------
Publishing $214,147 71.9 $182,001 68.6 $173,904 64.3
Gift 83,818 28.1 83,467 31.4 96,667 35.7
---------------------------------------------------
$297,965 100.0 $265,468 100.0 $270,571 100.0
Additional information regarding the Company's product segments is incorporated
by reference to Note T on page 32 of the Annual Report to Shareholders for the
year ended March 31, 2001.
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(R), Word(R), J. Countryman(R),
Tommy Nelson(TM), and Rutledge Hill Press(R), 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 its marketing and distribution capabilities.
In fiscal 2001, publishing net revenues realized from the distribution of books
published by other companies was immaterial.
Women of Faith, acquired in the fourth quarter of fiscal 2000, hosts
inspirational conferences and has an Internet portal, womenoffaith.com. Both
are designed to foster a community setting for Christian women and to provide a
forum for them to explore and strengthen their faith. In calendar year 2000,
Women of Faith hosted 24 conferences throughout the United States, which
attracted over 360,000 participants. Womenoffaith.com has built a base of over
120,000 subscribers in 16 months and receives over 2 million page views per
month. The events and the Internet site both provide excellent opportunities
to market and sell inspirational products.
In fiscal 2001, 2000 and 1999, 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, Thomas Kinkade, Tim LaHaye, Ann Graham Lotz, Max
Lucado, John MacArthur, John Maxwell, Frank Peretti, Robert Schuller, Gary
Smalley, Charles Stanley, Charles Swindoll 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 44% of the book division's net revenues in fiscal 2001. 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 eight of the thirteen
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 55% of the Company's net revenues from Bible
publishing in fiscal 2001 were generated through sales of its proprietary Bible
products.
The following table sets forth the eight major Bible translations, in the
English language, 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
Revised Standard Version, Catholic Edition (RSVCE) 1965 No
New King James Version (NKJV) 1982 Yes
International Children's Bible (ICB) 1983 Yes
New Century Version (NCV) 1984 Yes
New Revised Standard Version (NRSV) 1990 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
proprietary NKJV in 1982. During March 2000, the Company returned the
exclusive rights to the CEV to the American Bible Society.
Electronic Bibles and biblical reference books are published under the
Nelson Electronic Publishing(TM) 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 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), Creative Papers(R),
C.R. Gibson(R)Kids Kollection(TM), Tomorrow's Treasures(TM), Stepping
Stones(R), Artworks 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 Beatrix Potter(R), Carter's(R) Infant Apparel, Disney(R),
Echo(R), Warren Kimble, and Spode(R).
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, 2001, the Company employed a sales force of approximately
270 people and maintained 24-hour-a-day telemarketing capability. These
employees service over 53,000 retail accounts and 44,000 church related
accounts. Customer orders are usually shipped through a variety of common
carriers, as well as by UPS, FedEx and parcel post. No single customer
accounted for more than 10% of net revenues during fiscal 2001.
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 2001, the Company's export operations accounted for less than 10% 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
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, 2001, the Company employed approximately 1,080 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 71 Chairman of the Board, Chief Executive
Officer, President and Director
S. Joseph Moore 38 Executive Vice President and Director;
President, Thomas Nelson Gift
Division
Joe L. Powers 55 Executive Vice President and Secretary
Lee Gessner 48 Executive Vice President, Thomas Nelson
Publishing and Sales Group
Ray Capp 48 Senior Vice President of the
Company; Executive Vice President
of the Thomas Nelson Direct Group
of Companies
Vance Lawson 42 Senior Vice President, Finance and
Operations Group
Eric Heyden 47 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.
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.
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.
Lee Gessner was appointed Executive Vice President of the Company in
December of 2000. Previously, Mr. Gessner served as Senior Vice President
and Publishing Group Executive with Word Publishing, Publisher and COO of Word
Publishing, Senior Vice President of Sales with the Thomas Nelson Publishing
Group and Vice President of Sales with Word Publishing since 1989.
Ray Capp was appointed Senior Vice President of the Company and Executive
Vice President of Thomas Nelson Sales and Internet Development in 2000.
Previously, Mr. Capp served as Senior Vice President of the Company since 1995.
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.
Vance Lawson was appointed Senior Vice President, Finance and Operations
Group in 2000. Previously, Mr. Lawson served as Vice President, Finance of the
Company since 1993 and had served as 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, 2001 of approximately
$1,126,000.
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
approximately $333,000 at March 31, 2001. The Company maintains offices and
other warehousing facilities for its gift division in Beacon Falls, Connecticut
(of approximately 112,000 square feet), which are owned by the Company.
The Company's significant leased properties are described below:
Square Annual Lease
Location Use/Segment Feet Rent Expiration
- - -------------------------------------------------------------------------------
Carmel, IN Retail store/gift 12,500 $ 88,000 09/2004
Hayward, CA Manufacturing and
offices/Ceres 54,600 $358,000 05/2005
Monroe, CT Warehousing/gift 114,000 $508,000 09/2005
Nashville, TN Creative and sales office/ 30,000 $357,000 11/2001
publishing and gift
Nashville, TN Creative office/publishing 13,700 $284,000 09/2002
Nashville, TN Retail store/gift 3,804 $106,000 05/2007
Nashville, TN Warehousing/publishing 169,400 $599,000 12/2003
Norwalk, CT Warehouse and retail
store/gift 28,000 $215,000 09/2001
Plano, TX Office/Women of Faith 16,409 $ 53,000 10/2010
Shelton, CT Warehousing/gift 152,000 $645,000 03/2002
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 Beacon Falls, Monroe and Shelton, 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, is owned by the Company.
The Company's properties are operated at or near capacity. Additional
personnel are employed as required.
Item 3. Legal Proceedings
Remuda Ranch has certain pending litigation and has received a subpoena
from the Department of Defense, Office of the Inspector General, requesting
information regarding patients who were covered by a certain third party
insurance provider. At issue is whether Remuda Ranch was an authorized and
participating provider and was precluded from billing the patients for the
difference between the approved benefit and the full cost of the treatment
received. Remuda Ranch has challenged whether it was, in fact, an authorized
or participating provider at the time of these admissions and has denied that
it is required to make any refunds. The Company believes that the results of
the above noted litigation will not have a material adverse effect on the
financial condition, results of operations or liquidity of the Company.
The Company is subject to various other 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, 2001.
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, 2001 (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, 2001 and 2000.
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 23, 2001 (the "Proxy
Statement"), to be filed within 120 days of March 31, 2001 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 operations -- years ended March 31, 2001, 2000 and 1999
Balance sheets -- March 31, 2001 and 2000
Statements of shareholders' equity -- years ended March 31, 2001, 2000
and 1999
Statements of cash flow -- years ended March 31, 2001, 2000 and 1999
Notes to consolidated financial statements
Report of Arthur Andersen LLP, Independent Public Accountants
2. Financial Statement Schedules
The following consolidated financial statement schedules are 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 Quarterly Report on 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)
4.18 -- Sixth Amendment to Credit Agreement dated as of June 29, 2001, among
the Company, SunTrust Bank, Nashville, N.A., Bank of America, N.A. in
Nashville, Creditanstalt Corporate Finance, Inc. (formerly
Creditanstalt-Bankverein) in New York, National City Bank, Kentucky in
Louisville and Amsouth Bank in Nashville.
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 (filed as
Exhibit 2.3 to the Company's Current Report on 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) (filed as
Exhibit 10.15 to the Company's Annual Report on Form 10-K for the
year ended March 31, 2000 and incorporated herein by reference)*
10.16 -- Addendum to Employment Agreement dated as of May 10, 1996, between the
Company and S. Joseph Moore (executed on June 22, 2000) (filed as
Exhibit 10.16 to the Company's Annual Report on Form 10-K for the year
ended March 31, 2000 and incorporated herein by reference)*
10.17 -- Addendum to Employment Agreement dated as of May 10, 1996, between
the Company and Joe L. Powers (executed on June 22, 2000) (filed as
Exhibit 10.17 to the Company's Annual Report on Form 10-K for the year
ended March 31, 2000 and incorporated herein by reference)*
10.18 -- Thomas Nelson, Inc. 1997 Deferred Compensation Plan for Non-employee
Directors (adopted on May 22, 1997) (filed as Exhibit 10.18 to the
Company's Annual Report on Form 10-K for the year ended
March 31, 2000 and incorporated herein by reference)*
11 -- Statement re Computation of Per Share Earnings
13 -- Thomas Nelson, Inc. Annual Report to Shareholders for the year ended
March 31, 2001 (to the extent of portions specifically incorporated
by reference)
21 -- Subsidiaries of the Company
23 -- Consent of Independent Public Accountants
- - ------------------------------
*Management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K
The following reports were filed on Form 8-K:
- The Company filed a current report on Form 8-K on October 26, 2000 to
revise its earnings expectations for the second quarter of fiscal
year 2001.
- The Company filed a current report on Form 8-K on November 1, 2000 to
announce its fiscal year 2001 second quarter earnings.
- The Company filed a current report on Form 8-K on January 30, 2001 to
announce its fiscal year 2001 third quarter earnings release date and
conference call.
- The Company filed a current report on Form 8-K on April 23, 2001 to
announce its intention to explore strategic alternatives related to
The C.R. Gibson(R) Company.
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 29, 2001
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 29, 2001
----------------------- Directors, Chief Executive
Sam Moore Officer and President
(Principal Executive Officer)
/s/ S. Joseph Moore Executive Vice President June 29, 2001
----------------------- and Director
S. Joseph Moore
/s/ Joe L. Powers Executive Vice President June 29, 2001
----------------------- and Secretary (Principal
Joe L. Powers Financial and Accounting
Officer)
/s/ Brownlee O.
Currey, Jr. Director June 29, 2001
-----------------------
Brownlee O. Currey, Jr.
/s/ W. Lipscomb
Davis, Jr. Director June 29, 2001
-----------------------
W. Lipscomb Davis, Jr.
/s/ Robert J. Niebel Director June 29, 2001
-----------------------
Robert J. Niebel
/s/ Millard V. Oakley Director June 29, 2001
-----------------------
Millard V. Oakley
/s/ Andrew Young Director June 29, 2001
-----------------------
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, Inc.'s annual report to shareholders incorporated by reference in this
Form 10-K, and have issued our report thereon dated May 18, 2001. Our audit was
made for the purpose of forming an opinion on the basic consolidated financial
statements taken as a whole. The schedule listed in the index is the
responsibility of the Company's management and is 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 18, 2001
THOMAS NELSON, INC. AND SUBSIDIARIES
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
March 31, 2001 March 31, 2000 March 31, 1999
----------------------------------------------------
Reserve for Sales Returns:
Balance at beginning of
period $5,071,000 $4,844,000 $3,934,000
Additions:
1. Charged to costs
and expenses - 227,000 910,000
2. Charged to other
accounts - - -
Deductions: charge-offs 309,000 - -
----------------------------------------------------
Balance at end of period $4,762,000 $5,071,000 $4,844,000
====================================================
Reserve for Doubtful
Accounts:
Balance at beginning of
period $1,724,000 $2,138,000 $2,228,000
Additions:
1. Charged to costs
and expenses 2,920,000 1,993,000 2,027,000
2. Charged to other
accounts - 336,000 -
Deductions: charge-offs 2,743,000 2,743,000 2,117,000
----------------------------------------------------
Balance at end of period $1,901,000 $1,724,000 $2,138,000
====================================================
Discontinued Operations:
Balance at beginning of
period $2,424,000 $2,705,000 $5,197,000
Additions:
1. Charged to costs
and expenses - - -
2. Charged to other
accounts - - -
Deductions: charge-offs 459,000 281,000 2,492,000
----------------------------------------------------
Balance at end of period $1,965,000 $2,424,000 $2,705,000
====================================================
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
- - ------- ------
4.18 -- Sixth Amendment to Credit Agreement dated as of June 29,
2001, among the Company, SunTrust Bank, Nashville, N.A.,
Bank of America, N.A. in Nashville, Creditanstalt Corporate
Finance, Inc. (formerly Creditanstalt-Bankverein) in
New York, National City Bank, Kentucky in Louisville and
Amsouth Bank in Nashville. 21
11 -- Statement re Computation of Per Share Earnings 28
13 -- Thomas Nelson, Inc. Annual Report to Shareholders for the
year ended March 31, 2001 (to the extent of portions
specifically incorporated by reference)
21 -- Subsidiaries of the Company 29
23 -- Consent of Independent Public Accountants 30