Back to GetFilings.com
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, 2003 Commission file number 1-13788
THOMAS NELSON, INC.
(Exact name of Registrant as specified in its charter)
Tennessee 62-0679364
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
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. ( X ) YES ( ) 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 )
Indicate by check mark whether the registrant is an accelerated
filer (as defined in Rule 12B-2 of the Exchange Act). Yes ( X ) No ( )
As of June 23, 2003, the Registrant had outstanding 13,359,097 shares of
Common stock and 1,024,795 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 $91.2 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 23, 2003, as reported on The New York Stock Exchange.
DOCUMENTS INCORPORATED BY REFERENCE
Documents from which portions
Part of Form 10-K are incorporated by reference
- ------------------------------- ------------------------------
PART II
Item 5 - Market for Company's Common Page 45 of Annual Report to
Equity and Related Shareholder Shareholders for year ended
Matters March 31, 2003 (market price
and dividend information only)
Item 6 - Selected Financial Data Page 17 of Annual Report to
Shareholders for year ended
March 31, 2003
Item 7 - Management's Discussion and Pages 18 to 25 of Annual Report
Analysis of Financial Condition to Shareholders for year ended
and Results of Operations March 31, 2003
Item 7A - Quantitative and Qualitative Page 25 of Annual Report to
Disclosures about Market Risk Shareholders for year ended
March 31, 2003
Item 8 - Financial Statements and Pages 26 to 42 of Annual
Supplementary Data Report to Shareholders for
year ended March 31, 2003
PART III
Item 10 - Directors and Executive Officers To be included in Company's Proxy
of the Company Statement for the Annual
Meeting of Shareholders to be
held August 21, 2003, 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 21, 2003, 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 Certain To be included in Company's Proxy
Beneficial Owners and Management Statement for the Annual
Meeting of Shareholders to be
held August 21, 2003, 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 21, 2003, 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"), incorporated in 1961, 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 believes
it is the largest publisher of Christian and inspirational Bibles and books in
the United States.The Company also hosts inspirational conferences. The
financial performance of our publishing and conference segments is reflected
in Note T to our consolidated financial statements.
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),
W Publishing(TM), J. Countryman(R), Tommy Nelson(R), Rutledge Hill Press(R)
and Cool Springs Press(TM), 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,
churches, and ministries.
In fiscal 2003, 2002 and 2001, the Company released 523, 699 and 635 new
book titles, respectively. The Company publishes and distributes some of the
best known communicators in Christian and inspirational publishing, including
Carolyn Arends, Henry Blackaby, Kenneth Boa, Dr. Don Colbert, Ted Dekker,
Lewis Drummond, John Eldredge, Billy Graham, Franklin Graham, John Hagee, Hank
Hanegraaf, Jack Hayford, Benny Hinn, Angela Hunt, Barbara Johnson, Thomas
Kinkade, Anne Graham Lotz, Max Lucado, John C. Maxwell, John MacArthur, Frank
Peretti, Pat Robertson, Dr. Charles Stanley, Charles Swindoll, Tommy Tenney,
and Bruce Wilkinson. In addition, the Company maintains a backlist of
approximately 1,000 titles, which provides a stable base of recurring revenues
as many popular titles continue to generate significant sales from year to
year. Backlist titles accounted for approximately 52% of the book division's
net revenues in fiscal 2003. Authors and titles are supported through 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 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 one of the largest commercial publishers 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 2003 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(TM) (NKJV)(R) 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(R) in 1982.
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, Max Lucado 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 1,000 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 additional 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.
CONFERENCES
Women of Faith(R), 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. The Company benefits
through seminar attendance fees and the sale of Christian products at
seminars. In fiscal year 2003, Women of Faith hosted 28 conferences
throughout the United States, which attracted over 400,000 participants.
Womenoffaith.com is an on-line community of women who gather to build
relationships with one another. Founded in June 1999, Womenoffaith.com
created a place where Christian women from all over the world come to share
their life experiences and faith with one another. The events and the
Internet site both provide opportunities to market and sell inspirational
products.
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(R) and Borders(R); mass merchandisers such as Target(R),
WalMart(R) and Sam's(R) 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.
As of March 31, 2003, the Company employed a sales force of
approximately 112 people and maintained 24-hour-a-day telemarketing
capability. These employees service over 32,000 retail accounts and 28,000
church related accounts. Customer orders are usually shipped through a
variety of common carriers, as well as by UPS(R), FedEx(R) and parcel post.
No single customer accounted for more than 10% of net revenues during fiscal
2003.
The Company contracts with a number of foreign publishers to translate
the Company's English titles into foreign languages. The Company typically
retains publishing rights to the titles translated.
The Company distributes its products internationally in South America,
Europe, Australia, New Zealand, Africa, the Far East, Mexico and Canada. In
fiscal 2003, 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.
The Company's net revenues fluctuate seasonally, with revenues in the
first fiscal quarter historically being less than the remaining quarters of
the year. Seasonality is the result of increased consumer purchases of the
Company's products during the traditional calendar year-end holidays. Due to
this seasonality, the Company has historically incurred a loss or recognized
only a small profit during the first quarter of each fiscal year. In
addition, the Company's quarterly operating results may fluctuate significantly
due to new product introductions, the timing of selling and marketing expenses
and changes in sales and product mixes.
COPYRIGHTS AND ROYALTY AGREEMENTS
The Company customarily secures copyright registrations 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.
COMPETITION
The Company believes that it is the largest publisher of Christian and
inspirational Bibles and books in the United States. The Company competes
with numerous other companies that publish and distribute Christian and
inspirational books, 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 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 and distribution experience and its
management expertise give it a competitive advantage in signing and
maintaining contracts with top Christian and inspirational authors.
EMPLOYEES
As of March 31, 2003, the Company employed approximately 560 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.
AVAILABLE INFORMATION
The Company files reports with the Securities and Exchange Commission
(the "Commission"), including annual reports on Form 10-K, quarterly reports
on Form 10-Q and other reports from time-to-time. The Company is an
electronic filer and the Commission maintains an Internet site at
http://www.sec.gov that contains the reports, proxy and information statements,
and other information filed electronically. The Company's website address is
www.thomasnelson.com. Please note that the Company's website address is
provided as an inactive textual reference only. The Company makes available
free of charge through the Company's website, the annual report on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K, and all
amendments to those reports as soon as reasonably practicable after such
material is electronically filed with or furnished to the Commission. The
information provided on the Company's website is not part of this report, and
is therefore not incorporated by reference unless such information is
otherwise specifically referenced elsewhere in this report.
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 73 Chairman of the Board, Chief Executive
Officer, President and Director
Joe L. Powers 57 Executive Vice President and Secretary
Lee Gessner 50 Executive Vice President, Thomas Nelson
Sales and Conference Group
Vance Lawson 44 Senior Vice President, Finance and
Operations Group
Michael S. Hyatt 48 Executive Vice President and Publisher,
Thomas Nelson Book Group
Philip Stoner 43 Executive Vice President and Publisher,
Thomas Nelson Bible & Reference Group
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.
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 Thomas Nelson
Sales and Conferencing Group in February 2003. Previously, Mr. Gessner served
as Executive Vice President of the Thomas Nelson Publishing and Sales Group,
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.
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.
Michael S. Hyatt has been with the Company since February 1998. In
February 2003, he was appointed Executive Vice President and Publisher of the
Thomas Nelson Book Group. Previously, Mr. Hyatt served as Executive Vice
President and Group Publisher for Nelson Book, Tommy Nelson, Rutledge Hill
Press, Cool Springs Press and the Nelson Multi Media divisions; Executive Vice
President and Publisher of Nelson Books; Senior Vice President and Publisher
of Nelson Books and Senior Vice President and Associate Publisher of Nelson
Books. Mr. Hyatt was previously a partner with Wolgemuth & Hyatt, a literary
agency, from 1992 to 1998.
Philip Stoner has been with the Company since May 1990. He was appointed
Executive Vice President and Publisher of the Thomas Nelson Bible, Reference
and Spanish Group in February 2003. Previously, Mr. Stoner served as
Executive Vice President and Publisher for all Bible, Reference, Electronic
and Spanish Publishing; Executive Vice President and Publisher of Reference,
Electronic and Spanish Publishing; Senior Vice President and Publisher of
Reference Product; Vice President of Reference and Specialty Publishing; Vice
President of Reference and Mass Market and Director of Reference Publishing
and Director of Reference Books and Nelson's Communication Division.
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, 2003 of
approximately $600,000.
The Company's major warehouse facilities, which are owned by the Company
for its publishing division, are located in a building containing approximately
275,000 square feet adjacent to its corporate headquarters in Nashville,
Tennessee. This includes a 95,000 square foot building, which was completed
in fiscal 1976, and additions to the warehouse and distribution center of
approximately 120,000 and 60,000 square feet, which were completed during
fiscal 1993 and 2003, respectively.
The Company's significant leased properties are described below:
Square Annual Lease
Location Use/Segment Feet Rent Expiration
- -------------- ------------------------- ------ --------- ----------
Nashville, TN Sales office/publishing 38,000 $725,000 11/2005
Nashville, TN Warehousing 84,700 $245,000 12/2003
Plano, TX Office/Women of Faith 23,931 $313,000 10/2010
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 Plano, Texas 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 and office 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
The Company is subject to various legal proceedings, claims and
liabilities that 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, 2003.
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, 2003 (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, 2003 and
2002.
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 21, 2003 (the
"Proxy Statement"), to be filed within 120 days of March 31, 2003 with the
Commission pursuant to Regulation 14A under the Exchange Act. Information
regarding the Company's executive officers is contained in Part I, Item 1
herein.
Item 11. Executive Compensation
Incorporated by reference to the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information about security ownership of certain beneficial owners is
incorporated by reference to the Proxy Statement.
The Company does not maintain any equity compensation plans under which
stock may be issued except those approved by the Company's shareholders. The
table set forth below provides certain information as of March 31, 2003 with
repect to the Company's equity compensation plans:
EQUITY COMPENSATION PLAN INFORMATION
A B C
-------------------- ------------------- --------------------
Number of securities
to be issued upon Number of securities
exercise of Weighted-average available for future
outstanding options, exercise price issurance under equity
warrants and rights of outstanding compensation plans
-------------------- options, warrants (excluding securities
Plan Category Common Class B and rights reflected in Column A)
------------- --------- --------- ------------------- ---------------------
Equity
compensation Common or
plans approved 1,378,834 5,000 $10.09 653,825 Class B
by security Common
holders
- -------------------------------------------------------------------------------
Item 13. Certain Relationships and Related Transactions
Incorporated by reference to the Proxy Statement.
Item 14. Controls and Procedures
Within the past 90 days, the Chief Executive Officer and the Executive
Vice President and Secretary (Principal Financial and Accounting Officer) have
conducted an evaluation of the effectiveness of the Company's disclosure
controls and procedures pursuant to Exchange Act Rule 13a-14. Based on and as
of the date of that that evaluation, the Chief Executive Officer and Executive
Vice President and Secretary (Principal Financial and Accounting Officer)
concludedthat the disclosure controls and procedures are effective in ensuring
that material information required to be disclosed in the Company's reports
that it files or submits to the SEC under the Securities Exchange Act of 1934
has been made known to them in a timely fashion. There have been no significant
changes in internal controls, or in factors that could significantly affect
internal controls, subsequent to the date the Chief Executive Officer and
Executive Vice President and Secretary (Principal Financial and Accounting
Officer) completed their evaluation.
PART IV
Item 15. 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:
Consolidated statements of operations -- years ended March 31, 2003, 2002
and 2001
Consolidated balance sheets -- March 31, 2003 and 2002
Consolidated statements of shareholders' equity and comprehensive income
-- years ended March 31, 2003, 2002 and 2001
Consolidated statements of cash flow -- years ended March 31, 2003, 2002
and 2001
Notes to consolidated financial statements
Report of KPMG LLP, Independent Public Accountants
Copy of Report of Arthur Andersen LLP, Independent Public Accountants
RISK RELATING TO ARTHUR ANDERSEN LLP'S LACK OF CONSENT
Arthur Andersen LLP were the independent accountants for the Company
until May 10, 2002. Representatives of Arthur Andersen LLP are not available
to provide the consent required for the incorporation by reference of their
report on the financial statements of the Company appearing in this Form 10-K,
and we have dispensed with the requirements to file their consent in reliance
upon rule 437a under the Securities Act of 1933. Because Arthur Andersen LLP
have not consented to the incorporation by reference of their report,
investors will not be able to recover against Arthur Andersen LLP under
Section 11 of the Securities Act of 1933 for any untrue statements of a
material fact contained in the financial statements audited by Arthur Andersen
LLP that are included in this report or any omissions to state a material fact
required to be stated therein.
2. Financial Statement Schedules
The following consolidated financial statement schedules are included
herein:
Page
----
Report of KPMG LLP, Independent Public Accountants 17
Copy of report of Arthur Andersen LLP,
former Independent Public Accounts 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 as of May 1, 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 as of May 1, 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 dated as of May 1, 1990, from the Company to A. Stuart
Campbell, as Trustee. (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 -- Note Purchase Agreement dated January 3, 1996, among the Company,
The Prudential Insurance Company of America 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)
4.5 -- Letter Amendment No. 1 dated June 28, 1996, to Note Purchase
Agreement dated January 3, 1996, among the Company, The Prudential
Insurance Company of America 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)
4.6 -- Assumption and Amendment Agreement dated as of May 30, 1996, and as
amended June 28, 1996, between the Company, The C.R. Gibson Company,
The Prudential Insurance Company of America 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)
4.7 -- Revolving Credit Agreement dated as of June 28, 2002, among the
Company, several banks and other financial institutions from time to
time party hereto, and SunTrust Bank, Nashville, in its capacity as
Administrative Agent (filed as Exhibit 4.7 to the Company's Annual
Report on Form 10-K for the year ended March 31, 2002 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
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 -- 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)*
10.6 -- 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 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)*
10.8 -- 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)*
10.9 -- 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)*
10.10 -- Amended and Restated Asset Purchase Agreement, dated October 31, 2001
by and between the Company, The C.R. Gibson Company, and C.R. Gibson
Sales Company, Inc. and CRG Acquisition Corp., as Buyer. Schedules
to the Amended and Restated Asset Purchase Agreement have been
omitted. The Company agrees to furnish supplementally a copy of any
Schedule to the Commission upon request. (filed as Exhibit 2.1 to
the Company's Form 10-Q for the quarter period ended September 30,
2001 and incorporated herein by reference)
10.11 -- Transition Services Agreement, dated November 7, 2001, effective as
of October 31, 2001 by and between the Company and CRG Acquisition
Corp. (filed as Exhibit 10.1 to the Company's Form 10-Q for the
quarter period ended September 30, 2001 and incorporated herein by
reference)
10.12 -- Lease Agreement, dated November 7, 2001, effective as of October 31,
2001 by and between the Company, as Tenant, and CRG Acquisition
Corp., as Landlord. (filed as Exhibit 10.2 to the Company's
Form 10-Q for the quarter period ended September 30, 2001 and
incorporated herein by reference)
10.13 -- Employment Agreement dated as of November 11, 2000, between the
Company and Lee Gessner (filed as Exhibit 10.17 to the Company's
Annual Report on Form 10-K for the year ended March 31, 2002 and
incorporated herein by reference)*.
10.14 -- Employment Agreement dated as of July, 7, 2000, between the Company
and Mike Hyatt (filed as Exhibit 10.18 to the Company's Annual Report
on Form 10-K for the year ended March 31, 2002 and incorporated
herein by reference)*
10.15 -- Employment Agreement dated July 8, 1998, between the Company and Phil
Stoner (filed as Exhibit 10.19 to the Company's Annual Report
Form 10-K for the year ended March 31, 2002 and incorporated herein
by reference)*
10.16 -- Amendment to Thomas Nelson, Inc. Amended and Restated 1992 Employee
Stock Incentive Plan*
11 -- Statement re Computation of Per Share Earnings
13 -- Thomas Nelson, Inc. Annual Report to Shareholders for the year ended
March 31, 2003 (to the extent of portions specifically incorporated
by reference)
21 -- Subsidiaries of the Company
23 -- Independent Auditors' Report on Schedult and Consent
99.1 -- Certification of the President and Chief Executive Officer relating
to Form 10-K for period ending March 31, 2003
99.2 -- Certification of the Executive Vice President and Secretary (Principal
Financial and Acocunting Officer) relating to Form 10-K for period
ending March 31, 2003
- ------------------------
*Management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K
The Company filed a current report on Form 8-K on February 4, 2003, as
amended by Form 8-K/A on February 6, 2003, to announce the date and time
of its earnings release and conference call for the third quarter of
FY 2003.
The Company filed a current report on Form 8-K on February 10, 2003 to
announce its earnings results for the third quarter of FY 2003.
The Company filed a current report on Form 8-K on May 7, 2003 to announce
its earnings results for the fourth quarter and year-end for FY 2003.
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 Officerand President
Date: June 27, 2003
Pursuant to the requirements of Section 13 or 15(d) 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 27, 2003
- ---------------------------- Directors, Chief Executive
Sam Moore Officer and President
(Principal Executive Officer)
/s/ Joe L. Powers Executive Vice President and June 27, 2003
- ---------------------------- Secretary (Principal Financial
Joe L. Powers and Accounting Officer)
/s/ Jesse T. Correll Director June 27, 2003
- -----------------------------
Jesse T. Correll
/s/ Brownlee O. Currey, Jr. Director June 27, 2003
- -----------------------------
Brownlee O. Currey, Jr.
/s/ W. Lipscomb Davis, Jr. Director June 27, 2003
- -----------------------------
W. Lipscomb Davis, Jr.
/s/ S. Joseph Moore Director June 27, 2003
- -----------------------------
S. Joseph Moore
/s/ Robert J. Niebel, Sr. Director June 27, 2003
- -----------------------------
Robert J. Niebel, Sr.
/s/ Millard V. Oakley Director June 27, 2003
- -----------------------------
Millard V. Oakley
CERTIFICATIONS
I, Sam Moore, certify that:
1. I have reviewed this annual report on Form 10-K of Thomas Nelson, Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: June 27, 2003
By: /s/ Sam Moore
-----------------------
Sam Moore
Chairman, Chief Executive Officer
and President
CERTIFICATIONS
I, Joe L. Powers, certify that:
1. I have reviewed this annual report on Form 10-K of Thomas Nelson, Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date
of this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: June 27, 2003
By: /s/ Joe L. Powers
------------------------
Joe L. Powers
Executive Vice President
and Secretary
INDEPENDENT AUDITORS' REPORT ON SCHEDULE AND CONSENT
The Board of Directors
Thomas Nelson, Inc.:
The audit referred to in our report dated May 7, 2003, included the related
consolidated financial statement schedule as of March 31, 2003, and for the
year then ended included in the annual report on Form 10-K. This consolidated
financial statement schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion on this consolidated financial
statement schedule based on our audit. The consolidated financial statement
schedules for each of the years ended March 31, 2002 and 2001 were audited by
other auditors who have ceased operations. Those auditors expressed an
unqualified opinion on those consolidated financial statement schedules.
In our opinion, such financial statement schedule as of March 31, 2003 and
for the year then ended, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.
We consent to the incorporation by reference in this Form 10-K of our report
included in Thomas Nelson, Inc.'s annual report to shareholders. In addition,
we consent to the incorporation of our reports incorporated by reference in
this Form 10-K, into the Company's previously filed Registration Statements
(No.'s 33-80086 and 333-4503) on Form S-8. Our report refers to our audit of
the Company's adjustments to restate its reportable segment disclosures for
2002 and 2001 in order to conform such disclosures to the 2003 composition of
reportable segments, as more fully described in Note T to the consolidated
financial statements. However, we were not engaged to audit, review, or apply
any procedures to the 2002 and 2001 consolidated financial statements other
than with respect to such disclosures. Our report also refers to a change in
the method of accounting for goodwill and other intangible assets.
/s/ KPMG LLP
Nashville, Tennessee
May 7, 2003
COPY OF REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors
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 10, 2002. 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 10, 2002
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
March 31, March 31, March 31,
2003 2002 2001
---------- ----------- -----------
Reserve for Sales Returns:
- -------------------------
Balance at beginning of period $ 4,984,000 $ 4,637,000 $ 4,564,000
Additions:
1. Charged to costs and expenses 38,728,000 36,423,000 36,662,000
Deductions: charge-offs 37,666,000 36,076,000 36,589,000
----------- ----------- -----------
Balance at end of period $ 6,046,000 $ 4,984,000 $ 4,637,000
=========== =========== ===========
Reserve for Doubtful Accounts:
- -----------------------------
Balance at beginning of period $ 1,435,000 $ 1,538,000 $ 1,407,000
Additions:
1. Charged to costs and expenses 1,463,000 4,535,000 999,000
2. Charged to other accounts - 1,365,000 -
Deductions: charge-offs 1,633,000 6,003,000 868,000
---------- ----------- -----------
Balance at end of period $ 1,265,000 $ 1,435,000 $ 1,538,000
=========== =========== ===========
Discontinued Operations:
- -----------------------
Balance at beginning of period $ 6,313,000 $ 2,032,000 $ 2,424,000
Additions:
1. Charged to costs and expenses 137,000 6,313,000 -
Deductions:
1. Charge-offs 6,322,000 1,265,000 392,000
2. Charge to other accounts - 767,000 -
---------- ----------- -----------
Balance at end of period $ 128,000 $ 6,313,000 $ 2,032,000
=========== =========== ===========
INDEX TO EXHIBITS
Exhibit Page
Number Description Number
- ------ ----------- ------
10.18 -- Amendment to Thomas Nelson, Inc. Amended and Restated
1992 Employee Stock Incentive Plan..............................21
11 -- Statement re Computation of Per Share Earnings..................22
13 -- Thomas Nelson, Inc. Annual Report to Shareholders
for the year ended March 31, 2003 (to the extent
of portions specifically Incorporated by reference).............27
21 -- Subsidiaries of the Company.....................................23
23 -- Independent Auditors' Report on Schedule and Consent............24
99.1 -- Certification of President and Chief Executive Officer
relating to Form 10-K for period ending March 31, 2003..........25
99.2 -- Certification of Chief Financial Officer
relating to Form 10-K for period ending March 31, 2003..........26