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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, 2005
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 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. [ ]
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 13, 2005, the Registrant had outstanding 13,936,675 shares
of Common Stock and 916,362 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 $335 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 13, 2005, 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 40 of Annual Report to
Equity, Related Shareholder Shareholders for year ended
Matters, and Issuer Purchases March 31, 2005 (market price
of Equity Securities and dividend information only)
Item 6 - Selected Financial Data Page 23 of Annual Report to
Shareholders for year ended
March 31, 2005
Item 7 - Management's Discussion and Pages 24 to 26 of Annual Report
Analysis of Financial Condition to Shareholders for year ended
and Results of Operations March 31, 2005
Item 7A - Quantitative and Qualitative Page 26 of Annual Report to
Disclosures about Market Risk Shareholders for year ended
March 31, 2005
Item 8 - Financial Statements and Pages 28 to 38 of Annual
Supplementary Data Report to Shareholders for
year ended March 31, 2005
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 18, 2005, 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 18, 2005, 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 18, 2005, 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 18, 2005 to be
filed with the Securities and
Exchange Commission pursuant
to Regulation 14A under the
Securities Exchange Act of
1934, as amended.
Item 14 - Principal Accountant Fees To be included in Company's Proxy
and Services Statement for the Annual
Meeting of Shareholders to be
held August 18, 2005, 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 V 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 Bibles and books in the United States. Books are published by
the Company under several imprints including Thomas Nelson(R), W PublishingTM,
J. Countryman(R), Tommy Nelson(R), Nelson Current, Rutledge Hill Press(R), Cool
Springs PressTM, WestBow Press, Caribe-Betania Editores, Nelson Electronic
and Reference, World Publishing and our newest imprint, Nelson Ignite, and
consist generally of inspirational, trade, gift, children's and reference books
emphasizing Christian and family values themes. The Company distributes books
primarily through Christian bookstores, general bookstores, mass merchandisers
and direct sales to consumers, churches, and ministries.
In fiscal 2005, 2004 and 2003, the Company released 452, 480 and 523 new
book titles, respectively. The Company publishes and distributes some of the
best known communicators in Christian and inspirational publishing, including
John Bevere, Lisa Bevere, Henry Blackaby, Dr. Don Colbert, Ted Dekker, 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, Dr. Charles
Stanley and Charles Swindoll. In addition, the Company maintains a backlist of
over 4,900 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 45% of the book division's net
revenues in fiscal 2005. 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 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 fourteen major translations. Of these fourteen
translations, thirteen are protected by copyright laws, which grant the
copyright owner the exclusive right, for a limited term, to control the
publication of such translation. The Company publishes Bibles and Bible
products based on nine of the fourteen major translations, of which three are
exclusive to the Company as a result of copyright ownership. Approximately 41%
of the Company's net revenues from Bible publishing in fiscal 2005 were
generated through sales of its proprietary Bible products.
The following table sets forth the nine 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 Standard Bible (NASB) 1960 No
Revised Standard Version, Catholic Edition (RSVCE) 1965 No
New American Bible (NAB) 1970 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 and Reference PublishingTM 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 believes it 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
eveloping 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 approximately 3,400 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 to audio and video products. 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) hosts inspirational conferences and has an Internet
portal, womenoffaith.com. Both are designed to foster a community setting for
Christian women and to introduce women to a lifestyle of God's Grace. The
Company benefits through conference attendance fees and the sale of Christian
products at the conferences. In fiscal year 2005, Women of Faith hosted 28
conferences throughout North America, which attracted approximately 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. During the last two fiscal years,
womenoffaith.com shipped product to over 39,000 unique customers. The
conferences 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 include national chains
and stores owned independently; general bookstores, including national chains
such as Barnes & Noble(R) and Borders(R); mass merchandisers such as Costco(R),
Target(R), Wal-Mart(R) and Sam's(R) Wholesale Club and directly to consumers
through direct mail, telemarketing, inspirational conferences 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, 2005, the Company employed a sales force of approximately
125 people and maintained 24-hour-a-day telemarketing capability. These
employees service over 17,000 retail accounts and 39,000 church, school and
consumer-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
2005.
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 2005, 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 each of 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. 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, 2005, the Company employed approximately 600 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 the annual
report on Form 10-K, quarterly reports on Form 10-Q and current reports on
Form 8-K available free of charge through the Company's website, as well as 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 75 Chairman of the Board, Chief Executive
Officer and Director
Michael S. Hyatt 49 President, Chief Operating Officer and
Director
Joe L. Powers 59 Executive Vice President, Chief Finacial
Officer and Secretary
Vance Lawson 46 Senior Vice President, Finance and
Operations Group
Except as indicated below, each executive officer has been an employee of
the Company as his principal occupation for more than the past five years.
Sam Moore has been Chairman of the Board, Chief Executive Officer and a
Director of the Company since its founding in 1961. He was also President
until January 2004.
Michael S. Hyatt was appointed President and Chief Operating Officer of
the Company in January 2004. He 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 Books, 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.
Joe L. Powers was appointed Executive Vice President, Chief Financial
Officer and Secretary of the Company in 1995. Previously, Mr. Powers served as
a Vice President of the Company since 1980.
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, Incorporated since 1988.
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.
The Company's major warehouse facilities, which are owned by the Company,
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 has signed a lease commencing August 2005 for 41,000 square
feet of office space which will replace the current office space lease of
38,000 square feet expiring November 2005.
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 $745,000 11/2005
Plano, TX Office/Women of Faith 23,931 $340,000 10/2010
Nashville, TN Sales office/publishing 41,000 $580,000 12/2013
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 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 near capacity. The warehouse
currently operates two daily shifts and could run three daily shifts, if
necessary. Additional personnel are employed as required.
Item 3. Legal Proceedings
On February 3, 2004, the Company received a letter from one of its former
customers that has filed for Chapter 11 bankruptcy. It indicated that the
Company may have received preference transfers, in the form of cash and
returned books, totaling approximately $1.7 million. This claim was settled in
April 2005 with a payment of $18,125.
The Company is subject to various other 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 5. Market for the Company's Common Equity, Related Shareholder Matters,
and Issuer Purchases of Equity Securities
Incorporated by reference to the Annual Report to Shareholders for the
year ended March 31, 2005 (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, 2005 and 2004.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures, as defined in
Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act"), that are designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms
and that such information is accumulated and communicated to its management,
including its Chairman and Chief Executive Officer (principal executive officer)
and Executive Vice President and Secretary (principal financial and accounting
officer), as appropriate, to allow timely decisions regarding required
disclosure. The Company carried out an evaluation, under the supervision and
with the participation of its management, including its Chairman and Chief
Executive Officer and its Executive Vice President and Secretary, of the
effectiveness of the design and operation of its disclosure controls and
procedures as of the end of the period covered by this report. Based on the
evaluation of these disclosure controls and procedures, the Chairman and
Chief Executive Officer and the Executive Vice President and Secretary
concluded that the Company's disclosure controls and procedures were effective.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company's internal controls over financial
reporting during the Corporation's fiscal quarter ended March 31, 2005 that
have materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.
Management's Assessment on Internal Control Over Financial Reporting
Management of the Company is responsible for establishing and maintaining
effective internal control over financial reporting as defined in
Rules 13a-15(f) under the Securities Exchange Act of 1934. The Company's
internal control over financial reporting is designed to provide reasonable
assurance that the controls and procedures will meet their objectives regarding
the preparation and fair presentation of published financial statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation.
The Company's management assessed the effectiveness of the Company's
internal control over financial reporting, based on the criteria in Internal
Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on management's
evaluation under the criteria in Internal Control - Integrated Framework, we
concluded that our internal control over financial reporting was effective as
of March 31, 2005.
Management's assessment of the effectiveness of the Company's internal
control over financial reporting as of March 31, 2005 has been audited by
KPMG LLP, an independent registered public accounting firm, as stated in their
report which is included herein.
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 18, 2005 (the
"Proxy Statement"), to be filed within 120 days of March 31, 2005 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, 2005 with
respect 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 1,326,486(1) 300,000 $11.94 539,000 Class B
by security Common
holders
- -------------------------------------------------------------------------------
(1) Includes 231,684 options exercisable for either Class B or Common shares.
Item 13. Certain Relationships and Related Transactions
Incorporated by reference to the Proxy Statement.
Item 14. Principal Accountant Fees and Services
Incorporated by reference to the Proxy Statement.
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 income -
- years ended March 31, 2005, 2004 and 2003
Consolidated balance sheets -- March 31, 2005 and 2004
Consolidated statements of shareholders' equity and comprehensive income -
- years ended March 31, 2005, 2004 and 2003
Consolidated statements of cash flow -
- years ended March 31, 2005, 2004 and 2003
Notes to consolidated financial statements
Report of KPMG LLP, Independent Registered Public Accounting Firm
Report of KPMG LLP, Independent Registered Public Accounting Firm
2. Financial Statement Schedules
The following consolidated financial statement schedules are included
herein:
Page
----
Schedule II -- Valuation and Qualifying Accounts and Allowances 17
Report of KPMG LLP, Independent Registered Public Accounting Firm 20
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.
(b) Reports on Form 8-K
- On February 2, 2005, the Company furnished a current report on Form 8-K
to announce the results and financial condition for the third quarter of
fiscal 2005.
- On May 16, 2005, the Company furnished a current report on Form 8-K to
announce the results and financial condition for the fourth quarter of
fiscal 2005.
- On May 23, 2005, the Company furnished a current report on Form 8-K to
announce that Mr. Jesse T. Correll has decided not to stand for
re-election to the Board but would serve the remainder of his term,
which expires on August 18, 2005, the date of the Annual Meeting of
Shareholders of the Company.
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 -- 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)
4.2 -- 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)
4.3 -- 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)
4.4 -- First Amendment to Revolving Credit Agreement dated August 27, 2004,
among Thomas Nelson, Inc., the Lenders from time totime party thereto
and SunTrust Bank, as Administrative Agent (filed as Exhibit 99.1 to
the Company's Current Report on Form 8-K dated August 30, 2004 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 -- 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)*
10.4 -- 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)*
10.5 -- 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)*
10.6 -- 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)*
10.7 -- 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)*
10.8 -- 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)*
10.9 -- 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)
10.10 -- 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)
10.11 -- 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)
10.12 -- 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)*
10.13 -- 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)*
10.14 -- Amendment to Thomas Nelson, Inc. Amended and Restated 1992 Employee
Stock Incentive Plan (filed as Exhibit 10.16 to the Company's Annual
Report on Form 10-K for the year ended March 31, 2003 and incorporated
herein by referece)*
10.15 -- Thomas Nelson, Inc. 2003 Stock Incentive Plan, as adopted on
August 21, 2003 (filed as Appendix B to the Company's Proxy Statement
dated July 11, 2003, for the Annual Meeting of Shreholders held on
August 21, 2003 and incorporated herein by reference)*
10.16 -- Employment Agreement dated May 25, 2004 between the Company and
Michael S. Hyatt (filed as Exhibit 10.18 to the Company's Annual
Report on Form 10-K for the year ended March 31, 2004 and incorporated
herein by reference)*
10.17 -- Employment Agreement dated March 25, 1998 between the Company and
Jerry Park*
13 -- Thomas Nelson, Inc. Annual Report to Shareholders for the year ended
March 31, 2005 (to the extent of portions specifically incorporated
herein by reference)
21 -- Subsidiaries of the Company
23 -- Reports on Schedule and Consents of Independent Registered
Accounting Firm
31.1 -- Certification of Sam Moore, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2 -- Certification of Joe L. Powers, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1 -- Certification of Sam Moore, pursuant to 18 U.S.C. Section 1350 -
the Sarbanes-Oxley Act of 2002.
32.2 -- Certification of Joe L. Powers, pursuant to 18 U.S.C. Section 1350 -
the Sarbanes-Oxley Act of 2002.
- ------------------------
*Management contract or compensatory plan or arrangement.
The information contained in this Annual Report on Form 10-K includes
statements that are forward-looking as defined in Section 21E of the Securities
Exchange Act of 1934. Actual results could differ materially from those
projected in the forward-looking statemetns. Information concerning factors
that could cause actual results to differ materially from those in the forward-
looking statements is contained in the Management's Discussion and Analysis of
Financial Condition and Results of Operations section of the Company's 2004
Annual Report to Shareholders, portions of which are incorporated by reference
in this Annual Report on Form 10-K.
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
Date: June 14, 2005
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 14, 2005
- ---------------------------- Directors and Chief Executive
Sam Moore Officer
/s/ Michael S. Hyatt President and Chief Operating June 14, 2005
- ---------------------------- Officer
Michael S. Hyatt
/s/ Joe L. Powers Executive Vice President, June 14, 2005
- ---------------------------- Secretary, and Chief Financial
Joe L. Powers Officer
/s/ Ronald W. Blue Director June 14, 2005
- -----------------------------
Ronald W. Blue
/s/ Jesse T. Correll Director June 14, 2005
- -----------------------------
Jesse T. Correll
/s/ Brownlee O. Currey, Jr. Director June 14, 2005
- -----------------------------
Brownlee O. Currey, Jr.
/s/ W. Lipscomb Davis, Jr. Director June 14, 2005
- -----------------------------
W. Lipscomb Davis, Jr.
/s/ S. Joseph Moore Director June 14, 2005
- -----------------------------
S. Joseph Moore
/s/ Millard V. Oakley Director June 14, 2005
- -----------------------------
Millard V. Oakley
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS AND ALLOWANCES
March 31, March 31, March 31,
2005 2004 2003
---------- ----------- -----------
Allowance for Sales Returns:
- ---------------------------
Balance at beginning of period $ 6,792,000 $ 6,046,000 $ 4,984,000
Additions:
1. Charged to costs and expenses 41,053,000 40,058,000 38,728,000
Deductions:
1. Charge-offs 40,408,000 39,312,000 37,666,000
----------- ----------- -----------
Balance at end of period $ 7,437,000 $ 6,792,000 $ 6,046,000
=========== =========== ===========
Allowance for Doubtful Accounts:
- -------------------------------
Balance at beginning of period $ 1,159,000 $ 1,264,000 $ 1,435,000
Additions:
1. Charged to costs and expenses 600,000 1,262,000 1,463,000
Deductions:
1. Charge-offs 657,000 1,368,000 1,633,000
----------- ----------- -----------
Balance at end of period $ 1,102,000 $ 1,159,000 $ 1,265,000
=========== =========== ===========
Discontinued Operations:
- -----------------------
Balance at beginning of period $ 158,000 $ 128,000 $ 6,313,000
Additions:
1. Charged to costs and expenses - 208,000 -
Deductions:
1. Charge-offs 114,000 178,000 6,185,000
---------- ----------- -----------
Balance at end of period $ 44,000 $ 158,000 $ 128,000
=========== =========== ===========
INDEX TO EXHIBITS
Exhibit Page
Number Description Number
- ------ ----------- ------
10.17 -- Employment Agreement dated March 25, 1998 between the Company
and Jerry Park*.................................................19
13 -- Thomas Nelson, Inc. Annual Report to Shareholders
for the year ended March 31, 2005 (to the extent
of portions specifically incorporated by reference).............23
21 -- Subsidiaries of the Company.....................................52
23 -- Reports on Schedule and Consents of Independent
Registered Accounting Firm......................................53
31.1 -- Certification of Sam Moore, pursuant to Section 302
of the Sarbanes-Oxley Act of 2002...............................54
31.2 -- Certification of Joe L. Powers, pursuant to Section 302
of the Sarbanes-Oxley Act of 2002...............................55
32.1 -- Certification of Sam Moore, pursuant to
18 U.S.C. Section 1350 - the Sarbanes-Oxley Act of 2002.........56
32.2 -- Certification of Joe L. Powers, pursuant to
18 U.S.C. Section 1350 - the Sarbanes-Oxley Act of 2002.........57