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"THIS DOCUMENT IS A COPY OF THE ANNUAL REPORT ON FORM 10-K
FILED ON JULY 2, 1996, PURSUANT TO A RULE 201 TEMPORARY
HARDSHIP EXEMPTION."
=================================================================
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 Commission file number
March 31, 1996 0-4095
--------------------
THOMAS NELSON, INC.
(Exact name of Registrant as specified in its charter)
Tennessee 62-0679364
(State or other jurisdiction of (I.R.S. employer
incorporation organization identification number)
Nelson Place at Elm Hill Pike, 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 New York Stock Exchange
per share
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirement for the past 90 days. YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of the registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
As of June 26, 1996, the Registrant had outstanding
16,006,183 shares of common stock and 1,112,075 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 $181.1 million. The market value calculation
was determined using the closing sales price of the Registrant's
common stock and Class B common stock on June 26, 1996, as
reported on The New York Stock Exchange, and assumes that all
shares beneficially held by executive officers and the Board of
Directors of the Registrant are shares owned by "affiliates", a
status which each of such officers and directors individually
disclaims.
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DOCUMENTS INCORPORATED BY REFERENCE
Documents from which portions
Part of Form 10-K are incorporated by reference
- ------------------------------ -----------------------------
PART II
Item 5 - Market for Company's Page 41 of the Annual Report to
Common Equity and Shareholders for year ended
Related Shareholder March 31, 1996 (market price
Matters and dividend information only)
Item 6 - Selected Financial Page 16 of Annual Report to
Data Shareholders for year ended
March 31, 1996
Item 7 - Management's Page 17 to 21 of Annual Report to
Discussion and Shareholders for year ended
Analysis of Financial March 31, 1996
Condition and Results
of Operations
Item 8 - Financial Statements Page 22 to 40 of Annual Report to
and Supplementary Data Shareholders for year ended
March 31, 1996
PART III
Item 10 - Directors and Executive To be included in Company's Proxy
Officers of the Company Statement for the Annual Meeting
of Shareholders to be held
August 22, 1996, 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 22, 1996, to be filed with
the Securities and Exchange
Commission pursuant to Regulation
14A under the Securities Exchange
Act of 1934, as amended.
Item 12 - Security Ownership of To be included in Company's Proxy
Certain Beneficial Owners Statement for the Annual Meeting
and Management of Shareholders to be held
August 22, 1996, 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 22, 1996, to be filed with
the Securities and Exchange
Commission pursuant to Regulation
14A under the Securities Exchange
Act of 1934, as amended.
PART I
Item 1. BUSINESS
Thomas Nelson, Inc. (the "Company") is a leading publisher,
producer and distributor of books and recorded music emphasizing
Christian, inspirational and family value themes, and believes it
is the largest commercial publisher of the Bible in English
language translations. The Company also designs, manufactures
and markets a broad line of gift and stationery products. The
Company believes it is the largest publisher of Christian and
inspirational books and the largest producer of recorded
Christian music in the United States and the fourth largest
manufacturer of gift and stationery items in the world.
The Company, incorporated under the laws of the State of
Tennessee in 1961, has grown significantly over the last five
years through a combination of internal product development,
expanded product distribution and acquisitions. In November
1992, the Company acquired Word, Incorporated ("Word"), a leading
producer and publisher of Christian music with complementary
operations in Christian and inspirational book publishing. The
Company also has enhanced its position in the gifts products
market and related distribution channels through its March 1994
combination with PPC, Inc. ("Pretty Paper"), a designer and
manufacturer of gift products and collections, and through the
acquisition of The C.R. Gibson Company ("C.R. Gibson"), effective
October 31, 1995. C.R. Gibson, based in Norwalk, Connecticut, is
a leading designer, manufacturer and distributor of paper gift
products, including baby and wedding memory books, stationery,
gift wrap, greeting cards and other products.
During the fourth quarter of fiscal 1996, the Company
determined to discontinue its Royal Media division operations as
part of its business strategy to refocus its efforts and
resources on the growth of the Company's core businesses. The
Royal Media division was formed in fiscal 1995 to evaluate and
implement new initiatives in the use of alternative forms of
media and new distribution technologies to further capitalize on
the commercial potential of the Company's intellectual
properties. As a result of the termination of the Royal Media
operations, the Company incurred a net loss of approximately $4.7
million from discontinued operations for the fiscal year ended
March 31, 1996.
The following table sets forth the net revenues (in
thousands) and the percentage of total net revenues for each of
the Company's principal product lines for the periods indicated:
Year Ended March 31,
--------------------------------------------
1996 1995 1994
--------------------------------------------
Amount % Amount % Amount %
--------------- ------------ -------------
Publishing:
Book $ 88,334 28.6 $ 85,652 32.5 $ 76,988 34.2
Bible 73,555 23.9 60,214 22.8 53,212 23.6
--------------- -------------- ------------
Total
Publishing 161,889 52.51 45,866 55.31 30,200 57.8
Music 88,572 28.7 89,102 33.8 72,912 32.4
Gifts 54,790 17.8 25,337 9.6 19,926 8.8
Other 3,159 1.0 3,406 1.3 2,291 1.0
--------------- ------------ -----------
$308,410 100.0 $263,711 100.0 $225,329 100.0
================ ============= =============
PUBLISHING
Books
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 the "Nelson" and "Word" imprints and consist
generally of inspirational and personal experience books, and
educational, trade and reference books emphasizing Christian,
inspirational and family value themes. The Company distributes
books primarily through Christian bookstores, general bookstores,
mass merchandisers and directly to consumers. The Company also
distributes books published by other companies to complement
their marketing and distribution capabilities. In fiscal 1996,
approximately 13% of the book division's net revenues related to
the distribution of books published by other companies.
In fiscal 1996, the Company published over 200 new titles
and, in each of the previous two fiscal years, published over 300
new titles. The Company publishes some of the most well-known
communicators in the Christian and inspirational field, including
Charles Colson, James Dobson, Billy Graham, Benny Hinn, Barbara
Johnson, Max Lucado, Frank Peretti, Pat Robertson, Robert
Schuller, Gary Smalley, Charles Stanley, Charles Swindoll, and
Bodie and Brock Thoene. The Company also publishes books
emphasizing positive and inspirational themes by famous athletes
and celebrities, such as Bobby Bowden, Hugh Downs, Joe Gibbs,
Evander Holyfield, Bill McCartney, Tom Osborn, Nolan Ryan and Zig
Ziglar. In each of the last three fiscal years, the Company
published over 50% of the top ten bestselling Christian and
inspirational books based on the monthly Bookstore Journal
Christian Hardcover Bestsellers' Lists. In addition, the Company
maintains a backlist of approximately 1,400 titles which provide
a stable base of recurring revenues as many popular titles
continue to generate significant sales from year to year.
Backlist titles accounted for approximately 55% of the book
division's net revenues in fiscal 1996. Authors and titles are
supported through the use of radio, television, cooperative
advertising, author appearances, in-store promotions, direct mail
catalogs, book clubs and other means.
The Company's book publishing business is enhanced by the
breadth and development of its marketing and distribution
channels. In addition to enhancing sales of its products, the
Company believes its ability to sign and renew contracts with
popular authors is improved because the Company's marketing and
distribution capabilities provide exposure for the authors' books
to a broader audience than its competitors. See "-Marketing,
Distribution and Production."
Bibles
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 ten major translations.
Of these ten translations, nine 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 ten major translations, of which four are exclusive to the
Company as a result of copyright ownership or licensing
arrangements. See "-Copyrights and Royalty Agreements."
Approximately 70% of the Company's net revenues from Bible
publishing in fiscal 1996 were generated through sales of its
proprietary Bible products.
The following table sets forth the nine major Bible
translations currently published by the Company:
Date First Proprietary
Translation Published to the Company
- ----------- ---------- --------------
King James Version (KJV) 1611 No
New American Bible (NAB) 1970 No
The Living Bible (TLB) 1971 No
New American Standard Bible (NAS) 1972 No
Today's English Version (TEV) 1976 Yes
New King James Version (NKJV) 1982 Yes
New Century Version (NCV) 1984 Yes
New Revised Standard Version (NRSV) 1990 No
Contemporary English Version (CEV) 1995 Yes
The KJV, currently published in its fourth revision, is the
most widely distributed of all English translations of the Bible.
In 1975, the Company commissioned the fifth revision of the KJV
resulting in the publication of the NKJV in 1982. The monthly
Bookstore Journal consistently reports that the KJV, NKJV and NCV
are the second, third and fourth best selling Bible translations
in the United States, respectively. Among the Company's new
products is the CEV, translated under the auspices of the
American Bible Society, which is designed to be easy to read and
understandable at virtually any reading level. The new testament
portion of the CEV was first published by the Company in 1991 and
the complete CEV Bible was released in June 1995.
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 1,300 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. Different
editions of a particular Bible translation are created by
incorporating extra material, such as study helps, concordances,
indices and Bible outlines, or artwork, into the biblical text.
These editions (which are generally proprietary to the Company
regardless of whether or not the Company holds proprietary rights
to the underlying Bible translation) are targeted to the general
market or positioned for sale to specific market segments.
MUSIC
The Company believes it is the leading producer, distributor
and publisher of Christian and inspirational music in the United
States. The Company's music division produces a wide variety of
traditional and contemporary Christian and inspirational music,
such as gospel, praise and worship, and adult contemporary, as
well as pop, country, rock, rhythm and blues, rap and metal with
an emphasis on positive, inspirational and family value themes.
In addition, the music division produces master recordings of
classical music, the Bible on cassette, children's music and
video, and other products, and is a leading supplier of value
priced Christmas music to mass market, convenience and specialty
stores.
The Company produces recorded music and related products
under seven proprietary recording labels and in fiscal 1996
released 79 new titles. Each label is managed and operated by
its own staff within the music division. Over 50 recording
artists are currently under contract for future releases.
Artists produced by the Company include Anointed, Helen Baylor,
Shirley Caesar, Bryan Duncan, Amy Grant, Sandi Patty, Petra and
Point of Grace. In 1996, the Company's artists received 15 Dove
Awards, the Christian music industry's annual awards for
outstanding artists and releases sponsored by the Gospel Music
Association.
As is customary in the recording industry, contractual
arrangements with recording artists provide for the artist to
receive as a royalty a percentage of the suggested retail price
of recorded products sold. Most artists receive advance payments
against future royalties earned. The Company enters into
exclusive multi-record agreements with its recording artists.
During fiscal 1996, the Company renewed recording contracts with
all major artists whose contracts expired during the period.
The Company also distributes recordings for other companies
under their recording labels pursuant to exclusive distribution
agreements. Owners of these third party labels contract with the
Company for the distribution of products typically on an
exclusive basis to Christian markets worldwide. In fiscal 1996,
approximately 26% of the music division's net revenues were
attributable to products distributed under recording labels owned
or controlled by other companies.
In addition to producing and distributing recorded music,
the Company operates a music publishing business engaged in
songwriter development, print music publishing and copyright
administration. The Company has approximately 70 songwriters
under contract who write for the Company's recording artists and
for licensing to independent organizations for print and
recording products. Contracts in the music publishing business
range from exclusive songwriters' arrangements to co-publishing
agreements to copyright administration agreements. The Company
prints and distributes church hymnals, choral music, instrumental
music, vocal folios and solo tracks for churches and other
religious organizations. The copyright administration area
oversees the Company's music catalog of approximately 40,000
copyrighted songs which are licensed to independent publishers,
record companies, churches and other organizations.
GIFTS
The Company's gift division more than doubled in size during
fiscal 1996 through the acquisition of C.R. Gibson, and believes
it now is the fourth largest manufacturer of gift and stationery
products in the world. Current product lines offered by the
Company include journals and gift books, photo albums, baby and
wedding memory books, kitchen accessories, and stationery.
Products are marketed under the C.R. Gibson , Markings ,
Pretty Paper , Creative Papers , Stepping Stones and
Inspirations brand names, the latter of which incorporates
Christian and inspirational text or themes. Certain product
lines are marketed as collections, with each collection including
a variety of products featuring a common design or theme.
Designs include original art work designed in-house as well as
licensed from artists or design groups such as Waverly Fabrics
and Colonial Williamsburg.
The Company believes the gift division has significant
opportunities for growth as a result of the range of
complementary gift categories not offered currently and the
breadth of the Company's existing and potential distribution
channels. In addition to its product lines, the C.R. Gibson
acquisition provides the Company access to a dedicated sales
force of more than 100 representatives experienced in marketing
to the general gift department and specialty stores and C.R.
Gibson's manufacturing and distribution facilities.
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 B. Dalton Booksellers and Waldenbooks;
mass merchandisers such as Target, K-Mart, WalMart and Sam's
Wholesale Club; and directly to consumers through direct mail,
telemarketing and book and record clubs. The Company also
markets its products through other market channels, such as gift,
specialty retail and convenience stores. The Company services
these market channels through its sales force, and through
wholesalers or jobbers servicing bookstores, gift stores,
convenience stores, other retail outlets and libraries. Certain
recorded music products are also distributed to the secular
markets pursuant to a domestic distribution agreement with a
major record distribution company. In addition, the Company
sells certain of its products for promotional purposes and sells
specially designed or imprinted products to certain customers.
The Company's direct marketing operations sell religious and
inspirational products directly to consumers through a variety of
direct marketing methods, including direct mail, continuity
programs (selling a series of products over time) and the
Company's book and record clubs. The Company's book and record
clubs include the Word Family Record and Tape Club, which has
approximately 250,000 members and features contemporary,
traditional and gospel music, and its Book Club, Children's
Record Club, Children's Book Club and Continuity Programs, which
have a combined membership of approximately 150,000 members. The
Company also sells products directly to churches and religious
organizations by direct mail and telemarketing. The Company
markets academic and contemporary books, hymnals, choral music,
trade books and recorded music to approximately 200,000 churches,
other religious organizations and pastors. Retail sales also are
made during the summer months on a door-to-door, cash sales basis
through a student sales organization operated by the Company.
As of March 31, 1996, the Company employed a sales force of
approximately 290 people and maintains 24-hour-a-day
telemarketing capability. These employees service over 50,000
retail accounts and 200,000 church accounts. Customer orders are
usually shipped through a variety of common carriers, as well as
by UPS, RPS and parcel post. No single customer accounted for
more than 10% of net revenues during fiscal 1996.
The Company contracts with a number of foreign publishers to
translate the Company's English titles to foreign languages. The
Company typically retains ownership rights to the titles
translated.
The Company distributes its products internationally in
South America, Europe, Australia, New Zealand, South Africa, the
Far East, Mexico and Canada. In fiscal 1996, the Company's
international and export operations accounted for approximately
8% of the Company's total net revenues.
Substantially all of the Company's book, Bible and music
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 manufactures a significant portion of its gift
products and purchases its raw materials (e.g. paper, film and
boxes) from a wide group of suppliers.
COPYRIGHTS AND ROYALTY AGREEMENTS
The Company customarily secures copyrights on its books,
Bible editions and music in order to protect its publishing
rights. Almost all of the Company's books and music products are
published under royalty agreements with their respective authors
or other copyright proprietors. Many of the Company's gift
products incorporate copyrighted art work, which is licensed
directlyfrom theartistor theowning entityundera royaltyagreement.
COMPETITION
The Company believes that it is the largest publisher of
Christian and inspirational books, the largest commercial
publisher of Bibles in English language translations, the leading
producer, distributor and publisher of Christian and
inspirational music in the United States and the fourth largest
manufacturer of gift and stationery items in the world. The
publishing, music and gift divisions each compete with numerous
other companies that publish and distribute Christian and
inspirational books and/or music or manufacture and distribute
gift products, many of which have significantly longer operating
histories and larger revenue bases than the Company and certain
of which are tax-exempt organizations. While the Company's
prices are comparable to those of its competitors, the Company
believes that its breadth of product line, established market
channels, established sales forces and customer service, give it
a competitive advantage.
The most important factor with respect to the competitive
position of the Company's publishing and music divisions is the
contractual relationships it establishes and maintains with
authors and recording artists. The Company competes with other
book publishing, record and music publishing companies, both
Christian and secular, for signing top authors, artists and
songwriters, and for discovering new talent. The Company's
ability to sign and re-sign popular authors, recording artists
and successful songwriters 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, artists
and songwriters, which are based on its reputation in the book
publishing, recording and music publishing industries, its
marketing experience and its management expertise give it a
competitive advantage in signing and maintaining contracts with
top Christian and inspirational authors, artists and songwriters.
The Company's gift division has many competitors with
respect to one or more of its product lines, but the Company
believes there are few competitors who manufacture and distribute
all of the Company's gift product lines. The gift division also
competes with numerous religious publishers and suppliers,
including tax-free church-owned organizations, in connection with
the sale of its church supply products, and with numerous large
and small companies in the production and sale of stationery
products, gift wrap and paper tableware.
EMPLOYEES
As of March 31, 1996, the Company employed approximately
1,680 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.
MANAGEMENT
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 65 Chairman of the Board, Chief Executive Officer,
President and Director
S. Joseph Moore 33 Executive Vice President and Director; President,
Thomas Nelson Gift Division
Joe L. Powers 50 Executive Vice President and Secretary
Charles Z. Moore 62 Senior Vice President, International and
Diversified Markets
Ray Capp 43 Senior Vice President, Operations
Roland Lundy 46 President, Word Records and Music Division
Byron D. Williamson 50 President, NelsonWord Publishing Division
Vance Lawson 37 Vice President, Finance
Stuart A. Heaton 40 Vice President and General Counsel
Phyllis E. Williams 48 Treasurer
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.
S. Joseph Moore was appointed Executive Vice President and
Director of the Company in 1995 and President of the Thomas
Nelson Gift Division in 1996, and prior to such appointments, he
served as Divisional Vice President of the Company in various
capacities since 1991. S. Joseph Moore is the son of Sam Moore.
Joe L. Powers was appointed Executive Vice President of the
Company in 1995 and has been the Secretary of the Company since
1990. Previously, Mr. Powers served as a Vice President of the
Company since 1980.
Charles Z. Moore has been a Vice President of the Company
since 1983 and was appointed Senior Vice President, International
and Diversified Markets in 1986. Charles Moore is the brother of
Sam Moore.
Ray Capp was appointed Senior Vice President, Operations of
the Company in 1995. Prior to joining the Company, Mr. Capp was
the President and Chief Operating Officer of Ingram Merchandising
Services and Assistant to the Chairman of Ingram Distribution,
Inc. since 1992 and Executive Vice President and Chief Operating
Officer of Ingram Entertainment from 1987 to 1992.
Roland Lundy has been the President of the Company's Word
Records and Music Division since 1993. Mr. Lundy was formerly
President of Word from 1989 until Word was acquired by the
Company in November 1992.
Byron D. Williamson has been the President of the Company's
NelsonWord Publishing Division since 1995. Mr. Williamson was
formerly President of the Company's Word Publishing Division from
1993 to 1995 and Executive Vice President of the Word Publishing
Division of Word from 1988 until Word was acquired by the Company
in November 1992.
Vance Lawson has been the Vice President, Finance of the
Company since 1993. Mr. Lawson was formerly Vice President of
Finance and Operations at Word since 1988.
Stuart A. Heaton has been Vice President and General Counsel
of the Company since 1991. Previous to that time, Mr. Heaton
served as the Company's corporate counsel since 1989.
Phyllis E. Williams has been the Treasurer of the Company
since 1992. Mrs. Williams was previously Controller for the
Company since 1988.
Item 2. Properties
The Company's executive, editorial, sales and production
offices are primarily located at its corporate headquarters at
Nelson Place at Elm Hill Pike 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, 1996 of
$2,075,000.
The Company's major warehouse facilities for its publishing
division are located in a building containing approximately
215,000 square feet adjacent to its corporate headquarters in
Nashville, Tennessee. This building which was completed in
fiscal 1978, is owned subject to a mortgage securing debt with an
outstanding balance at March 31, 1996 of $400,000. An addition
to the warehouse and distribution center, of approximately
120,000 square feet, was completed during fiscal 1993. This
addition was financed by a $5,000,000 construction and term loan
secured by a mortgage with an outstanding balance of $3,666,667
at March 31, 1996. The Company maintains other offices and
warehouse facilities for its music division in two locations in
Waco, Texas (of approximately 30,000 and 100,000 square feet
each) which are owned by the Company. The Company also has
offices, manufacturing and warehousing facilities for its gift
division in Beacon Falls, Guilford and Norwalk, Connecticut (of
approximately 112,000, 74,000 and 147,000 square feet,
respectively) which are owned by the Company.
The Company leases properties as described below:
Square Annual Lease
Location Use Feet Rent Expiration
Miami, FL Editorial and sales
office 1,200 $ 17,500 8/97
Atlanta, GA Editorial office 800 $ 11,100 10/96
Carmel, IN Retail Store 12,500 $ 79,300 09/99
Cherryville,
NC Administrative 77,000 $ 78,000 4/98
Cherryville,
NC Warehousing 35,000 $ 60,000 12/96
Clifton, NJ Manufacturing 11,000 $ 46,800 10/98
Dallas, TX Editorial and sales
office 17,200 $211,400 12/99
King's Mountain,
NC Warehousing 15,000 $ 12,000 monthly
Nashville, TN Creation and sales
office 31,300 $366,500 11/98
Nashville, TN Creation and sales
office 34,400 $543,000 6/01
Nashville, TN Warehousing 85,000 $165,600 12/96
Norwalk, CT Warehousing 10,800 $ 72,000 monthly
Shelton, CT Warehousing 78,300 $313,200 01/99
Waco, TX Warehousing 168,000 $420,000 12/96
Richmond,
British Sales office and
Columbia warehousing 17,000 $ 84,200 06/99
(Canada)
Scarborough, Warehousing and office 18,500 $ 103,300 08/98
Ontario
(Canada)
Milton Keyes, Editorial and sales 25,000 $ 154,500 06/11
United Kingdom office
All building improvements on the properties are brick
veneer, metal or block construction and are considered adequate
and suitable by the Company for the purpose for which they are
used.
The Company's machinery and equipment consists primarily of
computer equipment located in Nashville, Tennessee, Norwalk,
Connecticut and Waco, Texas; warehousing and shipping racks,
conveyors and other material handling equipment located at the
various warehousing and manufacturing 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 which
is leased under capital leases, is owned by the Company.
The Company's physical properties are operated at
approximate capacity. Additional personnel are employed as
required.
Item 3. Legal Proceedings
The Company is subject to various legal proceedings, claims
and liabilities which arise in the ordinary course of its
business. In the opinion of management, the amount of ultimate
liability with respect to these actions will not materially
affect the financial position or results of operations of the
Company.
Item 4. Submission of Matter 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, 1996.
Item 5. Market for Company's Common Equity and Related
Shareholder Matters
Incorporated by reference to the Annual Report to
Shareholders for the year ended March 31, 1996 (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 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, 1996 and 1995.
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 22, 1996 (the "Proxy
Statement"), to be filed within 120 days of March 31, 1996 with
the Securities and Exchange Commission (the "Commission")
pursuant to Regulation 14A under the Exchange Act. Information
regarding the Company's executive officers is contained in Part
1, Item 1 herein.
Item 11. Executive Compensation
Incorporated by reference to the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Incorporated by reference to the Proxy Statement.
Item 13. Certain Relationships and Related Transactions
Incorporated by reference to the Proxy Statement.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a) Documents filed as part of Report
1. Financial Statements
The following consolidated financial statements of the Company
included in the Annual Report are incorporated [herein] by
reference as set forth in Part II, Item 8:
Statements of income -- years ended March 31, 1996, 1995
and 1994
Balance sheets -- March 31, 1996 and 1995
Statements of shareholders' equity -- years ended March 31,
1996, 1995 and 1994
Statements of cash flow -- years ended March 31, 1996, 1995
and 1994
Notes to [consolidated] financial statements
Report of Arthur Andersen LLP, Independent Public
Accountants
2. Financial Statement Schedules
The following consolidated financial statement schedules are
included herein:
Page
Report of Arthur Andersen LLP, Independent
Public Accountants . . . . . . . . . . . . . 19
Schedule VIII -- Valuation and Qualifying Accounts
and Reserves . . . . . . . . . . . . . . . . 20
Schedules not listed above have been omitted because they are
not required, inapplicable or the required information has been
given in the 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(b) to the Company's Annual Report on Form 10-K for
the year ended March 31, 1990 and incorporated herein
by reference)
4.1 -- Loan Agreement dated December 1, 1976, between the
Company and The Industrial Development Board of
Metropolitan Government of Nashville and Davidson
County (filed as Exhibit 3 to the Company's Annual
Report on Form 10-K for the year ended March 31, 1977
and incorporated herein by reference)
4.2 -- Promissory Note dated December 1, 1976, of the Company
payable to The Industrial Development Board of the
Metropolitan Government of Nashville and Davidson
County (filed as Exhibit 4 to the Company's Annual
Report on Form 10-K for the year ended March 31, 1977
and incorporated herein by reference)
4.3 -- Deed of Trust and Security Agreement dated December 1,
1976, from the Company to SunTrust Bank, Nashville,
N.A. (filed as Exhibit 5 to the Company's Annual Report
on Form 10-K for the year ended March 31, 1977 and
incorporated herein by reference)
4.4 -- Loan Agreement dated May 18, 1990, between the Company
and The Industrial Development Board of The
Metropolitan Government of Nashville and Davidson
County (filed as Exhibit 4(e) to the Company's Annual
Report on Form 10-K for the year ended March 31, 1990
and incorporated herein by reference)
4.5 -- Promissory Note dated May 18, 1990, of the Company
payable to The Industrial Development Board of the
Metropolitan Government of Nashville and Davidson
County (filed as Exhibit 4(f) to the Company's Annual
Report on Form 10-K for the year ended March 31, 1990
and incorporated herein by reference)
4.6 -- Deed of Trust and Security Agreement dated May 18,
1990, from the Company to SunTrust Bank, Nashville,
N.A. (filed as Exhibit 4.6 to the Company's Annual
Report on Form 10-K for the year ended March 31, 1991
and incorporated herein by reference)
4.7 -- Construction and Term Loan Agreement dated March 31,
1992, between the Company and SunTrust Bank, Nashville,
N.A. (filed as Exhibit 4.7 to Company's Annual Report
on Form 10-K for the year ended March 31, 1992 and
incorporated herein by reference)
4.8 -- Promissory Note dated March 31, 1992, of the Company
payable to SunTrust Bank, Nashville, N.A. (filed as
Exhibit 4.8 to Company's Annual Report on Form 10-K for
the year ended March 31, 1992 and incorporated herein
by reference)
4.9 -- Deed of Trust and Security Agreement dated March 31,
1992, from the Company to SunTrust Bank, Nashville,
N.A. (filed as Exhibit 4.9 to Company's Annual Report
on Form 10-K for the year ended March 31, 1992 and
incorporated herein by reference)
4.10 -- Indenture dated as of November 30, 1992, by and between
Thomas Nelson, Inc. and Boatman's Trust Company (filed
as Exhibit 4 to the Company's Form 8-K dated December
11, 1992 and incorporated herein by reference)
4.11 -- Amended and Restated Credit Agreement dated as of
December 13, 1995, and as amended January 3, 1996,
among the Company, SunTrust Bank, Nashville, N.A.,
National City Bank of Louisville, First American
National Bank in Nashville, Nationsbank of Texas, N.A.
in Dallas, and Creditanstalt-Bankverein in New York
(filed as Exhibit 4.1 to the Company's Form 10-Q for
the quarter ended December 31, 1995 and incorporated
herein by reference)
4.12 -- June 1996 Amendment and Waiver with Respect to Amended
and Restated Credit Agreement Dated as of December 13,
1995, among the Company, SunTrust Bank, Nashville,
N.A., National City Bank of Louisville, First American
National Bank in Nashville, Nationsbank of Texas, N.A.
in Dallas, and Creditanstalt-Bankverein in New York
4.13 -- 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 Form 10-Q for the
quarter ended December 31, 1995 and incorporated herein
by reference)
4.14 -- Letter Amendment No. 1 dated June 28, 1996, to Note
Purchase Agreement dated January 3, 1996, among the
Company, The Prudential Life Insurance Company of
America and Metropolitan Life Insurance Company and
related waiver, dated as of March 31, 1996.
4.15 -- Assumption and Amendment Agreement dated as of May 30,
1996, and as amended June 28, 1996, between the Company
and Metropolitan Life Insurance Company
4.16 -- Loan Agreement dated as of September 21, 1989 between
C.R. Gibson and Metropolitan Life Insurance Company
(filed by C.R. Gibson as Exhibit 4(c) to The C.R.
Gibson Company's Registration Statement on Form S-2
(No. 33-43644) and incorporated herein by reference)
4.17 -- Loan Agreement dated as of June 23, 1994 between C.R.
Gibson and Metropolitan Life Insurance Company (filed
by C.R. Gibson (Commission File No. 0-4855) as Exhibit
4(b) to C.R. Gibson's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994, filed with the
commission on March 14, 1995 and incorporated herein by
reference)
10.1 -- Tender Offer and Merger Agreement, dated as of
September 13, 1995, as amended by Amendment No.1, dated
as of October 16, 1995, among the Company, Nelson
Acquisition Corp. and Gibson (filed as Exhibits (c)(1)
and (c)(14) to the Company's joint Tender Offer
Statement on Schedule 14D-1/Schedule 13D filed
September 19, 1995, as amended, and is incorporated
herein by reference).
10.2 -- Thomas Nelson, Inc. Amended and Restated 1986 Stock
Incentive Plan (filed as Exhibit 4.4 to the Company's
Registration Statement on Form S-8 (No. 33-80086) and
incorporated herein by reference)*
10.3 -- 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) and incorporated herein by
reference)*
10.4 -- 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)*
10.5 -- Thomas Nelson, Inc. Sales Managers' Stock Plan for the
Varsity Company (filed as Exhibit 4.7 to the Company's
Registration Statement on Form S-8 (No. 33-80086) and
incorporated herein by reference)*
10.6 -- Severance Agreement dated as of May 17, 1991, between
the Company and Sam Moore (filed as Exhibit 10.6 to the
Company's Annual Report on Form 10-K for the year ended
March 31, 1991 and incorporated herein by reference)*
10.7 -- Employment Agreement dated as of May 13, 1996, between
the Company and Sam Moore*
10.8 -- Employment Agreement dated as of May 10, 1996, between
the Company and S. Joseph Moore*
10.9 -- Employment Agreement dated as of May 10, 1996, between
the Company and Joe L. Powers*
10.10-- Employment Agreement dated as of May 13, 1996, between
the Company and Charles Z. Moore*
10.11-- Employment Agreement dated as of May 17, 1993, between
the Company and Roland Lundy (filed as Exhibit 10.14 to
the Company's Annual Report on Form 10-K for the year
ended March 31, 1994 and incorporated herein by
reference)*
10.12-- Employment Agreement dated as of December 7, 1993,
between the Company and Byron Williamson (filed as
Exhibit 10.15 to the Company's Annual Report on Form
10-K for the year ended March 31, 1994 and incorporated
herein by reference)*
10.13-- Employment Agreement dated as of December 22, 1994,
between the Company and Raymond T. Capp (filed as
Exhibit 10.15 to the Company's Annual Report on Form
10-K for the year ended March 31, 1995 and incorporated
herein by reference)*
10.14-- Employment Agreement dated as of January 14, 1988, and
as amended July 17, 1991, between the Company and
Stuart A. Heaton (filed as Exhibit 10.13 to the
Company's Annual Report on Form 10-K for the year ended
March 31, 1992 and incorporated herein by reference)*
10.15-- 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)*
11 -- Statement Re Computation of Per Share Earnings
13 -- Thomas Nelson, Inc. Annual Report to Shareholders for
the year ended March 31, 1996 (to the extent of
portions specifically incorporated by reference)
21 -- Subsidiaries of the Company
23 -- Consent of Independent Public Accountants
27 -- Financial Data Schedule (for SEC use only)
- -----------
*Management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K
A Current Report of Form 8-K dated November 21, 1995 (the
"Form 8-K"), was filed by the Company on November 21, 1995. The
Form 8-K included information required pursuant to Item 2
thereunder relating to the acquisition by the Company of all of
the issued and outstanding capital stock of C.R. Gibson
consummated on November 7, 1995, in accordance with the terms of
the Tender Offer and Merger Agreement [included as Exhibit 10.1
herein]. Required financial statements and pro forma financial
information were not filed with the Form 8-K, in accordance with
applicable rules. The following financial statements and pro
forma financial information were filed on January 19, 1996, under
cover of a Form 8-K/A amending the Form 8-K:
1) The C.R. Gibson Company Consolidated Balance Sheets at
December 31, 1994 and 1993
2) The C.R. Gibson Company Consolidated Statements of
Operations for the years ended December 31, 1994 and
1993
3) The C.R. Gibson Company Consolidated Statements of Cash
Flows for the years ended December 31, 1994 and 1993
4) The C.R. Gibson Company Consolidated Statements of
Shareholders' Equity at December 31, 1994 and 1993
5) The C.R. Gibson Company Unaudited Condensed
Consolidated Balance Sheet at September 30, 1995
6) The C.R. Gibson Company Unaudited Condensed
Consolidated Statement of Income for the nine months
ended September 30, 1995
7) The C.R. Gibson Company Unaudited Condensed
Consolidated Statement of Cash Flows for the nine
months ended September 30, 1995
8) Thomas Nelson, Inc. and Subsidiaries Unaudited Pro
Forma Consolidated Balance Sheet at September 30, 1995
9) Thomas Nelson, Inc. and Subsidiaries Unaudited Pro
Forma Consolidated Statements of Income for the six
months ended September 30, 1995
10) Thomas Nelson, Inc. and Subsidiaries Unaudited Pro
Forma Consolidated Statements of Income for the six
months ended September 30, 1994
11) Thomas Nelson, Inc. and Subsidiaries Unaudited Pro
Forma Consolidated Statements of Income for the twelve
months ended March 31, 1995
(c) Exhibits - The response to this portion of Item 14 is
submitted [above] as a separate section of this report.
(d) Financial Statement Schedules - The response to this
portion of Item 14 is submitted [above] as a separate
section of this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.
THOMAS NELSON, INC.
By: /s/ Sam Moore
Sam Moore, Chief Executive Officer and President
Date: June 28, 1996
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 June 28, 1996
- ------------------- of Directors, Chief
Sam Moore Executive Officer and
President (Principal
Executive Officer)
/s/ S. Joseph Moore Executive Vice President June 28, 1996
S. Joseph Moore and Director
/s/ Joe L. Powers Executive Vice President, June 28, 1996
Joe L. Powers Secretary (Principal
Financial and Accounting
Officer)
/s/ Brownlee O. Currey
Jr. Director June 28, 1996
Brownlee O. Currey, Jr.
/s/ W. Lipscomb Davis,
Jr. Director June 28, 1996
W. Lipscomb Davis, Jr.
/s/ Robert J. Niebel,
Sr. Director June 28, 1996
Robert J. Niebel, Sr.
/s/ Millard V. Oakley Director June 28, 1996
Millard V. Oakley
/s/ Joe M. Rodgers Director June 28, 1996
Joe M. Rodgers
/s/ Cal Turner, Jr. Director June 28, 1996
Cal Turner, Jr.
/s/ Andrew Young Director June 28, 1996
Andrew Young
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Thomas Nelson, Inc.:
We have audited in accordance with generally accepted
auditing standards, the consolidated financial statements
included in Thomas Nelson's annual report to shareholders
incorporated by reference in this Form 10-K, and have issued our
report thereon dated May 21, 1996. Our audit was made for the
purpose of forming an opinion on those consolidated statements
taken as a whole. The schedules listed in the index are the
responsibility of the Company's management and are presented for
purposes of complying with the Securities and Exchange
Commission's rules and are not part of the basic consolidated
financial statements. These schedules have been subjected to the
auditing procedures applied in the audit of the basic
consolidated financial statements and, in our opinion, fairly
state in all material respects the financial data required to be
set forth therein in relation to the basic consolidated financial
statements taken as a whole.
/s/ Arthur Andersen LLP
Nashville, Tennessee
May 21, 1996
THOMAS NELSON, INC.
SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
=================================================================
Allowances for Trade Accounts Receivable
-----------------------------------------------
March 31, 1996 March 31, 1995 March 31, 1994
-----------------------------------------------
Reserve for Sales Returns
-----------------------------------------------
Balance at beginning
of period $ 5,744,000 $ 5,220,000 $ 6,054,000
Additions:
1. Charged to costs
and expenses 819,000 524,000 ( 834,000)
2. Charged to other
accounts 375,000 - -
Deductions - charge-offs - - -
-----------------------------------------------
Balance at end of
period $ 6,938,000 $ 5,744,000 $ 5,220,000
===============================================
Reserve for Doubtful Accounts
-----------------------------------------------
March 31, 1996 March 31, 1995 March 31, 1994
-----------------------------------------------
Balance at beginning
of period $ 3,257,000 $ 3,676,000 $ 4,371,000
Additions:
1. Charged to costs
and expenses 5,679,000 4,308,000 1,336,000
2. Charged to other
accounts 500,000 - ( 503,804)
Deductions - charge-offs 5,415,000 4,727,000 1,527,196
-----------------------------------------------
Balance at end of
period $ 4,021,000 $ 3,257,000 $ 3,676,000
===============================================
Discontinued Operations
-----------------------------------------------
March 31, 1996 March 31, 1995 March 31, 1994
-----------------------------------------------
Balance at beginning
of period $ - $ - $ -
Additions:
1. Charged to costs
and expenses 4,381,000 - -
2. Charged to other
accounts - - -
Deductions - charge-offs - - -
-----------------------------------------------
Balance at end of
period $ 4,381,000 $ - $ -
===============================================
Reserves acquired in connection with acquisition - C.R. Gibson in 1996 and
Word in 1994.
Reserve for loss on discontinued operations, before taxes, in 1996.
INDEX TO EXHIBITS
Exhibit
Number
4.12 -- June 1996 Amendment and Waiver With Respect to
Amended and Restated Credit Agreement Dated as of
December 13, 1995, among the Company, SunTrust
Bank, Nashville, N.A., National City Bank of
Louisville, First American National Bank in
Nashville, Nationsbank of Texas, N.A. in Dallas,
and Creditanstalt-Bankverein in New York
4.14 -- Letter Amendment No. 1 dated June 28, 1996, to Note
Purchase Agreement dated January 3, 1996, among the
Company, The Prudential Life Insurance Company of
America and Metropolitan Life Insurance Company and
related waiver, dated as of March 31, 1996
4.15 -- Assumption and Amendment Agreement dated as of May
30, 1996, and as amended June 28, 1996, between the
Company and Metropolitan Life Insurance Company
10.7 -- Employment Agreement dated as of May 13, 1996,
between the Company and Sam Moore
10.8 -- Employment Agreement dated as of May 10, 1996,
between the Company and S. Joseph Moore
10.9 -- Employment Agreement dated as of May 10, 1996,
between the Company and Joe L. Powers
10.10 -- Employment Agreement dated as of May 13, 1996,
between the Company and Charles Z. Moore
11 -- Statement Re-Computation of Per Share Earnings
13 -- Thomas Nelson, Inc. Annual Report to Shareholders
for the year ended March 31, 1996 (to the extent of
portions specifically incorporated by reference)
21 -- Subsidiaries of the Company
23 -- Consent of Independent Public Accountants
27 -- Financial Data Schedule (for SEC purposes only)