The Year in Review

Last week we published our Quarterly Earnings Release. In case you missed it, we finished our best year ever and our best quarter ever. For the year, net revenues were up 7 percent, from $222.6 million to $237.8 million. Net income was up 22 percent from $16.2 million to $19.8 million.

For the past several years, we have focused on improving margins. We have paid less attention to top line growth. That changed last year. Because our margins were in good shape and the business was healthy, we felt that we were in a good position to start growing the top line again. However, we didn’t want to sacrifice our profitability to do so. This last year we proved to ourselves—and the Street—that we could grow our top line at a respectable rate and still improve our bottom line. In fact, we grew the bottom line three times faster than the top line. This is encouraging.

Sixteen percent of our revenue came from Conferencing; 84 percent came from Publishing. These two segments of our business are strategically related. I believe this will produce significant synergy in the months ahead as Mary Graham, our Chief Conferencing Officer, and Tami Heim, our Chief Publishing Officer, look for ways to capitalize on these complimentary activities.

The prospects for growth are very positive. On May 16, 2005, the Book Industry Study Group released their Trends 2005 report. Two statements caught my eye:

“Religious books have emerged as the most impressive growth category in the book publishing industry over the past four years.”

“We predict that over the next five years total book industry revenues will increase 18.3 percent, paced by religious books with a 50 percent rise.”

This bodes well for us and for our future. If you are going to be in book publishing, this is the category to be in.

A special thanks to everyone for their hard work this past year. I couldn’t be more proud of our team.