Strong gains in its Rutledge Hill and Tommy Nelson children's divisions helped boost revenues at Thomas Nelson by 12.5% in the third quarter ended December 31, 2001, to $61.2 million. Income from continuing operations was $1.9 million in the period, compared to $2.2 million in last year's third quarter; results for the most recent quarter include a $4.4-million charge related to the bankruptcy filing of Kmart (News, Feb. 11).

Nelson chairman Sam Moore noted that mass merchandise outlets have become an important marketing channel for the company, with sales growing at double-digit rates through the first nine months of fiscal 2002. Mass merchandisers and general bookstores accounted for 28% of sales for the nine-month period, while sales to CBA accounts generated 34% of revenues.

In the third quarter, Nelson's top seller was Rutledge Hill's God Bless the U.S.A., a book/ CD package that the company shipped midway through the quarter. In the children's division, The Prayer of Jabez for Kids continued to sell well. Bible sales, which spiked briefly in September, returned to more normal levels early in the third quarter. In a conference call, Moore said that while orders were strong in October and November, reorders were slow in December, a trend that Moore speculated was due to accounts winding down their inventories. He further noted that several major customers have been slow to pay their bills, although he said that after Nelson had closed its books in December, the publisher received "substantial" payments from a number of accounts.

Moore had little to offer in the way of guidance for the fourth quarter, noting only that the company expects sales growth to return to single digits after the 12% gain recorded in the third period.

For the first nine months of fiscal 2002, revenues were up 3.8%, to $165.3 million, while income from continuing operations fell to $5.7 million from $7.1 million.