COLUMBUS, Ohio (ELCA) -- The board of trustees of Augsburg Fortress Publishers, Minneapolis, heard positive financial news and a series of optimistic plans for the future at its meeting here April 27-29. = =20 The meeting followed a six-month period in which the company reorganized and put a new management team in place. Augsburg Fortress is the publishing house of the Evangelical Lutheran Church in America (ELCA).
The meeting location was selected to give board members an opportunity to visit the company's distribution center at nearby Grove City, Ohio.
The publisher is financially strong, its inventories are under control and sales for the first quarter of 2000 are better than anticipated, said the Rev. Marvin L. Roloff, president and chief executive officer.
"I believe the spirit within the publishing house is very positive and there is eagerness to move ahead," he said in his report to the board.
The optimistic news for 2000 follows a year of significant change for the company, in which it reorganized into a series of specifically targeted business units, adopted a market-driven philosophy and announced several staff reductions as part of the changes. Augsburg Fortress finished 1999 with an operating loss, though the company's balance sheet remains strong, Roloff said.
In 1999 the board endorsed a reorganization plan for Augsburg Fortress, based on recommendations from an outside consulting firm the company retained. Timothy I. Maudlin, board member, Eden Prairie, Minn., presented to the board results of an independent audit for 1999, conducted by Deloitte & Touche, Minneapolis. Maudlin, who chairs the board's Audit and Finance Committee, reminded trustees the publisher was "virtually insolvent" in the mid 1990s.
The 1999 audit report showed "hope and encouragement for the future," and the publisher "is being transformed for the future," Maudlin said. The report also showed considerable improvement in the financial practices of the company, he said.
"There is great reason for celebration," Maudlin said. He credited the company's new management team, put together in the last seven months as the company reorganized.
Financial news for the first quarter of 2000 was also positive, said George W. Poehlman, Augsburg Fortress vice president for finance and treasurer. First quarter sales were at $13.5 million compared to a budgeted figure of $13.2 million, he said.
"These are wonderful early indicators," Poehlman said to the board. "The report for the first quarter is probably the best financial news you've had in four years."
Augsburg Fortress projects a $127,000 operating profit for 2000; it ended 1999 with a $467,000 operating loss, he reported. Revenue for 2000 is projected at $56 million, up from $54 million in 1999, Poehlman said. The differences in operating expenses and sales can be attributed to the company's reorganization, he added.
Poehlman also sounded a note of caution. While early 2000 numbers are positive, he said the company is still hiring people to meet its reorganization goals and there are some significant expenses expected in the future. Among them are costs for starting a new Christian magazine for women, "Sunday/Monday WOMAN," and plans to develop Internet sales.
"In my mind, the full year is a challenge," he said. "We're in a good place, we've got a great start, and we're in a good position to really make it this year."
Poehlman also told the board that nearly one-third of its inventory in the Grove City distribution center is "excess or obsolete" and is still being stored in the warehouse. Richard E. Lodmill, board chair, Seattle, said the board would be more comfortable if a "plan of action" could be developed regarding the obsolete inventory. Following a brief discussion, Poehlman invited board members to submit ideas for use of the obsolete inventory. The board heard an update on the company's reorganization from Charles S. Halberg, Augsburg Fortress executive vice president and chief operating officer. "A lot has been on our plate the last six months,' Halberg said. There have been many changes in the company, and the company's employees have handled the changes well, he said. He also said the company has been "aggressively" recruiting new people to fill key roles since Jan. 1. Augsburg Fortress is making an "aggressive effort" to establish new business partnerships, Halberg added. "I'm enthused about what's happening at Augsburg Fortress," he said. "This company is on the right course. We need this board to support the management team." Board members heard a detailed report on overall marketing strategy from Kenneth G. Hartwell, senior vice president and chief marketing officer. Vice presidents for each of the strategic business units and other company units discussed their plans with the board. Board members and staff recognized Dr. Leonard G. Schulze, Seguin, Texas, who resigned from the Augsburg Fortress board following his election in March as executive director of the ELCA Division for Higher Education and Schools. In early April, the ELCA Church Council elected Michael E. Carscaddon, Americus, Ga. to complete Schulze's unexpired term. Board members also participated in anti-racism training prior to their business sessions. The board's next meeting was rescheduled to Oct. 12-14, in Minneapolis.
For information contact:
John Brooks, Director (773) 380-2958 or NEWS@ELCA.ORG
http://listserv.elca.org/archives/elcanews.html
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About the Evangelical Lutheran Church in America:
The ELCA is one of the largest Christian denominations in the United States, with 2.8 million members in more than 8,500 worshiping communities across the 50 states and in the Caribbean region. Known as the church of "God's work. Our hands.," the ELCA emphasizes the saving grace of God through faith in Jesus Christ, unity among Christians and service in the world. The ELCA's roots are in the writings of the German church reformer Martin Luther.
For information contact:
Candice Hill Buchbinder
Public Relations Manager
Candice.HillBuchbinder@ELCA.org
