Augsburg Fortress Publishers Showing Positive Signs For 2005

MINNEAPOLIS (ELCA) -- The board of trustees of Augsburg Fortress, the publishing ministry of the Evangelical Lutheran Church in America (ELCA), heard reports that suggest the publisher may have a much better year in 2005 compared to 2004. Highlights included a better-than-forecast first quarter financial report and several new products with promising sales potential, according to company managers.
The trustees held their spring meeting here at the publisher's offices April 22-23.
To help the publisher achieve its 2005 goal of at least breaking even -- for the first time in many years -- it is critical "that all institutions of the church consider Augsburg Fortress resources," said Beth A. Lewis, president and chief executive officer.
"When we are competitive in quality, price and service, then the choice becomes a stewardship choice," she said in an interview with the ELCA News Service. "I'm asking that the church support this ministry, so that any profits can be reinvested into new ministry resources for this church."
"Forget the old Augsburg Fortress," said James (Jim) Myers, board chair, Kailua, Hawaii. "There is a new Augsburg Fortress, and we say this is positive for the church." This was Myers' final meeting as board chair.
In her report to the board, Lewis said the company's product teams and employees are using a goal-oriented performance system called "Balanced Scorecard," which constantly measures work performance.
For example, in a study of company service response time, results showed that orders are sent to customers within 24 hours of when the order is placed more than 99 percent of the time, she said.
In addition, the ELCA Department for Research and Evaluation conducted customer satisfaction surveys, Lewis said. In a benchmark study conducted in October 2003, customers rated the company service less than 4 on a 5-point satisfaction scale. By December 2004, the rating had climbed to 4.5, she said.
"Positive change is happening," Lewis said. "We are getting rave reviews from our customers. We are pushing all of our staff really hard."
Sales for the first quarter of 2005 were ahead of the budget forecast, she said. The company was able to achieve positive cash flow because of good sales and in part because of some decisions it made in December and January, Lewis said. In 2004 Augsburg Fortress closed its ecclesiastical arts studio in Philadelphia, and in early 2005 discontinued product lines and consolidated overhead costs. About 40 staff positions were eliminated.
The company continues to reduce operating expenses, including consolidation of its office space here from three floors to two, Lewis said. Augsburg Fortress is focusing on customers, and emphasizing better internal communication and "cross-fertilization" among product development and sales teams, she said.
The publisher is also focusing more attention on the needs of larger congregations, a move which should help the company financially, Lewis said. At the same time, Augsburg Fortress will not abandon small- and medium-sized congregations, she emphasized.
"We must meet our sales goal," Lewis told the board. "We need everyone in this church to help us."

Positive Financial Report for First Quarter, Finance Officer Reports
The most important financial result from the first quarter of 2005 is that Augsburg Fortress was able to generate cash from its operation, said George Poehlman, vice president for finance, and treasurer. It generated $782,172 in positive cash flow, $662,070 more than budgeted, Poehlman reported.
"Results from the first quarter of the year have been better than predicted," he wrote in his report to the board.
The company's first quarter sales were nearly $9.5 million, $387,000 better than budgeted, he said. Overall, Augsburg Fortress finished the first quarter ahead of its budget with an operating loss of only $110,000, Poehlman said.
Calling the first quarter results "an excellent start," Poehlman said "this may be the best first quarter report that I've had the opportunity to give you." Sales were better than expected for products in the Congregational Life and Learning group, the company's Canadian operation and ecclesiastical arts supplies, he said.
The board also learned that Poehlman will retire from Augsburg Fortress this summer.
"It has been my privilege and honor to serve as the chief financial officer and to work with all of you," he told the board at the conclusion of his report. "I thank you."

Company Anticipates Good Sales of New Resources
In his report to the board Jim Donohue, Augsburg Fortress senior vice president, sales and marketing, said the company's sales force is focused and stable, and he predicted the publisher will make its sales goal for 2005.
Donohue and other senior staff reviewed several newly introduced products for 2005:
+ "Splash!," a series of faith-formation resources for children from infancy to age three, produced sales more than double its budget since its introduction in November 2004.
+ "Here We Stand," a new Confirmation curricula will soon be introduced. A demonstration is available at http://www.herewestandconfirmation.org on the Web. A key part of the series is a new "The Lutheran Handbook: A Field Guide to Church Stuff, Everyday Stuff, and the Bible," a serious and sometimes humorous book about being Lutheran, intended for Confirmation students. The company sold out quickly of its first printing of the handbook. A second printing edition is expected to be available May 11.
+ "No Experience Necessary" is a newly introduced Bible study series written by the Rev. Kelly A. Fryer, author of the best-selling book, "Reclaiming the 'L' Word. Fryer's book was the first volume in the publisher's "Lutheran Voices" series
+ In June Augsburg Fortress will unveil sundaysandseasons.com, a Web-based worship planning tool that includes an electronic library of Biblical texts, hymns, visual images and research tools
+ An anticipated seven-volume series, "The People's History of Christianity," will be produced over a five-year period. The first two volumes, "Christian Origins" and "Late Ancient Christianity" will be available in November.
+ A new Augsburg Fortress store will be opened in Salisbury, N.C., this year, located next to the ELCA North Carolina Synod office and near Hood Theological Seminary of the African Methodist Episcopal Zion Church.
+ The company's sales of paraments and vestments achieved 65 percent of its total 2005 sales goal in the first quarter
"We have great products," Donohue told the board. "We have the best products we've had in a long time."
Donohue said the sales team's greatest concerns for 2005 are "maintaining a culture that focuses on the customer," profitability, and improving the company's Internet business. The company's Web server needs to be upgraded, so it can be competitive in Internet sales, he said.

New Officers Elected
The board of trustees concluded its meeting by electing officers who will assume their new roles following the ELCA Churchwide Assembly in August. The board elected Dr. Annette Citzler, La Grange, Texas, as chair; Michael D. Bash, Long Lake, Minn., vice chair; and Kimberly K. Folkers, Waverly, Iowa, secretary.
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Information about Augsburg Fortress Publishers is at http://www.augsburgfortress.org on the Web.

For information contact:
John Brooks, Director (773) 380-2958 or news@elca.org
http://www.elca.org/news