Thomas Nelson Posts 26% Income Gain for FY 2006 Third Quarter

Market Wire, February, 2006

Thomas Nelson, Inc. (NYSE: TNM) today announced its financial results for the third quarter and first nine months of fiscal 2006, the period ending December 31, 2005:

Net Revenue advanced 12% in the quarter, reaching $70.7 million. This compares with $63.4 million in the same period of the prior fiscal year. Nine-month net revenue was $183.9 million vs. $174.3 million, a gain of 6%. Publishing revenue, which accounted for 82% of the consolidated total in the quarter, expanded by 8%, and conference revenue grew by more than 28%, year over year.

Nelson achieved a net income gain of 26% in the quarter, earning $6.9 million vs. last year's comparable $5.5 million. Nine-month net income of $14.5 million was a 5% increase from the $13.8 million of the year before.

Diluted Income per Share reached $0.45 in the recent quarter, an advance of 25% from $0.36 a year ago. For this year's first nine months, earnings per share were $0.95, an increase of 4% from the $0.91 in the comparable year-prior period.

"As we noted on prior occasions, our publishing schedule for fiscal year 2006 is heavily weighted toward the second half," said Michael S. Hyatt, Chief Executive Officer. "This is one reason why our publishing results were so strong in the third quarter. 'Cure for the Common Life,' by Max Lucado, 'The Great Physician's Rx for Health and Wellness,' by Jordan Rubin, and 'The 360 Degree Leader,' by John Maxwell, were among our top five sellers in the quarter and among our top ten for the year to date. These books were all released during the third quarter."

Mr. Hyatt said: "With Billy Graham's newest work due this month; a collaborative work by Frank Peretti and Ted Dekker; and Michael Savage's fourth book with us also on the current docket, the outlook for our publishing business for the balance of this fiscal year remains good."

"I am also pleased to note that our business volume with the mass merchandiser class of trade is responding to management efforts and renewed sales-force focus. We are finding ways to broaden our penetration in this important market segment, while ensuring that we offer the most attractive and compelling products," Mr. Hyatt continued.

"This was a very strong quarter for Women of Faith," noted Mr. Hyatt. "We hosted seven Women of Faith conferences in the third quarter this year, the same number as in fiscal 2005's third quarter. Attendance was up, which boosted our revenue. Additionally, the third quarter's four Revolve conferences, a new series designed for younger women and teenagers, drew more participants and had stronger merchandise sales than we expected."

Mr. Hyatt continued: "We are seeing some pressure at the more conventional bookselling establishments, both religious bookstores and secular. Government statistics show that bookstore sales were off by 2% for calendar year 2005 through November, even as retail sales in general were up. We're holding our own despite the pressure, and I believe we are gaining market share. Additionally, we are increasing our business through non-traditional channels. Still, the business environment for bookselling remains less than ideal."

Thomas Nelson, Inc. will host a conference call related to this earnings release at 10:00 A.M. CST on Friday, February 10, 2006. Individuals may listen to the call by dialing (800) 946-0705. The confirmation number for the call is 4092289. The live broadcast of Thomas Nelson's quarterly conference call will be available online by going to www.thomasnelson.com/news and at www.streetevents.com. The online replay will be available shortly after the call and continue through February 18, 2006.

This news release includes certain forward-looking statements (all statements other than those made solely with respect to historical fact) and the actual results may differ materially from those contained in the forward-looking statements due to known and unknown risks and uncertainties. Any one or more of several risks and uncertainties could account for differences between the forward-looking statements that are made here and the actual results, including with respect to our sales, profits, liquidity and capital position. These factors include, but are not limited to: softness in the general retail environment or in the markets for our products; the timing and acceptance of products being introduced to the market; the level of product returns experienced; the level of margins achievable in the marketplace; the collectibility of accounts receivable; the recoupment of royalty advances; the effects of acquisitions or dispositions; the financial condition of our customers and suppliers; the realization of inventory values at carrying amounts; our access to capital; the implementation of new processes and systems; the outcome of any Internal Revenue Service audits; and the realization of income tax and intangible assets. These conditions cannot be predicted reliably, and the Company may adjust its strategy in light of changed conditions or new information. Thomas Nelson disclaims any obligation to update forward-looking statements.