NELSON THOMAS INC, 424B4, 1995-07-19

NELSON THOMAS INC
424B4, 1995-07-19
BOOKS: PUBLISHING OR PUBLISHING & PRINTING

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<PAGE> 1
Filed Pursuant to Rule 424(b)(4)
Registration Statement No. 33-60615

2,500,000 SHARES

[LOGO] THOMAS NELSON, INC.

COMMON STOCK
------------------------

All of the shares of Common Stock offered hereby are being sold by Thomas
Nelson, Inc. (the "Company"). Of the 2,500,000 shares of Common Stock offered
hereby, 2,000,000 shares are being offered in the United States and Canada (the
"U.S. Shares") and 500,000 shares are being offered in a concurrent
international offering outside the United States and Canada. The price to the
public and aggregate underwriting discounts and commissions per share are
identical for both offerings. See "Underwriting."

The Company has two classes of authorized and issued common stock. Holders
of the Common Stock, which is offered hereby, are entitled to one vote per
share, and holders of the Class B Common Stock are entitled to ten votes per
share on all matters submitted to a vote of shareholders of the Company. See
"Description of Capital Stock." After completion of this offering, directors and
executive officers of the Company will beneficially own Common Stock and Class B
Common Stock representing approximately 38.1% of the voting power of the
Company.

On June 19, 1995, the Common Stock and Class B Common Stock began trading
on the New York Stock Exchange (the "NYSE") under the symbols "TNM" and "TNM.B,"
respectively, and ceased to be quoted on the Nasdaq National Market System. On
July 18, 1995, the last reported sale prices of the Common Stock and Class B
Common Stock on the NYSE were $20 and $20 7/8 per share, respectively. See
"Price Range of Common Stock and Class B Common Stock."

------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Underwriting
Price to Discounts and Proceeds to
Public Commissions(1) Company(2)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share................................ $20.00 $.92 $19.08
- -----------------------------------------------------------------------------------------------
Total.................................... $50,000,000 $2,300,000 $47,700,000
- -----------------------------------------------------------------------------------------------
Total Assuming Full Exercise of Over-
Allotment Option(3).................... $57,500,000 $2,645,000 $54,855,000
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>

(1) See "Underwriting."
(2) Before deducting expenses, estimated at $250,000, which are payable by the
Company.
(3) Assuming exercise in full of the 30-day option granted by the Company to the
U.S. Underwriters to purchase up to 375,000 additional shares of Common
Stock, on the same terms, solely to cover over-allotments. See
"Underwriting."
------------------------

The U.S. Shares are offered by the U.S. Underwriters, subject to prior
sale, when, as and if delivered to and accepted by the Underwriters, and subject
to their right to reject orders in whole or in part. It is expected that
delivery of the Common Stock will be made in New York City on or about July 24,
1995.
------------------------

PAINEWEBBER INCORPORATED
MERRILL LYNCH & CO.
J.C. BRADFORD & CO.
------------------------

THE DATE OF THIS PROSPECTUS IS JULY 18, 1995.
<PAGE> 2
<TABLE>
<CAPTION>

[ARTWORK] [ARTWORK]
<S> <C>
In book publishing, the Company's new titles consistently Thomas Nelson publishes over 1,200 different Bibles and
dominate the Christian and inspirational bestseller lists, related publications in nine of ten major translations, including
while its 1,400 title backlists represents a stable source the Contemporary English Version, launched in 1995.
of recurring sales.

[ARTWORK] [ARTWORK]

The Company's music division boasts an impressive roster In 1994, the Company expanded its presence in gift products through
of Christian musical artists, both established stars and its merger with PPC, Inc., a creator of gift collections and
major new talent, spanning a broad range of styles of stationery products.
traditional and contemporary Christian and inspirational
music.
</TABLE>

[ARTWORK]

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OFFERED HEREBY AND CLASS B COMMON STOCK OF THE COMPANY AT LEVELS ABOVE THOSE
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE
EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

2
<PAGE> 3

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this prospectus or in documents incorporated
by reference in this prospectus. Unless otherwise indicated, the information in
this prospectus assumes that the Underwriters' over-allotment option is not
exercised and reflects a five-for-four stock split of the Common Stock and Class
B Common Stock in the form of a 25% stock dividend effected on March 24, 1995.

THE COMPANY

Thomas Nelson, Inc. is a leading publisher, producer and distributor of
books and recorded music emphasizing Christian, inspirational and family value
themes, and believes it is the largest commercial publisher of the Bible in
English language translations. The Company also designs and markets a broad line
of gift and stationery products. The Company believes it is the largest
publisher of Christian and inspirational books and the largest producer of
recorded Christian music in the United States.

The Company's publishing operations, which accounted for approximately 55%
of fiscal 1995 net revenues, involve the publication and distribution of
hardback and trade paperback books with Christian, inspirational or family value
themes and a broad line of Bibles and related publications. Authors published by
the Company include some of the most well-known Christian and inspirational
communicators in the field, including Chuck Colson, James Dobson, Billy Graham,
Benny Hinn, Barbara Johnson, Max Lucado, Frank Peretti, Pat Robertson, Robert
Schuller, Gary Smalley, Charles Stanley, Charles Swindoll and Bodie and Brock
Thoene. In each of the last three fiscal years, the Company published over 300
new titles and, during that period, published over 50% of the top ten best
selling Christian and inspirational books based on the monthly Bookstore Journal
Christian Hardbound Bestsellers' Lists. The Company maintains a backlist of over
1,400 active titles which provide a stable source of recurring revenues. The
Company publishes nine of the ten major English language Bible translations,
four of which are proprietary to the Company, and introduced in June 1995 the
Contemporary English Version ("CEV") Bible translation, which is designed to be
understandable at virtually any reading level.

The Company's music operations, which accounted for approximately 34% of
fiscal 1995 net revenues, are comprised of the production and distribution of
Christian and inspirational recorded music and related music publishing.
Traditional and contemporary Christian and inspirational music is a genre which
is defined by its lyrical content and encompasses a diverse range of musical
styles including gospel, praise and worship, country, rock, rhythm and blues,
rap and metal. Recording artists under contract with the Company include
Anointed, Helen Baylor, Shirley Caesar, Brian Duncan, Amy Grant, Sandi Patty,
Petra and Point of Grace. In 1995, the Company's artists received ten Dove
Awards, the Christian music industry's annual awards for outstanding recording
artists and releases. In fiscal 1995, the Company released 90 new titles, and
maintains a catalog of over 40,000 copyrighted songs which are licensed to
independent publishers, record companies, churches and other organizations. In
addition, the Company operates a music publishing business engaged in songwriter
development, print music publishing and copyright administration.

The Company has grown significantly over the last three years through a
combination of internal product development, expanded product distribution and
acquisitions, which have significantly enhanced its competitive position and
enabled it to more comprehensively serve its customer base. In November 1992,
the Company acquired Word, Incorporated ("Word"), a leading producer and
publisher of Christian music with complementary operations in Christian and
inspirational book publishing. Through the acquisition of Word and the
development of the combined music and book product lines and distribution
channels, the Company has established leading market positions in the Christian
and inspirational book and music businesses, which the Company believes are
among the fastest growing segments within the publishing and recorded music
industries. In March 1994, the Company expanded its gift products line and
related distribution channels through its combination with PPC, Inc. ("Pretty
Paper"), a designer and manufacturer of gift products and collections.

3
<PAGE> 4

In conjunction with the development and acquisition of new product lines,
the Company has significantly expanded its marketing and distribution channels.
In addition to Christian bookstores, the Company distributes its products to
general bookstores, such as B. Dalton Booksellers and Waldenbooks; to mass
market merchandisers, such as Target, K-Mart, WalMart and Sam's Wholesale Club;
and directly to consumers through direct mail, telemarketing and book and record
clubs. Utilizing an extensive direct sales force and independent sales
representatives, the Company sells its products to over 50,000 retail and 90,000
church and religious organization accounts. The Company also distributes its
products internationally in South America, Europe, Australia, New Zealand, South
Africa, the Far East, Mexico and Canada.

The Company believes that there has been increasing societal awareness of
and interest in traditional, Christian and family values, which has contributed
to a growing demand for media, educational and entertainment products and
services that convey these themes. The Company's business strategy seeks to
capitalize on this growing demand by expanding its core publishing, music and
gift product lines, developing and acquiring complementary product lines that
utilize common distribution channels, and expanding the marketing and
distribution of its products through secular channels and in new geographic
markets. The Company is also actively exploring the use of emerging digital,
interactive and multimedia technologies through strategic partnerships and
creative alliances to further capitalize on the commercial potential of its
proprietary content.

THE OFFERING

<TABLE>
<S> <C>
Common Stock Offered by the Company:
United States Offering..................... 2,000,000 shares
International Offering..................... 500,000 shares
-----------
Total Offering..................... 2,500,000 shares
-----------
-----------
Shares to be Outstanding After the Offering:
Common Stock............................... 14,870,955 shares
Class B Common Stock....................... 1,085,843 shares
-----------
Total.............................. 15,956,798 shares(1)
-----------
-----------
Voting Rights................................ The Common Stock is entitled to one vote per
share, while the Class B Common Stock is
entitled to ten votes per share. Except for
such voting rights, the Common Stock and the
Class B Common Stock have substantially the
same rights. After completion of this
offering, members of the Board of Directors
and executive officers of the Company will
beneficially own Common Stock and Class B
Common Stock representing approximately 38.1%
of the voting power of the Company. See
"Description of Capital Stock."
Use of Proceeds.............................. To repay a portion of the Company's
outstanding bank debt. See "Use of Proceeds."
Common Stock NYSE Symbol..................... "TNM"
</TABLE>

- ---------------

(1) Does not include (i) 3,235,294 shares of Common Stock issuable upon
conversion of the Company 5 3/4% Convertible Subordinated Notes due 1999
(the "Convertible Notes") and (ii) 330,765 shares reserved for issuance
upon exercise of options outstanding at June 23, 1995, under the Company's
stock option plans.

4
<PAGE> 5

SUMMARY FINANCIAL INFORMATION

<TABLE>
<CAPTION>
MARCH 31, 1995
-------------------------
ACTUAL AS ADJUSTED(3)
-------- --------------
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Working capital...................................................... $129,441 $129,441
Total assets......................................................... 249,869 249,869
Long-term debt (including current portion)........................... 121,000 73,550
Shareholders' equity................................................. 72,729 120,179
</TABLE>

- ---------------

(1) Includes the operations of Word subsequent to its acquisition by the Company
on November 30, 1992.
(2) Reflects the impact of the conversion of the outstanding Convertible Notes
into 3,235,294 shares of Common Stock and exercise of stock options, in
periods in which such conversion or exercise would be dilutive.
(3) Adjusted to reflect the sale of the 2,500,000 shares of Common Stock offered
hereby and the proposed application of the estimated net proceeds
therefrom. See "Use of Proceeds."

5
<PAGE> 6

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 2,500,000 shares of
Common Stock offered hereby are estimated to be approximately $47.5 million
($54.6 million if the Underwriters' over-allotment option is exercised in full).

All of the net proceeds will be used to repay a portion of the borrowings
outstanding under the Company's $100 million bank credit facility (the "Credit
Facility"). Borrowings under the Credit Facility bear interest at either the
prime rate or, at the Company's option, the relevant London Interbank Offered
Rate ("LIBOR") plus 1.5% (7.9% at June 23, 1995). The balance outstanding under
the Credit Facility at May 31, 1997 will be converted into a four year term loan
payable in equal quarterly principal installments thereafter. At July 17, 1995,
the Company had $78.0 million outstanding, and $22.0 million available for
borrowing under the Credit Facility. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Liquidity and Capital
Resources" and Note H of Notes to Consolidated Financial Statements.

PRICE RANGE OF COMMON STOCK AND CLASS B COMMON STOCK

The Common Stock and the Class B Common Stock are traded on the NYSE under
the symbols "TNM" and "TNM.B," respectively. Until June 19, 1995, the Common
Stock and the Class B Common Stock were quoted on the Nasdaq National Market
System under the symbols "TNEL" and "TNELB," respectively. The following table
sets forth, for the periods indicated, the high and low bid prices of the Common
Stock and Class B Common Stock as reported on the Nasdaq National Market System
for each of the quarters indicated through June 16, 1995 and the high and low
closing sales prices as reported on the NYSE composite tape from June 19, 1995:

<TABLE>
<CAPTION>
CLASS B
COMMON COMMON
STOCK STOCK
----------- -----------
HIGH LOW HIGH LOW
---- ---- ---- ----
<S> <C> <C> <C> <C>
FISCAL 1994:
First quarter............................................. $14 3/8 $ 12 $ 14 $12 3/8
Second quarter............................................ 17 5/8 13 5/8 16 3/4 13 5/8
Third quarter............................................. 20 3/4 15 3/4 19 5/8 15 3/4
Fourth quarter............................................ 20 1/4 15 5/8 20 17 1/4

FISCAL 1995:
First quarter............................................. 17 5/8 15 1/4 17 5/8 16 3/8
Second quarter............................................ 16 5/8 14 1/4 16 3/8 14 5/8
Third quarter............................................. 19 1/4 14 1/4 18 3/4 14 5/8
Fourth quarter............................................ 20 3/8 18 3/4 19 3/8 17 5/8

FISCAL 1996:
First quarter............................................. 20 1/4 17 5/8 23 18 1/2
Second quarter (through July 18, 1995).................... 20 19 1/8 20 7/8 20 7/8
</TABLE>

The Company effected a five-for-four stock split of the Common Stock and
Class B Common Stock in the form of a 25% stock dividend on March 24, 1995. The
prices in the table set forth above have been adjusted to give effect to the
stock dividend.

On July 18, 1995, the last sale prices of the Common Stock and the Class B
Common Stock on the NYSE composite tape were $20 and $20 7/8, respectively. As
of July 17, 1995, there were 1,147 record holders of the Common Stock and 863
record holders of the Class B Common Stock.

6
<PAGE> 7

DIVIDEND POLICY

Declaration of dividends is within the discretion of the Board of Directors
of the Company. The Board considers the payment of dividends on a quarterly
basis, taking into account the Company's earnings and capital requirements as
well as financial and other conditions existing at the time. Certain covenants
of the Company's credit agreements limit the amount of cash dividends payable
based on the Company's cumulative consolidated net income. See Note H of Notes
to Consolidated Financial Statements. In each quarter in fiscal 1994 and 1995,
the Company paid a cash dividend of $.032 per share on its Common Stock and
Class B Common Stock. On May 24, 1995, the Company declared a cash dividend of
$.04 per share on its Common Stock and Class B Common Stock to be paid on August
14, 1995 to shareholders of record on July 31, 1995.

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
March 31, 1995 and as adjusted to reflect the sale of the 2,500,000 shares of
Common Stock offered hereby and the proposed application of the estimated net
proceeds therefrom. See "Use of Proceeds."

<TABLE>
<CAPTION>
AT MARCH 31, 1995
------------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt (including current portion)(1):
Credit agreements............................................. $ 63,133 $ 15,683
5 3/4% Convertible Subordinated Notes, due in 1999(2)......... 55,000 55,000
Industrial revenue bonds, due through 2005.................... 2,700 2,700
Other......................................................... 167 167
-------- -----------
Total long-term debt........................................ 121,000 73,550
-------- -----------
Shareholders' equity:
Preferred Stock, $1.00 par value, authorized 1,000,000 shares,
none issued................................................. -- --
Common Stock, $1.00 par value, authorized 20,000,000 shares,
issued 12,362,377 shares (issued 14,862,377 shares, as
adjusted)(3)................................................ 12,362 14,862
Class B Common Stock, $1.00 par value, authorized 5,000,000
shares, issued 1,067,094 shares(3).......................... 1,067 1,067
Additional paid-in capital.................................... 18,211 63,161
Retained earnings............................................. 40,538 40,538
Foreign currency translation adjustments...................... 551 551
-------- -----------
Total shareholders' equity.................................. 72,729 120,179
-------- -----------
Total capitalization..................................... $193,729 $ 193,729
======== =========
</TABLE>

- ---------------

(1) For additional information regarding the Company's long-term debt, see Note
H of Notes to Consolidated Financial Statements.
(2) The Convertible Notes are convertible at their principal amount into shares
of Common Stock at any time prior to redemption or maturity at $17.00 per
share, subject to adjustment in certain circumstances. See Note H of Notes
to Consolidated Financial Statements.
(3) Does not include (i) 3,235,294 shares of Common Stock issuable upon
conversion of the Convertible Notes and (ii) 375,765 shares reserved for
issuance upon the exercise of options outstanding at March 31, 1995 under
the Company's stock option plans. See Notes H and J of Notes to
Consolidated Financial Statements.

7
<PAGE> 8

SELECTED CONSOLIDATED FINANCIAL DATA

The following selected statement of income data for the fiscal years ended
March 31, 1995, 1994, 1993 and 1992 and selected balance sheet data at March 31,
1995 have been derived from the consolidated financial statements of the Company
which have been audited by Arthur Andersen LLP. All of this information should
be read in conjunction with the audited consolidated financial statements and
notes thereto contained elsewhere herein and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
----------------------------------------
1992 1993(1) 1994 1995
------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Net revenues........................................... $98,582 $143,072 $226,434 $265,107
Cost of goods sold..................................... 53,878 74,975 115,201 133,650
------- -------- -------- --------
Gross profit........................................... 44,704 68,097 111,233 131,457
Selling, general and administrative expenses........... 35,144 55,193 89,649 103,614
Amortization of goodwill and non-compete agreements.... 46 718 1,616 1,806
------- -------- -------- --------
Operating income....................................... 9,514 12,186 19,968 26,037
Other income........................................... 411 178 227 897
Interest expense....................................... 1,032 3,027 6,903 8,585
------- -------- -------- --------
Income before income taxes............................. 8,893 9,337 13,292 18,349
Provision for income taxes............................. 3,069 3,055 4,547 6,639
------- -------- -------- --------
Income before cumulative effect of change in accounting
principle............................................ 5,824 6,282 8,745 11,710
Cumulative effect of change in accounting principle for
income taxes......................................... -- -- 336 --
------- -------- -------- --------
Net income............................................. $ 5,824 $ 6,282 $ 9,081 $ 11,710
======= ======== ======== ========
Net income per share:
Income before cumulative effect of change in
accounting principle.............................. $ 0.47 $ 0.47 $ 0.65 $ 0.88
Cumulative effect of change in accounting
principle......................................... -- -- 0.03 --
------- -------- -------- --------
Net income........................................... $ 0.47 $ 0.47 $ 0.68 $ 0.88
======= ======== ======== ========
Weighted average number of shares outstanding.......... 12,500 13,268 13,355 13,374
======= ======== ======== ========
Fully diluted net income per share(2):
Income before cumulative effect of change in
accounting principle.............................. $ 0.47 $ 0.47 $ 0.65 $ 0.83
Cumulative effect of change in accounting
principle......................................... -- -- 0.02 --
------- -------- -------- --------
Net income........................................... $ 0.47 $ 0.47 $ 0.67 $ 0.83
======= ======== ======== ========
</TABLE>

- ---------------

8
<PAGE> 9

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

During the last three fiscal years, the Company's net revenues have grown
at a compound annual rate of approximately 39%. This growth in net revenues has
resulted from increased sales of existing product lines and through the
development and acquisition of new product lines. In November 1992, the Company
acquired Word for approximately $72 million in cash, and in March 1994 acquired
all of the outstanding shares of Pretty Paper in exchange for the issuance of
115,551 shares of the Company's Common Stock. The acquisition of Word was
accounted for using the purchase method of accounting with the excess of the
purchase price over the fair value of the net assets acquired allocated to
goodwill of approximately $31 million. The combination with Pretty Paper was
accounted for as a pooling of interests. See Note B of Notes to Consolidated
Financial Statements.

As a result of the acquisition of Word and the further development of the
combined product lines, there has been a shift in the Company's product revenue
mix with each of music and book products contributing a larger percentage of the
Company's net revenues than Bible products. The broader mix of products has also
enabled the Company to expand its distribution channels from bookstores to mass
market accounts, direct marketing programs, gift stores and specialty retail
stores. The acquisition of Pretty Paper expanded the Company's gift product
lines and distribution network, which enabled the gift division to grow
significantly in fiscal 1995.

This shift in sales mix and distribution channels has positively impacted
the Company's gross profit, as a percentage of net revenues, in each of fiscal
1994 and fiscal 1995. In particular, the increase in music and book products has
enabled the Company to increase sales through direct marketing. Sales through
direct marketing typically produce a higher gross margin than sales through
other distribution channels. The increase in the Company's gross margins
resulting from these factors has been partially offset by increased sales to
mass merchandisers. These customers typically earn volume discounts due to the
significantly larger quantities purchased as compared to the typical bookstore;
however, sales to mass merchandisers have relatively lower selling and marketing
costs than sales through other distribution channels.

The following table sets forth for the periods indicated certain selected
statement of income data of the Company expressed as a percentage of net
revenues and the percentage change in dollars of such data from the prior fiscal
year.

<TABLE>
<CAPTION>
FISCAL YEAR TO YEAR
YEAR ENDED MARCH 31, INCREASE
----------------------- ---------------------------
1995 1994 1993 1994 TO 1995 1993 TO 1994
----- ----- ----- ------------ ------------
<S> <C> <C> <C> <C> <C>
NET REVENUES:
Publishing:
Book......................................... 32.8% 34.0% 33.9% 12.9% 58.7%
Bible........................................ 22.0 23.5 33.0 10.0 12.4
----- ----- -----
Total publishing.......................... 54.8 57.5 66.9 11.7 35.9
Music.......................................... 33.8 32.2 17.7 22.9 188.1
Gift........................................... 9.6 8.8 13.0 27.1 7.2
Other.......................................... 1.8 1.5 2.4 38.7 0.9
----- ----- -----
Total net revenues........................ 100.0 100.0 100.0 17.1 58.3
EXPENSES:
Cost of goods sold............................. 50.4 50.9 52.4 16.0 53.7
Selling, general and administrative expenses... 39.1 39.6 38.6 15.6 62.4
Amortization of goodwill and non-compete
agreements................................... 0.7 0.7 0.5 11.8 125.1
----- ----- -----
Total expenses............................ 90.2 91.2 91.5 15.8 57.7
----- ----- -----
Operating income............................... 9.8 8.8 8.5 30.4 63.9
Income before income taxes..................... 6.9 5.9 6.5 38.0 42.4
Income before cumulative effect of accounting
change....................................... 4.4 3.9 4.4 33.9 39.2
Net income..................................... 4.4 4.0 4.4 28.9 44.6
</TABLE>

9
<PAGE> 10

The Company's net revenues fluctuate seasonally, with net revenues in the
second and third fiscal quarters historically being greater than those in the
first and fourth fiscal quarters. This seasonality is the result of increased
consumer purchases of the Company's products during the traditional year-end
holidays. Due to this seasonality, the Company has historically incurred a loss
during the first quarter of each fiscal year. In addition, the Company's
quarterly operating results may fluctuate significantly due to the seasonality
of new product introductions, the timing of selling and marketing expenses and
changes in sales and product mixes. See Note N of Notes to Consolidated
Financial Statements.

RESULTS OF OPERATIONS

Fiscal 1995 compared to Fiscal 1994

Net revenues for fiscal 1995 increased by $38.7 million or 17.1% over
fiscal 1994 primarily due to volume increases arising from the introduction of
new products in each of the Company's product lines. Net revenues increased for
fiscal 1995 over fiscal 1994 as follows: music products increased by $16.7
million or 22.9%; book products increased by $9.9 million or 12.9%; Bible
products increased by $5.3 million or 10.0%; and gift products increased by $5.4
million or 27.1%. Price increases did not have a material effect on net
revenues.

The Company's cost of goods sold in fiscal 1995 increased by $18.4 million
or 16.0% over fiscal 1994 and, as a percentage of net revenues, decreased
slightly to 50.4% in fiscal 1995 from 50.9% in fiscal 1994. The slight decrease
in cost of goods sold, as a percentage of net revenues, resulted from a change
in the mix of product types and distribution channels. During fiscal 1995, the
Company derived a greater percentage of its net revenues from direct marketing
which typically has higher gross margins than sales through other distribution
channels, and higher music sales as a percentage of total sales, which also have
greater gross margins than other product types.

Selling, general and administrative expenses for fiscal 1995 increased by
$14.0 million or 15.6% over fiscal 1994. These expenses, expressed as a
percentage of net revenues, decreased slightly to 39.1% in fiscal 1995 from
39.6% in fiscal 1994 primarily as a result of volume increases and from cost
savings resulting from the consolidation of certain operational departments.
This improvement was partially offset by increased sales through direct
marketing programs, which have relatively higher selling and marketing costs
than sales through other distribution channels.

Other income for fiscal 1995 increased by $0.7 million over fiscal 1994 due
to a gain on the sale of substantially all of the assets of a bindery plant in
Camden, New Jersey. See Note B of Notes to Consolidated Financial Statements.

Interest expense for fiscal 1995 increased $1.7 million or 24.4% over
fiscal 1994 due to increased borrowings and an increase in interest rates.

The Company's effective tax rate in fiscal 1995 was 36.2% as compared to
34.2% for fiscal 1994. This increase resulted from an increase in the statutory
federal tax rate and proportionately more income in states and foreign countries
with higher effective tax rates. See Note M of Notes to Consolidated Financial
Statements.

Fiscal 1994 compared to Fiscal 1993

Net revenues for fiscal 1994 increased by $83.4 million or 58.3% over
fiscal 1993. This increase was due to volume increases associated with the
acquisition of Word, whose results of operations were included in all of fiscal
1994 as compared to four months in fiscal 1993, as well as the introduction of
new products and distribution channels. Net revenues increased for fiscal 1994
over 1993 as follows: music products increased by $47.7 million or 188.1%; book
products increased by $28.5 million or 58.7%; Bible products increased by $5.9
million or 12.4%; and gift products increased by $1.3 million or 7.2%. Price
increases did not have a material effect on net revenues.

The Company's cost of goods sold in fiscal 1994 increased by $40.2 million
or 53.7% over fiscal 1993 and, as a percentage of net revenues, decreased to
50.9% in fiscal 1994 from 52.4% in fiscal 1993. The decrease in

10
<PAGE> 11

cost of goods sold, as a percentage of net revenues, resulted from changes in
the mix of products and distribution channels as well as improved purchasing
power as a result of the combined operations of the Company and Word.

Selling, general and administrative expenses for fiscal 1994 increased by
$34.5 million or 62.4% over fiscal 1993. These expenses, expressed as a
percentage of net revenues, increased to 39.6% in fiscal 1994 from 38.6% in
fiscal 1993. These increases were primarily due to changes in the mix of
products and distribution channels from the prior year and Word's higher
selling, general and administrative expenses as a percentage of net revenues.

Amortization of goodwill and non-compete agreements in fiscal 1994
increased by $0.9 million over fiscal 1993 due to the acquisition of Word.
Interest expense in fiscal 1994 increased by $3.9 million over fiscal 1993 due
to increased borrowings used for working capital needs and a full year of
borrowings incurred in connection with the acquisition of Word, compared to four
months in fiscal 1993.

The Company's effective tax rate in fiscal 1994 was 34.2% as compared to
32.7% in fiscal 1993. This increase resulted from an increase in the statutory
federal tax rate, proportionately more income in states and foreign countries
with higher effective tax rates, and additional non-deductible goodwill
amortization as a result of the acquisition of Word. See Note M of Notes to
Consolidated Financial Statements.

LIQUIDITY AND CAPITAL RESOURCES

The primary sources of liquidity to meet the Company's future obligations
and working capital needs are cash generated from operations and borrowings
available under bank credit facilities. At March 31, 1995, the Company had
working capital of $129.4 million. At July 17, 1995, the Company had $79.6
million outstanding, and $25.4 million available for borrowing, under its two
credit facilities. The Company intends to use the net proceeds from this
offering to repay a portion of the outstanding borrowings under the Credit
Facility.

Net cash used in operating activities was $9.0 million, $0.3 million and
$1.3 million in fiscal 1995, 1994 and 1993, respectively. The increase in cash
used in operations during fiscal 1995 was principally attributable to the
increase in accounts receivable and prepaid expenses. Net accounts receivable
increased by $27.1 million primarily as a result of a 31.7% increase in net
revenues in the fourth quarter of fiscal 1995 as compared to the prior year
period and increased sales through those distribution channels which typically
have slightly longer payment periods for receivables. Prepaid expenses increased
by $9.3 million principally because of increased royalty advances and advance
production costs related to the signing and re-signing of certain key authors
and artists during the year and an increase in direct marketing sales, which
resulted in an increase in prepaid direct marketing costs in connection with the
addition of new club members. As a result of the Company's focus on inventory
management, inventories increased by only $2.4 million in fiscal 1995, which did
not materially impact the Company's working capital requirements.

During fiscal 1995, capital expenditures totaled approximately $2.2
million. The majority of this amount related to capital expenditures for
computer equipment and leasehold improvements. In fiscal 1996, the Company
anticipates capital expenditures of approximately $3 million, consisting of
warehouse improvements and purchases of in-store promotional fixtures and
computer equipment.

The Company's bank credit facilities are unsecured and consist of the $100
million Credit Facility and a $5 million credit facility (collectively, the
"Credit Agreements"). Balances outstanding under the Credit Facility at May 31,
1997 will be converted into a four-year term loan payable in equal quarterly
principal installments thereafter. The Credit Facility bears interest at either
the prime rate or, at the Company's option, LIBOR plus 1.50%, subject to
adjustment based on certain financial ratios. The $5 million credit facility
bears interest at the prime rate and matures on July 31, 1996. Under the terms
of the Credit Agreements, the Company has agreed to limit the payment of
dividends and to maintain certain interest coverage, fixed charge coverage and
debt-to-total capital ratios. Due to the seasonality of the Company's business,
borrowings under the Credit Agreements typically peak during the third quarter
of the fiscal year.

11
<PAGE> 12

The Company also has outstanding $55 million of 5 3/4% Convertible
Subordinated Notes due November 30, 1999. The Convertible Notes presently are
convertible into Common Stock at $17.00 per share and are redeemable at the
Company's option on or after November 30, 1995 at 103.29% of the principal
amount, declining annually thereafter to 100% on November 30, 1999.

Management believes cash generated by operations and borrowings available
under the Credit Agreements will be sufficient to fund anticipated working
capital requirements for existing operations through fiscal 1996. Although the
Company has no present definitive agreements or agreements in principle with
respect to any acquisitions, the Company's growth strategy includes strategic
acquisitions using stock, cash, debt or a combination thereof. Depending on the
terms of any such acquisition, the Company may need to incur additional
indebtedness or issue additional equity securities.

12
<PAGE> 13

BUSINESS

The Company is a leading publisher, producer and distributor of books and
recorded music emphasizing Christian, inspirational and family value themes, and
believes it is the largest commercial publisher of the Bible in English language
translations. The Company also designs and markets a broad line of gift and
stationery products. The Company believes it is the largest publisher of
Christian and inspirational books and the largest producer of recorded Christian
music in the United States.

The following table sets forth the net revenues (in thousands) and the
percentage of total net revenues for each of the Company's principal product
lines for the periods indicated:

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
----------------------------------------------------------
1995 1994 1993
---------------- ---------------- ----------------
AMOUNT % AMOUNT % AMOUNT %
-------- ----- -------- ----- -------- -----
<S> <C> <C> <C> <C> <C> <C>
Publishing:
Book.......................... $ 86,894 32.8 $ 76,985 34.0 $ 48,507 33.9
Bible......................... 58,395 22.0 53,073 23.5 47,208 33.0
-------- ----- -------- ----- -------- -----
Total publishing........... 145,289 54.8 130,058 57.5 95,715 66.9
Music........................... 89,676 33.8 72,969 32.2 25,324 17.7
Gifts........................... 25,337 9.6 19,942 8.8 18,599 13.0
Other........................... 4,805 1.8 3,465 1.5 3,434 2.4
-------- ----- -------- ----- -------- -----
$265,107 100.0 $226,434 100.0 $143,072 100.0
======== ===== ======== ===== ======== =====
</TABLE>

STRATEGY

PUBLISHING

Books

The Company's book publishing division publishes and distributes hardcover
and trade paperback books emphasizing Christian, inspirational and family value
themes. The Company believes it is the largest publisher of Christian and
inspirational books in the United States. Books are published by the Company
under the "Nelson" and "Word" imprints and consist generally of inspirational
and personal experience books, and educational, trade and reference books
emphasizing Christian, inspirational and family value themes. The Company
distributes books primarily through Christian bookstores, general bookstores,
mass merchandisers and directly to consumers. The Company also distributes books
published by other companies to complement their marketing and distribution
capabilities. In fiscal 1995, approximately 17% of the book division's net
revenues related to the distribution of books published by other companies.

In each of the last three fiscal years, the Company has published over 300
new titles. The Company publishes some of the most well-known communicators in
the Christian and inspirational field, including Chuck Colson, James Dobson,
Billy Graham, Benny Hinn, Barbara Johnson, Max Lucado, Frank Peretti, Pat
Robertson, Robert Schuller, Gary Smalley, Charles Stanley, Charles Swindoll, and
Bodie and Brock Thoene. The Company also publishes books emphasizing positive
and inspirational themes by famous athletes and celebrities, such as Bobby
Bowden, Hugh Downs, Joe Gibbs, Evander Holyfield, Bill McCartney, Tom

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<PAGE> 14

Osborn, Nolan Ryan and Zig Ziglar. In each of the last three fiscal years, the
Company published over 50% of the top ten best selling Christian and
inspirational books based on the monthly Bookstore Journal Christian Hardbound
Bestsellers' Lists. In addition, the Company maintains a backlist of
approximately 1,400 titles which provide a stable base of recurring revenues as
many popular titles continue to generate significant sales from year to year.
Backlist titles accounted for approximately 40% of the book division's net
revenues in fiscal 1995. Authors and titles are supported through the use of
radio, television, cooperative advertising, author appearances, in-store
promotions, direct mail catalogs, book clubs and other means.

The Company's book publishing business is enhanced by the breadth and
development of its marketing and distribution channels. In addition to enhancing
sales of its products, the Company believes its ability to sign and renew
contracts with popular authors is improved because the Company's marketing and
distribution capabilities provide exposure for the author's books to a broader
audience than its competitors. See "-- Marketing, Distribution and Production."

Bibles

The Company believes it is the largest commercial publisher of English
translations of the Bible. The Bible is based on ancient manuscripts which are
the surviving reproductions of the original writings. These manuscripts, written
in Hebrew, Aramaic or Greek, have been translated into English and other modern
languages by biblical scholars and theologians, generally under the auspices of
a major Bible society or translation organization. Each of the many English
translations available differs in some degree from the others, primarily because
of different translation guidelines and principles used as the basis for each
translation. The distinctiveness of each translation is also, in part, a result
of the evolution of the meaning and use of words within the English language.

Virtually all Bibles and Bible products currently published in the United
States are based on one of ten major translations. Of these ten translations,
nine are protected by copyright laws which grant the copyright owner the
exclusive right, for a limited term, to control the publication of such
translation. The Company publishes Bibles and Bible products based on nine of
the ten major translations, of which four are exclusive to the Company as a
result of copyright ownership or licensing arrangements. Approximately 60% of
the Company's net revenues from Bible publishing in fiscal 1995 were generated
through sales of its proprietary Bible products.

The following table sets forth the nine major Bible translations currently
published by the Company:

<TABLE>
<CAPTION>
DATE FIRST PROPRIETARY
TRANSLATION PUBLISHED TO THE COMPANY
-------------------------------------------------------------- ---------- --------------
<S> <C> <C>
King James Version (KJV)...................................... 1611 No
New American Bible (NAB)...................................... 1970 No
The Living Bible (TLB)........................................ 1971 No
New American Standard Bible (NAS)............................. 1972 No
Today's English Version (TEV)................................. 1976 Yes
New King James Version (NKJV)................................. 1982 Yes
New Century Version (NCV)..................................... 1984 Yes
New Revised Standard Version (NRSV)........................... 1990 No
Contemporary English Version (CEV)............................ 1995 Yes
</TABLE>

The KJV, currently published in its fourth revision, is the most widely
distributed of all English translations of the Bible. In 1975, the Company
commissioned the fifth revision of the KJV resulting in the publication of the
NKJV in 1982. The KJV, NKJV and NCV are the second, third and fourth best
selling Bible translations in the United States, respectively. Among the
Company's new products is the CEV, translated under the auspices of the American
Bible Society, which is designed to be easy to read and understandable at
virtually any reading level. The new testament portion of the CEV was first
published by the Company in 1991 and the complete CEV Bible was released in June
1995.

14
<PAGE> 15

The Company continually seeks to expand its Bible product line by
developing or aiding in the development of new translations and editions and
seeking new publishing opportunities. The Company also continually makes
editorial, design and other changes to its existing line of Bibles and other
Bible products in an effort to increase their marketability. The Company
currently publishes over 1,200 different Bibles and biblical reference products
such as commentaries, study guides and other popular Bible help texts. Styles
range from inexpensive paperbacks to deluxe leather-bound Bibles. Different
editions of a particular Bible translation are created by incorporating extra
material, such as study helps, concordances, indices and Bible outlines, or
artwork, into the biblical text. These editions (which are generally proprietary
to the Company regardless of whether or not the Company holds proprietary rights
to the underlying Bible translation) are targeted to the general market or
positioned for sale to specific market segments.

MUSIC

The Company believes it is the leading producer, distributor and publisher
of Christian and inspirational music in the United States. The Company's music
division produces a wide variety of traditional and contemporary Christian and
inspirational music, such as gospel, praise and worship, and adult contemporary,
as well as pop, country, rock, rhythm and blues, rap and metal with an emphasis
on positive, inspirational and family value themes. In addition, the music
division produces master recordings of classical music, the Bible on cassette,
children's music and video, and other products, and believes it is a leading
supplier of value priced Christmas music to mass market, convenience and
specialty stores.

The Company produces recorded music and related products under seven
proprietary recording labels and in fiscal 1995 released 90 new titles. Each
label is managed and operated by its own staff within the music division. Over
50 recording artists are currently under contract for future releases. Artists
under contract with the Company include Anointed, Helen Baylor, Shirley Caesar,
Bryan Duncan, Amy Grant, Sandi Patty, Petra, and Point of Grace. In 1993 and
1994, the Company had under exclusive contract the artists (Cindy Morgan and
Point of Grace, respectively) named "New Artist of the Year" by the Gospel Music
Association. In 1995, the Company's artists received ten Dove Awards, the
Christian music industry's annual awards for outstanding artists and releases
sponsored by the Gospel Music Association.

As is customary in the recording industry, contractual arrangements with
recording artists provide for the artist to receive as a royalty a percentage of
the suggested retail price of recorded products sold. Most artists receive
advance payments against future royalties earned. The Company enters into
exclusive multi-record agreements with its recording artists. During fiscal
1995, the Company renewed recording contracts with all major artists whose
contracts expired during the period.

The Company also distributes recordings for other companies under their
recording labels pursuant to exclusive distribution agreements. Owners of these
third party labels contract with the Company for the distribution of products
typically on an exclusive basis to Christian markets worldwide. In fiscal 1995,
approximately 26% of the music division's net revenues were attributable to
products distributed under recording labels owned or controlled by other
companies.

In addition to producing and distributing recorded music, the Company
operates a music publishing business engaged in songwriter development, print
music publishing and copyright administration. The Company has approximately 50
songwriters under contract who write for the Company's recording artists and for
licensing to independent organizations for print and recording products.
Contracts in the music publishing business range from exclusive songwriters'
arrangements to co-publishing agreements to copyright administration agreements.
The Company prints and distributes church hymnals, choral music, instrumental
music, vocal folios and solo tracks for churches and other religious
organizations. The copyright administration area oversees the Company's music
catalog of approximately 40,000 copyrighted songs which are licensed to
independent publishers, record companies, churches and other organizations.

15
<PAGE> 16

GIFTS

The Company established a gift division in fiscal 1989 to develop and
market gift and stationery items and other products for social expression. In
fiscal 1994, the gift division was expanded through the Company's combination
with Pretty Paper. Current product lines offered by the Company include 80
collections and over 800 separate items, such as journals and blank books,
diaries, address books, photo albums, gift bags, calendar and desk sets, baby
gifts, kitchen accessories, and stationery.

Products are marketed under the Markings(TM), Pretty Paper(R) and Markings
Inspirations(TM) brand names, the latter of which incorporates Christian and
inspirational text or themes. Certain product lines are marketed as collections,
with each collection including a variety of products featuring a common design
or theme. Designs include original art work licensed from artists such as Sam
Butcher, Carol Endres, Larry Stephenson and Susan Wheeler and classic oriental,
tapestry and country print fabric designs.

The Company believes the gift division has significant opportunities for
growth as a result of the range of complementary gift categories not offered
currently and the breadth of the Company's existing and potential distribution
channels. The Company sells its gift products through its primary market
channels, including Christian bookstores, general bookstores and mass
merchandisers, as well as through independent and chain gift and specialty
stores, such as Hallmark stores.

ROYAL MEDIA

In fiscal 1995, the Company formed the Royal Media division to evaluate and
implement new initiatives in the use of alternative forms of media and new
distribution technologies to further capitalize on the commercial potential of
the Company's intellectual properties. The Royal Media division includes the
existing operations of the Royal Magazine Group and the Morningstar Radio
Network. To date, revenues from the Royal Media division have not been
significant to the Company's operations.

The Company complements its publishing, music and gift operations with the
publication of four periodicals under the Royal Magazine Group tradename.
Aspire, the Company's first newsstand-distributed magazine, covers a broad range
of Christian lifestyle issues and features celebrities such as Kathie Lee
Gifford, John Tesh and Amy Grant. A Better Tomorrow, a magazine designed for
mature readers, received the 1994 Award of Excellence from the Evangelical Press
Association. The Company also publishes two controlled circulation journals:
Release, which features Christian recording artists and targets the Christian
music industry; and Release Ink, which features Christian authors and targets
the Christian book industry. These four periodicals, marketed by the Company's
sales force directly to consumers and to Christian and general bookstores,
achieved combined bi-monthly circulation in excess of 400,000 copies in fiscal
1995.

The Royal Media division also operates the Morningstar Radio Network, a
24-hour satellite delivered, digital network featuring adult contemporary
Christian music and "High Country" programming formats. At the end of fiscal
1995, the Morningstar Radio Network was broadcast on 138 affiliate stations in
130 cities nationwide. This network generates revenues through the sale of
commercial airtime to advertisers and through affiliate fees and also provides
significant exposure for the Company's products, artists and authors.

The Company also is actively exploring the use of emerging digital,
interactive and multimedia technologies, including on-line services, CD-ROM
multimedia and electronic products, as well as television and video production
and broadcasting, through strategic partnerships and creative alliances to
further capitalize on the commercial potential of its proprietary content. There
can be no assurance, however, that the Company will successfully develop or
commercialize products for these mediums.

MARKETING, DISTRIBUTION AND PRODUCTION

The principal market channels through which the Company markets its
products domestically are Christian bookstores, which are primarily
independently owned; general bookstores, including national chains such as B.
Dalton Booksellers and Waldenbooks; mass merchandisers such as Target, K-Mart,
WalMart and Sam's Wholesale Club; and directly to consumers through direct mail,
telemarketing and book and record clubs. The Company also markets its products
through other market channels, such as gift, specialty retail and convenience
stores. The Company services these market channels through its sales force, and
through wholesalers or jobbers servicing bookstores, gift stores, convenience
stores, other retail outlets and libraries.

16
<PAGE> 17

Certain recorded music products are also distributed to the secular markets
pursuant to a domestic distribution agreement with a major record distribution
company. In addition, the Company sells certain of its products for promotional
purposes and sells specially designed or imprinted products to certain
customers.

The Company's direct marketing operations sell religious and inspirational
products directly to consumers through a variety of direct marketing methods,
including direct mail, continuity programs (selling a series of products over
time) and the Company's book and record clubs. The Company's book and record
clubs include the Word Family Record and Tape Club, which has approximately
300,000 members and features contemporary, traditional and gospel music, and its
Book Club, Children's Record Club, Children's Book Club and Continuity Programs,
which have a combined membership of approximately 200,000 members. The Company
also sells products directly to churches and religious organizations by direct
mail and telemarketing. The Company markets academic and contemporary books,
hymnals, choral music, trade books and recorded music to approximately 90,000
churches, other religious organizations and pastors. Retail sales also are made
during the summer months on a door-to-door, cash sales basis through a student
sales organization operated by the Company.

As of March 31, 1995, the Company employed a sales force of approximately
160 people. In addition, the Company contracts with approximately 120
independent sales representatives, who work on a commission basis, and maintains
a 24-hour-a-day telemarketing capability to serve these accounts. These
employees and sales representatives service over 50,000 retail accounts and
90,000 church and religious organization accounts. Customer orders are usually
shipped through a variety of common carriers, as well as by UPS, RPS and parcel
post. No single customer accounted for more than 10% of net revenues during
fiscal 1995.

The Company contracts with a number of foreign publishers to translate the
Company's English titles to foreign languages. The Company typically retains
ownership rights to the titles translated. Over 200 of the titles released by
the Company in fiscal 1995 were translated into foreign languages.

The Company distributes its products internationally in South America,
Europe, Australia, New Zealand, South Africa, the Far East, Mexico and Canada.
In fiscal 1995, the Company's international and export operations accounted for
approximately 9% of the Company's total net revenues.

Substantially all of the Company's products are manufactured by domestic
and foreign commercial printers, binders and manufacturers which are selected on
the basis of competitive bids. The Company may contract separately for paper and
certain other supplies used by its manufacturers.

COMPETITION

The Company believes that it is the largest publisher of Christian and
inspirational books, the largest commercial publisher of Bibles in English
language translations and the leading producer, distributor and publisher of
Christian and inspirational music in the United States. The publishing and music
divisions each compete with numerous other companies that publish and distribute
Christian and inspirational books and/or music, many of which have significantly
longer operating histories and larger revenue bases than the Company and certain
of which are tax-exempt organizations. While the Company's prices are comparable
to those of its competitors, the Company believes that its breadth of product
line, established market channels, established sales forces and customer
service, give it a competitive advantage.

The most important factor with respect to the Company's competitive
position is the contractual relationships it establishes and maintains with
authors and recording artists. The Company competes with other book publishing,
record and music publishing companies, both Christian and secular, for signing
top authors, artists and songwriters, and for discovering new talent. The
Company's ability to sign and re-sign popular authors, recording artists and
successful songwriters depends on a number of factors, including distribution
and marketing capabilities, the Company's management team and the royalty and
advance arrangements offered. The Company believes its relationships with its
authors, artists and songwriters, which are based on its reputation in the book
publishing, recording and music publishing industries, its marketing experience
and its management expertise give it a competitive advantage in signing and
maintaining contracts with top Christian and inspirational authors, artists and
songwriters.

In the gift product line, the Company competes with numerous other
companies, many of which have significantly longer operating histories and
larger revenue bases.

17
<PAGE> 18

MANAGEMENT

Following is certain information regarding the executive officers and
directors of the Company:

<TABLE>
<CAPTION>
DIRECTOR/OFFICER
NAME AGE SINCE POSITION WITH THE COMPANY
- ------------------------------------ --- ---------------- ------------------------------------------
<S> <C> <C> <C>
Sam Moore(1)........................ 64 1961 Chairman of the Board of Directors, Chief
Executive Officer and President and
Director
S. Joseph Moore..................... 32 1995 Executive Vice President
Joe L. Powers....................... 49 1980 Executive Vice President and Secretary
Charles Z. Moore.................... 61 1983 Senior Vice President, International
Ray Capp............................ 42 1995 Senior Vice President, Operations
Roland Lundy........................ 45 1993 President, Word Records and Music Division
Byron D. Williamson................. 49 1993 President, Word Publishing Division
Vance Lawson........................ 36 1988 Vice President, Finance
Stuart A. Heaton.................... 39 1989 Vice President and General Counsel
Phyllis E. Williams................. 47 1988 Treasurer
Brownlee O. Currey, Jr.(3).......... 66 1984 Director
W. Lipscomb Davis, Jr.(2)........... 66 1984 Director
Robert J. Niebel, Sr.(2)............ 57 1973 Director
Millard V. Oakley(2)................ 65 1972 Director
Joe M. Rodgers(3)................... 61 1992 Director
Cal Turner, Jr.(1).................. 55 1991 Director
Andrew J. Young(1).................. 63 1993 Director
</TABLE>

- ---------------

(1) Term expires at the 1995 Annual Meeting of Shareholders
(2) Term expires at the 1996 Annual Meeting of Shareholders
(3) Term expires at the 1997 Annual Meeting of Shareholders

Except as indicated below, each director and executive officer has been an
employee of the firm(s) listed below as his principal occupation for more than
the past five years.

Sam Moore has been the Chairman of the Board, Chief Executive Officer,
President and a Director of the Company since its founding in 1961.

S. Joseph Moore was appointed Executive Vice President of the Company in
1995, and, prior to such appointment, he served as Divisional Vice President of
the Company in various capacities since 1991. S. Joseph Moore is the son of Sam
Moore.

Joe L. Powers was appointed Executive Vice President of the Company in 1995
and has been the Secretary of the Company since 1990. Previously, Mr. Powers
served as a Vice President of the Company since 1980.

Charles Z. Moore has been a Vice President of the Company since 1983 and
was appointed Senior Vice President, International in 1986. Charles Moore is the
brother of Sam Moore.

Ray Capp was appointed Senior Vice President, Operations of the Company in
1995. Prior to joining the Company, Mr. Capp was the President and Chief
Operating Officer of Ingram Merchandising Services and Assistant to the Chairman
of Ingram Distribution, Inc. since 1992 and Executive Vice President and Chief
Operating Officer of Ingram Entertainment from 1987 to 1992.

Roland Lundy has been the President of the Company's Word Records and Music
Division since 1993. Mr. Lundy was formerly President of Word since 1989.

Byron D. Williamson has been the President of the Company's Word Publishing
Division since 1993. Mr. Williamson was formerly Executive Vice President of
Word Publishing since 1988.

Vance Lawson has been the Vice President, Finance of the Company since
1993. Mr. Lawson was formerly Vice President of Finance and Operations at Word
since 1988.

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<PAGE> 19

Stuart A. Heaton has been the Vice President and General Counsel of the
Company since 1991. Previous to that time, Mr. Heaton served as the Company's
corporate counsel since 1989.

Phyllis E. Williams has been the Treasurer of the Company since 1992. Mrs.
Williams was previously Controller for the Company since 1988.

Brownlee O. Currey, Jr. is the Chairman of the Board and President of the
Nashville Banner Publishing Company, a newspaper company, a Director of OCC,
Inc., the principal subsidiary of Osborn Communications Corporation, a
diversified media company, and A+ Communications Inc., a provider of paging
communications and telemessaging services.

W. Lipscomb Davis, Jr. is a Partner of Hillsboro Enterprises, an investment
company, and a Director of Third National Bank, a Tennessee bank, American
General Corporation, an insurance holding company, and Genesco, Inc., a consumer
products company.

Robert J. Niebel is the Senior Vice President of 20th Century Christian,
Inc., a publishing company.

Millard V. Oakley is a businessman managing private investments.

Joe M. Rodgers is the Chairman of the JMR Group (investments), a Director
of AMR Corporation, an airline, BellSouth Telecommunications, a
telecommunications company, Gaylord Entertainment Company, a diversified
entertainment and communications company, Gryphon Holding, Inc., an insurance
company, LaFarge Corp., a cement and construction materials company, and Willis
Corroon plc, an insurance holding company. Mr. Rodgers previously was the
Chairman and CEO of Berlitz International from December 1991 until February
1993.

Cal Turner, Jr. is the Chairman and Chief Executive Officer of Dollar
General Corp., an operator of general merchandise stores, and a Director of
First American Corporation, a Tennessee bank holding company, and Shoney's,
Inc., a national restaurant company.

Andrew J. Young is the Vice President of Law Companies Group, an
engineering company, Chairman of the Atlanta Commission for Olympic Games, and a
Director of Delta Airlines and Host Marriott Corporation, a lodging company. Mr.
Young previously served as the Mayor of Atlanta, Georgia from 1980 to 1990.

DESCRIPTION OF CAPITAL STOCK

The Company is authorized to issue 26,000,000 shares of capital stock,
consisting of 20,000,000 shares of Common Stock, $1.00 par value, 5,000,000
shares of Class B Common Stock, $1.00 par value, and 1,000,000 shares of
Preferred Stock, $1.00 par value. At July 18, 1995, there were 12,370,955 shares
of Common Stock outstanding, 1,085,843 shares of Class B Common Stock
outstanding and no shares of Preferred Stock outstanding.

The following summary is qualified in its entirety by reference to the
Company's Amended and Restated Charter, which sets forth the full rights, powers
and limitations of each class of the Company's capital stock.

COMMON STOCK AND CLASS B COMMON STOCK

Voting. The voting rights, powers and limitations of the shares of Common
Stock are identical in all respects with those of the shares of the Class B
Common Stock, except that each holder of Common Stock is entitled to one vote
for each share of such stock held on all matters submitted to the shareholders
and each holder of Class B Common Stock is entitled to ten votes for each share
of such stock held on all such matters. Except as otherwise provided by law, all
actions submitted to a vote of shareholders are voted on by holders of Common
Stock, Class B Common Stock and Preferred Stock, voting together as a single
class. Shareholders of the Company do not have the right to cumulate votes in
the election of directors.

At July 18, 1995, Class B Common Stock represented 8.1% of the Company's
outstanding equity, but had 46.7% of the voting power of the Company's
outstanding capital stock. The Company's Amended and Restated Charter provides
that, subject to certain exceptions, the affirmative vote of two-thirds of the

19
<PAGE> 20

outstanding capital stock of the Company, voting together as a class, is
required to approve certain actions, including an amendment to the Company's
charter or bylaws, merger, consolidation, sale of all or substantially all of
the Company's assets, dissolution or removal of a director. The holders of Class
B Common Stock currently have the ability to prevent such actions requiring a
two-thirds vote of shareholders (assuming (i) no change in the total number of
shares of capital stock currently outstanding and (ii) that all shares of Class
B Common Stock vote together).

Dividends and Other Distributions. Subject to the rights of holders of
Preferred Stock and other provisions of the Amended and Restated Charter,
holders of Common Stock and Class B Common Stock, treated together as a single
class, are entitled to receive such dividends and other distributions in cash,
stock or property of the Company when and as declared by the Board of Directors
out of assets or funds legally available therefor. In the event of a
liquidation, dissolution or winding up of the Company, holders of Common Stock
and Class B Common Stock have the right to a ratable portion with the Preferred
Stock of the assets remaining after payment of all liabilities and any
liquidation preferences of outstanding Preferred Stock, Common Stock and Class B
Common Stock, if any. Under the Credit Agreements, the Company is restricted as
to the payment of cash dividends. See "Dividend Policy."

Other Matters. The holders of Common Stock and Class B Common Stock have
no preemptive rights and are not subject to future calls or assessments by the
Company. Shares of Class B Common Stock are convertible at the option of the
holder thereof, and without cost to the shareholder, into shares of Common Stock
on a share-for-share basis. Shares of Class B Common Stock so converted shall
become authorized but unissued shares to be disposed of by resolution of the
Board of Directors of the Company. Common Stock is not convertible into Class B
Common Stock. All outstanding shares of Common Stock and Class B Common Stock
are fully paid and non-assessable.

It is expected that the voting rights of the Class B Common Stock may make
the Company less attractive as the potential target of a hostile tender offer,
proxy contest or other proposal to acquire the stock or business of the Company,
and merger proposals might be rendered more difficult, even if such actions
would be in the best interests of the holders of the Common Stock. Accordingly,
increases in the market price of the Common Stock, temporary or otherwise, which
might result from actual or rumored hostile takeover attempts, will be
inhibited. The Company is not aware of any pending effort by any person to
acquire control of the Company or to change its management or to propose to
enter into any transaction of the type to which reference is made above.

PREFERRED STOCK

The Company is authorized to issue 1,000,000 shares of Preferred Stock,
$1.00 par value, in one or more series, and to designate the rights,
preferences, limitations and restrictions of and upon shares of each series,
including voting, redemption and conversion rights. The Board of Directors also
may designate dividend rights and preferences in liquidation. It is not possible
to state the actual effect of the authorization and issuance of Preferred Stock
upon the rights of holders of Common Stock and Class B Common Stock until the
Board of Directors determines the specific terms, rights and preferences of a
series of Preferred Stock. However, such effects might include, among other
things, restricting dividends on the Common Stock and Class B Common Stock,
diluting the voting power of the Common Stock and Class B Common Stock, or
impairing liquidation rights of such shares without further action by holders of
Common Stock or Class B Common Stock. In addition, under certain circumstances,
the issuance of Preferred Stock may render more difficult or tend to discourage
a merger, tender offer or proxy contest, the assumption of control by a holder
of a large block of the Company's securities or the removal of incumbent
management. No shares of Preferred Stock are currently outstanding.

20
<PAGE> 21

DESCRIPTION OF CERTAIN PROVISIONS OF THE CHARTER AND BYLAWS OF THE COMPANY

In addition to the existence of the Class B Common Stock and the
authorization of Preferred Stock, the Company's Amended and Restated Charter and
the Amended Bylaws contain provisions that tend to make more difficult the
acquisition of control of the Company by means of a tender offer, open market
purchases, proxy fight or otherwise. These provisions are intended to discourage
certain types of coercive takeover practices and inadequate takeover bids and to
encourage persons seeking to acquire control of the Company first to negotiate
with the Company. The Company believes that the benefits of increased protection
of its potential ability to negotiate with the proponent of an unfriendly or
unsolicited proposal to take over or restructure the Company outweigh the
disadvantages of discouraging such proposals because, among other things,
negotiation of such proposals could result in an improvement of their terms.

Classified Board and Shareholder Actions. The Company's Amended and
Restated Charter and Amended Bylaws provide for a Board of Directors that is
divided into three classes of as equal size as possible, serving staggered
three-year terms. The number of directors is to be fixed from time to time by a
vote of 75% of the members of the Board, but such number shall not be less than
three nor more than 15. The vote of 75% of the members of the Board then in
office is also required to fill vacancies occurring in the Board as well as to
adopt, amend or repeal provisions of the Amended Bylaws. In addition, the
Company's Amended Bylaws contain provisions which require strict procedural
compliance as a prerequisite for a shareholder to nominate a director or raise a
matter for consideration at a meeting of shareholders. The overall effect of
these provisions is to render more difficult a change in control of the Company
or the removal of incumbent management.

Extraordinary Corporate Transaction. The affirmative vote of at least
two-thirds of the votes represented by the outstanding shares of the Company's
Common Stock, Class B Common Stock and Preferred Stock entitled to vote at
elections of directors, voting as a class, is required to authorize (i) the
amendment, alteration or repeal of any provision of the Amended and Restated
Charter or Amended Bylaws of the Company; (ii) a merger or consolidation by the
Company; (iii) the sale of all or substantially all the Company's property and
assets; (iv) the dissolution of the Company; or (v) the removal of a director;
provided that such two-thirds approval shall not be required if shareholder
approval of any of the foregoing is not required under Tennessee law or 75% of
the Board of Directors has approved the transaction in question.

NYSE LISTING

The Common Stock and the Class B Common Stock are listed on the NYSE under
the symbols "TNM" and "TNM.B," respectively. The current rules of the NYSE
effectively preclude the listing on the NYSE of any securities of an issuer
which has issued securities or taken other corporate action that would have the
effect of nullifying, restricting or disparately reducing the per share voting
rights of holders of an outstanding class or classes of equity securities
registered under Section 12 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). The Company does not intend to issue any additional shares
of any stock that would make either the Common Stock or the Class B Common Stock
ineligible for continued listing or cause the Common Stock or the Class B Common
Stock to be delisted from the NYSE.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is Trust Company
Bank, Atlanta, Georgia.

21
<PAGE> 22

UNDERWRITING

The U.S. Underwriters named below, for whom PaineWebber Incorporated,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.C. Bradford & Co. are
acting as the representatives (the "U.S. Representatives"), have severally
agreed, subject to the terms and conditions of the U.S. Underwriting Agreement
(the "U.S. Underwriting Agreement"), to purchase from the Company, and the
Company has agreed to sell to the U.S. Underwriters, the number of shares of
Common Stock set forth opposite their names.

<TABLE>
<CAPTION>
NUMBER
UNDERWRITER OF SHARES
-------------------------------------------------------------------------- ---------
<S> <C>
PaineWebber Incorporated.................................................. 667,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................................. 667,000
J.C. Bradford & Co. ...................................................... 666,000
---------
Total........................................................... 2,000,000
========
</TABLE>

The Company has also entered into an International Underwriting Agreement
(the "International Underwriting Agreement") with certain International
Underwriters (the "International Underwriters", together with the U.S.
Underwriters, the "Underwriters"), for whom PaineWebber International (U.K.)
Ltd., Merrill Lynch International Limited and J.C. Bradford & Co. are acting as
the representatives. Subject to the terms and conditions of the International
Underwriting Agreement, and concurrently with the sale of 2,000,000 shares of
Common Stock to the U.S. Underwriters, the Company has agreed to sell to the
International Underwriters, and the International Underwriters have severally
agreed to purchase, an aggregate of 500,000 shares of Common Stock. The public
offering price per share and the total underwriting discounts and commissions
per share are identical in the U.S. Underwriting Agreement and the International
Underwriting Agreement with respect to all shares of Common Stock being
purchased by the Underwriters from the Company.

The U.S. Underwriting Agreement provides that the obligations of the U.S.
Underwriters to purchase the shares of Common Stock are subject to certain
conditions. The U.S. Underwriters are committed to purchase, and the Company is
obligated to sell, all the shares of Common Stock offered by this prospectus, if
any are purchased. In general, the closing with respect to the sale of the
shares of Common Stock pursuant to the U.S. Underwriting Agreement is a
condition to the closing with respect to the sale of the shares of Common Stock
pursuant to the International Underwriting Agreement and vice versa. PaineWebber
International (U.K.) Ltd. is an affiliate of PaineWebber Incorporated, and
Merrill Lynch International Limited is an affiliate of Merrill Lynch, Pierce,
Fenner & Smith Incorporated.

The Company has been advised by the U.S. Representatives that the U.S.
Underwriters propose initially to offer the shares of Common Stock to the public
at the public offering price set forth on the cover page of this prospectus, and
to certain securities dealers at such price less a concession not in excess of
$.55 per share. The U.S. Underwriters may allow, and such dealers may reallow,
concessions of not more than $.10 per share on sales to certain other dealers.
After the public offering, the public offering price and concessions may be
changed by the U.S. Representatives.

Each U.S. Underwriter has represented and agreed that, as part of the
distribution of the shares of Common Stock, (a) it is not purchasing any shares
of Common Stock for the account of anyone other than a U.S. or Canadian Person
and (b) it has not offered or sold, and will not offer or sell, directly or
indirectly, any shares of Common Stock or distribute this prospectus to any
person outside the United States or Canada. Each International Underwriter has
represented and agreed that, as part of the distribution of the shares of Common
Stock, (a) it is not purchasing any shares of Common Stock for the account of
any U.S. or Canadian Person, and (b) it has not offered or sold, and will not
offer or sell, directly or indirectly, any shares of Common Stock or distribute
the international prospectus to any person within the United States or to any
U.S. or Canadian Person. The foregoing limitations do not apply to stabilization
transactions or to certain other transactions specified in the Agreement Between
U.S. and International Underwriters described below.

22
<PAGE> 23

As used herein, "U.S. or Canadian Person" means any individual who is resident
in the United States or Canada, or any corporation, pension, profit-sharing or
other trust or other entity organized under or governed by the laws of the
United States or Canada or any political subdivision thereof (other than a
foreign branch of any U.S. or Canadian Person), and includes any U.S. or
Canadian branch of a non-U.S. or Canadian Person.

The U.S. Underwriters and the International Underwriters have entered into
an Agreement Between U.S. and International Underwriters that provides for the
coordination of their activities. Pursuant to the Agreement Between U.S. and
International Underwriters, sales may be made between the U.S. Underwriters and
the International Underwriters of such number of shares of Common Stock as may
be mutually agreed upon. The per share price of any shares so sold shall be the
public offering price set forth on the cover page of this prospectus, less an
amount not greater than the per share amount of the concession to dealers set
forth above. To the extent there are sales between the U.S. Underwriters and the
International Underwriters, the number of shares of Common Stock initially
available for sale by the U.S. Underwriters or by the International Underwriters
may be more or less than the amount appearing on the cover page of this
prospectus.

The Company has granted to the U.S. Underwriters an option, exercisable
within the 30-day period after the date of the prospectus, to purchase up to an
additional 375,000 shares of Common Stock at the public offering price set forth
on the cover page of this prospectus, less the underwriting discounts and
commissions. The U.S. Underwriters may exercise such option only to cover
over-allotments, if any, in the sale of the shares of Common Stock offered
hereby. To the extent that such option is exercised, each U.S. Underwriter will
become obligated, subject to certain conditions, to purchase approximately the
same percentage of such additional shares of Common Stock as the percentage it
was obligated to purchase pursuant to the U.S. Underwriting Agreement.

The Company and its executive officers and directors have agreed not to
sell, offer to sell or otherwise dispose of (a) shares of Common Stock, Class B
Common Stock or securities convertible into Common Stock or Class B Common Stock
or (b) sell, offer to sell or grant rights, options or warrants with respect to
Common Stock, Class B Common Stock or securities convertible into Common Stock
or Class B Common Stock prior to the expiration of 90 days from the date of this
prospectus, without the prior written consent of PaineWebber Incorporated, other
than pursuant to existing employee stock option plans or in connection with
other employee incentive compensation arrangements of the Company and issuances
of Common Stock upon conversion of securities outstanding as of the date of this
prospectus.

The Company has agreed to indemnify the U.S. Underwriters and the
International Underwriters and their controlling persons against certain
liabilities, including liabilities under the Securities Act of 1933, as amended
(the "Securities Act"), or to contribute to payments the U.S. Underwriters and
the International Underwriters may be required to make in respect thereof.

23
<PAGE> 24

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Bass, Berry & Sims, Nashville, Tennessee. Certain legal
matters relating to the offering will be passed upon for the Underwriters by
Shereff, Friedman, Hoffman & Goodman, LLP, New York, New York.

EXPERTS

The financial statements and schedules included or incorporated by
reference in this prospectus and elsewhere in the registration statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon authority of said firm as experts in giving said reports.

AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") in Washington, D.C., a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act, with respect to the shares of Common Stock
offered hereby. This prospectus constitutes a part of the Registration Statement
and does not contain all the information set forth therein, certain portions of
which have been omitted as permitted by the rules and regulations of the
Commission. Any statements contained herein concerning the provisions of any
contract or other document are not necessarily complete and, in each instance,
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference. For further
information regarding the Company and the securities offered hereby, reference
is made to the Registration Statement and to the exhibits thereto.

The Company is subject to the informational requirements of the Exchange
Act, and, in accordance therewith, files reports, proxy statements and other
information with the Commission. The Registration Statement (with exhibits), as
well as such reports, proxy statements and other information filed by the
Company with the Commission, may be inspected and copied at the public reference
facilities maintained by the Commission at its principal offices at Judiciary
Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the
following Regional Offices of the Commission: 7 World Trade Center, 13th Floor,
New York, New York, 10048; and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material may be obtained from the Public
Reference Section of the Commission at 450 Fifth Street. N.W., Room 1024,
Washington, D.C. 20549, at prescribed rates.

The Common Stock and Class B Common Stock are listed on the NYSE. The
aforementioned material also can be inspected at the offices of the NYSE, 20
Broad Street, New York, New York 10005. The Company is organized under the laws
of the State of Tennessee, its executive offices are located at Nelson Place at
Elm Hill Pike, Nashville, Tennessee 37214-1000, and its telephone number is
(615) 889-9000.

24
<PAGE> 25

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The following documents, heretofore filed by the Company with the
Commission (File No. 0-4095) pursuant to the Exchange Act, are incorporated and
made a part of this prospectus by reference, except as superseded or modified
herein:

(1) The Company's Annual Report on Form 10-K for the year ended March
31, 1995.

(2) The description of the Company's Common Stock and Class B Common
Stock contained in the Registration Statement on Form 8-A filed on May 26,
1995.

All documents subsequently filed by the Company pursuant to Section 13 (a),
13 (c), 14, or 15 (d) of the Exchange Act prior to the termination of this
offering shall be deemed to be incorporated by reference in this prospectus and
shall be part hereof from the date of filing of such documents. Any statement
contained herein or in any document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this prospectus to the extent that a statement contained herein or in any
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as modified or superseded, to
constitute a part of this prospectus.

The Company undertakes to provide without charge to each person, including
any beneficial owner, to whom a copy of this prospectus is delivered, upon the
written or oral request of any such person, a copy of any document described
herein (not including exhibits to those documents unless such exhibits are
specifically incorporated by reference into the information incorporated into
this prospectus). Requests for such copies should be directed to Joe L. Powers,
Executive Vice President and Secretary, Thomas Nelson, Inc., Nelson Place at Elm
Hill Pike, Nashville, Tennessee 37214-1000, telephone number (615) 889-9000.

25
<PAGE> 26

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Report of Independent Public Accountants.............................................. F-2
Consolidated Statements of Income for the Years Ended March 31, 1995, 1994 and 1993... F-3
Consolidated Balance Sheets at March 31, 1995 and 1994................................ F-4
Consolidated Statements of Shareholders' Equity for the Years Ended March 31, 1995,
1994 and 1993....................................................................... F-5
Consolidated Statements of Cash Flows for the Years Ended March 31, 1995, 1994 and
1993................................................................................ F-6
Notes to Consolidated Financial Statements............................................ F-7
</TABLE>

F-1
<PAGE> 27

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and Board of Directors of
Thomas Nelson, Inc. and Subsidiaries:

We have audited the accompanying consolidated balance sheets of Thomas
Nelson, Inc. and Subsidiaries (a Tennessee corporation) as of March 31, 1995 and
1994, and the related consolidated statements of income, shareholders' equity
and cash flows for each of the three years in the period ended March 31, 1995.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Thomas Nelson, Inc. and
Subsidiaries as of March 31, 1995 and 1994, and the results of its operations
and its cash flows for each of the three years in the period ended March 31,
1995 in conformity with generally accepted accounting principles.

As explained in Note M to the financial statements, effective April 1,
1993, the Company changed its method of accounting for income taxes.

ARTHUR ANDERSEN LLP

Nashville, Tennessee
May 19, 1995

F-2
<PAGE> 28

THOMAS NELSON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
----------------------------------
1995 1994 1993
-------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
Net revenues............................................... $265,107 $226,434 $143,072
Cost of goods sold......................................... 133,650 115,201 74,975
-------- -------- --------
Gross profit............................................... 131,457 111,233 68,097
Selling, general and administrative expenses............... 103,614 89,649 55,193
Amortization of goodwill and non-compete agreements........ 1,806 1,616 718
-------- -------- --------
Operating income........................................... 26,037 19,968 12,186
Other income............................................... 897 227 178
Interest expense........................................... 8,585 6,903 3,027
-------- -------- --------
Income before income taxes................................. 18,349 13,292 9,337
Provision for income taxes................................. 6,639 4,547 3,055
-------- -------- --------
Income before cumulative effect of change in accounting
principle................................................ 11,710 8,745 6,282
Cumulative effect of change in accounting principle for
income taxes............................................. -- 336 --
-------- -------- --------
Net income............................................ $ 11,710 $ 9,081 $ 6,282
======== ======== ========
Weighted average number of shares outstanding.............. 13,374 13,355 13,268
======== ======== ========
Net income per share:
Income before cumulative effect of change in accounting
principle............................................. $ .88 $ .65 $ .47
Cumulative effect of change in accounting principle...... -- .03 --
-------- -------- --------
Net income............................................... $ .88 $ .68 $ .47
======== ======== ========
Fully diluted net income per share:
Income before cumulative effect of change in accounting
principle............................................. $ .83 $ .65 $ .47
Cumulative effect of change in accounting principle...... -- .02 --
-------- -------- --------
Net income............................................... $ .83 $ .67 $ .47
======== ======== ========
</TABLE>

See Notes to Consolidated Financial Statements

F-3
<PAGE> 29

THOMAS NELSON, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
MARCH 31,
---------------------
1995 1994
-------- --------
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents.............................................. $ 779 $ 788
Accounts receivable, less allowances of $9,029 and $8,916,
respectively......................................................... 85,100 58,038
Inventories............................................................ 69,351 66,994
Prepaid expenses....................................................... 20,683 11,400
Deferred tax asset..................................................... 7,714 13,235
-------- --------
Total current assets......................................... 183,627 150,455
Other assets........................................................... 14,688 12,054
Property, plant and equipment, net..................................... 16,226 17,359
Deferred charges....................................................... 4,149 4,179
Goodwill, less accumulated amortization of $2,046 and $1,087,
respectively......................................................... 31,179 32,278
-------- --------
Total assets................................................. $249,869 $216,325
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable....................................................... $ 32,419 $ 20,798
Accrued expenses....................................................... 19,558 18,618
Dividends payable...................................................... 537 428
Income taxes currently payable......................................... -- 4,471
Current portion of long-term debt...................................... 892 878
Current portion of capital lease obligations........................... 780 723
-------- --------
Total current liabilities.................................... 54,186 45,916
Long-term debt......................................................... 120,108 102,618
Capital lease obligations.............................................. 80 861
Deferred tax liability................................................. 1,410 1,330
Other liabilities...................................................... 1,356 2,875
Commitments and contingencies

SHAREHOLDERS' EQUITY
Preferred stock, $1.00 par value, authorized 1,000,000 shares; none
issued............................................................... -- --
Common stock, $1.00 par value, authorized 20,000,000 shares; issued
12,362,377 and 9,891,233, respectively............................... 12,362 9,891
Class B common stock, $1.00 par value, authorized 5,000,000 shares;
issued 1,067,094 and 799,933, respectively........................... 1,067 800
Additional paid-in capital............................................. 18,211 20,982
Retained earnings...................................................... 40,538 30,651
Foreign currency translation adjustments............................... 551 401
-------- --------
Total shareholders' equity............................................. 72,729 62,725
-------- --------
Total liabilities and shareholders' equity................... $249,869 $216,325
======== ========
</TABLE>

See Notes to Consolidated Financial Statements

F-4
<PAGE> 30

THOMAS NELSON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
FOREIGN
CLASS B ADDITIONAL CURRENCY
COMMON COMMON PAID-IN RETAINED TRANSLATION DEFERRED
STOCK STOCK CAPITAL EARNINGS ADJUSTMENTS COMPENSATION
------- ------- ---------- -------- ----------- ------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT MARCH 31, 1992........... $ 6,565 $ 490 $ 23,349 $ 18,759 $ -- $ (120)
Net income.......................... 6,282
Common stock issued:
Executive Stock Purchase Plan --
30,733 shares.................. 30 554
Option plans -- 29,519 common and
80,038 Class B common shares... 30 80 260
Stock dividend -- 50%............... 3,243 244 (3,496)
Dividends declared -- $0.117........ (1,548)
PPC, Inc. common stock dividends
declared.......................... (30)
Contributions to ESOP............... 120
Foreign currency translation
adjustments....................... 480
Class B common stock converted to
common stock...................... 9 (9)
------- ------- ---------- -------- ----------- ------------
BALANCE AT MARCH 31, 1993........... 9,877 805 20,667 23,463 480 --
Net income.......................... 9,081
Common stock issued:
Option plans -- 9,000 common...... 9 36
Dividends declared -- $0.128........ (1,696)
PPC, Inc. common stock:
Dividends declared................ (197)
Net issued........................ 279
Foreign currency translation
adjustments....................... (79)
Class B common stock converted to
common stock...................... 5 (5)
------- ------- ---------- -------- ----------- ------------
BALANCE AT MARCH 31, 1994........... 9,891 800 20,982 30,651 401 --
Net income.......................... 11,710
Common stock issued:
Option plans -- 10,500 common and
60,000 Class B common shares... 11 60 306
Retirement for option payments
15,038 common and 180 Class B
common shares.................. (15) (348)
Dividends declared -- $0.136........ (1,823)
Executive Stock Purchase Plan
Retired 2,255 shares of common.... (2) (26)
Foreign currency translation
adjustments....................... 150
Stock dividend -- 25%............... 2,471 213 (2,703)
Class B common stock converted to
common stock...................... 6 (6)
------- ------- ---------- -------- ----------- ------------
BALANCE AT MARCH 31, 1995........... $12,362 $ 1,067 $ 18,211 $ 40,538 $ 551 $ --
======= ====== ======= ======= ========= ==========
</TABLE>

See Notes to Consolidated Financial Statements

F-5
<PAGE> 31

THOMAS NELSON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
------------------------------
1995 1994 1993
-------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income..................................................... $ 11,710 $ 9,081 $ 6,282
Adjustments to reconcile net income to net cash provided by
(used in) operations:
Depreciation and amortization................................ 5,870 5,362 3,829
Deferred income taxes........................................ 5,601 (1,062) (273)
Cumulative effect of change in accounting principle.......... (--) (336) (--)
Loss (gain) on sale of property, plant and equipment......... (702) 61 (6)
Changes in assets and liabilities, net of acquisitions and
disposals:
Accounts receivable, net.................................. (27,011) (8,327) 3,930
Inventories............................................... (2,713) (13,025) (10,869)
Prepaid expenses.......................................... (9,234) (801) (3,734)
Accounts payable and accrued expenses..................... 11,945 3,516 1,295
Income taxes currently payable and deferred............... (4,471) 5,244 (1,734)
-------- -------- --------
Net cash used in operating activities.......................... (9,005) (287) (1,280)
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................................... (2,245) (2,400) (4,952)
Proceeds from sale of property, plant and equipment............ 23 34 20
Proceeds from sale of business assets.......................... 2,823 4,155 --
Purchase of net assets of acquired companies -- net of cash
received..................................................... (187) -- (67,260)
Changes in other assets and deferred charges................... (4,880) (5,867) (11,281)
-------- -------- --------
Net cash used in investing activities.......................... (4,466) (4,078) (83,473)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under line of credit................................ 18,300 9,298 25,741
Borrowings (payments) under construction and term loan......... (667) -- 3,123
Proceeds from issuance of long-term debt....................... -- -- 55,000
Payments under industrial revenue bonds........................ (225) (195) (190)
Payments under capital lease obligations....................... (723) (566) (372)
Changes in other liabilities................................... (1,646) (2,542) 1,592
Dividends paid................................................. (1,713) (1,888) (1,433)
Proceeds from issuance of common stock......................... 377 433 944
Common stock retired........................................... (391) (108) --
-------- -------- --------
Net cash provided by financing activities...................... 13,312 4,432 84,405
-------- -------- --------
Effect of translation rate changes............................. 150 (79) 480
-------- -------- --------
Net increase (decrease) in cash and cash equivalents........... (9) (12) 132
Cash and cash equivalents at beginning of year................. 788 800 668
-------- -------- --------
Cash and cash equivalents at end of year....................... $ 779 $ 788 $ 800
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING
ACTIVITIES:
Non-compete agreements......................................... $ -- $ 300 $ --
Capital lease obligations incurred to lease new equipment...... $ -- $ 764 $ 214
Contribution to ESOP using previously funded advances.......... $ -- $ -- $ 120
Dividends accrued and unpaid................................... $ 537 $ 428 $ 423
</TABLE>

See Notes to Consolidated Financial Statements

F-6
<PAGE> 32

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation: The consolidated financial statements consist
of the accounts of Thomas Nelson, Inc. and subsidiary companies (the "Company").
All intercompany transactions and balances have been eliminated. As discussed
further in Note B, the Company acquired PPC, Inc. ("Pretty Paper Company") in a
pooling-of-interests transaction in March 1994 and acquired Word, Incorporated
("Word") through a purchase effective November 30, 1992. All financial data
presented in the consolidated financial statements and notes thereto have been
restated for all periods shown to include the accounts of PPC, Inc. under the
pooling-of-interests method of accounting. The consolidated statement of income
for the year ended March 31, 1993, includes Word operations for the four months
ended March 31, 1993.

Sales Returns: Provision is made for the estimated effect of sales returns
where right-of-return privileges exist. Returns of products from customers are
accepted in accordance with standard industry practice. The full amount of the
returns allowance (estimated returns to be received net of inventory and royalty
costs) is shown, along with the allowance for doubtful accounts, as a reduction
of accounts receivable in the accompanying financial statements.

Inventories: Inventories are stated at the lower of cost or market using
the first-in, first-out (FIFO) valuation method. Costs of the production and
publication of products are included in inventory and charged to operations when
sold or when otherwise disposed. Costs of abandoned publishing projects and
appropriate provisions for inventory obsolescence and decreases in market value
are charged to operations on a current basis.

Property, Plant and Equipment: Property, plant and equipment are stated at
cost. Depreciation and amortization are provided for principally on the
straight-line method over the estimated useful lives of the individual assets.

Goodwill: Goodwill is being amortized on a straight-line basis over forty
years. Subsequent to acquisitions, the Company continually evaluates whether
later events and circumstances have occurred that indicate the remaining
estimated useful life of goodwill may warrant revision or that the remaining
balance of goodwill may not be recoverable. In the evaluation of possible
impairment, the Company uses the most appropriate method of evaluation given the
circumstances surrounding the particular acquisition, which has generally been
an estimate of the related business unit's undiscounted operating income before
interest and taxes over the remaining life of the goodwill.

Prepaid Expenses: Prepaid expenses consist primarily of royalty advances,
certain production costs of music products, direct marketing costs, and
production and distribution costs relating to marketing programs that are
expected to benefit future periods. These costs are expensed over the expected
benefit periods.

Deferred Charges: Deferred charges consist primarily of loan issuance
costs which are being amortized over the average life of the related debt. Also
included are publication costs that are expected to be of significant benefit to
future periods and other deferred charges, all of which are amortized over
periods not to exceed 60 months.

Other Assets: Other assets consist primarily of costs of copyright
production masters which are amortized over periods not to exceed 60 months, a
non-compete agreement related to the Word acquisition which is being amortized
over 60 months (the term of the agreement) and prepaid royalty and production
advances for works and projects which are not expected to be released within the
next fiscal year.

Income Taxes: Effective April 1, 1993, the Company adopted the provisions
of Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes". Deferred income taxes are provided for temporary differences in
bases between financial statement and income tax assets and liabilities.

F-7
<PAGE> 33

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Foreign Currency Translation: Assets and liabilities of foreign
subsidiaries are translated at year-end rates of exchange and revenues and
expenses are translated at the average rate of exchange for the year. Gains and
losses resulting from translation are accumulated in a separate component of
shareholders' equity. Gains and losses resulting from foreign currency
transactions are not material.

Computation of Net Income Per Share: Net income per share is computed by
dividing net income by the weighted average number of common and Class B common
shares outstanding during the year. The fully diluted per share computation
reflects the effect of common shares contingently issuable upon conversion of
convertible debt securities in periods in which such conversion would cause
dilution and the effect on net income of converting the debt securities. Fully
diluted earnings per share also reflect additional dilution related to stock
options using the market price at the end of the period, when higher than the
average price for the period.

Statement of Cash Flows: For purposes of the statement of cash flows, the
Company considers as cash equivalents all highly liquid debt instruments with a
maturity of three months or less.

Reclassifications: Certain reclassifications of prior period amounts have
been made to conform to the current year's presentation.

NOTE B -- ACQUISITIONS AND DISPOSITIONS

In March 1994, Pretty Paper Company became a wholly-owned subsidiary of the
Company, and 115,551 shares of the Company's common stock were issued in
exchange for all of the outstanding common stock of Pretty Paper Company. The
combination was accounted for as a pooling of interests, and accordingly, the
accompanying financial statements have been restated to include the accounts and
operations of Pretty Paper Company for all periods prior to the combination.
Pretty Paper Company had net revenues of $8.0 million and $5.6 million, and net
income (loss) of $342,000 and ($74,000), for the fiscal years 1994 and 1993,
respectively. Costs and expenses incurred in connection with this transaction
were immaterial and have been charged to expenses in March 1994. In addition,
certain shareholders of Pretty Paper Company entered into agreements not to
compete with the Company for a period of five years from the date of the pooling
in consideration of an aggregate of $300,000.

Effective November 30, 1992, the Company consummated the acquisition of all
of the issued and outstanding capital stock of Word. Word produces and
distributes Christian recorded and printed music products, and also publishes
Christian and inspirational books and Bibles. The purchase price of the capital
stock was $68.4 million. The purchase price was funded by the Company's issuance
of $55 million of 5 3/4% Convertible Subordinated Notes due in 1999 and by
borrowings under the Company's credit facilities. The acquisition has been
accounted for as a purchase, and Word's results of operations are included in
the Company's consolidated financial statements since the date of acquisition.
The total acquisition cost was allocated to the net assets acquired and adjusted
in fiscal year 1994, primarily for the recognition of approximately $8 million
in a deferred tax asset. There may be additional tax assets available in future
years, however, at this time, the Company has not recorded these assets. Any
related tax assets recorded in the future will result in an adjustment to
goodwill. In addition, the seller entered into an agreement not to compete with
the Company for a period of five years from the date of the acquisition for a
payment of $3.6 million. Effective September 27, 1993, the Company sold certain
assets of a subsidiary of Word for approximately $4.2 million, which was
approximately book value. No gain or loss was recorded in connection therewith.
On a combined basis, the Company and Word would have had unaudited pro forma net
revenues of $223.2 million for fiscal 1993.

In March, 1995 the Company sold substantially all of the assets of a
bindery plant for $2.8 million. A $0.7 million gain on the sale is included in
other income in the accompanying financial statements.

F-8
<PAGE> 34

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE C -- INVENTORIES

Inventories consisted of the following at March 31 (in thousands):

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Finished goods................................................. $59,116 $58,463
Work in process and raw materials.............................. 10,235 8,531
------- -------
$69,351 $66,994
======= =======
</TABLE>

NOTE D -- PREPAID EXPENSES

Prepaid expenses consisted of the following at March 31 (in thousands):

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Direct marketing costs......................................... $ 4,562 $ 2,650
Prepaid advertising............................................ 1,423 670
Royalties and production costs................................. 11,516 7,096
Other.......................................................... 3,182 984
------- -------
$20,683 $11,400
======= =======
</TABLE>

NOTE E -- PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following at March 31 (in
thousands):

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Land........................................................... $ 1,916 $ 1,933
Buildings...................................................... 11,314 11,229
Machinery and equipment........................................ 8,959 8,171
Assets under capital leases.................................... 2,800 2,800
Furniture and fixtures......................................... 3,521 3,190
------- -------
28,510 27,323
Less allowance for depreciation and amortization............... (12,284) (9,964)
------- -------
$16,226 $17,359
======= =======
</TABLE>

NOTE F -- OTHER ASSETS

Other assets consisted of the following at March 31 (in thousands):

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Prepaid royalties.............................................. $ 9,050 $ 6,200
Production masters, net of accumulated amortization of $1,267
and $789, respectively....................................... 2,089 1,209
Non-compete agreements, net of accumulated amortization of
$2,121 and $1,214, respectively.............................. 2,682 3,489
Other.......................................................... 867 1,156
------- -------
$14,688 $12,054
======= =======
</TABLE>

F-9
<PAGE> 35

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE G -- ACCRUED EXPENSES

Accrued expenses consisted of the following at March 31 (in thousands):

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Accrued interest............................................... $ 1,247 $ 969
Accrued royalties.............................................. 10,992 9,980
Accrued payroll................................................ 4,369 3,043
Other.......................................................... 2,950 4,626
------- -------
$19,558 $18,618
======= =======
</TABLE>

Cash payments for interest were $8.0 million in 1995, $6.2 million in 1994
and $2.4 million in 1993.

NOTE H -- LONG-TERM DEBT

Long-term debt consisted of the following at March 31 (in thousands):

<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Industrial Revenue Bonds, 7.65% to 8.35%, due through 2005... $ 2,700 $ 2,920
Loan Agreement............................................... 4,333 5,000
Credit Agreements............................................ 58,800 40,500
5.75% Convertible Subordinated Notes, due in 1999............ 55,000 55,000
Other........................................................ 167 76
-------- --------
121,000 103,496
Less current portion......................................... (892) (878)
-------- --------
$120,108 $102,618
======== ========
</TABLE>

At March 31, 1995, Industrial Revenue Bonds were secured by property, plant
and equipment with a net book value of approximately $2.3 million.

The Loan Agreement indebtedness is secured by property, plant and equipment
related to the warehouse and distribution center expansion completed in June
1992. Interest is at the London Interbank Offered Rate ("LIBOR") plus 1.25%,
which was 7.4% at March 31, 1995. Semi-annual principal payments are due through
March 2002.

The Credit Agreements totaling $80 million were obtained in November 1992
from a group of banks, and increased in March 1995 to $105 million. The primary
credit facility provides for a $100 million facility, with any outstanding
balance at May 31, 1997 converting to a term loan payable in 16 equal quarterly
principal installments thereafter. This credit facility bears interest at either
the prime rate or, at the Company's option, at LIBOR plus 1.5%, based on certain
financial ratios. At March 31, 1995, the average interest rate was 8.0%. This
facility is guaranteed by all of the Company's subsidiaries and the Company has
agreed, among other things, to limit the payment of cash dividends to $1.6
million, plus 30% of the Company's cumulative consolidated net income earned
after March 31, 1992, and to maintain certain interest coverage, fixed charge
coverage, debt-to-total-capital ratios and working capital of at least $60
million. The maximum dividends which the Company may pay for fiscal 1996 would
be $4.2 million. Additionally, the Company has a $5 million credit facility
which matures July 31, 1996 and bears interest at the prime rate, with covenants
which are the same as the $100 million facility. At March 31, 1995, the Company
was in compliance with all covenants of the credit facilities. At March 31,
1995, the Company had $46.2 million available under its Credit Agreements.

During November 1992, the Company issued $55 million of Convertible
Subordinated Notes due November 30, 1999, priced at par to yield 5.75%. The
notes are convertible into common stock initially at

F-10
<PAGE> 36

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$17.00 per share and are redeemable at the Company's option on or after November
30, 1995, at 103.29% of the principal amount, declining thereafter to 100% on
November 30, 1999. This conversion would result in 3,235,294 additional shares
outstanding.

Maturities of long-term debt for the years ending March 31, are as follows
(in thousands):

<TABLE>
<S> <C>
1996...................................................................... $ 892
1997...................................................................... 3,207
1998...................................................................... 15,092
1999...................................................................... 15,117
2000...................................................................... 70,117
2001 and thereafter....................................................... 16,575
--------
$121,000
========
</TABLE>

NOTE I -- LEASES

Total rental expense for all operating leases, including short-term leases
of less than a year, amounted to approximately $2.2 million in 1995, $2.2
million in 1994, and $1.0 million in 1993. Generally, the leases provide that,
among other things, the Company shall pay for utilities, insurance, maintenance,
and property taxes in excess of base year amounts.

Minimum rental commitments under non-cancelable leases for the years ending
March 31, are as follows (in thousands):

<TABLE>
<CAPTION>
OPERATING CAPITAL
LEASES LEASES
--------- -------
<S> <C> <C>
1996................................................................ $ 2,419 $ 818
1997................................................................ 2,058 51
1998................................................................ 1,622 34
1999................................................................ 1,103 --
2000................................................................ 495 --
2001 and thereafter................................................. 2,103 --
--------- -------
Total minimum lease payments.............................. $ 9,800 903
=======
Less amount representing interest................................... (43)
-------
Present value of net lease payments................................. 860
Less current portion................................................ (780)
-------
$ 80
=====
</TABLE>

NOTE J -- STOCK PLANS

Executive Stock Purchase Plan of 1986: The Company has adopted the
Executive Stock Purchase Plan of 1986, which is administered by the Company's
Compensation Committee. There were no offers of investment rights under the
Executive Stock Purchase Plan of 1986 that required a contribution by the
Company for fiscal 1995, 1994 and 1993. Under this plan, there were 99,186
shares of common stock and 371,809 shares of Class B common stock reserved at
March 31, 1995.

1986 Stock Incentive Plan: The Company has adopted the 1986 Stock
Incentive Plan, which is administered by the Company's Compensation Committee.
Stock options may be granted under the 1986 Stock Incentive Plan at a price not
less than the fair market value ("FMV") of the stock on the date the option is
granted and must be exercised not later than five years after the date of grant.
Stock options issued to

F-11
<PAGE> 37

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

a person then owning more than 10% of the voting power in all classes of the
Company's outstanding stock must be granted at a purchase price of not less than
110% of the FMV and exercised within five years from the date of grant. Shares
reserved and options outstanding under this plan are as follows:

<TABLE>
<CAPTION>
COMMON STOCK CLASS B COMMON STOCK
----------------------- ----------------------- FMV
REMAINING REMAINING --------------------
SHARES OUTSTANDING SHARES OUTSTANDING EXERCISE
RESERVED OPTIONED RESERVED OPTIONED PRICES
FOR GRANT SHARES FOR GRANT SHARES PER SHARE
--------- ----------- --------- ----------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
APRIL 1, 1992............... 30,000 59,000 126,700 103,700 $ 4.05 - $ 9.35
Stock Dividend.............. 16,000 26,700 63,375 51,750 (1.35) - (3.12)
Exercised................... (28,462) (80,038) 2.70 - 5.00
Cancelled................... 10,738 (10,738) 412 (412) 2.70 - 5.00
--------- ----------- --------- ----------- --------------------
MARCH 31, 1993.............. 56,738 46,500 190,487 75,000 5.00 - 6.23
Exercised................... (9,000) 5.00
Cancelled................... 1,500 (1,500) 5.00
--------- ----------- --------- ----------- --------------------
MARCH 31, 1994.............. 58,238 36,000 190,487 75,000 5.00 - 6.23
Granted..................... (60,238) 200,000 (189,762) 50,000 14.40 - 18.40
Stock Dividend.............. 54,750 181 16,250 (1.00) - (1.83)
Exercised................... (15,000) (60,000) 4.00 - 4.40
Cancelled................... 2,000 (2,000) -- 4.00
--------- ----------- --------- ----------- --------------------
MARCH 31, 1995.............. -- 273,750 906 81,250 $ 4.00 - $18.40
======== ========= ======== ========= ====================
</TABLE>

1990 Deferred Compensation Option Plan for Outside Directors: The Company
has adopted the 1990 Deferred Compensation Option Plan for Outside Directors.
Options may be awarded, on or prior to the annual meeting of shareholders or on
initial election to the Board of Directors ("Board"), to each Director of the
Company who files with the Company an irrevocable election to receive options in
lieu of not less than fifty percent (50%) of the retainer fees to be earned
during each fiscal year. The option price shall be $1.00 per share with the
number of shares being determined by dividing the amount of the annual retainer
fee by the fair market value of the shares on the option date less $1.00 per
share. The amount of annual retainer fee for options is expensed by the Company
as earned. Options granted and outstanding under this plan are as follows:

<TABLE>
<CAPTION>
COMMON STOCK
---------------------------
REMAINING
SHARES OUTSTANDING
RESERVED OPTIONED
FOR GRANT SHARES
--------- -----------
<S> <C> <C>
APRIL 1, 1992............................................... 90,630 4,228
Stock Dividend.............................................. 44,035 2,866
Exercised................................................... (1,057)
Granted..................................................... (2,560) 2,560
--------- -----------
MARCH 31, 1993.............................................. 132,105 8,597
Granted..................................................... (3,840) 3,840
--------- -----------
MARCH 31, 1994.............................................. 128,265 12,437
Stock Dividend.............................................. 31,023 4,153
Granted..................................................... (4,175) 4,175
--------- -----------
MARCH 31, 1995.............................................. 155,113 20,765
======= =========
</TABLE>

1992 Employee Stock Incentive Plan: In 1992, the Company's shareholders
approved the 1992 Employee Stock Incentive Plan. Stock options, stock
appreciation rights, restricted stock, deferred stock, stock

F-12
<PAGE> 38

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

purchase rights and other stock-based awards may be granted under this plan.
There are 562,500 shares of common stock and 375,000 shares of Class B common
stock reserved under this plan at fiscal year end. Restricted stock awards of
132,084 shares of common stock and 55,000 shares of Class B common stock were
granted during fiscal 1995. Under the provision of the restricted stock awards,
employees may earn 50% of the award in fiscal years 1995 and 1996 based upon
achieving performance goals in each year provided the employee does not
voluntarily terminate his or her employment for two years subsequent to when an
award is earned. Due to the results of fiscal 1995, the Company will issue
approximately 66,000 shares of common stock and recognize compensation of
approximately $1.3 million over two years which is the period in which the risk
of forfeiture lapses.

NOTE K -- RETIREMENT PLANS

The Company has adopted an Employee Stock Ownership Plan ("ESOP") for all
eligible officers and employees who are not covered under a profit-sharing plan
established through collective bargaining. The Company matches 25% of each
employee's 401(k) contributions annually and, in addition, may make retirement
contributions to the ESOP at its discretion. Contributions to the ESOP including
the Company's matching 401(k) contribution totaled $1.0 million, $0.9 million
and $0.7 million in 1995, 1994 and 1993, respectively.

NOTE L -- COMMON STOCK

On March 24, 1995, the Company effected a five-for-four stock split in the
form of a 25% stock dividend. All common stock, Class B common stock, dividends
per share and earnings per share data has been restated to reflect this
five-for-four stock split.

On September 30, 1992, the Company effected a three-for-two stock split in
the form of a 50% stock dividend. All common stock, Class B common stock,
dividends per share and earnings per share data has been restated to reflect
this three-for-two stock split.

NOTE M -- INCOME TAXES

The summary below sets forth the components of the federal and state income
tax provision (benefit) for the years ending March 31 (in thousands):

<TABLE>
<CAPTION>
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Current:
Federal................................................... $ 97 $ 4,973 $ 3,051
State..................................................... 839 417 313
Foreign................................................... 102 219 --
------- ------- -------
1,038 5,609 3,364
Deferred.................................................... 5,601 (1,062) (309)
------- ------- -------
Total............................................. $ 6,639 $ 4,547 $ 3,055
====== ====== ======
</TABLE>

F-13
<PAGE> 39

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The deferred income tax provision (benefit) is comprised of the following
for the years ending March 31 (in thousands):

<TABLE>
<CAPTION>
1995 1994 1993
------ ------- -------
<S> <C> <C> <C>
Accelerated depreciation................................... $ 176 $ 91 $ 88
Contributions.............................................. (386) 48 147
Inventory reserve.......................................... 2,100 (539) 246
Bad debt and return reserves............................... 1,281 (468) (1,262)
Inventory -- tax over book................................. 612 (588) (1,111)
Advances and prepaid expenses.............................. 1,717 889 382
Deferred charges........................................... 95 (172) 573
Accrued liabilities........................................ 6 (323) 459
Other...................................................... -- -- 169
------ ------- -------
$5,601 $(1,062) $ (309)
====== ======= =======
</TABLE>

The effective income tax rate applicable to income differs from the U.S.
federal income tax rate ("statutory rate") for the following reasons:

<TABLE>
<CAPTION>
PERCENT OF PRE-TAX INCOME
----------------------------
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Effective tax rate......................................... 36.2% 34.2% 32.7%
State taxes on income...................................... (4.6) (3.1) (3.3)
Other...................................................... 2.9 3.1 4.6
---- ---- ----
Statutory rate............................................. 34.5% 34.2% 34.0%
==== ==== ====

</TABLE>

The deferred tax asset consists primarily of temporary differences in
inventory, accounts receivable, advances and prepaid expenses.

The Company's federal income tax returns have been examined by the Internal
Revenue Service for the fiscal years through 1987.

As discussed in Note A, the Company adopted SFAS No. 109 as of the
beginning of fiscal 1994. The cumulative effect on the prior years of this
change in accounting principle increased fiscal 1994 net income by $0.3 million,
or $.03 per share, and is reported in the consolidated statements of income for
the year ended March 31, 1994 as a cumulative effect of accounting change.
Fiscal 1993 financial statements have not been restated to apply the provisions
of SFAS No. 109.

Cash payments for income taxes were $6.0 million, $0.4 million, and $3.4
million in 1995, 1994 and 1993, respectively.

A Federal Income Tax receivable of approximately $0.9 million is included
in current year consolidated prepaid expenses.

F-14
<PAGE> 40

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE N -- QUARTERLY RESULTS (UNAUDITED)

Summarized results for each quarter in the fiscal years ended March 31,
1995 and March 31, 1994 are as follows (dollars in thousands, except per share
data):

<TABLE>
<CAPTION>
1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995
Net revenues............................... $49,103 $70,512 $71,086 $74,406
Gross profit............................... 23,829 35,165 35,452 37,011
Net income (loss).......................... (544) 5,623 4,815 1,816
Net income (loss) per share................ (.04) .42 .36 .14
1994
Net revenues............................... $44,839 $64,363 $60,728 $56,504
Gross profit............................... 21,877 31,234 29,450 28,672
Net income (loss).......................... (829) 4,560 3,823 1,527
Net income (loss) per share................ (.06) .34 .29 .11
</TABLE>

NOTE O -- COMMITMENTS AND CONTINGENCIES

The Company has commitments to provide advances to certain artists and
authors in connection with products they are developing for the Company.
Estimated commitments totalled $28 million at March 31, 1995. The timing of
payments will be dependent upon the performance by the authors and artists of
conditions provided in the applicable contracts. It is anticipated that a
substantial portion of the commitments will be completed within the next three
years.

The Company is subject to various legal proceedings, claims and
liabilities, which arise in the ordinary course of business. In the opinion of
management, the amount of ultimate liability with respect to these actions will
not materially affect the financial position or results of operations of the
Company.

NOTE P -- FINANCIAL INSTRUMENTS

The following disclosure of estimated fair value of financial instruments
as of March 31, 1995 is made in accordance with SFAS No. 107, "Disclosures about
Fair Value of Financial Instruments". The estimated fair value amounts have been
determined by the Company using available market information as of March 31,
1995 and 1994, respectively. The estimates presented are not necessarily
indicative of amounts the Company could realize in a current market transaction.

<TABLE>
<CAPTION>
1995 1994
--------------------- ---------------------
CARRYING ESTIMATED CARRYING ESTIMATED
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
-------- ---------- -------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
CASH AND CASH EQUIVALENTS....................... $ 779 $ 779 $ 788 $ 788
LONG-TERM DEBT:
5.75% Convertible Subordinated Notes............ 55,000 65,450 55,000 65,450
Credit Agreements............................... 58,800 58,800 40,500 40,500
Loan Agreement.................................. 4,333 4,333 5,000 5,000
Industrial Revenue Bonds........................ 2,700 2,700 2,920 2,920
</TABLE>

The fair value of the 5.75% Convertible Subordinated Notes is based on the
unofficial market for these privately placed instruments. The carrying value of
the Company's Credit Agreements and Loan Agreement approximates the fair value.
Due to the variable rate nature of the instruments, the interest rate paid by
the

F-15
<PAGE> 41

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company approximates the current market rate demanded by investors; therefore,
the instruments are valued at par. The carrying value of the Industrial Revenue
Bonds approximates the fair value.

Financial instruments which potentially subject the Company to credit risk
consist primarily of trade receivables. Credit risk on trade receivables is
minimized as a result of the large and diverse nature of the Company's customer
base.

F-16
<PAGE> 42

- ------------------------------------------------------
- ------------------------------------------------------

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION AND REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Use of Proceeds....................... 6
Price Range of Common Stock and Class
B Common Stock...................... 6
Dividend Policy....................... 7
Capitalization........................ 7
Selected Consolidated Financial
Data................................ 8
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 9
Business.............................. 13
Management............................ 18
Description of Capital Stock.......... 19
Underwriting.......................... 22
Legal Matters......................... 24
Experts............................... 24
Available Information................. 24
Incorporation of Certain Information
by Reference........................ 25
Index to Consolidated Financial
Statements.......................... F-1
</TABLE>

- ------------------------------------------------------
- ------------------------------------------------------

2,500,000 SHARES

[LOGO]

THOMAS NELSON, INC.

COMMON STOCK

------------------------

PROSPECTUS
------------------------

PAINEWEBBER INCORPORATED

MERRILL LYNCH & CO.

J.C. BRADFORD & CO.

------------------------

JULY 18, 1995
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 43
Filed Pursuant to Rule 424(b)(4)
Registration Statement No. 33-60615

2,500,000 SHARES

[LOGO] THOMAS NELSON, INC.

COMMON STOCK
------------------------

All of the shares of Common Stock offered hereby are being sold by Thomas
Nelson, Inc. (the "Company"). Of the 2,500,000 shares of Common Stock offered
hereby, 500,000 shares are being offered in an international offering outside
the United States and Canada (the "International Shares") and 2,000,000 shares
are being offered in a concurrent offering in the United States and Canada. The
price to the public and aggregate underwriting discounts and commissions per
share are identical for both offerings. See "Underwriting."

On June 19, 1995, the Common Stock and Class B Common Stock began trading
on the New York Stock Exchange (the "NYSE") under the symbols "TNM" and "TNM.B,"
respectively, and ceased to be quoted on the Nasdaq National Market System. On
July 18, 1995 the last reported sale prices of the Common Stock and Class B
Common Stock on the NYSE were $20 and $20 7/8 per share, respectively. See
"Price Range of Common Stock and Class B Common Stock."

------------------------

The International Shares are offered by the International Underwriters,
subject to prior sale, when, as and if delivered to and accepted by the
International Underwriters, and subject to their right to reject orders in whole
or in part. It is expected that delivery of the Common Stock will be made in New
York City on or about July 24, 1995.
------------------------

PAINEWEBBER INTERNATIONAL
MERRILL LYNCH INTERNATIONAL LIMITED
J.C. BRADFORD & CO.
------------------------

THE DATE OF THIS PROSPECTUS IS JULY 18, 1995.
<PAGE> 44
<TABLE>
<CAPTION>

[ARTWORK] [ARTWORK]

[ARTWORK]

2
<PAGE> 45

PROSPECTUS SUMMARY

THE COMPANY

3
<PAGE> 46

THE OFFERING

- ---------------

4
<PAGE> 47

SUMMARY FINANCIAL INFORMATION

- ---------------

5
<PAGE> 48

USE OF PROCEEDS

PRICE RANGE OF COMMON STOCK AND CLASS B COMMON STOCK

FISCAL 1996:
First quarter............................................. 20 1/4 17 5/8 23 18 1/2
Second quarter (through July 18, 1995).................... 20 19 1/8 20 7/8 20 7/8
</TABLE>

6
<PAGE> 49

DIVIDEND POLICY

CAPITALIZATION

- ---------------

7
<PAGE> 50

SELECTED CONSOLIDATED FINANCIAL DATA

- ---------------

8
<PAGE> 51

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

9
<PAGE> 52

RESULTS OF OPERATIONS

Fiscal 1995 compared to Fiscal 1994

Interest expense for fiscal 1995 increased $1.7 million or 24.4% over
fiscal 1994 due to increased borrowings and an increase in interest rates.

Fiscal 1994 compared to Fiscal 1993

10
<PAGE> 53

LIQUIDITY AND CAPITAL RESOURCES

11
<PAGE> 54

12
<PAGE> 55

BUSINESS

The following table sets forth the net revenues (in thousands) and the
percentage of total net revenues for each of the Company's principal product
lines for the periods indicated:

STRATEGY

PUBLISHING

Books

13
<PAGE> 56

Bibles

The following table sets forth the nine major Bible translations currently
published by the Company:

14
<PAGE> 57

MUSIC

15
<PAGE> 58

GIFTS

ROYAL MEDIA

MARKETING, DISTRIBUTION AND PRODUCTION

16
<PAGE> 59

COMPETITION

In the gift product line, the Company competes with numerous other
companies, many of which have significantly longer operating histories and
larger revenue bases.

17
<PAGE> 60

MANAGEMENT

Following is certain information regarding the executive officers and
directors of the Company:

- ---------------

(1) Term expires at the 1995 Annual Meeting of Shareholders
(2) Term expires at the 1996 Annual Meeting of Shareholders
(3) Term expires at the 1997 Annual Meeting of Shareholders

Except as indicated below, each director and executive officer has been an
employee of the firm(s) listed below as his principal occupation for more than
the past five years.

Sam Moore has been the Chairman of the Board, Chief Executive Officer,
President and a Director of the Company since its founding in 1961.

Charles Z. Moore has been a Vice President of the Company since 1983 and
was appointed Senior Vice President, International in 1986. Charles Moore is the
brother of Sam Moore.

Roland Lundy has been the President of the Company's Word Records and Music
Division since 1993. Mr. Lundy was formerly President of Word since 1989.

Byron D. Williamson has been the President of the Company's Word Publishing
Division since 1993. Mr. Williamson was formerly Executive Vice President of
Word Publishing since 1988.

Vance Lawson has been the Vice President, Finance of the Company since
1993. Mr. Lawson was formerly Vice President of Finance and Operations at Word
since 1988.

18
<PAGE> 61

Stuart A. Heaton has been the Vice President and General Counsel of the
Company since 1991. Previous to that time, Mr. Heaton served as the Company's
corporate counsel since 1989.

Phyllis E. Williams has been the Treasurer of the Company since 1992. Mrs.
Williams was previously Controller for the Company since 1988.

Robert J. Niebel is the Senior Vice President of 20th Century Christian,
Inc., a publishing company.

Millard V. Oakley is a businessman managing private investments.

DESCRIPTION OF CAPITAL STOCK

COMMON STOCK AND CLASS B COMMON STOCK

19
<PAGE> 62

PREFERRED STOCK

20
<PAGE> 63

DESCRIPTION OF CERTAIN PROVISIONS OF THE CHARTER AND BYLAWS OF THE COMPANY

NYSE LISTING

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is Trust Company
Bank, Atlanta, Georgia.

21
<PAGE> 64

UNITED STATES TAXATION OF NON-U.S. SHAREHOLDERS

GENERAL

The following is a general discussion of certain anticipated United States
federal tax consequences of the ownership, holding and disposition of Common
Stock by a person that, for United States federal income tax purposes, is not a
"United States Person" (a "Non-U.S. Holder"). For these purposes, a "United
States Person" means a citizen or resident of the United States, a corporation,
a partnership or other entity created or organized in or under the laws of the
United States or any state thereof, or an estate or trust, the income of which
is subject to United States federal income taxation regardless of its source.

The following discussion does not consider specific facts and circumstances
that may be relevant to a particular Non-U.S. Holder's tax position, including
the benefits that may be available to any person under an applicable tax treaty
to which the United States is a party. Specifically, without limitation, this
discussion does not address the United States tax consequences to any Non-U.S.
Holder who at any time owns (directly or through attribution) more than 5% of
the Common Stock or to any Non-U.S. Holder that is a controlled foreign
corporation, a foreign personal holding company, a foreign private foundation or
a foreign government. Furthermore, the following discussion is based on current
provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and on
administrative and judicial pronouncements thereunder, all of which are subject
to change possibly retroactively. Each prospective Non-U.S. Holder is urged to
consult a tax advisor with respect to the United states tax consequences of
acquiring, holding and disposing of Common Stock, as well as any tax
consequences that may arise under the laws of any foreign, state, local or other
tax jurisdiction.

DIVIDENDS

In each quarter of fiscal 1994 and 1995, the Company paid a cash dividend
of $.032 per share on its Common Stock and Class B Common Stock. On May 24,
1995, the Company declared a cash dividend of $.04 per share on its Common Stock
and Class B Common Stock to be paid on August 14, 1995 to shareholders of record
on July 31, 1995. See "Dividend Policy." Dividends paid on shares of Common
Stock will generally be subject to withholding of United States federal income
tax at a rate of 30% of such payment unless either (i) such holder is eligible
for a reduced tax rate or a tax exemption under an applicable income tax treaty
or (ii) such holder is engaged in the conduct of a trade or business within the
United States and the dividend is effectively connected with that trade or
business. If the dividend is effectively connected with the conduct of a trade
or business within the United States by a Non-U.S. Holder, the dividend (as
adjusted by any applicable deductions) will be subject to United States federal
income tax at regular rates generally applicable to United States Persons. Any
such effectively connected dividends received by a corporate Non-U.S. Holder
may, under certain circumstances, be subject to an additional "branch profits
tax" at a 30% rate or such lower rate as may be specified by an applicable
income tax treaty. Certain certification requirements may have to be satisfied
to claim treaty benefits or exemption from withholding under the foregoing
rules. Non-U.S. Holders that are partnerships or trusts may be subject to
certain additional withholding requirements and are urged to consult their tax
advisors as to the application of such requirements.

GAIN ON DISPOSITION OF COMMON STOCK

Except as described below, a Non-U.S. Holder will generally not be subject
to United States federal income tax (and no tax will generally be withheld) with
respect to gain recognized on a sale or the disposition of the Common Stock
unless the gain is effectively connected with a trade or business conducted by
the Non-U.S. Holder in the United States.

FEDERAL ESTATE TAXES

Common Stock held by a Non-U.S. holder who is a non-resident alien
individual (as specially defined for United States federal estate tax purposes)
at the date of his or her death will be included in his or her gross estate for
United States federal estate tax purposes, unless an applicable estate tax
treaty provides otherwise.

22
<PAGE> 65

UNITED STATES INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING TAX

The Company must report annually to the Internal Revenue Service and to
each Non-U.S. Holder the amount of dividends and other payments distributed to
and the tax withheld with respect to such holder. These information reporting
requirements apply regardless of whether withholding is reduced or eliminated by
an applicable treaty or is not required because the dividends are effectively
connected with a U.S. trade or business of a Non-U.S. Holder. Under certain
treaties, the Internal Revenue Service may make this information available to
their tax authorities in the country of a Non-U.S. Holder's residence.

Backup withholding tax (which generally is a withholding tax imposed at the
rate of 31% on certain payments to persons that are not "exempt recipients" and
that fail to furnish certain information under United States information
reporting requirements) and information reporting relating thereto (which is
separate from the reporting described in the preceding paragraph) generally will
not apply to dividends and other payments paid to a Non-U.S. Holder that are
either (i) subject to the 30% tax discussed above (under the heading
"Dividends"), (ii) not so subject because a tax treaty applies that reduces or
eliminates such withholding or (iii) not so subject because the Non-U.S. Holder
provides Internal Revenue Service Form 4224, indicating that such payments are
effectively connected with a trade or business conducted by the Non-U.S. Holder
in the United States. These backup withholding requirements and information
reporting rules will apply to the gross proceeds paid by or through a United
States office of a broker to a Non-U.S. Holder upon the disposition of shares of
the Company, unless the Non-U.S. Holder certifies under penalty of perjury that
it is an exempt foreign person (as specifically defined for this purpose) or the
Non-U.S. Holder otherwise establishes an exemption. Under existing regulations,
information reporting but not backup withholding will also apply to the payment
of gross proceeds of a sale or other disposition of Common Stock by or through a
foreign office of a broker with certain United States connections, unless the
broker has documentary evidence (other than merely a foreign address) that the
holder is a Non-U.S. Holder and the broker has no actual knowledge to the
contrary. Any amounts withheld under the backup withholding rules from a payment
to a Non-U.S. Holder will be refunded (or credited against the Non-U.S. Holder's
United States federal income tax liability, if any), provided that an
appropriate claim for refund is filed with the Internal Revenue Service. These
backup withholding and information reporting requirements are under review by
the United States Treasury Department. Their application to the ownership and
disposition of shares of Common Stock could be changed by future regulations.

23
<PAGE> 66

UNDERWRITING

The International Underwriters named below, for whom PaineWebber
International (U.K.) Ltd., Merrill Lynch International Limited and J.C. Bradford
& Co. are acting as the representatives (the "International Representatives"),
have severally agreed, subject to the terms and conditions of the International
Underwriting Agreement (the "International Underwriting Agreement"), to purchase
from the Company, and the Company has agreed to sell to the International
Underwriters, the number of shares of Common Stock set forth opposite their
names.

<TABLE>
<CAPTION>
NUMBER
UNDERWRITER OF SHARES
- ------------------------------------- ---------
<S> <C> <C>
PaineWebber International (U.K.) Ltd........................................... 225,000
---------
Merrill Lynch International Limited............................................ 225,000
---------
J.C. Bradford & Co............................................................. 50,000
---------
Total................................................................ 500,000
=======
</TABLE>

The Company has also entered into a U.S. Underwriting Agreement (the "U.S.
Underwriting Agreement") with certain U.S. Underwriters (the "U.S.
Underwriters", together with the International Underwriters, the
"Underwriters"), for whom PaineWebber Incorporated, Merrill Lynch Pierce, Fenner
& Smith Incorporated and J.C. Bradford & Co. are acting as the representatives.
Subject to the terms and conditions of the U.S. Underwriting Agreement, and
concurrently with the sale of 500,000 shares of Common Stock to the
International Underwriters, the Company has agreed to sell to the U.S.
Underwriters, and the U.S. Underwriters have severally agreed to purchase, an
aggregate of 2,000,000 shares of Common Stock. The public offering price per
share and the total underwriting discounts and commissions per share are
identical in the International Underwriting Agreement and the U.S. Underwriting
Agreement with respect to all shares of Common Stock being purchased by the
Underwriters from the Company.

The International Underwriting Agreement provides that the obligations of
the International Underwriters to purchase the shares of Common Stock are
subject to certain conditions. The International Underwriters are committed to
purchase, and the Company is obligated to sell, all the shares of Common Stock
offered by this prospectus, if any are purchased. In general, the closing with
respect to the sale of the shares of Common Stock pursuant to the International
Underwriting Agreement is a condition to the closing with respect to the sale of
the shares of Common Stock pursuant to the U.S. Underwriting Agreement and vice
versa. PaineWebber International (U.K.) Ltd. is an affiliate of PaineWebber
Incorporated, and Merrill Lynch International Limited is an affiliate of Merrill
Lynch, Pierce, Fenner & Smith Incorporated.

The Company has been advised by the International Representatives that the
International Underwriters propose initially to offer the shares of Common Stock
to the public at the public offering price set forth on the cover page of this
prospectus, and to certain securities dealers at such price less a concession
not in excess of $.55 per share. The International Underwriters may allow, and
such dealers may reallow, concessions of not more than $.10 per share on sales
to certain other dealers. After the public offering, the public offering price
and concessions may be changed by the International Representatives.

Each International Underwriter has represented and agreed that, as part of
the distribution of the shares of Common Stock, (a) it is not purchasing any
shares of Common Stock for the account of any U.S. or Canadian Person and (b) it
has not offered or sold, and will not offer or sell, directly or indirectly, any
shares of Common Stock or distribute this prospectus to any person within the
United States or Canada or to any U.S. or Canadian Person. Each U.S. Underwriter
has represented and agreed that, as part of the distribution of the shares of
Common Stock, (a) it is not purchasing any shares of Common Stock for the
account of anyone other than a U.S. or Canadian Person, and (b) it has not
offered or sold, and will not offer or sell, directly or indirectly, any shares
of Common Stock or distribute the U.S. Prospectus to any person outside the
United States or to anyone other than a U.S. or Canadian Person. The foregoing
limitations do not apply to stabilization transactions or to certain other
transactions specified in the Agreement Between U.S. and International
Underwriters described below. As used herein, "U.S. or Canadian Person" means
any individual who is resident in the United States or Canada, or any
corporation, pension, profit-sharing or other trust or

24
<PAGE> 67

other entity organized under or governed by the laws of the United States or
Canada or any political subdivision thereof (other than a foreign branch of any
U.S. or Canadian Person), and includes any U.S. or Canadian branch of a non-U.S.
or Canadian Person.

Each International Underwriter has represented and agreed not to offer or
sell Common Stock in Great Britain by means of any document except to persons
whose ordinary business it is to buy or sell shares or debentures, whether as
principal or agent (except in circumstances which do not constitute an offer to
the public within the meaning of the Companies Act 1985 of Great Britain), and,
unless such International Underwriter is a person permitted to do so under the
securities laws of Great Britain, it will not distribute this prospectus or any
other offering material in respect of any proposed offer or sale of Common Stock
in or from Great Britain other than to persons whose business involves the
acquisition and disposal, or the holding, of securities whether as principal or
agent.

The Company and its executive officers and directors have agreed not to
sell, offer to sell or otherwise dispose of shares of Common Stock, Class B
Common Stock or securities convertible into Common Stock or Class B Common Stock
or sell, offer to sell or grant rights, options or warrants with respect to
Common Stock, Class B Common Stock or securities convertible into Common Stock
or Class B Common Stock prior to the expiration of 90 days from the date of this
prospectus, without the prior written consent of PaineWebber Incorporated, other
than pursuant to existing employee stock option plans or in connection with
other employee incentive compensation arrangement of the Company and issuances
of Common Stock upon conversion of securities outstanding as of the date of this
prospectus.

The Company has agreed to indemnify the International Underwriters and the
U.S. Underwriters and their controlling persons against certain liabilities,
including liabilities under the Securities Act of 1933, as amended (the
"Securities Act"), or to contribute to payments the U.S. Underwriters and the
International Underwriters may be required to make in respect thereof.

25
<PAGE> 68

LEGAL MATTERS

EXPERTS

AVAILABLE INFORMATION

26
<PAGE> 69

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

(1) The Company's Annual Report on Form 10-K for the year ended March
31, 1995.

(2) The description of the Company's Common Stock and Class B Common
Stock contained in the Registration Statement on Form 8-A filed on May 26,
1995.

27
<PAGE> 70

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

F-1
<PAGE> 71

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and Board of Directors of
Thomas Nelson, Inc. and Subsidiaries:

As explained in Note M to the financial statements, effective April 1,
1993, the Company changed its method of accounting for income taxes.

ARTHUR ANDERSEN LLP

Nashville, Tennessee
May 19, 1995

F-2
<PAGE> 72

THOMAS NELSON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

See Notes to Consolidated Financial Statements

F-3
<PAGE> 73

THOMAS NELSON, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

See Notes to Consolidated Financial Statements

F-4
<PAGE> 74

THOMAS NELSON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

See Notes to Consolidated Financial Statements

F-5
<PAGE> 75

THOMAS NELSON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

See Notes to Consolidated Financial Statements

F-6
<PAGE> 76

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

F-7
<PAGE> 77

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Statement of Cash Flows: For purposes of the statement of cash flows, the
Company considers as cash equivalents all highly liquid debt instruments with a
maturity of three months or less.

Reclassifications: Certain reclassifications of prior period amounts have
been made to conform to the current year's presentation.

NOTE B -- ACQUISITIONS AND DISPOSITIONS

F-8
<PAGE> 78

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE C -- INVENTORIES

Inventories consisted of the following at March 31 (in thousands):

NOTE D -- PREPAID EXPENSES

Prepaid expenses consisted of the following at March 31 (in thousands):

NOTE E -- PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following at March 31 (in
thousands):

NOTE F -- OTHER ASSETS

Other assets consisted of the following at March 31 (in thousands):

F-9
<PAGE> 79

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE G -- ACCRUED EXPENSES

Accrued expenses consisted of the following at March 31 (in thousands):

Cash payments for interest were $8.0 million in 1995, $6.2 million in 1994
and $2.4 million in 1993.

NOTE H -- LONG-TERM DEBT

Long-term debt consisted of the following at March 31 (in thousands):

At March 31, 1995, Industrial Revenue Bonds were secured by property, plant
and equipment with a net book value of approximately $2.3 million.

During November 1992, the Company issued $55 million of Convertible
Subordinated Notes due November 30, 1999, priced at par to yield 5.75%. The
notes are convertible into common stock initially at

F-10
<PAGE> 80

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Maturities of long-term debt for the years ending March 31, are as follows
(in thousands):

NOTE I -- LEASES

Minimum rental commitments under non-cancelable leases for the years ending
March 31, are as follows (in thousands):

NOTE J -- STOCK PLANS

F-11
<PAGE> 81

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

F-12
<PAGE> 82

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE K -- RETIREMENT PLANS

NOTE L -- COMMON STOCK

NOTE M -- INCOME TAXES

The summary below sets forth the components of the federal and state income
tax provision (benefit) for the years ending March 31 (in thousands):

F-13
<PAGE> 83

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The deferred income tax provision (benefit) is comprised of the following
for the years ending March 31 (in thousands):

The effective income tax rate applicable to income differs from the U.S.
federal income tax rate ("statutory rate") for the following reasons:

</TABLE>

The deferred tax asset consists primarily of temporary differences in
inventory, accounts receivable, advances and prepaid expenses.

The Company's federal income tax returns have been examined by the Internal
Revenue Service for the fiscal years through 1987.

Cash payments for income taxes were $6.0 million, $0.4 million, and $3.4
million in 1995, 1994 and 1993, respectively.

A Federal Income Tax receivable of approximately $0.9 million is included
in current year consolidated prepaid expenses.

F-14
<PAGE> 84

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE N -- QUARTERLY RESULTS (UNAUDITED)

Summarized results for each quarter in the fiscal years ended March 31,
1995 and March 31, 1994 are as follows (dollars in thousands, except per share
data):

NOTE O -- COMMITMENTS AND CONTINGENCIES

NOTE P -- FINANCIAL INSTRUMENTS

F-15
<PAGE> 85

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company approximates the current market rate demanded by investors; therefore,
the instruments are valued at par. The carrying value of the Industrial Revenue
Bonds approximates the fair value.

F-16
<PAGE> 86

- ------------------------------------------------------
- ------------------------------------------------------

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Use of Proceeds....................... 6
Price Range of Common Stock and Class
B Common Stock...................... 6
Dividend Policy....................... 7
Capitalization........................ 7
Selected Consolidated Financial
Data................................ 8
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 9
Business.............................. 13
Management............................ 18
Description of Capital Stock.......... 19
United States Taxation of Non-U.S.
Shareholders........................ 22
Underwriting.......................... 24
Legal Matters......................... 26
Experts............................... 26
Available Information................. 26
Incorporation of Certain Information
by Reference........................ 27
Index to Consolidated Financial
Statements.......................... F-1
</TABLE>

- ------------------------------------------------------
- ------------------------------------------------------

2,500,000 SHARES

[LOGO]

THOMAS NELSON, INC.

COMMON STOCK

------------------------

PROSPECTUS
------------------------

PAINEWEBBER INTERNATIONAL

MERRILL LYNCH
INTERNATIONAL LIMITED

J.C. BRADFORD & CO.

------------------------

JULY 18, 1995

- ------------------------------------------------------
- ------------------------------------------------------