ELCA Department for Communication, News & Information
8765 West Higgins Rd, Chicago, IL 60631 800/638-3522 ext. 2963
HEADLINES FOR ELCA NEWS RELEASE ISSUE #13, May 5, 1995
-- AUGSBURG FORTRESS REPORTS NET LOSS
-- LUTHERAN SOCIAL MINISTRIES ORGANIZE
May 5, 1995
AUGSBURG FORTRESS REPORTS NET LOSS
95-13-041-AH
TORONTO, ONT. (ELCA) -- Augsburg Fortress Publishers
experienced a net loss of $3.8 million in 1994 according to a report to its
board, meeting here April 28-29. Robert McNulty, vice president for
finance, told the board to expect additional losses in 1995 as the
publishing house reorganizes its distribution/order fulfillment operation
and streamlines its product line. He emphasized that Augsburg Fortress
should show a positive cash flow in 1995 and projected a return to
profitability in 1996.
Augsburg Fortress, based in Minneapolis, is the publishing house
of the Evangelical Lutheran Church in America. The board's first order of
business was to accept "with sadness" the resignation of Gary J.N.
Aamodt, president and CEO. Aamodt and the Rev. David L. Tiede, board
chair, both declined to comment on the resignation.
Tiede said, "The board has confidence in the fundamental
decisions that have been made and is prepared to authorize investment
in the structural changes required to lower the costs of production and
move the publishing house into the future."
According to McNulty, "Financial performance for 1994 reflected
continuing decline in sales without corresponding declines in costs." He
reported net revenues of $58.4 million, down nearly 3 percent from 1993.
Costs remained unchanged, resulting in an operating loss of $3.6 million.
Augsburg Fortress, which operates in Canada also, experienced a loss
on the drop in value of the Canadian dollar as well.
McNulty calls the financial strength of the publishing house
"strong" and its ability to meet its obligations "unimpaired."
Centralization of distribution in Columbus, Ohio, was approved by
the board last October. Previously orders were taken and filled by the
publisher's eight branches. McNulty expects the improvements to result
in a reduction of operating expenses totaling $5.8 million.
The costly short-term investment in new systems and facilities
compelled the board to authorize external loans in 1995 as needed, not to
exceed 10 percent of 1994 net sales revenue. Kathryn L. Smith,
director for order fulfillment, told the board the Columbus operation will be
"up and running" in mid-October. Orders will be taken at the branch sites
until early 1996 when new order-processing software will be in place in
Minneapolis early in 1996, she said.
Smith projects that 500,000 customer orders will be shipped out
of the new facility annually. Subscription products will be distributed
directly from printers.
Luther Dale reported that "the monster," Augsburg Fortress's
huge inventory, will not be moved to the new Columbus site. He projects
a 33 percent product reduction with 96 percent of sales retained. Dale is
director for market/product development. Each product will undergo
"rationalization," Dale said, as the publishing house makes the case for
the number of items in its product line, warehouse space needed,
strategies for disposal and new "rules criteria" for remaining and new
products.
The Rev. William H. Lazareth, board member from Princeton, N.J.,
expressed concern that criteria "other than sales" be taken into account,
such as "flagship" theological products "that represent the best interests
of the church and further the mission of the church."
Dale introduced "With One Voice," a worship resource designed
to complement the "Lutheran Book of Worship." "With One Voice" was
created in partnership with the ELCA's Division for Congregational
Ministries. Sales in the first six weeks total more than $45,000.
In October the board made the decision to close Augsburg
Fortress's printing operation in Minneapolis. Approximately 60 percent of
printing work had been shifted to outside vendors by early April. Bruce
Keil, director for production and manufacturing, told the board he expects
the move to outside printing vendors to be complete by mid-June and the
sale of equipment completed by October 1.
Keil said 46 plant employees have left Augsburg Fortress. The
majority have found new jobs, transferred to the Augsburg Fortress
warehouse, started their own business or enrolled in school.
The board adopted a statement of "Identity and Mission" to be
included among the "Vision" and "Values" statements of the publishing
house. The new statement emphasizes the relationship of Augsburg
Fortress to the ELCA and its "biblical and confessional commitments,"
and indicating that its "organizational identity is therefore shaped by
distinctly Lutheran emphases as well as by growing ecumenical
cooperation."
Dr. Alan R. Seagren, Lincoln, Neb., was elected chair of the
board. The outgoing and newly-elected executive committees will meet
in Minneapolis May 30 to develop a process for transitional leadership.
A. Jean Lesher, board member from Chicago, chairs the search
committee for a new CEO.
Tiede told the board, "God has entrusted to us the finest Lutheran
publishing house that has ever existed at a time of great opportunity for
the communication of the gospel of Jesus Christ. And we are in the
gospel communication business!"
The Rev. Marvin L. Roloff is responsible for operations while a
process is put in place for finding a successor to Aamodt. He said, "We
move on in faith and courage with the task at hand, meeting the
challenges and promises the day brings. We are committed to moving
ahead. God, help us to heal, to be the publishing house of the ELCA, to
serve your church as it proclaims your Word."
##########
May 5, 1995
LUTHERAN SOCIAL MINISTRIES ORGANIZE
95-13-042-FI
SAN FRANCISCO (ELCA) -- A merger has created a single
organization to represent operators of the largest charity in the United
States. The Association of Lutheran Social Ministry Organizations
(ALSMO) was formed here April 28 during a joint meeting of the National
Association of Lutheran Ministries with the Aging (NALMA) and the
Coalition of Executives (COE).
"This is the first time we have ever had such a broad-based
association," said the Rev. Nelson C. Meyer, president of Lutheran Social
Services of Central Ohio, Columbus. Meyer was elected the first
president of ALSMO.
"The two predecessor bodies were quite different," he said.
"The Coalition of Executives was focused around the chief executive
officer of each organization. NALMA was a national association
focused around one program aspect of our social ministry."
ALSMO has the potential of representing all 250 social ministry
organizations affiliated with the Evangelical Lutheran Church in America
or Lutheran Church-Missouri Synod when the merger takes effect July 1.
Those organization had a combined budget of almost $2.3 billion in 1994
-- the largest of any charity in the United States.
"I've found, in my travels, this news was totally unheard of by
most Lutherans I talked to. So one advantage is just to communicate the
size and the magnitude of the effort that is already going on," said Meyer.
"It gives us a basis to build for an even stronger future."
Many American health care providers are using partnerships and
mergers to improve their services, said Ruth A. Henrichs, president of
Lutheran Family Services of Nebraska, Omaha. She chaired the COE
directing committee.
"It's very expensive to develop outcome measurements, quality
assurance and utilization reviews. If we work together, we can do that
and probably do that much more economically. There is real benefit for
us," she said.
NALMA represents over 400 housing and long-term care facilities
-- including nursing homes, hospices and AIDS ministries.
COE has about 70 members who represented a cross-section of
leadership from social ministry organizations across the United States
and Caribbean. Some of those organizations were also members of
NALMA, but others were various combinations of services, including
counseling, child care and adoption services, refugee resettlement and
disaster response.
"Now in a real sense we have broadened the kinds of ministries
we do," said Richard Goebel, St. Paul, Minn., executive secretary of
NALMA. Some long-term care providers are "getting out of the brick and
mortar and into the community," he said, to provide other services to the
elderly, such as home health care and "meals on wheels."
Goebel said ALSMO will better represent all the services of
NALMA's current members and put them in a direct relationship with
multi-service agencies. "It's probably the best of all worlds, when all of
these organizations come together," he said.
The joint meeting April 27-29 brought 120 members here. The
merger was accomplished through a series of unanimous votes to
merge, adopt the new organization's name, accept bylaws, elect a board
and approve a budget and dues structure.
America is experiencing a "culture of disappointment," said the
Rev. Timothy F. Lull, academic dean at Pacific Lutheran Theological
Seminary, Berkeley, Calif. "Never have so many had so much and been
so unhappy," he said in the keynote address.
Whether deserved or not, Americans express dissatisfaction
with their family life, work, government and church, said Lull. The
church must accept the fact that the United States will never again be a
predominantly "Christian nation" and develop "a new emphasis on
mission."
The global market has put most of the world's resources into the
hands of a minority and created an underclass of unnecessary people,
said Robert N. Bellah, sociology professor, University of California,
Berkeley. Those two classes are separated by an "anxious class" trying
to remain relevant.
"The religious community currently has more civic resources than
any other," he said. The church can use those resources to speak to all
three classes, encouraging them to believe "we are all members of the
same body."
The church must work to support "a culture of mutual
encouragement," said the Rev. Adele Stiles Resmer. "We recognize that
things are not the way we would have them be," and yet "we are not
paralyzed by those realities."
Christians can take comfort in the fact that "the big stuff ain't up to
us," she said. "God will make marvelous things out of modest, grass
roots efforts."
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