MennoMedia’s financial health improving
Director reports on finances before and after July 1 merger
By Steve Shenk
HARRISONBURG, Va.—Despite the costs of merging in July and losses on inventory and a building, MennoMedia finished 2011 with improving financial health, according to Executive Director Russ Eanes.
His assessment was confirmed by a financial audit released in December by the accounting firm of Simon-Lever in Lancaster, Pa.
The merger of Mennonite Publishing Network and Third Way Media into MennoMedia cost about $350,000, said Eanes. That included severance pay for nine former MPN staff, disposal of excess books and other obsolete materials, moving expenses and legal fees.
The financial audit was for MPN’s fiscal year that ended in January 2011 and for a shorter period ending when the merger occurred.
MPN closed its 75,000-square-foot building in Scottdale, Pa., at the end of June and moved to the Third Way Media building in Harrisonburg, Va., where MennoMedia came into being on July 1.
Eanes, who was previously MPN’s director of finance and operations, sold the Scottdale property shortly after the merger, despite a depressed real-estate market in the area. Due to the sale price of $125,000 being less than book value, MPN incurred a non-cash loss of $472,000 on the sale of the property.
Since the July merger of MPN and Third Way Media, overall financial results have continued to improve with savings realized through a variety of efficiencies, including consolidation into one building and a slight reduction in total staff. Sales of products—especially Herald Press books—also have increased.
Third Way Media was previously part of Mennonite Mission Network and the new agency continues to receive financial support from Mission Network during the transition to assist with the merger.
At the time of the merger, MPN had overcome its burden of debt. Ten years earlier the debt stood at $5.1 million when MPN was created from the merger of Mennonite Publishing House in Scottdale and Faith & Life Press in Newton, Kan. The two joined in preparation for the establishment of Mennonite Church USA and Mennonite Church Canada.
To reduce the debt, MPN restructured the way it was organized and reduced the number of staff. Allegheny Mennonite Conference, the local area conference where MPN’s headquarters were located, initiated a fundraising campaign, which generated more than $500,000 in donations from across the United States and Canada. And in 2006, MPN sold its remaining Provident bookstores for $2.1 million.
In addition to repaying the $5.1 million debt, MPN has paid approximately $1 million to former employees in the form of severance pay and unfunded pensions since 2001.
MPN also had other challenges to face. “These included tectonic shifts in the publishing industry, changes in the size and structure of our parent denominations—Mennonite Church USA and Mennonite Church Canada—and the worst financial recession since the Great Depression,” said Eanes.
“We have emerged as a stronger and more responsive business and church agency,” said Phil Bontrager, an Ohio business executive who chaired the board during the merger process. “We are grateful for the support from constituency in Canada and the United States and from our related agencies in the church. We are optimistic about the future.”
Bontrager, who is president and CEO of Sauder Manufacturing Company in Archbold, Ohio, concluded six years as board chair for MPN and then MennoMedia at the end of 2011. He is succeeded by Melissa Miller, a pastor, counselor, and writer from Winnipeg, Man.