NASHVILLE (BP)—Trustees of LifeWay Christian Resources unanimously approved a $210 million budget Aug. 25 for the 2020-21 fiscal year that includes reductions of 17 percent.
LifeWay projects missing its budgeted revenue for the 2019-20 fiscal year by $61 million, a net loss of $21.7 million, LifeWay President and CEO Ben Mandrell told trustees, whose meeting was conducted in a virtual format because of COVID-19 restrictions.
Mandrell attributed the loss to declining sales and loss of revenue related to cancellation of summer camps and women’s events. LifeWay is planning for the negative impact from COVID-19 to stretch into the first two quarters of the 2020-2021 fiscal year, he added.
“It is a wait-and-see situation, but this hasn’t stopped us from looking down the road and plotting the course for the future,” Mandrell said. “Jesus said that even the gates of hell could not hold back the advance of the local church. As long as LifeWay remains close to the body of Christ, adapting to her needs, there is a future for us.”
The approved budget includes a net loss of $8.6 million. LifeWay CFO Joe Walker told trustees they are budgeting 2021 as a “bridge year” to 2022 and will be monitoring expenses and revenue closely.
Implementing cost-saving measures
In April, LifeWay instituted spending reductions of about 10 percent, which included staff reductions, a freeze on all hiring and discretionary spending, and suspension of salary increases and matching 401K contributions for all employees. Beginning in May, members of the executive leadership team gave up one month’s salary.
Mandrell said those cost savings somewhat mitigated the impact to LifeWay’s bottom line, but said the organization would still end the year with a significant net loss. He told trustees LifeWay had been on a growth trajectory before the pandemic.
“We did not see this season coming, but we are responding as we should with cost-saving measures in place, with a close eye on our cash position, preserving the future of the company,” Mandrell said. “We’ve been serving the local church for 129 years, and we are making plans to be around at least 129 more.”
According to the report to trustees, LifeWay’s cash position remains strong and the organization has nearly completed paying off leases from stores.
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Mandrell told trustees he sees a future that includes a revived church, an acceleration of online products and services from LifeWay, as well as a laser focus on the organization’s core customer —church leaders.
“We believe the local church is going to surge once again, and when it emerges from this season, there will be a renewed passion for ministry, a new joy in worship,” Mandrell said. “Churches are going to see their core return with fresh enthusiasm, ready to serve and to rebuild. Though it may take some time, we believe the church will recover, and we are getting organized to be ready.”
Digital product development a high priority
Mandrell told trustees the COVID-19 crisis had pushed churches to move online and use technology like never before.
“In the coming years, church leaders will conduct far more ministry online, unafraid to harness the technology that got us through a global pandemic,” Mandrell said.
“LifeWay must press the gas to the floor when it comes to developing digital products as well as creating a frictionless online experience. These discussions are top-priority for our team and now is the season to pour great energy into lifeway.com—improving the look, feel and functionality.”
Trustees elected Jamie Adams as senior vice president and chief information technology officer. Adams comes to LifeWay from Mspark in Birmingham, Ala., where she served as chief information officer since 2016. At Mspark, a national direct-mail, advertising company, Adams led a team responsible for both internal business technologies as well as customer-facing technologies. Prior to Mspark, she was chief information officer at The Cliffs, a private equity-backed hospitality and real estate company. She has experience in e-commerce, business intelligence and data analytics, and digital applications.
Adams has a bachelor’s in business administration/management information systems from the University of Georgia in Athens and a Master of Business Administration degree from the University of Alabama in Tuscaloosa.
“Jamie brings a wealth of IT leadership expertise that will be invaluable to LifeWay in this new season where much of our business is focused online,” Mandrell said. “Her proven experience in digital transformation and global leadership will be a huge asset to LifeWay.”
Three finalists for Ridgecrest sale
Mandrell told trustees LifeWay had identified three finalists for the potential sale of Ridgecrest Conference Centers and Camps.
In April, LifeWay’s trustees approved exploration of the sale of Ridgecrest. Mandrell told the trustees the entity had received several proposals from potential buyers and said the offers had been narrowed to three finalists. Each had stated an intent to build on the legacy of Ridgecrest, continuing the ministry.
“We are very grateful to God for bringing such wonderful groups to us,” Mandrell said. “We are more convinced than ever that this decision will result in a greater kingdom impact for both LifeWay and Ridgecrest.”
Mandrell also told trustees the executive leadership team is continuing a feasibility study on the future use of the corporate office building, but said a final decision had not been made. The study began in April.
“The future of work will likely mean a healthy blend of collaborative, in-person meetings as well as the flexibility of working from home,” Mandrell said, citing a study completed prior to COVID-19 that showed the organization was using its facility at about 60-percent occupancy on a daily basis.
“LifeWay has embraced the work-from-anywhere culture, allowing our team members to come on campus for strategic meetings and team gatherings, while also enjoying the flexibility of working at home or close to home as much as possible,” he added. “We believe this need for flexibility is only going to grow as the world changes post-COVID.”
Before a final decision to downsize is made, “much more study needs to be done,” Mandrell said. “I believe passionately the people we serve and the churches we supply must be the driving force for this decision.”
The next LifeWay trustee meeting is scheduled Jan. 25-26, 2021, in Nashville.