MINNEAPOLIS, MN , a 24-hour TV shopping network, today reported
financial results for its first fiscal quarter ended May 3, 2008.
These results are consistent with what the Company previously
announced on May 12.
First quarter revenues were $156 million, a 17% decrease
compared with revenues of $188 million in the first quarter of
2007. EBITDA, as adjusted, was ($12) million compared with ($1.2)
million in the year-ago period. Net Loss for Q1 was ($18) million
vs. Net Income for the same quarter last year of $34.4 million,
driven by a $40 million gain on the sale of the Company's equity
interest in Polo.com. Included in the first quarter results is a
non-cash inventory impairment charge of $3.8 million.
"We are in a transitional period at ShopNBC, and I am confident
that we can successfully address the challenges before us," said
Rene Aiu, ShopNBC's president and CEO. "ShopNBC has a compelling
business model with tremendous underlying strength and assets: a
strong cash position, national cable and satellite distribution, a
strategic relationship with NBC Universal, and a new, experienced
management team that understands what it takes to succeed in TV
shopping. Importantly, we have a plan and are taking steps to
improve future performance and deliver long-term shareholder value
by returning to a focus on the basics that make home shopping
companies thrive."
EBITDA and EBITDA, as adjusted
The Company defines EBITDA as net income (loss) from continuing
operations for the respective periods excluding depreciation and
amortization expense, interest income (expense) and income taxes.
The Company defines EBITDA, as adjusted, as EBITDA excluding
non-recurring non-operating gains (losses) and equity in income of
Ralph Lauren Media, LLC; non-recurring restructuring and CEO
transition costs; and non-cash share-based payment expense.
Management has included the term EBITDA, as adjusted, in order to
adequately assess the operating performance of the Company's "core"
television and Internet businesses and in order to maintain
comparability to its analyst's coverage and financial guidance.
Management believes that EBITDA, as adjusted, allows investors to
make a more meaningful comparison between our core business
operating results over different periods of time with those of
other similar small cap, higher growth companies. In addition,
management uses EBITDA, as adjusted, as a metric measure to
evaluate operating performance under its management and executive
incentive compensation programs. EBITDA, as adjusted, should not be
construed as an alternative to operating income (loss) or to cash
flows from operating activities as determined in accordance with
GAAP and should not be construed as a measure of liquidity. EBITDA,
as adjusted, may not be comparable to similarly entitled measures
reported by other companies.
About ShopNBC
ShopNBC reaches 70 million homes in the United States via cable
affiliates and satellite: Dish Network channel 228 and Direct TV
channel 316. ShopNBC.com is recognized as a top e-commerce site.
ShopNBC is owned and operated by ValueVision Media (NASDAQ: VVTV).
For more information, please visit www.ShopNBC.com.
Forward-Looking Information
This release contains certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements are based on management's current
expectations and are accordingly subject to uncertainty and changes
in circumstances. Actual results may vary materially from the
expectations contained herein due to various important factors,
including (but not limited to): consumer spending and debt levels;
interest rates; competitive pressures on sales, pricing and gross
profit margins; the level of cable distribution for the Company's
programming and the fees associated therewith; the success of the
Company's e-commerce and rebranding initiatives; the performance of
its equity investments; the success of its strategic alliances and
relationships; the ability of the Company to manage its operating
expenses successfully; risks associated with acquisitions; changes
in governmental or regulatory requirements; litigation or
governmental proceedings affecting the Company's operations; and
the ability of the Company to obtain and retain key executives and
employees. More detailed information about those factors is set
forth in the Company's filings with the Securities and Exchange
Commission, including the Company's annual report on Form 10-K,
quarterly reports on Form 10-Q, and current reports on Form 8-K.
The Company is under no obligation (and expressly disclaims any
such obligation to) update or alter its forward-looking statements
whether as a result of new information, future events or
otherwise.
VALUE VISION MEDIA, INC.
Key Performance Metrics*
(Unaudited)
Q1
For the three months ending
-------------------------------
5/3/2008 5/5/2007 %
--------- --------- ---------
Program Distribution
Cable FTEs 42,361 40,379 5%
Satellite FTEs 28,394 27,136 5%
--------- --------- ---------
Total FTEs (Average 000s) 70,755 67,515 5%
Net Sales per FTE (Annualized) $ 8.72 $ 10.98 -21%
Product Mix
Jewelry 44% 40%
Apparel, Fashion Accessories and Health
& Beauty 10% 9%
Computers & Electronics 17% 23%
Watches, Coins & Collectibles 20% 15%
Home & All Other 9% 13%
Shipped Units (000s) 1,004 1,149 -13%
Average Price Point - shipped units $ 228 $ 225 1%
--------- --------- ---------
*Includes ShopNBC TV and ShopNBC.com only.
VALUEVISION MEDIA, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share data)
May 3, February 2,
2008 2008
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 44,367 $ 25,605
Short-term investments 17,886 33,473
Accounts receivable, net 72,100 109,489
Inventories 69,254 79,444
Prepaid expenses and other 4,632 4,172
----------- -----------
Total current assets 208,239 252,183
Long term investments 23,802 26,306
Property and equipment, net 35,818 36,627
FCC broadcasting license 31,943 31,943
NBC Trademark License Agreement, net 9,801 10,608
Cable distribution and marketing agreement, net 676 872
Other assets 526 541
----------- -----------
$ 310,805 $ 359,080
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 52,895 $ 73,093
Accrued liabilities 36,936 44,609
Deferred revenue 678 648
----------- -----------
Total current liabilities 90,509 118,350
Deferred revenue 2,258 2,322
Series A Redeemable Convertible Preferred Stock,
$.01 par value, 5,339,500 shares authorized;
5,339,500 shares issued and outstanding 43,971 43,898
Shareholders' equity:
Common stock, $.01 par value, 100,000,000
shares authorized; 33,550,834 and 34,070,422
shares issued and outstanding 336 341
Warrants to purchase 2,036,858 shares of
common stock 12,041 12,041
Additional paid-in capital 271,856 274,172
Accumulated other comprehensive losses (2,998) (2,454)
Accumulated deficit (107,168) (89,590)
----------- -----------
Total shareholders' equity 174,067 194,510
----------- -----------
$ 310,805 $ 359,080
=========== ===========
VALUEVISION MEDIA, INC.
AND SUBSIDIARIES
Reconciliation of EBITDA, as adjusted, to Net Income (Loss):
First First
Quarter Quarter
3-May-08 4-May-07
---------- ----------
EBITDA, as adjusted (000's) $ (12,394) $ (1,249)
Less:
Non-operating gains (losses) and equity in
income of RLM - 40,849
Restructuring costs (330) -
CEO transition costs (277) -
Non-cash share-based compensation (1,068) (593)
---------- ----------
EBITDA (as defined) (a) (14,069) 39,007
---------- ----------
A reconciliation of EBITDA to net income (loss) is
as follows:
EBITDA, as defined (14,069) 39,007
Adjustments:
Depreciation and amortization (4,319) (5,586)
Interest income 825 1,240
Income taxes (15) (281)
---------- ----------
Net income (loss) $ (17,578) $ 34,380
========== ==========
(a) EBITDA as defined for this statistical presentation represents net
income (loss) from continuing operations for the respective periods
excluding depreciation and amortization expense, interest income (expense)
and income taxes. The Company defines EBITDA, as adjusted, as EBITDA
excluding non-recurring non-operating gains (losses) and equity in income
of Ralph Lauren Media, LLC; non-recurring restructuring and CEO transition
costs; and non-cash share-based compensation expense.
Management has included the term EBITDA, as adjusted, in its EBITDA
reconciliation in order to adequately assess the operating performance of
the Company's "core" television and Internet businesses and in order to
maintain comparability to its analyst's coverage and financial guidance.
Management believes that EBITDA, as adjusted, allows investors to make a
more meaningful comparison between our core business operating results over
different periods of time with those of other similar small cap, higher
growth companies. In addition, management uses EBITDA, as adjusted, as a
metric measure to evaluate operating performance under its management and
executive incentive compensation programs. EBITDA, as adjusted, should not
be construed as an alternative to operating income (loss) or to cash flows
from operating activities as determined in accordance with GAAP and should
not be construed as a measure of liquidity. EBITDA, as adjusted, may not
be comparable to similarly entitled measures reported by other companies.
VALUEVISION MEDIA, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
For the Three Month
Periods Ended
----------------------
May 3, May 5,
2008 2007
---------- ----------
Net sales $ 156,288 $ 188,109
Cost of sales 106,332 121,996
(exclusive of depreciation and amortization
shown below)
Operating expense:
Distribution and selling 57,083 60,460
General and administrative 6,335 7,495
Depreciation and amortization 4,319 5,586
Restructuring costs 330 -
CEO transition costs 277 -
---------- ----------
Total operating expense 68,344 73,541
---------- ----------
Operating loss (18,388) (7,428)
---------- ----------
Other income:
Interest income 825 1,240
---------- ----------
Total other income 825 1,240
---------- ----------
Loss before income taxes and equity in net income
of affiliates (17,563) (6,188)
Gain on sale of RLM investment - 40,240
Equity in income of affiliates - 609
Income tax provision (15) (281)
---------- ----------
Net income (loss) (17,578) 34,380
Accretion of redeemable preferred stock (73) (72)
---------- ----------
Net income (loss) available to common shareholders $ (17,651) $ 34,308
========== ==========
Net income (loss) per common share $ (0.53) $ 0.80
========== ==========
Net income (loss) per common share
---assuming dilution $ (0.53) $ 0.80
========== ==========
Weighted average number of common shares
outstanding:
Basic 33,577,899 42,938,624
========== ==========
Diluted 33,577,899 42,938,684
========== ==========
Contact Info: Frank Elsenbast CFO 952-943-6262
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