ShopNBC (NASDAQ: VVTV), a 24-hour TV shopping network, today
announced financial results for its third fiscal quarter ended
November 1, 2008.
Third Quarter Results
Third quarter revenues were $124.8 million, a 32% decrease from
the same period last year. EBITDA, as adjusted, was ($13.3) million
compared to approximately $1 million in the year-ago period. Net
loss for the third quarter was ($20.8) million compared to a net
loss of ($5.7) million for the same quarter last year.
"Revenues in the third quarter were disappointing," said John
Buck, ShopNBC's Chairman and CEO. "While certainly it's been a
tough economy with consumer confidence at historic lows, we take
full responsibility for our sales performance. We are in a
transition period at the Company and working hard to improve the
fundamentals of this business for long-term sustained growth. The
Board and management recognize the challenges facing this business,
and we are taking decisive action by working on three strategic
initiatives on parallel paths to increase shareholder value."
The Company stated these initiatives include:
-- Sharp focus on the Company's balance sheet through tight control of
expenses and working capital resulting in a cash and securities balance
which stands at $81 million, an improvement of approximately $2 million
over the previous quarter.
-- Executing key operational efficiencies and initiatives to improve the
fundamentals of ShopNBC's multi-channel, electronic retailing business
model.
-- Actively exploring strategic alternatives to enhance shareholder value
by a Special Committee of Independent Directors of the Company's Board. An
update for this initiative will be provided on tomorrow's investor call by
Special Committee Chairman George Vandeman.
Third Quarter Highlights
-- The Company continued control of operating expenses, which decreased year-
over-year by 12% in the quarter.
-- Increased gross margins from 33.7% in Q2 to 34.5% in the third quarter
while return rates decreased from 31.5% in Q2 to 29.2%, respectively. The
Company will continue to work with its vendors to improve gross margins.
-- Realigned merchandising, broadcast operations, sales and product
planning, calendar and events, and e-commerce teams for improved
operational efficiencies and customer centricity.
-- Continued to aggressively negotiate with its cable and satellite
providers in the quarter. The Company's priority is to achieve a
significant reduction in its distribution costs next year.
Business Outlook
"In this difficult retail environment, we are highly focused on
managing the business thoughtfully yet decisively by protecting our
balance sheet for the long term," said Buck. "At the same time, we
are working on improving the fundamentals of our business and
exploring a full range of strategic alternatives. Given the changes
being implemented at the Company and the volatile economic
conditions, we will not be providing guidance at this time."
Conference Call Information
The Company has scheduled its conference call for 11 a.m. EST /
10 a.m. CST on Wednesday, November 19, 2008, to discuss the results
for the fiscal third quarter. To participate in the conference
call, please dial 1-888-455-9646 (pass code: SHOPNBC) five to ten
minutes prior to the call time. If you are unable to participate
live in the conference call, a replay will be available for 30
days. To access the replay, please dial 1-866-470-4775 with pass
code 7467622 (keypad: SHOPNBC).
You also may participate via live audio stream by logging on to
https://e-meetings.verizonbusiness.com. To access the audio stream,
please use conference number 1742627 with pass code: SHOPNBC. A
rebroadcast of the audio stream will be available using the same
access information for 30 days after the initial broadcast.
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 is a multi-channel electronic retailer operating with a
premium lifestyle brand. The shopping network reaches 70 million
homes in the United States via cable affiliates and satellite: DISH
Network channel 228 and DIRECTV channel 316. www.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.
VALUEVISION MEDIA, INC.
Key Performance Metrics*
(Unaudited)
Q3 YTD
For the three months ending For the nine months ending
---------- ---------- --- ---------- ---------- ---
11/1/2008 11/3/2007 % 11/1/2008 11/3/2007 %
---------- ---------- --- ---------- ---------- ---
Program Distribution
Cable FTEs 43,326 41,726 4% 42,886 41,156 4%
Satellite FTEs 28,846 27,687 4% 28,632 27,421 4%
---------- ---------- --- ---------- ---------- ---
Total FTEs
(Average 000s) 72,172 69,413 4% 71,518 68,577 4%
Net Sales per FTE
(Annualized) $ 6.92 $ 10.46 -34% $ 7.85 $ 10.77 -27%
Product Mix
Jewelry 33% 38% 39% 39%
Apparel, Fashion
Accessories and
Health & Beauty 12% 10% 10% 9%
Computers &
Electronics 25% 25% 20% 24%
Watches, Coins
& Collectibles 21% 16% 23% 16%
Home & All Other 9% 11% 8% 12%
Shipped Units
(000s) 782 1,069 -27% 2,655 3,350 -21%
Average Price Point
- shipped units $ 212 $ 240 -12% $ 223 $ 233 -4%
---------- ---------- --- ---------- ---------- ---
*Includes ShopNBC TV and ShopNBC.com only.
VALUEVISION MEDIA, INC.
AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
For the Three Month For the Nine Month
Periods Ended Periods Ended
---------- ---------- ---------- ----------
November November November November
1, 3, 1, 3,
2008 2007 2008 2007
---------- ---------- ---------- ----------
Net sales $ 124,769 $ 184,821 $ 422,984 $ 563,543
Cost of sales 81,694 119,837 282,072 365,124
(exclusive of
depreciation
and amortization shown
below)
Operating expense:
Distribution and selling 51,743 59,126 162,653 179,619
General and
administrative 5,582 5,423 17,599 19,128
Depreciation and
amortization 4,246 4,734 12,811 15,581
Restructuring costs 175 1,061 505 3,104
CEO transition costs 1,883 2,096 2,713 2,096
---------- ---------- ---------- ----------
Total operating expense 63,629 72,440 196,281 219,528
---------- ---------- ---------- ----------
Operating loss (20,554) (7,456) (55,369) (21,109)
---------- ---------- ---------- ----------
Other income (loss):
Other loss (969) - (969) (119)
Interest income 745 1,728 2,331 4,543
---------- ---------- ---------- ----------
Total other income (224) 1,728 1,362 4,424
---------- ---------- ---------- ----------
Loss before income taxes
and equity in net income
of affiliates (20,778) (5,728) (54,007) (16,685)
Gain on sale of RLM
investment - - - 40,240
Equity in income of
affiliates - - - 609
Income tax provision - - (33) (921)
---------- ---------- ---------- ----------
Net income (loss) (20,778) (5,728) (54,040) 23,243
Accretion of redeemable
preferred stock (73) (73) (219) (218)
---------- ---------- ---------- ----------
Net income (loss)
available to common
shareholders $ (20,851) $ (5,801) $ (54,259) $ 23,025
========== ========== ========== ==========
Net income (loss) per
common share $ (0.62) $ (0.16) $ (1.62) $ 0.54
========== ========== ========== ==========
Net income (loss) per
common share
---assuming dilution $ (0.62) $ (0.16) $ (1.62) $ 0.54
========== ========== ========== ==========
Weighted average number of
common shares outstanding:
Basic 33,590,834 36,330,800 33,580,955 42,438,322
========== ========== ========== ==========
Diluted 33,590,834 36,330,800 33,580,955 42,458,720
========== ========== ========== ==========
VALUEVISION MEDIA, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands except share and per share data)
November 1, February 2,
2008 2008
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 56,444 $ 25,605
Short-term investments 4,975 33,473
Accounts receivable, net 43,178 109,489
Inventories 70,513 79,444
Prepaid expenses and other 5,198 4,172
------------ ------------
Total current assets 180,308 252,183
Long term investments 20,487 26,306
Property and equipment, net 33,532 36,627
FCC broadcasting license 31,943 31,943
NBC Trademark License Agreement, net 8,188 10,608
Cable distribution and marketing agreement, net 329 872
Other assets 567 541
------------ ------------
$ 275,354 $ 359,080
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 58,391 $ 73,093
Accrued liabilities 34,073 44,609
Deferred revenue 705 648
------------ ------------
Total current liabilities 93,169 118,350
Deferred revenue 1,997 2,322
Series A Redeemable Convertible Preferred
Stock, $.01 par value, 5,339,500 shares
authorized; 5,339,500 shares issued and
outstanding 44,117 43,898
Shareholders' equity:
Common stock, $.01 par value, 100,000,000
shares authorized; 33,590,834 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 273,638 274,172
Accumulated other comprehensive losses (6,314) (2,454)
Accumulated deficit (143,630) (89,590)
------------ ------------
Total shareholders' equity 136,071 194,510
------------ ------------
$ 275,354 $ 359,080
============ ============
VALUEVISION MEDIA, INC.
AND SUBSIDIARIES
Reconciliation of EBITDA, as adjusted, to Net Income (Loss):
Nine-Month Nine-Month
Third Third Period Period
Quarter Quarter Ended Ended
1-Nov-08 3-Nov-07 1-Nov-08 3-Nov-07
---------- ---------- ---------- ----------
EBITDA, as adjusted (000s) $ (13,283) $ 947 $ (36,343) $ 1,461
Less:
Non-operating gains
(losses) and equity
in income of RLM (969) - (969) 40,730
Restructuring costs (175) (1,061) (505) (3,104)
CEO transition costs (1,883) (2,096) (2,713) (2,096)
Non-cash share-based
compensation (967) (512) (2,997) (1,789)
---------- ---------- ---------- ----------
EBITDA (as defined) (a) (17,277) (2,722) (43,527) 35,202
---------- ---------- ---------- ----------
A reconciliation of EBITDA
to net income (loss) is as
follows:
EBITDA, as defined (17,277) (2,722) (43,527) 35,202
Adjustments:
Depreciation and
amortization (4,246) (4,734) (12,811) (15,581)
Interest income 745 1,728 2,331 4,543
Income taxes - - (33) (921)
---------- ---------- ---------- ----------
Net income (loss) $ (20,778) $ (5,728) $ (54,040) $ 23,243
========== ========== ========== ==========
(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.
Contacts: Frank Elsenbast Chief Financial Officer 952-943-6262
Anthony Giombetti Media Relations 612-308-1190
Evolv Technologies (NASDAQ:EVLV)
Historical Stock Chart
From Jun 2024 to Jul 2024
Evolv Technologies (NASDAQ:EVLV)
Historical Stock Chart
From Jul 2023 to Jul 2024
