Evine Live Inc. (“Evine”) (NASDAQ:EVLV) today announced results for
the third quarter ended October 29, 2016. The company posted
quarterly net sales of $152 million, continuing its progress on the
strategy of driving toward sustained profitability this fiscal
year. Net loss for the quarter was $3.9 million, a 25% improvement
year-over-year, with adjusted EBITDA of a positive $2.5 million, a
1,400% improvement year-over-year. Gross profit as a percentage of
sales increased 210 basis points to 36.6% compared to 34.5% in the
third quarter of last year.
“I’m pleased with our progress as we continue to improve
profitability through a disciplined merchandising mix that
prioritizes contribution margin,” said CEO Bob Rosenblatt.
“For consecutive quarters, we have been expanding our gross margin
rate, improving our cash position, lowering our net loss and
improving our EPS by refining our mix of compelling merchandise,
focusing on our most successful product categories, and engaging
our valued customers via a personal shopping experience.”
Fiscal Year 2016 Third Quarter
Highlights
- Net sales were $152 million, a 7% decrease year-over-year.
- Gross profit as a percentage of sales increased 210 basis
points to 36.6%.
- Net loss was $3.9 million, a 25% improvement
year-over-year.
- Adjusted EBITDA was $2.5 million, a 1,400% improvement
year-over-year.
- EPS was ($0.06), a 33% improvement year-over-year.
- Total Cash, including restricted cash, was $40 million.
Rosenblatt continued, “I am also proud of the
progress we made this quarter toward our 2017 revenue growth
strategy that centers on gathering a world-class team to help us
cultivate our products, attract the right new customers based on
their digital lifetime value, and create a culture that can drive
sustainable revenue growth. This progress includes filling
out our executive management team with the recent hire of Lori
Riley, SVP, Chief Human Resources Officer; launching new high
quality beauty brands, like Sirot and CoverFx; launching new fixed
programming blocks like Paula Deen on location in Savannah,
Georgia, and attracting leading industry advisors to help us bring
new brands, products and personalities to our business, as we have
done with Tommy Hilfiger and Tommy Mottola.”
|
SUMMARY RESULTS AND KEY OPERATING
METRICS |
($ Millions, except average price points and
EPS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2016 10/29/2016 |
|
Q3 2015 10/31/2015 |
|
Change |
|
YTD 2016 10/29/2016 |
|
YTD 2015 10/31/2015 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales |
|
$ |
151.6 |
|
|
$ |
162.3 |
|
|
|
(7 |
%) |
|
$ |
475.7 |
|
|
$ |
481.8 |
|
|
|
(1 |
%) |
Gross
Margin % |
|
|
36.6 |
% |
|
|
34.5 |
% |
|
210 bps |
|
|
37.1 |
% |
|
|
35.7 |
% |
|
140 bps |
Adjusted
EBITDA |
|
$ |
2.5 |
|
|
$ |
0.2 |
|
|
|
1,396 |
% |
|
$ |
9.8 |
|
|
$ |
4.3 |
|
|
|
129 |
% |
Net
Loss |
|
$ |
(3.9 |
) |
|
$ |
(5.2 |
) |
|
|
25 |
% |
|
$ |
(10.8 |
) |
|
$ |
(13.0 |
) |
|
|
17 |
% |
EPS |
|
$ |
(0.06 |
) |
|
$ |
(0.09 |
) |
|
|
33 |
% |
|
$ |
(0.19 |
) |
|
$ |
(0.23 |
) |
|
|
17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Shipped Units
(000s) |
|
|
2,253 |
|
|
|
2,282 |
|
|
|
(1 |
%) |
|
|
7,131 |
|
|
|
6,946 |
|
|
|
3 |
% |
|
Average Selling Price
(ASP) |
|
$ |
60 |
|
|
$ |
65 |
|
|
|
(8 |
%) |
|
$ |
59 |
|
|
$ |
63 |
|
|
|
(6 |
%) |
|
Return Rate % |
|
|
20.5 |
% |
|
|
18.9 |
% |
|
160 bps |
|
|
19.8 |
% |
|
|
20.2 |
% |
|
(40 bps) |
|
Online Net Sales % |
|
|
49.0 |
% |
|
|
46.0 |
% |
|
300 bps |
|
|
48.6 |
% |
|
|
45.7 |
% |
|
290 bps |
|
Total
Customers - 12 Month Rolling (000s) |
|
1,429 |
|
|
|
1,446 |
|
|
|
(1 |
%) |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Net
Sales by Category |
|
|
|
|
|
|
|
|
|
|
|
|
|
Jewelry &
Watches |
|
|
42 |
% |
|
|
36 |
% |
|
|
|
|
42 |
% |
|
|
41 |
% |
|
|
|
Home & Consumer
Electronics |
|
|
25 |
% |
|
|
33 |
% |
|
|
|
|
23 |
% |
|
|
27 |
% |
|
|
|
Beauty |
|
|
14 |
% |
|
|
13 |
% |
|
|
|
|
15 |
% |
|
|
14 |
% |
|
|
|
Fashion &
Accessories |
|
|
19 |
% |
|
|
18 |
% |
|
|
|
|
20 |
% |
|
|
18 |
% |
|
|
|
Total |
|
|
100 |
% |
|
|
100 |
% |
|
|
|
|
100 |
% |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter 2016 Results
- Wearable categories, which include Jewelry & Watches,
Fashion & Accessories, and Beauty, posted strong revenue
performance, and together grew by 3%. The growth in wearables
was offset by a 66% decline in the Consumer Electronics
category.
- Return rate for the quarter was 20.5%; an increase of 160 basis
points year-over-year, driven by product mix shifts.
- Gross profit as a percentage of sales increased 210 basis
points to 36.6%, also driven by product mix shifts. Gross
profit dollars decreased 0.9% to $55.4 million.
- Net loss was $3.9 million, a 25% improvement year-over-year and
Adjusted EBITDA increased 1,400% to a positive $2.5 million. These
results were primarily attributable to a 4% operating expense
reduction of $2.7 million year-over-year, driven primarily by lower
content distribution costs and decreased accrued incentive
compensation, which were partially offset by higher expenses in
marketing, and higher variable expenses resulting from increased
credit costs and increased labor costs in customer solutions and
fulfillment center.
- EPS for the fiscal 2016 third quarter improved to ($0.06),
which includes $0.6 million in executive and management transition
costs and $0.2 million in distribution facility consolidation and
technology upgrade costs. EPS for the fiscal 2015 third quarter was
($0.09), which included $0.8 million in executive and management
transition costs, $0.1 million in costs associated with the
implementation of the Shareholder Rights Plan, and $0.3 million in
distribution facility consolidation and technology upgrade
costs.
Liquidity and Capital Resources
As of October 29, 2016, total cash, including restricted cash,
was $40.1 million, compared to $40.1 million at the end of the
second quarter of fiscal 2016. The Company also had an
additional $16.2 million of unused availability on its revolving
credit facility with PNC Bank at the end of the third quarter
2016.
Strategic Investment in Evine
As announced on September 14, 2016, the Company executed a
definitive agreement to sell $10 million of common stock
at $1.68 per share to investors (“Investors”) that
included, among others, Mr. Tommy Hilfiger, Mr. Morris
Goldfarb and Mr. Tommy Mottola. This initial investment
closed on September 19, 2016 and resulted in 5,952,381 shares sold
to the Investors. Other details were provided in Form 8-K
filings with the SEC on September 15, 2016 and November 4,
2016.
2016 Outlook
The Company expects revenue in the fourth
quarter to be negative low to mid-single digits on a year-over-year
basis. We expect Adjusted EBITDA to increase in the fourth quarter
on both a sequential and year-over-year basis.
Conference Call
A conference call and webcast to discuss the
Company's third quarter earnings will be held at 8:30 a.m. Eastern
Time on Tuesday, November 22, 2016:
AUDIO WEBCAST
LINK: http://event.on24.com/wcc/r/1212123/4462CF2FF40534845EAD22D0F0F3B135
TELEPHONE: 1-877-407-9039 (domestic) or
201-689-8470 (international)
Please visit www.evine.com/ir for more investor
information and to review an updated investor deck.
About Evine Live Inc.Evine Live Inc.
(NASDAQ:EVLV) operates Evine, a digital commerce company that
offers a compelling mix of proprietary and name brands directly to
consumers in an engaging and informative shopping experience via
television, online and on mobile. Evine reaches approximately 87
million cable and satellite television homes 24 hours a day with
entertaining content in a comprehensive digital shopping
experience.
Please visit www.evine.com/ir for more investor information.
EVINE Live Inc. |
AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(In thousands except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 29, |
|
January 30, |
|
|
|
|
|
|
|
2016 |
|
|
|
2016 |
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
Current assets: |
|
|
|
|
|
|
Cash |
|
|
$ |
39,680 |
|
|
$ |
11,897 |
|
|
Restricted
cash and investments |
|
|
|
450 |
|
|
|
450 |
|
|
Accounts
receivable, net |
|
|
|
89,588 |
|
|
|
114,949 |
|
|
Inventories |
|
|
|
81,187 |
|
|
|
65,840 |
|
|
Prepaid
expenses and other |
|
|
|
5,257 |
|
|
|
5,913 |
|
|
|
Total
current assets |
|
|
|
216,162 |
|
|
|
199,049 |
|
Property and equipment, net |
|
|
|
51,464 |
|
|
|
52,629 |
|
FCC
broadcasting license |
|
|
|
12,000 |
|
|
|
12,000 |
|
Other assets |
|
|
|
1,609 |
|
|
|
1,819 |
|
|
|
|
|
|
|
$ |
281,235 |
|
|
$ |
265,497 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts
payable |
|
|
$ |
78,504 |
|
|
$ |
77,779 |
|
|
Accrued
liabilities |
|
|
|
36,367 |
|
|
|
35,342 |
|
|
Current
portion of long term credit facilities |
|
|
2,993 |
|
|
|
2,143 |
|
|
Deferred
revenue |
|
|
|
85 |
|
|
|
85 |
|
|
|
Total
current liabilities |
|
|
|
117,949 |
|
|
|
115,349 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred revenue |
|
|
|
100 |
|
|
|
164 |
|
Deferred tax liability |
|
|
|
3,326 |
|
|
|
2,734 |
|
Long term credit facilities |
|
|
|
83,122 |
|
|
|
70,271 |
|
|
|
Total
liabilities |
|
|
|
204,497 |
|
|
|
188,518 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
Preferred
stock, $.01 par value, 400,000 shares authorized; |
|
|
|
|
|
zero shares
issued and outstanding |
|
|
- |
|
|
|
- |
|
|
Common
stock, $.01 par value, 100,000,000 shares authorized; |
|
|
|
|
|
57,335,381
and 57,170,245 shares issued and outstanding |
|
635 |
|
|
|
571 |
|
|
Additional
paid-in capital |
|
|
|
434,061 |
|
|
|
423,574 |
|
|
Accumulated
deficit |
|
|
|
(357,958 |
) |
|
|
(347,166 |
) |
|
|
Total
shareholders' equity |
|
|
|
76,738 |
|
|
|
76,979 |
|
|
|
|
|
|
|
$ |
281,235 |
|
|
$ |
265,497 |
|
EVINE Live Inc. |
AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited) |
(In thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three-Month Periods
Ended |
|
For the Nine-Month Periods
Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 29, |
|
October 31, |
|
October 29, |
|
October 31, |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Net
sales |
$ |
151,636 |
|
|
$ |
162,258 |
|
|
$ |
475,695 |
|
|
$ |
481,770 |
|
Cost of sales |
|
96,205 |
|
|
|
106,348 |
|
|
|
298,988 |
|
|
|
309,699 |
|
|
|
|
Gross profit |
|
55,431 |
|
|
|
55,910 |
|
|
|
176,707 |
|
|
|
172,071 |
|
|
|
|
Margin % |
|
36.6 |
% |
|
|
34.5 |
% |
|
|
37.1 |
% |
|
|
35.7 |
% |
Operating expense: |
|
|
|
|
|
|
|
|
Distribution and selling |
|
49,161 |
|
|
|
51,038 |
|
|
|
154,191 |
|
|
|
153,194 |
|
|
General and
administrative |
|
5,690 |
|
|
|
5,975 |
|
|
|
17,337 |
|
|
|
18,078 |
|
|
Depreciation and amortization |
|
1,941 |
|
|
|
2,131 |
|
|
|
6,025 |
|
|
|
6,369 |
|
|
Executive
and management transition costs |
|
568 |
|
|
|
754 |
|
|
|
4,411 |
|
|
|
3,549 |
|
|
Distribution facility consolidation and technology upgrade
costs |
|
150 |
|
|
|
294 |
|
|
|
530 |
|
|
|
1,266 |
|
|
|
Total
operating expense |
|
57,510 |
|
|
|
60,192 |
|
|
|
182,494 |
|
|
|
182,456 |
|
Operating loss |
|
(2,079 |
) |
|
|
(4,282 |
) |
|
|
(5,787 |
) |
|
|
(10,385 |
) |
|
|
|
|
|
|
|
|
|
|
|
Other expense: |
|
|
|
|
|
|
|
|
Interest
income |
|
3 |
|
|
|
2 |
|
|
|
7 |
|
|
|
6 |
|
|
Interest
expense |
|
(1,586 |
) |
|
|
(690 |
) |
|
|
(4,397 |
) |
|
|
(1,957 |
) |
|
|
Total other
expense |
|
(1,583 |
) |
|
|
(688 |
) |
|
|
(4,390 |
) |
|
|
(1,951 |
) |
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
(3,662 |
) |
|
|
(4,970 |
) |
|
|
(10,177 |
) |
|
|
(12,336 |
) |
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision |
|
(205 |
) |
|
|
(205 |
) |
|
|
(615 |
) |
|
|
(615 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net
loss |
$ |
(3,867 |
) |
|
$ |
(5,175 |
) |
|
$ |
(10,792 |
) |
|
$ |
(12,951 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net
loss per common share |
$ |
(0.06 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.23 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net
loss per common share |
|
|
|
|
|
|
|
|
|
---assuming dilution |
$ |
(0.06 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.23 |
) |
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of |
|
|
|
|
|
|
|
common
shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
60,513,215 |
|
|
|
57,125,435 |
|
|
|
58,317,681 |
|
|
|
56,952,952 |
|
|
|
|
Diluted |
|
60,513,215 |
|
|
|
57,125,435 |
|
|
|
58,317,681 |
|
|
|
56,952,952 |
|
EVINE Live Inc. |
AND SUBSIDIARIES |
Reconciliation of Adjusted EBITDA to Net
Loss: |
(Unaudited) |
|
|
|
|
|
|
|
|
|
For the Three-Month Periods
Ended |
|
For the Nine-Month Periods
Ended |
|
|
|
|
|
|
|
|
|
October 29, |
October 31, |
|
October 29, |
October 31, |
|
|
|
2016 |
|
|
2015 |
|
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(000's) |
|
$ |
2,529 |
|
$ |
169 |
|
|
$ |
9,790 |
|
$ |
4,279 |
|
Less: |
|
|
|
|
|
|
Executive
and management transition costs |
|
|
(568 |
) |
|
(754 |
) |
|
|
(4,411 |
) |
|
(3,549 |
) |
Distribution facility consolidation and technology upgrade
costs |
|
(150 |
) |
|
(294 |
) |
|
|
(530 |
) |
|
(1,266 |
) |
Shareholder Rights Plan costs |
|
|
- |
|
|
(82 |
) |
|
|
- |
|
|
(446 |
) |
Non-cash
share-based compensation |
|
|
(797 |
) |
|
(762 |
) |
|
|
(1,432 |
) |
|
(2,138 |
) |
EBITDA (as
defined) |
|
|
1,014 |
|
|
(1,723 |
) |
|
|
3,417 |
|
|
(3,120 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of
EBITDA to net loss is as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (as
defined) |
|
|
1,014 |
|
|
(1,723 |
) |
|
|
3,417 |
|
|
(3,120 |
) |
Adjustments: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
(3,093 |
) |
|
(2,559 |
) |
|
|
(9,204 |
) |
|
(7,265 |
) |
Interest
income |
|
|
3 |
|
|
2 |
|
|
|
7 |
|
|
6 |
|
Interest
expense |
|
|
(1,586 |
) |
|
(690 |
) |
|
|
(4,397 |
) |
|
(1,957 |
) |
Income
taxes |
|
|
(205 |
) |
|
(205 |
) |
|
|
(615 |
) |
|
(615 |
) |
Net
loss |
|
$ |
(3,867 |
) |
$ |
(5,175 |
) |
|
$ |
(10,792 |
) |
$ |
(12,951 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
EBITDA represents net income (loss) for the
respective periods excluding depreciation and amortization expense,
interest income (expense) and income taxes. The Company defines
Adjusted EBITDA as EBITDA excluding non-operating gains (losses);
executive and management transition costs; distribution facility
consolidation and technology upgrade costs; Shareholder Rights Plan
costs and non-cash share-based compensation expense. The Company
has included the term “Adjusted EBITDA” in our EBITDA
reconciliation in order to adequately assess the operating
performance of our television and online businesses and in order to
maintain comparability to our analyst's coverage and financial
guidance, when given. Management believes that the term Adjusted
EBITDA allows investors to make a more meaningful comparison
between our business operating results over different periods of
time with those of other similar companies. In addition, management
uses Adjusted EBITDA as a metric to evaluate operating performance
under the Company’s management and executive incentive compensation
programs. Adjusted EBITDA should not be construed as an alternative
to operating income (loss), net income (loss) or to cash flows from
operating activities as determined in accordance with generally
accepted accounting principles and should not be construed as a
measure of liquidity. Adjusted EBITDA may not be comparable to
similarly entitled measures reported by other companies. The
Company has included a reconciliation of Adjusted EBITDA to net
income (loss), the most directly comparable GAAP financial measure,
in this release.
Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995
This document may contain certain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements may be identified by words such as
anticipate, believe, estimate, expect, intend, predict, hope,
should, plan, will or similar expressions. Any statements contained
herein that are not statements of historical fact may be deemed
forward-looking statements. These statements are based on
management's current expectations and accordingly are 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
preferences, spending and debt levels; the general economic and
credit environment; interest rates; seasonal variations in consumer
purchasing activities; the ability to achieve the most effective
product category mixes to maximize sales and margin objectives;
competitive pressures on sales; pricing and gross sales margins;
the level of cable and satellite distribution for our programming
and the associated fees or estimated cost savings from contract
renegotiations; our ability to establish and maintain acceptable
commercial terms with third-party vendors and other third parties
with whom we have contractual relationships, and to successfully
manage key vendor relationships and develop key partnerships and
proprietary and exclusive brands; our ability to manage our
operating expenses successfully and our working capital levels; our
ability to remain compliant with our credit facilities covenants;
customer acceptance of our branding strategy and our repositioning
as a digital commerce company; the market demand for television
station sales; changes to our management and information systems
infrastructure; challenges to our data and information security;
changes in governmental or regulatory requirements; including
without limitation, regulations of the Federal Communications
Commission, and adverse outcomes from regulatory proceedings;
litigation or governmental proceedings affecting our operations;
significant public events that are difficult to predict, or other
significant television-covering events causing an interruption of
television coverage or that directly compete with the viewership of
our programming; our ability to obtain and retain key executives
and employees; our ability to attract new customers and retain
existing customers; changes in shipping costs; our ability to offer
new or innovative products and customer acceptance of the same;
changes in customers viewing habits of television programming; and
the risks identified under “Risk Factors” in our recently filed
Form 10-K and any additional risk factors identified in our
periodic reports since the date of such Form 10-K. More detailed
information about those factors is set forth in our filings with
the Securities and Exchange Commission, including our annual report
on Form 10-K, quarterly reports on Form 10-Q, and current reports
on Form 8-K. You are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date of this
announcement. We are under no obligation (and expressly disclaim
any such obligation) to update or alter our forward-looking
statements whether as a result of new information, future events or
otherwise.
Contacts
Media:
Dawn Zaremba
Evine Live Inc.
press@evine.com
(952) 943-6043
Investors:
Michael Porter
Evine Live Inc.
mporter@evine.com
(952) 943-6517
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