MINNEAPOLIS, MN --
(MARKET WIRE)
-- 03/16/2010 --
ShopNBC (NASDAQ: VVTV), the premium
lifestyle brand in electronic retailing, today announced financial results
for its fiscal fourth quarter and full year ended January 30, 2010.
Fourth Quarter Results
Fourth quarter revenues were $155.3 million, a 7.4% increase from the same
period last year. The company's e-commerce sales penetration was 39% of
total sales in the quarter, up 690 basis points vs. last year. EBITDA, as
adjusted, was a loss of ($1.3) million compared to an EBITDA, as adjusted,
loss of ($15.1) million in the year-ago period. Net loss for the fourth
quarter was ($8.8) million compared to a net loss of ($43.8) million for
the same quarter last year.
Full Year 2009 Results
Net sales for fiscal 2009 were $528 million, a decrease of 7% vs. the
previous year. The company's e-commerce sales penetration for the full year
was 33.7%, up 170 basis points vs. last year. Full year EBITDA loss, as
adjusted, was ($19.4) million, compared to an EBITDA, as adjusted, loss of
($51.4) million last year. For the fiscal year, the company is reporting a
net loss of ($42.0) million compared to a net loss of ($97.8) million in
the prior year.
Fourth Quarter Highlights
The company noted several key improvements and developments in the quarter:
Bob Ayd Named President. The company appointed Bob Ayd, a multichannel
retailing veteran with more than 30 years of experience, as president of
ShopNBC, reporting to CEO Keith Stewart. Mr. Ayd brings an extensive
background and proven track record of success to the company, including
executive leadership roles at multi-billion-dollar retailers QVC and Macy's.
Most recently, he served as Executive Vice President and Chief
Merchandising Officer at QVC (U.S.). At Macy's, Mr. Ayd held a number of
executive leadership positions.
Customers. Customer trends continued to improve with new and active
customers up 38% and 32%, respectively, in the fourth quarter vs. the same
period last year. For the full year, new and active customers were up 63%
and 36% respectively. Return rates for the quarter were 19% vs. 26% in the
year-ago quarter, reflecting improvements in delivery time, customer
service, product quality, and lower price points. For the full year, return
rates were 21% vs. 31% in the previous year.
Gross Profit Margin. For the quarter, gross profit margin was 32.4%, 350
basis points higher compared to last year, driven by merchandise rate
improvements in several key categories and favorable mix change. For the
full year, gross profit margin was 32.9%, up 70 basis points from the
year-ago period.
Net Average Selling Price. The fourth quarter net average selling price was
strategically lowered to $96 vs. $139 in the year-ago period. For the full
year, the net average selling price was lowered to $108 vs. $176 in the
previous year.
Net Shipped Units. In the quarter, net shipped units increased by 54% as
lower price points and new merchandise drove increased customer activity.
Net shipped units for the full year were up 47% vs. prior year.
Cash and Cash Equivalents Balance. Fourth quarter cash and cash equivalents
balance ended at $22.1 million, including $5.1 million of restricted cash.
This cash and securities balance is a decrease of $10.4 million vs. the
prior quarter driven by the EBITDA loss, capital expenditures, and working
capital use. In the fourth quarter, the company entered into a 3-year
revolving credit facility for up to $20 million to finance working capital
investment and fund other company growth initiatives.
Operating Expenses. Fourth quarter operating expenses decreased $17.4
million year-over-year or 23%. For the full year, operating expenses
decreased $56.3 million year-over-year or 21% vs. the prior-year period.
"The fourth quarter proved to be another positive step toward achieving
sustained growth and profitability," said Keith Stewart, ShopNBC's CEO. "We
surpassed the 1 million customer mark. Leading indicators across all fronts
continued to trend in the right direction with our Internet business
achieving industry-leading e-commerce sales penetration of 39%. As our
merchandising strategies continue to take form and be well-received by the
customer, we remain excited about the broadening appeal of our business."
Added Stewart: "I am encouraged by the continued progress made throughout
the year to improve ShopNBC's performance. While we are not providing
guidance for 2010, we have clearly defined initiatives in place to further
drive sustained sales growth, increased margins, and predictable
performance. With a lean cost-structure, I remain confident in our 2010
plans and execution capabilities to deliver on the expectations of the
shareholders."
Conference Call Information
The company has scheduled its conference call for 11 a.m. EDT / 10 a.m. CDT
on Tuesday, March 16, 2010, to discuss the results for the fiscal fourth
quarter and full year 2009. To participate in the conference call, please
dial 1-888-606-5948 (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
1-800-945-6332 with pass code 6059802 (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 6059802 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.
About ShopNBC
ShopNBC is a multichannel electronic retailer operating with a premium
lifestyle brand. Over 1 million customers benefit from ShopNBC as an
authority and destination in the categories of home, electronics, beauty,
fashion, jewelry and watches. As part of the company's "ShopNBC Anywhere"
initiative, customers can interact and shop via cable and satellite TV in
75 million homes (DISH Network channels 134 and 228; and DIRECTV channel
316); mobile devices including iPhone, BlackBerry and Droid; online at
www.ShopNBC.com; live streaming at www.ShopNBC.TV; and social networking
sites Facebook, Twitter, and YouTube. ShopNBC is owned and operated by
ValueVision Media (NASDAQ: VVTV). For more information, please
visit www.ShopNBC.com/IR.
EBITDA and EBITDA, as adjusted
EBITDA represents net 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); non-cash impairment charges and write-downs;
restructuring and chief executive officer transition 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 "core" television and internet
businesses and in order to maintain comparability to our analyst's coverage
and financial guidance, when given. Management believes that Adjusted
EBITDA allows investors to make a more meaningful comparison between our
core business operating results over different periods of time with those
of other similar companies. In addition, management uses Adjusted EBITDA as
a metric measure to evaluate operating performance under its management and
executive incentive compensation programs. Adjusted EBITDA should not be
construed as an alternative to operating 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.
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 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 spending and
debt levels; interest rates; competitive pressures on sales, pricing and
gross profit margins; the level of cable and satellite distribution for the
company's programming and the fees associated therewith; the success of the
company's e-commerce and new sales initiatives; the success of its
strategic alliances and relationships; the ability of the company to manage
its operating expenses successfully; the ability of the Company to
establish and maintain acceptable commercial terms with third party vendors
and other third parties with whom the Company has contractual relationships;
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.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share data)
January 30, January 31,
2010 2009
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 17,000 $ 53,845
Restricted cash and investments 5,060 1,589
Accounts receivable, net 68,891 51,310
Inventories 44,077 51,057
Prepaid expenses and other 4,333 3,668
----------- -----------
Total current assets 139,361 161,469
Long term investments - 15,728
Property and equipment, net 28,342 31,723
FCC broadcasting license 23,111 23,111
NBC Trademark License Agreement, net 4,154 7,381
Other Assets 1,246 2,088
----------- -----------
$ 196,214 $ 241,500
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 58,777 $ 64,615
Accrued liabilities 26,487 30,657
Deferred revenue 728 716
----------- -----------
Total current liabilities 85,992 95,988
Deferred revenue 1,153 1,849
Long Term Payable 4,841 -
Accrued Dividends - Series B Preferred Stock 4,681 -
Series B Mandatorily Redeemable Preferred Stock 11,243 -
$.01 par value, 4,929,266 shares authorized;
4,929,266 shares issued and outstanding
----------- -----------
Total liabilities 107,910 97,837
Commitments and Contingencies
Series A Redeemable Convertible Preferred Stock,
$.01 par value, 5,339,500 shares authorized - 44,191
Shareholders' equity:
Common stock, $.01 par value, 100,000,000
shares authorized; 32,672,735 and 33,690,266
shares issued and outstanding 327 337
Warrants to purchase 6,022,115 and 29,487
shares of common stock 637 138
Additional paid-in capital 316,721 286,380
Accumulated deficit (229,381) (187,383)
----------- -----------
Total shareholders' equity 88,304 99,472
----------- -----------
$ 196,214 $ 241,500
=========== ===========
VALUEVISION MEDIA, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
For the Three Month For the Twelve Month
Periods Ended Periods Ended
---------- ---------- ---------- ----------
January 30 January 31 January 30 January 31
2010 2009 2010 2009
---------- ---------- ---------- ----------
Net sales $ 155,285 $ 144,526 $ 527,873 $ 567,510
Cost of sales 104,929 102,690 354,101 384,761
(exclusive of
depreciation
and amortization shown
below)
Operating expense:
Distribution and selling 47,117 52,303 178,015 214,956
General and
administrative 5,173 5,542 18,373 23,142
Depreciation and
amortization 3,597 4,486 14,320 17,297
Restructuring costs 1,588 3,794 2,303 4,299
CEO transition costs 65 (32) 1,932 2,681
FCC licence impairment - 8,832 - 8,832
---------- ---------- ---------- ----------
Total operating
expense 57,540 74,925 214,943 271,207
---------- ---------- ---------- ----------
Operating loss (7,184) (33,089) (41,171) (88,458)
---------- ---------- ---------- ----------
Other income (expense):
Interest income 17 408 382 2,739
Interest expense (1,600) - (4,928) -
Writedown of auction
rate investments - (11,072) - (11,072)
Gain (loss) on sale of
investments - - 3,628 (969)
---------- ---------- ---------- ----------
Total other income
(expense) (1,583) (10,664) (918) (9,302)
---------- ---------- ---------- ----------
Loss before income taxes (8,767) (43,753) (42,089) (97,760)
Income tax (provision)
benefit (66) - 91 (33)
---------- ---------- ---------- ----------
Net loss (8,833) (43,753) (41,998) (97,793)
Excess of preferred stock
carrying value
over redemption value - - 27,362 -
Accretion of redeemable
Series A preferred stock - (74) (62) (293)
---------- ---------- ---------- ----------
Net loss available to
common shareholders $ (8,833) $ (43,827) $ (14,698) $ (98,086)
========== ========== ========== ==========
Net loss per common share $ (0.27) $ (1.30) $ (0.45) $ (2.92)
========== ========== ========== ==========
Net loss per common share
---assuming dilution $ (0.27) $ (1.30) $ (0.45) $ (2.92)
========== ========== ========== ==========
Weighted average number of
common shares outstanding:
Basic 32,442,541 33,649,843 32,537,849 33,598,177
========== ========== ========== ==========
Diluted 32,442,541 33,649,843 32,537,849 33,598,177
========== ========== ========== ==========
VALUEVISION MEDIA, INC.
AND SUBSIDIARIES
Reconciliation of EBITDA, as adjusted, to Net Loss:
For the Three Month For the Twelve Month
Periods Ended Periods Ended
---------------------- ----------------------
January 30 January 31 January 30 January 31
2010 2009 2010 2009
---------- ---------- ---------- ----------
EBITDA, as adjusted (000's) $ (1,259) $ (15,078) $ (19,411) $ (51,421)
Less:
Non-operating gains
(losses) and equity
in income of RLM - - 3,628 (969)
FCC license impairment - (8,832) - (8,832)
Write down of auction
rate investments - (11,072) - (11,072)
Restructuring costs (1,588) (3,794) (2,303) (4,299)
CEO transition costs (65) 32 (1,932) (2,681)
Non-cash share-based
compensation (675) (931) (3,205) (3,928)
---------- ---------- ---------- ----------
EBITDA (as defined) (a) (3,587) (39,675) (23,223) (83,202)
---------- ---------- ---------- ----------
A reconciliation of EBITDA
to net loss is as follows:
EBITDA, as defined (3,587) (39,675) (23,223) (83,202)
Adjustments:
Depreciation and
amortization (3,597) (4,486) (14,320) (17,297)
Interest income 17 408 382 2,739
Interest expense (1,600) - (4,928) -
Income taxes (66) - 91 (33)
---------- ---------- ---------- ----------
Net loss $ (8,833) $ (43,753) $ (41,998) $ (97,793)
========== ========== ========== ==========
(a) EBITDA as defined for this statistical presentation represents net
income (loss) 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-operating
gains (losses); non-cash impairment charges and writedowns, 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
when given. 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
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.
VALUE VISION MEDIA, INC.
Key Performance Metrics*
(Unaudited)
Q4 YTD
For the three months ending For the twelve months ending
1/30/2010 1/31/2009 % 1/30/2010 1/31/2009 %
-------- -------- -------- --------- -------- --------
Program
Distribution
Cable FTEs 44,543 43,614 2% 43,927 43,127 2%
Satellite
FTEs 30,158 28,843 5% 29,649 28,613 4%
-------- -------- -------- --------- -------- --------
Total FTEs
(Average
000s) 74,701 72,457 3% 73,576 71,740 3%
Net Sales per
FTE
(Annualized) $ 8.32 $ 7.98 4% $ 7.17 $ 7.88 -9%
Customer
Counts
Year-to-Date
New 168,926 122,311 38% 523,314 321,054 63%
Active 491,814 372,292 32% 1,021,725 753,538 36%
Product Mix
Jewelry 20% 29% 23% 36%
Apparel,
Fashion
Accessories
and
Health &
Beauty 15% 15% 13% 12%
Computers &
Electronics 17% 28% 18% 22%
Watches,
Coins &
Collectibles 33% 22% 34% 22%
Home & All
Other 15% 6% 12% 8%
Net Shipped
Units (000s) 1,519 988 54% 4,537 3,088 47%
Average Price
Point - net
units $ 96 $ 139 -31% $ 108 $ 176 -39%
Return Rate 19.0% 25.9% -6.9ppt 21.0% 31.2% -10.2ppt
-------- -------- -------- --------- -------- --------
*Includes ShopNBC TV and ShopNBC.com only.
Contact Info:
ShopNBC
Investor & Media Relations
Anthony Giombetti
agiombetti@shopnbc.com
612-308-1190
