ValueVision Media Reports Q4 and Fiscal 2012 Results

ValueVision Media Reports Q4 and Fiscal 2012 Results 
MINNEAPOLIS, MN -- (Marketwire) -- 03/06/13 --  ValueVision Media,
Inc. (NASDAQ: VVTV), a multichannel electronic retailer operating as
ShopNBC (www.shopnbc.com), today announced operating results for its
fiscal 2012 fourth quarter (Q4'12) and year ended February 2, 2013.
ValueVision will host an investor conference call/webcast today at
4:30 pm ET, details below. 
During the fourth quarter, ValueVision achieved net sales of $177.5
million, adjusted EBITDA of $4.2 million, and a net loss of $11.4
million. For the full fiscal year, the Company achieved net sales of
$586.8 million, adjusted EBITDA of $4.5 million, and a net loss of
$27.7 million.  
Because ValueVision follows a 4-5-4 retail calendar, every five to
six years the Company has an extra week of operations, and this
occurred in fiscal 2012. Therefore, Q4'12 and full year periods have
14 and 53 weeks, respectively, as compared to the same periods last
year of 13 and 52 weeks. To facilitate more meaningful comparisons
with fiscal 2011 results, ValueVision is presenting in the table
below pro forma results for Q4 and fiscal 2012, reflecting current
period results on an equivalent 13- and 52-week basis. Q4'12 pro
forma results were calculated by dividing actual Q4'12 results by 14
and by multiplying the quotients by 13. The 52-week pro formas were
calculated by adding the Q4 13-week pro formas to the previously
reported fiscal year-to-date Q3 results of operations. 


 
                                                                            
SUMMARY RESULTS AND KEY OPERATING METRICS -- FOURTH QUARTER                 
                                                                            
($ Millions, except average price points)                                   
                                                                            
                                   Actual   Pro Forma    Actual   Pro Forma 
                                   Q4'12      Q4'12      Q4'11      Change  
                                  2/2/2013             1/28/2012            
                                  14 Weeks   13 Weeks   13 Weeks   13 Weeks 
                                 ---------  ---------  ---------  --------- 
Net Sales          
              $   177.5  $   164.8  $   147.5       11.7%
Gross Profit                     $    58.9  $    54.7  $    49.2       11.1%
Gross Profit %                        33.2%      33.2%      33.3%    -10bps 
EBITDA, as adjusted              $     4.2  $     3.9  $    (2.7) $     6.6 
                                                                            
Loss Before Write Downs          $    (0.3) $    (0.3) $    (8.3) $     8.0 
  FCC License Impairment         $   (11.1) $   (11.1) $       -  $   (11.1)
  Debt Extinguishment            $       -  $       -  $       -  $       - 
                                 ---------  ---------  ---------  --------- 
Net Loss                         $   (11.4) $   (11.4) $    (8.3) $    (3.1)
                                 =========  =========  =========  ========= 
                                                                            
Homes (Average 000s)                83,914     83,900     81,162        3.4%
Net Shipped Units (000s)             1,763      1,637      1,467       11.6%
Average Selling Price            $      92  $      92  $      93       -1.1%
Return Rate %                         22.1%      22.1%      22.2%    -10bps 
Internet Net Sales %                  46.3%      46.3%      44.7%   +160bps 

 
                                                                            
                                                   
                         
SUMMARY RESULTS AND KEY OPERATING METRICS -- FISCAL YEAR                    
                                                                            
($ Millions, except average price points)                                   
                                                                            
                                   Actual   Pro Forma    Actual   Pro Forma 
                                   FY'12      FY'12      FY'11      Change  
                                  2/2/2013             1/28/2012            
                                  53 Weeks   52 Weeks   52 Weeks   52 Weeks 
                                 ---------  ---------  ---------  --------- 
Net Sales                        $   586.8  $   574.1  $   558.4        2.8%
Gross Profit                     $   212.4  $   208.3  $   204.1        2.0%
Gross Profit %                        36.2%      36.3%      36.6%   -30 bps 
EBITDA, as adjusted              $     4.5  $     4.2  $     1.0  $     3.2 
                                                                            
Loss Before Write Downs          $   (16.1) $   (16.0) $   (22.4) $     6.4 
  FCC License Impairment         $   (11.1) $   (11.1) $       -  $   (11.1)
  Debt Extinguishment            $    (0.5) $    (0.5) $   (25.7) $    25.2 
                                 ---------  ---------  ---------  --------- 
Net Loss                         $   (27.7) $   (27.6) $   (48.1) $    20.5 
                                 =========  =========  =========  ========= 
                                                                            
Homes (Average 000s                 82,761     82,757     79,822        3.7%
Net Shipped Units (000s)             5,620      5,494      4,947       11.1%
Average Selling Price            $      96  $      96  $     104       -7.7%
Return Rate %                         22.1%      22.1%      22.6%    -50bps 
Internet Net Sales %                  45.7%      45.7%      44.9%    +80bps 

 
Management believes that the pro forma Q4'12 and full fiscal 2012
results are a more appropriate basis for analysis and comparison to
prior-year results. Therefore, the Company's subsequent commentary
will utilize pro forma results presented in the above table.  
The Company's Q4'12 pro forma net sales rose 11.7% to $164.8 million
over Q4'11. Sales growth was achieved by a significant rebound in the
Consumer Electronics category and by solid performances in the Home
and Beauty segments. Pro forma adjusted EBITDA improved to a positive
$3.9 million in Q4'12 vs. a loss of $2.7 million last year,
reflecting higher sales and lower distribution costs. 
Pro forma net shipped units rose 11.6% to 1.6 million in Q4'12 vs.
Q4'11, reflecting the benefit of continued improvements to the
Company's merchandise mix as well as a modest decline in average
price points. Internet Net Sales increased 160 bps to 46.3% versus
Q4'11, principally driven by growth in mobile transaction volume
compared to last year. 
For the full year 2012, pro forma net sales grew 2.8% to $574.1
million, while pro forma adjusted EBITDA for the year improved to
$4.2 million compared to $1.0 million in 2011. ValueVision also
increased its distribution footprint to 84 million homes at year-end
2012 and began calendar 2013 with two channels of exposure in 70% of
its homes. 
ValueVision CEO Keith Stewart, commented, "I am encouraged by our
performance this quarter and believe we have made further progress
toward our goals. We overcame the adverse impact of Superstorm Sandy
on our business in the first few weeks of Q4'12 to post solid net
sales growth for the quarter. We also achieved continued improvements
in both new and active customer counts versus last year, providing
further evidence that our customer service, engagement and retention
initiatives are resonating with our customers." 
Added Mr. Stewart, "With the start of 2013, we are benefiting from
reduced TV distribution costs negotiated last year and improved
channel positioning. Overall, we feel our Q4 performance is another
step forward toward realizing the full potential of our business." 
ValueVision EVP & CFO William McGrath, stated, "ValueVision ended the
year with $28 million in cash and restricted cash versus $32 million
at the end of Q3'12. The net use of cash in the quarter was primarily
due to the increase in accounts receivable, reflecting higher Q4
sales. We anticipate the collection of these accounts receivable will
provide positive cash flow in Q1'13." 
As a result of ValueVision's annual asset impairment analysis, the
Company recorded a non-cash impairment charge of $11.1 million in
Q4'12 related to its Boston television station and FCC broadcast
license. This adjustment to carrying value reflects current trends in
revenues and operating margins among independent television station
properties as well as recent comparable market transactions. The
impairment charge reduced the Company's FCC license asset carrying
value of $23.1 million to $12.0 million. 
Conference Call / Webcast Today, Wednesday, March 6 at 4:30 pm ET: 
WEBCAST/WEB REPLAY: http://www.media-server.com/m/p/67fgny7u 
TELEPHONE: 866-383-8009; Passcode: 65252850 
Adjusted EBITDA  
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
debt extinguishment, non-operating gains (losses); non-cash
impairment charges and write-downs; restructuring; 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), 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 loss, its most directly comparable GAAP financial
measure, in this release.  
About ValueVision Media/ShopNBC (www.shopnbc.com/ir)  
ValueVision Media, Inc. operates ShopNBC, a multichannel electronic
retailer that enables customers to shop via TV, phone, Internet and
mobile devices and to interact via the ShopNBC website as well as
Facebook, Twitter and YouTube. The ShopNBC television network reaches
84 million c
able and satellite homes and is also available nationwide
on PCs, tablets and iPhone, Android and other mobile devices via live
streaming at www.shopnbc.com. ShopNBC's merchandise categories
include Home & Consumer Electronics, Beauty, Health & Fitness,
Fashion & Accessories, and Jewelry & Watches. Please visit
www.shopnbc.com/ir for more investor information. 
Forward-Looking Information  
This release contains certain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. 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; 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; our ability to manage our operating
expenses successfully and our working capital levels; our ability to
remain compliant with our long-term credit facility covenants; the
market demand for television station sales; our management and
information systems infrastructure; challenges to our data and
information security; changes in governmental or regulatory
requirements; 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; and our ability to obtain and retain
key executives and employees. More detailed information about those
factors i
s 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. You are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date of this announcement. 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. 
(tables follow) 


 
                                                                            
                          VALUEVISION MEDIA, INC.                           
                              AND SUBSIDIARIES                              
                        CONSOLIDATED BALANCE SHEETS                         
               (In thousands except share and per share data)               
                                                                            
                                                  February 2,   January 28, 
                                                     2013          2012     
                                                 ------------  ------------ 
                                                  (Unaudited)               
                                                                            
                                   ASSETS                                   
Current assets:                                                             
  Cash and cash equivalents                      $     26,477  $     32,957 
  Restricted cash and investments                       2,100         2,100 
  Accounts receivable, net                             98,360        80,274 
  Inventories                                          37,155        43,476 
  Prepaid expenses and other                            6,620         4,464 
                                                 ------------  ------------ 
    Total current assets                              170,712       163,271 
Property and equipment, net                            24,665        27,992 
FCC broadcasting license                               12,000        23,111 
NBC trademark license agreement, net            
        3,997         1,215 
Other assets                                              725         2,871 
                                                 ------------  ------------ 
                                                 $    212,099  $    218,460 
                                                 ============  ============ 
                                                                            
                    LIABILITIES AND SHAREHOLDERS' EQUITY                    
                                                                            
Current liabilities:                                                        
  Accounts payable                               $     65,719  $     53,437 
  Accrued liabilities                                  30,596        37,842 
  Deferred revenue                                         85            85 
                                                 ------------  ------------ 
    Total current liabilities                          96,400        91,364 
                                                                            
                                                                            
Deferred revenue                                          420           507 
Term loan                                                   -        25,000 
Long term credit facility                              38,000             - 
                                                 ------------  ------------ 
    Total liabilities                                 134,820       116,871 
                                                                            
Commitments and contingencies                                               
                                                                            
Shareholders' equity:                                                       
  Common stock, $.01 par value, 100,000,000                                 
   shares authorized; 49,139,361 and 48,560,205                             
   shares issued and outstanding                          491           486 
                                                                            
  Warrants to purchase 6,000,000 and 6,007,372                              
   shares of common stock                                 533           567 
                                                                            
  Additional paid-in capital                          407,244       403,849 
                                                                            
  Accumulated deficit                                (330,989)     (303,313)
                                                 ------------  ------------ 
    Total shareholders' equity                         77,279       101,589 
                                                 ------------  ------------ 
                                                 $    212,099  $    218,460 
                                                 ============  ============ 
                                                                            
                                                                            
                          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      
                         ---------------
---------  ------------------------ 
                                                                            
                         February 2,  January 28,  February 2,  January 28, 
                             2013         2012         2013         2012    
                         -----------  -----------  -----------  ----------- 
Net sales                $   177,500  $   147,537  $   586,820  $   558,394 
Cost of sales                118,630       98,344      374,448      354,299 
                         -----------  -----------  -----------  ----------- 
      Gross profit            58,870       49,193      212,372      204,095 
      Margin %                  33.2%        33.3%        36.2%        36.6%
Operating expense:                                                          
  Distribution and                                                          
   selling                    50,729       48,447      193,037      188,813 
  General and                                                               
   administrative              4,851        4,746       18,297       19,542 
  Depreciation and                                                          
   amortization                3,198        3,300       13,224       12,578 
  FCC license impairment      11,111            -       11,111            - 
                         -----------  -----------  -----------  ----------- 
    Total operating                                                         
     expense                  69,889       56,493      235,669      220,933 
                         -----------  -----------  -----------  ----------- 
Operating loss               (11,019)      (7,300)     (23,297)     (16,838)
                         -----------  -----------  -----------  ----------- 
                                                                            
Other expense:                                                              
  Interest income                  -            3           11           64 
  Interest expense              (399)        (999)      (3,970)      (5,527)
  Gain on sale of assets           -            -          100            - 
  Loss on debt                                                              
   extinguishment                  -            -         (500)     (25,679)
                         -----------  -----------  -----------  ----------- 
    Total other expense         (399)        (996)      (4,359)     (31,142)
                         -----------  -----------  -----------  ----------- 
                                                                            
Loss before income taxes     (11,418)      (8,296)     (27,656)     (47,980)
                                                                            
Income tax provision               -          (32)         (20)         (84)
                         -----------  -----------  -----------  ----------- 
                                                                            
Net loss                 $   (11,418) $    (8,328) $   (27,676) $   (48,064)
                         ===========  ===========  ===========  =========== 
                                                                            
Net loss per common                                                         
 share                   $     (0.23) $     (0.17) $     (0.57) $     (1.03)
                         ===========  ===========  ===========  =========== 
                                                                            
Net loss per common                                                         
 share---assuming                                                           
 dilution                $     (0.23) $     (0.17) $     (0.57) $     (1.03)
                         ===========  ===========  ===========  =========== 
                                                                            
Weighted average number                                                     
 of common shares                                                           
 outstanding:                                                               
      Basic               49,076,122   48,546,447   48,874,842   46,451,262 
                         ===========  ===========  ===========  =========== 
      Diluted             49,076,122   48,546,447   48,874,842   46,451,262 
                         ===========  ===========  ===========  =========== 
                                                                            
                                                                            
                          VALUEVISION MEDIA, INC.                           
                              AND SUBSIDIARIES                              
                                                                            
               Reconciliation of Adjusted EBITDA to Net Loss:               
                                                                            
                            For the Three Month      For the Twelve Month   
                               Periods Ended             Periods Ended      
                         ------------------------  ------------------------ 
                                                                            
                         February 2,  January 28,  February 2,  January 28, 
                             2013         2012         2013         2012    
                         -----------  -----------  -----------  ----------- 
                                                                            
                
                                                            
Adjusted EBITDA (000's)  $     4,194  $    (2,681) $     4,494  $       996 
Less:                                                                       
  FCC license impairment     (11,111)           -      (11,111)           - 
  Debt extinguishment              -            -         (500)     (25,679)
  Gain on sale of assets           -            -          100            - 
  Non-cash share-based                                                      
   compensation                 (854)      (1,270)      (3,257)      (5,007)
                         -----------  -----------  -----------  ----------- 
EBITDA (as defined) (a)       (7,771)      (3,951)     (10,274)     (29,690)
                         -----------  -----------  -----------  ----------- 
                                                                            
                                                                            
A reconciliation of                                                         
 EBITDA to net loss is                                                      
 as follows:                                                                
                                                                            
EBITDA (as defined) (a)       (7,771)      (3,951)     (10,274)     (29,690)
Adjustments:                                                                
  Depreciation and                                                          
   amortization               (3,248)      (3,349)     (13,423)     (12,827)
  Interest income                  -            3           11           64 
  Interest expense              (399)        (999)      (3,970)      (5,527)
  Income taxes                     -          (32)         (20)         (84)
                         -----------  -----------  -----------  ----------- 
Net loss                 $   (11,418) $    (8,328) $   (27,676) $   (48,064)
                         ===========  ===========  ===========  =========== 

 
(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 Adjusted EBITDA as EBITDA excluding debt
extinguishment, non-operating gains (losses); non-cash impairment
charges and writedowns, restructuring costs; and non-cash share-based
compensation expense. 
Management has included the term Adjusted EBITDA 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
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), net 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. Adjusted EBITDA may not
be comparable to similarly entitled measures reported by other
companies.  
Contact:
Media Relations: 
Dawn Zaremba 
ShopNBC 
dzaremba@shopnbc.com
(952) 943-6043 O 
Investors:
David Collins, Eric Lentini
Catalyst Global LLC
vvtv@catalyst-ir.com
(212) 924-9800 O 
(917) 734-0339 M 
 
 
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