ValueVision Media Reports Q3 2013 Results

ValueVision Media Reports Q3 2013 Results 
MINNEAPOLIS, MN -- (Marketwired) -- 11/20/13 --  ValueVision Media,
Inc. (NASDAQ: VVTV), a multichannel electronic retailer that reaches
over 86 million homes via TV, Internet and mobile, today announced
results for its fiscal 2013 third quarter (Q3'13) ended November 2,
2013. ValueVision will host an investor conference call/webcast today
at 4:30 pm ET, details below. ValueVision is finalizing the
transition of its consumer brand to ShopHQ from ShopNBC. 
ValueVision's Q3'13 net sales increased 7% to $147 million versus
Q3'12, driven primarily by strong sales results in the Fashion &
Accessories and Home & Consumer Electronics categories. Adjusted
EBITDA improved to $4 million in Q3'13 versus $1 million in the same
quarter last year, reflecting higher sales and improved gross profit
margin. The Company reported a Q3'13 net loss of $1 million, or
($0.02) per share, compared to a net loss of $4 million, or ($0.08)
per share, in Q3'12. 
Year to date, ValueVision reported net sales up 9% to $447 million,
adjusted EBITDA of $13 million compared to an approximate breakeven
adjusted EBITDA position last year, and a net loss of $1 million or
($0.02) per share, compared to a net loss of $16 million or ($0.33)
per share, for the same period last year. 


 
                                                                            
SUMMARY RESULTS AND KEY OPERATING METRICS                                   
($ Millions, except per share and average price points)                     
                                                                            
                    Three months ended              Nine months ended       
             -------------------------------  ----------------------------- 
              11/2/2013  10/27/2012           11/2/2013  10/27/2012         
             ----------  ----------           ---------  ----------         
               Q3 '13      Q3 '12     Change     YTD         YTD     Change 
             ----------  ----------  -------  ---------  ----------  ------ 
Net Sales    $      147  $      138        7% $     447  $      409       9%
Gross Profit $       55  $       51        9% $     168  $      154       9%
Gross Profit                                                                
 %                 37.5%       36.9%   60bps       37.5%       37.5%      - 
EBITDA, as                                                                  
 adjusted    $        4  $        1  $     3  $      13  $        0  $   13 
Net                                                                         
 Income/                                                                
 (Loss)      $       (1) $       (4) $     3  $      (1) $      (16) $   15 
Net                                                                         
 Income/                                                                
 (Loss) per                                                                     
 Share       $    (0.02) $    (0.08) $  0.06  $   (0.02) $    (0.33) $ 0.31 
                                                                            
Homes                                                                       
 (Average                                                                   
 000s)           86,605      83,268        4%    85,958      82,366       4%
Net Shipped                                                                 
 Units                                                                      
 (000s)           1,665       1,273       31%     4,789       3,857      24%
Average                                                                     
 Price Point $       80  $      100      -20% $      85  $       99     -14%
Return Rate                                                                 
 %                 22.8%       23.5%  -70bps       22.6%       22.1%  50bps 
Internet Net                                                                
 Sales %           47.2%       44.8%  240bps       46.2%       45.4%  80bps 
Total                                                                       
 Customers -                                                                
 12 month                                                                   
 rolling      1,246,018   1,098,363       13%       N/A         N/A         

 
Total customers purchasing over the last 12 months rose 13% to 1.25
million. The growth in the customer base reflects continued
diversification of the Company's merchandise at lower price points as
well as a product mix shift from the Jewelry & Watches category to
the Fashion & Accessories and Home & Consumer Electronics categories.
Improvements in customer satisfaction and channel positioning also
contributed to customer growth. In addition, the size of the total
customer base who purchased during the three months of Q3'13
increased 20% versus last year's same period. 
Net shipped units rose 31% to 1.7 million in Q3'13, over the same
quarter last year, reflecting a broader merchandise mix and a 20%
decline in the average price point. Internet sales penetration
increased 240 bps to 47%. Mobile net sales grew 45%, increasing to
22% of Internet sales compared to 18% in Q3'12.  
ValueVision CEO, Keith Stewart, said, "We are pleased with our
operating performance in the third quarter, which marked our sixth
consecutive quarter of sales growth and positive Adjusted EBITDA. We
continued to improve our product offerings and to diversify our
product mix. We achieved double-digit customer growth. Our rebranding
to ShopHQ, your shopping headquarters, is largely complete, and we
believe we are well positioned for the holiday season."  
ValueVision EVP and CFO, William McGrath, said, "Our balance sheet
condition remains strong. We ended the third quarter with a cash
balance, including restricted cash, of $31 million. ValueVision
maintains $12 million in undrawn availability under its $50 million
credit facility with PNC." 
Conference Call / Webcast Today, Wednesday, November 20th at 4:30 pm
ET: 
WEBCAST/WEB REPLAY: http://www.media-server.com/m/p/e7s2e6pp 
TELEPHONE: 866-700-0133; Passcode: 18107976 
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 debt extinguishment; non-operating gains (losses);
non-cash impairment charges and write-downs; activist shareholder
response 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 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 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 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 cons
trued 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), its most directly comparable GAAP
financial measure, in this release.  
About ValueVision Media, ShopNBC and ShopHQ 
ValueVision Media, Inc. is a multichannel retailer that enables
customers to shop and interact via TV, phone, Internet and mobile in
the merchandise categories of Home & Consumer Electronics, Beauty,
Health & Fitness, Fashion & Accessories, and Jewelry & Watches.
ValueVision is transitioning its consumer brand to ShopHQ, your
shopping headquarters, from ShopNBC over the balance of fiscal 2013.
ValueVision's television network reaches over 86 million cable and
satellite homes and is also available nationwide via live streaming
at www.shophq.com. Please visit www.shophq.com/ir for more investor
information. 
Forward-Looking Information 
This release may contain 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; our
ability to successfully transition our brand name; 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 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. 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 o
bligation) to update or
alter its forward-looking statements whether as a result of new
information, future events or otherwise. 
Important Information  
This release may be deemed to be solicitation material in respect of
the solicitation of proxies from shareholders in connection with one
or more meetings of the Company's stockholders, including a special
meeting of shareholders, if such a meeting is called. The Company,
its directors and certain of its executive officers and employees may
be deemed to be participants in the solicitation of proxies from
shareholders in connection with any such meetings of shareholders.
Information concerning these directors and executive officers in
connection with the matters to be voted on at any such meeting that
may be held will be included in the proxy statement filed by the
Company with the Securities and Exchange Commission (the "SEC") in
connection with any such meeting. In addition, the Company files
annual, quarterly and special reports, proxy and information
statements, and other information with the SEC. Any proxy statement,
any other relevant documents and any other material filed with the
SEC concerning the Company will be, when filed, available free of
charge at the SEC website at http://www.sec.gov. SHAREHOLDERS ARE
URGED TO READ CAREFULLY ANY SUCH PROXY STATEMENT FILED BY THE COMPANY
AND ANY OTHER RELEVANT DOCUMENTS FILED WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING
INFORMATION WITH RESPECT TO PARTICIPANTS. 


 
                                                                            
                               (tables follow)                              
                                                                            
                                                                            
                                                                            
                          VALUEVISION MEDIA, INC.                           
                              AND SUBSIDIARIES                              
                        CONSOLIDATED BALANCE SHEETS                         
               (In thousands except share and per share data)               
                                                                            
                                                 November 2,    February 2, 
                                                    2013           2013     
                                                ------------   ------------ 
                                                 (Unaudited)                
                                                                            
                                   ASSETS                                   
Current assets:                                                             
  Cash and cash equivalents                     $     28,996   $     26,477 
  Restricted cash and investments                      2,100          2,100 
  Accounts receivable, net                            86,995         98,360 
  Inventories                                         54,608         37,155 
  Prepaid expenses and other                           6,717          6,620 
                                                ------------   ------------ 
    Total current assets                             179,416        170,712 
Property and equipment, net                           24,806         24,665 
FCC broadcasting license                              12,000         12,000 
NBC trademark license agreement, net                     999          3,997 
Other assets                                             814            725 
                                                ------------   ------------ 
                                                $    218,035   $    212,099 
                                                ============   ============ 
                                                                            
                    LIABILITIES AND SHAREHOLDERS' EQUITY                    
Current liabilities:                                                        
  Accounts payable                              $     66,554   $     65,719 
  Accrued liabilities                                 33,308         30,596 
  Deferred revenue                                        85             85 
                                                ------------   ------------ 
    Total current liabilities                         99,947         96,400 
                                                                            
                                                                            
Long term capital lease liability                        101              - 
Deferred revenue                                         356            420 
Long term deferred tax liability                         869              - 
Long term credit facility                             38,000         38,000 
                                                ------------   ------------ 
    Total liabilities                                139,273        134,820 
                                                                            
Commitments and contingencies                                               
                                                                            
Shareholders' equity:                                                       
  Common stock, $.01 par value, 100,000,000                                 
   shares authorized; 49,637,003 and                                        
   49,139,361 shares issued and outstanding              496            491 
                                                                            
  Warrants to purchase 6,000,000 shares of                                  
   common stock                                          533            533 
                                                                            
  Additional paid-in capital                         409,715        407,244 
                                                                            
  Accumulated deficit                               (331,982)      (330,989)
                                                ------------   ------------ 
    Total shareholders' equity                        78,762         77,279 
                                                ------------   ------------ 
                                                $    218,035   $    212,099 
                                                ============   ============ 
                                                                            
                                                                            
                                                                            
                          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 
                            Periods Ended                   Ended           
                     --------------------------  -------------------------- 
                                                                            
                      November 2,   October 27,   November 2,   October 27, 
                         2013          2012          2013          2012     
                     ------------  ------------  ------------  ------------ 
Net sales            $    147,318  $    137,592  $    447,236  $    409,320 
Cost of sales              92,083        86,802       279,311       255,818 
                     ------------  ------------  ------------  ------------ 
    Gross profit           55,235        50,790       167,925       153,502 
    Margin %                 37.5%         36.9%         37.5%         37.5%
Operating expense:                                                          
  Distribution and                                                          
   selling                 46,683        46,762       139,477       142,308 
  General and                                                               
   administrative           6,086         4,242        18,155        13,446 
  Depreciation and                                                          
   amortization             3,039         3,174         9,342        10,026 
                     ------------  ------------  ------------  ------------ 
    Total operating                                                         
     expense               55,808        54,178       166,974       165,780 
                     ------------  ------------  ------------  ------------ 
Operating in
come                                                            
 (loss)                      (573)       (3,388)          951       (12,278)
                     ------------  ------------  ------------  ------------ 
                                                                            
Other expense:                                                              
  Interest income               3             7            17            11 
  Interest expense           (355)         (379)       (1,081)       (3,571)
  Gain on sale of                                                           
   assets                       -           100             -           100 
  Loss on debt                                                              
   extinguishment               -             -             -          (500)
                     ------------  ------------  ------------  ------------ 
    Total other                                                             
     expense                 (352)         (272)       (1,064)       (3,960)
                     ------------  ------------  ------------  ------------ 
                                                                            
Loss before income                                                          
 taxes                       (925)       (3,660)         (113)      (16,238)
                                                                            
Income tax provision         (292)          (15)         (880)          (21)
                     ------------  ------------  ------------  ------------ 
                                                                            
Net loss             $     (1,217) $     (3,675) $       (993) $    (16,259)
                     ============  ============  ============  ============ 
                                                                            
Net loss per common                                                         
 share               $      (0.02) $      (0.08) $      (0.02) $      (0.33)
                     ============  ============  ============  ============ 
                                                                            
Net loss per common                                                         
 share                                                                      
  ---assuming                                                               
   dilution          $      (0.02) $      (0.08) $      (0.02) $      (0.33)
                     ============  ============  ============  ============ 
                                                                            
Weighted average                                                            
 number of                                                                  
common shares                                                               
 outstanding:                                                               
    Basic              49,604,860    48,931,464    49,412,646    48,807,749 
                     ============  ============  ============  ============ 
    Diluted            49,604,860    48,931,464    49,412,646    48,807,749 
                     ============  ============  ============  ============ 
                                                                            
                                                                            
                                                                            
                          VALUEVISION MEDIA, INC.                           
                              AND SUBSIDIARIES                              
                                                                            
               Reconciliation of Adjusted EBITDA to Net Loss:               
                                                                            
                                                                            
                         For the Three Month     For the Nine Month Periods 
                            Periods Ended                   Ended           
                     --------------------------  -------------------------- 
                                                                            
                      November 2,   October 27,   November 2,   October 27, 
                         2013          2012          2013          2012     
                     ------------  ------------  ------------  ------------ 
                                                                            
Adjusted EBITDA                                                             
 (000's)             $      3,595  $        561  $     13,170  $        301 
Less:                                                                       
  Activist                                                                  
   shareholder                                                              
   response costs            (344)            -          (344)            - 
  Debt                                                                      
   extinguishment               -             -             -          (500)
  Gain on sale of                                                           
   assets                       -           100             -           100 
  Non-cash share-                                                           
   based                                                                    
   compensation              (718)         (725)       (2,368)       (2,403)
                     ------------  ------------  ------------  ------------ 
EBITDA (as defined)                                                         
 (a)                        2,533           (64)       10,458        (2,502)
                     ------------  ------------  ------------  ------------ 
                                                                            
A reconciliation of                                                         
 EBITDA to net loss                                                         
 is as follows:                                                             
                                                                            
EBITDA (as defined)                                                         
 (a)                        2,533           (64)       10,458        (2,502)
Adjustments:                
                                                
  Depreciation and                                                          
   amortization            (3,106)       (3,224)       (9,507)      (10,176)
  Interest income               3             7            17            11 
  Interest expense           (355)         (379)       (1,081)       (3,571)
  Income taxes               (292)          (15)         (880)          (21)
                     ------------  ------------  ------------  ------------ 
Net loss             $     (1,217) $     (3,675) $       (993) $    (16,259)
                     ============  ============  ============  ============ 

 
(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, activist shareholder response 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 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 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. 
Contacts 
Media: 
Dawn Zaremba 
ShopHQ 
dzaremba@shophq.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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