EXHIBIT 99
[VALUEVISION LOGO]
For Immediate Release
VALUEVISION MEDIA REPORTS RECORD FISCAL SECOND QUARTER 2003
TV AND INTERNET RESULTS
MINNEAPOLIS, AUGUST 20 -- ValueVision Media (Nasdaq: VVTV), which owns and
operates ShopNBC and ShopNBC.com, today announced financial results for the
second quarter ended July 31, 2003.
FINANCIAL AND DISTRIBUTION HIGHLIGHTS FOR THE SECOND QUARTER ENDED JULY 31, 2003
-- Consolidated net sales a second quarter record $144 million, up
12% over prior-year period
-- Internet net sales a second quarter record $26 million, up 33%
over previous-year quarter
-- EBITDA (as defined below) was $3.6 million, up 10% over year-ago
quarter
-- Full-time equivalent (FTE) homes of 53 million, up 400,000 from
last quarter
"In the face of a difficult economic, post-Iraq environment, I am pleased to say
that our performance for the second quarter was at the high-end of expectations
and revenue growth out-paced our peer group. Internet sales were particularly
strong and gross margin improved again to 37.6%," said Gene McCaffery,
ValueVision Media Chairman and CEO. "Additionally in the quarter, we continued
to broaden our merchandise mix and lower our price points by introducing brand
name cosmetics and apparel lines, such as Benefit Cosmetics and Jones New York,
which were well-received by our customer base."
Added McCaffery, "The `Shop & Style' test-show on NBC, which concluded last
Friday, was a great learning experience for us and NBC. We determined there is
definitely a viewer interest in this kind of programming. Merchandise was more
diversified and the price points were lower than what has been traditionally
sold on ShopNBC. The lower price points and greater diversity of merchandise is
where we want to be, so you could say the `Shop & Style' show format and
merchandise selection is a glimpse of things to come. In the meantime, we're
going to digest the information from this test, conduct a number of consumer
research projects and further explore our options with NBC on this unique show
concept."
EBITDA was $3.6 million for the quarter. The Company defines EBITDA as its
operating income (loss) for respective periods being reported excluding
depreciation and amortization expense.
BUSINESS HIGHLIGHTS FOR THE SECOND QUARTER ENDED JULY 31, 2003
-- "Shop & Style" Show Test With NBC Concluded
-- ShopNBC Continues to Diversify Merchandise Mix
-- ShopNBC Achieved Record Sales During Second Annual All-Star
Anniversary Weekend in June
"SHOP & STYLE" SHOW TEST WITH NBC CONCLUDED
"Shop & Style" concluded its test run Friday, August 15th. The purpose of the
show was to explore the appeal of commerce-oriented, entertainment programming
with NBC's daytime audience and whether that influence would entice viewers to
purchase product by leveraging the talents of both media companies. The Company
learned there is a definite viewer interest in this kind of programming.
Additionally, the show provided ShopNBC with increased online traffic, new
customers, and additional awareness in four major U.S. markets, including New
York City, San Francisco, Chicago, and Philadelphia. The next step is to
evaluate the results and determine where to go with the concept.
SHOPNBC CONTINUES TO DIVERSIFY MERCHANDISE MIX AND PROGRAMMING PARTNERS
In the second quarter, ShopNBC continued to expand and diversify its merchandise
mix and programming partners. Popular brands added include Kitchen Aid,
Delongli, Schwinn Scooters, Sirius Satellite Radio, Benefit cosmetics, Jones
apparel, Karen Kane, Nine West and Bandalino shoes, Cuisinart, Discovery
Channel, Wustof Trident, Reebok treadmills, and Champion Clothing.
SHOPNBC ACHIEVED RECORD ORDERS IN SECOND ANNUAL ALL-STAR ANNIVERSARY WEEKEND
IN JUNE
On June 20-23, ShopNBC achieved record sales in its second annual All-Star
Anniversary Weekend - the single largest promotion of the year for the Company
where vendors offer customers the best in merchandise values. During the weekend
sales event, the Company achieved $20.8 million in orders with ShopNBC.com
contributing $4.2 million to the order total, including the first ever three
consecutive million dollar plus days of on-line sales.
OUTLOOK FOR THE THIRD QUARTER ENDING OCTOBER 31, 2003
-- Consolidated net sales expected to be $153 million to $158
million, up 13% to 16% over the prior-year period
-- EBITDA for the quarter expected to be $3 million to $5 million
"We are cautiously optimistic on the direction of the economy leading out of the
second quarter," said Dick Barnes, ValueVision Media EVP, COO, and CFO. "Our
guidance assumes a continuing improvement in economic conditions and consumer
spending through the third and fourth quarters."
This release contains certain "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements are based
on management's current expectations and are accordingly subject to uncertainty
and changes in circumstances. Actual results may vary materially from the
expectations contained herein due to various important factors, including (but
not limited to): consumer spending and debt levels; interest rates; competitive
pressures on sales, pricing and gross profit margins; the level of cable
distribution for the Company's programming and the fees associated therewith;
the success of the Company's e-commerce initiatives; the success of its
strategic alliances and relationships; the ability of the Company to manage its
operating expenses successfully; risks associated with acquisitions; changes in
governmental or regulatory requirements; litigation or governmental proceedings
affecting the Company's operations; and the ability of the Company to obtain and
retain key executives and employees. More detailed information about those
factors is set forth in the Company's filings with the Securities and Exchange
Commission, including the Company's annual report on Form 10-K, quarterly
reports on Form 10-Q, and current reports on Form 8-K. The Company is under no
obligation (and expressly disclaims any such obligation to) update or alter its
forward-looking statements whether as a result of new information, future events
or otherwise.
ValueVision Media operates in the converged world of television, the Internet,
and e-commerce. The live home shopping industry, the majority of ValueVision's
business, is $7 billion and growing at a double digit rate annually while the
attendant e-commerce space is many times that size and also growing
substantially. The Company owns and operates the nation's third largest home
shopping network, ShopNBC, with fiscal 2002 sales of $555 million. At the close
of fiscal 2002, ShopNBC was broadcast into approximately 55 million cable and
satellite homes. The Company also operates ShopNBC.com, which contributed $94
million in sales in fiscal 2002. In addition, the Company operates wholly owned
subsidiary FanBuzz, a leading provider of e- commerce solutions to sports,
entertainment, and media brands, such as the National Hockey League, The Weather
Channel, and ESPN. GE Equity and NBC own approximately 40% of ValueVision Media.
For more information, please visit the Company's website at
www.valuevisionmedia.com .
###
VALUEVISION MEDIA, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
For the Three Months Ended For the Six Months Ended
July 31, July 31,
2003 2002 2003 2002
Net sales $ 144,214 $ 128,336 $ 287,689 $ 261,185
Cost of sales 89,933 79,924 180,319 160,954
Gross profit 54,281 48,412 107,370 100,231
Operating (income)
expense:
Distribution and
selling 45,773 41,215 93,450 83,568
General and
administrative 4,939 3,945 10,337 8,106
Depreciation and
amortization 4,301 4,097 8,554 7,418
Gain on sale of
television stations -- -- (4,417) --
Total operating
(income) expense 55,013 49,257 107,924 99,092
Operating income (loss) (732) (845) (554) 1,139
Other income (expense):
Gain (loss) on sale
and conversion of
investments 361 (526) 361 (532)
Unrealized gain on
security holdings -- -- -- 1,021
Write-down of
investments -- (86) -- (1,070)
Equity in losses
of affiliates -- (2,132) -- (4,230)
Interest income 395 1,091 749 2,127
Total other
income (expense) 756 (1,653) 1,110 (2,684)
Income (loss)
before income taxes 24 (2,498) 556 (1,545)
Income tax provision
(benefit) 100 (906) 100 (563)
Net income (loss) (76) (1,592) 456 (982)
Accretion of redeemable
preferred stock (71) (70) (141) (141)
Net income (loss)
available to
common shareholders $ (147) $ (1,662) $ 315 $ (1,123)
Net income (loss)
per common share $ (0.00) $ (0.04) $ 0.01 $ (0.03)
Net income (loss)
per common share
- -- assuming dilution $ (0.00) $ (0.04) $ 0.01 $ (0.03)
Weighted average number
of common shares
outstanding:
Basic 35,689,645 38,007,047 35,835,416 38,080,110
Diluted 35,689,645 38,007,047 42,489,465 38,080,110
SUBSCRIBER INFORMATION (estimated in millions)
July 31, January 31, July 31,
2003 2003 2002
Full-time Equivalent Subscribers 53.1 50.5 46.6
Total Subscribers 59.4 55.1 53.1
Full-time Subscribers 46.4 44.1 39.7
VALUEVISION MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
July 31, January 31,
2003 2003
(In thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents $ 74,685 $ 55,109
Short-term investments 63,050 113,525
Accounts receivable, net 73,998 76,734
Inventories 57,771 61,246
Prepaid expenses and other 7,414 7,449
Total current assets 276,918 314,063
Property and equipment, net 51,702 39,905
FCC Licenses 31,943 ---
NBC Trademark License Agreement, net 23,527 25,141
Cable distribution and marketing
agreement, net 4,893 5,341
Goodwill 9,442 9,442
Other intangible assets, net 933 1,242
Investments and other assets 5,145 11,140
$404,503 $406,274
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 54,573 $ 56,961
Accrued liabilities 32,878 30,310
Income taxes payable 88 226
Total current liabilities 87,539 87,497
Long-term capital lease obligations 1,302 1,669
Series A Redeemable Convertible Preferred
Stock, $.01 par value, 5,339,500 shares
authorized; 5,339,500 shares issued
and outstanding 42,603 42,462
Shareholders' equity:
Common stock, $.01 par value,
100,000,000 shares authorized;
35,794,235 and 36,171,250 shares
issued and outstanding 358 362
Common stock purchase warrants;
8,235,343 and 8,235,343 shares 47,638 47,638
Additional paid-in capital 240,921 244,134
Accumulated other comprehensive losses -- (2,517)
Deferred compensation (1,243) --
Note receivable from officer (4,128) (4,098)
Accumulated deficit (10,487) (10,873)
Total shareholders' equity 273,059 274,646
$ 404,503 $406,274
VALUE VISION MEDIA, INC.
OPERATING STATISTICS
Six Six
Second Second Months Months
Quarter Quarter Ending Ending
31-Jul-03 31-Jul-02 31-Jul-03 31-Jul-02
Ending FTE Households:
(in millions)
Cable 34.5 30.1 NA NA
Satellite 18.6 16.5
Total 53.1 46.6
ShopNBC Merchandise Sales Mix:
Jewelry 70% 75% 69% 74%
Computers & Accessories 15% 15% 15% 16%
Others 15% 10% 16% 10%
Total 100% 100% 100% 100%
EBITDA (as defined)
(000's) (A) $ 3,569 $ 3,252 $ 8,000 $ 8,557
A reconciliation of EBITDA
to net income (loss) is
as follows:
EBITDA, as presented $ 3,569 $ 3,252 $ 8,000 $ 8,557
Less:
Depreciation and amortization (4,301) (4,097) (8,554) (7,418)
Other non-operating income
(expense) 756 (1,653) 1,110 (2,684)
Income taxes $ (100) 906 (100) 563
Net income (loss) (76) $ (1,592) $ 456 $ (982)
Third Quarter Outlook
31-Oct-03
A reconciliation of EBITDA to net income (loss) is as follows:
EBITDA, as forecasted $ 3000 - $ 5000
Less:
Depreciation and amortization,
as forecasted (4,500)
Other non-operating income, as
forecasted 400
Income taxes, as forecasted ---
Net income (loss) $(1,100) - $ 900
(A) EBITDA as defined for this statistical presentation represents operating
income for the respective periods excluding depreciation and amortization
expense.
Source: ValueVision Media
Contact: Anthony Giombetti, Director, Corporate Communications of ValueVision
Media, +1-952-943-6017, or agiombetti@shopnbc.com