EXHIBIT 99
[VALUEVISION LOGO]
ValueVision Media
6740 Shady Oak Road
Minneapolis, MN 55344-3433
Contact: Anthony Giombetti
Director, Corporate Communications
952-943-6017, agiombetti@shopnbc.com
FOR IMMEDIATE RELEASE
VALUEVISION MEDIA REPORTS FINANCIAL RESULTS
FOR FISCAL THIRD QUARTER 2003
MINNEAPOLIS, NOV. 19, 2003 -- ValueVision Media (NASDAQ: VVTV), which owns and
operates ShopNBC and ShopNBC.com, today announced financial results for the
third quarter ended October 31, 2003. In addition, it was announced that third
quarter programming allocations were significantly changed in order to initiate
a strategic directional change for the Company, emphasizing merchandise
diversity and lower price points to more effectively address the significant
increase in cable distribution that has occurred over the past three years.
QUARTERLY PERFORMANCE AND COMMENTS
"Consolidated net sales were a third quarter record $150 million, a 10% increase
over the prior year period," said Gene McCaffery ValueVision Media Chairman and
CEO. "EBITDA for the quarter was $1.6 million, a $10 million year-over-year
improvement from negative EBITDA in last year's third quarter. I am also
encouraged with the start to our holiday season as November month-to-date TV and
Internet sales are trending up 20%. In addition, in the third quarter, we made
dramatic progress on the dual strategic imperatives of diversifying our
merchandise mix and lowering our price points, as indicated by the following
major achievements."
o Merchandise sales outside of ShopNBC's core offering of jewelry and
personal computers accounted for 19% of total sales for the quarter or 35%
higher than year ago, focused primarily on apparel, cosmetics and home
accessories. Airtime for these categories also increased by 50% in the
quarter, representing a significant directional change for the Company,
which has been discussed for some time.
o Average price points declined by 7% in the quarter and will continue in
that direction, which the Company believes will attract new customers and
decrease merchandise returns.
o Unit sales increased significantly by 20% in the quarter as a result of
product diversification and lowering of price points.
o Jewelry airtime decreased by 5% for the quarter yet jewelry sales increased
by approximately 9%. The Company plans to continue its efforts to improve
productivity in jewelry, which the
o Company believes is critical, as it continues to diversify its merchandise
mix while continuing to grow profitability.
o Personal computer airtime was decreased by 20% in the quarter while overall
sales decreased by approximately 7%. This reallocation, while affecting
topline sales to some extent, was a key ingredient in moving gross margin
for the quarter from 31% last year to 36% this year.
o Over 70 new product lines were added to the merchandise mix in the past two
quarters, with almost 60 outside of the Company's core jewelry product
strengths, such as Susan Bristol and Karen Kane ready-to-wear, Yan Can Cook
and Cuisinart housewares, Schwinn electric scooters, Benefit cosmetics, and
Versace crystal. The Company continues to receive positive feedback from
existing customers while attracting new ones.
- MORE -
Continued McCaffery, "In the fourth quarter, and as we move into next year, we
will continue with our strategy of category diversification and lower price
points, carefully balancing and adjusting these levels based on the strengths of
the merchandise offer and the acceptance with the consumer. We want to ensure
that jewelry and personal computer productivity continues to improve while these
new categories and expanded assortments continue to be grown. And while we're
pleased with the improvements made in jewelry and personal computer productivity
per hour, our objective remains to drive productivity improvements even further
so we can support investments in new categories without sacrificing our
financial objectives."
Dick Barnes, ValueVision EVP, COO and CFO said: "While we fell somewhat short of
the aggressive targets we set for ourselves at the start of the quarter, we are
pleased with the strategic progress we have made in a short period of time in
spite of a continuing difficult retail promotional environment. In the quarter,
incoming orders for August and September averaged approximately 15% year over
year growth while October sales orders were approximately flat to the previous
year after starting the month unusually slow. Also, we chose not to repeat this
quarter an aggressive, yet unprofitable Internet sales promotion that we ran
last year, which caused our Internet sales growth this quarter to temporarily
slow to single digits, but improved overall margins. Finally, sales trends for
the first half of November have been good which further reinforces our
confidence that we are on the right track with our strategic changes to
merchandise mix and lowered price points."
The Company defines EBITDA as its operating income (loss) for respective periods
being reported excluding depreciation and amortization.
BUSINESS HIGHLIGHTS FOR THE THIRD QUARTER ENDED OCTOBER 31, 2003
- -- ShopNBC Launches Holiday Gift Giving Strategy
- -- ShopNBC Private Label Credit Card Surpasses 200,000 Accounts
- -- FanBuzz Continues to Add Clients
SHOPNBC LAUNCHES HOLIDAY GIFT GIVING STRATEGY
In the quarter, ShopNBC launched an all-new gift giving strategy for the holiday
season to further demonstrate the breadth and depth of ShopNBC's product
selection. As part of the strategy, ShopNBC debuted an all-new, 48-page,
holiday-themed catalog, which was mailed to its top 150,000 customers. In
addition, ShopNBC TV is dedicating 120 hours of airtime during the holiday
season with show concepts specifically about gift giving, such as "Gifts for
Him," "Gifts for Her," "Gifts for You," "Gifts Under $199," "Gifts to Wear, and
"Gifts for Home." Finally, through coordinated marketing and merchandising
efforts, these same items can also be found on ShopNBC.com under a highlighted
section entitled "Holiday Gifts."
"This three-fold effort represents a significant volume opportunity for ShopNBC
this holiday season," said Liz Haesler, ShopNBC's EVP of TV/Internet Sales.
"Already we're seeing promising results."
- MORE -
SHOPNBC PRIVATE LABEL CREDIT CARD SURPASSES 200,000 ACCOUNTS
In the quarter, ShopNBC achieved a milestone by exceeding 200,000 private label
ShopNBC credit card accounts through a combination of strong TV and Internet
promotions. The credit card program was launched 24 months ago. In addition to
reducing credit card transaction costs, the private label program is a great
marketing vehicle to our best customers.
FANBUZZ CONTINUES TO ADD CLIENTS
In the third quarter, FanBuzz, a wholly owned subsidiary of ValueVision, added
several new clients, including Peanuts/United Media (a Scripps company), the
Boston Celtics, and the NYPD. This new list of clients complements their
existing extensive customer base, including such brands as the NHL, ESPN, and
The Weather Channel.
"The recent addition of the Peanuts brand in particular is a great opportunity
for us and is another important step in extending FanBuzz's footprint beyond
sports-oriented brands," said FanBuzz President Roy Seinfeld. "Taking well-known
character brands and helping them create additional transactional revenue
through a multiple platform approach, spanning the Internet, catalog or TV, is a
key element of our business strategy."
OUTLOOK FOR THE FOURTH QUARTER ENDING JANUARY 31, 2004
- -- Consolidated net sales are expected to be $175 million to $185 million, up
11% to 17% over the prior-year period
- -- EBITDA from operations and prior to CEO transition charges for the quarter is
expected to be $7 million to $10 million
"Given the multitude of new product and marketing initiatives we have underway,
our outlook is cautiously optimistic for the fourth quarter," said Dick Barnes,
ValueVision Media EVP, COO, and CFO. "Moreover, as mentioned above, we are
encouraged by the start to the holiday season with November TV and Internet
sales trending well, up 20% month-to-date. We also launched our first-ever
comprehensive gift-giving strategy at the beginning of the quarter, and we are
confident it will drive incremental business."
Added Barnes, "In the fourth quarter, we expect to take a charge to income of
approximately $4 million related to the May CEO transition announcement.
Specific details will be forthcoming at a later date."
VALUEVISION MEDIA THIRD QUARTER 2003 CONFERENCE CALL ADVISORY
ValueVision Media will hold a conference call at 11:00 a.m. ET on Thursday,
November 20, 2003, to discuss its fiscal third quarter 2003 financial results.
The event will be hosted by Gene McCaffery, Chairman and CEO, and Dick Barnes,
EVP, COO, and CFO.
The conference call is available via webcast. To listen, please go to
www.valuevisionmedia.com and select the Calendar of Events link for details.
If you are unable to listen to the call, a replay will be available through
Thursday, December 4, 2003, by calling 402-998-1038. Thank you for your
interest.
- MORE -
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 NINE MONTHS ENDED
OCTOBER 31, OCTOBER 31,
------------------------------ ------------------------------
2003 2002 2003 2002
------------ ------------- ------------ ------------
Net sales $ 149,996 $ 135,754 $ 437,685 $ 396,939
COST OF SALES 96,634 93,816 276,953 254,770
------------ ------------ ------------ ------------
Gross profit 53,362 41,938 160,732 142,169
------------ ------------ ------------ ------------
OPERATING (INCOME) EXPENSE:
Distribution and selling 47,949 46,434 141,399 130,002
General and administrative 3,828 4,177 14,165 12,283
Depreciation and amortization 4,662 4,205 13,216 11,623
Gain on sale of television stations -- -- (4,417) --
------------ ------------ ------------ ------------
Total operating (income) expense 56,439 54,816 164,363 153,908
------------ ------------ ------------ ------------
OPERATING LOSS (3,077) (12,878) (3,631) (11,739)
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE):
Gain (loss) on sale and conversion of investments -- (1) 361 (533)
Unrealized gain on security holdings -- -- -- 1,021
Write-down of investments -- -- -- (1,070)
Equity in losses of affiliates -- (236) -- (4,466)
Interest income 315 640 1,064 2,767
------------ ------------ ------------ ------------
Total other income (expense) 315 403 1,425 (2,281)
------------ ------------ ------------ ------------
LOSS BEFORE INCOME TAXES (2,762) (12,475) (2,206) (14,020)
Income tax provision (benefit) 80 (4,478) 180 (5,041)
------------ ------------ ------------ ------------
NET LOSS (2,842) (7,997) (2,386) (8,979)
ACCRETION OF REDEEMABLE
PREFERRED STOCK (71) (70) (212) (211)
------------ ------------ ------------ ------------
NET LOSS AVAILABLE TO
COMMON SHAREHOLDERS $ (2,913) $ (8,067) $ (2,598) $ (9,190)
============ ============ ============ ============
NET LOSS PER COMMON SHARE $ (0.08) $ (0.22) $ (0.07) $ (0.24)
============ ============ ============ ============
NET LOSS PER COMMON SHARE
---ASSUMING DILUTION $ (0.08) $ (0.22) $ (0.07) $ (0.24)
============ ============ ============ ============
Weighted average number of common shares outstanding:
Basic 35,894,859 36,381,915 35,855,230 37,514,045
============ ============ ============ ============
Diluted 35,894,859 36,381,915 35,855,230 37,514,045
============ ============ ============ ============
SUBSCRIBER INFORMATION (estimated in millions)
OCTOBER 31, JANUARY 31, OCTOBER 31,
2003 2003 2002
----------- ----------- -----------
Full-time Equivalent Subscribers 54.1 50.5 48.1
Total Subscribers 60.7 55.1 54.0
Full-time Subscribers 47.4 44.1 41.8
VALUEVISION MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands ecept share and per share data)
OCTOBER 31, JANUARY 31,
2003 2003
------------------- ------------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 67,913 $ 55,109
Short-term investments 67,555 113,525
Accounts receivable, net 65,614 76,734
Inventories 78,277 61,246
Prepaid expenses and other 6,894 7,449
------------------- ------------------
Total current assets 286,253 314,063
PROPERTY AND EQUIPMENT, NET 53,904 39,905
FCC LICENSES 31,943 -
NBC TRADEMARK LICENSE AGREEMENT, NET 22,721 25,141
CABLE DISTRIBUTION AND MARKETING AGREEMENT, NET 4,669 5,341
GOODWILL 9,442 9,442
OTHER INTANGIBLE ASSETS, NET 783 1,242
INVESTMENTS AND OTHER ASSETS 4,967 11,140
------------------- ------------------
$ 414,682 $ 406,274
=================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 66,364 $ 56,961
Accrued liabilities 30,896 30,310
Income taxes payable 120 226
------------------- ------------------
Total current liabilities 97,380 87,497
LONG-TERM CAPITAL LEASE OBLIGATIONS 2,176 1,669
SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK,
$.01 PAR VALUE, 5,339,500 SHARES AUTHORIZED; 5,339,500
SHARES ISSUED AND OUTSTANDING 42,674 42,462
Shareholders' equity:
Common stock, $.01 par value, 100,000,000 shares authorized;
35,956,074 and 36,171,250 shares issued and outstanding 360 362
Warrants to purchase 8,235,343 shares of common stock 47,638 47,638
Additional paid-in capital 243,043 244,134
Accumulated other comprehensive losses - (2,517)
Deferred compensation (1,118) -
Note receivable from officer (4,142) (4,098)
Accumulated deficit (13,329) (10,873)
------------------- ------------------
Total shareholders' equity 272,452 274,646
------------------- ------------------
$ 414,682 $ 406,274
=================== ==================
VALUE VISION MEDIA, INC.
OPERATING STATISTICS
NINE MONTHS NINE MONTHS
THIRD QUARTER THIRD QUARTER ENDING ENDING
31-OCT-03 31-OCT-02 31-OCT-03 31-OCT-02
--------- --------- --------- ---------
ENDING FTE HOUSEHOLDS: (IN MILLIONS)
Cable 35.0 31.1 NA NA
Satellite 19.1 17.0
-----------------------------
Total 54.1 48.1
=============================
SHOPNBC MERCHANDISE SALES MIX:
Jewelry 63% 61% 67% 70%
Computers & Accessories 18% 25% 16% 19%
Others 19% 14% 17% 11%
----------------------------- -------------------------------
Total 100% 100% 100% 100%
============================= ===============================
EBITDA (AS DEFINED) (000'S) (A) $ 1,585 $ (8,673) $ 9,585 $ (116)
============================= ===============================
A reconciliation of EBITDA to net loss is as follows:
EBITDA, as presented $ 1,585 $ (8,673) $ 9,585 $ (116)
Less:
Depreciation and amortization (4,662) (4,205) (13,216) (11,623)
Other non-operating income (expense) 315 403 1,425 (2,281)
Income taxes (80) 4,478 (180) 5,041
----------------------------- -------------------------------
Net loss $ (2,842) $ (7,997) $ (2,386) $ (8,979)
============================= ===============================
FOURTH QUARTER OUTLOOK
31-JAN-04
---------
A reconciliation of EBITDA to net income (loss) is as follows:
EBITDA, as forecasted (Operating) $ 7,000 - $ 10,000
Less:
CEO transition charge (estimated) (4,000)
Depreciation and amortization, as forecasted (4,600)
Other non-operating income, as forecasted 350
Income taxes, as forecasted -
--------------------------
Net income (loss) ($ 1,250) - $ 1,750
==========================
(a) EBITDA as defined for this statistical presentation represents operating
income (loss) for the respective periods excluding depreciation and amortization
expense.