EXHIBIT 99
[VALUEVISION LETTERHEAD]
FOR IMMEDIATE RELEASE
VALUEVISION MEDIA ANNOUNCES FINANCIAL RESULTS
FOR FISCAL FIRST QUARTER 2004
Company Achieves Record First Quarter Sales and Units Shipped
MINNEAPOLIS - MAY 18, 2004 - VALUEVISION MEDIA (NASDAQ: VVTV) today announced
financial results for its first quarter ended April 30, 2004.
Consolidated net sales were a first-quarter-record $159 million, an increase of
11% over prior-year period. Internet net sales were a first-quarter-record $34
million, up 37% over previous-year quarter. Net loss was $8 million in the first
quarter and EBITDA, as defined below, was ($3.4) million.
QUARTERLY HIGHLIGHTS
- Unit volume was up a record 42%, the best shipping quarter in the
Company's history.
- Average price points decreased by 23% to $168 versus prior-year
quarter.
- Home, apparel, and cosmetics as a category grew from 17% to 21% over
year-ago quarter.
- New customer count was up 30% over last year's same period.
- Sales growth per full-time equivalent home was positive for the
first time since 2002.
- ShopNBC.com continued strong growth, representing 21% of company
sales.
- FanBuzz entered into an outsourced e-commerce and fulfillment
services agreement with Elvis Presley Enterprises, and now manages
all aspects of The Official Elvis Presley online store at
http://www.ShopElvis.com.
"Our first quarter results signal a good start to the year," said William
Lansing, president and CEO ValueVision Media. "I am pleased with the strategic
improvements we achieved across a variety of company fronts, which are
highlighted above. We are on the right path and making good progress."
2004 OUTLOOK
The following forward-looking statements reflect ValueVision Media's
expectations for 2004.
- - Consolidated net sales growth is expected to be in the low to mid teens.
Unit growth is expected to be in the high teens as average price points
decline.
- - EBITDA will be negative in the first half of the year and positive in the
second half as the Company's upfront investments to improve on-air
quality, customer service levels, and test various marketing initiatives
improve the business.
- - Full-time equivalent (FTE) household growth is expected to be up
approximately 7% to 8% driven predominantly by satellite and digital cable
growth.
- - Net sales per FTE is expected to be up approximately 3% to 6% on average,
lower in the first half and higher in the second half of the year as
marketing, product, and other initiatives gain traction.
- - New customer acquisition is targeted to be up over 20%.
A conference call will be Webcast live Wednesday, May 19, 2004, at 11 a.m. ET /
8 a.m. PT and will be available through Wednesday, June 2 at
www.valuevisionmedia.com. This call will contain forward-looking statements and
other material information regarding the Company's financial and operating
results.
The Company defines EBITDA as operating income (loss) for the respective periods
excluding depreciation and amortization expense, other non-operating income
(expense), and income taxes. Management views EBITDA as an important alternative
operating performance measure because it is commonly used by analysts and
institutional investors in analyzing the financial performance of companies in
the broadcast and television home shopping sectors. However, EBITDA should not
be construed as an alternative to operating income 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.
EBITDA, as presented, may not be comparable to similarly entitled measures
reported by other companies. Management uses EBITDA to evaluate operating
performance and as a measure of performance for incentive compensation purposes.
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 and rebranding initiatives; the
performance of its equity investments; 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 is an integrated direct marketing company that sells products
directly to consumers through television, the Internet, and direct mail. The
television home shopping industry is a $7 billion industry growing at a
double-digit rate annually. The e-commerce space is even larger and growing
faster. The Company owns and operates the nation's third largest home shopping
network, ShopNBC, with fiscal 2003 sales of $617 million. At the close of fiscal
2003, ShopNBC was broadcast into approximately 56 million full-time equivalent
cable and satellite homes. The Company also operates ShopNBC.com, which
contributed $111 million in sales in fiscal 2003. Through its wholly-owned
subsidiary FanBuzz, the Company provides e-commerce solutions to sports,
entertainment, and media brands, such as the National Hockey League, Elvis
Presley, Peanuts, 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.
###
2
VALUEVISION MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share data)
APRIL 30, JANUARY 31,
2004 2004
---- ----
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ............................................ $ 36,462 $ 81,033
Short-term investments ............................................... 89,512 46,148
Accounts receivable, net ............................................. 68,041 71,166
Inventories .......................................................... 65,713 67,620
Prepaid expenses and other ........................................... 6,355 5,017
--------- ---------
Total current assets ............................................... 266,083 270,984
PROPERTY AND EQUIPMENT, NET ............................................ 53,911 54,511
FCC BROADCASTING LICENSE ............................................... 31,943 31,943
NBC TRADEMARK LICENSE AGREEMENT, NET ................................... 21,107 21,914
CABLE DISTRIBUTION AND MARKETING AGREEMENT, NET ........................ 4,222 4,445
GOODWILL ............................................................... 9,442 9,442
OTHER INTANGIBLE ASSETS, NET ........................................... 544 661
INVESTMENTS AND OTHER ASSETS ........................................... 2,500 2,691
--------- ---------
$ 389,752 $ 396,591
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ..................................................... $ 50,325 $ 51,482
Accrued liabilities .................................................. 34,222 33,267
Income taxes payable ................................................. 57 88
--------- ---------
Total current liabilities .......................................... 84,604 84,837
LONG-TERM CAPITAL LEASE OBLIGATIONS .................................... 1,830 2,002
SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK,
$.01 PAR VALUE, 5,339,500 SHARES AUTHORIZED; 5,339,500
SHARES ISSUED AND OUTSTANDING ........................................ 42,816 42,745
SHAREHOLDERS' EQUITY:
Common stock, $.01 par value, 100,000,000 shares authorized;
36,788,528 and 36,487,821 shares issued and outstanding ............ 368 365
Warrants to purchase 8,035,343 and 8,235,343 shares of common stock .. 46,683 47,638
Additional paid-in capital ........................................... 248,427 246,143
Deferred compensation ................................................ (565) (646)
Note receivable from former officer .................................. (4,173) (4,158)
Accumulated deficit .................................................. (30,238) (22,335)
--------- ---------
Total shareholders' equity ......................................... 260,502 267,007
--------- ---------
$ 389,752 $ 396,591
========= =========
VALUEVISION MEDIA, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
FOR THE THREE MONTHS ENDED
APRIL 30,
---------
2004 2003
---- ----
NET SALES .............................................. $ 159,197 $ 143,475
COST OF SALES .......................................... 106,113 90,386
------------ ------------
Gross profit ........................................ 53,084 53,089
------------ ------------
OPERATING (INCOME) EXPENSE:
Distribution and selling ............................ 50,802 47,677
General and administrative .......................... 5,675 5,398
Depreciation and amortization ....................... 4,784 4,253
Gain on sale of television stations ................. -- (4,417)
------------ ------------
Total operating (income) expense ................ 61,261 52,911
------------ ------------
OPERATING INCOME (LOSS) ................................ (8,177) 178
------------ ------------
OTHER INCOME:
Interest income ..................................... 274 354
------------ ------------
Total other income .............................. 274 354
------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES ...................... (7,903) 532
Income tax provision ................................... -- --
------------ ------------
NET INCOME (LOSS) ...................................... (7,903) 532
ACCRETION OF REDEEMABLE
PREFERRED STOCK ..................................... (71) (71)
------------ ------------
NET INCOME (LOSS) AVAILABLE TO
COMMON SHAREHOLDERS ................................. $ (7,974) $ 461
============ ============
NET INCOME (LOSS) PER COMMON SHARE ..................... $ (0.22) $ 0.01
============ ============
NET INCOME (LOSS) PER COMMON SHARE
---ASSUMING DILUTION ............................ $ (0.22) $ 0.01
============ ============
Weighted average number of common shares outstanding:
Basic ...................................... 36,640,477 35,981,187
============ ============
Diluted .................................... 36,640,477 42,500,565
============ ============
SUBSCRIBER INFORMATION (ESTIMATED IN MILLIONS)
(Unaudited)
ENDING ENDING ENDING
APRIL 30, JANUARY 31, APRIL 30,
2004 2004 2003
---- ---- ----
Full-time Equivalent Subscribers ... 56.6 55.6 52.6
Total Subscribers .................. 60.9 61.9 58.6
Full-time Subscribers .............. 50.4 49.0 45.8
VALUE VISION MEDIA, INC.
KEY PERFORMANCE METRICS*
(Unaudited)
Q1
FOR THE THREE MONTHS ENDING 4/30
--------------------------------
F04 F03 %
--- --- -
PROGRAM DISTRIBUTION
Cable FTE's ........................... 35,896 33,610 7%
Satellite FTE's ....................... 20,151 17,892 13%
-------- -------- --------
Total FTE's (Average 000's) .............. 56,047 51,502 9%
Net Sales per FTE (Annualized) ........... $ 10.79 $ 10.65 1%
New Customer Count ....................... 148,570 114,508 30%
Customer Penetration - 12 month rolling .. 1.4% 1.3% n/a
PRODUCT MIX
Jewelry ............................... 65% 68%
Apparel ............................... 5% 1%
Health & Beauty ....................... 3% 2%
Computer & Electronics ................ 14% 15%
Fitness ............................... 2% 1%
Home .................................. 11% 13%
Shipped Units (000's) .................... 1,316 929 42%
Average Price Point - shipped units ...... $ 168 $ 219 (23%)
* Includes ShopNBC TV and ShopNBC.com only.
RECONCILIATION OF EBITDA TO NET INCOME (LOSS):
FIRST QUARTER FIRST QUARTER
30-APR-04 30-APR-03
EBITDA (AS DEFINED) (000'S) (A) ....................... $(3,393) $ 4,431
======= =======
A reconciliation of EBITDA to net income (loss) is as
follows:
EBITDA, as presented .................................. $(3,393) $ 4,431
Less:
Depreciation and amortization ......................... (4,784) (4,253)
Other non-operating income (expense) .................. 274 354
Income taxes .......................................... -- --
------- -------
Net income (loss) ................................ $(7,903) $ 532
======= =======
(a) EBITDA as defined for this statistical presentation represents operating
income (loss) for the respective periods excluding depreciation and
amortization expense. other non-operating income (expense) and income
taxes. Management views EBITDA as an important alternative operating
performance measure because it is commonly used by analysts and
institutional investors in analyzing the financial performance of
companies in the broadcast and television home shopping sectors. However,
EBITDA should not be construed as an alternative to operating income 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. EBITDA, as presented, may not be comparable to
similarly entitled measures reported by other companies. Management uses
EBITDA to evaluate operating performance and as a measure of performance
for incentive compensation purposes.