EXHIBIT 99
VALUEVISION MEDIA, INC.
6740 SHADY OAK ROAD
MINNEAPOLIS, MN 55344
Contact Information:
Heather S. Faulkner
Director of Communications
hfaulkner@shopnbc.com
Phone: 952-943-6736
VALUEVISION MEDIA ANNOUNCES FINANCIAL RESULTS FOR FIRST QUARTER 2005
FIRST QUARTER RESULTS IN LINE WITH MAY 3RD PRE-RELEASE.
ValueVision Media today announced financial results for its first quarter ended
April 30, 2005.
Consolidated net sales for the first quarter were $156 million, down 2% vs.
prior year. Net sales from its core TV and Internet business were $152 million,
up $0.6 million vs. prior year. Consolidated net loss was $10.7 million in the
first quarter compared to a loss of $7.9 million last year. EBITDA, as defined
below, was a loss of $6.0 million versus a loss of $3.4 million one year ago.
The Company recorded a first quarter charge of $0.4 million related to
long-lived asset impairments of FanBuzz, a wholly owned subsidiary.
Additionally, ValueVision recorded a first quarter charge of $0.5 million
associated with the elimination of a number of positions primarily at FanBuzz.
EBITDA DEFINED
The Company defines EBITDA as net income (loss) for the respective periods
excluding depreciation and amortization expense, interest 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 (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. 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.
ABOUT VALUEVISION MEDIA, INC
Founded in 1990, ValueVision Media is an integrated direct marketing company
that sells its products directly to consumers through television, the Internet,
and direct mail. For more information, please visit www.valuevisionmedia.com or
www.shopnbc.com.
FORWARD-LOOKING INFORMATION
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, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share data)
APRIL 30, JANUARY 31,
2005 2005
------------------- ------------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 63,682 $ 62,640
Short-term investments 39,731 37,941
Accounts receivable, net 73,010 79,405
Inventories 59,308 54,903
Prepaid expenses and other 5,490 5,635
------------------- ------------------
Total current assets 241,221 240,524
PROPERTY AND EQUIPMENT, NET 50,761 52,725
FCC BROADCASTING LICENSE 31,943 31,943
NBC TRADEMARK LICENSE AGREEMENT, NET 17,881 18,687
CABLE DISTRIBUTION AND MARKETING AGREEMENT, NET 3,326 3,550
OTHER INTANGIBLE ASSETS, NET - 68
INVESTMENTS AND OTHER ASSETS 2,799 2,799
------------------- ------------------
$ 347,931 $ 350,296
=================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 59,458 $ 48,012
Accrued liabilities 37,910 41,062
------------------- ------------------
Total current liabilities 97,368 89,074
LONG-TERM CAPITAL LEASE OBLIGATIONS 1,212 1,380
SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK,
$.01 PAR VALUE, 5,339,500 SHARES AUTHORIZED; 5,339,500
SHARES ISSUED AND OUTSTANDING 43,102 43,030
Shareholders' equity:
Common stock, $.01 par value, 100,000,000 shares authorized;
37,094,081 and 37,043,912 shares issued and outstanding 371 370
Warrants to purchase 7,630,583 shares of common stock 46,683 46,683
Additional paid-in capital 264,079 264,005
Deferred compensation (295) (353)
Accumulated deficit (104,589) (93,893)
------------------- ------------------
Total shareholders' equity 206,249 216,812
------------------- ------------------
$ 347,931 $ 350,296
=================== ==================
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,
----------------------------------
2005 2004
------------ ------------
Net sales $ 156,163 $ 159,197
COST OF SALES 103,780 106,113
------------ ------------
Gross profit 52,383 53,084
------------ ------------
OPERATING EXPENSE:
Distribution and selling 51,145 50,802
General and administrative 6,610 5,675
Depreciation and amortization 5,291 4,784
Asset impairments 400 --
Employee termination costs 528 --
------------ ------------
Total operating expense 63,974 61,261
------------ ------------
OPERATING LOSS (11,591) (8,177)
------------ ------------
OTHER INCOME:
Other income 255 --
Interest income 646 274
------------ ------------
Total other income 901 274
------------ ------------
LOSS BEFORE INCOME TAXES (10,690) (7,903)
Income tax provision 6 --
------------ ------------
NET LOSS (10,696) (7,903)
ACCRETION OF REDEEMABLE
PREFERRED STOCK (72) (71)
------------ ------------
NET LOSS AVAILABLE TO
COMMON SHAREHOLDERS $ (10,768) $ (7,974)
============ ============
NET LOSS PER COMMON SHARE $ (0.29) $ (0.22)
============ ============
NET LOSS PER COMMON SHARE
---ASSUMING DILUTION $ (0.29) $ (0.22)
============ ============
Weighted average number of common shares outstanding:
Basic 37,077,473 36,640,477
============ ============
Diluted 37,077,473 36,640,477
============ ============
RECONCILIATION OF EBITDA TO NET LOSS:
FIRST QUARTER FIRST QUARTER
30-APR-05 30-APR-04
EBITDA (AS DEFINED) (000'S) (A) $ (6,045) $ (3,393)
===========================================
A reconciliation of EBITDA to net loss is as follows:
EBITDA, as presented $ (6,045) $ (3,393)
Adjustments:
Depreciation and amortization (5,291) (4,784)
Interest income 646 274
Income taxes (6) -
-------------------------------------------
Net loss $ (10,696) $ (7,903)
===========================================
(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. Previous to the
second quarter of fiscal 2004, management defined EBITDA as operating
income (loss) excluding depreciation and amortization expense, other
non-operating income (expense) and income taxes. The change was made to
conform to the more common definition of EBITDA. 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.
VALUE VISION MEDIA, INC.
KEY PERFORMANCE METRICS*
(Unaudited)
----------------------------------------
Q1
FOR THE THREE MONTHS ENDING 4/30
----------------------------------------
F05 F04 %
--- --- -
PROGRAM DISTRIBUTION
- --------------------
Cable FTE's 37,510 35,896 4%
Satellite FTE's 23,325 20,151 16%
------------- ----------- ---
Total FTE's (Average 000's) 60,835 56,047 9%
Net Sales per FTE (Annualized) $ 9.97 $ 10.79 -8%
Active Customers - 12 month rolling 770,348 736,370 5%
% New Customers - 12 month rolling 58% 63%
% Reactivated & Retained - 12 month rolling 42% 37%
Customer Penetration - 12 month rolling 1.3% 1.3%
PRODUCT MIX
- -----------
Jewelry 58% 65%
Apparel 5% 5%
Health & Beauty 4% 3%
Computer & Electronics 19% 14%
Fitness 2% 2%
Home 12% 11%
Shipped Units (000's) 1,196 1,316 -9%
Average Price Point - shipped units $ 183 $ 168 9%
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*Includes ShopNBC TV and ShopNBC.com only.