EXHIBIT 99
VALUEVISION MEDIA ANNOUNCES RECORD FINANCIAL RESULTS FOR SECOND QUARTER 2005
SECOND QUARTER RESULTS IN LINE WITH AUGUST 9TH EARNINGS PRE-RELEASE.
ValueVision Media today announced financial results for its second quarter ended
July 30, 2005.
Consolidated net sales for the second quarter were a record $172 million, up 6%
vs. prior year. Net sales from the core TV and Internet business were $167
million, up 8% vs. prior year. Consolidated net loss was $1.2 million in the
second quarter and EBITDA, as defined below, was a positive $2.4 million vs. a
$3.2 million loss a year ago.
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)
JULY, 30 JANUARY 31,
2005 2005
-------------------- ------------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 57,003 $ 62,640
Short-term investments 33,790 37,941
Accounts receivable, net 83,386 79,405
Inventories 67,869 54,903
Prepaid expenses and other 5,760 5,635
-------------------- ------------------
Total current assets 247,808 240,524
PROPERTY AND EQUIPMENT, NET 48,639 52,725
FCC BROADCASTING LICENSE 31,943 31,943
NBC TRADEMARK LICENSE AGREEMENT, NET 17,074 18,687
CABLE DISTRIBUTION AND MARKETING AGREEMENT, NET 3,102 3,550
OTHER INTANGIBLE ASSETS, NET - 68
OTHER ASSETS 3,058 2,799
-------------------- ------------------
$ 351,624 $ 350,296
==================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 59,194 $ 48,012
Accrued liabilities 42,996 41,062
-------------------- ------------------
Total current liabilities 102,190 89,074
LONG-TERM CAPITAL LEASE OBLIGATIONS 1,099 1,380
SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK,
$.01 PAR VALUE, 5,339,500 SHARES AUTHORIZED; 5,339,500
SHARES ISSUED AND OUTSTANDING 43,174 43,030
Shareholders' equity:
Common stock, $.01 par value, 100,000,000 shares authorized;
37,104,374 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 264,100 264,005
Deferred compensation (246) (353)
Accumulated deficit (105,747) (93,893)
-------------------- ------------------
Total shareholders' equity 205,161 216,812
-------------------- ------------------
$ 351,624 $ 350,296
==================== ==================
VALUEVISION MEDIA, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
FOR THE THREE MONTH FOR THE SIX MONTH
PERIODS ENDED PERIODS ENDED
------------------------------- -------------------------------
JULY 30, JULY 31, JULY 30, JULY 31,
2005 2004 2005 2004
------------- ------------- --------------- ------------
NET SALES $ 171,668 $ 161,478 $ 327,831 $ 320,675
COST OF SALES 111,147 107,578 214,927 213,691
------------- ------------- -------------- ------------
Gross profit 60,521 53,900 112,904 106,984
------------- ------------- -------------- ------------
OPERATING EXPENSE:
Distribution and selling 51,766 52,275 102,911 103,077
General and administrative 6,394 5,107 13,004 10,782
Depreciation and amortization 5,102 4,918 10,393 9,702
Asset impairments - - 400 -
Employee termination costs - - 528 -
------------- ------------- -------------- ------------
Total operating expense 63,262 62,300 127,236 123,561
------------- ------------- -------------- ------------
OPERATING LOSS (2,741) (8,400) (14,332) (16,577)
------------- ------------- -------------- ------------
OTHER INCOME:
Other income (expense) (256) 250 (1) 250
Interest income 738 322 1,384 596
------------- ------------- -------------- ------------
Total other income 482 572 1,383 846
------------- ------------- -------------- ------------
LOSS BEFORE INCOME TAXES (2,259) (7,828) (12,949) (15,731)
Equity in income of affiliates 275 - 275 -
Income tax benefit 826 - 820 -
------------- ------------- -------------- ------------
NET LOSS (1,158) (7,828) (11,854) (15,731)
ACCRETION OF REDEEMABLE
PREFERRED STOCK (71) (71) (143) (142)
------------- ------------- -------------- ------------
NET LOSS AVAILABLE TO
COMMON SHAREHOLDERS $ (1,229) $ (7,899) $ (11,997) $ (15,873)
============= ============= ============== ============
NET LOSS PER COMMON SHARE $ (0.03) $ (0.21) $ (0.32) $ (0.43)
============= ============= ============== ============
NET LOSS PER COMMON SHARE
---ASSUMING DILUTION $ (0.03) $ (0.21) $ (0.32) $ (0.43)
============= ============= ============== ============
Weighted average number of common shares outstanding:
Basic 37,102,001 36,809,884 37,089,737 36,725,181
============= ============= ============== ============
Diluted 37,102,001 36,809,884 37,089,737 36,725,181
============= ============= ============== ============
RECONCILIATION OF EBITDA TO NET LOSS:
SIX MONTH SIX MONTH
SECOND QUARTER SECOND QUARTER PERIOD ENDED PERIOD ENDED
30-JUL-05 31-JUL-04 30-JUL-05 31-JUL-04
--------- --------- --------- ---------
EBITDA (AS DEFINED) (000'S) (A) $ 2,380 $ (3,232) $ (3,665) $ (6,625)
======================== ===========================
A reconciliation of EBITDA to net loss is as follows:
EBITDA, as presented $ 2,380 $ (3,232) $ (3,665) $ (6,625)
Adjustments:
Depreciation and amortization (5,102) (4,918) (10,393) (9,702)
Interest income 738 322 1,384 596
Income taxes 826 - 820 -
------------------------ ---------------------------
Net loss $ (1,158) $ (7,828) $ (11,854) $ (15,731)
======================== ===========================
(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)
---------------------------------------- ----------------------------------
Q2 YTD
FOR THE THREE MONTHS ENDING FOR THE SIX MONTHS ENDING
---------------------------------------- -----------------------------------
7/30/2005 7/31/2004 % 7/30/2005 7/31/2004 %
--------- --------- - --------- --------- -
PROGRAM DISTRIBUTION
- --------------------
Cable FTE's 37,990 36,192 5% 37,759 36,046 5%
Satellite FTE's 23,956 20,942 14% 23,616 20,544 15%
------------- ------------- --- ------------- ------------- ---
Total FTE's (Average 000's) 61,946 57,134 8% 61,374 56,590 8%
Net Sales per FTE (Annualized) $ 10.78 $ 10.83 0% $ 10.39 $ 10.81 -4%
Active Customers - 12 month rolling 773,210 753,453 3% n/a n/a
% New Customers - 12 month rolling 58% 62% n/a n/a
% Reactivated & Retained - 12 month rolling 42% 38% n/a n/a
Customer Penetration - 12 month rolling 1.2% 1.3% n/a n/a
PRODUCT MIX
- -----------
Jewelry 57% 67% 56% 67%
Apparel 4% 3% 5% 4%
Health & Beauty 4% 3% 4% 3%
Computer & Electronics 23% 15% 22% 14%
Fitness 0% 1% 1% 1%
Home 12% 11% 12% 11%
Shipped Units (000's) 1,159 1,233 -6% 2,355 2,549 -8%
Average Price Point - shipped units $ 205 $ 186 10% $ 194 $ 177 10%
-------------------------------------- ------------------------------------
*Includes ShopNBC TV and ShopNBC.com only.