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8-K - FORM 8-K - iMedia Brands, Inc. | c64594e8vk.htm |
Exhibit 99
For Immediate Release Before Market
ValueVision Q1 Net Sales Rose 15% to $143.5 Million and
Adjusted EBITDA Rose to $3.1 Million
Adjusted EBITDA Rose to $3.1 Million
Q1 11 Highlights:
| Net Sales rose 15% over prior year to $143.5M | ||
| Adjusted EBITDA increased by $7.4M to $3.1M | ||
| Gross Margin rose to 37.2% vs. 36.6% in Q1 10 and 33.3% in Q4 10 | ||
| Internet Sales Penetration increased 530 bps to 44.9% from Q1 10 and 90 bps from Q4 10 | ||
| Raised $55.5M through a 9.5M share offering completed in April at $6.25 per share |
| Enabled redemption of 12% Series B Preferred and all accrued dividends totaling $47.3M; Redemption eliminates $17.5M in future dividend expense | ||
| Provided $8.2M in working capital | ||
| Required one-time, non-cash Q1 11 debt extinguishment charge of $24.5M |
MINNEAPOLIS, MN, May 11, 2011 ValueVision Media, Inc. (NASDAQ: VVTV), a premium interactive
retailer via TV, Internet, mobile and social media, operating under the ShopNBC brand, today
announced improved operating results for its fiscal first quarter ended April 30, 2011. ValueVision
will host a conference call and webcast today at 11:00 a.m. ET to review its results, details
below.
Three months ended | ||||||||||||
4/30/2011 | 5/1/2010 | |||||||||||
Q1 11 | Q1 10 | Change | ||||||||||
Net Sales |
$ | 143.5 | $ | 125.0 | 14.8 | % | ||||||
EBITDA, as adjusted |
$ | 3.1 | $ | (4.3 | ) | +$7.4 | ||||||
Loss Before Debt Extinguishment |
$ | (3.3 | ) | $ | (11.0 | ) | +$7.7 | |||||
Debt Extinguishment |
$ | (25.7 | ) | $ | | n/a | ||||||
Net Loss |
$ | (28.9 | ) | $ | (11.0 | ) | ($17.9 | ) | ||||
Homes (Average 000s) |
78,291 | 75,681 | 3.4 | % | ||||||||
Net Shipped Units (000s) |
1,134 | 1,079 | 5.1 | % | ||||||||
Average Price Point |
$ | 117 | $ | 108 | 8.3 | % | ||||||
Return Rate % |
21.2 | % | 19.2 | % | +200 bps | |||||||
Gross Margin % |
37.2 | % | 36.6 | % | +60 bps | |||||||
Internet Net Sales % |
44.9 | % | 39.6 | % | +530 bps | |||||||
New
Customers 12 month rolling |
568,912 | 548,731 | 3.7 | % | ||||||||
Active
Customers 12 month rolling |
1,147,536 | 1,050,599 | 9.2 | % |
ValueVision started fiscal 2011 with another quarter of solid progress across our
multichannel business, led by strong sales and margin growth and our third consecutive quarter of
positive adjusted EBITDA, said Keith Stewart, ValueVision CEO. In addition to strong
merchandising and operational execution, we also strengthened our capital structure and enhanced
our financial flexibility through the early redemption of our 12% preferred stock with proceeds
from the sale of 9.5 million common shares.
Mr. Stewart added, We also continued to build our talent pool across key areas of the company,
adding four proven interactive retail veterans to our team. Annette Repasch, a multichannel
retailing executive of 25 years, joined us to oversee merchandising strategy and product
development for
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Jewelry & Watches, Health & Beauty, and Fashion & Accessories. We also added three
industry veteran strategic advisors to focus on major IT, process engineering, merchandising and
customer service initiatives. The ShopNBC team is key to our future, and we are executing on an
exciting road map to drive improved performance.
Plans for the remainder of this year are centered around an impressive line-up of new product, top
brands, and compelling promotions to drive new and active customer growth. We will also be focused
on further increasing our internet sales penetration toward 50% as well as refinancing our
long-term debt with lower interest rates.
Q1 Highlights
ValueVisions Q1 net sales reflected strong performances across the Jewelry & Watches and Home &
Electronics categories, in addition to solid momentum in the Health & Beauty segment. Fashion &
Accessories is still early in its repositioning, though it achieved some well received Q1 brand
launches. Strong customer response to higher-priced items, including big screen TVs, mattresses
and certain jewelry offerings contributed to a slight up-tick in average selling price in Q1, as
well as a more modest increase in units shipped and an expected increase in return rates.
ValueVision recorded non-cash debt extinguishment charges totaling $25.7 million in Q1, reflecting
accelerated amortization of its Preferred Stock discount. Of the charges, $24.5 million resulted
from ValueVisions early redemption of its outstanding 12% Redeemable Preferred stock and accrued
dividends. An additional $1.2 million charge was related to a $2.5 million preferred stock payment
made prior to the redemption.
Bob Ayd, President of ShopNBC, commented, Q1 saw a continuation of the trends that drove strong Q4
results and provide our business with a more balanced and resilient platform. In addition, we had
more merchandise variety across key product categories and saw benefits from several national brand
introductions, including Simmons mattresses, Sur La Table kitchenware, and Anne Klein fashion
accessories. This ever-expanding array of quality products and unique offers helped drive customer
activity and sales gains in Q1.
Looking ahead in 2011, we cant help but be optimistic. We have a more established and robust
business, strong senior leadership, a growing base of popular products and brands, a healthy
balance sheet, and a growing track record of success. All of these factors are proving beneficial
in our efforts to both delight our customers as well as to attract exciting new vendors and product
exclusives.
Liquidity and Capital Resources
Net proceeds of $55.5 million from the early-April common stock offering were used to redeem all
outstanding 12% preferred stock and accrued dividends (totaling $47.3 million) and contributed $8.2
million to working capital. During Q1, ValueVision invested $2.8 million in capital expenditures,
$2.4 million in working capital and made a $12 million deferred payment to a distribution partner.
ValueVision ended Q1 2011 with cash and cash equivalents of $45.3 million, inclusive of $5.0
million in restricted cash, and has $25 million in long-term debt.
Conference Call / Webcast Today, Wednesday, May 11 at 11:00 a.m. ET:
Webcast/Web Replay:
|
https://e-meetings.verizonbusiness.com/emeet/join/index.jsp | |
Conference #: 7043730 / Passcode: SHOPNBC; archived for 30 days | ||
Telephone:
|
800-988-9672 / Passcode: SHOPNBC; keypad: 7467622 | |
Telephone Replay:
|
866-454-2121 / Passcode: 81810; available for 30 days |
Adjusted EBITDA
EBITDA represents net loss for the respective periods excluding depreciation and amortization
expense, interest income (expense) and income taxes. The company defines Adjusted EBITDA as EBITDA
excluding non-operating gains (losses); non-cash impairment charges and write-downs; restructuring;
and non-cash share-based compensation expense. The company has included the term Adjusted EBITDA
in our EBITDA reconciliation in order to adequately assess the operating performance of our core
television and internet
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businesses and in order to maintain comparability to our analysts coverage
and financial guidance, when given. Management believes that Adjusted EBITDA allows investors to
make a more meaningful comparison between our core business operating results over different
periods of time with those of other similar companies. In addition, management uses Adjusted EBITDA
as a metric measure to evaluate operating performance under its management and executive incentive
compensation programs. Adjusted EBITDA should not be construed as an alternative to operating
income (loss), net 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. Adjusted EBITDA may not be comparable to similarly entitled measures reported by
other companies.
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 managements current
expectations and accordingly are 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 and satellite
distribution for the companys programming and the fees associated therewith; the success of the
companys e-commerce and new sales initiatives; the success of its strategic alliances and
relationships; the ability of the company to manage its operating expenses successfully; working
capital levels; the ability of the Company to establish and maintain acceptable commercial terms
with third party vendors and other third parties with whom the Company has contractual
relationships; changes in governmental or regulatory requirements; litigation or governmental
proceedings affecting the companys 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
companys filings with the Securities and Exchange Commission, including the companys 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.
About ValueVision Media / ShopNBC (http://www.shopnbc.com)
ValueVision Media, Inc. (NASDAQ: VVTV) is a premium interactive retailer bringing high-quality
merchandise to customers via TV, Internet and mobile, under the ShopNBC brand. The ShopNBC
television network reaches over 79 million homes via cable and satellite and is streamed live at
http://www.shopnbc.com. Over 1.1 million customers have interacted with ShopNBC in the categories
of Home & Electronics, Health & Beauty, Fashion & Accessories, and Jewelry & Watches, yielding
revenues of over $560 million, over $230 million (41%) of which were Internet-based. The Companys
ShopNBC Anywhere initiative allows customers to interact and shop via TV, phone, mobile devices
and online at www.ShopNBC.com and via Facebook, Twitter and YouTube.
Contact:
Investors / Media Relations:
|
Investors: | |
Anthony Giombetti
|
Norberto Aja, David Collins, Jennifer Neuman | |
ValueVision Media, Inc.
|
Jaffoni & Collins | |
agiombetti@shopnbc.com
|
vvtv@jcir.com | |
(612) 308-1190
|
(212) 835-8500 |
(tables follow)
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VALUEVISION MEDIA, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share data)
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share data)
April 30, | January 29, | |||||||
2011 | 2011 | |||||||
(Unaudited) | ||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 40,324 | $ | 46,471 | ||||
Restricted cash and investments |
4,961 | 4,961 | ||||||
Accounts receivable, net |
85,176 | 90,183 | ||||||
Inventories |
42,215 | 39,800 | ||||||
Prepaid expenses and other |
3,688 | 3,942 | ||||||
Total current assets |
176,364 | 185,357 | ||||||
Property and equipment, net |
26,380 | 25,775 | ||||||
FCC broadcasting license |
23,111 | 23,111 | ||||||
NBC Trademark License Agreement, net |
121 | 928 | ||||||
Other Assets |
3,060 | 3,188 | ||||||
$ | 229,036 | $ | 238,359 | |||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 51,295 | $ | 58,310 | ||||
Accrued liabilities |
41,089 | 43,405 | ||||||
Current portion of accrued dividends |
| 1,355 | ||||||
Deferred revenue |
728 | 728 | ||||||
Total current liabilities |
93,112 | 103,798 | ||||||
Deferred revenue |
243 | 425 | ||||||
Long Term Payable |
| 4,894 | ||||||
Term Loan |
25,000 | 25,000 | ||||||
Accrued Dividends Series B Preferred Stock |
| 6,491 | ||||||
Series B Mandatorily Redeemable Preferred Stock
$.01 par value, 4,929,266 shares authorized; 0 and 4,929,266
shares issued and outstanding |
| 14,599 | ||||||
Total liabilities |
118,355 | 155,207 | ||||||
Commitments and Contingencies |
||||||||
Shareholders equity: |
||||||||
Common stock, $.01 par value, 100,000,000 shares authorized;
47,359,188 and 37,781,688 shares issued and outstanding |
473 | 378 | ||||||
Warrants to purchase 6,014,744 shares of common stock |
602 | 602 | ||||||
Additional paid-in capital |
393,785 | 337,421 | ||||||
Accumulated deficit |
(284,179 | ) | (255,249 | ) | ||||
Total shareholders equity |
110,681 | 83,152 | ||||||
$ | 229,036 | $ | 238,359 | |||||
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VALUEVISION MEDIA, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
For the Three Month Periods Ended | ||||||||
April 30, | May 1, | |||||||
2011 | 2010 | |||||||
Net sales |
143,533 | $ | 124,977 | |||||
Cost of sales |
90,141 | 79,240 | ||||||
Gross profit |
53,392 | 45,737 | ||||||
Margin % |
37.2 | % | 36.6 | % | ||||
Operating expense: |
||||||||
Distribution and selling |
46,476 | 46,042 | ||||||
General and administrative |
4,564 | 4,768 | ||||||
Depreciation and amortization |
2,982 | 3,690 | ||||||
Restructuring costs |
| 376 | ||||||
Total operating expense |
54,022 | 54,876 | ||||||
Operating loss |
(630 | ) | (9,139 | ) | ||||
Other income (expense): |
||||||||
Interest income |
| 42 | ||||||
Interest expense |
(2,602 | ) | (1,850 | ) | ||||
Debt extinguishment |
(25,679 | ) | | |||||
Total other expense |
(28,281 | ) | (1,808 | ) | ||||
Loss before income taxes |
(28,911 | ) | (10,947 | ) | ||||
Income tax provision |
(19 | ) | (24 | ) | ||||
Net loss |
$ | (28,930 | ) | $ | (10,971 | ) | ||
Net loss per common share |
$ | (0.71 | ) | $ | (0.34 | ) | ||
Net loss per common share
assuming dilution |
$ | (0.71 | ) | $ | (0.34 | ) | ||
Weighted average number of
common shares outstanding: |
||||||||
Basic |
40,655,177 | 32,679,504 | ||||||
Diluted |
40,655,177 | 32,679,504 | ||||||
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VALUEVISION MEDIA, INC.
AND SUBSIDIARIES
AND SUBSIDIARIES
Reconciliation of Adjusted EBITDA to Net Loss:
For the Three Month Periods Ended |
||||||||
April 30, | May 1, | |||||||
2011 | 2010 | |||||||
Adjusted EBITDA (000s) |
$ | 3,118 | $ | (4,292 | ) | |||
Less: |
||||||||
Debt extinguishment |
(25,679 | ) | | |||||
Restructuring costs |
| (376 | ) | |||||
Non-cash share-based compensation |
(697 | ) | (781 | ) | ||||
EBITDA (as defined) (a) |
(23,258 | ) | (5,449 | ) | ||||
A reconciliation of EBITDA to net loss is as
follows: |
||||||||
EBITDA, as defined |
(23,258 | ) | (5,449 | ) | ||||
Adjustments: |
||||||||
Depreciation and amortization |
(3,051 | ) | (3,690 | ) | ||||
Interest income |
| 42 | ||||||
Interest expense |
(2,602 | ) | (1,850 | ) | ||||
Income taxes |
(19 | ) | (24 | ) | ||||
Net loss |
$ | (28,930 | ) | $ | (10,971 | ) | ||
(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. The Company defines Adjusted EBITDA as EBITDA excluding non-operating gains (losses); non-cash impairment charges and writedowns, restructuring costs; and non-cash share-based compensation expense. |
Management has included the term Adjusted EBITDA in its EBITDA reconciliation in order to
adequately assess the operating performance of the Companys core television and Internet
businesses and in order to maintain comparability to its analysts coverage and financial guidance,
when given. Management believes that Adjusted EBITDA allows investors to make a more meaningful
comparison between our core business operating results over different periods of time with those of
other similar companies. In addition, management uses Adjusted EBITDA as a metric measure to
evaluate operating performance under its management and executive incentive compensation programs.
Adjusted EBITDA should not be construed as an alternative to operating income (loss), net income
(loss) or to cash flows from operating activities as determined in accordance with GAAP and should
not be construed as a measure of liquidity. Adjusted EBITDA may not be comparable to similarly
entitled measures reported by other companies.
# # #
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