-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S6lt7XH4o4yOCFGifHsvmd+A78HEm8cXJdNe3a7Y8X5wOoOsfpuDBx0s/yo4WWIL bta/bSBTJpsJr+CVMudUaQ== 0000950134-03-008545.txt : 20030523 0000950134-03-008545.hdr.sgml : 20030523 20030523095633 ACCESSION NUMBER: 0000950134-03-008545 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030520 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030523 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VALUEVISION MEDIA INC CENTRAL INDEX KEY: 0000870826 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-CATALOG & MAIL-ORDER HOUSES [5961] IRS NUMBER: 411673770 STATE OF INCORPORATION: MN FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-20243 FILM NUMBER: 03717275 BUSINESS ADDRESS: STREET 1: 6740 SHADY OAK RD CITY: MINNEAPOLIS STATE: MN ZIP: 55344-3433 BUSINESS PHONE: 6129475200 MAIL ADDRESS: STREET 1: 6740 SHADY OAK RAOD CITY: EDEN PRAIRIE STATE: MN ZIP: 55344-3433 FORMER COMPANY: FORMER CONFORMED NAME: VALUEVISION INTERNATIONAL INC DATE OF NAME CHANGE: 19930328 8-K 1 c77393e8vk.txt FORM 8-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 MAY 20, 2003 ------------------------------------------------------ Date of report (Date of earliest event reported) VALUEVISION MEDIA, INC. -------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) MINNESOTA 0-20243 41-1673770 - ------------------------ ------------------------ --------------------- (State of Incorporation) (Commission File Number) (I.R.S. Employer Identification No.) 6740 SHADY OAK ROAD EDEN PRAIRIE, MINNESOTA 55344-3433 - -------------------------------------------- ---------------- (Address of principal executive offices) (Zip Code) Telephone Number: (952) 943-6000 ----------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) ================================================================================ ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits -------- 99 Press Release dated May 20, 2003. ITEM 9. REGULATION FD DISCLOSURE The information in this section is being furnished to, but not filed with, the Securities and Exchange Commission (the "Commission") solely under Item 12 of Form 8-K, "Results of Operations and Financial Condition," pursuant to interim procedures promulgated by the Commission in Release No. 33-8216 issued March 27, 2003. On May 20, 2003, ValueVision Media, Inc. issued a press release that included financial information for its fiscal first quarter ended April 30, 2003. A copy of the press release is attached as Exhibit 99 to this Form 8-K. EBITDA represents operating income for the respective periods excluding depreciation and amortization expense. 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 an indication of operating performance or as a measure of liquidity. EBITDA, as presented, may not be comparable to similarly entitled measures reported by other companies. Our management uses EBITDA, among other criteria, to evaluate our operating performance and as a measure of performance for incentive compensation purposes. Exhibit 99 includes an outlook for the second quarter ending July 31, 2003 that EBITDA for such quarter is expected to be $2.0 million to $4.0 million. Operating income, which includes depreciation and amortization expense, is expected to range from $(2.7) million to $(0.7) million. The difference between these measures includes approximately $4.7 million of depreciation and amortization expense. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: May 22, 2003 VALUEVISION MEDIA, INC. By /s/ Nathan E. Fagre ------------------------------- Nathan E. Fagre Senior Vice President, General Counsel and Secretary 2 EXHIBIT INDEX
No. Description Manner of Filing - --- ----------- ---------------- 99 Press Release dated May 20, 2003............................................. Filed Electronically
EX-99 3 c77393exv99.txt PRESS RELEASE 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 RECORD FISCAL FIRST QUARTER 2003 TV AND INTERNET SALES Company Meets Guidance, Exceeds Topline Estimates MINNEAPOLIS, MINN. -- MAY 20, 2003 -- VALUEVISION MEDIA (NASDAQ: VVTV), which owns and operates ShopNBC and ShopNBC.com, today announced financial results for the first quarter ended April 30, 2003. FINANCIAL AND DISTRIBUTION HIGHLIGHTS FOR THE FIRST QUARTER ENDED APRIL 30, 2003 o Consolidated net sales a first quarter record $143 million, up 8% over prior-year period o Internet net sales a first quarter record $25 million, up 8% over previous-year quarter o EBITDA (as defined below) was $4.4 million o Full-time equivalent (FTE) homes of 52.6 million, up 2.1 million from last quarter "The past few months continued to present a challenging retail environment. The confluence of a difficult economy, the war in Iraq, and retail sales in general continue to affect consumer confidence and purchase decision making," said Gene McCaffery, ValueVision Media Chairman and CEO. "Our revenue for the quarter exceeded our expectations with a strong finish in April. We had pre-planned for a difficult sales environment anticipating the conflict in Iraq. Promotional activity was heightened to increase our penetration during lower viewership created by news and events." Added McCaffery, "We continue to experience significant household growth with each quarter, adding 2.1 million new homes this period in addition to the 2.4 million added last quarter. While the added distribution costs are always challenging in the short run, the positioning for longer-term benefits is compelling. We continue to invest in strengthening our management and buying staff to address the opportunities afforded by these distribution additions, and to better merchandise and price our programs to increase sales and margin per household." Dick Barnes, ValueVision Media EVP, COO, & CFO, said: "While net sales were higher than expected in the quarter, EBITDA was impacted by approximately $1.3 million of incremental operating expenses associated with the stronger than expected FTE growth in the period, the establishment of a reserve for a pending litigation settlement, and legal fees for a discontinued business development initiative. Gross margin of 37% improved again versus the prior quarter, but continued to be impacted by higher levels of promotion in a difficult retail environment." Added Barnes, "Cash, cash equivalents, and short-term investments ended the quarter at $138 million. Inventory balances declined again by a further $2 million and have returned to more normalized levels. Finally, we repurchased 567,000 shares of common stock at average prices of $10.90 per share or $6.2 million." EBITDA as reported was $4.4 million. The Company defines EBITDA as its operating income for respective periods being reported excluding depreciation and amortization expense. This includes a gain of $4.4 million on the previously reported sale of 10 low-powered television stations, which closed during the quarter. Net income was $532,000 inclusive of the item identified above. There has been no tax provision recorded in the current quarter due to the Company's ability to utilize previously reserved capital loss carryforwards against the low-power television station gain. BUSINESS HIGHLIGHTS FOR THE FIRST QUARTER ENDED APRIL 30, 2003 ValueVision Media Completes Purchase of Full Power Television Station WWDP in Boston, Completes Sale of Low Power Television Stations o ShopNBC Continues to Add New Brands and Shows o ShopNBC Credit Card Surpasses 150,000 Account Holders o FanBuzz Continues to Expand Client List o Annual Shareholders' Meeting Announced 2 VALUEVISION MEDIA COMPLETES PURCHASE OF FULL POWER TELEVISION STATION WWDP IN BOSTON, COMPLETES SALE OF LOW POWER TELEVISION STATIONS During the quarter, ValueVision completed the purchase of the full power television station WWDP TV-46 in Boston, which reaches approximately 1.8 million cable households. The Company invested approximately $33 million to acquire the television station in order to build a long-term and cost effective distribution strategy in the attractive Boston area. The deal closed with FCC approval. ValueVision also completed the sale of 10 low power television stations for approximately $5 million in the period, resulting in a $4.4 million gain on the sale. SHOPNBC CONTINUES TO ADD NEW BRANDS AND SHOWS ShopNBC continued to add new brands and shows to its programming line-up. During the first quarter, the Company entered into commerce agreements with Dell, Discovery Channel's retail division, Sirius Satellite Radio, Danbury Mint, Premier Collectibles (coins), Versace and Mikasa crystal, Dirt Devil, and Cuisinart, to mention a few. These developments are the latest additions to an on-going list of brand names including Bose, Solutions, AOL, Gevalia, ProFlowers, and Omaha Steaks. SHOPNBC CREDIT CARD SURPASSES 150,000 ACCOUNT HOLDERS ShopNBC achieved a milestone with its 18 month old private label credit card by surpassing the 150,000 account holders mark with an open-to-buy of approximately $300 million. The ShopNBC card has proven to be a successful marketing promotion and customer loyalty tool as well as financially attractive because it generates incremental revenue to our top line and significant savings to our bottom line by lowering processing fees. 3 FANBUZZ CONTINUES TO EXPAND CLIENT LIST FanBuzz, a wholly owned subsidiary of ValueVision and a leading provider of e-commerce solutions to major media and brand companies, continued to expand its client list of sports and entertainment media companies during the first quarter. In addition to signing e-commerce and fulfillment agreements with the Arena Football League and two national governing bodies of amateur sports (USA Basketball, and USA Gymnastics), FanBuzz also now powers the online store of The Weather Channel. ANNUAL SHAREHOLDERS' MEETING ANNOUNCED The Company will hold its Annual Shareholders Meeting on Thursday, June 26, 2003 at the Marriott Southwest in Minnetonka, MN, from 10:00 a.m. to noon. Details will be mailed to shareholders of record in late May. OUTLOOK FOR THE SECOND QUARTER ENDING JULY 31, 2003 o Consolidated net sales expected to be $142 million to $147 million, up 11% to 15% over the prior- year period o EBITDA for the quarter expected to be $2 million to $4 million "With the war in Iraq behind us and signs of improvement in consumer confidence, we are cautiously optimistic as we look forward," said Barnes. "However, we do expect the retail promotional environment to remain challenging in the short-term. Moreover, we will continue to invest in expanding our program distribution and putting in place the building blocks to support category diversification." 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 4 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 and The Weather Channel. GE Equity and NBC own approximately 40% of ValueVision Media. For more information, please visit the Company's website at www.valuevisionmedia.com ### 5 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, ---------------------------- 2003 2002 ------------ ------------ NET SALES $ 143,475 $ 132,849 COST OF SALES 90,386 81,030 ------------ ------------ Gross profit 53,089 51,819 ------------ ------------ OPERATING (INCOME) EXPENSE: Distribution and selling 47,677 42,352 General and administrative 5,398 4,161 Depreciation and amortization 4,253 3,321 Gain on sale of television stations (4,417) -- ------------ ------------ Total operating (income) expense 52,911 49,834 ------------ ------------ OPERATING INCOME 178 1,985 ------------ ------------ OTHER INCOME (EXPENSE): Loss on sale and conversion of investments -- (6) Unrealized gain on security holdings -- 1,021 Write-down of investments -- (985) Equity in losses of affiliates -- (2,098) Interest income 354 1,035 ------------ ------------ Total other income (expense) 354 (1,033) ------------ ------------ INCOME BEFORE INCOME TAXES 532 952 Income tax provision -- 343 ------------ ------------ NET INCOME 532 609 ACCRETION OF REDEEMABLE PREFERRED STOCK (71) (70) ------------ ------------ NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 461 $ 539 ============ ============ NET INCOME PER COMMON SHARE $ 0.01 $ 0.01 ============ ============ NET INCOME PER COMMON SHARE ---ASSUMING DILUTION $ 0.01 $ 0.01 ============ ============ Weighted average number of common shares outstanding: Basic 35,981,187 38,153,172 ============ ============ Diluted 42,500,565 46,558,647 ============ ============
SUBSCRIBER INFORMATION (estimated in millions) APRIL 30, JANUARY 31, APRIL 30, 2003 2003 2002 ---------- ----------- ---------- Full-time Equivalent Subscribers 52.6 50.5 45.2 Total Subscribers 58.6 55.1 53.0 Full-time Subscribers 45.8 44.1 37.7
VALUEVISION MEDIA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
APRIL 30, JANUARY 31, 2003 2003 --------- ----------- (In thousands, except share data) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 74,749 $ 55,109 Short-term investments 63,316 113,525 Accounts receivable, net 60,641 76,734 Inventories 59,347 61,246 Prepaid expenses and other 7,193 7,449 --------- --------- Total current assets 265,246 314,063 PROPERTY AND EQUIPMENT, NET 52,298 39,905 FCC LICENSES 31,943 -- NBC TRADEMARK LICENSE AGREEMENT, NET 24,334 25,141 CABLE DISTRIBUTION AND MARKETING AGREEMENT, NET 5,117 5,341 GOODWILL 9,442 9,442 OTHER INTANGIBLE ASSETS, NET 1,064 1,242 INVESTMENTS AND OTHER ASSETS 10,405 11,140 --------- --------- $ 399,849 $ 406,274 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 53,977 $ 56,961 Accrued liabilities 32,396 30,310 Income taxes payable 76 226 --------- --------- Total current liabilities 86,449 87,497 LONG-TERM CAPITAL LEASE OBLIGATIONS 1,323 1,669 SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK, $.01 PAR VALUE, 5,339,500 SHARES AUTHORIZED; 5,339,500 SHARES ISSUED AND OUTSTANDING 42,533 42,462 SHAREHOLDERS' EQUITY: Common stock, $.01 par value, 100,000,000 shares authorized; 35,657,277 and 36,171,250 shares issued and outstanding 356 362 Common stock purchase warrants; 8,235,343 and 8,235,343 shares 47,638 47,638 Additional paid-in capital 239,677 244,134 Accumulated other comprehensive losses (2,233) (2,517) Deferred compensation (1,367) -- Note receivable from officer (4,115) (4,098) Accumulated deficit (10,412) (10,873) --------- --------- Total shareholders' equity 269,544 274,646 --------- --------- $ 399,849 $ 406,274 ========= =========
VALUE VISION MEDIA, INC. OPERATING STATISTICS
FIRST QUARTER FIRST QUARTER 30-APR-03 30-APR-02 --------- --------- ENDING FTE HOUSEHOLDS: (IN MILLIONS) Cable 34.4 29.1 Satellite 18.2 16.1 ------------------------------------------------- Total 52.6 45.2 ================================================= SHOPNBC MERCHANDISE SALES MIX: Jewelry 68% 71% Computers & Accessories 15% 16% Others 17% 13% ------------------------------------------------- Total 100% 100% ================================================= EBITDA (AS DEFINED) (000'S) (A) $ 4,431 $ 5,306 ================================================= A reconciliation of EBITDA to operating income is as follows: EBITDA as presented $ 4,431 $ 5,306 Less: Depreciation and amortization (4,253) (3,321) ------------------------------------------------- Operating income $ 178 $ 1,985 =================================================
(a) EBITDA as defined for this statistical presentation represents operating income for the respective periods excluding depreciation and amortization expense. -----END PRIVACY-ENHANCED MESSAGE-----