-----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, UX3LyIwaleY88OWFo16BmxznWJJaH6q/oiXdH2o9SqgIx/s471W4F07KXBetHy0/ P2rvMLiQmmfjWWbkZ7NIsA== 0000950134-03-012193.txt : 20030825 0000950134-03-012193.hdr.sgml : 20030825 20030825121350 ACCESSION NUMBER: 0000950134-03-012193 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030820 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030825 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: 03863849 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 c79288e8vk.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 AUGUST 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 August 20, 2003. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On August 20, 2003 ValueVision Media, Inc. issued a press release discussing its results of operations and financial condition for its second quarter ended July 31, 2003. A copy of the press release is attached hereto as Exhibit 99 and incorporated herein by reference. The information in this Current Report, including Exhibit 99 hereto, is being furnished pursuant to Item 12 and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended. EBITDA represents operating income for the respective periods excluding depreciation and amortization expense, other non-operating income 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 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 to evaluate our operating performance and as a measure of performance for incentive compensation purposes. For the second quarter ended July 31, 2003, Exhibit 99 states that EBITDA for such quarter was $3.6 million. Net loss for such quarter, which includes depreciation and amortization expense, other non-operating income and income taxes, was $(.1) million. The difference between these measures includes $(4.3) million of depreciation and amortization expense, $0.8 million of other non-operating income and $(.1) million of income taxes. Exhibit 99 includes an outlook for the third quarter ending October 31, 2003 that EBITDA for such quarter is expected to be $3.0 million to $5.0 million. Net income (loss), which includes depreciation and amortization expense, along with other non-operating income, is expected to range from $(1.1) million to $0.9 million. The difference between these measures includes approximately $(4.5) million of depreciation and amortization expense and $0.4 million of other non-operating income. 2 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: August 22, 2003 VALUEVISION MEDIA, INC. By /s/ Richard D. Barnes ------------------------------------- Richard D. Barnes Executive Vice President, Chief Operating Officer and Chief Financial Officer 3 EXHIBIT INDEX No. Description Manner of Filing - --- ----------- ---------------- 99 Press Release dated August 20, 2003............... Filed Electronically EX-99 3 c79288exv99.txt PRESS RELEASE EXHIBIT 99 [VALUEVISION LOGO] For Immediate Release VALUEVISION MEDIA REPORTS RECORD FISCAL SECOND QUARTER 2003 TV AND INTERNET RESULTS MINNEAPOLIS, AUGUST 20 -- ValueVision Media (Nasdaq: VVTV), which owns and operates ShopNBC and ShopNBC.com, today announced financial results for the second quarter ended July 31, 2003. FINANCIAL AND DISTRIBUTION HIGHLIGHTS FOR THE SECOND QUARTER ENDED JULY 31, 2003 -- Consolidated net sales a second quarter record $144 million, up 12% over prior-year period -- Internet net sales a second quarter record $26 million, up 33% over previous-year quarter -- EBITDA (as defined below) was $3.6 million, up 10% over year-ago quarter -- Full-time equivalent (FTE) homes of 53 million, up 400,000 from last quarter "In the face of a difficult economic, post-Iraq environment, I am pleased to say that our performance for the second quarter was at the high-end of expectations and revenue growth out-paced our peer group. Internet sales were particularly strong and gross margin improved again to 37.6%," said Gene McCaffery, ValueVision Media Chairman and CEO. "Additionally in the quarter, we continued to broaden our merchandise mix and lower our price points by introducing brand name cosmetics and apparel lines, such as Benefit Cosmetics and Jones New York, which were well-received by our customer base." Added McCaffery, "The `Shop & Style' test-show on NBC, which concluded last Friday, was a great learning experience for us and NBC. We determined there is definitely a viewer interest in this kind of programming. Merchandise was more diversified and the price points were lower than what has been traditionally sold on ShopNBC. The lower price points and greater diversity of merchandise is where we want to be, so you could say the `Shop & Style' show format and merchandise selection is a glimpse of things to come. In the meantime, we're going to digest the information from this test, conduct a number of consumer research projects and further explore our options with NBC on this unique show concept." EBITDA was $3.6 million for the quarter. The Company defines EBITDA as its operating income (loss) for respective periods being reported excluding depreciation and amortization expense. BUSINESS HIGHLIGHTS FOR THE SECOND QUARTER ENDED JULY 31, 2003 -- "Shop & Style" Show Test With NBC Concluded -- ShopNBC Continues to Diversify Merchandise Mix -- ShopNBC Achieved Record Sales During Second Annual All-Star Anniversary Weekend in June "SHOP & STYLE" SHOW TEST WITH NBC CONCLUDED "Shop & Style" concluded its test run Friday, August 15th. The purpose of the show was to explore the appeal of commerce-oriented, entertainment programming with NBC's daytime audience and whether that influence would entice viewers to purchase product by leveraging the talents of both media companies. The Company learned there is a definite viewer interest in this kind of programming. Additionally, the show provided ShopNBC with increased online traffic, new customers, and additional awareness in four major U.S. markets, including New York City, San Francisco, Chicago, and Philadelphia. The next step is to evaluate the results and determine where to go with the concept. SHOPNBC CONTINUES TO DIVERSIFY MERCHANDISE MIX AND PROGRAMMING PARTNERS In the second quarter, ShopNBC continued to expand and diversify its merchandise mix and programming partners. Popular brands added include Kitchen Aid, Delongli, Schwinn Scooters, Sirius Satellite Radio, Benefit cosmetics, Jones apparel, Karen Kane, Nine West and Bandalino shoes, Cuisinart, Discovery Channel, Wustof Trident, Reebok treadmills, and Champion Clothing. SHOPNBC ACHIEVED RECORD ORDERS IN SECOND ANNUAL ALL-STAR ANNIVERSARY WEEKEND IN JUNE On June 20-23, ShopNBC achieved record sales in its second annual All-Star Anniversary Weekend - the single largest promotion of the year for the Company where vendors offer customers the best in merchandise values. During the weekend sales event, the Company achieved $20.8 million in orders with ShopNBC.com contributing $4.2 million to the order total, including the first ever three consecutive million dollar plus days of on-line sales. OUTLOOK FOR THE THIRD QUARTER ENDING OCTOBER 31, 2003 -- Consolidated net sales expected to be $153 million to $158 million, up 13% to 16% over the prior-year period -- EBITDA for the quarter expected to be $3 million to $5 million "We are cautiously optimistic on the direction of the economy leading out of the second quarter," said Dick Barnes, ValueVision Media EVP, COO, and CFO. "Our guidance assumes a continuing improvement in economic conditions and consumer spending through the third and fourth quarters." 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 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, The Weather Channel, 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 . ### VALUEVISION MEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) (Unaudited)
For the Three Months Ended For the Six Months Ended July 31, July 31, 2003 2002 2003 2002 Net sales $ 144,214 $ 128,336 $ 287,689 $ 261,185 Cost of sales 89,933 79,924 180,319 160,954 Gross profit 54,281 48,412 107,370 100,231 Operating (income) expense: Distribution and selling 45,773 41,215 93,450 83,568 General and administrative 4,939 3,945 10,337 8,106 Depreciation and amortization 4,301 4,097 8,554 7,418 Gain on sale of television stations -- -- (4,417) -- Total operating (income) expense 55,013 49,257 107,924 99,092 Operating income (loss) (732) (845) (554) 1,139 Other income (expense): Gain (loss) on sale and conversion of investments 361 (526) 361 (532) Unrealized gain on security holdings -- -- -- 1,021 Write-down of investments -- (86) -- (1,070) Equity in losses of affiliates -- (2,132) -- (4,230) Interest income 395 1,091 749 2,127 Total other income (expense) 756 (1,653) 1,110 (2,684) Income (loss) before income taxes 24 (2,498) 556 (1,545) Income tax provision (benefit) 100 (906) 100 (563) Net income (loss) (76) (1,592) 456 (982) Accretion of redeemable preferred stock (71) (70) (141) (141) Net income (loss) available to common shareholders $ (147) $ (1,662) $ 315 $ (1,123) Net income (loss) per common share $ (0.00) $ (0.04) $ 0.01 $ (0.03) Net income (loss) per common share - -- assuming dilution $ (0.00) $ (0.04) $ 0.01 $ (0.03) Weighted average number of common shares outstanding: Basic 35,689,645 38,007,047 35,835,416 38,080,110 Diluted 35,689,645 38,007,047 42,489,465 38,080,110
SUBSCRIBER INFORMATION (estimated in millions)
July 31, January 31, July 31, 2003 2003 2002 Full-time Equivalent Subscribers 53.1 50.5 46.6 Total Subscribers 59.4 55.1 53.1 Full-time Subscribers 46.4 44.1 39.7
VALUEVISION MEDIA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
July 31, January 31, 2003 2003 (In thousands, except share data) ASSETS Current assets: Cash and cash equivalents $ 74,685 $ 55,109 Short-term investments 63,050 113,525 Accounts receivable, net 73,998 76,734 Inventories 57,771 61,246 Prepaid expenses and other 7,414 7,449 Total current assets 276,918 314,063 Property and equipment, net 51,702 39,905 FCC Licenses 31,943 --- NBC Trademark License Agreement, net 23,527 25,141 Cable distribution and marketing agreement, net 4,893 5,341 Goodwill 9,442 9,442 Other intangible assets, net 933 1,242 Investments and other assets 5,145 11,140 $404,503 $406,274 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 54,573 $ 56,961 Accrued liabilities 32,878 30,310 Income taxes payable 88 226 Total current liabilities 87,539 87,497 Long-term capital lease obligations 1,302 1,669 Series A Redeemable Convertible Preferred Stock, $.01 par value, 5,339,500 shares authorized; 5,339,500 shares issued and outstanding 42,603 42,462 Shareholders' equity: Common stock, $.01 par value, 100,000,000 shares authorized; 35,794,235 and 36,171,250 shares issued and outstanding 358 362 Common stock purchase warrants; 8,235,343 and 8,235,343 shares 47,638 47,638 Additional paid-in capital 240,921 244,134 Accumulated other comprehensive losses -- (2,517) Deferred compensation (1,243) -- Note receivable from officer (4,128) (4,098) Accumulated deficit (10,487) (10,873) Total shareholders' equity 273,059 274,646 $ 404,503 $406,274
VALUE VISION MEDIA, INC. OPERATING STATISTICS
Six Six Second Second Months Months Quarter Quarter Ending Ending 31-Jul-03 31-Jul-02 31-Jul-03 31-Jul-02 Ending FTE Households: (in millions) Cable 34.5 30.1 NA NA Satellite 18.6 16.5 Total 53.1 46.6 ShopNBC Merchandise Sales Mix: Jewelry 70% 75% 69% 74% Computers & Accessories 15% 15% 15% 16% Others 15% 10% 16% 10% Total 100% 100% 100% 100% EBITDA (as defined) (000's) (A) $ 3,569 $ 3,252 $ 8,000 $ 8,557 A reconciliation of EBITDA to net income (loss) is as follows: EBITDA, as presented $ 3,569 $ 3,252 $ 8,000 $ 8,557 Less: Depreciation and amortization (4,301) (4,097) (8,554) (7,418) Other non-operating income (expense) 756 (1,653) 1,110 (2,684) Income taxes $ (100) 906 (100) 563 Net income (loss) (76) $ (1,592) $ 456 $ (982)
Third Quarter Outlook 31-Oct-03 A reconciliation of EBITDA to net income (loss) is as follows: EBITDA, as forecasted $ 3000 - $ 5000 Less: Depreciation and amortization, as forecasted (4,500) Other non-operating income, as forecasted 400 Income taxes, as forecasted --- Net income (loss) $(1,100) - $ 900 (A) EBITDA as defined for this statistical presentation represents operating income for the respective periods excluding depreciation and amortization expense. Source: ValueVision Media Contact: Anthony Giombetti, Director, Corporate Communications of ValueVision Media, +1-952-943-6017, or agiombetti@shopnbc.com -----END PRIVACY-ENHANCED MESSAGE-----