ValueVision Media, Inc. (Form: 8-K)

ValueVision Media announces Fourth Quarter and Year-End Results, Provides Outlook for Fiscal 2005

MINNEAPOLIS, MN.—(PR NEWSWIRE)—March 28, 2005—ValueVision Media, Incorporated (NASDAQ:VVTV) today announced results for fourth quarter and fiscal year ended January 31, 2005.

Fourth Quarter Performance
ValueVision’s fourth quarter revenues were a record $184.4 million for the quarter ended January 31, 2005. This represents a 3% increase over last year and the largest sales quarter in the company’s history. Fourth quarter EBITDA (defined below) was a loss of $2.5 million. The EBITDA loss includes a non-cash write-off of $1.9 million of advertising credits and employee severance charges of $0.6 million.

William J. Lansing, President and Chief Executive Officer of ValueVision Media, Inc., summarized, “We are pleased with the performance of our business in the fourth quarter. Sales in our TV and Internet business grew 6% vs. the prior year. Our merchandise team continues to aggressively grow our Apparel, Cosmetics and Home categories. These categories represented 24% of our sales this quarter vs. 18% last year. In addition, the productivity of our new categories exceeded our jewelry productivity for the first time in the company’s history. And finally, we ended the year with an exceptionally strong balance sheet with over $100 million in cash and short-term investments, plus a very clean inventory position.”

Overview of Fiscal Year Performance
Consolidated net sales for the 2004 full year were $649.4 million, an increase of 5.3% over last year. For the year ended January 31, 2005, the Company reported an EBITDA loss of $39.0 million, compared to an EBITDA profit of $5.3 million last year. The current year EBITDA loss included charges of $17.2 million, of which $11.3 million related to FanBuzz asset impairment, $1.9 million related to advertising credit impairment and $4.0 million related to employee severance costs.

Outlook for 2005
Lansing commented, “We are optimistic about the outlook for 2005. Many of the initiatives that we started in 2004 are beginning to yield significant results. Specifically, ‘Our Top Value’ (OTV) initiative was launched last August and has become a significant sales driver for us. Each day we spotlight one exceptional product at an incredible value throughout the day. In addition to driving significant sales volume, our OTVs have been a great source of new customers to our network.

“Other initiatives that were launched in 2004 that are hitting their stride in 2005 include Oversell / Waitlist, Off-Air Sales and the continued growth in our direct marketing initiatives. All of these programs drive incremental sales and increase our operating margins.

“Throughout 2005 we will also focus on increasing our active customer base. Customer retention has grown steadily during 2004 aided by our improved customer experience and direct marketing efforts. New customer growth will continue as our broader merchandise mix appeals to a bigger slice of the homes we serve.”

“And finally, 2005 will benefit from the 2004 investments that were made in our Merchandising, Marketing, Media and IT groups. The teams and ideas are in place to deliver our 2005 objectives with modest growth in operating expenses.

“We are confident that these exciting initiatives position us to deliver our strategic objectives of growing our customer base, increasing our sales per household and expanding our gross margins.”

“This year we will continue our practice of giving the investment community more general sales and EBITDA guidance, along with a broader set of key performance metrics,” continues Mr. Lansing. “These metrics are how we evaluate our company internally, and we believe they provide a clear indication of the progress we’re making toward our strategic goals.

“For 2005, we are projecting double-digit sales growth. We expect the growth rate to be slower in the first half of the year, with growth accelerating in the fall season. Our EBITDA objective for fiscal 2005 is to return to profitability,” advised Lansing. This guidance does not reflect the impact of stock option expense on EBITDA, resulting from the new Statement of Financial Accounting Standards 123(r) Share-Based Payment, which is effective for reporting periods beginning after June 15, 2005. Adjustments to EBITDA will be made accordingly when this rule goes into effect.

Conference Call Information
Management has scheduled a conference call at 11:00 a.m. EST/10:00 a.m. CST on Tuesday, March 29, 2005 to discuss fourth quarter and full year results.

To participate in the conference call, please dial 1-888-398-1687 (Pass code: VALUEVISION) five to ten minutes prior to call time. If you are unable to participate live, a replay will be available for 48 hours after the conference call. To access the replay, please dial 1-800-685-8573.

You may also participate via live audio stream by logging on to https://e-meetings.mci.com.
To access the audio stream, please use conference number 6760806 with pass code ‘VALUEVISION’. A rebroadcast of the audio stream will be available using the same access information for 30 days after the initial broadcast.

To be placed on the Company’s e-mail notification list for press releases, SEC filings, certain analytical information, and/or upcoming events, please go to www.valuevisionmedia.com and click on “Investor Relations.” Click on “E-mail Alerts” and complete the requested information.

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)


		January 31,			January 31,
		2005			2004
		(Unaudited)
	ASSETS
Current assets:
Cash and cash equivalents		$	62,640		$	81,033
Short-term investments			37,941			46,148
Accounts receivable, net			79,405			71,166
Inventories			54,903			67,620
Prepaid expenses and other			5,635			5,017

Total current assets			240,524			270,984
Property and equipment, net			52,725			54,511
FCC broadcasting license			31,943			31,943
NBC Trademark License Agreement, net			18,687			21,914
Cable distribution and marketing agreement, net			3,550			4,445
Goodwill			—			9,442
Other intangible assets, net			68			661
Investments and other assets			2,799			2,691

		$	350,296		$	396,591

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	48,012		$	51,482
Accrued liabilities			41,062			33,355

Total current liabilities			89,074			84,837
Long-term capital lease obligations			1,380			2,002
Series A Redeemable Convertible Preferred Stock,
$.01 par value, 5,339,500 shares authorized; 5,339,500
shares issued and outstanding			43,030			42,745
Shareholders’ equity:
Common stock, $.01 par value, 100,000,000 shares authorized;
37,043,912 and 36,487,821 shares issued and outstanding
			370			365
Warrants to purchase 8,035,343 and 8,235,343 shares of common stock			46,683			47,638
Additional paid-in capital			264,005			260,100
Deferred compensation			(353	)		(646	)
Note receivable from former officer			—			(4,158	)
Accumulated deficit			(93,893	)		(36,292	)

Total shareholders' equity			216,812			267,007

		$	350,296		$	396,591

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 Twelve Months Ended
		January 31,						January 31,
		2005			2004			2005			2004
Net sales		$	184,400		$	179,110		$	649,416		$	616,795
Cost of sales			122,637			118,609			435,176			395,562

Gross profit			61,763			60,501			214,240			221,233

Operating (income) expense:
Distribution and selling			56,155			51,616			213,788			193,015
General and administrative			5,568			4,923			22,250			19,088
Depreciation and amortization			5,316			4,630			20,120			17,846
CEO transition costs			—			4,625			—			4,625
Asset impairment			1,900			—			13,202			—
Employee termination costs			638			2,000			3,964			2,000
Gain on sale of television stations			-			-			-			(4,417	)

Total operating expense			69,577			67,794			273,324			232,157

Operating loss			(7,814	)		(7,293	)		(59,084	)		(10,924	)

Other income (expense):
Gain on sale and conversion of investments			-			-			-			361
Write-down of investments			—			(2,011	)		—			(2,011	)
Other expense			—			—			(50	)		—
Interest income			594			298			1,558			1,362

Total other income (expense)			594			(1,713	)		1,508			(288	)

Loss before income taxes			(7,220	)		(9,006	)		(57,576	)		(11,212	)
Income tax provision			25			-			25			180

Net loss			(7,245	)		(9,006	)		(57,601	)		(11,392	)
Accretion of redeemable
preferred stock			(71	)		(70	)		(285	)		(283	)

Net loss available to
common shareholders		$	(7,316	)	$	(9,076	)	$	(57,886	)	$	(11,675	)

Net loss per common share		$	(0.20	)	$	(0.25	)	$	(1.57	)	$	(0.32	)

Net loss per common share
	---assuming dilution	$	(0.20	)	$	(0.25	)	$	(1.57	)	$	(0.32	)

Weighted average number of common shares outstanding:
Basic			36,939,488			36,168,713			36,815,044			35,933,601

Diluted			36,939,488			36,168,713			36,815,044			35,933,601


	Q4								YTD
	For the three months ending 1/31								For the twelve months ending 1/31
		F04			F03		%			F04			F03		%

Program Distribution

Cable FTE’s		36,746			35,353		4	%		36,351			34,530		5	%
Satellite FTE’s		22,499			19,437		16	%		21,312			18,633		14	%

Total FTE’s (Average 000’s)		59,245			54,790		8	%		57,663			53,163		8	%
Net Sales per FTE (Annualized)	$	11.58		$	11.86		-2.4	%	$	10.66		$	10.95		-2.6	%
Active Customers - 12 month rolling		n/a			n/a					754,198			689,850		9.3	%
% New Customers - 12 month rolling		n/a			n/a					57	%		59	%
% Reactivated & Retained - 12 month rolling		n/a			n/a					43	%		41	%
Customer Penetration - 12 month rolling		n/a			n/a					1.3	%		1.3	%
Product Mix

Jewelry		55	%		63	%				61	%		65	%
Apparel		8	%		4	%				5	%		2	%
Health & Beauty		3	%		3	%				3	%		3	%
Computer & Electronics		19	%		17	%				17	%		16	%
Fitness		2	%		2	%				2	%		2	%
Home		13	%		11	%				12	%		12	%
Shipped Units (000’s)		1,348			1,296		4	%		5,004			4,080		23	%
Average Price Point — shipped units	$	182		$	185		(2	%)	$	179		$	213		(16	%)

*Includes ShopNBC TV and ShopNBC.com only.


Reconciliation of EBITDA to net loss:
	Fourth Quarter			Fourth Quarter			Twelve Months Ended			Twelve Months Ended
	31-Jan-05			31-Jan-04			31-Jan-05			31-Jan-04
EBITDA (as defined) (000’s) (a)	$	(2,498	)	$	(4,674	)	$	(39,014	)	$	5,272

A reconciliation of EBITDA to net loss is as follows:
EBITDA, as presented	$	(2,498	)	$	(4,674	)	$	(39,014	)	$	5,272
Adjustments:
Depreciation and amortization		(5,316	)		(4,630	)		(20,120	)		(17,846	)
Interest income		594			298			1,558			1,362
Income taxes		(25	)		—			(25	)		(180	)

Net loss	$	(7,245	)	$	(9,006	)	$	(57,601	)	$	(11,392	)

(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.

Contact Information:
Heather S. Faulkner
Director of Communications
hfaulkner@shopnbc.com
O) 952-943-6736

VALUEVISION MEDIA ANNOUNCES PRELIMINARY FINANCIAL
RESULTS FOR FIRST QUARTER 2005

Minneapolis, May 4, 2005 – ValueVision Media (NASDAQ: VVTV) today announced preliminary results for its first quarter ending April 30^th, 2005. Based on current estimates, consolidated net sales are expected to be in the range of $155 to $157 million, a decrease of approximately 2% over the prior-year period. Net sales from the core TV and Internet business – at approximately $152 million – were slightly above last year. Net loss is expected to be approximately $10.5 to $11.5 million in the first quarter, compared to $7.9 million last year. EBITDA loss (as defined below) is expected to be in the range of $6 to $7 million, versus a loss of $3.4 million one year ago. The end-of-quarter cash balance remains over $100 million as we offset the first quarter EBITDA loss with aggressive working capital management.

“While the first quarter results were below our expectations, we continue to make steady progress on key initiatives and our long term strategy,” said William Lansing, president and CEO of ValueVision Media. “The softness in our sales and profit is attributable to weakness in selected categories and diminished consumer confidence. We are addressing the category weakness, and expect our sales and profitability to improve even if consumer confidence comes back slowly. Our merchandise diversification efforts and growing customer base will reduce the day-to-day volatility of our results.

“Additionally, we are exiting the FanBuzz business, which did not develop into the complementary e-commerce business that was envisioned at the time of acquisition. The financial results for this quarter will contain less than $1 million in related charges. Exiting this business is the right strategic decision for our company and our shareholders.”

Updated Guidance for Fiscal 2005
In light of lower first quarter sales and EBITDA, we are adjusting our full year guidance for 2005, but continue to expect steady, incremental improvement for the remainder of the year.

•

Net sales are expected to grow at 5% or better for the year, with acceleration in the second half of the year.

•

EBITDA is expected to be positive in the second half of the year, but with our first quarter EBITDA loss it is unlikely that we will achieve our goal of breakeven EBITDA for the year.

Management has scheduled a conference call at 11:00 a.m. EDT/10:00 a.m. CDT on Thursday, May 5, 2005 to discuss preliminary first quarter results.

To participate in the conference call, please dial 1-888-603-6971 (Pass code: VALUEVISION) five to ten minutes prior to call time. If you are unable to participate live, a replay will be available for 48 hours after the conference call. To access the replay, please dial 1-866-465-2118.

You may also participate via live audio stream by logging on to https://e-meetings.mci.com. To access the audio stream, please use conference number 1739848 with pass code ‘VALUEVISION’. A rebroadcast of the audio stream will be available using the same access information for 30 days after the initial broadcast.

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.

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.


	First Quarter			First Quarter
	30-Apr-05			30-Apr-04
	(Estimate)
EBITDA (as defined) (000’s) (a)		($6,000) - ($7,000	)	$	(3,393	)

A reconciliation of EBITDA to net loss is as follows:
EBITDA, as presented		($6,000) - ($7,000	)	$	(3,393	)
Adjustments:
Depreciation and amortization		(5,100	)		(4,784	)
Interest income		600			274
Income taxes		—			—

Net loss		($10,500) - ($11,500	)	$	(7,903	)


Minnesota	0-20243	41-1673770
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)

6740 Shady Oak Road, Eden Prairie, Minnesota		55344-3433
_________________________________ (Address of principal executive offices)		___________ (Zip Code)


	ValueVision Media, Inc.

May 4, 2005	By:	Nathan E. Fagre

		Name: Nathan E. Fagre
		Title: Senior Vice President, General Counsel & Secretary


Exhibit No.		Description

99.1		Press Release dated March 28, 2005
99.2		Press Release dated May 4, 2005


	Ending		Ending		Ending
	January 31,		January 31,		January 31,
	2005		2004		2003
Full-time Equivalent Subscribers		60.1		55.6		50.5
Total Subscribers		63.9		61.9		55.1
Full-time Subscribers		54.2		49.0		44.1


Date of Report (Date of Earliest Event Reported):		March 28, 2005


Registrant’s telephone number, including area code:		(952) 943-6000