SOURCE: ValueVision Media, Inc.

March 25, 2008 16:45 ET

ShopNBC Reports Fourth Quarter and Full Year 2007 Results

MINNEAPOLIS, MN--(Marketwire - March 25, 2008) - ShopNBC (NASDAQ: VVTV), a 24-hour TV shopping network, today announced results for the fourth quarter and fiscal year-ended February 2, 2008.

Financial Highlights

The Company's fourth quarter revenues were $218 million, an increase of 1% over last year. Fourth quarter EBITDA, as adjusted, was $5.4 million compared to EBITDA, as adjusted, of $8.1 million in the same year-ago quarter. Net loss for the quarter was ($0.8) million compared to net income of $3.5 million for the same quarter last year.

Net sales for fiscal 2007 were $782 million, an increase of 2% over the previous year. The Company's full year EBITDA, as adjusted, was $6.9 million, compared to an EBITDA, as adjusted, of $14.7 million last year. For the fiscal year, the Company recorded net income of $22.5 million compared to a net loss of ($2.4) million in the prior year.

Business Highlights

--  Recruited and hired our new CEO, Rene Aiu, who has extensive industry
    knowledge and a proven track record of leadership and success in TV
    shopping. A 22-year veteran of the home shopping arena, she comes to the
    network having served as CEO of Jupiter Shop Channel Japan and prior to
    that as a Senior Vice President of HSN.
--  Successfully partnered with Alvarez & Marsal to conduct a complete
    business review.  As a result, the Company's organizational structure was
    streamlined including a 10% salaried workforce reduction.
--  Repurchased 1.9 million shares during the quarter at an average price
    of $5.81/share. Our balance sheet remains strong with $85 million in cash
    and securities.
--  Internet sales grew 12% in the fourth quarter and represented 31% of
    merchandise sales.
--  Introduced new product lines including home products designer
    Christopher Lowell and collectable coin dealer Silver Towne, which has a 20-
    year history in home shopping.
    

"We made commitments to you, our shareholders, at the outset of the fourth quarter and delivered against them in a time without a permanent CEO and in a period of transition at our company," said ShopNBC Executive Chairman of the Board John Buck. "While I am generally pleased with our operating performance in the fourth quarter, I am disappointed with the performance of our stock, which is why the Board authorized an additional $10 million in funding for our share repurchase program. What I am most excited about is the arrival of our new CEO Rene Aiu and the experience and vision she brings to our company."

Added Rene Aiu, CEO of ShopNBC, "This is an exciting time for me and for the company. I'm encouraged by what I've seen so far and the opportunity within. I look forward to working with our employees, vendors and shareholders as we improve the performance of our company and build long-term shareholder value."

Investor Conference Call and Audio Streaming Information

Management has scheduled a conference call at 11 a.m. EDT / 10 a.m. CDT on Wednesday, March 26, 2008 to discuss the fourth quarter and full year results.

To participate in the conference call, please dial 1-800-857-9866 (pass code: SHOPNBC) five to ten minutes prior to the call time. If you are unable to participate live in the conference call, a replay will be available for 30 days. To access the replay, please dial 1-800-945-7247.

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 9511906 with pass code 'SHOPNBC.' A rebroadcast of the audio stream will be available using the same access information for 30 days after the initial broadcast.

EBITDA and EBITDA, as adjusted

The Company defines EBITDA as net income (loss) from continuing operations for the respective periods excluding depreciation and amortization expense, interest income (expense) and income taxes. The Company defines EBITDA, as adjusted, as EBITDA excluding non-recurring non-operating gains (losses) and equity in income of Ralph Lauren Media, LLC; non-recurring restructuring and CEO transition costs; and non-cash share-based payment expense. Management has included the term EBITDA, as adjusted, in order to adequately assess the operating performance of the Company's "core" television and Internet businesses and in order to maintain comparability to its analyst's coverage and financial guidance. Management believes that EBITDA, as adjusted, allows investors to make a more meaningful comparison between our core business operating results over different periods of time with those of other similar small cap, higher growth companies. In addition, management uses EBITDA, as adjusted, as a metric measure to evaluate operating performance under its management and executive incentive compensation programs. EBITDA, as adjusted, should not be construed as an alternative to operating 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. EBITDA, as adjusted, may not be comparable to similarly entitled measures reported by other companies.

About ShopNBC

ShopNBC reaches 70 million homes in the United States via cable affiliates and satellite: Dish Network channel 228 and Direct TV channel 316. ShopNBC.com is recognized as a top e-commerce site. ShopNBC is owned and operated by ValueVision Media (NASDAQ: VVTV). For more information, please visit 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.
                         Key Performance Metrics*
                                (Unaudited)



                                     Q4                     YTD
                                For the three           For the twelve
                                months ending           months ending
                            ----------------------  ----------------------
                            2/2/2008  2/3/2007   %  2/2/2008  2/3/2007   %
                            --------  --------  --  --------  --------  --
Program Distribution
   Cable FTEs                 41,902    40,082   5%   41,335    39,288   5%
   Satellite FTEs             28,060    26,572   6%   27,585    25,923   6%
                            --------  --------  --  --------  --------  --
Total FTEs (Average 000s)     69,962    66,654   5%   68,920    65,211   6%

Net Sales per FTE
 (Annualized)               $  12.20  $  12.74  -4% $  11.13  $  11.58  -4%

Active Customers - 12 month
 rolling                         n/a       n/a       893,991   845,564

% New Customers - 12 month
 rolling                         n/a       n/a            51%       53%

% Retained - 12 month
 rolling                         n/a       n/a            49%       47%

Customer Penetration - 12
 month rolling                   n/a       n/a           1.3%      1.3%

Product Mix
   Jewelry                        34%       34%           38%       39%
   Watches, Apparel and
    Health & Beauty               25%       26%           25%       24%
   Home & All Other               41%       40%           37%       37%

Shipped Units (000s)           1,271     1,340  -5%    4,621     4,989  -7%

Average Price Point -
 shipped units              $    235  $    219   7% $    233  $    211  10%
                            --------  --------  --  --------  --------  --

*Includes ShopNBC TV and ShopNBC.com only.





                          VALUEVISION MEDIA, INC.
                             AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS
              (In thousands, except share and per share data)
                                (Unaudited)

                          For the Three Month       For the Twelve Month
                             Periods Ended             Periods Ended
                        -----------  -----------  -----------  -----------
                        February 2,  February 3,  February 2,  February 3,
                            2008         2007         2008         2007
                        -----------  -----------  -----------  -----------
Net sales               $   218,007  $   216,683  $   781,550  $   767,275
Cost of sales               145,411      141,526      510,535      500,114
  (exclusive of
   depreciation and
   amortization shown
   below)
Operating expense:
  Distribution and
   selling                   62,062       60,980      241,681      226,450
  General and
   administrative             5,771        6,583       24,899       27,922
  Depreciation and
   amortization               4,412        5,712       19,993       22,239
  Restructuring costs         1,939            -        5,043            -
  CEO transition costs          355            -        2,451            -
  Asset impairments and
   write offs                     -            -            -           29
                        -----------  -----------  -----------  -----------
    Total operating
     expense                 74,539       73,275      294,067      276,640
                        -----------  -----------  -----------  -----------
Operating income
 (loss)                      (1,943)       1,882      (23,052)      (9,479)
                        -----------  -----------  -----------  -----------
Other income:
  Other income
   (expense)                    (67)           -         (186)         350
  Interest income             1,137          851        5,680        3,802
                        -----------  -----------  -----------  -----------
    Total other income        1,070          851        5,494        4,152
                        -----------  -----------  -----------  -----------
Income (loss) before
 income taxes and
 equity in net income
 of affiliates                 (873)       2,733      (17,558)      (5,327)
Gain on sale of RLM
 investment                      -            -       40,240            -
Equity in income of
 affiliates                      -          814          609        3,006
Income tax (provision)
 benefit                         82          (30)        (839)         (75)
                        -----------  -----------  -----------  -----------

Net income (loss)             (791)       3,517       22,452       (2,396)
Accretion of redeemable
 preferred stock                (73)         (72)        (291)        (289)
                        -----------  -----------  -----------  -----------
Net income (loss)
 available to common
 shareholders           $      (864) $     3,445  $    22,161  $    (2,685)
                        ===========  ===========  ===========  ===========

Net income (loss) per
 common share           $     (0.02) $      0.09  $      0.53  $     (0.07)
                        ===========  ===========  ===========  ===========

Net income (loss) per
 common share --
 assuming dilution      $     (0.02) $      0.08  $      0.53  $     (0.07)
                        ===========  ===========  ===========  ===========

Weighted average
 number of common
 shares outstanding:
    Basic                35,314,203   37,483,594   41,992,167   37,646,162
                        ===========  ===========  ===========  ===========
    Diluted              35,314,203   42,861,399   42,010,972   37,646,162
                        ===========  ===========  ===========  ===========





                          VALUEVISION MEDIA, INC.
                             AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
              (In thousands except share and per share data)


                                                  February 2,  February 3,
                                                      2008         2007
                                                  -----------  -----------
                                                  (Unaudited)

                    ASSETS
Current assets:
   Cash and cash equivalents                      $    25,605  $    41,496
   Short-term investments                              33,473       29,798
   Accounts receivable, net                           109,489      117,169
   Inventories                                         79,444       66,622
   Prepaid expenses and other                           4,172        5,360
                                                  -----------  -----------
     Total current assets                             252,183      260,445

Long term investments                                  26,306            -
Property and equipment, net                            36,627       40,107
FCC broadcasting license                               31,943       31,943
NBC Trademark License Agreement, net                   10,608       12,234
Cable distribution and marketing agreement, net           872        1,759
Other assets                                              541        5,492
                                                  -----------  -----------
                                                  $   359,080  $   351,980
                                                  ===========  ===========

      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Accounts payable                               $    73,093  $    57,196
   Accrued liabilities                                 44,609       47,709
   Deferred revenue                                       648          369
                                                  -----------  -----------
     Total current liabilities                        118,350      105,274

Other long-term obligations                                 -        2,553
Deferred revenue                                        2,322        1,699

Series A Redeemable Convertible Preferred Stock,
 $.01 par value, 5,339,500 shares authorized;
 5,339,500 shares issued and outstanding               43,898       43,607

Shareholders' equity:
   Common stock, $.01 par value, 100,000,000
    shares authorized; 34,070,422 and 37,593,768
    shares issued and outstanding                         341          376
   Warrants to purchase 2,036,858 shares of
    common stock                                       12,041       22,972
   Additional paid-in capital                         274,172      287,541
   Accumulated other comprehensive losses              (2,454)           -
   Accumulated deficit                                (89,590)    (112,042)
                                                  -----------  -----------
     Total shareholders' equity                       194,510      198,847
                                                  -----------  -----------
                                                  $   359,080  $   351,980
                                                  ===========  ===========

Contact Information

  • CONTACT:

    Frank Elsenbast
    Chief Financial Officer
    952-943-6262

    Amy Kahlow
    Director of Communications
    952-943-6717