FORMATTING UPDATE - ValueVision Urges Shareholders to Review Its
Five-Year Track Record of Performance Before Voting on the
Company's Future
MINNEAPOLIS, MN--(Marketwired - Jun 12, 2014) - In the news
release, "ValueVision Urges Shareholders to Review Its Five-Year
Track Record of Performance Before Voting on the Company's Future,"
issued earlier today by ValueVision Media, Inc. (NASDAQ: VVTV), two
tables appeared following the release text; these tables have now
been placed in line within the release to place each table
alongside its respective accompanying text. Complete release with
updated layout follows.
ValueVision Urges Shareholders to Review Its Five-Year Track
Record of Performance Before Voting on the Company's Future
MINNEAPOLIS, MN--(June 12, 2014) - ValueVision Media, Inc.
(NASDAQ: VVTV), a multichannel electronic retailer operating as
ShopHQ via TV, Internet and mobile, today provided a clear
quantitative accounting of the Company's current leadership's track
record of success across a number of crucial financial and
operating metrics. The table (below) illustrates the Company's
performance over the five full years during which key members of
the current Board and management team formulated and executed the
Company's successful strategy and return to growth.
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ValueVision Media, Inc. Financial and Operational
Progress over 5 Years |
Based on VVTV Board & Team Assembled Starting Late
2008/Early 2009 |
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Prior Team |
Current Team's Performance |
Current Team |
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2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
Improvement |
Improved Financial Performance |
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Revenue $M's |
$568 |
$528 |
$562 |
$558 |
$587 |
$641 |
+ $73M |
Gross Margin % |
32.0% |
32.9% |
35.5% |
36.6% |
36.2% |
35.9% |
+390 basis points |
Gross Profit, $M's |
$182 |
$173 |
$200 |
$204 |
$212 |
$230 |
+ $48M |
Total Operating Expenses, $M's |
$
271 |
$
215 |
$
215 |
$
221 |
$
236 |
$
230 |
- $41M |
Operating (Loss) Profit, $M's |
$
(89) |
$
(41) |
$
(16) |
$
(17) |
$
(23) |
$
1 |
+ $90M |
Adj. EBITDA, $M's |
$
(51) |
$
(19) |
$
2 |
$
1 |
$
5 |
$
18 |
+ $69M |
Net Loss, $M's |
$
(98) |
$
(42) |
$
(26) |
$
(48) |
$
(28) |
$
(3) |
+ $95M |
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Diversification of Merchandise Assortment |
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Jewelry & Watches |
56% |
55% |
52% |
53% |
52% |
43% |
- 1,300 basis points * |
Home & Consumer Electronics |
32% |
32% |
33% |
28% |
27% |
33% |
+ 100 basis points |
Fashion & Accessories |
7% |
6% |
6% |
7% |
8% |
11% |
+ 400 basis points |
Beauty, Health & Fitness |
5% |
7% |
9% |
12% |
13% |
13% |
+ 800 basis points |
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Improved Operating Metrics |
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Internet / Mobile % of Revenue |
32.0% |
33.7% |
41.2% |
44.9% |
45.7% |
46.4% |
+ 1,440 basis points |
Net Promoter Score # |
n/a |
n/a |
n/a |
36% |
47% |
54% |
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Returns % |
31.2% |
21.0% |
19.8% |
22.6% |
21.1% |
22.3% |
- 900 basis points |
Average Selling Price |
$
176 |
$
108 |
$
101 |
$
104 |
$
96 |
$
81 |
- $95 |
Shipped Units |
3.7 |
4.5 |
5.2 |
4.9 |
5.5 |
7.2 |
+ 3.5M |
Transaction Costs |
$4.82 |
$3.60 |
$2.90 |
$2.91 |
$2.61 |
$2.50 |
- $2.32 |
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Active Customers Past 12 Months, M's |
0.754 |
1.022 |
1.144 |
1.060 |
1.132 |
1.357 |
+ 0.60 M |
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* Progress on strategy to diminish reliance on Jewelry
& Watches category and to invest in growing its other
segments. |
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Randy Ronning, ValueVision's Chairman of the Board of Directors,
stated, "ValueVision's record is clear and compelling. On nearly
every important measure, the Board and leadership team have made
tremendous progress, transforming a business that was seriously
challenged and near bankruptcy into a growing and vibrant Company.
Based on our record, we believe ValueVision's nominees deserve
strong shareholder support. Moreover, the Company's track record of
accomplishment should be the real focus of consideration as our
shareholders face the critical choices before them for the future
of their investment.
"Owning collectively 12.6% of the Company, ValueVision's Board
and management are deeply concerned about the future of the
Company, given the risk and uncertainty that we believe could
result should shareholders support the Clinton Group's proposed
change of Board leadership and Company direction and the proposed
immediate removal of the current senior management in light of the
Clinton Group's constant and baseless criticisms, which we believe
are not supported by the Company's performance.
"What is clear to the Board is that few if any shareholders
would support such unwarranted change and risk, if they were fully
informed regarding the breadth of progress that has been made. To
assure that performance is both clear and accessible, we have
provided the above table of performance metrics from Fiscal 2008
through Fiscal 2013.
"We believe that in reviewing the Company's record and in
considering the huge management, operational, distribution,
financial, merchandise, branding and reputational challenges the
business faced when management arrived, that shareholders will
conclude that the Clinton Group's nominees and their proposed
actions are the wrong direction for the Company. Most importantly,
such review will likely inform shareholders as to which leadership
team, strategy and direction offers the greatest experience,
potential and lowest risk for delivering further improvements in
shareholder value.
"We have come too far to risk your and our collective
investments on what we believe to be Clinton Group's and its
nominees' superficial ideas to bet the Company's future on costly,
uncertain celebrity-linked products or strategies to be executed by
an as yet undetermined CEO. Instead, imagine what the proven
ValueVision team can do over the next five years as they focus
fully on growth and business enhancements, rather than fixes,
financial restructuring and other remedial tasks. Certainly our
covering analysts also share our enthusiasm, as each of them
recommends our shares as a Buy."
Adjusted EBITDA
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Reconciliation of Adjusted EBITDA to Net
Income/(Loss): |
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Prior Team |
Current Team's Performance |
Current Team |
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2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
Improvement |
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EBITDA, as adjusted |
$ |
(51) |
$ |
(19) |
$ |
2 |
$ |
1 |
$ |
5 |
$ |
18 |
+ $69M |
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Less: |
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FCC license impairment |
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(9) |
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(11) |
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- |
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Writedown of Auction Rate Securities |
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(11) |
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Gain (loss) on sale of investments or asset |
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(1) |
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4 |
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0 |
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- |
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CEO Transition Cost |
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(3) |
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(2) |
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- |
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- |
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Debt Extinguishment |
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- |
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- |
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(1) |
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(26) |
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(1) |
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- |
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Activist Shareholder Response Costs |
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- |
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- |
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- |
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- |
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- |
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(2) |
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Restructuring costs and other non-recurring items |
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(4) |
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(2) |
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(1) |
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- |
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- |
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- |
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Non-cash share-based compensation |
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(4) |
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(3) |
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(3) |
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(5) |
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(3) |
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(3) |
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EBITDA (as defined) (a) |
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(83) |
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(23) |
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(3) |
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(30) |
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(10) |
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13 |
+ $96M |
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A reconciliation of EBITDA to net income (loss) is as follows: |
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EBITDA, as defined |
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(83) |
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(23) |
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(3) |
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(30) |
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(10) |
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13 |
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Adjustments: |
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Depreciation and amortization |
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(17) |
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(14) |
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(13) |
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(13) |
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(13) |
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(13) |
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Interest income |
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3 |
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0 |
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0 |
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0 |
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0 |
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0 |
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Interest expense |
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- |
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(5) |
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(10) |
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(6) |
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(4) |
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(1) |
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Income taxes |
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(0) |
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0 |
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1 |
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(0) |
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(0) |
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(1) |
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Net income (loss) |
$ |
(98) |
$ |
(42) |
$ |
(26) |
$ |
(48) |
$ |
(28) |
$ |
(3) |
+ $95M |
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EBITDA 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 debt extinguishment; non-operating gains (losses);
non-cash impairment charges and write-downs; activist shareholder
response costs; 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 television and Internet businesses and in order
to maintain comparability to our analysts' coverage and financial
guidance, when given. Management believes that the term Adjusted
EBITDA allows investors to make a more meaningful comparison
between our business operating results over different periods of
time with those of other similar companies. In addition, management
uses Adjusted EBITDA as a metric to evaluate operating performance
under the Company's 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. The
Company has included a reconciliation of Adjusted EBITDA to net
income (loss), its most directly comparable GAAP financial measure,
above.
About ValueVision Media/ShopHQ (www.shophq.com/ir)
ValueVision Media, Inc. operates as ShopHQ, a multichannel
retailer that enables customers to shop and interact via TV, phone,
Internet and mobile in the merchandise categories of Home &
Consumer Electronics, Beauty, Health & Fitness, Fashion &
Accessories, and Jewelry & Watches. The ShopHQ television
network reaches over 87 million cable and satellite homes and is
also available nationwide via live streaming at www.shophq.com.
Please visit www.shophq.com/ir for more investor information.
Forward-Looking Information
This release may contain certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. Any statements contained herein that are not statements of
historical fact may be deemed forward-looking statements. These
statements are based on management's 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 preferences, spending and
debt levels; the general economic and credit environment; interest
rates; seasonal variations in consumer purchasing activities; the
ability to achieve the most effective product category mixes to
maximize sales and margin objectives; competitive pressures on
sales; pricing and gross sales margins; the level of cable and
satellite distribution for our programming and the associated fees;
our ability to establish and maintain acceptable commercial terms
with third-party vendors and other third parties with whom we have
contractual relationships, and to successfully manage key vendor
relationships; our ability to manage our operating expenses
successfully and our working capital levels; our ability to remain
compliant with our long-term credit facility covenants; our ability
to successfully transition our brand name; the market demand for
television station sales; our management and information systems
infrastructure; challenges to our data and information security;
changes in governmental or regulatory requirements; litigation or
governmental proceedings affecting our operations; significant
public events that are difficult to predict, or other significant
television-covering events causing an interruption of television
coverage or that directly compete with the viewership of our
programming; and our ability 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.
You are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date of this announcement.
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.
Important Information
This release may be deemed to be solicitation material in
respect of the solicitation of proxies from shareholders in
connection with one or more meetings of the Company's shareholders,
including the Company's 2014 Annual Meeting of Shareholders. On May
9, 2014, the Company filed with the Securities and Exchange
Commission ("SEC") a proxy statement and a WHITE proxy card in
connection with the Company's 2014 Annual Meeting of Shareholders.
The Company, its directors and certain of its executive officers
and employees may be deemed to be participants in the solicitation
of proxies from shareholders in connection with the Company's 2014
Annual Meeting of Shareholders. Information concerning the
interests of these directors and executive officers in connection
with the matters to be voted on at the Company's 2014 Annual
Meeting of Shareholders is included in the proxy statement filed by
the Company with the SEC in connection with such meeting. In
addition, the Company files annual, quarterly and special reports,
proxy and information statements, and other information with the
SEC. The proxy statement for the 2014 Annual Meeting of
Shareholders is available, and any other relevant documents and any
other material filed with the SEC concerning the Company will be,
when filed, available, free of charge at the SEC website at
http://www.sec.gov. SHAREHOLDERS ARE URGED TO READ CAREFULLY THE
PROXY STATEMENT FILED BY THE COMPANY AND ANY OTHER RELEVANT
DOCUMENTS FILED WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION WITH RESPECT
TO PARTICIPANTS.
Media Contact: Dawn Zaremba ShopHQ dzaremba@shophq.com (952)
943-6043 O
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