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ValueVision Media Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: September 8, 2011 01:07PM

ValueVision Media Inc. (VVTV) filed Quarterly Report for the period ended 2011-07-30. Valuevision Media Inc. has a market cap of $177.9 million; its shares were traded at around $3.7 with and P/S ratio of 0.3.



Highlight of Business Operations:

Consolidated net sales for the fiscal 2011 second quarter were $132,137,000 compared to $126,177,000 for the fiscal 2010 second quarter, which represents a 5% increase. We reported an operating loss of $3,539,000 and a net loss of $4,456,000 for the fiscal 2011 second quarter. We reported an operating loss of $6,237,000 and a net loss of $7,693,000 for the fiscal 2010 second quarter.

Total operating expenses for the fiscal 2011 second quarter were $54,807,000 compared to $53,393,000 for the comparable prior year period, an increase of 3%. Total operating expenses for the six months ended July 30, 2011 were $108,829,000 compared to $108,269,000 for the comparable prior year period, an increase of 1%. Distribution and selling expense increased $1,292,000, or 3%, to $46,313,000, or 35% of net sales during the fiscal 2011 second quarter compared to $45,021,000 or 36% of net sales for the comparable prior year fiscal quarter. Distribution and selling expense increased $1,726,000 or 2%, to $92,789,000, or 34% of net sales during the six months ended July 30, 2011 compared to $91,063,000 or 36% of net sales for the comparable prior year period. Distribution and selling expense increased on a year-to-date basis primarily due to increased credit card fees and bad debt expense totaling $1,937,000 each as a result of the overall increase in net sales and order transactions over the prior year comparable period. The increase over the prior year's fiscal year-to-date total was also due to increased bonus accruals of $795,000 and increased restricted stock expense of $349,000. The distribution and selling expense increases during the year were offset by: decreases in customer service and telemarketing expense of $276,000 resulting primarily from efficiencies gained in the areas of increased order process automation as well as efficiencies achieved in fulfillment and customer service and decreases in advertising and promotion expense of $937,000.

General and administrative expense for the fiscal 2011 second quarter increased $613,000, or 13%, to $5,408,000, or 4.1% of net sales, compared to $4,795,000, or 3.8% of net sales for the comparable prior year fiscal quarter. For the six months ended July 30, 2011, general and administrative expenses increased $410,000, or 4%, to $9,972,000 or 3.6% of net sales compared to $9,562,000 or 3.8% of net sales for the comparable prior year period. General and administrative expense increased on a year-to-date basis primarily as a result of increased share based compensation of $436,000 and increased bonus accruals of $440,000, offset by a $405,000 gain recorded on the disposal of a piece of operational equipment.

Depreciation and amortization expense for the fiscal 2011 second quarter was $3,086,000 compared to $3,527,000 for the comparable prior year fiscal quarter, representing a decrease of $441,000, or 13%. Depreciation and amortization expense as a percentage of net sales for the three month periods ended July 30, 2011 and July 31, 2010 was 2.3% and 2.8%, respectively. For the six months ended July 30, 2011 depreciation and amortization expense was $6,068,000 compared to $7,218,000 for the comparable prior year period, representing a decrease of $1,150,000 , or 16%. The decrease in depreciation and amortization expense in fiscal 2011 is due to a reduction in our depreciable asset base year over year which resulted from our Oracle11i upgrade asset becoming fully depreciated during fiscal 2010.

For the fiscal 2011 second quarter, we reported a net loss of $4,456,000 or $.09 per common share on 48,131,218 weighted average common shares outstanding compared with a net loss of $7,693,000 or $.24 per share on 32,703,164 weighted average common shares outstanding in the fiscal 2010 second quarter. For the six months ended July 30, 2011 we reported a net loss of $33,386,000 or $.75 per share compared to a net loss of $18,664,000 or $.57 for the comparable prior year period. Net loss for the second quarter of fiscal 2011 includes interest expense of $944,000, relating primarily to bank term loan interest expense and the amortization of fees paid to obtain our bank credit facilities and interest income totaling $44,000 earned on our cash and investments. Net loss for the second quarter of fiscal 2010 includes interest expense of $2,095,000, relating primarily to interest on our Series B Preferred Stock and the amortization of fees paid to obtain our bank credit facility, and interest income totaling $9,000 earned on our cash and investments. Net loss for the six months ended July 30, 2011 includes a $25.7 million charge related to the early preferred stock debt extinguishment, interest expense of $3,546,000, relating primarily to interest and debt discount amortization on our Series B Preferred Stock, bank term loan interest expense and the amortization of fees paid to obtain our bank credit facilities and interest income totaling $44,000 earned on our cash and investments. Without the effect of the $25.7 million one-time charge, our year-to-date net loss was $7,707,000 million, a 59% improvement over the comparable prior year period. Net loss available to common shareholders for the six months ended July 31, 2010 includes interest expense of $3,945,000, relating primarily to interest on our Series B Preferred Stock and bank credit facility fee amortization and interest income totaling $51,000 earned on our cash and investments.

As of July 30, 2011, we had cash and cash equivalents of $37,503,000 and had restricted cash and investments of $4,961,000 pledged as collateral for our issuances of commercial letters of credit. Our restricted cash is generally restricted for a period ranging from 30-60 days and / or to the extent that commercial letters of credit remain outstanding. As of January 29, 2011 we had cash and cash equivalents of $46,471,000 and had restricted cash and investments of $4,961,000 pledged as collateral for our issuances of commercial letters of credit. For the first six months of fiscal 2011, working capital decreased $684,000 to $80,875,000. The current ratio (our total current assets over total current liabilities) was 1.8 at each of July 30, 2011 and January 29, 2011.

Read the The complete Report



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