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ValueVision Media Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: December 8, 2011 01:44PM

ValueVision Media Inc. (VVTV) filed Quarterly Report for the period ended 2011-10-29. Valuevision Media Inc. has a market cap of $106.6 million; its shares were traded at around $2.2 with and P/S ratio of 0.2.



Highlight of Business Operations:

Consolidated net sales for the nine months ended October 29, 2011 were $410,857,000 as compared with consolidated net sales of $383,437,000 for the comparable prior period, a 7% increase. The increase in year to date consolidated net sales from the prior year is due to higher net sales in almost every major product category, with double-digit sales increases in our jewelry, health & beauty and fashion & accessories product categories. Year-to date consolidated net sales were also favorably impacted by our wider product assortment during the year and through the success of our increased offers and usage of our ValuePay installment program. Consolidated net sales for the nine months ended October 29, 2011 also increased as a result of higher shipping and handling revenues due to fewer free shipping promotions. Our internet net sales increased 11.3% and 21.1%, respectively, during the third quarter and first nine months of fiscal 2011 over prior year and our e-commerce sales penetration was 44.1% during the third quarter of fiscal 2011 and 45.0% for the first nine-months of fiscal 2011 as compared to 40.5% for the third quarter of fiscal 2010 and 39.8% for the first nine months of fiscal 2010; driven primarily by strong cross-channel promotions from our core television channel, online marketing efforts, unique internet only product offerings and mobile and social media platforms.

Distribution and selling expense increased $4,825,000, or 11%, to $47,577,000, or 35.2% of net sales during the fiscal 2011 third quarter compared to $42,752,000 or 32.3% of net sales for the comparable prior year fiscal quarter. Distribution and selling expense increased during the quarter primarily due to increased program distribution expense of $2,861,000 related to a 5% increase in average homes and improved channel positions obtained in certain markets. The increase over the prior year's quarter was also due to increased credit card fees and bad debt expense totaling $905,000 each as a result of the overall increase in net sales and order transactions over the prior year comparable quarter, increased salaries and consulting costs of $839,000 and increased share-based compensation expense of $573,000. These distribution and selling expense increases during the quarter were offset by decreases in advertising and promotion expense of $513,000.

Distribution and selling expense increased $6,551,000 or 5%, to $140,366,000, or 34.2% of net sales during the nine months ended October 29, 2011 compared to $133,815,000 or 34.8% 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 $2,842,000 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 an additional $2,743,000 in program distribution expense related to a 4% increase in average homes and improved channel positions in certain markets, increased bonus accruals of $635,000 and increased restricted stock share-based compensation expense of $915,000. The distribution and selling expense increases during the year were offset by decreases in advertising and promotion expense of $1,451,000.

General and administrative expense for the fiscal 2011 third quarter increased $379,000, or 9%, to $4,824,000, or 3.6% of net sales, compared to $4,445,000, or 3.4% of net sales for the comparable prior year fiscal quarter. For the nine months ended October 29, 2011, general and administrative expenses increased $789,000, or 6%, to $14,796,000 or 3.6% of net sales compared to $14,007,000 or 3.7% of net sales for the comparable prior year period. General and administrative expense increased during the quarter primarily as a result of increased share-based compensation of $302,000. General and administrative expense increased on a year-to-date basis primarily as a result of increased share-based compensation of $739,000 and increased bonus accruals of $350,000, offset by a $412,000 gain recorded on the disposal of a piece of operational equipment.

Depreciation and amortization expense for the fiscal 2011 third quarter was $3,210,000 compared to $2,997,000 for the comparable prior year fiscal quarter, representing an increase of $213,000, or 7%. Depreciation and amortization expense as a percentage of net sales for the three month periods ended October 29, 2011 and October 30, 2010 was 2.4% and 2.3%, respectively. For the nine months ended October 29, 2011 depreciation and amortization expense was $9,278,000 compared to $10,215,000 for the comparable prior year period, representing a decrease of $937,000, or 9%. The increase in depreciation and amortization expense during the third quarter was primarily due to increased amortization expense attributable to our renewed NBC trademark license. The decrease in depreciation and amortization expense on a year-to-date basis 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, offset by increased amortization expense attributable to our renewed NBC trademark license.

Read the The complete Report



Stocks Discussed: VVTV,
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