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ValueVision Media Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: June 7, 2012 08:19PM
ValueVision Media Inc. (VVTV) filed Quarterly Report for the period ended 2012-04-28. Valuevision Cla has a market cap of $79.1 million; its shares were traded at around $1.87 with and P/S ratio of 0.1.
Highlight of Business Operations:Consolidated net sales for our fiscal 2012 first quarter were $136,549,000 compared to $143,533,000 for our fiscal 2011 first quarter, which represents a 5% decrease. We reported an operating loss of $5,428,000 and a net loss of $8,739,000 for our fiscal 2012 first quarter. We had an operating loss of $630,000 and a net loss of $28,930,000 for our fiscal 2011 first quarter. The net loss for our first quarter of fiscal 2011 was primarily attributable to a one-time $25,679,000 loss on debt extinguishment resulting from the full redemption of our Series B preferred stock.
Consolidated net sales for the fiscal 2012 first quarter were $136,549,000 as compared with consolidated net sales of $143,533,000 for the fiscal 2011 first quarter, a 5% decrease. The decrease in quarterly consolidated net sales from the prior year largely reflects the impact of a 76% sales decrease in our consumer electronics product category. Net sales shortfalls in our consumer electronics category continued to impact our sales results during the first quarter due to continued challenges related to limited product assortment as well as execution and organizational challenges within this product area. While we have taken specific actions to address these challenges, we do not anticipate a significant improvement in consumer electronics performance in the upcoming quarters. Going forward, we expect that this category will remain a small percentage of our overall company sales as we focus on further broadening our other higher margin businesses while investing in new businesses to grow our product mix and customer base. Excluding consumer electronics, aggregate sales in all other product categories increased 12% over prior year's first quarter, reflecting an enhanced product mix and an 8% shift in airtime allocation to these categories. Our e-commerce sales penetration was 45.9% as compared to 44.9% for the first quarter of fiscal 2011 driven primarily by product mix, ongoing strong cross-channel promotions from our core television channel, online marketing efforts, internet only product offerings and mobile and social media platforms.
Gross profit for the fiscal 2012 first quarter and fiscal 2011 first quarter was $51,032,000 and $53,392,000, respectively, a decrease of $2,360,000, or 4% . The decrease in the gross profits experienced during the quarter was driven primarily by the year-over-year quarter sales decrease discussed above. Gross margin percentages for the first quarters of fiscal 2012 and fiscal 2011 were 37.4% and 37.2%, respectively, a 20 basis point increase. The increase in the gross margin percentage was driven primarily by a lower sales mix of lower margin consumer electronics partially offset by increased shipping and handling promotional initiatives during the quarter.
Total operating expenses for the fiscal 2012 first quarter were $56,460,000 compared to $54,022,000 for the comparable prior year period, an increase of 5%. Distribution and selling expense increased $1,889,000, or 4%, to $48,365,000, or 35.4% of net sales during the fiscal 2012 first quarter compared to $46,476,000, or 32.3% of net sales for the comparable prior year fiscal
General and administrative expense for the fiscal 2012 first quarter increased $103,000, or 2%, to $4,667,000, or 3.4% of net sales, compared to $4,564,000, or 3.2% of net sales for the comparable prior year fiscal quarter. General and administrative expense increased during the quarter primarily as a result of a $336,000 gain recorded on the disposal of a piece of operational equipment during the prior year first quarter reducing total general and administrative expense in fiscal 2011, partially offset by lower bonus and consulting expenses of $233,000 recorded during the first quarter of fiscal 2012.
Stocks Discussed: VVTV,