ValueVision Media Inc. (VVTV, Financial) filed Quarterly Report for the period ended 2009-10-31.
VALUEVISION INTERNATIONAL, IN is a home-shopping retailer in the United States. Through its continuous merchandise-focused television programming, it sells a wide variety of products directly to consumers. The products are presented by on-air hosts, and orders are processed on-site by its telemarketing service representatives who use its customized computer processing system which provides real-time feedback to the on- air hosts. Valuevision Media Inc. has a market cap of $131.9 million; its shares were traded at around $4.08 with and P/S ratio of 0.2.
Cost of sales (exclusive of depreciation and amortization) for the fiscal 2009 third quarter and fiscal 2008 third quarter was $79,774,000 and $81,694,000, respectively, a decrease of $1,920,000, or 2%. Cost of sales (exclusive of depreciation and amortization) for the nine months ended October 31, 2009 and for the comparable prior year period was $249,172,000 and $282,072,000, respectively, a decrease of $32,900,000, or 12%. The decrease in cost of sales is directly attributable to decreased costs associated with decreased sales volume from our television home shopping and internet businesses. Net sales less cost of sales (exclusive of depreciation and amortization) as a percentage of sales for the third quarters of fiscal 2009 and fiscal 2008 quarters were 33.2% and 34.5%, respectively. Net sales less cost of sales (exclusive of depreciation and amortization) as a percentage of sales for the nine months ended October 31, 2009 and for the comparable prior year period were 33.1% and 33.3%, respectively. The decrease in gross margins experienced during the quarter and year to date periods was driven primarily by an increase in free shipping promotions and other promotional markdowns, offset by a change in our inventory reserves on a year-to-date basis. We intend to continue to shift and grow our merchandise mix in the key product categories of home, fashion and health & beauty. We will also continue to reposition our core jewelry business with more moderate price points and higher margins.
Total operating expenses for the fiscal 2009 third quarter were $51,238,000 compared to $63,629,000 for the comparable prior year period, a decrease of 19%. Total operating expenses for the nine months ended October 31, 2009 were $157,403,000 compared to $196,281,000 for the comparable prior year period, a decrease of 20%. Distribution and selling expense decreased $9,969,000, or 19%, to $41,774,000, or 35% of net sales during the 2009 third quarter compared to $51,743,000 or 42% of net sales for the comparable prior year quarter. Distribution and selling expense decreased $31,755,000, or 20%, to $130,898,000, or 35% of net sales during the nine months ended October 31, 2009 compared to $162,653,000 or 39% of net sales for the comparable prior year period. Distribution and selling expense decreased on a year-to-date basis over the prior year primarily due to a $21,131,000 decrease in net cable and satellite rates; a decrease in third-party cable affiliation fees of $610,000; decreases in salaries, headcount and other related
personnel costs associated with merchandising, television production and show management personnel and on-air talent of $4,134,000; decreases in marketing expenses of $1,768,000; decreases in stock option expense of $136,000 and decreases in credit card fees and bad debt expense of $3,831,000 due to the overall decrease in net sales during the nine months ended October 31, 2009.
General and administrative expense for the fiscal 2009 third quarter decreased $1,318,000, or 24%, to $4,264,000, or 3.6% of net sales, compared to $5,582,000, or 4.5% of net sales for the fiscal 2008 third quarter. General and administrative expense for the nine months ended October 31, 2009 decreased $4,399,000, or 25%, to $13,200,000, or 3.5% of net sales, compared to $17,599,000, or 4.2% of net sales for the comparable prior year period. General and administrative expense decreased on a year-to-date basis over the prior year primarily as a result of our restructuring initiatives that included reductions in salaries, related benefits and consulting fees totaling $3,253,000; decreases in board related expenses of $264,000 and a $318,000 decrease associated with share-based compensation expense.
Depreciation and amortization expense for the fiscal 2009 third quarter was $3,507,000 compared to $4,246,000 for the fiscal 2008 quarter, representing a decrease of $739,000, or 17%, from the comparable prior year period. Depreciation and amortization expense for the nine months ended October 31, 2009 was $10,723,000 compared to $12,811,000 for the nine months ended November 1, 2008, representing a decrease of $2,088,000, or 16%, from the comparable prior year period. Depreciation and amortization expense as a percentage of net sales for the three and nine month periods ended October 31, 2009 and November 1, 2008 was constant at 3% for each period. The quarterly and year to date decrease in depreciation and amortization expense relates to reduced capital spending and the timing of fully depreciated assets year over year, offset by increased depreciation and amortization as a result of assets placed in service in connection with our various application software development and functionality enhancements and new digital transmission equipment.
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VALUEVISION INTERNATIONAL, IN is a home-shopping retailer in the United States. Through its continuous merchandise-focused television programming, it sells a wide variety of products directly to consumers. The products are presented by on-air hosts, and orders are processed on-site by its telemarketing service representatives who use its customized computer processing system which provides real-time feedback to the on- air hosts. Valuevision Media Inc. has a market cap of $131.9 million; its shares were traded at around $4.08 with and P/S ratio of 0.2.
Highlight of Business Operations:
Consolidated net sales for the fiscal 2009 third quarter were $119,441,000 compared to $124,769,000 for the 2008 third quarter, a 4% decrease. We reported an operating loss of ($11,571,000) and a net loss of ($12,919,000) for the 2009 third quarter. We reported an operating loss of ($20,554,000) and a net loss of ($20,778,000) for the 2008 third quarter.Cost of sales (exclusive of depreciation and amortization) for the fiscal 2009 third quarter and fiscal 2008 third quarter was $79,774,000 and $81,694,000, respectively, a decrease of $1,920,000, or 2%. Cost of sales (exclusive of depreciation and amortization) for the nine months ended October 31, 2009 and for the comparable prior year period was $249,172,000 and $282,072,000, respectively, a decrease of $32,900,000, or 12%. The decrease in cost of sales is directly attributable to decreased costs associated with decreased sales volume from our television home shopping and internet businesses. Net sales less cost of sales (exclusive of depreciation and amortization) as a percentage of sales for the third quarters of fiscal 2009 and fiscal 2008 quarters were 33.2% and 34.5%, respectively. Net sales less cost of sales (exclusive of depreciation and amortization) as a percentage of sales for the nine months ended October 31, 2009 and for the comparable prior year period were 33.1% and 33.3%, respectively. The decrease in gross margins experienced during the quarter and year to date periods was driven primarily by an increase in free shipping promotions and other promotional markdowns, offset by a change in our inventory reserves on a year-to-date basis. We intend to continue to shift and grow our merchandise mix in the key product categories of home, fashion and health & beauty. We will also continue to reposition our core jewelry business with more moderate price points and higher margins.
Total operating expenses for the fiscal 2009 third quarter were $51,238,000 compared to $63,629,000 for the comparable prior year period, a decrease of 19%. Total operating expenses for the nine months ended October 31, 2009 were $157,403,000 compared to $196,281,000 for the comparable prior year period, a decrease of 20%. Distribution and selling expense decreased $9,969,000, or 19%, to $41,774,000, or 35% of net sales during the 2009 third quarter compared to $51,743,000 or 42% of net sales for the comparable prior year quarter. Distribution and selling expense decreased $31,755,000, or 20%, to $130,898,000, or 35% of net sales during the nine months ended October 31, 2009 compared to $162,653,000 or 39% of net sales for the comparable prior year period. Distribution and selling expense decreased on a year-to-date basis over the prior year primarily due to a $21,131,000 decrease in net cable and satellite rates; a decrease in third-party cable affiliation fees of $610,000; decreases in salaries, headcount and other related
personnel costs associated with merchandising, television production and show management personnel and on-air talent of $4,134,000; decreases in marketing expenses of $1,768,000; decreases in stock option expense of $136,000 and decreases in credit card fees and bad debt expense of $3,831,000 due to the overall decrease in net sales during the nine months ended October 31, 2009.
General and administrative expense for the fiscal 2009 third quarter decreased $1,318,000, or 24%, to $4,264,000, or 3.6% of net sales, compared to $5,582,000, or 4.5% of net sales for the fiscal 2008 third quarter. General and administrative expense for the nine months ended October 31, 2009 decreased $4,399,000, or 25%, to $13,200,000, or 3.5% of net sales, compared to $17,599,000, or 4.2% of net sales for the comparable prior year period. General and administrative expense decreased on a year-to-date basis over the prior year primarily as a result of our restructuring initiatives that included reductions in salaries, related benefits and consulting fees totaling $3,253,000; decreases in board related expenses of $264,000 and a $318,000 decrease associated with share-based compensation expense.
Depreciation and amortization expense for the fiscal 2009 third quarter was $3,507,000 compared to $4,246,000 for the fiscal 2008 quarter, representing a decrease of $739,000, or 17%, from the comparable prior year period. Depreciation and amortization expense for the nine months ended October 31, 2009 was $10,723,000 compared to $12,811,000 for the nine months ended November 1, 2008, representing a decrease of $2,088,000, or 16%, from the comparable prior year period. Depreciation and amortization expense as a percentage of net sales for the three and nine month periods ended October 31, 2009 and November 1, 2008 was constant at 3% for each period. The quarterly and year to date decrease in depreciation and amortization expense relates to reduced capital spending and the timing of fully depreciated assets year over year, offset by increased depreciation and amortization as a result of assets placed in service in connection with our various application software development and functionality enhancements and new digital transmission equipment.
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