ShopNBC can’t seem to stop bleeding red ink: It posted a $27.7 million net loss in fiscal 2012.
We were too busy at our day job to write them up Wednesday, when the home shopping released its fourth quarter and fiscal 2012 earnings.
In a nutshell, during the fourth quarter ShopNBC hit net sales of $177.5 million, adjusted EBITDA of $4.2 million and a net loss of $11.4 million. For the full fiscal year, the company posted net sales of $586.8 million, adjusted EBITDA of $4.5 million and a net loss of $27.7 million. The loss is actually an improvement, since the network lost $48.1 million in 2011. But all we can recall about this home shopping network is its years of losses.
“I am encouraged by our performance this quarter and believe we have made further progress toward our goals,” ShopNBC CEO Keith Stewart said in a canned statement.
“We overcame the adverse impact of Superstorm Sandy on our business in the first few weeks of Q4’12 to post solid net sales growth for the quarter. We also achieved continued improvements in both new and active customer counts versus last year, providing further evidence that our customer service, engagement and retention initiatives are resonating with our customers.”
ShopNBC’s results compare to QVC’s 3 percent increase in net revenue to $5.6 billion last year, and HSN’s 5 percent gain to $2.27 billion in net sales.
Here is where things get a little tricky with ShopNBC’s earnings, because fiscal 2012 had an extra week than fiscal 2011.
“Because ValueVision follows a 4-5-4 retail calendar, every five to six years the company has an extra week of operations, and this occurred in fiscal 2012,” the network said in a press release.
“Therefore, Q4’12 and full-year periods have 14 and 53 weeks, respectively, as compared to the same periods last year of 13 and 52 weeks. To facilitate more meaningful comparisons with fiscal 2011 results, ValueVision is presenting in the table below pro forma results for Q4 and fiscal 2012, reflecting current period results on an equivalent 13- and 52-week basis.
Q4’12 pro forma results were calculated by dividing actual Q4’12 results by 14 and by multiplying the quotients by 13. The 52-week pro formas were calculated by adding the Q4 13-week pro formas to the previously reported fiscal year-to-date Q3 results of operations.”
That said, the company’s fourth quarter pro forma net sales rose 11.7 percent to $164.8 million over the prior-year quarter. Sales growth was achieved by a significant rebound in the consumer electronics category and by solid performances in the home and beauty segments.
Pro forma adjusted EBITDA improved to a positive $3.9 million in the fourth quarter versus loss of $2.7 million last year, reflecting higher sales and lower distribution costs.
Pro forma net shipped units rose 11.6 percent to 1.6 million in the fourth quarter, reflecting the benefit of continued improvements to the company’s merchandise mix as well as a modest decline in average price points. Internet net Sales increased 160 bps to 46.3 percent versus the year-ago quarter, principally driven by growth in mobile transaction volume compared to last year.
For full 2012, pro forma net sales grew 2.8 percent to $574.1 million, while pro forma adjusted EBITDA for the year improved to $4.2 million compared to $1 million in 2011. ShopNBC also increased its distribution footprint to 84 million homes at year-end 2012 and began calendar 2013 with two channels of exposure in 70 percent of its homes.
“With the start of 2013, we are benefiting from reduced TV distribution costs negotiated last year and improved channel positioning,” Stewart said. “Overall, we feel our fourth-quarter performance is another step forward toward realizing the full potential of our business.”
ShopNBC Chief Financial Officer William McGrath had his canned statement,too.
“(ShopNBC) ended the year with $28 million in cash and restricted cash versus $32 million at the end of Q3’12,” he said. “The net use of cash in the quarter was primarily due to the increase in accounts receivable, reflecting higher Q4 sales. We anticipate the collection of these accounts receivable will provide positive cash flow in Q1’13.”