Call Us Crazy, But If ShopNBC’s Sales Jumped 15 Percent, How Come Losses More Than Doubled?

ValueVision Media, aka ShopNBC, posted a whopping 15 percent increases in its first-quarter net sales, to $143.5 million from $125 million, the home shopping network reported Wednesday.

That’s the good news. The bad news was that unless our eyes are deceiving us, ShopNBC’s net loss in the quarter was $28.9 million, more than double the loss in the year-ago period. But the operating loss was only $630,000, versus $9.1 million a year ago.

ShopNBC also reported that: Adjusted EBITDA increased by $7.4 million to $3.1 million; gross margin rose to 37.2 percent versus 36.6 percent in the year-ago quarter; and Internet-sales penetration increased to 44.9 percent.

“ValueVision started fiscal 2011 with another quarter of solid progress across our multichannel business, led by strong sales and margin growth and our third consecutive quarter of positive adjusted EBITDA,” ShopNBC CEO Keith Stewart said in a canned statement. “In addition to strong merchandising and operational execution, we also strengthened our capital structure and enhanced our financial flexibility through the early redemption of our 12 percent preferred stock with proceeds from the sale of 9.5 million common shares.”

Apparently not knowing when to stop when he’s ahead, Stewart added, “We also continued to build our talent pool across key areas of the company, adding four proven interactive retail veterans to our team. Annette Repasch, a multichannel retailing executive of 25 years, joined us to oversee merchandising strategy and product development for Jewelry & Watches, Health & Beauty, and Fashion & Accessories. We also added three industry veteran
strategic advisors to focus on major IT, process engineering, merchandising and customer service initiatives. The ShopNBC team is key to our future, and we are executing on an exciting road map to drive improved performance.

“Plans for the remainder of this year are centered around an impressive line-up of new product, top brands, and compelling
promotions to drive new and active customer growth. We will also be focused on further increasing our Internet sales penetration toward 50 percent as well as refinancing our long-term debt with lower interest rates.”

The first-quarter net sales reflected strong performances across the Jewelry & Watches and Home & Electronics categories, in addition to solid momentum in the Health & Beauty segment. Fashion &

Accessories is still early in its repositioning, though it achieved some well-received first-quarter brand launches, according to ShopNBC.

Strong customer response to higher-priced items, including big-screen TVs, mattresses and certain jewelry offerings contributed to a slight uptick in average selling price in the quarter, as well as a more modest increase in units shipped and an expected increase in return rates.

ShopNBC president Bob Ayd chimed in.

“Q1 saw a continuation of the trends that drove strong Q4 results and provide our business with a more balanced and resilient platform,” he said. “In addition, we had more merchandise variety across key product categories and saw benefits from several national brand introductions, including Simmons mattresses, Sur La Table kitchenware, and Anne Klein fashion accessories. This ever-expanding array of quality products and unique offers helped drive customer activity and sales gains in Q1.”

Yada, yada…

“Looking ahead in 2011, we can’t help but be optimistic. We have a more established and robust business, strong senior leadership, a growing base of popular products and brands, a healthy balance sheet, and a growing track record of success. All of these factors are proving beneficial in our efforts to both delight our customers as well as to attract exciting new vendors and product exclusives.”

ShopNBC To Report First-Quarter Earnings May 11

ValueVision Media, dba ShopNBC, will release its first-quarter financial results before the market opens May 11, the company said Thursday.

The home shopping network will host a conference call and simultaneous webcast at 11 a.m.

Participating in the call will be CEO Keith Stewart, President Bob Ayd and Chief Financial Officer Bill McGrath.

Both the call and webcast are open to the general public.

ShopNBC Redeems Stock For $40.9 Million, Undecipherable Financial Stuff On Keith Stewart

ValueVision Media, aka ShopNBC, said Wednesday that it has redeemed all of its outstanding 12 percent Series B Redeemable
Preferred Stock for $40.9 million and has paid all accrued Series B Preferred dividends, amounting to $6.4 million. The preferred stock was held by GE Capital Equity Investments.

The preferred stock redemption eliminates $17.5 million in future dividend payments. The redemption was funded by proceeds from the recent sale of 9,487,500 shares of common stock at $6.25 per share (including full exercise of the over-allotment option). Net proceeds from the offering, after commissions and offering expenses, were $55.6 million.

ShopNBC CEO Keith Stewart

Additionally, $8.3 million of the offering proceedsare available to ValueVision for working capital and general corporate purposes.

As a result of the preferred stock redemption, ValueVision will incur a one-time, non-cash charge of $24.5 million in Q1 2011, representing accelerated amortization of the preferred stock discount. This expense would otherwise have been realized over the remaining term of the preferred stock, which was required to be redeemed in February 2013 (30 percent and February 2014 (70 percent).

ShopNBC CEO Keith Stewart said, “The recent stock offering achieved several important objectives that support our growth goals. We strengthened our balance sheet and financial flexibility by removing the high cost Series B Preferred from our
capital structure, thereby eliminating $17.5 million in futuredividend payments. We also expanded our investment community
visibility and base of shareholders, supporting the long-term liquidity of our shares.”

Chief financial officer Bill McGrath said, “A major driver in our decision to redeem the preferred at this time was to eliminate the
cash sweep covenant requiring excess cash balances be used to pay down preferred obligations. The elimination of the sweep provides us with greater financial control and flexibility to invest future cash flows to support our growth.”

As contemplated in the company’s March 30, 2011 offering prospectus, ShopNBC clarified that Stewart may sell up to, but no more than, 500,000 shares of common stock within the next 90 days.

Stewart has beneficial ownership of 1,881,155 shares of common stock, 1,000,000 stock options (583,333 of which are currently vested) and 72,545 restricted stock units (vests 50 percent over two years) representing a total of 2,953,700 million common share or share equivalents.

His contemplated sales represent up to 16.9 percent of his total holdings and are being pursued principally for the repayment of borrowings that funded his open market purchases of ValueVision stock in 2009.

ShopNBC To Report Fourth-Quarter Earnings On St. Patricks Day, Our Parents’ 60th Anniversary

Bob Ayd

Isn’t this special, for those of us of Irish descent?

ShopNBC will announce its fourth-quarter results March 17 — St. Patty’s Day, which just happens to be our mom and dad’s 60th wedding anniversay — at 11:00 a.m.

ShopNBC, also known as ValueVision Media, will release its fiscal 2010 fourth quarter and full year results before the market
opens, and will host a conference call and simultaneous webcast at 11 a.m. ET.

CEO Keith Stewart, president Bob Ayd and CFO Bill McGrath will participate in the call. We hope covering this call doesn’t put a damper on our celebrating (St. Paddy’s and Ida and Jim’s anniversary).

Both the call and webcast are open to the general public.

WEBCAST/WEB REPLAY: https://e-meetings.verizonbusiness.com. Conference number 1548956 (passcode: SHOPNBC; archived for 30 days)

TELEPHONE: 800-988-9672 (passcode: SHOPNBC; keypad: 7467622)

ValueVision Media, Namely ShopNBC, To Present at Sidoti Micro-Cap Conference

ValueVision Media, which we know as ShopNBC, will do a presentation at the Sidoti & Co. Micro-Cap Conference Jan. 10, the company said Monday.

CEO Keith Stewart and chief financial officer Bill McGrath will do the dog-and-pony show at the Grand Hyatt Hotel in New York City.

ShopNBC’s presentation will be at 2:50 p.m. ET. Management will also be available earlier in the day for one-on-one meetings (anyone want to meet Keith and Bill?).

A copy of the home shopping networks’ presentation slides will be available on the Investor Relation section of its website at http://www.ShopNBC.com/IR.

ShopNBC Posts 12 Percent Black Friday Sales Gain, And 36 Percent Jump Cyber Monday

Keith is very chatty

ShopNBC got a pretty good start for the holiday season, with total company sales rising 36 percent on Cyber Monday versus last year, led by a 59 percent increase in online sales, the home shopping network said Wednesday.

As a percentage of total revenue on Cyber Monday, e-commerce sales penetration rose to a record 56 percent, as compared to 48 percent a year ago.

ShopNBC places substantial emphasis on cross-promoting the flexibility, ease of use and customer benefits of its online sales channels, such as improved customer engagement, order tracking, ValuePay, and management of returns — or so it claims.

The No. 3 home shopping network maintained that its on-air strategy has enabled it “to achieve higher average e-commerce sales penetration than its multi-media retailing peers.” We’re not sure how true that is, but that’s the claim.

“For ShopNBC, higher e-commerce sales penetration has led to improved customer satisfaction, lower returns, and reduced costs,” the company said.

ShopNBC’s total “Black Friday” sales rose 12 percent versus the prior year, driven by a 54 percent increase in online sales. As a percentage of total sales on Black Friday, e-commerce sales penetration rose to 51 percent, as compared to 37 percent a year ago and 40.5 percent during the third quarter this year.

Unlike QVC, ShopNBC did not disclose the dollar-amount of its Black Friday sales. QVC raked in $42 million that day.

“The multi-channel shopper was quite active at ShopNBC over the Holiday Shopping Weekend, from Black Friday through Cyber Monday,” ShopNBC CEO Keith Stewart said in a very, very, very long canned statement. “We achieved sales gains and increasing e-commerce sales penetration by keeping the customer’s interest and attention over a sustained period of time on our multiple platforms of TV, online, mobile and social media.”

Keith are you paid by the word for this stuff?

“Video game consoles, big screen TVs, GPS devices, along with jewelry and watches, were some of the principal categories of interest to our customers,” he said. “The ease and convenience of shopping remotely, combined with our unique and ever-expanding product assortment, helped to drive much of the sales gains.”

And that’s not all folks.

“Additionally, ShopNBC’s focus on highlighting the benefit of online shopping continued to resonate with the consumer. Going forward, we remain highly focused on keeping the customer’s appetite satisfied with new products, exciting programming, and strong service to continue building loyalty and community during the Holidays and beyond,” Stewart said.

ShopNBC, Meet Your New Biggest Shareholder: Comcast

Post its acquisition of NBC Universal, it looks like Comcast is going to wind up as the largest shareholder of ShopNBC.

This may or may not help the home shopping network plug the “one gaping hole” in its distribution: Comcast, which is the nation’s largest cable operator.

To get that tasty tidbit, we took the time to listen to ShopNBC’s third-quarter conference call Thursday, even though we nodded off at one point, dropped our princess phone and had to call to get reconnected to the replay (actually, we nodded off twice). We’re glad we hung in there.

ShopNBC CEO Keith Stewart went mum when an analyst asked why the network had decided not to rebrand itself — as it previously planned — and instead renewed its licensing deal with NBCU to use its current name. ShopNBC will issue additional shares next May valued at $4 million to NBCU as part of the licensing deal.

Then another analyst noted that NBCU now owns 6.4 million shares of ShopNBC, or just under 19 percent of the company, and that the additional shares will put the merged Comcast-NBCU at more than 20 percent of the network, making it the biggest shareholder.

It’s a flash to the past for Comcast, which has a history in the home shopping business. It used to own QVC before selling it to John Malone’s Liberty Media Corp.

During the call, it was Stewart who said that Comcast homes were ShopNBC’s “gaping hole” in distribution. The home shopping network isn’t distributed in about 10 million of Comcast’s roughly 23 million homes.

“We generally use overbuilders to cover that distribution,” Stewart said.

But don’t take Comcast’s new ownership in ShopNBC as a guarantee that your carriage will be boosted, Keith.

About 25 percent of ShopNBC’s carriage deals expire at the end of this year, but the network’s pact with Comcast is not part of that 25 percent, according to Stewart.

ShopNBC Scraps Rebranding Plan, Inks One-Year Deal License Deal With NBCU

ShopNBC has shelved its plans to rebrand and rename the network.

The home shopping network said Thursday that it had reached a one-year extension of its license agreement with NBC Universal to use the ShopNBC brand related to its television shopping network and its e-commerce websites http://www.ShopNBC.com and http://www.ShopNBC.tv.

The license agreement, which was to expire in May 2011, has been extended to May 2012.

As consideration to NBCU for the license extension, ShopNBC will issue common stock in May of 2011 valued at $4 million. Additionally, the agreement allows for a 1-year extension to May 2013 upon the mutual agreement of both parties.

“We are pleased to have extended our use of the NBC trademark for another year,” ShopNBC CEO Keith Stewart said. “Our ability to continue leveraging this well-known brand will allow our experienced multi-channel team to remain focused on our company goals of consistent profitability and long-term sustained growth. We are grateful to our partner and shareholder, NBCU, for their ongoing support.”

Earlier in the year Stewart had said that the No. 3 home shopping channel would change its name after its licensing deal with NBCU expired.

No. 3 ShopNBC Retains N.Y. Investor Relations Firm For Outreach

ShopNBC is embarking on an investor relations outreach program to raise its visibility with the investment community and financial media, hiring the New York City-based investor relations firm, Jaffoni & Collins, the company said Wednesday.

“Having made substantial progress over the past two years in rebuilding and repositioning ShopNBC, we have reached the appropriate point in our evolution to initiate a more proactive investor relations program,” ShopNBC CEO Keith Stewart said in a canned statement. “The team at Jaffoni & Collins shares our passion for the business of multi-channel retailing, and we look forward to a strong partnership.”

ShopNBC made its announcement a day before the home shopping channel is set to report third-quarter earnings.

Here is the boilerplate on the firm.

Founded in 1996, Jaffoni & Collins is a full-service Investor Relations agency exclusively focused on creating and executing long-term communication programs that generate tangible results for publicly traded companies, particularly those in the media and leisure sectors. The firm’s company-specific programs have helped clients build more productive investment community relationships, drive substantial valuation increases and execute over $37 billion in financings and M&A transactions.

ShopNBC To Report Third-Quarter Results Nov. 18

ShopNBC will discuss its third-quarter earnings during a conference call Nov. 18 at 11 a.m., the network said Monday.

The company will release its third quarter 2010 results the morning of the conference call.

Participating in the call will be CEO Keith Stewart, president Bob Ayd and chief financial officer Bill McGrath.