Shop At Home Announces Quarterly Results; Operating Loss Reduced by 51%
Contact:
Kearstin Patterson
Communications
615-263-8193
kpatterson@sath.com
NASHVILLE, Tennessee (April 19, 2002) - - Shop At Home, Inc. (Nasdaq: SATH), a 16-year old nationally televised home shopping service, today announced financial operating results for the quarter and nine months ended March 31, 2002. The Company’s fiscal year ends June 30. For the quarter, net revenues were $49.7 million compared to $50.4 million last year. Loss from operations improved 51%, dropping to $6.7 million from $13.5 million last year. EBITDA (earnings before interest, offering costs, taxes, depreciation and amortization) improved 67% from a loss of $8.9 million last year to a loss of $2.9 million this year. Net income, which last year included an asset sale gain of $48.9 million, declined to a loss of $6.2 from income of $19.7 million. Excluding the asset sale gain and related taxes, net income would have improved to a loss of $6.2 million this year from a loss of $10.6 million last year.
For the nine months ended March 31, 2002, net revenues increased 3% to $142.4 million from $137.7 million last year. Loss from operations improved 38%, dropping to $17.3 million from $27.9 million last year. EBITDA improved 55% from a loss of $17.3 million last year to a loss of $7.7 million this year. Net loss was $16.6 million compared to net income of $2.7 million last year (which included the asset sale gain of $48.9 million). Excluding the asset sale gain and related taxes, net income would have improved to a loss of $16.6 million from a loss of $27.6 million last year.
The Company continued its turnaround efforts with significant progress in several areas during the quarter:
· Repeat customers accounted for over half of all sales orders.
· Revenues have remained stable in comparison with the prior year in spite of the planned shift away from the sale of sports memorabilia, which traditionally had been the Company’s dominant merchandise category.
· Returned merchandise improved to 17.3% of sales from 23.6% last year.
· Chargebacks (including fraud) improved to 0.1% of sales from 1.1% last year.
· Affiliate costs per home reached improved substantially, even as the average number of full-time equivalent homes reached grew 42% over last year.
· General and administrative expenses improved 26% with particular success in reducing bad debts.
· There were significant improvements year-over-year in customer service metrics and shipping timeliness.
· Revenue improved in all major product categories except sports memorabilia, which the Company is strategically de-emphasizing.
The Company also successfully reduced headcount during the quarter. Several systems initiatives designed to make the Company’s employees more efficient are bearing fruit. For example, the percentage of sales orders processed through the Company’s automated phone system has tripled since the beginning of the fiscal year, thus substantially reducing the need for live operators.
With 23 new suppliers of merchandise added during the quarter in categories other than sports memorabilia, the Company is making progress executing its strategy of offering a wide variety of products appealing to both male and female consumers.
Conference Call and Webcast
As noted in the Company’s April 18, 2002 press release, a conference call to discuss Fiscal Year 2002 3rd Quarter Earnings will be held at 11:00 CST on April 22, 2002. A live listen-only web-cast of the conference call will be available for 90 days on the Company’s website at www.shopathometv.com/corporate/news-index.html or by dial-in instant replay at 1-888-482-2240. The dial-in instant replay will be available beginning April 23rd until April 29, 2002.
About Shop At Home
Shop At Home, Inc. is a premier retailer of a wide variety of consumer products sold through a 24-hour per day national television shopping network and website (www.shopathometv.com). Currently, Shop At Home Network reaches approximately 68 million unique cable and satellite households and owns full power television stations in San Francisco (KCNS, Channel 38), Boston (WMFP, Channel 62), Cleveland (WOAC, Channel 67), Raleigh-Durham (WRAY, Channel 30) and Bridgeport (WSAH, Channel 43), which is licensed to cover a portion of the New York market.
“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995-
This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Shop At Home, Inc. (the “Company” or “Shop At Home”) based these forward-looking statements largely on its current expectations and projections about future events and financial trends affecting the financial condition of its business. These forward-looking statements are subject to a number of risks, uncertainties and assumptions about Shop At Home, including, among other things:
· general economic and business conditions, both nationally and in the Company’s markets;
· the Company’s expectations and estimates concerning future financial performance and financing plans;
· anticipated trends in the Company’s business;
· existing and future regulations affecting the Company’s business;
· the Company’s successful implementation of its business strategy;
· fluctuations in the Company’s operating results;
· technological changes in the television and Internet industry;
· restrictions imposed by the terms of the Company;
· the Company’s ability to manage its related expenses;
· significant competition in the sale of consumer products through electronic media;
· the Company’s dependence on exclusive arrangements with vendors;
· the Company’s ability to achieve broad recognition of its brand names;
· continued employment of key personnel and the ability to hire qualified personnel; and
· legal uncertainties and possible security breaches associated with the Internet.
In addition, in this report, the words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar expressions, as they relate to Shop At Home, its business or management, are intended to identify forward-looking statements.
The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this report. Because of these risks and uncertainties, the forward-looking events and circumstances discussed in this report may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.
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