ValueVision Media Announces Financial Results for First Quarter 2005

ValueVision Media Announces Financial Results for First Quarter 2005

First Quarter Results in line with May 3rd Pre-Release

MINNEAPOLIS, May 19 /PRNewswire-FirstCall/ -- ValueVision Media (NASDAQ:VVTV) today announced financial results for its first quarter ended April 30, 2005.

Consolidated net sales for the first quarter were $156 million, down 2% vs. prior year. Net sales from its core TV and Internet business were $152 million, up $0.6 million vs. prior year. Consolidated net loss was $10.7 million in the first quarter compared to a loss of $7.9 million last year. EBITDA, as defined below, was a loss of $6.0 million versus a loss of $3.4 million one year ago.

The Company recorded a first quarter charge of $0.4 million related to long-lived asset impairments of FanBuzz, a wholly owned subsidiary. Additionally, ValueVision recorded a first quarter charge of $0.5 million associated with the elimination of a number of positions primarily at FanBuzz.

EBITDA Defined

The Company defines EBITDA as net income (loss) for the respective periods excluding depreciation and amortization expense, interest income (expense), and income taxes. Management views EBITDA as an important alternative operating performance measure because it is commonly used by analysts and institutional investors in analyzing the financial performance of companies in the broadcast and television home shopping sectors. However, EBITDA should not be construed as an alternative to operating income (loss) or to cash flows from operating activities (as determined in accordance with generally accepted accounting principles) and should not be construed as a measure of liquidity. EBITDA, as presented, may not be comparable to similarly entitled measures reported by other companies. Management uses EBITDA to evaluate operating performance and as a measure of performance for incentive compensation purposes.

About ValueVision Media, Inc

Founded in 1990, ValueVision Media is an integrated direct marketing company that sells its products directly to consumers through television, the Internet, and direct mail. For more information, please visit http://www.valuevisionmedia.com/ or http://www.shopnbc.com/ .

Forward-Looking Information

This release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are accordingly subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained herein due to various important factors, including (but not limited to): consumer spending and debt levels; interest rates; competitive pressures on sales, pricing and gross profit margins; the level of cable distribution for the Company's programming and the fees associated therewith; the success of the Company's e-commerce and rebranding initiatives; the performance of its equity investments; the success of its strategic alliances and relationships; the ability of the Company to manage its operating expenses successfully; risks associated with acquisitions; changes in governmental or regulatory requirements; litigation or governmental proceedings affecting the Company's operations; and the ability of the Company to obtain and retain key executives and employees. More detailed information about those factors is set forth in the Company's filings with the Securities and Exchange Commission, including the Company's annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. The Company is under no obligation (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.

VALUEVISION MEDIA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands except share and per share data)

April 30, January 31, 2005 2005 (Unaudited)

ASSETS Current assets: Cash and cash equivalents $63,682 $62,640 Short-term investments 39,731 37,941 Accounts receivable, net 73,010 79,405 Inventories 59,308 54,903 Prepaid expenses and other 5,490 5,635 Total current assets 241,221 240,524 Property and equipment, net 50,761 52,725 FCC broadcasting license 31,943 31,943 NBC Trademark License Agreement, net 17,881 18,687 Cable distribution and marketing agreement, net 3,326 3,550 Other intangible assets, net - 68 Investments and other assets 2,799 2,799 $347,931 $350,296

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities: Accounts payable $59,458 $48,012 Accrued liabilities 37,910 41,062 Total current liabilities 97,368 89,074

Long-term capital lease obligations 1,212 1,380

Series A Redeemable Convertible Preferred Stock, $.01 par value, 5,339,500 shares authorized; 5,339,500 shares issued and outstanding 43,102 43,030

Shareholders' equity: Common stock, $.01 par value, 100,000,000 shares authorized; 37,094,081 and 37,043,912 shares issued and outstanding 371 370

Warrants to purchase 7,630,583 shares of common stock 46,683 46,683

Additional paid-in capital 264,079 264,005

Deferred compensation (295) (353)

Accumulated deficit (104,589) (93,893) Total shareholders' equity 206,249 216,812 $347,931 $350,296

VALUEVISION MEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) (Unaudited)

For the Three Months Ended April 30, 2005 2004

Net sales $156,163 $159,197 Cost of sales 103,780 106,113 Gross profit 52,383 53,084

Operating expense: Distribution and selling 51,145 50,802 General and administrative 6,610 5,675 Depreciation and amortization 5,291 4,784 Asset impairments 400 - Employee termination costs 528 -

Total operating expense 63,974 61,261

Operating loss (11,591) (8,177)

Other income: Other income 255 - Interest income 646 274

Total other income 901 274

Loss before income taxes (10,690) (7,903)

Income tax provision 6 -

Net loss (10,696) (7,903)

Accretion of redeemable preferred stock (72) (71)

Net loss available to common shareholders $(10,768) $(7,974)

Net loss per common share $(0.29) $(0.22)

Net loss per common share ---assuming dilution $(0.29) $(0.22)

Weighted average number of common shares outstanding: Basic 37,077,473 36,640,477 Diluted 37,077,473 36,640,477

Reconciliation of EBITDA to net loss:

First Quarter First Quarter 30-Apr-05 30-Apr-04

EBITDA (as defined) (000's) (a) $(6,045) $(3,393)

A reconciliation of EBITDA to net loss is as follows:

EBITDA, as presented $(6,045) $(3,393) Adjustments: Depreciation and amortization (5,291) (4,784) Interest income 646 274 Income taxes (6) - Net loss $(10,696) $(7,903)

(a) EBITDA as defined for this statistical presentation represents net income (loss) for the respective periods excluding depreciation and amortization expense, interest income (expense) and income taxes. Previous to the second quarter of fiscal 2004, management defined EBITDA as operating income (loss) excluding depreciation and amortization expense, other non-operating income (expense) and income taxes. The change was made to conform to the more common definition of EBITDA. Management views EBITDA as an important alternative operating performance measure because it is commonly used by analysts and institutional investors in analyzing the financial performance of companies in the broadcast and television home shopping sectors. However, EBITDA should not be construed as an alternative to operating income or to cash flows from operating activities (as determined in accordance with generally accepted accounting principles) and should not be construed as a measure of liquidity. EBITDA, as presented, may not be comparable to similarly entitled measures reported by other companies. Management uses EBITDA to evaluate operating performance and as a measure of performance for incentive compensation purposes.

VALUE VISION MEDIA, INC. Key Performance Metrics* (Unaudited)

Q1 For the three months ending 4/30 F05 F04 % Program Distribution Cable FTE's 37,510 35,896 4% Satellite FTE's 23,325 20,151 16% Total FTE's (Average 000's) 60,835 56,047 9%

Net Sales per FTE (Annualized) $9.97 $10.79 -8%

Active Customers - 12 month rolling 770,348 736,370 5%

% New Customers - 12 month rolling 58% 63%

% Reactivated & Retained - 12 month rolling 42% 37%

Customer Penetration - 12 month rolling 1.3% 1.3%

Product Mix Jewelry 58% 65% Apparel 5% 5% Health & Beauty 4% 3% Computer & Electronics 19% 14% Fitness 2% 2% Home 12% 11%

Shipped Units (000's) 1,196 1,316 -9%

Average Price Point - shipped units $183 $168 9%

*Includes ShopNBC TV and ShopNBC.com only.

Source: ValueVision Media

CONTACT: Heather S. Faulkner, Director of Communications, of ValueVision Media, +1-952-943-6736, hfaulkner@shopnbc.com

Web site: http://www.valuevisionmedia.com/ http://www.shopnbc.com/

------- Profile: Ent