ValueVision Media Announces Record Financial Results for Second Quarter 2005

ValueVision Media Announces Record Financial Results for Second Quarter 2005

Second Quarter Results in Line With August 9th Earnings Pre-Release

MINNEAPOLIS, Aug. 31 /PRNewswire-FirstCall/ -- ValueVision Media (NASDAQ:VVTV) today announced financial results for its second quarter ended July 30, 2005.

Consolidated net sales for the second quarter were a record $172 million, up 6% vs. prior year. Net sales from the core TV and Internet business were $167 million, up 8% vs. prior year. Consolidated net loss was $1.2 million in the second quarter versus a $7.8 million loss a year ago. EBITDA, as defined below, was a positive $2.4 million vs. a $3.2 million loss a year ago.

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)

July 30, January 31, 2005 2005 (Unaudited) ASSETS Current assets: Cash and cash equivalents $57,003 $62,640 Short-term investments 33,790 37,941 Accounts receivable, net 83,386 79,405 Inventories 67,869 54,903 Prepaid expenses and other 5,760 5,635 Total current assets 247,808 240,524 Property and equipment, net 48,639 52,725 FCC broadcasting license 31,943 31,943 NBC Trademark License Agreement, net 17,074 18,687 Cable distribution and marketing agreement, net 3,102 3,550 Other intangible assets, net - 68 Other assets 3,058 2,799 $351,624 $350,296

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities: Accounts payable $59,194 $48,012 Accrued liabilities 42,996 41,062 Total current liabilities 102,190 89,074

Long-term capital lease obligations 1,099 1,380

Series A Redeemable Convertible Preferred Stock, $.01 par value, 5,339,500 shares authorized; 5,339,500 shares issued and outstanding 43,174 43,030

Shareholders' equity: Common stock, $.01 par value, 100,000,000 shares authorized; 37,104,374 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 264,100 264,005 Deferred compensation (246) (353) Accumulated deficit (105,747) (93,893) Total shareholders' equity 205,161 216,812 $351,624 $350,296

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

For the Three Month Periods Ended

July 30, July 31, 2005 2004 Net sales $171,668 $161,478 Cost of sales 111,147 107,578 Gross profit 60,521 53,900

Operating expense: Distribution and selling 51,766 52,275 General and administrative 6,394 5,107 Depreciation and amortization 5,102 4,918 Asset impairments - - Employee termination costs - - Total operating expense 63,262 62,300 Operating loss (2,741) (8,400)

Other income: Other income (expense) (256) 250 Interest income 738 322 Total other income 482 572 Loss before income taxes (2,259) (7,828)

Equity in income of affiliates 275 - Income tax benefit 826 - Net loss (1,158) (7,828)

Accretion of redeemable preferred stock (71) (71)

Net loss available to common shareholders $(1,229) $(7,899)

Net loss per common share $(0.03) $(0.21)

Net loss per common share --- assuming dilution $(0.03) $(0.21)

Weighted average number of common shares outstanding: Basic 37,102,001 36,809,884 Diluted 37,102,001 36,809,884

For the Six Month Periods Ended

July 30, July 31, 2005 2004 Net sales $327,831 $320,675 Cost of sales 214,927 213,691 Gross profit 112,904 106,984

Operating expense: Distribution and selling 102,911 103,077 General and administrative 13,004 10,782 Depreciation and amortization 10,393 9,702 Asset impairments 400 - Employee termination costs 528 - Total operating expense 127,236 123,561 Operating loss (14,332) (16,577)

Other income: Other income (expense) (1) 250 Interest income 1,384 596 Total other income 1,383 846 Loss before income taxes (12,949) (15,731)

Equity in income of affiliates 275 - Income tax benefit 820 - Net loss (11,854) (15,731)

Accretion of redeemable preferred stock (143) (142)

Net loss available to common shareholders $(11,997) $(15,873)

Net loss per common share $(0.32) $(0.43)

Net loss per common share --- assuming dilution $(0.32) $(0.43)

Weighted average number of common shares outstanding: Basic 37,089,737 36,725,181 Diluted 37,089,737 36,725,181

Reconciliation of EBITDA to net loss:

Six Month Six Month Second Second Period Period Quarter Quarter Ended Ended 30-Jul-05 31-Jul-04 30-Jul-05 31-Jul-04

EBITDA (as defined) (000's) (a) $2,380 $(3,232) $(3,665) $(6,625)

A reconciliation of EBITDA to net loss is as follows:

EBITDA, as presented $2,380 $(3,232) $(3,665) $(6,625) Adjustments: Depreciation and amortization (5,102) (4,918) (10,393) (9,702) Interest income 738 322 1,384 596 Income taxes 826 - 820 - Net loss $(1,158) $(7,828) $(11,854) $(15,731)

(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.

VALUEVISION MEDIA, INC. Key Performance Metrics* (Unaudited)

Q2 YTD For the three months For the six months ending ending 7/30 7/31 7/30 7/31 2005 2004 % 2005 2004 % Program Distribution Cable FTE's 37,990 36,192 5% 37,759 36,046 5% Satellite FTE's 23,956 20,942 14% 23,616 20,544 15% Total FTE's (Average 000's) 61,946 57,134 8% 61,374 56,590 8%

Net Sales per FTE (Annualized) $10.78 $10.83 0% $10.39 $10.81 -4%

Active Customers - 12 month rolling 773,210 753,453 3% n/a n/a

% New Customers - 12 month rolling 58% 62% n/a n/a

% Reactivated & Retained - 12 month rolling 42% 38% n/a n/a

Customer Penetration - 12 month rolling 1.2% 1.3% n/a n/a

Product Mix Jewelry 57% 67% 56% 67% Apparel 4% 3% 5% 4% Health & Beauty 4% 3% 4% 3% Computer & Electronics 23% 15% 22% 14% Fitness 0% 1% 1% 1% Home 12% 11% 12% 11%

Shipped Units (000's) 1,159 1,233 -6% 2,355 2,549 -8%

Average Price Point - shipped units $205 $186 10% $194 $177 10%

*Includes ShopNBC TV and ShopNBC.com only.

Source: ValueVision Media, Inc.

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

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

------- Profile: Ent