evine investor-presentation-q3-v final

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  • Investor PresentationThird Quarter 2015

  • Safe Harbor Statement

    2

    This document may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as anticipate, believe, estimate, expect, intend, predict, hope, should, plan, will or similar expressions. Any statements contained herein that are not statements of historical fact may be deemed forward-looking statements. These statements are based on management's current expectations and accordingly are 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 preferences, spending and debt levels; the general economic and credit environment; interest rates; seasonal variations in consumer purchasing activities; the ability to achieve the most effective product category mixes to maximize sales and margin objectives; competitive pressures on sales; pricing and gross sales margins; the level of cable and satellite distribution for our programming and the associated fees; our ability to establish and maintain acceptable commercial terms with third-party vendors and other third parties with whom we have contractual relationships, and to successfully manage key vendor relationships and develop key partnerships and proprietary brands; our ability to manage our operating expenses successfully and our working capital levels; our ability to remain compliant with our long-term credit facility covenants; our ability to successfully transition our brand name and corporate name; customer acceptance of our new branding strategy and our repositioning as a digital commerce company; the market demand for television station sales; changes to our management and information systems infrastructure; challenges to our data and information security; changes in governmental or regulatory requirements; litigation or governmental proceedings affecting our operations; significant public events that are difficult to predict, or other significant television-covering events causing an interruption of television coverage or that directly compete with the viewership of our programming; our ability to obtain and retain key executives and employees; our ability to attract new customers and retain existing customers; changes in shipping costs; our ability to offer new or innovative products and customer acceptance of the same; changes in customers viewing habits of television programming; and the risks identified under Risk Factors in our recently filed Form 10-K and any additional risk factors identified in our periodic reports since the date of such Form 10-K. More detailed information about those factors is set forth in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this announcement. We are under no obligation (and expressly disclaim any such obligation) to update or alter our forward-looking statements whether as a result of new information, future events or otherwise.

    Adjusted EBITDA

    EBITDA represents net income (loss) for the respective periods excluding depreciation and amortization expense, interest income (expense) and income taxes. We define Adjusted EBITDA as EBITDA excluding non-operating gains (losses); activist shareholder response costs; executive and management transition costs; distribution center consolidation and technology upgrade costs; Shareholder Rights Plan costs and non-cash share-based compensation expense. We have included the term Adjusted EBITDA in our EBITDA reconciliation in order to adequately assess the operating performance of our television and online businesses and in order to maintain comparability to our analyst's coverage and financial guidance, when given. Management believes that the term Adjusted EBITDA allows investors to make a more meaningful comparison between our business operating results over different periods of time with those of other similar companies. In addition, management uses Adjusted EBITDA as a metric to evaluate operating performance under our management and executive incentive compensation programs. Adjusted EBITDA should not be construed as an alternative to operating income (loss), net 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. Adjusted EBITDA may not be comparable to similarly entitled measures reported by other companies. We have included a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, on Slide 12 of this presentation.

    Data in this presentation may be unaudited. Percentage changes represent Q3 2015 as compared to Q3 2014.

  • 3

    +34%Cable & Satellite

    Homes

    88M

    Mobile Net SalesYear over Year

    46%Online Net Sales

    Percentage represents Q3 2015

  • 4

    Net Sales

    %

    Percentage changes represent Q3 2015 as compared to Q3 2014.

    +3

  • 5

    Average Purchase Frequency

    +4%

    Percentage changes represent Q3 2015 as compared to Q3 2014.

    Return Rate

    bps-230

  • 6

    %

    Increase in Units Shipped

    7

    Percentage changes represent Q3 2015 as compared to Q3 2014.

  • 7

  • 8

  • 99

  • 10

  • 11

  • Investors are advised to review carefully the risk factors contained in our most recently filed annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K.

    Appendices

    12

  • Summary P&L

    13

    (In thousands, except per share data) F11 FY F12 FY* F13 FY F14 Q1 F14 Q2 F14 Q3 F14 Q4 F14 FY F15 Q1 F15 Q2 F15 Q3

    1/28/2012 2/2/2013 2/1/2014 5/3/2014 8/2/2014 11/1/2014 1/31/2014 1/31/2014 5/2/2015 8/1/2015 10/31/2015Net Sales 558,394$ 586,820$ 640,489$ 159,701$ 156,587$ 157,106$ 201,224$ 674,618$ 158,451$ 161,061$ 162,258$

    Cost of Sales 354,299 374,448 410,465 99,695 96,152 98,040 135,683 429,570 101,146 102,205 106,348 Gross Profit 204,095 212,372 230,024 60,006 60,435 59,066 65,541 245,048 57,305 58,856 55,910 Gross Profit % 36.6% 36.2% 35.9% 37.6% 38.6% 37.6% 32.6% 36.3% 36.2% 36.5% 34.5%

    Operating Expenses:Distribution and selling 188,813 193,037 191,695 49,729 50,110 49,457 53,283 202,579 50,799 51,357 51,038 General and administrative 19,542 18,297 23,799 5,912 6,776 5,357 5,938 23,983 5,712 6,391 5,975 Depreciation and amortization 12,578 13,224 12,320 2,268 2,163 2,034 1,980 8,445 2,131 2,107 2,131 Executive & Mgmt transition costs - - - - 2,620 2,415 485 5,520 2,590 205 754 FCC License Impairment - 11,111 - - - - - - - - - Activist Shareholder Response Cost - - 2,133 1,045 2,473 - - 3,518 - - - Restructuring costs - - - - - - - - - - Distribution facility consolidation and technology upgrade costs - - - - - - - - - 972 294 Total operating expense 220,933 235,669 229,947 58,954 64,142 59,263 61,686 244,045 61,232 61,032 60,192

    Operating income/(loss) (16,838) (23,297) 77 1,052 (3,707) (197) 3,855 1,003 (3,927) (2,176) (4,282)

    Other income (expense):Interest income/(expense) (5,463) (3,959) (1,419) (391) (381) (404) (386) (1,562) (596) (667) (688) Gain/(Loss) on sale of investments or assets - 100 - - - - - - - - - Debt extinguishment (25,679) (500) - - - - - - - - - Total other income/(expense) (31,142) (4,359) (1,419) (391) (381) (404) (386) (1,562) (596) (667) (688)

    Income tax provision/(benefit) (84) (20) (1,173) (201) (201) (207) (210) (819) (205) (205) (205)

    Total Net Income/(Loss) (48,064)$ (27,676)$ (2,515)$ 460$ (4,289)$ (808)$ 3,259$ (1,378)$ (4,728)$ (3,048)$ (5,175)$

    EBITDA, as adjusted 996$ 4,494$ 18,012$ 5,513$ 5,528$ 4,780$ 6,952$ 22,773$ 1,579$ 2,532$ 169$

    Weighted average number of common shares outstanding (000's) 46,451 48,875 49,505 56,341 52,200 55,433 57,598 53,459 56,641 57,093 57,125

    Net income/(loss) per common share (1.03)$ (0.57)$ (0.05)$ 0