MINNEAPOLIS, Aug. 23, 2017 (GLOBE NEWSWIRE) -- Evine Live Inc. ("Evine") (NASDAQ:EVLV) today announced results for the second quarter ended July 29, 2017.  The Company posted quarterly net sales of $149 million, which is a 5.2% decrease year-over-year and is within management's guidance.  The Company posted a net loss of $2.0 million and EPS of ($0.03), both flat year-over-year, and an Adjusted EBITDA of $3.5 million.  

"This second quarter is the final quarter of expected revenue decline, which was related to the year-long rebalancing of our Consumer Electronics mix of business that began in April of last year. This rebalancing was an important step to position our merchandising offering for long term profitable growth and we accomplished it while again delivering on our quarterly EPS guidance," said CEO Bob Rosenblatt.  "When we combine this progress with the launch of more than 10 million high definition homes and the launch of our high definition signal in September, we believe the second half of fiscal 2017 is positioned well to deliver solid, profitable growth."

Fiscal Year 2017 Second Quarter Highlights
  • Net sales were $149 million, a 5.2% decrease year-over-year.
  • Gross profit as a percentage of sales decreased 20 basis points to 37.9% year-over-year.
  • Net loss was $2.0 million, flat year-over-year.
  • Adjusted EBITDA was $3.5 million, a 9% decrease year-over-year.
  • EPS was ($0.03), flat year-over-year.
  • Total cash, including restricted cash, was $23 million.

Rosenblatt continued, "It is clear that there is a sea change occurring throughout the retail landscape.  All retailers, be it online or those with a significant bricks and mortar presence, continue to try to find better and differentiated ways to connect with the consumer.  We believe interactive video commerce messaged to the consumer, based on the delivery platform used, whether that be through social, or traditional eCommerce, in concert with the data and predictive analytics available, marks the next significant growth curve."

"When I look out two to three years from now," Rosenblatt added, "there will be two types of retailers. Those whose models are based on price, selling commoditized products available on multiple platforms, and those whose models are based on product exclusivity and the customer experience.  Our goal is to be a leader in the latter category. Interactive video is the cornerstone of our digital commerce company that is driving business opportunities in all digital platforms and business models, from mobile to social, from laptop to television, and from merchandising business models to web service business models.  We plan to do this while engaging with all types of customers, from Millennials to Baby Boomers and to both women and men.  A significant portion of the population will continue to purchase product from a curated assortment that facilitates the opportunity of discovery.  We believe interactive video commerce at scale, an expertise we have continued to refine over many years, gives us an unfair advantage in delivering that experience." 

 
SUMMARY RESULTS AND KEY OPERATING METRICS
($ Millions, except average selling price and EPS)
                                   
        Q2 2017 7/29/2017   Q2 2016 7/30/2016   Change   YTD 2017 7/29/2017   YTD 2016 7/30/2016   Change
                         
Net Sales   $ 148.9   $ 157.1   (5.2%)   $ 305.3   $ 324.1   (5.8%)
                         
Gross Margin %     37.9%     38.1%   (20 bps)     36.9%     37.4%   (50 bps)
                         
Adjusted EBITDA   $ 3.5   $ 3.8   (9%)   $ 6.6   $ 7.3   (10%)
                         
Net Loss   $ (2.0)   $ (2.0)   0%   $ (5.2)   $ (6.9)   25%
                         
EPS   $ (0.03)   $ (0.03)   0%   $ (0.08)   $ (0.12)   33%
                         
Net Shipped Units (000s)     2,423     2,461   (2%)     5,003     4,878   3%
Average Selling Price (ASP)   $ 55   $ 57   (4%)   $ 54   $ 59   (8%)
Return Rate %     19.1%     19.8%   (70 bps)     19.0%     19.4%   (40 bps)
Digital Net Sales %     48.1%     47.9%   20 bps     49.4%     48.4%   100 bps
Total Customers - 12 Month Rolling (000s)     1,377     1,447   (5%)   N/A   N/A   N/A
                         
% of Net Merchandise Sales by Category                        
Jewelry & Watches     40%     41%         41%     42%    
Home & Consumer Electronics     23%     21%         22%     22%    
Beauty     16%     16%         16%     16%    
Fashion & Accessories     21%     22%         21%     20%    
Total     100%     100%         100%     100%    

Second Quarter 2017 Results
  • The top performing category in the quarter was Home, which grew 9% year-over-year.  Consumer Electronics, which declined again as a result of management's proactive reduction of lower margin merchandise, decreased by 8% year-over-year.  Our wearables group decreased collectively by 8% year-over-year driven by continued pressure in our Watches category.
  • Return rate for the quarter was 19.1%; an improvement of 70 basis points year-over-year.
  • Gross profit as a percentage of sales decreased 20 basis points to 37.9% year-over-year, driven primarily by mix pressure from the Home category.  Gross profit dollars decreased 6% to $56.5 million year-over-year.
  • Operating expense decreased $3.1 million year-over-year to $57 million, a 5% decrease, driven by reduced distribution and selling expenses.
  • Net loss was $2.0 million and EPS was ($0.03) for the fiscal 2017 second quarter.  Both were flat year-over-year.  Adjusted EBITDA decreased 9% year-over-year to $3.5 million.

Liquidity and Capital Resources

As of July 29, 2017, total cash, including restricted cash, was $23 million, compared to $26 million at the end of the first quarter. The Company also had an additional $11 million of unused availability on its revolving credit facility with PNC Bank, which gives the Company total liquidity of approximately $34 million as of the end of the second quarter.

Third Quarter and Full Year 2017 Outlook

The following details relate to our expected performance for the third quarter and full-year of fiscal 2017:

For Q3: We expect revenue growth in the low single digits and net income and EPS that is slightly improved to prior year's Q3 results.

For Full Year:  We continue to expect adjusted EBITDA to be in the $18 to $22 million range, which would be growth of 11% to 36% year over year.  These results include a 53 rd week in fiscal 2017.

Conference CallA conference call and webcast to discuss the Company's second quarter earnings will be held at 8:30 a.m. Eastern Time on Wednesday, August 23, 2017:

WEBCAST LINK:   http://event.on24.com/wcc/r/1400380/564716D174B109733474197672B07CA3 

TELEPHONE:  1-877-407-9039 (domestic) or 1-201-689-8470 (international)

Please visit www.evine.com/ir for more investor information and to review an updated investor deck.

About Evine Live Inc.Evine Live Inc. (NASDAQ:EVLV) operates Evine, a multiplatform video commerce company that offers a mix of proprietary, exclusive and name brands directly to consumers in an engaging and informative shopping experience via television, online and mobile. Evine reaches more than 87 million cable and satellite television homes with entertaining content in a comprehensive digital shopping experience 24 hours a day.

Please visit www.evine.com/ir for more investor information.   

 
EVINE Live Inc.  
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share data)
         
  July 29,   January 28,
    2017       2017  
  (Unaudited)    
       
ASSETS
Current assets:      
Cash $ 22,059     $ 32,647  
Restricted cash and investments   450       450  
Accounts receivable, net   82,814       99,062  
Inventories   63,748       70,192  
Prepaid expenses and other   5,564       5,510  
Total current assets   174,635       207,861  
Property and equipment, net   53,135       52,715  
FCC broadcasting license   12,000       12,000  
Other assets   2,231       2,204  
Total Assets $ 242,001     $ 274,780  
       
LIABILITIES AND SHAREHOLDERS' EQUITY
       
Current liabilities:      
Accounts payable $ 47,082     $ 65,796  
Accrued liabilities   36,881       37,858  
Current portion of long term credit facilities   3,440       3,242  
Deferred revenue   85       85  
Total current liabilities   87,488       106,981  
       
       
Other long term liabilities   286       428  
Deferred tax liability   3,916       3,522  
Long term credit facilities   73,308       82,146  
Total liabilities   164,998       193,077  
       
Commitments and contingencies      
       
Shareholders' equity:      
Preferred stock, $.01 par value, 400,000 shares authorized;      
zero shares issued and outstanding   -       -  
Common stock, $.01 par value, 99,600,000 shares authorized;      
65,220,233 and 65,192,314 shares issued and outstanding                                                                                 652       652  
       
Additional paid-in capital   437,449       436,962  
       
Accumulated deficit   (361,098 )           (355,911 )
Total shareholders' equity    77,003       81,703  
Total Liabilities and Shareholders' Equity  $ 242,001     $ 274,780  

 

  EVINE Live Inc.  
  AND SUBSIDIARIES  
  CONSOLIDATED STATEMENTS OF OPERATIONS  
(Unaudited)
(In thousands, except share and per share data)
           
           
    For the Three-Month Periods Ended       For the Six-Month Periods Ended  
                                       
  July 29,   July 30,   July 29,   July 30,
    2017       2016       2017       2016  
  Net sales   $ 148,949     $ 157,139     $ 305,292     $ 324,059  
  Cost of sales     92,469       97,311       192,526       202,783  
Gross profit   56,480       59,828       112,766       121,276  
Margin %   37.9 %     38.1 %     36.9 %     37.4 %
  Operating expense:            
Distribution and selling   48,687       51,605       97,417       105,030  
General and administrative   6,012       5,878       12,007       11,647  
Depreciation and amortization   1,680       1,977       3,316       4,084  
Executive and management transition costs   572       242       1,078       3,843  
Distribution facility consolidation and technology upgrade costs     -       300       -       380  
Total operating expense   56,951       60,002       113,818       124,984  
  Operating loss     (471 )     (174 )     (1,052 )     (3,708 )
                               
  Other income (expense):            
Interest income   2       2       4       4  
Interest expense   (1,313 )     (1,606 )     (2,808 )     (2,811 )
Loss on debt extinguishment   -       -       (913 )     -  
Total other expense   (1,311 )     (1,604 )     (3,717 )     (2,807 )
                               
  Loss before income taxes     (1,782 )     (1,778 )     (4,769 )     (6,515 )
           
Income tax provision   (209 )     (205 )     (418 )     (410 )
           
  Net loss   $ (1,991 )   $ (1,983 )   $ (5,187 )   $ (6,925 )
                               
  Net loss per common share   $ (0.03 )   $ (0.03 )   $ (0.08 )   $ (0.12 )
                               
  Net loss per common share                                
  --assuming dilution   $ (0.03 )   $ (0.03 )   $ (0.08 )   $ (0.12 )
                               
Weighted average number of          
common shares outstanding:          
Basic   64,091,228       57,258,672       62,504,868       57,219,914  
Diluted   64,091,228       57,258,672       62,504,868       57,219,914  

  
EVINE Live Inc.
AND SUBSIDIARIES
Reconciliation of Net Loss to Adjusted EBITDA:
(Unaudited)
(In thousands)
                 
 
      For the Three-Month Periods Ended       For the Six-Month Periods Ended  
                 
  July 29,   July 30,   July 29,   July 30,
    2017       2016           2017       2016  
               
     
Net loss     $ (1,991 )   $ (1,983 )   $ (5,187 )   $ (6,925 )
Adjustments:                
Depreciation and amortization     2,655       3,070       5,259       6,111  
Interest income     (2 )     (2 )     (4 )     (4 )
Interest expense     1,313       1,606       2,808       2,811  
Income taxes     209       205       418       410  
EBITDA (as defined)   $ 2,184     $ 2,896     $ 3,294     $ 2,403  
                 
                 
A reconciliation of EBITDA to Adjusted EBIDTA is as follows:              
EBITDA (as defined)   $ 2,184     $ 2,896     $ 3,294     $ 2,403  
Adjustments:                
Executive and management transition costs     572       242       1,078       3,843  
Loss on debt extinguishment     -       -       913       -  
Distribution facility consolidation and technology upgrade costs         -       300       -       380  
Non-cash share-based compensation expense     746       398       1,267       635  
Adjusted EBITDA   $ 3,502     $ 3,836     $ 6,552     $ 7,261  

Adjusted EBITDAEBITDA represents net income (loss) for the respective periods excluding depreciation and amortization expense, interest income (expense) and income taxes. The Company defines Adjusted EBITDA as EBITDA excluding non-operating gains (losses); executive and management transition costs; loss on debt extinguishment; distribution facility consolidation and technology upgrade costs and non-cash share-based compensation expense. The Company has 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 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 the Company's 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 ("GAAP") and should not be construed as a measure of liquidity. Adjusted EBITDA may not be comparable to similarly entitled measures reported by other companies. The Company has included a reconciliation of the comparable GAAP measure, net income (loss) to Adjusted EBITDA in this release. 

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995This document may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including guidance regarding anticipated future operating results, the Company's focus for the remainder of the fiscal year and the Company's beliefs regarding the future of retailing. 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 or estimated cost savings from contract renegotiations; 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 and exclusive brands; our ability to manage our operating expenses successfully and our working capital levels; our ability to remain compliant with our credit facilities covenants; customer acceptance of our branding strategy and our repositioning as a video 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; including without limitation, regulations of the Federal Communications Commission and Federal Trade Commission, and adverse outcomes from regulatory proceedings; 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. 
ContactsMedia: Dawn Zaremba  press@evine.com(952) 943-6043Investors: Michael Portermporter@evine.com(952) 943-6517

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