We strongly believe that ISS reached the wrong conclusion in failing to recommend that shareholders elect ALL of ValueVision's eight, highly qualified director nominees.
We believe that shareholders should seriously question ISS's report due to numerous material errors and omissions:
•In its very first "Key Takeaway," ISS overstates
In considering which directors are better qualified to preserve and increase value, shareholders should seriously question ISS's recommendation to give 50% board control to a dissident shareholder that owns substantially fewer shares than the Company's CEO, and has been steadily selling down its position since it first publicly announced its campaign. In addition, shareholders should consider that neither ISS nor any of its analysts have any experience in eCommerce or the Company's business.
We also question the basis for the analysis supporting ISS's conclusion about "needed change" in proprietary brands, product mix and programming. In fact, revenue from ValueVision's more than 20 proprietary brands grew 67% in the last two fiscal years, and now represents approximately 25% of our product mix in fiscal 2013.
The ISS report raises questions as to how shareholders can be expected to rely on an ISS recommendation that, in its very first "Key Takeaway," materially overstates
The election of
For example, ValueVision's Board and management team have transformed the Company over the past five years through the continued successful execution of ValueVision's strategy, and are continuing to deliver positive results.
•Significantly diversified and broadened its merchandise offerings; •Reduced the average selling price to enable customer growth; •Increased customer count from approximately 754,000 in 2008 to 1.4 million customers now; •Increased net sales by 6% and net units shipped by 28% in the first quarter of 2014 alone; •Reduced the cost per home over the last six years from
Even ISS acknowledges that ValueVision's record of delivering shareholder value is superior. Listen to what the independent experts are saying about ValueVision. All sell-side analysts that cover ValueVision have a BUY rating post Q1 2014 earnings(1):
"Improvements in recent quarters appear to be driven by greater depth of SKUs in each category, thereby reducing concentration risk in product offerings. Broader product assortments are driving customer growth -- YOY customer growth has trended from 7% in Q1, 22% in Q2, 20% in Q3, and 30% in Q4 to 19% in Q1. A bigger customer base increases the likelihood of sustainable long-term revenue growth, which is the driver of VVTV's decision to lower ASPs by emphasizing products that appeal to a larger audience." -
"The company will leverage the sales growth more in F2015 and experience very high earnings growth. We think the long-term investment thesis is intact which is that the company can grow revenue by reducing ASP, increasing transactions and the higher revenue will leverage largely fixed operating expenses leading to strong earnings growth. With ample price appreciation potential to our new price target, we are maintaining our BUY rating." -
"VVTV reported solid Q1 results... As evidence that the strategy to broaden the merchandise assortment and lower average prices is working, new customer acquisition was up 19% in Q1, paving the way for strong revenue growth in future quarters. ShopHQ has several brands and partnerships slated to launch this year: notably, a partnership featuring Shark Tank's
"Mobile continues to grow -- underscoring this mega trend in consumer behavior. We note that eCommerce sales in total were about 45% of the company's total revenues, of which 32% (or 14% of the company's total revenues) were conducted via a mobile device. Mobile strategies put into place last year are paying off in driving penetration via mobile. For this year, the company intends to continue these enhancements aimed at driving customer engagement and purchase frequency." - Piper Jaffray on
ValueVision's shareholders are reminded that their vote is important, no matter how many or how few shares they own. Whether or not shareholders plan to attend the Annual Meeting, they have an opportunity to protect their investment by voting the WHITE proxy card "FOR" ValueVision's eight highly qualified and experienced nominees:
Your Vote Is Important, No Matter How Many Or How Few Shares You Own
If you have questions about how to vote your shares, or need additional assistance,
please contact the firm assisting us in the solicitation of proxies:
INNISFREE M&A INCORPORATED
Shareholders Call Toll-Free: (888) 750-5834
Banks and Brokers May Call Collect: (212) 750-5833
We urge you NOT to sign any Gold proxy card sent to you by
(1) Permission to use quotes were neither sought nor obtained.
This release may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. 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; 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; the market demand for television station sales; 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; and our ability to obtain and retain key executives and employees. More detailed information about those factors is set forth in the Company's filings with the
This release may be deemed to be solicitation material in respect of the solicitation of proxies from shareholders in connection with one or more meetings of the Company's shareholders, including the Company's 2014 Annual Meeting of Shareholders. On
Dawn ZarembaShopHQ firstname.lastname@example.org (952) 943-6043 O Tim Lynch/ Jed Repko Joele Frank, Wilkinson Brimmer Katcher (212) 355-4449 Investors: David Collins/ Eric Lentini Catalyst Global LLCvvtv@catalyst-ir.com (212) 924-9800 O (917) 734-0339 M Arthur Crozier/ Scott Winter/ Jonathan Salzberger Innisfree M&A Incorporated(212) 750-5833