EVINE LIVE INC., 10-Q filed on 9/9/2014
Quarterly Report
Document and Entity Information (USD $)
In Thousands, except Share data, unless otherwise specified
6 Months Ended
Aug. 2, 2014
Sep. 5, 2014
Aug. 3, 2013
Document Information [Line Items]
 
 
 
Entity Registrant Name
VALUEVISION MEDIA INC 
 
 
Entity Central Index Key
0000870826 
 
 
Current Fiscal Year End Date
--01-31 
 
 
Entity Filer Category
Accelerated Filer 
 
 
Document Type
10-Q 
 
 
Document Period End Date
Aug. 02, 2014 
 
 
Document Fiscal Year Focus
2014 
 
 
Document Fiscal Period Focus
Q2 
 
 
Amendment Flag
false 
 
 
Entity Common Stock, Shares Outstanding
 
55,289,993 
 
Entity Well-known Seasoned Issuer
No 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Public Float
 
 
$ 240,622,224 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Aug. 2, 2014
Feb. 1, 2014
Current assets:
 
 
Cash and cash equivalents
$ 20,790 
$ 29,177 
Restricted cash and investments
2,100 
2,100 
Accounts receivable, net
92,972 
107,386 
Inventories
52,332 
51,162 
Prepaid expenses and other
6,463 
6,032 
Total current assets
174,657 
195,857 
Property and equipment, net
26,619 
24,952 
FCC broadcasting license
12,000 
12,000 
Other assets
1,062 
896 
Total Assets
214,338 
233,705 
Current liabilities:
 
 
Accounts payable
59,030 
77,296 
Accrued liabilities
37,789 
38,535 
Deferred revenue
85 
85 
Total current liabilities
96,904 
115,916 
Capital Lease Obligations, Noncurrent
62 
88 
Deferred revenue
292 
335 
Deferred Tax Liabilities, Net, Noncurrent
1,551 
1,158 
Long term credit facility
38,000 
38,000 
Total liabilities
136,809 
155,497 
Shareholders' equity:
 
 
Common stock, $.01 per share par value, 100,000,000 shares authorized; 48,472,205 and 37,781,688 shares issued and outstanding
552 
498 
Warrants to purchase 6,007,372 shares of common stock
533 
Additional paid-in capital
414,310 
410,681 
Accumulated deficit
(337,333)
(333,504)
Total shareholders’ equity
77,529 
78,208 
Total Liabilities and Equity
$ 214,338 
$ 233,705 
Consolidated Balance Sheets (Parentheticals) (USD $)
Aug. 2, 2014
Feb. 1, 2014
Stockholders' Equity:
 
 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
100,000,000 
100,000,000 
Common stock, shares issued
55,185,123 
49,844,253 
Common stock, shares outstanding
55,185,123 
49,844,253 
Warrants, Outstanding
6,000,000 
Consolidated Statements of Operations (USD $)
3 Months Ended 6 Months Ended
Aug. 2, 2014
Aug. 3, 2013
Aug. 2, 2014
Aug. 3, 2013
Net sales
$ 156,587,000 
$ 148,564,000 
$ 316,288,000 
$ 299,918,000 
Cost of sales
96,152,000 
92,907,000 
195,847,000 
187,228,000 
Gross profit
60,435,000 
55,657,000 
120,441,000 
112,690,000 
Operating expense:
 
 
 
 
Distribution and selling
50,110,000 
46,542,000 
99,839,000 
92,794,000 
General and administrative
6,776,000 
6,177,000 
12,688,000 
12,069,000 
Depreciation and amortization
2,163,000 
3,098,000 
4,431,000 
6,303,000 
Activist Shareholder Costs
2,473,000 
3,518,000 
Severance Costs
2,620,000 
2,620,000 
Total operating expense
64,142,000 
55,817,000 
123,096,000 
111,166,000 
Operating income (loss)
(3,707,000)
(160,000)
(2,655,000)
1,524,000 
Other income (expense):
 
 
 
 
Interest income
6,000 
3,000 
6,000 
14,000 
Interest expense
(387,000)
(348,000)
(778,000)
(726,000)
Total other expense
(381,000)
(345,000)
(772,000)
(712,000)
Income (loss) before income taxes
(4,088,000)
(505,000)
(3,427,000)
812,000 
Income tax (provision) benefit
(201,000)
(294,000)
(402,000)
(588,000)
Net income (loss)
$ (4,289,000)
$ (799,000)
$ (3,829,000)
$ 224,000 
Net income (loss) per common share
$ (0.08)
$ (0.02)
$ (0.08)
$ 0.00 
Net income (loss) per common share — assuming dilution
$ (0.08)
$ (0.02)
$ (0.08)
$ 0.00 
Weighted average number of common shares outstanding:
 
 
 
 
Basic
52,199,792 
49,406,562 
51,022,023 
49,316,539 
Diluted
52,199,792 
49,406,562 
51,022,023 
55,206,943 
Consolidated Statement of Shareholders' Equity (USD $)
In Thousands, except Share data
Total
Common Stock [Member]
Warrant [Member]
Additional Paid-in Capital [Member]
Accumulated Deficit
Total Shareholders' Equity period beginning at Feb. 01, 2014
$ 78,208 
$ 498 
$ 533 
$ 410,681 
$ (333,504)
Common Stock, Shares, Outstanding period beginning at Feb. 01, 2014
49,844,253 
49,844,253 
 
 
 
Net income (loss)
(3,829)
(3,829)
Share-based payment compensation
2,918 
2,918 
Share-based payment compensation
 
 
 
 
Debt Conversion, Converted Instrument, Warrants or Options Issued
5,058,741 
 
 
 
 
Stock and Warrants Issued During Period, Value, Preferred Stock and Warrants
533 
 
(533)
 
 
Adjustments to Additional Paid in Capital, Warrant Issued
51 
 
482 
Total Shareholders' Equity period end at Aug. 02, 2014
$ 77,529 
$ 552 
$ 0 
$ 414,310 
$ (337,333)
Common Stock, Shares, Outstanding period end at Aug. 02, 2014
55,185,123 
55,185,123 
 
 
 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Aug. 2, 2014
Aug. 3, 2013
Proceeds from Stock Options Exercised
$ 232 
$ 78 
Payments to Acquire Intangible Assets
2,830 
OPERATING ACTIVITIES:
 
 
Net loss
(3,829)
224 
Adjustments to reconcile net loss to net cash provided by (used for) operating activities:
 
 
Depreciation and amortization
4,641 
6,402 
Share-based compensation
2,918 
1,650 
Amortization of deferred revenue
(43)
(43)
Amortization of deferred finance costs
102 
101 
Deferred income taxes
393 
580 
Changes in operating assets and liabilities:
 
 
Accounts receivable, net
14,414 
13,621 
Inventories, net
(1,170)
(11,810)
Prepaid expenses and other
(399)
(706)
Accounts payable and accrued liabilities
(19,182)
2,705 
Net cash provided by (used for) operating activities
(2,155)
12,724 
INVESTING ACTIVITIES:
 
 
Property and equipment additions
(6,138)
(3,825)
Net cash used for investing activities
(6,138)
(6,655)
FINANCING ACTIVITIES:
 
 
Payments for deferred issuance costs
(300)
(264)
Repayments of Long-term Capital Lease Obligations
(26)
Net cash provided by (used for) financing activities
(94)
(186)
Net increase (decrease) in cash and cash equivalents
(8,387)
5,883 
BEGINNING CASH AND CASH EQUIVALENTS
29,177 
26,477 
ENDING CASH AND CASH EQUIVALENTS
20,790 
32,360 
Interest Paid
676 
625 
Income Taxes Paid
22 
16 
Property and equipment purchases included in accounts payable
643 
262 
Stock and Warrants Issued During Period, Value, Preferred Stock and Warrants
$ 533 
$ 0 
General
The Company
General
ValueVision Media, Inc. and its subsidiaries ("we," "our," "us," or the "Company") is a digital commerce company that markets, sells and distributes products to consumers through TV, telephone, online, mobile and social media. The Company operates a 24-hour television shopping network, ShopHQ, which is distributed primarily through cable and satellite affiliation agreements, through which it offers brand name and private label products in the categories of jewelry & watches; home & consumer electronics; beauty, health & fitness; and fashion & accessories. Orders are fulfilled via telephone, online and mobile channels. The television network is distributed into approximately 87 million homes, primarily through cable and satellite affiliation agreements and agreements with telecommunications companies such as AT&T and Verizon. Programming is also streamed live on the Internet at ShopHQ.com and is also available on all mobile channels. Programming is also distributed through a Company-owned full power television station in Boston, Massachusetts and through leased carriage on a full power television station in Seattle, Washington.
The Company also operates ShopHQ.com, a comprehensive digital commerce platform that sells products which appear on its television shopping channel as well as an extended assortment of online-only merchandise. The live programming and products are also marketed via mobile devices, including smartphones and tablets, and through the leading social media channels.
In May 2013, the Company announced its intention to rebrand its 24-hour television shopping network, ShopNBC, and its companion digital commerce internet website, ShopNBC.com, and on January 31, 2014, the Company officially transitioned to its new brand, ShopHQ and ShopHQ.com, to reinforce its positioning as the shopping headquarters for customers.
Basis of Financial Statement Presentation
Basis of Financial Statement Presentation
Basis of Financial Statement Presentation
Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles ("GAAP") in the United States of America have been condensed or omitted in accordance with these rules and regulations. The accompanying condensed consolidated balance sheet as of February 1, 2014 has been derived from the Company's audited financial statements for the fiscal year ended February 1, 2014. The information furnished in the interim condensed consolidated financial statements includes normal recurring accruals and reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of these financial statements. Although management believes the disclosures and information presented are adequate, these interim condensed consolidated financial statements should be read in conjunction with the Company’s most recent audited financial statements and notes thereto included in its annual report on Form 10-K for the fiscal year ended February 1, 2014. Operating results for the six-month period ended August 2, 2014 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2015.
The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.
Fiscal Year
The Company's fiscal year ends on the Saturday nearest to January 31. References to years in this report relate to fiscal years, rather than to calendar years. The Company’s most recently completed fiscal year, fiscal 2013, ended on February 1, 2014, and consisted of 52 weeks. Fiscal 2014 will end on January 31, 2015, and will contain 52 weeks. The quarters ended August 2, 2014 and August 3, 2013 each consisted of 13 weeks.
Fair Value Measurements
Fair Value Measurements
Fair Value Measurements
GAAP utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to observable quoted prices (unadjusted) in active markets for identical assets (Level 1 measurement), then priority to quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market (Level 2 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).
As of August 2, 2014 and February 1, 2014, the Company had $2,100,000 in Level 2 investments in the form of bank certificates of deposit which are used as cash collateral for the issuance of commercial letters of credit. The Company's investments in certificates of deposits were measured using inputs based upon quoted prices for similar instruments in active markets and, therefore, were classified as Level 2 investments. As of August 2, 2014 and February 1, 2014, the Company also had a long-term variable rate bank credit loan with a carrying value of $38,000,000. The fair value of the variable rate bank loan approximates and is based on its carrying value. The Company has no Level 3 cash investments that use significant unobservable inputs.
Intangible Assets
Intangible Assets
Intangible Assets
Intangible assets in the accompanying consolidated balance sheets consisted of the following:
 
Weighted
Average
Life
(Years)
 
August 2, 2014
 
February 1, 2014
 
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Gross
Carrying
Amount
 
Accumulated
Amortization
Indefinite-lived intangible assets:
 
 
 
 
 
 
 
 
 
FCC broadcast license
 
 
$
12,000,000

 
 
 
$
12,000,000

 
 

As of August 2, 2014 and February 1, 2014, the Company had an intangible FCC broadcasting license with a carrying value of $12,000,000 and a current estimated fair value of $13,100,000. The Company annually reviews its FCC television broadcast license for impairment in the fourth quarter, or more frequently if an impairment indicator is present. The Company estimates the fair value of its FCC television broadcast license primarily by using income-based discounted cash flow models with the assistance of an independent outside fair value consultant. The discounted cash flow models utilize a range of assumptions including revenues, operating profit margin, projected capital expenditures and an unobservable discount rate. The Company concluded that the inputs used in its intangible FCC broadcasting license asset valuation are Level 3 inputs related to this valuation. The Company also considers comparable asset market and sales data for recent comparable market transactions for standalone television broadcasting stations to assist in determining fair value.
While the Company believes that its estimates and assumptions regarding the valuation of the license are reasonable, different assumptions or future events could materially affect its valuation. In addition, due to the illiquid nature of this asset, the Company's valuation for this license could be materially different if it were to decide to sell it in the short term which, upon revaluation, could result in a future impairment of this asset.
Amortization expense related to an expired NBCU trademark license was $999,000 and $1,999,000 for the three and six month periods, respectively, ended August 3, 2013.
Credit Agreements
Credit Agreements
Credit Agreement
On February 9, 2012, the Company entered into a credit and security agreement (the "Credit Facility") with PNC Bank, N.A. ("PNC"), a member of The PNC Financial Services Group, Inc., as lender and agent. On January 31, 2014, the Company entered into a third amendment to its revolving credit and security agreement with PNC, as previously amended that, among other things, increased the size of the revolving line of credit from $50 million to $60 million and provides for a $15 million term loan on which the Company will draw to fund an expansion at the Company's distribution facility in Bowling Green, Kentucky.
The revolving line of credit under the Credit Facility, as amended, bears interest at LIBOR plus 3% per annum. All borrowings under the amended Credit Facility mature and are payable on May 1, 2018. Subject to certain conditions, the Credit Facility also provides for the issuance of letters of credit in an aggregate amount up to $6 million which, upon issuance, would be deemed advances under the Credit Facility. Remaining capacity under the Credit Facility, currently $21.3 million, provides liquidity for working capital and general corporate purposes.
Maximum borrowings and available capacity under the amended revolving Credit Facility are equal to the lesser of $60 million or a calculated borrowing base comprised of eligible accounts receivable and eligible inventory. The Credit Facility is secured by substantially all of the Company’s personal property, as well as the Company’s real properties located in Eden Prairie, Minnesota and Bowling Green, Kentucky. Under certain circumstances, the borrowing base may be adjusted if there were to be a significant deterioration in value of the Company’s accounts receivable and inventory. The Credit Facility is subject to mandatory prepayment in certain circumstances. In addition, if the total Credit Facility is terminated prior to maturity, the Company would be required to pay an early termination fee of 1.0% if terminated on or before May 1, 2015; 0.5% if terminated on or before May 1, 2016; and no fee if terminated after May 1, 2016. Interest expense recorded under the Credit Facility's revolving line of credit for the three and six-month periods ended August 2, 2014 was $383,000 and $774,000, respectively and $348,000 and $726,000 for the three and six month periods ended August 3, 2013.
If drawn, the term loan shall bear interest at either (i) a fixed rate based on the LIBOR Rate for interest periods of one, two, three or six months, or (ii) a daily floating alternate base rate (the “Base Rate”), plus a margin of 5% on the Base Rate and 6% on the LIBOR Rate until January 31, 2015, at which time the margin shall adjust each fiscal year to a rate consisting of between 4% and 5% on Base Rate term loans and 5% to 6% on LIBOR Rate term loans based on the Company’s leverage ratio as demonstrated in its audited financial statements. Principal borrowings under the term loan are to be payable in monthly installments over an 84 month amortization period commencing on January 1, 2015 and are also subject to mandatory prepayment in certain circumstances, including, but not limited to, if the outstanding borrowings are more than the borrowing base and upon receipt of certain proceeds from dispositions of collateral. The third amendment also provides that borrowings under the term loan, if made, are subject to mandatory prepayment starting in the fiscal year ending January 31, 2016 in an amount equal to fifty percent (50%) of excess cash flow for such fiscal year, with any such payment not to exceed $3,750,000 in any such fiscal year. As of August 2, 2014, there were no borrowings under the Credit Facility term loan.
The amended Credit Facility contains customary covenants and conditions, including, among other things, maintaining a minimum of unrestricted cash plus facility availability of $10 million at all times and limiting annual capital expenditures. Certain financial covenants, including minimum EBITDA levels (as defined in the Credit Facility) and a minimum fixed charge coverage ratio, become applicable only if unrestricted cash plus facility availability falls below $16 million or upon an event of default. In addition, the Credit Facility places restrictions on the Company’s ability to incur additional indebtedness or prepay existing indebtedness, to create liens or other encumbrances, to sell or otherwise dispose of assets, to merge or consolidate with other entities, and to make certain restricted payments, including payments of dividends to common shareholders. As of August 2, 2014, the Company was in compliance with the applicable financial covenants of the amended Credit Facility.
Costs incurred to obtain amendments to the Credit Facility of approximately $710,000 and unamortized costs incurred to obtain the original Credit Facility totaling $466,000 have been deferred and are being expensed as additional interest over the five-year term of the Credit Facility.
(Notes)
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
-Based Compensation - Stock Option Awards
Compensation is recognized for all share-based compensation arrangements by the Company. Stock-based compensation expense for the second quarters of fiscal 2014 and fiscal 2013 related to stock option awards was $1,319,000 and $637,000, respectively. Stock-based compensation expense for the first six-months of fiscal 2014 and fiscal 2013 related to stock option awards was $2,063,000 and $1,248,000, respectively. The Company has not recorded any income tax benefit from the exercise of stock options due to the uncertainty of realizing income tax benefits in the future.
As of August 2, 2014, the Company had one omnibus stock plan for which stock awards can be currently granted: the 2011 Omnibus Incentive Plan that provides for the issuance of up to 6,000,000 shares of the Company's stock. The 2004 Omnibus Plan expired on June 22, 2014. No further awards may be made under the 2004 Omnibus Plan, but any award granted under the 2004 Omnibus Plan and outstanding on June 22, 2014 will remain outstanding in accordance with its terms. The 2001 Omnibus Stock Plan expired on June 21, 2011. The 2011 plan is administered by the human resources and compensation committee of the board of directors and provide for awards for employees, directors and consultants. All employees and directors of the Company and its affiliates are eligible to receive awards under the plan. The types of awards that may be granted under the plan include restricted and unrestricted stock, incentive and nonstatutory stock options, stock appreciation rights, performance units, and other stock-based awards. Incentive stock options may be granted to employees at such exercise prices as the human resources and compensation committee may determine but not less than 100% of the fair market value of the underlying stock as of the date of grant. No incentive stock option may be granted more than 10 years after the effective date of the respective plan's inception or be exercisable more than 10 years after the date of grant. Options granted to outside directors are nonstatutory stock options with an exercise price equal to 100% of the fair market value of the underlying stock as of the date of grant. With the exception of market-based options, options granted generally vest over three years in the case of employee stock options and vest immediately on the date of grant in the case of director options, and have contractual terms of 10 years from the date of grant.
The fair value of each time-based vesting option award is estimated on the date of grant using the Black-Scholes option pricing model that uses assumptions noted in the following table. Expected volatilities are based on the historical volatility of the Company's stock. Expected term is calculated using the simplified method taking into consideration the option's contractual life and vesting terms. The Company uses the simplified method in estimating its expected option term because it believes that historical exercise data cannot be accurately relied upon at this time to provide a reasonable basis for estimating an expected term due to the extreme volatility of its stock price and the resulting unpredictability of its stock option exercises. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected dividend yields were not used in the fair value computations as the Company has never declared or paid dividends on its common stock and currently intends to retain earnings for use in operations.
 
Fiscal 2014
 
Fiscal 2013
Expected volatility
97% - 98%
 
100%
Expected term (in years)
5 - 6 years
 
6 years
Risk-free interest rate
1.5% - 2.2%
 
1.1% - 1.8%

Market-Based Stock Option Awards
On October 3, 2012, the Company granted 2,125,000 non-qualified market-based stock options to its executive officers as part of the Company's long-term executive compensation program. The options were granted with an exercise price of $4.00 and each option will become exercisable in three tranches, as follows, on the dates when the Company's average closing stock price for 20 consecutive trading days equals or exceeds the following prices: Tranche 1 (50% of the shares subject to the option at $6.00 per share); Tranche 2 (25% at $8.00 per share); and Tranche 3 (25% at $10.00 per share). On August 14, 2013, 50% of this stock option grant (Tranche 1) vested and as a result, the vesting of the second and third tranches can occur any time on or before the fifth anniversary of the grant date. Net shares issued upon the exercise of these market-based stock options (after shares are potentially withheld to cover the exercise price and applicable withholding taxes) may not be sold for a period of one year from the date of exercise. As of August 2, 2014, all 2,125,000 market-based stock option awards were outstanding. The total grant date fair value was estimated to be $1,998,000 and is being amortized over the derived service periods for each tranche.
Grant date fair values and derived service periods for each tranche were determined using a Monte Carlo valuation model based on assumptions, which included a weighted average risk-free interest rate of 0.38%, a weighted average expected life of 3.3 years and an implied volatility of 78% and were as follows for each tranche:
 
Fair Value
(Per Share)
 
Derived Service
Period
Tranche 1 ($6.00/share)
$0.93
 
15
months
Tranche 2 ($8.00/share)
$0.95
 
20
months
Tranche 3 ($10.00/share)
$0.95
 
24
months

A summary of the status of the Company’s stock option activity as of August 2, 2014 and changes during the six-months then ended is as follows:
 
2011
Incentive
Stock
Option
Plan
 
Weighted
Average
Exercise
Price
 
2004
Incentive
Stock
Option
Plan
 
Weighted
Average
Exercise
Price
 
2001
Incentive
Stock
Option
Plan
 
Weighted
Average
Exercise
Price
 
Other Non-
Qualified
Stock
Options
 
Weighted
Average
Exercise
Price
Balance outstanding,
February 1, 2014
3,083,000

 
$
4.03

 
2,104,000

 
$
6.25

 
1,121,000

 
$
6.05

 
500,000

 
$
4.24

Granted
120,000

 
$
3.74

 
107,000

 
$
5.66

 

 
$

 

 
$

Exercised
(33,000
)
 
$
1.62

 
(100,000
)
 
$
0.81

 
(10,000
)
 
$
3.29

 
(35,000
)
 
$
1.82

Forfeited or canceled
(17,000
)
 
$
1.62

 
(241,000
)
 
$
12.03

 
(33,000
)
 
$
13.81

 

 
$

Balance outstanding,
August 2, 2014
3,153,000

 
$
4.06

 
1,870,000

 
$
5.76

 
1,078,000

 
$
5.83

 
465,000

 
$
4.42

Options exercisable at
August 2, 2014
1,508,000

 
$
4.02

 
1,843,000

 
$
5.78

 
1,078,000

 
$
5.83

 
395,000

 
$
4.50



The following table summarizes information regarding stock options outstanding at August 2, 2014:
 
Options Outstanding
 
Options Vested or Expected to Vest
Option Type
Number of
Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life
(Years)
 
Aggregate
Intrinsic
Value
 
Number of
Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life
(Years)
 
Aggregate
Intrinsic
Value
2011 Incentive:
3,153,000

 
$
4.06

 
8.5
 
$
2,577,000

 
3,094,000

 
$
4.10

 
8.5
 
$
2,533,000

2004 Incentive:
1,870,000

 
$
5.76

 
5.2
 
$
1,229,000

 
1,867,000

 
$
5.74

 
5.2
 
$
1,229,000

2001 Incentive:
1,078,000

 
$
5.83

 
4.1
 
$
863,000

 
1,078,000

 
$
5.83

 
4.1
 
$
863,000

Non-Qualified:
465,000

 
$
4.42

 
5.9
 
$
328,000

 
458,000

 
$
4.43

 
5.9
 
$
323,000


The weighted average grant-date fair value of options granted in the first six-months of fiscal 2014 and fiscal 2013 was $3.75 and $2.83, respectively. The total intrinsic value of options exercised during the first six-months of fiscal 2014 and fiscal 2013 was $842,000 and $91,000, respectively. As of August 2, 2014, total unrecognized compensation cost related to stock options was $1,675,000 and is expected to be recognized over a weighted average expected life of approximately 1.4 years years.
Restricted Stock (Notes)
Restricted Stock
Restricted Stock and Warrant Exercise
Restricted Stock
Compensation expense recorded for the second quarter of fiscal 2014 and fiscal 2013 relating to restricted stock grants was $555,000 and $154,000, respectively. Compensation expense recorded for the first six-months of fiscal 2014 and fiscal 2013 related to restricted stock grants was $855,000 and $402,000, respectively. As of August 2, 2014, there was $2,088,000 of total unrecognized compensation cost related to non-vested restricted stock granted. That cost is expected to be recognized over a weighted average expected life of 1.2 years years. The total fair value of restricted stock vested during the first six-months of fiscal 2014 and fiscal 2013 was $518,000 and $1,059,000, respectively.
On June 18, 2014, the Company granted a total of 56,000 shares of restricted stock to seven non-management board members as part of the Company's annual director compensation program. Each restricted stock award vests on the day immediately preceding the next annual meeting of shareholders following the date of grant. The aggregate market value of the restricted stock at the date of the award was $281,000 and is being amortized as director compensation expense over the twelve-month vesting period.
On March 13, 2014, the Company granted a total of 53,000 shares of restricted stock to certain key employees as part of the Company's long-term incentive program. The restricted stock will vest in three equal annual installments beginning March 13, 2015. The aggregate market value of the restricted stock at the date of the award was $314,000 and is being amortized as compensation expense over the three-year vesting period. During the first quarter of fiscal 2014, the Company also granted a total of 4,000 shares of restricted stock to two new non-management board members as part of the Company's annual director compensation program. Each restricted stock award vests on the day immediately preceding the next annual meeting of shareholders following the date of grant. The aggregate market value of the restricted stock at the date of the award was $23,500 and was amortized as director compensation expense through June 2014.
On November 25, 2013, the Company granted a total of 436,000 shares of restricted stock to certain key employees as part of the Company's long-term incentive program. The restricted stock will vest in three equal annual installments beginning November 25, 2014. The aggregate market value of the restricted stock at the date of the award was $2,426,000 and is being amortized as compensation expense over the three-year vesting period.
During the first half of fiscal 2013, the Company granted a total of 44,000 shares of restricted stock to six non-management board members as part of the Company's annual director compensation program. Each restricted stock award vests on the day immediately preceding the next annual meeting of shareholders following the date of grant. The aggregate market value of the restricted stock at the date of the award was $228,000 and is being amortized as director compensation expense over the twelve-month vesting period.
On October 3, 2012, the Company granted 300,000 shares of market-based restricted stock to certain key employees as part of the Company's long-term incentive program. Each restricted stock award will vest in three tranches, as follows, on the dates when the Company's average closing stock price for 20 consecutive trading days equals or exceeds the following prices: Tranche 1 (50% of the shares subject to the award at $6.00 per share); Tranche 2 (25% at $8.00 per share); and Tranche 3 (25% at $10.00 per share). On August 14, 2013, 50% of this restricted stock grant (Tranche 1) vested and as a result, the vesting of the second and third tranches can occur any time on or before the fifth anniversary of the grant date. Net shares received upon the vesting of these market-based stock restricted awards (after shares are potentially withheld to cover applicable withholding taxes) may not be sold for a period of one year from the date of vesting. As of August 2, 2014, 150,000 market-based restricted stock awards were outstanding. The total grant date fair value was estimated to be $425,000 and is being amortized over the derived service periods for each tranche.
Grant date fair values and derived service periods for each tranche were determined using a Monte Carlo valuation model based on assumptions, which included a weighted average risk-free interest rate of 0.32%, a weighted average expected life of 2.8 years and an implied volatility of 78% and were as follows for each tranche:
 
Fair Value
(Per Share)
 
Derived Service
Period
Tranche 1 ($6.00/share)
$1.48
 
15
months
Tranche 2 ($8.00/share)
$1.39
 
20
months
Tranche 3 ($10.00/share)
$1.31
 
24
months

A summary of the status of the Company’s non-vested restricted stock activity as of August 2, 2014 and changes during the six-month period then ended is as follows:
 
Shares
 
Weighted
Average
Grant Date
Fair Value
Non-vested outstanding, February 1, 2014
641,000

 
$4.49
Granted
113,000

 
$5.26
Vested
(104,000
)
 
$5.12
Forfeited
(33,000
)
 
$3.30
Non-vested outstanding, August 2, 2014
617,000

 
$4.58

Warrant Exercise
On June 24, 2014, GE Equity exercised its common stock purchase warrant in a cashless exercise acquiring 5,058,741 shares of the Company's common stock. The warrants were issued in connection with the issuance of the Company's Series B Redeemable Preferred Stock in February 2009. As of August 2, 2014, there are no other common stock warrants outstanding.
Net Income (Loss) Per Common Share (Notes)
Net Income (Loss) Per Common Share
Net Income (Loss) Per Common Share
Basic net income (loss) per share is computed by dividing reported income (loss) by the weighted average number of shares of common stock outstanding for the reported period. Diluted income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock of the Company during reported periods.
A reconciliation of net income (loss) per share calculations and the number of shares used in the calculation of basic income (loss) per share and diluted income (loss) per share is as follows:
 
 
Three-Month Periods Ended
 
Six-Month Periods Ended
 
 
August 2,
2014
 
August 3,
2013
 
August 2,
2014
 
August 3,
2013
Net income (loss) (a)
 
$
(4,289,000
)
 
$
(799,000
)
 
$
(3,829,000
)
 
$
224,000

Weighted average number of shares of common stock outstanding — Basic
 
52,199,792

 
49,406,562

 
51,022,023

 
49,316,539

Dilutive effect of stock options, non-vested shares and warrants (b)
 

 

 

 
5,890,404

Weighted average number of shares of common stock outstanding — Diluted
 
52,199,792

 
49,406,562

 
51,022,023

 
55,206,943

Net income (loss) per common share
 
$
(0.08
)
 
$
(0.02
)
 
$
(0.08
)
 
$

Net income (loss) per common share — assuming dilution
 
$
(0.08
)
 
$
(0.02
)
 
$
(0.08
)
 
$

(a) The net loss for the three and six-month periods ended August 2, 2014 includes costs related to an activist shareholder response of $2,473,000 and $3,518,000, respectively, and costs related to CEO transition of $2,620,000.
(b) For the three and six-month periods ended August 2, 2014, approximately 3,891,000 and 5,182,000, respectively, incremental in-the-money potentially dilutive common share options have been excluded from the computation of diluted earnings per share, as the effect of their inclusion would be antidilutive. For the three-month period ended August 3, 2013, approximately 6,631,000 incremental in-the-money potentially dilutive common share options have been excluded from the computation of diluted earnings per share, as the effect of their inclusion would be antidilutive.
Business Segments and Sales by Product Group
Business Segments and Sales by Product Group
Business Segments and Sales by Product Group
The Company has only one reporting segment, which encompasses its digital commerce business. The Company markets, sells and distributes its products to consumers primarily through its digital commerce platforms of television and internet website ShopHQ.com. The Company's television shopping and internet online operations have similar economic characteristics with respect to products, product sourcing, vendors, marketing and promotions, gross margins, customers, and methods of distribution. In addition, the Company believes that its television shopping program is a key driver of traffic to the ShopHQ website whereby many of the internet sales originate from customers viewing the Company's television program and then place their orders online. All of the Company's sales are made in the United States. The chief operating decision maker is the Chief Executive Officer of the Company.
Information on net sales by significant product groups are as follows (in thousands):
 
 
Three-Month Periods Ended
 
Six-Month Periods Ended
 
 
August 2,
2014
 
August 3,
2013
 
August 2,
2014
 
August 3,
2013
Jewelry & Watches
 
$
61,212

 
$
65,083

 
$
130,115

 
$
131,267

Home & Consumer Electronics
 
34,051

 
38,026

 
71,352

 
79,976

Beauty, Health & Fitness
 
21,091

 
16,573

 
41,476

 
35,136

Fashion & Accessories
 
25,609

 
15,629

 
44,888

 
28,426

All other (primarily shipping & handling revenue)
 
14,624

 
13,253

 
28,457

 
25,113

Total
 
$
156,587

 
$
148,564

 
$
316,288

 
$
299,918

Income Taxes
Income Taxes
Income Taxes
At February 1, 2014, the Company had federal net operating loss carryforwards ("NOLs") of approximately $304 million, and state NOLs of approximately $140 million which are available to offset future taxable income.  The Company's federal NOLs expire in varying amounts each year from 2023 through 2033 in accordance with applicable federal tax regulations and the timing of when the NOLs were incurred.  In the first quarter of fiscal 2011, the Company had a change in ownership (as defined in Section 382 of the Internal Revenue Code) as a result of the issuance of common stock coupled with the redemption of all the Series B Preferred Stock held by GE Equity.  Sections 382 and 383 limit the annual utilization of certain tax attributes, including NOL carryforwards, incurred prior to a change in ownership. The limitations imposed by Sections 382 and 383 are not expected to impair the Company's ability to fully realize its NOLs; however, the annual usage of NOLs incurred prior to the change in ownership will be limited.  The Company currently has recorded a full valuation allowance for its net deferred tax assets.  The ultimate realization of these deferred tax assets and related limitations depend on the ability of the Company to generate sufficient taxable income in the future, as well as the timing of such income.
For the second quarter of fiscal 2014 and fiscal 2013, the income tax provision included a non-cash tax charge of approximately $196,000 and $290,000, respectively, relating to changes in our long-term deferred tax liability related to the tax amortization of the Company's indefinite-lived intangible FCC license asset that is not available to offset existing deferred tax assets in determining changes to our income tax valuation allowance. For the first six-months of fiscal 2014 and fiscal 2013, the income tax provision included a non-cash charge of approximately $393,000 and $580,000, respectively. The Company expects the continued tax amortization of its indefinite-lived intangible asset and resulting book versus tax asset carrying value difference to result in approximately $394,000 of additional non-cash income tax expense over the remainder of fiscal 2014.
Litigation
Litigation
Litigation
The Company is involved from time to time in various claims and lawsuits in the ordinary course of business. In the opinion of management, the claims and suits individually and in the aggregate will not have a material effect on the Company’s operations or consolidated financial statements.
Related Party Transactions
Related Party Transactions
Related Party Transactions
Relationship with GE Equity and NBCU
In January 2011, General Electric Company ("GE") consummated a transaction with Comcast Corporation ("Comcast") pursuant to which GE contributed all of its holdings in NBCU to NBCUniversal, LLC, a newly formed entity beneficially owned 51% by Comcast and 49% by GE. As a result of that transaction, NBCU is now a wholly owned subsidiary of NBCUniversal, LLC. In March 2013, GE sold its remaining 49% common equity interest in NBCUniversal, LLC to Comcast pursuant to an agreement reached in February 2013. As of August 2, 2014, the direct equity ownership of GE Equity in the Company consists of 5,058,741 shares of common stock and the direct ownership of NBCU in the Company consists of 7,141,849 shares of common stock. The Company has a significant cable distribution agreement with Comcast and believes that the terms of this agreement are comparable to those with other cable system operators.
In connection with the January 2011 transfer of its ownership in NBCU to NBCUniversal, LLC, GE also agreed with Comcast that, for so long as GE Equity is entitled to appoint two members of the Company's board of directors, NBCU will be entitled to retain a board seat provided that NBCU beneficially owns at least 5% of the Company's adjusted outstanding common stock. Furthermore, GE agreed to obtain the consent of NBCU prior to consenting to the Company's adoption of any shareholders right plan or certain other actions that would impede or restrict the ability of NBCU to acquire or dispose of shares of the Company's voting stock or taking any action that would result in NBCU being deemed to be in violation of the Federal Communications Commission multiple ownership regulations. For additional information regarding the Company's arrangements with Comcast, GE, GE Equity and NBCU, see the Company's definitive Proxy Statement on Schedule 14A, filed with the SEC on May 9, 2014.
Distribution Facility Expansion (Notes)
Property, Plant and Equipment, Schedule of Significant Acquisitions and Disposals [Table Text Block]
Distribution Facility Expansion
During fiscal 2014, we began a significant operational expansion initiative with respect to overall warehousing capacity and new equipment and system upgrades at our Bowling Green, Kentucky distribution facility. The expansion project will include the construction of a new building which, when completed, will expand our current 260,000 square foot facility to an approximately 600,000 square foot facility. The expansion project is expected to be completed in the first half of fiscal 2015. The updated facilities will also include new high-speed parcel shipping, handling and item sortation equipment to support our increased level of shipments and units and a new call center facility to better serve our customers. Total cost of the expansion will be approximately $25 million and will be financed with our expanded PNC revolving line of credit and a $15 million PNC term loan. Construction has started in the second quarter of fiscal 2014 with expected cash commitments of approximately $18 million during fiscal 2014 and cash commitments of approximately $7 million during the first quarter of fiscal 2015.
Activist Shareholder Costs (Notes)
Other Operating Income and Expense [Text Block]
Activist Shareholder Response Costs
In October of 2013, the Company received a demand from an activist shareholder to call a special meeting of shareholders for the purpose, among other things, of voting on a new slate of directors and amending certain of the Company’s bylaws. The Company retained a team of advisers, including a financial adviser, proxy solicitor, investor relations firm and legal counsel, to assist in responding to the demand and the solicitation of proxies. In conjunction with such activities, the Company recorded charges to income for the second quarter and year-to-date periods ended August 2, 2014 totaling $2,473,000 and $3,518,000, respectively, which includes 750,000 as reimbursement for a portion of the activist shareholder’s expenses.  As previously disclosed, the activist shareholder requested that the Company reimburse it for certain of its expenses relating to the proxy contest.  In exchange for paying certain activist shareholder expenses, the Company obtained a customary standstill agreement from the activist shareholder among other settlement provisions. The process of responding to the initial demand concluded with the Company’s annual shareholder meeting on June 18, 2014.
Basis of Financial Statement Presentation (Policies)
Fiscal Year
Fiscal Year
The Company's fiscal year ends on the Saturday nearest to January 31. References to years in this report relate to fiscal years, rather than to calendar years. The Company’s most recently completed fiscal year, fiscal 2013, ended on February 1, 2014, and consisted of 52 weeks. Fiscal 2014 will end on January 31, 2015, and will contain 52 weeks. The quarters ended August 2, 2014 and August 3, 2013 each consisted of 13 weeks.
Intangible Assets (Tables)
Schedule of Finite-lived and Infinite-lived Intangible Asset [Table Text Block]
Intangible assets in the accompanying consolidated balance sheets consisted of the following:
 
Weighted
Average
Life
(Years)
 
August 2, 2014
 
February 1, 2014
 
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Gross
Carrying
Amount
 
Accumulated
Amortization
Indefinite-lived intangible assets:
 
 
 
 
 
 
 
 
 
FCC broadcast license
 
 
$
12,000,000

 
 
 
$
12,000,000

 
 
(Tables)
Expected dividend yields were not used in the fair value computations as the Company has never declared or paid dividends on its common stock and currently intends to retain earnings for use in operations.
 
Fiscal 2014
 
Fiscal 2013
Expected volatility
97% - 98%
 
100%
Expected term (in years)
5 - 6 years
 
6 years
Risk-free interest rate
1.5% - 2.2%
 
1.1% - 1.8%
Grant date fair values and derived service periods for each tranche were determined using a Monte Carlo valuation model based on assumptions, which included a weighted average risk-free interest rate of 0.38%, a weighted average expected life of 3.3 years and an implied volatility of 78% and were as follows for each tranche:
 
Fair Value
(Per Share)
 
Derived Service
Period
Tranche 1 ($6.00/share)
$0.93
 
15
months
Tranche 2 ($8.00/share)
$0.95
 
20
months
Tranche 3 ($10.00/share)
$0.95
 
24
months
A summary of the status of the Company’s stock option activity as of August 2, 2014 and changes during the six-months then ended is as follows:
 
2011
Incentive
Stock
Option
Plan
 
Weighted
Average
Exercise
Price
 
2004
Incentive
Stock
Option
Plan
 
Weighted
Average
Exercise
Price
 
2001
Incentive
Stock
Option
Plan
 
Weighted
Average
Exercise
Price
 
Other Non-
Qualified
Stock
Options
 
Weighted
Average
Exercise
Price
Balance outstanding,
February 1, 2014
3,083,000

 
$
4.03

 
2,104,000

 
$
6.25

 
1,121,000

 
$
6.05

 
500,000

 
$
4.24

Granted
120,000

 
$
3.74

 
107,000

 
$
5.66

 

 
$

 

 
$

Exercised
(33,000
)
 
$
1.62

 
(100,000
)
 
$
0.81

 
(10,000
)
 
$
3.29

 
(35,000
)
 
$
1.82

Forfeited or canceled
(17,000
)
 
$
1.62

 
(241,000
)
 
$
12.03

 
(33,000
)
 
$
13.81

 

 
$

Balance outstanding,
August 2, 2014
3,153,000

 
$
4.06

 
1,870,000

 
$
5.76

 
1,078,000

 
$
5.83

 
465,000

 
$
4.42

Options exercisable at
August 2, 2014
1,508,000

 
$
4.02

 
1,843,000

 
$
5.78

 
1,078,000

 
$
5.83

 
395,000

 
$
4.50

The following table summarizes information regarding stock options outstanding at August 2, 2014:
 
Options Outstanding
 
Options Vested or Expected to Vest
Option Type
Number of
Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life
(Years)
 
Aggregate
Intrinsic
Value
 
Number of
Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life
(Years)
 
Aggregate
Intrinsic
Value
2011 Incentive:
3,153,000

 
$
4.06

 
8.5
 
$
2,577,000

 
3,094,000

 
$
4.10

 
8.5
 
$
2,533,000

2004 Incentive:
1,870,000

 
$
5.76

 
5.2
 
$
1,229,000

 
1,867,000

 
$
5.74

 
5.2
 
$
1,229,000

2001 Incentive:
1,078,000

 
$
5.83

 
4.1
 
$
863,000

 
1,078,000

 
$
5.83

 
4.1
 
$
863,000

Non-Qualified:
465,000

 
$
4.42

 
5.9
 
$
328,000

 
458,000

 
$
4.43

 
5.9
 
$
323,000

Restricted Stock (Tables)
Grant date fair values and derived service periods for each tranche were determined using a Monte Carlo valuation model based on assumptions, which included a weighted average risk-free interest rate of 0.32%, a weighted average expected life of 2.8 years and an implied volatility of 78% and were as follows for each tranche:
 
Fair Value
(Per Share)
 
Derived Service
Period
Tranche 1 ($6.00/share)
$1.48
 
15
months
Tranche 2 ($8.00/share)
$1.39
 
20
months
Tranche 3 ($10.00/share)
$1.31
 
24
months
A summary of the status of the Company’s non-vested restricted stock activity as of August 2, 2014 and changes during the six-month period then ended is as follows:
 
Shares
 
Weighted
Average
Grant Date
Fair Value
Non-vested outstanding, February 1, 2014
641,000

 
$4.49
Granted
113,000

 
$5.26
Vested
(104,000
)
 
$5.12
Forfeited
(33,000
)
 
$3.30
Non-vested outstanding, August 2, 2014
617,000

 
$4.58
Net Income (Loss) Per Common Share (Tables)
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
A reconciliation of net income (loss) per share calculations and the number of shares used in the calculation of basic income (loss) per share and diluted income (loss) per share is as follows:
 
 
Three-Month Periods Ended
 
Six-Month Periods Ended
 
 
August 2,
2014
 
August 3,
2013
 
August 2,
2014
 
August 3,
2013
Net income (loss) (a)
 
$
(4,289,000
)
 
$
(799,000
)
 
$
(3,829,000
)
 
$
224,000

Weighted average number of shares of common stock outstanding — Basic
 
52,199,792

 
49,406,562

 
51,022,023

 
49,316,539

Dilutive effect of stock options, non-vested shares and warrants (b)
 

 

 

 
5,890,404

Weighted average number of shares of common stock outstanding — Diluted
 
52,199,792

 
49,406,562

 
51,022,023

 
55,206,943

Net income (loss) per common share
 
$
(0.08
)
 
$
(0.02
)
 
$
(0.08
)
 
$

Net income (loss) per common share — assuming dilution
 
$
(0.08
)
 
$
(0.02
)
 
$
(0.08
)
 
$

(a) The net loss for the three and six-month periods ended August 2, 2014 includes costs related to an activist shareholder response of $2,473,000 and $3,518,000, respectively, and costs related to CEO transition of $2,620,000.
(b) For the three and six-month periods ended August 2, 2014, approximately 3,891,000 and 5,182,000, respectively, incremental in-the-money potentially dilutive common share options have been excluded from the computation of diluted earnings per share, as the effect of their inclusion would be antidilutive. For the three-month period ended August 3, 2013, approximately 6,631,000 incremental in-the-money potentially dilutive common share options have been excluded from the computation of diluted earnings per share, as the effect of their inclusion would be antidilutive.
Business Segments and Sales by Product Group (Tables)
Revenue from External Customers by Products and Services [Table Text Block]
Information on net sales by significant product groups are as follows (in thousands):
 
 
Three-Month Periods Ended
 
Six-Month Periods Ended
 
 
August 2,
2014
 
August 3,
2013
 
August 2,
2014
 
August 3,
2013
Jewelry & Watches
 
$
61,212

 
$
65,083

 
$
130,115

 
$
131,267

Home & Consumer Electronics
 
34,051

 
38,026

 
71,352

 
79,976

Beauty, Health & Fitness
 
21,091

 
16,573

 
41,476

 
35,136

Fashion & Accessories
 
25,609

 
15,629

 
44,888

 
28,426

All other (primarily shipping & handling revenue)
 
14,624

 
13,253

 
28,457

 
25,113

Total
 
$
156,587

 
$
148,564

 
$
316,288

 
$
299,918

General (Details)
6 Months Ended
Aug. 2, 2014
Households
General [Abstract]
 
Household Broadcast Penetration, Number of Households
87,000,000 
Basis of Financial Statement Presentation (Details)
6 Months Ended 12 Months Ended
Aug. 2, 2014
Aug. 3, 2013
Jan. 31, 2015
Feb. 1, 2014
Feb. 2, 2013
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
 
 
 
 
Number of Weeks in Fiscal Year, Minimum
 
 
364 days 
364 days 
 
Number of Weeks in Fiscal Year, Maximum
 
 
 
 
371 days 
Number Of Weeks In Fiscal Period
P13W 
P13W 
 
 
 
Fair Value Measurements (Details) (USD $)
Aug. 2, 2014
Feb. 1, 2014
Fair Value, Option, Quantitative Disclosures [Line Items]
 
 
Restricted Cash and Investments, Current
$ 2,100,000 
$ 2,100,000 
Long-term Line of Credit, Noncurrent
38,000,000 
38,000,000 
Indefinite-Lived License Agreements
12,000,000 
12,000,000 
Operating and Broadcast Rights [Member]
 
 
Fair Value, Option, Quantitative Disclosures [Line Items]
 
 
Indefinite-Lived License Agreements
$ 12,000,000 
$ 12,000,000 
Intangible Assets (Details) (USD $)
3 Months Ended 6 Months Ended
Aug. 3, 2013
Aug. 3, 2013
Aug. 2, 2014
Feb. 1, 2014
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
Indefinite-Lived License Agreements
 
 
$ 12,000,000 
$ 12,000,000 
Fair Market Value of FCC License
 
 
13,100,000 
 
Amortization of Intangible Assets
999,000 
1,999,000 
 
 
Operating and Broadcast Rights [Member]
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
Indefinite-Lived License Agreements
 
 
$ 12,000,000 
$ 12,000,000 
Credit Agreements (Details) (USD $)
0 Months Ended 3 Months Ended 6 Months Ended
Feb. 1, 2014
Aug. 2, 2014
Aug. 3, 2013
Aug. 2, 2014
Aug. 3, 2013
Jan. 31, 2014
May 1, 2013
Feb. 9, 2012
2012 Line Of Credit Agreement - PNC Bank, N.A. [Member]
 
 
 
 
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
Line of Credit Facility, Maximum Borrowing Capacity
 
 
 
 
 
$ 60,000,000 
$ 50,000,000 
 
Debt Instrument, Maturity Date Range, End
5 years 
 
 
 
 
 
 
 
Line of Credit Facility, Capacity Available for Trade Purchases
 
 
 
 
 
6,000,000 
 
 
Line of Credit Facility, Remaining Borrowing Capacity
 
21,300,000 
 
21,300,000 
 
 
 
 
Interest Expense, Debt
 
383,000 
348,000 
774,000 
726,000 
 
 
 
Debt Instrument, Covenant Compliance, Minimum Unrestricted Cash Requirement
 
 
 
 
 
10,000,000 
 
 
Debt Instrument, Covenant Compliance, Minimum Unrestricted Cash Threshold for Additional Covenants
 
 
 
 
 
16,000,000 
 
 
Deferred Finance Costs, Noncurrent, Net
 
 
 
 
 
710,000 
 
466,000 
2014 Line Of Credit Amendment - PNC Bank, N.A. [Member]
 
 
 
 
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
Line of Credit Facility, Maximum Borrowing Capacity
 
 
 
 
 
15,000,000 
 
 
Debt Instrument, Term
84 months 
 
 
 
 
 
 
 
Mandatory Prepayment Percentage
50.00% 
 
 
 
 
 
 
 
Mandatory Prepayment Maximum Amount
$ 3,750,000 
 
 
 
 
 
 
 
LIBOR [Member] |
2012 Line Of Credit Agreement - PNC Bank, N.A. [Member]
 
 
 
 
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
Debt Instrument, Basis Spread on Variable Rate
3.00% 
 
 
 
 
 
 
 
LIBOR [Member] |
2014 Line Of Credit Amendment - PNC Bank, N.A. [Member]
 
 
 
 
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
Debt Instrument, Basis Spread on Variable Rate
6.00% 
 
 
 
 
 
 
 
LIBOR Rate Period One
1 month 
 
 
 
 
 
 
 
LIBOR Rate Period Two
2 months 
 
 
 
 
 
 
 
LIBOR Rate Period Three
3 months 
 
 
 
 
 
 
 
LIBOR Rate Period Four
6 months 
 
 
 
 
 
 
 
Debt Instrument Minimum Basis Spread
5.00% 
 
 
 
 
 
 
 
Debt Instrument Maximum Basis Spread
6.00% 
 
 
 
 
 
 
 
Base Rate Option [Member] |
2014 Line Of Credit Amendment - PNC Bank, N.A. [Member]
 
 
 
 
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
Debt Instrument, Basis Spread on Variable Rate
5.00% 
 
 
 
 
 
 
 
Debt Instrument Minimum Basis Spread
4.00% 
 
 
 
 
 
 
 
Debt Instrument Maximum Basis Spread
5.00% 
 
 
 
 
 
 
 
Year Two [Member] |
2012 Line Of Credit Agreement - PNC Bank, N.A. [Member]
 
 
 
 
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
Debt Early Termination Fee
1.00% 
 
 
 
 
 
 
 
Year Three [Member] |
2012 Line Of Credit Agreement - PNC Bank, N.A. [Member]
 
 
 
 
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
Debt Early Termination Fee
0.50% 
 
 
 
 
 
 
 
Stock Grant Volatility (Details)
6 Months Ended
Aug. 2, 2014
Aug. 3, 2013
Share-based Compensation [Abstract]
 
 
Award Vesting Period
3 years 
 
Expected Volatility Rate, Minimum
97.00% 
100.00% 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Maximum
98.00% 
100.00% 
Risk Free Interest Rate, Minimum
1.50% 
1.10% 
Risk Free Interest Rate, Maximum
2.20% 
1.80% 
Expected Term
5 years 
6 years 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Maximum Expected Term
6 years 
 
Grant Term Limit
10 years 
 
Exercise Term Limit
10 years 
 
Stock Option Activity (Details) (USD $)
6 Months Ended
Aug. 2, 2014
Aug. 3, 2013
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
 
 
Granted, weighted average grant date fair value
$ 3.75 
$ 2.83 
2011 Omnibus Incentive Plan [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
Balance outstanding at beginning of period
3,083,000 
 
Granted
120,000 
 
Exercised
(33,000)
 
Forfeited or canceled
(17,000)
 
Balance outstanding at end of period
3,153,000 
 
Options exercisable
1,508,000 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
 
 
Balance outstanding at beginning of period, weighted average exercise price
$ 4.03 
 
Granted, weighted average grant date fair value
$ 3.74 
 
Exercised, weighted average exercise price
$ 1.62 
 
Forfeited or canceled, weighted average grant date fair value
$ 1.62 
 
Balance outstanding at end of period, weighted average exercise price
$ 4.06 
 
Options exercisable, weighted average exercise price
$ 4.02 
 
2004 Omnibus Incentive Stock Plan [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
Balance outstanding at beginning of period
2,104,000 
 
Granted
107,000 
 
Exercised
(100,000)
 
Forfeited or canceled
(241,000)
 
Balance outstanding at end of period
1,870,000 
 
Options exercisable
1,843,000 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
 
 
Balance outstanding at beginning of period, weighted average exercise price
$ 6.25 
 
Granted, weighted average grant date fair value
$ 5.66 
 
Exercised, weighted average exercise price
$ 0.81 
 
Forfeited or canceled, weighted average grant date fair value
$ 12.03 
 
Balance outstanding at end of period, weighted average exercise price
$ 5.76 
 
Options exercisable, weighted average exercise price
$ 5.78 
 
2001 Omnibus Stock Plan [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
Balance outstanding at beginning of period
1,121,000 
 
Granted
 
Exercised
(10,000)
 
Forfeited or canceled
(33,000)
 
Balance outstanding at end of period
1,078,000 
 
Options exercisable
1,078,000 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
 
 
Balance outstanding at beginning of period, weighted average exercise price
$ 6.05 
 
Granted, weighted average grant date fair value
$ 0.00 
 
Exercised, weighted average exercise price
$ 3.29 
 
Forfeited or canceled, weighted average grant date fair value
$ 13.81 
 
Balance outstanding at end of period, weighted average exercise price
$ 5.83 
 
Options exercisable, weighted average exercise price
$ 5.83 
 
Stock Option [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
Balance outstanding at beginning of period
500,000 
 
Granted
 
Exercised
(35,000)
 
Forfeited or canceled
 
Balance outstanding at end of period
465,000 
 
Options exercisable
395,000 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
 
 
Balance outstanding at beginning of period, weighted average exercise price
$ 4.24 
 
Granted, weighted average grant date fair value
$ 0.00 
 
Exercised, weighted average exercise price
$ 1.82 
 
Forfeited or canceled, weighted average grant date fair value
$ 0.00 
 
Balance outstanding at end of period, weighted average exercise price
$ 4.42 
 
Options exercisable, weighted average exercise price
$ 4.50 
 
Outstanding Stock Options (Details) (USD $)
6 Months Ended
Aug. 2, 2014
Feb. 1, 2014
2011 Omnibus Incentive Plan [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Options outstanding
3,153,000 
3,083,000 
Options outstanding, weighted average exercise price
$ 4.06 
$ 4.03 
Options outstanding, weighted average remaining contractual term
8 years 6 months 
 
Options outstanding, aggregate intrinsic value
$ 2,577,000 
 
Vested or expected to vest, outstanding
3,094,000 
 
Vested or expected to vest, outstanding, weighted average exercise price
$ 4.10 
 
Vested or expected to vest, outstanding, weighted average remaining contractual term
8 years 6 months 
 
Vested or expected to vest, outstanding, aggregate intrinsic value
2,533,000 
 
2004 Omnibus Incentive Stock Plan [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Options outstanding
1,870,000 
2,104,000 
Options outstanding, weighted average exercise price
$ 5.76 
$ 6.25 
Options outstanding, weighted average remaining contractual term
5 years 2 months 12 days 
 
Options outstanding, aggregate intrinsic value
1,229,000 
 
Vested or expected to vest, outstanding
1,867,000 
 
Vested or expected to vest, outstanding, weighted average exercise price
$ 5.74 
 
Vested or expected to vest, outstanding, weighted average remaining contractual term
5 years 2 months 12 days 
 
Vested or expected to vest, outstanding, aggregate intrinsic value
1,229,000 
 
2001 Omnibus Stock Plan [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Options outstanding
1,078,000 
1,121,000 
Options outstanding, weighted average exercise price
$ 5.83 
$ 6.05 
Options outstanding, weighted average remaining contractual term
4 years 1 month 6 days 
 
Options outstanding, aggregate intrinsic value
863,000 
 
Vested or expected to vest, outstanding
1,078,000 
 
Vested or expected to vest, outstanding, weighted average exercise price
$ 5.83 
 
Vested or expected to vest, outstanding, weighted average remaining contractual term
4 years 1 month 6 days 
 
Vested or expected to vest, outstanding, aggregate intrinsic value
863,000 
 
Stock Option [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Options outstanding
465,000 
500,000 
Options outstanding, weighted average exercise price
$ 4.42 
$ 4.24 
Options outstanding, weighted average remaining contractual term
5 years 10 months 24 days 
 
Options outstanding, aggregate intrinsic value
328,000 
 
Vested or expected to vest, outstanding
458,000 
 
Vested or expected to vest, outstanding, weighted average exercise price
$ 4.43 
 
Vested or expected to vest, outstanding, weighted average remaining contractual term
5 years 10 months 24 days 
 
Vested or expected to vest, outstanding, aggregate intrinsic value
$ 323,000 
 
Narrative (Details) (USD $)
3 Months Ended 6 Months Ended 0 Months Ended 6 Months Ended 0 Months Ended
Aug. 2, 2014
Aug. 3, 2013
Aug. 2, 2014
Aug. 3, 2013
Aug. 2, 2014
Minimum [Member]
Aug. 2, 2014
2011 Omnibus Incentive Plan [Member]
Oct. 3, 2012
Market Based Stock Options Awards [Member]
Aug. 2, 2014
2004 Omnibus Incentive Stock Plan [Member]
Mar. 13, 2014
Restricted Stock [Member]
Nov. 25, 2013
Restricted Stock [Member]
Jun. 19, 2013
Restricted Stock [Member]
Aug. 2, 2014
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Allocated Share-based Compensation Expense
$ 1,319,000 
$ 637,000 
$ 2,063,000 
$ 1,248,000 
 
 
 
 
 
 
 
 
Document Period End Date
 
 
Aug. 02, 2014 
 
 
 
 
 
 
 
 
 
Number of Omnibus Stock Plans
 
 
 
 
 
 
 
 
 
 
Number of shares authorized
 
 
 
 
 
6,000,000 
 
 
 
 
 
 
Purchase price of common stock, percent
 
 
 
 
100.00% 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period
 
 
 
 
10 years 
 
 
 
 
 
 
 
Award Vesting Period
 
 
3 years 
 
3 years 
 
 
 
3 years 
3 years 
12 months 
 
Granted, weighted average grant date fair value
 
 
$ 3.75 
$ 2.83 
 
$ 3.74 
$ 4.00 
$ 5.66 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value
 
 
842,000 
91,000 
 
 
 
 
 
 
 
 
Unrecognized compensation cost related to non-vested awards
$ 1,675,000 
 
$ 1,675,000 
 
 
 
 
 
 
 
 
$ 2,088,000 
Period for recognition of unrecognized compensation cost
 
 
1 year 4 months 24 days 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement, Options, Grants in Period, Gross
 
 
 
 
 
120,000 
2,125,000 
107,000 
 
 
 
 
Market Based Stock Option Awards (Details) (USD $)
3 Months Ended 6 Months Ended 0 Months Ended 6 Months Ended 0 Months Ended 0 Months Ended 3 Months Ended 6 Months Ended 0 Months Ended
Aug. 2, 2014
Aug. 3, 2013
Aug. 2, 2014
Aug. 3, 2013
Oct. 3, 2012
2011 Omnibus Incentive Plan [Member]
Aug. 2, 2014
2011 Omnibus Incentive Plan [Member]
Feb. 1, 2014
2011 Omnibus Incentive Plan [Member]
Oct. 3, 2012
Market Based Stock Options Awards [Member]
tranche
Aug. 2, 2014
Market Based Stock Options Awards [Member]
Oct. 3, 2012
Tranche 1 [Member]
Oct. 3, 2012
Tranche 2 [Member]
Oct. 3, 2012
Tranche 3 [Member]
Oct. 3, 2012
Restricted Stock [Member]
Aug. 2, 2014
Restricted Stock [Member]
Aug. 3, 2013
Restricted Stock [Member]
Aug. 2, 2014
Restricted Stock [Member]
Aug. 3, 2013
Restricted Stock [Member]
Oct. 3, 2012
Restricted Stock [Member]
Tranche 1 [Member]
Oct. 3, 2012
Restricted Stock [Member]
Tranche 2 [Member]
Oct. 3, 2012
Restricted Stock [Member]
Tranche 3 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
 
 
$ 2,918,000 
$ 1,650,000 
 
 
 
 
 
 
 
 
 
$ 555,000 
$ 154,000 
$ 855,000 
$ 402,000 
 
 
 
Allocated Share-based Compensation Expense
1,319,000 
637,000 
2,063,000 
1,248,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Granted
 
 
 
 
 
120,000 
 
2,125,000 
 
 
 
 
 
 
 
 
 
 
 
 
Award vesting rights
 
 
 
 
 
 
 
 
 
.5 
.25 
.25 
 
 
 
 
 
 
 
 
Stock Option Plans, Exercise Price Range, Lower Range Limit
 
 
 
 
 
 
 
$ 6.00 
 
 
$ 8.00 
$ 10.00 
 
 
 
 
 
 
 
 
Risk Free Interest Rate
 
 
 
 
 
 
 
0.38% 
 
 
 
 
0.32% 
 
 
 
 
 
 
 
Weighted average volatility rate
 
 
 
 
 
 
 
78.00% 
 
 
 
 
 
 
 
 
 
 
 
 
Required Stock Option Holding Period
 
 
 
 
 
 
 
1 year 
 
 
 
 
 
 
 
 
 
 
 
 
Options outstanding
 
 
 
 
 
3,153,000 
3,083,000 
 
2,125,000 
 
 
 
 
 
 
 
 
 
 
 
Granted, weighted average grant date fair value
 
 
$ 3.75 
$ 2.83 
 
$ 3.74 
 
$ 4.00 
 
$ 0.93 
$ 0.95 
$ 0.95 
 
 
 
 
 
$ 1.48 
$ 1.39 
$ 1.31 
Number of tranches
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of consecutive trading days
 
 
 
 
20 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expected Term
 
 
5 years 
6 years 
 
 
 
3 years 3 months 18 days 
 
15 months 
20 months 
24 months 
2 years 9 months 18 days 
 
 
 
 
15 months 
20 months 
24 months 
Grant date fair value
 
 
 
 
 
 
 
$ 1,998,000 
 
 
 
 
 
 
 
 
 
 
 
 
Restricted Stock (Details) (USD $)
0 Months Ended 3 Months Ended 6 Months Ended
Jun. 18, 2014
tranche
Mar. 17, 2014
Mar. 13, 2014
Nov. 25, 2013
Jun. 19, 2013
Oct. 3, 2012
tranche
Aug. 2, 2014
Aug. 3, 2013
Aug. 2, 2014
Aug. 3, 2013
Feb. 1, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
 
 
 
 
 
 
 
 
$ 2,918,000 
$ 1,650,000 
 
Unrecognized compensation cost related to non-vested awards
 
 
 
 
 
 
1,675,000 
 
1,675,000 
 
 
Award Vesting Period
 
 
 
 
 
 
 
 
3 years 
 
 
Debt Conversion, Converted Instrument, Warrants or Options Issued
 
 
 
 
 
 
 
 
5,058,741 
 
 
Restricted Stock [Member]
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
 
 
 
 
 
 
555,000 
154,000 
855,000 
402,000 
 
Unrecognized compensation cost related to non-vested awards
 
 
 
 
 
 
2,088,000 
 
2,088,000 
 
 
Weighted average remaining contractual term
 
 
 
 
 
 
 
 
1 year 2 months 12 days 
 
 
Restricted stock vested in period, total fair value
 
 
 
 
 
 
 
 
518,000 
1,059,000 
 
Granted
56,000 
4,000 
53,000 
436,000 
44,000 
300,000 
 
 
113,000 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Number of Tranches
 
 
 
 
 
 
 
 
 
Award Vesting Period
 
 
3 years 
3 years 
12 months 
 
 
 
 
 
 
Total grant date fair value
281,000 
23,500 
314,000 
2,426,000 
228,000 
425,000 
 
 
 
 
 
Number of non-management board members granted shares
 
$ 2 
 
 
$ 6 
 
 
 
 
 
 
Non-vested shares outstanding, end of period
 
 
 
 
 
 
617,000 
 
617,000 
 
641,000 
Restricted Stock Non-Vested Restricted Stock Table (Details) (USD $)
0 Months Ended 3 Months Ended 6 Months Ended
Jun. 18, 2014
tranche
Mar. 17, 2014
Mar. 13, 2014
Nov. 25, 2013
Jun. 19, 2013
Oct. 3, 2012
tranche
Aug. 2, 2014
Aug. 3, 2013
Aug. 2, 2014
Aug. 3, 2013
Aug. 2, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
 
 
 
 
 
 
 
 
$ 2,918,000 
$ 1,650,000 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Award Vesting Period
 
 
 
 
 
 
 
 
3 years 
 
 
Restricted Stock [Member]
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
 
 
 
 
 
 
555,000 
154,000 
855,000 
402,000 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Non-vested shares outstanding, beginning of period
 
 
 
 
 
 
 
 
641,000 
 
 
Granted
56,000 
4,000 
53,000 
436,000 
44,000 
300,000 
 
 
113,000 
 
 
Award Vesting Period
 
 
3 years 
3 years 
12 months 
 
 
 
 
 
 
Vested
 
 
 
 
 
 
 
 
104,000 
 
 
Forfeited
 
 
 
 
 
 
 
 
(33,000)
 
 
Non-vested shares outstanding, end of period
 
 
 
 
 
 
617,000 
 
617,000