EVINE LIVE INC., 10-K filed on 4/5/2012
Annual Report
Condensed Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Jan. 28, 2012
Jan. 29, 2011
Current assets:
 
 
Cash and cash equivalents
$ 32,957 
$ 46,471 
Restricted cash and investments
2,100 
4,961 
Accounts receivable, net
80,274 
90,183 
Inventories
43,476 
39,800 
Prepaid expenses and other
4,464 
3,942 
Total current assets
163,271 
185,357 
Property and equipment, net
27,992 
25,775 
FCC broadcasting license
23,111 
23,111 
NBC trademark license agreement, net
1,215 
928 
Other assets
2,871 
3,188 
Total Assets
218,460 
238,359 
Current liabilities:
 
 
Accounts payable
53,437 
58,310 
Accrued liabilities
37,842 
43,405 
Deferred revenue
85 
728 
Current portion of accrued dividends
1,355 
Total current liabilities
91,364 
103,798 
Deferred revenue
507 
425 
Long-term payable
4,894 
Term loan
25,000 
25,000 
Accrued dividends - Series B Preferred Stock
6,491 
Series B Redeemable Preferred Stock, $.01 par value, 4,929,266 shares authorized; 4,929,266 shares issued and outstanding
14,599 
Total liabilities
116,871 
155,207 
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
486 
378 
Warrants to purchase 6,014,744 shares of common stock
567 
602 
Additional paid-in capital
403,849 
337,421 
Accumulated deficit
(303,313)
(255,249)
Total shareholders’ equity
101,589 
83,152 
Total Liabilities and Equity
$ 218,460 
$ 238,359 
Document and Entity Information (USD $)
12 Months Ended
Jan. 28, 2012
Jan. 29, 2012
Entity Information [Line Items]
 
 
Entity Registrant Name
VALUEVISION MEDIA INC 
 
Entity Central Index Key
0000870826 
 
Current Fiscal Year End Date
--01-28 
 
Entity Filer Category
Accelerated Filer 
 
Document Type
10-K 
 
Document Period End Date
Jan. 28, 2012 
 
Document Fiscal Year Focus
2011 
 
Document Fiscal Period Focus
Q4 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
48,561,305 
Entity Well-known Seasoned Issuer
No 
 
Entity Voluntary Filers
No 
 
Entity Current Reporting Status
Yes 
 
Entity Public Float
 
$ 111,111,111 
Condensed Consolidated Statements of Operations (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Jan. 28, 2012
Jan. 29, 2011
Jan. 30, 2010
Current Fiscal Year End Date
--01-28 
 
 
Net sales
$ 558,394 
$ 562,273 
$ 527,873 
Cost of sales
354,299 
362,744 
354,101 
Gross profit
204,095 
199,529 
173,772 
Operating expense:
 
 
 
Distribution and selling
188,813 
181,536 
178,015 
General and administrative
19,542 
19,171 
18,373 
Depreciation and amortization
12,578 
13,158 
14,320 
Restructuring costs
1,130 
2,303 
CEO transition costs
1,932 
Total operating expense
220,933 
214,995 
214,943 
Operating loss
(16,838)
(15,466)
(41,171)
Other income (expense):
 
 
 
Gain on sale of investments
3,628 
Loss on debt extinguishment
(25,679)
(1,235)
Interest expense
(5,527)
(9,795)
(4,928)
Interest income
64 
51 
382 
Total other expense
(31,142)
(10,979)
(918)
Loss before income taxes
(47,980)
(26,445)
(42,089)
Income tax (provision) benefit
(84)
577 
91 
Net loss
(48,064)
(25,868)
(41,998)
Excess of preferred stock carrying value over redemption value
27,362 
Accretion of redeemable Series A preferred stock
(62)
Net loss available to common shareholders
$ (48,064)
$ (25,868)
$ (14,698)
Net loss per common share
$ 0 
$ 0 
$ 0 
Net loss per common share — assuming dilution
$ 0 
$ 0 
$ 0 
Weighted average number of common shares outstanding:
 
 
 
Basic
46,451,262 
33,326,200 
32,537,849 
Diluted
46,451,262 
33,326,200 
32,537,849 
Consolidated Balance Sheet (Parentheticals) (USD $)
12 Months Ended
Jan. 28, 2012
Jan. 29, 2011
Current Fiscal Year End Date
--01-28 
 
Series B Preferred Stock, Par Value
$ 0.01 
$ 0.01 
Series B Preferred Stock, Shares Authorized
4,929,266 
4,929,266 
Series B Preferred Stock, Shares, Issued
4,929,266 
Series B Preferred Stock, Shares, Outstanding
4,929,266 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
100,000,000 
100,000,000 
Common stock, shares issued
48,560,205 
37,781,688 
Common stock, shares outstanding
48,560,205 
37,781,688 
Warrants, Outstanding
6,007,372 
6,014,744 
Condensed Consolidated Statement of Shareholders' Equity (USD $)
Total
Common Stock [Member]
Warrant [Member]
Additional Paid-in Capital [Member]
Accumulated Deficit
Accumulated Other Comprehensive Income (Loss) [Member]
Total Shareholders' Equity period beginning at Jan. 31, 2009
$ 99,472,000 
$ 337,000 
$ 138,000 
$ 286,380,000 
$ (187,383,000)
 
Common Stock, Shares, Outstanding period beginning at Jan. 31, 2009
 
33,690,266 
 
 
 
 
Net loss
(41,998,000)
 
 
 
(41,998,000)
(41,998,000)
Net loss
(14,698,000)
 
 
 
 
 
Issuance of Stock and Warrants for Services or Claims
533,000 
 
533,000 
 
 
 
Common stock issuances pursuant to equity compensation plans, Shares
 
604,637 
 
 
 
 
Common stock issuances pursuant to equity compensation plans, Value
729,000 
6,000 
723,000 
 
stock purchase warrants forfeited
 
 
(34,000)
34,000 
 
 
Share-based compensation
 
 
 
 
 
Share-based compensation
3,205,000 
3,205,000 
 
Stock Repurchased During Period, Shares
 
(1,622,168)
 
 
 
 
Stock Repurchased During Period, Value
(937,000)
(16,000)
(921,000)
 
Preferred Stock Redemption Discount
27,362,000 
 
 
27,362,000 
 
 
Preferred Stock, Accretion of Redemption Discount
(62,000)
 
 
(62,000)
 
 
Total Shareholders' Equity period end at Jan. 30, 2010
88,304,000 
327,000 
637,000 
316,721,000 
(229,381,000)
 
Common Stock, Shares, Outstanding period end at Jan. 30, 2010
 
32,672,735 
 
 
 
 
Net loss
(25,868,000)
 
 
 
 
 
Net loss
(25,868,000)
 
 
 
(25,868,000)
(25,868,000)
Common stock issuances pursuant to equity compensation plans, Shares
 
208,953 
 
 
 
 
Common stock issuances pursuant to equity compensation plans, Value
357,000 
2,000 
355,000 
 
stock purchase warrants forfeited
 
 
(35,000)
35,000 
 
 
Stock Issued During Period, Shares, Restricted Stock Award, Forfeited
 
 
 
 
 
Share-based compensation
 
 
 
 
 
Share-based compensation
3,350,000 
3,350,000 
 
Common stock issuances - equity offerings, Shares
 
4,900,000 
 
 
 
 
Common stock issuances - equity offerings, Value
17,009,000 
49,000 
16,960,000 
 
Preferred Stock Redemption Discount
 
 
 
 
 
Preferred Stock, Accretion of Redemption Discount
 
 
 
 
 
Total Shareholders' Equity period end at Jan. 29, 2011
83,152,000 
378,000 
602,000 
337,421,000 
(255,249,000)
 
Common Stock, Shares, Outstanding period end at Jan. 29, 2011
37,781,688 
37,781,688 
 
 
 
 
Net loss
(48,064,000)
 
 
 
 
 
Net loss
(48,064,000)
 
 
 
 
(48,064)
Common stock issuances pursuant to equity compensation plans, Shares
 
601,362 
 
 
 
 
Common stock issuances pursuant to equity compensation plans, Value
1,828,000 
6,000 
1,822,000 
 
stock purchase warrants forfeited
 
 
(35,000)
35,000 
 
 
Stock Issued During Period, Shares, Restricted Stock Award, Forfeited
 
 
 
 
 
Share-based compensation
 
 
 
 
 
Share-based compensation
5,007,000 
5,007,000 
 
Common stock issuances - equity offerings, Shares
 
9,487,500 
 
 
 
 
Common stock issuances - equity offerings, Value
55,500,000 
95,000 
55,405,000 
 
Common stock issuances - NBCU, Shares
 
689,655 
 
 
 
 
Common stock issuances - NBCU, Value
4,166,000 
7,000 
4,159,000 
 
Preferred Stock Redemption Discount
 
 
 
 
 
Preferred Stock, Accretion of Redemption Discount
 
 
 
 
 
Total Shareholders' Equity period end at Jan. 28, 2012
$ 101,589,000 
$ 486,000 
$ 567,000 
$ 403,849,000 
$ (303,313,000)
 
Common Stock, Shares, Outstanding period end at Jan. 28, 2012
48,560,205 
48,560,205 
 
 
 
 
Consolidated Statement of Cash Flow (Parenthetical)
12 Months Ended
Jan. 28, 2012
Current Fiscal Year End Date
--01-28 
Common Stock Shares Issued
689,655 
Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Jan. 28, 2012
Jan. 29, 2011
Jan. 30, 2010
OPERATING ACTIVITIES:
 
 
 
Net loss
$ (48,064)
$ (25,868)
$ (41,998)
Adjustments to reconcile net loss to net cash provided by (used for) operating activities:
 
 
 
Depreciation and amortization
12,827 
13,337 
14,320 
Share-based payment compensation
5,007 
3,350 
3,205 
Amortization of deferred revenue
(1,061)
(728)
(715)
Amortization of debt discount
575 
2,121 
181 
Amortization of deferred finance costs
609 
305 
Gain on sale of investments
(3,628)
Gain from disposal of equipment
(416)
Asset impairments and write-offs
809 
1,446 
Loss on debt extinguishment
25,679 
1,235 
Changes in operating assets and liabilities:
 
 
 
Accounts receivable
9,909 
(21,292)
(17,581)
Inventories, net
(3,676)
4,277 
6,980 
Prepaid expenses and other
(460)
348 
(493)
Deferred revenue
500 
31 
Accounts payable and accrued liabilities
(15,447)
16,768 
(4,325)
Accrued dividends payable — Series B Preferred Stock
1,069 
5,665 
4,681 
Net cash provided by (used for) operating activities
(12,949)
327 
(37,896)
INVESTING ACTIVITIES:
 
 
 
Property and equipment additions
(11,096)
(7,584)
(7,578)
Proceeds from sale of short and long-term investments
19,356 
Proceeds from disposal of equipment
416 
55 
Change in restricted cash and investments
2,861 
99 
(3,471)
Net cash used for investing activities
(7,819)
(7,430)
8,307 
FINANCING ACTIVITIES:
 
 
 
Payments for repurchases of common stock
(937)
Payment on redemption of Series A preferred stock
(3,400)
Payment for Series B Preferred stock redemption
(3,648)
Payments for deferred issuance costs
(306)
(3,292)
Payment for Series B Preferred stock dividend
(8,915)
(2,500)
Payments for Series B Preferred Stock and other issuance costs
(40,853)
Proceeds from exercise of stock options
1,828 
357 
729 
Proceeds from issuance of term loan
25,000 
Procceeds from issuance of common stock, net
55,500 
17,009 
Net cash provided by (used for) financing activities
7,254 
36,574 
(7,256)
Net increase (decrease) in cash and cash equivalents
(13,514)
29,471 
(36,845)
BEGINNING CASH AND CASH EQUIVALENTS
46,471 
17,000 
53,845 
ENDING CASH AND CASH EQUIVALENTS
$ 32,957 
$ 46,471 
$ 17,000 
General
Nature of Operations [Text Block]
The Company
ValueVision Media, Inc. and its subsidiaries (the “Company”) is a multichannel electronic retailer that markets, sells and distributes products to consumers through TV, telephone, online, mobile and social media. Our principal form of product exposure is our 24-hour television shopping network, ShopNBC, which markets brand name and private label products in the categories of jewelry & watches; home & electronics; beauty, health & fitness; and fashion & accessories. Orders are fulfilled via telephone, online and mobile channels. ShopNBC is distributed into approximately 82 million homes, primarily through cable and satellite affiliation agreements and the purchase of month-to-month full- and part-time lease agreements of cable and broadcast television time. ShopNBC programming is also streamed live on the Internet at www.ShopNBC.com and www.ShopNBC.tv. We also distribute our programming 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 ShopNBC.com, a comprehensive e-commerce platform that sells products appearing on our television shopping channel as well as an extended assortment of online-only merchandise. Its programming and products are also marketed via mobile devices — including smartphones and tablets, such as the iPad, and through the leading social media channels.
The Company has an exclusive trademark license from NBCUniversal Media, LLC, formerly known as NBC Universal, Inc. (“NBCU”), for the worldwide use of an NBC-branded name through May 2012. Additionally, the agreement allows for a one-year extension to May 2013 upon the mutual agreement of both parties. Pursuant to the license, we operate our television home shopping network and our Internet websites, ShopNBC.com and ShopNBC.tv.
Basis of Financial Statement Presentation
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]
Summary of Significant Accounting Policies
Fiscal Year
The Company’s most recently completed fiscal year ended on January 28, 2012 and is designated fiscal 2011. The year ended January 29, 2011 is designated fiscal 2010 and the year ended January 30, 2010 is designated fiscal 2009. The Company reports on a 52/53 week fiscal year which ends on the Saturday nearest to January 31. The 52/53 week fiscal year allows for the weekly and monthly comparability of sales results relating to the Company’s television home-shopping and internet business. Each of fiscal 2011, fiscal 2010 and fiscal 2009 contained 52 weeks.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.
Revenue Recognition and Accounts Receivable
Revenue is recognized at the time merchandise is shipped or when services are provided. Shipping and handling fees charged to customers are recognized as merchandise is shipped and are classified as revenue in the accompanying statements of operations in accordance with GAAP. The Company classifies shipping and handling costs in the accompanying statements of operations as a component of cost of sales. Revenue is reported net of estimated sales returns and excludes sales taxes. Sales returns are estimated and provided for at the time of sale based on historical experience. Payments received for unfilled orders are reflected as a component of accrued liabilities.
Accounts receivable consist primarily of amounts due from customers for merchandise sales and from credit card companies, and are reflected net of reserves for estimated uncollectible amounts of $5,638,000 at January 28, 2012 and $5,643,000 at January 29, 2011. The Company utilizes an installment payment program called ValuePay that entitles customers to purchase merchandise and generally pay for the merchandise in two or more equal monthly credit card installments. As of January 28, 2012 and January 29, 2011, the Company had approximately $72,415,000 and $82,659,000, respectively, of net receivables due from customers under the ValuePay installment program. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Provision for doubtful accounts receivable primarily related to the Company’s ValuePay program were $11,876,000, $9,321,000 and $6,813,000 for fiscal 2011, fiscal 2010 and fiscal 2009, respectively.

Cost of Sales and Other Operating Expenses
Cost of sales includes primarily the cost of merchandise sold, shipping and handling costs, inbound freight costs, excess and obsolete inventory charges and customer courtesy credits. Purchasing and receiving costs, including costs of inspection, are included as a component of distribution and selling expense and were approximately $8,245,000, $7,888,000 and $7,877,000 for fiscal 2011, fiscal 2010 and fiscal 2009, respectively. Distribution and selling expense consist primarily of cable and satellite access fees, credit card fees, bad debt expense and costs associated with purchasing and receiving, inspection, marketing and advertising, show production, website marketing and merchandising, telemarketing, customer service, warehousing and fulfillment. General and administrative expense consists primarily of costs associated with executive, legal, accounting and finance, information systems and human resources departments, software and system maintenance contracts, insurance, investor and public relations and director fees.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on deposit. The Company maintains its cash balances at financial institutions in demand deposit accounts that are federally insured. The Company has not experienced losses in such accounts and believes it is not exposed to any significant credit risk on its cash and cash equivalents.
Restricted Cash and Investments
The Company had restricted cash and investments of $2,100,000 and $4,961,000 for fiscal 2011 and fiscal 2010. The restricted cash and investments primarily collateralizes the Company’s issuances of commercial letters of credit. The Company’s restricted cash and investments consist of certificates of deposit. Dividends or interest income is recognized when earned.
Inventories
Inventories, which consists of consumer merchandise held for resale, are stated principally at the lower of average cost or net realizable value, giving consideration to obsolescence write downs of $2,246,000 at January 28, 2012 and $2,292,000 at January 29, 2011.
Marketing and Advertising Costs
Marketing and advertising costs are expensed as incurred and consist primarily of contractual marketing fees paid to certain cable operators for cross channel promotions and internet advertising including amounts paid to online search engine operators, customer mailings and traffic-driving affiliate websites. The Company receives vendor allowances for the reimbursement of certain advertising costs. Advertising and other allowances received by the Company are recorded as a reduction of expense and were $892,000, $630,000 and $1,203,000 for fiscal 2011, fiscal 2010 and fiscal 2009, respectively. Total marketing and advertising costs and internet search marketing fees, after reflecting allowances given by vendors, totaled $2,115,000, $5,662,000 and $7,799,000 for fiscal 2011, fiscal 2010 and fiscal 2009, respectively. The Company includes advertising costs as a component of distribution and selling expense in the Company’s consolidated statement of operations.
Property and Equipment
Property and equipment are stated at cost. Improvements and renewals that extend the life of an asset are capitalized and depreciated. Repairs and maintenance are charged to expense as incurred. The cost and accumulated depreciation of property and equipment retired or otherwise disposed of are removed from the related accounts, and any residual values are charged or credited to operations. Depreciation and amortization for financial reporting purposes are provided on the straight-line method based upon estimated useful lives. Costs incurred to develop software for internal use and the Company’s websites are capitalized and amortized over the estimated useful life of the software. Costs related to maintenance of internal-use software and for the Company’s website are expensed as incurred.
Intangible Assets
The Company’s primary identifiable intangible assets include an FCC broadcast license and a trademark license agreement. Identifiable intangibles with finite lives are amortized and those identifiable intangibles with indefinite lives are not amortized. Identifiable intangible assets that are subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Identifiable intangible assets not subject to amortization are tested for impairment annually or more frequently if events warrant. The impairment test consists of a comparison of the fair value of the intangible asset with its carrying amount.
Income Taxes
The Company accounts for income taxes under the liability method of accounting whereby deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between financial statement and tax basis of assets and liabilities. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of the enactment of such laws. The Company assesses the recoverability of its deferred tax assets in accordance with GAAP.
The Company recognizes interest and penalties related to uncertain tax positions within income tax expense.
Net Loss Per Common Share
Basic earnings (loss) per share is computed by dividing reported earnings by the weighted average number of common shares outstanding for the reported period. Diluted earnings (loss) 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 loss per share calculations and the number of shares used in the calculation of basic loss per share and diluted loss per share is as follows:
 
 
For the Years Ended
 
 
January 28,
2012
 
January 29,
2011
 
January 30,
2010
Net loss available to common shareholders (a)
 
$
(48,064,000
)
 
$
(25,868,000
)
 
$
(14,698,000
)
Weighted average number of common shares outstanding using two-class method — Basic
 
46,451,000

 
33,326,000

 
32,538,000

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

 

 

Weighted average number of common shares outstanding — Diluted
 
46,451,000

 
33,326,000

 
32,538,000

 
 
 
 
 
 
 
Net loss per common share
 
$
(1.03
)
 
$
(0.78
)
 
$
(0.45
)
Net loss per common share — assuming dilution
 
$
(1.03
)
 
$
(0.78
)
 
$
(0.45
)

(a) The net loss available to common shareholders for fiscal 2011 included a $25.7 million charge related to the early preferred stock debt extinguishment made in the first quarter of fiscal 2011.
For fiscal 2011, fiscal 2010 and fiscal 2009, approximately 5,563,000, 4,719,000 and 3,107,000, respectively, incremental in-the-money potentially dilutive common share stock options and warrants have been excluded from the computation of diluted earnings per share, as the effect of their inclusion would be anti-dilutive.
Fair Value of Financial Instruments
GAAP requires disclosures of fair value information about financial instruments for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. GAAP excludes certain financial instruments and all non-financial instruments from its disclosure requirements.
The Company used the following methods and assumptions in estimating its fair values for financial instruments:
The carrying amounts reported in the accompanying consolidated balance sheets approximate the fair value for cash and cash equivalents, short-term investments, accounts receivable, trade payables and accrued liabilities, due to the short maturities of those instruments. The fair value of the Company’s $25 million term loan is estimated based on rates available to the Company for issuance of debt. As of January 28, 2012, our bank term loan had a carrying amount of $25 million and an estimated fair value of $25.5 million.
Use of Estimates
The preparation of financial statements in conformity with GAAP in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during reporting periods. These estimates relate primarily to the carrying amounts of accounts receivable and inventories, the realizability of certain long-term assets and the recorded balances of certain accrued liabilities and reserves. Ultimate results could differ from these estimates.
Stock-Based Compensation
Compensation is recognized for all stock-based compensation arrangements by the Company, including employee and non-employee stock options granted. The estimated grant date fair value of each stock-based award is recognized in income over the requisite service period, which is generally the vesting period. The estimated fair value of each option is calculated using the Black-Scholes option-pricing model. Non-vested share awards are recorded as compensation cost over the requisite service periods based on the market value on the date of grant.
Property and Equipment
Property, Plant and Equipment Disclosure [Text Block]
Property and Equipment
Property and equipment in the accompanying consolidated balance sheets consisted of the following:
 
 
Estimated
Useful Life
(In Years)
 
January 28, 2012
 
January 29, 2011
Land and improvements
 
 
$
3,399,000

 
$
3,399,000

Buildings and improvements
 
5-40
 
23,283,000

 
22,462,000

Transmission and production equipment
 
5-10
 
8,416,000

 
8,292,000

Office and warehouse equipment
 
3-15
 
9,818,000

 
11,065,000

Computer hardware, software and telephone equipment
 
3-7
 
90,447,000

 
83,106,000

Leasehold improvements
 
3-5
 
2,733,000

 
3,105,000

Less — Accumulated depreciation
 
 
 
(110,104,000
)
 
(105,654,000
)
 
 
 
 
$
27,992,000

 
$
25,775,000


Depreciation expense in fiscal 2011, fiscal 2010 and fiscal 2009 was $8,949,000, $10,111,000 and $10,937,000, respectively.
Intangible Assets
Intangible Assets Disclosure [Text Block]
Intangible Assets
Intangible assets in the accompanying consolidated balance sheets consisted of the following:
 
 
Weighted
 
January 28, 2012
 
January 29, 2011
 
 
Average
Life
(Years)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Gross
Carrying
Amount
 
Accumulated
Amortization
Definite-lived intangible assets:
 
 
 


 


 
 

 
 

NBCU trademark license renewal
 
1.0
 
$
4,166,000

 
$
(2,951,000
)
 
$

 
$

NBCU trademark license agreement
 
10.5
 
$
34,437,000

 
$
(34,437,000
)
 
$
34,437,000

 
$
(33,509,000
)
Indefinite-lived intangible assets:
 
 
 


 


 
 

 
 

FCC broadcast license
 
 
 
$
23,111,000

 


 
$
23,111,000

 
 


On May 16, 2011 the Company issued 689,655 shares of the Company's common stock as consideration for a one-year license agreement renewal with NBCU for the use of the ShopNBC brand name in connection with its television shopping network and its e-commerce websites. The renewed license agreement expires in May 2012 and allows for a one-year extension to May 2013 upon the mutual agreement of both parties. Shares issued were valued at $6.04 per share, representing the fair market value of the Company's stock on the date of issuance.
Amortization expense in fiscal 2011, fiscal 2010 and fiscal 2009 was $3,879,000, $3,226,000 and $3,383,000, respectively. Estimated amortization expense for fiscal 2012 is $1,215,000.
The Company annually reviews its FCC 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 broadcast license by using an income-based discounted cash flow model with the assistance of an independent outside fair value consultant. The discounted cash flow model includes certain assumptions including revenues, operating profit and a discount rate. While we believe that our 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, our valuation for this license could be materially different if we were to decide to sell it in the short term which, upon revaluation, could result in a future impairment of this asset.
In fiscal 2011, fiscal 2010 and fiscal 2009, no impairment was indicated as a result of the annual fair value assessment
Accrued Liabilities
Other Liabilities Disclosure [Text Block]
Accrued Liabilities
Accrued liabilities in the accompanying consolidated balance sheets consisted of the following:
 
 
January 28, 2012
 
January 29, 2011
Accrued cable access fees
 
$
27,506,000

 
$
28,730,000

Accrued salaries and related
 
1,343,000

 
2,093,000

Reserve for product returns
 
4,544,000

 
4,522,000

Other
 
4,449,000

 
8,060,000

 
 
$
37,842,000

 
$
43,405,000

ShopNBC Private Label and Co-Brand Credit Card Program
Private Label Credit Card Program [Text Block]
ShopNBC Private Label Consumer Credit Card Program
The Company has a private label consumer credit card program (the “Program”). The Program is made available to all qualified consumers for the financing of purchases of products from ShopNBC. The Program provides a number of benefits to customers including deferred billing options and free or reduced shipping promotions throughout the year. Use of the ShopNBC credit card furthers customer loyalty and reduces the Company’s overall bad debt exposure since the credit card issuing bank bears the risk of bad debt on ShopNBC credit card transactions that do not utilize our ValuePay installment payment program. In December 2011, the Company entered into a Private Label Consumer Credit Card Program Agreement Amendment with GE Capital Retail Bank extending the Program for an additional seven years until 2019. The Company received a $500,000 signing bonus as an incentive for the Company to extend the Program. The signing bonus has been recorded as deferred revenue in the accompanying financial statements and is being recognized as revenue over the seven-year term of the agreement.
GE Capital Retail Bank, the issuing bank for the Program, is indirectly wholly-owned by the General Electric Company (“GE”), which is also the parent company of GE Equity. GE Equity has a substantial percentage ownership in the Company and has the right to select three members of the Company’s board of directors.
Long Term Investments
Investments and Other Noncurrent Assets [Text Block]
Long-Term Investments
In the second quarter of fiscal 2009, the Company sold its long-term illiquid auction rate securities portfolio for net proceeds of $19,356,000. The auction rate securities had a carrying value of $15,728,000 and the Company recorded a $3,628,000 non-operating gain in the second quarter of fiscal 2009.
Fair Value Measurements
Fair Value Disclosures [Text Block]
Fair Value Measurements
GAAP uses 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 and liabilities and the lowest priority to unobservable inputs.
As of January 28, 2012 and January 29, 2011, the Company had $2,100,000 and $4,961,000, respectively, 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 and had no Level 3 investments that used significant unobservable inputs.

Measured at Fair Value - Nonrecurring Basis

During the fiscal quarter ended May 2, 2009, the Company measured the fair value of the Series B preferred stock issued in connection with a preferred stock exchange. The Company originally estimated the fair value of the Series B preferred stock before issuance costs of $12,959,000 utilizing a discounted cash flow model estimating the projected future cash payments over the life of the five-year redemption term. The assumptions used in preparing the discounted cash flow model include estimates for discount rate and expected timing of repayment of the Series B preferred stock. The Company concluded that the inputs used in its Series B preferred stock valuation are Level 3 inputs.

The following table provides a reconciliation of the beginning and ending balances of items measured at fair value on a non-recurring basis that use significant unobservable inputs (Level 3):
 
 
 
 
 
 
 
 
Series B preferred stock:
January 28, 2012
 
January 29, 2011
Beginning balance
$
14,599,000

 
$
11,243,000

   Total gains or losses:

 

   Included in earnings (interest expense)
575,000

 
2,121,000

   Included in earnings (loss on debt extinguishment)
25,679,000

 
1,235,000

   Purchases, issuances, and settlements
(40,853,000
)
 

Ending balance
$

 
$
14,599,000

Preferred Stock and Deferred Payables
Preferred Stock [Text Block]
Preferred Stock and Long-Term Payable
 
 
January 28, 2012
 
January 29, 2011
Series B preferred stock
 
$

 
$
40,853,000

Unamortized debt discount on Series B preferred stock
 

 
(26,254,000
)
Series B preferred stock, carrying value
 
$

 
$
14,599,000

Long-Term payable
 
$

 
$
4,894,000


In February 2011, the Company made a $2.5 million payment to GE Capital Equity Investments, Inc. ("GE Equity"), in connection with obtaining a consent for the execution of a common stock equity offering in December 2010, reduced the outstanding accrued dividends payable on the Series B preferred stock and recorded a $1.2 million charge to income related to the early preferred stock debt extinguishment. In April 2011, the Company redeemed all of its outstanding Series B preferred stock for $40.9 million, paid accrued Series B preferred dividends of $6.4 million and recorded a $24.5 million charge related to the early preferred stock debt extinguishment.
In the third quarter of fiscal 2009, the Company entered into a long-term agreement with one of its larger service providers to defer a material portion of its monthly contractual cash payment obligation over the next three fiscal years. All services under this arrangement are being recognized as expense ratably over the term of the agreement. Amounts recognized as expense in excess of amounts paid, plus accrued interest at 5% annually totaled $12,347,000, and is included in accrued liabilities in the accompanying January 28, 2012 balance sheet. As of January 29, 2011, the total deferred amount was $16,820,000, of which $11,926,000 was included in accrued liabilities and $4,894,000 and was reported as a deferred long-term payable in the accompanying January 29, 2011 balance sheet. In February 2011, the Company made an $11,926,000 required payment under this agreement and subsequent to fiscal 2011 year end, in connection with securing a new $40 million credit facility on February 9, 2012, the Company made an additional $12,365,000 payment, paying off all remaining deferred obligations under the agreement. In connection with this deferral agreement, the Company has granted a security interest in its Eden Prairie, Minnesota headquarters facility and its Boston television station to the service provider until January 2013.

Term Loan Credit Agreement
Debt Disclosure [Text Block]
Term Loan Credit Agreement
On November 17, 2010, the Company entered into a credit agreement with Crystal Financial LLC, as agent for the lending group, which provides for a term loan of $25 million (the “Credit Agreement”). The Credit Agreement had a five-year maturity and bears interest on the outstanding principal amount based on fixed interest rates and floating interest rates based on LIBOR plus variable margins. The interest rate calculated for fiscal 2011 was 11%. The term loan is subject to a minimum borrowing base of $25 million and is based on eligible accounts receivable, eligible inventory, certain real estate and certain eligible cash and is secured by substantially all of the Company’s personal property, as well as the Company’s real property located in 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 term loan is subject to mandatory prepayment in certain circumstances. In addition, any voluntary or mandatory prepayments made prior to November 18, 2013 would require an early termination fee of the greater of the first year’s yield revenue or 3% if terminated in year one; 2% if terminated in year two; and 1% if terminated in year three. The $25 million term loan matures and is payable in November 2015. Interest paid in fiscal 2011 was $2,788,000.
The Credit Agreement contains customary covenants and conditions, including, among other things, maintaining a minimum of unrestricted cash of $5,000,000 at all times. In addition, the Credit Agreement placed 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 January 28, 2012, the Company was in compliance with the applicable covenants of the facility and was in compliance with its minimum borrowing base requirement. Costs incurred to obtain the Credit Agreement totaling approximately $3,037,000 have been capitalized and are being expensed as additional interest over the five-year term of the Credit Agreement.
On February 9, 2012, the Company refinanced its $25 million term loan and secured a new three-year $40 million new credit facility with PNC Bank, National Association. See Note 21.
Shareholders' Equity
Stockholders' Equity Note Disclosure [Text Block]
Shareholder's Equity
Common Stock
The Company currently has authorized 100,000,000 shares of undesignated capital stock, of which approximately 48,560,000 shares were issued and outstanding as common stock as of January 28, 2012. The board of directors may establish new classes and series of capital stock by resolution without shareholder approval; however, approval of GE Equity is required in certain circumstances.
Dividends
The Company has never declared or paid any dividends with respect to its capital stock. Under the terms of the amended and restated shareholder agreement between the Company and GE Equity, the Company is prohibited from paying dividends on its common stock without GE Equity’s prior consent. The Company is further restricted from paying dividends on its stock by its bank credit agreement.
Warrants
As of January 28, 2012, the Company had outstanding warrants to purchase 6,000,000 shares of the Company’s common stock at an exercise price of $0.75 per share issued to GE Equity. The warrants are fully vested and expire ten years from date of grant. The warrants were issued in connection with the issuance of the Company’s Series B Redeemable Preferred Stock in February 2009. In addition, the Company also has outstanding warrants to purchase 7,372 shares of the Company’s stock at an exercise price of $15.74 per share issued to NBCU. These warrants are fully vested and expire in November 2012.
Stock-Based Compensation
Compensation is recognized for all stock-based compensation arrangements by the Company. Stock-based compensation expense for fiscal 2011, fiscal 2010 and fiscal 2009 related to stock option awards was $2,647,000, $3,274,000 and $2,752,000, 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 January 28, 2012, the Company had two active omnibus stock plans for which stock awards can be currently granted: the 2011 Omnibus Incentive Plan that provides for the issuance of up to 3,000,000 shares of the Company's stock and the 2004 Omnibus Stock Plan (as amended and restated in fiscal 2006) that provides for the issuance of up to 4,000,000 shares of the Company’s common stock. The 2001 Omnibus Stock Plan expired on June 21, 2011. These plans are 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 plans. The types of awards that may be granted under these plans 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 ten years after the effective date of the respective plan’s inception or be exercisable more than ten 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. 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 generally have contractual terms of either five years from the date of vesting or ten years from the date of grant.
The fair value of each 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 recent 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 2011
Fiscal 2010
Fiscal 2009
 
 
 
 
Expected volatility
88%-96%
80%-88%
66%-78%
Expected term (in years)
6 years
6 years
6 years
Risk-free interest rate
1.3%-2.7%
1.9%-3.3%
2.3%-3.4%

A summary of the status of the Company’s stock option activity as of January 28, 2012 and changes during the year 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,
 
 
 
 
 

 
 

 
 

 
 

 
 

 
 

January 29, 2011

 
$

 
2,374,000

 
$
5.72

 
1,746,000

 
$
5.97

 
525,000

 
$
3.58

Granted
160,000

 
$
2.25

 
285,000

 
$
7.52

 

 
$

 
150,000

 
$
6.44

Exercised

 
$

 
(268,000
)
 
$
4.31

 
(283,000
)
 
$
2.25

 
(8,000
)
 
$
2.02

Forfeited or canceled

 
$

 
(46,000
)
 
$
9.48

 
(237,000
)
 
$
9.52

 
(17,000
)
 
$
2.02

Balance outstanding,
 
 
 
 
 

 
 

 
 

 
 

 
 

 
 

January 28, 2012
160,000

 
$
2.25

 
2,345,000

 
$
6.03

 
1,226,000

 
$
6.15

 
650,000

 
$
4.30

Options exercisable at:
 
 
 
 
 

 


 
 

 
 

 
 

 
 

January 28, 2012

 
$

 
2,015,000

 
$
6.18

 
1,029,000

 
$
6.35

 
143,000

 
$
3.60

   January 29, 2011

 
$

 
1,735,000

 
$
6.65

 
1,192,000

 
$
7.03

 

 
$

   January 30, 2010

 
$

 
1,342,000

 
$
8.79

 
969,000

 
$
8.32

 

 
$

The following table summarizes information regarding stock options at January 28, 2012:

 
 
Options
 
Weighted
Average
Exercise
 
Weighted
Average
Remaining
Contractual
 
Aggregate
Intrinsic
 
Vested or
Expected to
 
Weighted
Average
Exercise
 
Weighted
Average
Remaining
Contractual
 
Aggregate
Intrinsic
Option Type
 
Outstanding
 
Price
 
Life (Years)
 
Value
 
Vest
 
Price
 
Life (Years)
 
Value
2011 Incentive:
 
160,000

 
$
2.25

 
9.9
 
$

 
144,000

 
$
2.25

 
9.9
 
$

2004 Incentive:
 
2,345,000

 
$
6.03

 
6.7
 
$
188,000

 
2,280,000

 
$
6.06

 
6.7
 
$
182,000

2001 Incentive:
 
1,226,000

 
$
6.15

 
6.4
 
$

 
1,204,000

 
$
6.19

 
6.3
 
$

Other Non-Qualified Incentive:
 
650,000

 
$
4.30

 
8.5
 
$

 
599,000

 
$
4.28

 
8.5
 
$

The weighted average grant date fair value of options granted in fiscal 2011, fiscal 2010 and fiscal 2009 was $4.31, $2.26 and $1.17, respectively. The total intrinsic value of options exercised during fiscal 2011, fiscal 2010 and fiscal 2009 was $1,856,000, $355,000 and $898,000, respectively. As of January 28, 2012, total unrecognized compensation cost related to stock options was $2,093,000 and is expected to be recognized over a weighted average period of approximately 1.1 years.
Stock Option Tax Benefit
The exercise of certain stock options granted under the Company’s stock option plans give rise to compensation, which is includible in the taxable income of the applicable employees and deductible by the Company for federal and state income tax purposes. Such compensation results from increases in the fair market value of the Company’s common stock subsequent to the date of grant of the applicable exercised stock options and these increases are not recognized as an expense for financial accounting purposes, as the options were originally granted at the fair market value of the Company’s common stock on the date of grant. The related tax benefits will be recorded as additional paid-in capital if and when realized, and totaled $691,000, $121,000 and $332,000 in fiscal 2011, fiscal 2010 and fiscal 2009, respectively. The Company has not recorded any income tax benefit from the exercise of stock options through paid in capital in these fiscal years, due to the uncertainty of realizing income tax benefits in the future. These benefits are expected to be recorded in the applicable future periods.
Restricted Stock
Compensation expense recorded in fiscal 2011, fiscal 2010 and fiscal 2009 relating to restricted stock grants was $2,360,000, $76,000 and $453,000, respectively. As of January 28, 2012, there was $2,001,000 of total unrecognized compensation cost related to non-vested restricted stock granted. That cost is expected to be recognized over a weighted average period of 1.0 years. The total fair value of restricted stock vested during fiscal 2011, fiscal 2010 and fiscal 2009 was $316,000, $68,000 and $306,000, respectively. On March 31, 2011, the Company granted a total of 522,000 shares of restricted stock to employees in lieu of an annual cash bonus for fiscal 2010. The restricted stock vests in two equal annual installments beginning March 31, 2012 and ending March 31, 2013. The aggregate market value of the restricted stock at the date of the award was $3,323,000 and is being amortized as compensation expense over the one and two-year vesting periods. On June 15, 2011, the Company granted a total of 50,000 shares of restricted stock to seven non-management board members as part of the Company's annual director compensation program. The restricted stock 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 $377,000 and is being amortized as director compensation expense over the twelve-month vesting period. On November 18, 2011, the Company granted a total of 453,000 shares of restricted stock to employees. The restricted stock vests in two equal annual installments beginning November 18, 2012 and ending November 18, 2013. The aggregate market value of the restricted stock at the date of the award was $816,000 and is being amortized as compensation expense over the one and two-year vesting periods.
A summary of the status of the Company’s non-vested restricted stock activity as of January 28, 2012 and changes during the twelve-month period then ended is as follows:
 
 
Shares
 
Weighted Average
Grant Date Fair
Value
Non-vested outstanding, January 29, 2011
 
40,000

 
$1.90
Granted
 
1,026,000

 
$4.40
Vested
 
(42,000
)
 
$2.17
Forfeited
 
(42,000
)
 
$4.49
Non-vested outstanding, January 28, 2012
 
982,000

 
$4.39
Common Stock Repurchase Program
The Company’s board of directors had, in previous fiscal years, authorized common stock repurchase programs. During 2009, the Company repurchased a total of 1,622,000 shares of common stock for a total investment of $937,000 at an average price of $0.58 per share. The authorizations for repurchase programs have expired.
Equity Offering
On March 30, 2011, the Company completed a public equity offering of 9,487,000 common shares at a price to the public of $6.25 per share. Net proceeds from the offering were approximately $55.5 million after deducting the underwriting discount and offering expenses.
Sales by Product Group
Segment Reporting Disclosure [Text Block]
Sales by Product Group
The Company has only one reporting segment. Information on net sales by significant product groups is as follows (in thousands):
 
 
For the Years Ended
 
 
January 28, 2012
 
January 29, 2011
 
January 30, 2010
Jewelry & Watches
 
$
272,689

 
$
272,151

 
$
278,784

Home & Electronics
 
146,917

 
170,714

 
149,358

Beauty, Health & Fitness
 
61,160

 
46,612

 
36,648

Fashion & Accessories
 
34,947

 
30,815

 
27,084

All other
 
42,681

 
41,981

 
35,999

Total
 
$
558,394

 
$
562,273

 
$
527,873

Income Taxes
Income Tax Disclosure [Text Block]
Income Taxes
The Company records deferred taxes for differences between the financial reporting and income tax bases of assets and liabilities, computed in accordance with tax laws in effect at that time. The deferred taxes related to such differences as of January 28, 2012 and January 29, 2011 were as follows (in thousands):

 
 
January 28, 2012
 
January 29, 2011
Accruals and reserves not currently deductible for tax purposes
 
$
4,663

 
$
6,747

Inventory capitalization
 
763

 
665

Basis differences in intangible assets
 
(3,709
)
 
(2,881
)
Differences in depreciation lives and methods
 
2,727

 
2,617

Differences in investments and other items
 
495

 
1,900

Net operating loss carryforwards
 
109,538

 
98,270

Valuation allowance
 
(114,477
)
 
(107,318
)
Net deferred tax asset
 
$

 
$

The (provision) benefit from income taxes consisted of the following:
 
 
For the Years Ended
 
 
January 28, 2012
 
January 29, 2011
 
January 30, 2010
Current
 
$
(84,000
)
 
$
577,000

 
$
91,000

Deferred
 

 

 

 
 
$
(84,000
)
 
$
577,000

 
$
91,000


A reconciliation of the statutory tax rates to the Company’s effective tax rate is as follows:
 
 
For the Years Ended
 
 
January 28, 2012
 
January 29, 2011
 
January 30, 2010
Taxes at federal statutory rates
 
35.0
 %
 
35.0
 %
 
35.0
 %
State income taxes, net of federal tax benefit
 
0.4

 
1.3

 
1.9

Non-cash stock option vesting expense
 
(0.9
)
 
(3.7
)
 
(1.6
)
Non-deductible interest
 
(1.2
)
 
(10.6
)
 
(4.0
)
Non-deductible loss on debt extinguishment
 
(18.7
)
 
(1.6
)
 

Other
 
0.1

 
0.5

 
0.8

Valuation allowance and NOL carryforward benefits
 
(14.9
)
 
(18.7
)
 
(31.9
)
Effective tax rate
 
(0.2
)%
 
2.2
 %
 
0.2
 %

Based on the Company’s recent history of losses, the Company has recorded a full valuation allowance for its net deferred tax assets as of January 28, 2012 and January 29, 2011 in accordance with GAAP, which places primary importance on the Company’s most recent operating results when assessing the need for a valuation allowance. The ultimate realization of these deferred tax assets depends on the ability of the Company to generate sufficient taxable income in the future, as well as the timing of such income. The Company intends to maintain a full valuation allowance for its net deferred tax assets until sufficient positive evidence exists to support reversal of the allowance. As of January 28, 2012, the Company has federal net operating loss carryforwards (NOL's) of approximately $285 million which are available to offset future taxable income. The Company's federal NOLs expire in varying amounts each year from 2023 through 2031 in accordance with applicable federal tax regulations and the timing of when the NOLs were incurred. During the quarter ending April 30, 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 NOL's; however, the annual usage of NOL's incurred prior to the change in ownership will be limited. As of January 28, 2012 and January 29, 2011, there were no unrecognized tax benefits for uncertain tax positions.
The Company is subject to U.S. federal income taxation and the taxing authorities of various states. The Company’s tax years for 2008, 2009, and 2010 are currently subject to examination by taxing authorities. With limited exceptions, the Company is no longer subject to U.S. federal, state, or local examinations by tax authorities for years before 2008.
Commitments and Contingencies
Commitments and Contingencies Disclosure [Text Block]
Commitments and Contingencies
Cable and Satellite Affiliation Agreements
As of January 28, 2012, the Company has entered into affiliation agreements that represent approximately 1,530 cable systems along with the satellite companies DIRECTV and DISH that require each to offer the Company’s television home shopping programming on a full-time basis over their systems. The terms of the affiliation agreements typically range from one to two years. During the fiscal year, certain agreements with cable, satellite or other distributors may expire. Under certain circumstances, the television operators or we may cancel the agreements prior to their expiration. The affiliation agreements generally provide that the Company will pay each operator a monthly access fee and in some cases a marketing support payment based on the number of homes receiving our programming. For fiscal 2011, fiscal 2010 and fiscal 2009, respectively, the Company expensed approximately $106,658,000, $102,440,000 and $99,637,000 under these affiliation agreements.
Over the past years, each of the material cable and satellite distribution agreements up for renewal have been renegotiated and renewed with no reduction to the Company’s distribution footprint. Failure to maintain the cable agreements covering a material portion of the Company’s existing cable households on acceptable financial and other terms could adversely affect future growth, sales revenues and earnings unless the Company is able to arrange for alternative means of broadly distributing its television programming. Cable operators serving a large majority of cable households offer cable programming on a digital basis. The use of digital compression technology provides cable companies with greater channel capacity. While greater channel capacity increases the opportunity for distribution and, in some cases, reduces access fees paid by us, it also may adversely impact our ability to compete for television viewers to the extent it results in a higher channel position for us, placement of our programming in separate programming tiers, the broadcast of additional competitive channels or viewer fragmentation due to a greater number of programming alternatives.
The Company has entered into, and will continue to enter into, affiliation agreements with other television operators providing for full- or part-time carriage of the Company’s television home shopping programming.
Future cable and satellite affiliation cash commitments at January 28, 2012 are as follows:
 
 

Fiscal Year
Amount
 
 
2012
$
97,782,000

2013
26,726,000

2014
22,255,000

2015
20,350,000

2016 and thereafter


Employment Agreements
The Company has entered into employment agreements with its on-air hosts and the chief executive officer of the Company with original terms of 12 months. These agreements specify, among other things, the term and duties of employment, compensation and benefits, termination of employment (including for cause, which would reduce the Company’s total obligation under these agreements), severance payments and non-disclosure and non-compete restrictions. The aggregate commitment for future base compensation at January 28, 2012 was approximately $2,679,000.
The Company has a policy and practice regarding severance for its senior executive officers whereby up to 12 months of base salary could become payable in the event of terminations without cause only under specified circumstances. Senior executive officers are also eligible for 12 months of base salary in the event of a change in control under specified circumstances. The chief executive officer’s employment agreement provides for 12 months of base salary and his target bonus payment in the event of termination without cause and 24 months of base salary for change of control severance under specified circumstances.
Operating Lease Commitments
The Company leases certain property and equipment under non-cancelable operating lease agreements. Property and equipment covered by such operating lease agreements include offices and warehousing facilities at subsidiary locations, satellite transponder, office equipment and certain tower site locations.
Future minimum lease payments at January 28, 2012 are as follows:
 
 

Fiscal Year
Amount
 
 
2012
$
1,657,000

2013
1,105,000

2014
780,000

2015
780,000

2016 and thereafter
520,000


Total rent expense under such agreements was approximately $1,706,000 in fiscal 2011, $1,971,000 in fiscal 2010, and $2,180,000 in fiscal 2009.
Retirement and Savings Plan
The Company maintains a qualified 401(k) retirement savings plan covering substantially all employees. The plan allows the Company’s employees to make voluntary contributions to the plan. The Company’s contribution, if any, is determined annually at the discretion of the board of directors. During fiscal 2011, fiscal 2010 and fiscal 2009, the Company did not make any matching contributions to the plan.
Litigation
Legal Matters and Contingencies [Text Block]
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 adverse effect on the Company’s operations or consolidated financial statements.
In the third quarter of fiscal 2009, the U.S. Customs and Border Protection agency commenced an investigation into an undervaluation and corresponding underpayment of the customs duty owed by a vendor relating to a particular shipment of goods to the United States. The Company notified the vendor and has withheld certain funds from the vendor under contractual indemnification obligations to cover any potential costs, penalties or fees that may result from the investigation. The Company made a formal request for indemnification from the vendor but the request was refused. As a result, in December 2009, through the U.S. District Court of Minnesota, the Company commenced litigation in federal court against the vendor for breach of contract. The vendor filed counterclaims for payments it claims were owed by the Company. The case has been stayed by the district court pending the outcome of the U.S. Customs investigation. The Company believes that the funds it is withholding from the vendor will be sufficient to cover any costs or possible liabilities against us that may result from the investigation.
Supplemental Cash Flow Information
Cash Flow, Supplemental Disclosures [Text Block]
Supplemental Cash Flow Information
Supplemental cash flow information and noncash investing and financing activities were as follows:
 
 
For the Years Ended
 
 
January 28, 2012
 
January 29, 2011
 
January 30, 2010
Supplemental cash flow information:
 
 

 
 

 
 

Interest paid
 
$
3,320,000

 
$
647,000

 
$
11,000

Income taxes paid
 
$
98,000

 
$
100,000

 
$
43,000

Supplemental non-cash investing and financing activities:
 
 
 
 

 
 

Common stock purchase warrants forfeited
 
$
35,000

 
$
35,000

 
$
34,000

Deferred financing costs included in accrued liabilities
 
$
53,000

 
$
4,000

 
$
414,000

Property and equipment purchases included in accounts payable
 
$
156,000

 
$
87,000

 
$
72,000

Issuance of 689,655 shares of common stock for license agreement
 
$
4,166,000

 
$

 
$

Accretion of redeemable Series A preferred stock
 
$

 
$

 
$
62,000

Issuance of Series B preferred stock
 
$

 
$

 
$
12,959,000

Excess of preferred stock carrying value over redemption value
 
$

 
$

 
$
27,362,000

Redemption of Series A preferred stock
 
$

 
$

 
$
40,854,000

Issuance of 6,000,000 common stock warrants
 
$

 
$

 
$
533,000

Relationship with NBCU and GE Equity
Collaborative Arrangement Disclosure [Text Block]
Relationship with NBCU and GE Equity
Alliance with GE Equity and NBCU
In March 1999, the Company entered into an alliance with GE Equity and NBCUniversal Media, LLC ("NBCU"), pursuant to which the Company issued Series A redeemable convertible preferred stock and common stock warrants, and entered into a shareholder agreement, a registration rights agreement, a distribution and marketing agreement and, the following year, a trademark license agreement. On February 25, 2009, the Company entered into an exchange agreement with the same parties, pursuant to which GE Equity exchanged all outstanding shares of the Company’s Series A preferred stock for (i) 4,929,266 shares of the Company’s Series B redeemable preferred stock, (ii) a warrant to purchase up to 6,000,000 shares of the Company’s common stock at an exercise price of $0.75 per share and (iii) a cash payment in the amount of $3.4 million. In connection with the exchange, the parties also amended and restated the 1999 shareholder agreement and registration rights agreement. The outstanding agreements with GE Equity and NBCU are described in more detail below.
The shares of Series B redeemable preferred stock were redeemable by the Company at any time for an initial redemption amount of $40.9 million, plus accrued dividends at a base annual rate of 12%, subject to adjustment. In addition, the Series B preferred stock provided GE Equity with class voting rights and the rights to designate members of the Company's board of directors. In April, 2011, the Company redeemed all of the outstanding Series B preferred stock for $40.9 million and paid accrued dividends of $6.4 million.
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 became a wholly owned subsidiary of NBCUniversal, LLC.
As of February 17, 2012, the direct equity ownership of GE Equity in the Company consisted of warrants to purchase up to 6,000,000 shares of common stock and, as of May 16, 2011, (their most recent filed 13D), the direct ownership of NBCU in the Company consisted of 7,141,849 shares of common stock and warrants to purchase 7,372 shares of common stock. The Company is currently making arm’s length negotiated payments to Comcast for cable distribution under a pre-existing contract.
In connection with the transfer of its ownership in NBCU, GE also agreed with Comcast that, for so long as GE Equity is entitled to appoint two members of our board of directors, NBCU will be entitled to retain a board seat provided that NBCU beneficially owns at least 5% of our adjusted outstanding common stock as computed under the amended and restated shareholders agreement described below. Furthermore, GE agreed to obtain the consent of NBCU prior to consenting to our adoption of any shareholders rights 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 Federal Communications Commission multiple ownership regulations.
NBCU Trademark License Agreement
On November 16, 2000, the Company entered into a trademark license agreement with NBCU pursuant to which NBCU granted it an exclusive, worldwide license for a term of ten years to use certain NBC trademarks, service marks and domain names to rebrand the Company’s business and corporate name and website. The Company subsequently selected the names ShopNBC and ShopNBC.com.
Under the license agreement, the Company has agreed, among other things, to (i) certain restrictions on using trademarks, service marks, domain names, logos or other source indicators owned or controlled by NBCU, (ii) the loss of its rights under the license with respect to specific territories outside of the United States in the event it fails to achieve and maintain certain performance targets in such territories, (iii) not own, operate, acquire or expand its business to include certain businesses without NBCU’s prior consent, (iv) comply with NBCU’s privacy policies and standards and practices, and (v) not own, operate, acquire or expand its business such that one-third or more of our revenues or the Company’s aggregate value is attributable to certain services (not including retailing services similar to our existing e-commerce operations) provided over the internet. The license agreement also grants to NBCU the right to terminate the license agreement at any time upon certain changes of control of the Company, in certain situations upon the failure by NBCU to own a certain minimum percentage of the Company’s outstanding capital stock on a fully diluted basis, and certain other situations.
In connection with the license agreement, the Company issued to NBCU warrants to purchase 6,000,000 shares of the Company’s common stock at an exercise price of $17.375 per share all of which have expired unexercised. In March 2001, the Company established a measurement date with respect to the license agreement by amending the agreement, and fixed the fair value of the trademark license asset at $32,837,000, which is being amortized over the remaining term of the license agreement. On March 28, 2007, the Company and NBCU agreed to extend the term of the license by six months, such that the license would continue through May 15, 2011, and to provide that certain changes of control involving a financial buyer would not provide the basis for an early termination of the license by NBCU. On November 18, 2010, the Company announced a further extension of the license agreement to May 2012, an option to further extend the license agreement to May 2013 upon the mutual agreement of both parties, and an agreement to enter into a separate transition agreement, on the terms and subject to the conditions to be mutually agreed between the parties, relating to the twelve month period following the ultimate expiration of the license agreement. In consideration for the license agreement extension, the Company issued 689,655 shares of the Company’s common stock to NBCU on May 16, 2011. Shares issued were valued at $6.04 per share, representing the fair market value of our stock on the date of issuance. As of January 28, 2012 and January 29, 2011, accumulated amortization related to this asset totaled $37,388,000 and $33,509,000 respectively.
Amended and Restated Shareholder Agreement
On February 25, 2009, the Company entered into an amended and restated shareholder agreement with GE Equity and NBCU, which provides for certain corporate governance and standstill matters. The amended and restated shareholder agreement provides that GE Equity is entitled to designate nominees for three out of nine members of the Company’s board of directors so long as the aggregate beneficial ownership of GE Equity and NBCU (and their affiliates) is at least equal to 50% of their beneficial ownership as of February 25, 2009 (i.e., beneficial ownership of approximately 8.75 million common shares, including for such purpose, shares of our common stock issuable to GE Equity upon exercise of the warrant for 6,000,000 shares of our common stock), and two out of nine members so long as their aggregate beneficial ownership is at least 10% of the shares of “adjusted outstanding common stock,” as defined in the amended and restated shareholder agreement. In addition, the amended and restated shareholder agreement provides that GE Equity may designate any of its director-designees to be an observer of the Audit, Human Resources and Compensation, and Corporate Governance and Nominating Committees of our board of directors. The amended and restated shareholder agreement requires the consent of GE Equity prior to the Company entering into any material agreements with any of CBS, Fox, Disney, Time Warner or Viacom (and their respective affiliates), provided that this restriction will no longer apply when either (i) the Company’s trademark license agreement with NBCU (described below) has terminated or (ii) GE Equity is no longer entitled to designate at least two director nominees. In addition, the amended and restated shareholder agreement requires the consent of GE Equity prior to the Company (i) exceeding certain thresholds relating to the issuance of securities, the payment of dividends, the repurchase or redemption of common stock, acquisitions (including investments and joint ventures) or dispositions, and the incurrence of debt; (ii) entering into any business different than what the Company and its subsidiaries are currently engaged; and (iii) amending the Company’s articles of incorporation to adversely affect GE Equity and NBCU (or their affiliates); provided, however, that these restrictions will no longer apply when both (i) GE Equity is no longer entitled to designate three director nominees and (ii) GE Equity and NBCU no longer hold any Series B preferred stock. The Company is also prohibited from taking any action that would cause any ownership interest by the Company in television broadcast stations from being attributable to GE Equity, NBCU or their affiliates.
The amended and restated shareholder agreement further provides that during the “standstill period” (as defined in the amended and restated shareholder agreement), subject to certain limited exceptions, GE Equity and NBCU are prohibited from: (i) any asset/business purchases from the Company in excess of 10% of the total fair market value of the Company’s assets; (ii) increasing their beneficial ownership above 39.9% of our shares, treating as outstanding and actually owned for such purpose shares of our common stock issuable to GE Equity upon exercise of the warrant for 6,000,000 shares of our common stock; (iii) making or in any way participating in any solicitation of proxies; (iv) depositing any securities of the Company in a voting trust; (v) forming, joining or in any way becoming a member of a “13D Group” with respect to any voting securities of the Company; (vi) arranging any financing for, or providing any financing commitment specifically for, the purchase of any voting securities of the Company; or (vii) otherwise acting, whether alone or in concert with others, to seek to propose to the Company any tender or exchange offer, merger, business combination, restructuring, liquidation, recapitalization or similar transaction involving the Company, or nominating any person as a director of the Company who is not nominated by the then incumbent directors, or proposing any matter to be voted upon by the Company’s shareholders. If, during the standstill period, any inquiry has been made regarding a “takeover transaction” or “change in control,” each as defined in the amended and restated shareholder agreement, that has not been rejected by the Company’s board of directors, or the Company’s board of directors pursues such a transaction, or engages in negotiations or provides information to a third party and the board of directors has not resolved to terminate such discussions, then GE Equity or NBCU may propose to the Company a tender offer or business combination proposal.
In addition, unless GE Equity and NBCU beneficially own less than 5% or more than 90% of the adjusted outstanding shares of common stock, GE Equity and NBCU shall not sell, transfer or otherwise dispose of any securities of the Company except for transfers: (i) to certain affiliates who agree to be bound by the provisions of the amended and restated shareholder agreement, (ii) that have been consented to by the Company, (iii) subject to certain exceptions, pursuant to a third-party tender offer, (iv) pursuant to a merger, consolidation or reorganization to which the Company is a party, (v) in an underwritten public offering pursuant to an effective registration statement, (vi) pursuant to Rule 144 of the Securities Act of 1933, or (vii) in a private sale or pursuant to Rule 144A of the Securities Act of 1933; provided, that in the case of any transfer pursuant to clause (v), (vi) or (vii), the transfer does not result in, to the knowledge of the transferor after reasonable inquiry, any other person acquiring, after giving effect to such transfer, beneficial ownership, individually or in the aggregate with that person’s affiliates, of more than 10% (or 20% in the case of a transfer by NBCU) of the adjusted outstanding shares of the common stock, as determined in accordance with the amended and restated shareholder agreement.
The standstill period will terminate on the earliest to occur of (i) the ten-year anniversary of the amended and restated shareholder agreement, (ii) the Company entering into an agreement that would result in a “change in control” (subject to reinstatement), (iii) an actual “change in control” (subject to reinstatement), (iv) a third-party tender offer (subject to reinstatement), or (v) six months after GE Equity can no longer designate any nominees to the Company’s board of directors. Following the expiration of the standstill period pursuant to clause (i) above and two years in the case of clause (v) above, GE Equity and NBCU’s beneficial ownership position may not exceed 39.9% of the Company’s adjusted outstanding shares of common stock, except pursuant to issuances or exercises of any warrants or pursuant to a 100% tender offer for the Company.
Registration Rights Agreement
On February 25, 2009, the Company entered into an amended and restated registration rights agreement providing GE Equity, NBCU and their affiliates and any transferees and assigns, an aggregate of four demand registrations and unlimited piggy-back registration rights. In addition, NBCU was subsequently granted one additional demand registration right pursuant to the second amendment of the NBCU Trademark License Agreement
Restructuring Costs
Restructuring and Related Activities Disclosure [Text Block]
Restructuring Costs
As a result of a number of restructuring initiatives taken by the Company in order to simplify and streamline the Company’s organizational structure, reduce operating costs and pursue and evaluate strategic alternatives, the Company recorded restructuring charges of $1,130,000 in fiscal 2010 and $2,303,000 in fiscal 2009. Restructuring costs primarily include employee severance costs associated with the streamlining the Company's organizational structure, incremental costs associated with the refinancing of our debt facilities, restructuring advisory service fees and costs associated with strategic alternative initiatives. All restructuring costs were paid as of January 29, 2011 and no restructuring costs were incurred during fiscal 2011.

The table below sets forth for the year ended January 29, 2011, the significant components and activity under the restructuring program:
 
 
Balance at
January 30,
2010
 
Charges
 
Cash
Payments
 
Balance at
January 29,
2011
Severance and retention
 
$
255,000

 
$
278,000

 
$
(533,000
)
 
$

Incremental restructuring charges
 
179,000

 
852,000

 
(1,031,000
)
 

 
 
$
434,000

 
$
1,130,000

 
$
(1,564,000
)
 
$

Chief Executive Officer Transition Costs
Chief Executive Officer Transition Costs [Text Block]
Chief Executive Officer Transition Costs
During fiscal 2009, the Company recorded a $1.9 million charge relating primarily to settlement and legal costs associated with the termination of the Company’s former chief executive officer.
Related Party Transactions
Related Party Transactions Disclosure [Text Block]
Related Party Transactions
The Company entered into marketing agreements with Creative Commerce and its subsidiary, International Commerce Agency, LLC (“International Commerce”), under which Creative Commerce and International Commerce agreed to provide vendor sourcing and retailing consulting services to the Company. One of the Company’s directors, Edwin Garrubbo, is the majority owner of both Creative Commerce and International Commerce. The Company made payments totaling approximately $1,384,000 during fiscal 2011 and $787,000 during fiscal 2010 relating to these services.

Relationship with GE Equity, Comcast 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. As of October 29, 2011, the direct equity ownership of GE Equity in the Company consists of warrants to purchase up to 6,000,000 shares of common stock and the direct ownership of NBCU in the Company consists of 7,141,849 shares of common stock and warrants to purchase 7,372 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 transfer of its ownership in NBCU, GE also agreed with Comcast that, for so long as GE Equity is entitled to appoint two members of our board of directors, NBCU will be entitled to retain a board seat provided that NBCU beneficially owns at least 5% of our adjusted outstanding common stock. Furthermore, GE agreed to obtain the consent of NBCU prior to consenting to our adoption of any shareholders rights plan or certain other actions that would impede or restrict the ability of NBCU to acquire or dispose of shares of our 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.
Subsequent Event
Subsequent Events [Text Block]
Subsequent Event

On February 9, 2012, the Company entered into a $40 million new 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. The Credit Facility has a three-year maturity and bears interest at LIBOR plus 3% per annum. The initial net proceeds of borrowing of approximately $38.2 million were primarily used to retire the Company's existing 11%, $25 million term loan with Crystal Financial LLC and to pay a $12.4 million deferred payment obligation to a television distribution provider. 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 $1.8 million, will provide liquidity for working capital and general corporate purposes.
Maximum borrowings under the Credit Facility are equal to the lesser of $40 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 property located in 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 term loan 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 2% of the total Credit Facility if terminated in year one; .5% if terminated in year two; with no fee if terminated in year three. Borrowings under the Credit Facility mature and are payable in February 2015.
The Credit Facility contains customary covenants and conditions, including, among other things, maintaining a minimum of unrestricted cash plus facility availability of $6 million at all times and limiting annual capital expenditures. Certain financial covenants including minimum EBITDA levels (as defined in the Credit Facility agreement) and minimum fixed charge coverage ratio become applicable only if unrestricted cash plus credit availability falls below $12 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.
Valuation and Qualifying Accounts
Schedule of Valuation and Qualifying Accounts Disclosure [Text Block]
VALUEVISION MEDIA, INC. AND SUBSIDIARIES
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
 
 
 
 
Column C
 
 
 
 
 
 
 
 
Column B
 
Additions
 
 
 
 
 
 
 
 
Balances at
 
Charged to
 
 
 
 
 
Column E
 
 
Beginning of
 
Costs and
 
Column D
 
 
 
Balance at
Column A
 
Year
 
Expenses
 
Deductions
 
 
 
End of Year
For the year ended January 28, 2012:
 


 


 


 

 


Allowance for doubtful accounts
 
$
5,643,000

 
11,876,000

 
(11,881,000
)
 
(1)
 
$
5,638,000

Reserve for returns
 
$
4,522,000

 
64,503,000

 
(64,481,000
)
 
(2)
 
$
4,544,000

For the year ended January 29, 2011:
 
 

 
 

 
 

 
 
 
 

Allowance for doubtful accounts
 
$
4,819,000

 
9,321,000

 
(8,497,000
)
 
(1)
 
$
5,643,000

Reserve for returns
 
$
2,742,000

 
49,335,000

 
(47,555,000
)
 
(2)
 
$
4,522,000

For the year ended January 30, 2010:
 
 

 
 

 
 

 
 
 
 

Allowance for doubtful accounts
 
$
6,063,000

 
6,813,000

 
(8,057,000
)
 
(1)
 
$
4,819,000

Reserve for returns
 
$
2,770,000

 
49,276,000

 
(49,304,000
)
 
(2)
 
$
2,742,000


_______________________________________

(1)
Write off of uncollectible receivables, net of recoveries.
(2)
Refunds or credits on products returned.
3. Exhibits
The exhibits filed with this report are set forth on the exhibit index filed as a part of this report immediately following the signatures to this report.