EVINE LIVE INC., 10-Q filed on 12/9/2013
Quarterly Report
Document and Entity Information
9 Months Ended
Nov. 2, 2013
Dec. 2, 2013
Document Information [Line Items]
 
 
Entity Registrant Name
VALUEVISION MEDIA INC 
 
Entity Central Index Key
0000870826 
 
Current Fiscal Year End Date
--02-01 
 
Entity Filer Category
Accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Nov. 02, 2013 
 
Document Fiscal Year Focus
2013 
 
Document Fiscal Period Focus
Q3 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
49,773,628 
Entity Well-known Seasoned Issuer
No 
 
Entity Voluntary Filers
No 
 
Entity Current Reporting Status
Yes 
 
Consolidated Balance Sheets (USD $)
Nov. 2, 2013
Feb. 2, 2013
Current assets:
 
 
Cash and cash equivalents
$ 28,996,000 
$ 26,477,000 
Restricted cash and investments
2,100,000 
2,100,000 
Accounts receivable, net
86,995,000 
98,360,000 
Inventories
54,608,000 
37,155,000 
Prepaid expenses and other
6,717,000 
6,620,000 
Total current assets
179,416,000 
170,712,000 
Property and equipment, net
24,806,000 
24,665,000 
FCC broadcasting license
12,000,000 
12,000,000 
NBC trademark license agreement, net
999,000 
3,997,000 
Other assets
814,000 
725,000 
Total Assets
218,035,000 
212,099,000 
Current liabilities:
 
 
Accounts payable
66,554,000 
65,719,000 
Accrued liabilities
33,308,000 
30,596,000 
Deferred revenue
85,000 
85,000 
Total current liabilities
99,947,000 
96,400,000 
Capital Lease Obligations, Noncurrent
101,000 
Deferred revenue
356,000 
420,000 
Deferred Tax Liabilities, Net, Noncurrent
869,000 
Long term credit facility
38,000,000 
38,000,000 
Total liabilities
139,273,000 
134,820,000 
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
496,000 
491,000 
Warrants to purchase 6,007,372 shares of common stock
533,000 
533,000 
Additional paid-in capital
409,715,000 
407,244,000 
Accumulated deficit
(331,982,000)
(330,989,000)
Total shareholders’ equity
78,762,000 
77,279,000 
Total Liabilities and Equity
$ 218,035,000 
$ 212,099,000 
Consolidated Balance Sheets (Parentheticals) (USD $)
Nov. 2, 2013
Feb. 2, 2013
Stockholders' Equity:
 
 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
100,000,000 
100,000,000 
Common stock, shares issued
49,637,003 
49,139,361 
Common stock, shares outstanding
49,637,003 
49,139,361 
Warrants, Outstanding
6,000,000 
6,000,000 
Consolidated Statements of Operations (USD $)
3 Months Ended 9 Months Ended
Nov. 2, 2013
Oct. 27, 2012
Nov. 2, 2013
Oct. 27, 2012
Net sales
$ 147,318,000 
$ 137,592,000 
$ 447,236,000 
$ 409,320,000 
Cost of sales
92,083,000 
86,802,000 
279,311,000 
255,818,000 
Gross profit
55,235,000 
50,790,000 
167,925,000 
153,502,000 
Operating expense:
 
 
 
 
Distribution and selling
46,683,000 
46,762,000 
139,477,000 
142,308,000 
General and administrative
6,086,000 
4,242,000 
18,155,000 
13,446,000 
Depreciation and amortization
3,039,000 
3,174,000 
9,342,000 
10,026,000 
Total operating expense
55,808,000 
54,178,000 
166,974,000 
165,780,000 
Operating income (loss)
(573,000)
(3,388,000)
951,000 
(12,278,000)
Other income (expense):
 
 
 
 
Interest income
3,000 
7,000 
17,000 
11,000 
Interest expense
(355,000)
(379,000)
(1,081,000)
(3,571,000)
Gain (Loss) on Disposition of Other Assets
100,000 
100,000 
Gains (Losses) on Extinguishment of Debt
500,000 
Total other expense
(352,000)
(272,000)
(1,064,000)
(3,960,000)
Income (loss) before income taxes
(925,000)
(3,660,000)
(113,000)
(16,238,000)
Income tax (provision) benefit
(292,000)
(15,000)
(880,000)
(21,000)
Net income (loss)
(1,217,000)
(3,675,000)
(993,000)
(16,259,000)
Net income (loss) per common share
$ (0.02)
$ (0.08)
$ (0.02)
$ (0.33)
Net income (loss) per common share — assuming dilution
$ (0.02)
$ (0.08)
$ (0.02)
$ (0.33)
Weighted average number of common shares outstanding:
 
 
 
 
Basic
49,604,860 
48,931,464 
49,412,646 
48,807,749 
Diluted
49,604,860 
48,931,464 
49,412,646 
48,807,749 
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property
 
 
$ 0 
$ 102,000 
Consolidated Statement of Shareholders' Equity (USD $)
Total
Common Stock [Member]
Warrant [Member]
Additional Paid-in Capital [Member]
Accumulated Deficit
Total Shareholders' Equity period beginning at Feb. 02, 2013
$ 77,279,000 
$ 491,000 
$ 533,000 
$ 407,244,000 
$ (330,989,000)
Common Stock, Shares, Outstanding period beginning at Feb. 02, 2013
49,139,361 
49,139,361 
 
 
 
Net income (loss)
(993,000)
(993,000)
Common stock issuances pursuant to equity compensation plans, Shares
 
497,642 
 
 
 
Common stock issuances pursuant to equity compensation plans, Value
108,000 
5,000 
103,000 
Share-based compensation
 
 
 
 
Share-based compensation
2,368,000 
2,368,000 
Total Shareholders' Equity period end at Nov. 02, 2013
$ 78,762,000 
$ 496,000 
$ 533,000 
$ 409,715,000 
$ (331,982,000)
Common Stock, Shares, Outstanding period end at Nov. 02, 2013
49,637,003 
49,637,003 
 
 
 
Consolidated Statements of Cash Flows (USD $)
9 Months Ended
Nov. 2, 2013
Oct. 27, 2012
OPERATING ACTIVITIES:
 
 
Net loss
$ (993,000)
$ (16,259,000)
Adjustments to reconcile net loss to net cash provided by (used for) operating activities:
 
 
Depreciation and amortization
9,507,000 
10,176,000 
Share-based compensation
2,368,000 
2,403,000 
Amortization of deferred revenue
(64,000)
(65,000)
Amortization of deferred finance costs
139,000 
184,000 
Write-off of deferred financing costs
2,306,000 
Loss on debt extinguishment
500,000 
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property
102,000 
Deferred income taxes
869,000 
Changes in operating assets and liabilities:
 
 
Accounts receivable, net
11,365,000 
(3,144,000)
Inventories, net
(17,453,000)
(10,408,000)
Prepaid expenses and other
(50,000)
(852,000)
Accounts payable and accrued liabilities
6,085,000 
9,465,000 
Net cash provided by (used for) operating activities
11,773,000 
(5,796,000)
INVESTING ACTIVITIES:
 
 
Property and equipment additions
(6,262,000)
(4,786,000)
Purchase of NBC Trademark License
(2,830,000)
(4,000,000)
Proceeds from Sale of Property, Plant, and Equipment
102,000 
Net cash used for investing activities
(9,092,000)
(8,684,000)
FINANCING ACTIVITIES:
 
 
Payments for deferred issuance costs
(270,000)
(552,000)
Proceeds from Issuance of Long-term Debt
38,215,000 
Repayments of Long-term Debt
(25,715,000)
Proceeds from exercise of stock options
108,000 
84,000 
Net cash provided by (used for) financing activities
(162,000)
12,032,000 
Net increase (decrease) in cash and cash equivalents
2,519,000 
(2,448,000)
BEGINNING CASH AND CASH EQUIVALENTS
26,477,000 
32,957,000 
ENDING CASH AND CASH EQUIVALENTS
28,996,000 
30,509,000 
Interest Paid
931,000 
1,651,000 
Income Taxes Paid
16,000 
27,000 
Property and equipment purchases included in accounts payable
282,000 
92,000 
Capital Lease Obligations Incurred
155,000 
Intangible asset purchase included in accrued liabilities
$ 0 
$ 2,830,000 
General
The Company
General
ValueVision Media, Inc. and its subsidiaries ("we," "our," "us," or the "Company") is a multichannel electronic retailer 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, that is currently transitioning its brand from ShopNBC to ShopHQ over the remainder of fiscal 2013, 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, agreements with telecommunications companies such as AT&T and Verizon and the purchase of month-to-month full- and part-time lease agreements of cable and broadcast television time. Programming is also streamed live on the Internet at ShopHQ.com and ShopNBC.com. The Company also distributes its 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 operates ShopHQ.com, a comprehensive e-commerce platform that sells products appearing on its 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, 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 NBCU-branded name through January 2014.
On May 22, 2013, the Company announced its intention to rebrand its 24-hour television shopping network and its companion e-commerce internet website from ShopNBC and ShopNBC.com to ShopHQ and ShopHQ.com, respectively, to reinforce its positioning as the shopping headquarters for its customers. Customers and viewers began to see the new ShopHQ brand name and logo across television, online, mobile and social platforms immediately with a gradual transition to the new brand and new Internet URL to be completed over the balance of the fiscal year. As ShopHQ, the Company will continue its multichannel electronic retail model to provide product offerings in jewelry & watches; home & consumer electronics; beauty, health & fitness; and fashion & accessories across its 87 million cable and satellite homes, in addition to its online, mobile and social media distribution.
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 2, 2013 has been derived from the Company's audited financial statements for the fiscal year ended February 2, 2013. 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 2, 2013. Operating results for the nine-month period ended November 2, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending February 1, 2014.
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 2012, ended on February 2, 2013, and consisted of 53 weeks. Fiscal 2013 will end on February 1, 2014, and will contain 52 weeks. The quarters ended November 2, 2013 and October 27, 2012 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 November 2, 2013 and February 2, 2013, 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 and standby 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 November 2, 2013 and February 2, 2013, the Company also had a long-term variable rate bank credit loan with a carrying value of $38,000,000. The fair values 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)
 
November 2, 2013
 
February 2, 2013
 
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Gross
Carrying
Amount
 
Accumulated
Amortization
Finite-lived intangible assets:
 
 
 
 
 
 
 
 
 
  NBCU trademark license - second renewal
0.25
 
$
6,830,000

 
$
(5,831,000
)
 
$
6,830,000

 
$
(2,833,000
)
 
 
 
 
 
 
 
 
 
 
Indefinite-lived intangible assets:
 
 
 
 
 
 
 
 
 
FCC broadcast license
 
 
$
12,000,000

 
 
 
$
12,000,000

 
 

The Company annually reviews its FCC television broadcast license for impairment in the fourth quarter, or more frequently if an impairment indicator is present. As of November 2, 2013 and February 2, 2013, the Company had an intangible FCC broadcasting license asset with a carrying value and fair value of $12,000,000. 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 of 10%. The Company concluded that the inputs used in its intangible FCC broadcasting license asset valuation at February 2, 2013 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.
During the Company's annual fiscal 2012 fair value assessment and utilizing independent market data, assumptions in the Company's discounted cash flow models reflected declines in independent television station industry revenues and operating margins due to television station rating declines and reduced advertising purchases on local broadcast television stations. As a result, cash flows from our discounted cash flow model did not support recovery of the asset's carrying value and the Company recorded an $11.1 million non-cash impairment charge in the fourth quarter of fiscal 2012.
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.
On May 11, 2012, the Company amended its trademark license agreement for the use of the ShopNBC brand name with NBCU, extending the term of the license agreement through January 2014. As consideration for the amendment, the Company paid NBCU $4,000,000 upon execution and paid an additional $2,830,000 on May 15, 2013. NBCU has the right to terminate the trademark license agreement if the Company were to be in default on its Credit Facility (as defined below), unless waived or cured within 90 days of default, or if unrestricted cash plus credit availability on the Credit Facility were to fall below $8 million.
On May 22, 2013, the Company announced its intention to rebrand its 24-hour television shopping network and its companion e-commerce internet website from ShopNBC and ShopNBC.com to ShopHQ and ShopHQ.com, respectively, to reinforce its positioning as the shopping headquarters for its customers. Customers and viewers began to see the new ShopHQ brand name and logo across television, online, mobile and social platforms immediately with a gradual transition to the new brand and new Internet URL to be completed over the balance of the fiscal year.
Amortization expense related to the NBCU trademark license was $999,000 and $2,998,000, respectively, for the three and nine month periods ended November 2, 2013 and $1,000,000 and $3,048,000, respectively, for the three and nine month periods ended October 27, 2012. Estimated amortization expense for fiscal 2013 will be approximately $3,997,000.
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 May 1, 2013, the Company amended its Credit Facility with PNC increasing the size of the facility to $50 million and further made an additional amendment to the Credit Facility during our fiscal 2013 second quarter. The Credit Facility, as amended, also has a new five-year maturity and continues to bear interest at LIBOR plus 3% per annum. 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 amended Credit Facility, $12 million as of November 2, 2013, provides liquidity for working capital and general corporate purposes. Borrowings under the Credit Facility mature in May 2018.
Maximum borrowings under the Credit Facility are equal to the lesser of $50 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 3% of the total Credit Facility if terminated in year one; 1% if terminated in year two; 0.5% if terminated in year three; and no fee if terminated in years four or five. Borrowings under the Credit Facility mature and are payable in May 2018. Interest expense recorded under the Credit Facility for the three and nine month periods ended November 2, 2013 was $355,000 and $1,081,000, respectively and $379,000 and $1,104,000, respectively for the three and nine month periods ended October 27, 2012.
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) and a minimum fixed charge coverage ratio become applicable only if unrestricted cash plus facility 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. As of November 2, 2013, the Company was in compliance with the applicable covenants of the Credit Facility.
Costs incurred to obtain the amendment to the Credit Facility of approximately $275,000 and unamortized costs incurred to obtain the original Credit Facility totaling $466,000 have been capitalized and are being expensed as additional interest over the new five-year term of the Credit Facility. In connection with a previous term loan refinancing, the Company was required to pay an early termination fee of $500,000 which was recorded as a loss on debt extinguishment in the accompanying statement of operations for the first quarter of fiscal 2012. Additionally, the Company recorded an additional non-cash interest charge totaling $2.3 million in the first quarter of fiscal 2012 relating to the write-off of unamortized term loan financing costs.
(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. Share-based compensation expense for the third quarters of fiscal 2013 and fiscal 2012 related to stock option awards was $556,000 and $406,000, respectively. Share-based compensation expense for the first nine months of fiscal 2013 and fiscal 2012 related to stock option awards was $1,804,000 and $1,072,000, 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 November 2, 2013, the Company had two omnibus stock plans 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 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. 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 ten 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 2013
 
Fiscal 2012
Expected volatility
100%
 
97% - 98%
Expected term (in years)
5 - 6 years
 
6 years
Risk-free interest rate
1.1% - 1.8%
 
1.0%

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 November 2, 2013, 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 November 2, 2013 and changes during the nine-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 2, 2013
2,500,000

 
$
3.73

 
2,098,000

 
$
6.23

 
1,169,000

 
$
5.88

 
525,000

 
$
4.12

Granted
120,000

 
$
3.61

 
50,000

 
$
3.73

 

 
$

 

 
$

Exercised
(8,000
)
 
$
1.97

 
(10,000
)
 
$
2.36

 
(10,000
)
 
$
2.36

 
(25,000
)
 
$
1.69

Forfeited or canceled

 
$

 
(2,000
)
 
$
10.41

 
(8,000
)
 
$
2.95

 

 
$

Balance outstanding,
November 2, 2013
2,612,000

 
$
3.75

 
2,136,000

 
$
6.19

 
1,151,000

 
$
5.93

 
500,000

 
$
4.24

Options exercisable at
November 2, 2013
1,171,000

 
$
3.85

 
2,069,000

 
$
6.14

 
1,151,000

 
$
5.93

 
397,000

 
$
4.11



The following table summarizes information regarding stock options outstanding at November 2, 2013:
 
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:
2,612,000

 
$
3.75

 
9.0
 
$
3,807,000

 
2,574,000

 
$
3.77

 
9.0
 
$
3,714,000

2004 Incentive:
2,136,000

 
$
6.19

 
5.1
 
$
2,047,000

 
2,129,000

 
$
6.18

 
5.1
 
$
2,047,000

2001 Incentive:
1,151,000

 
$
5.93

 
4.7
 
$
1,142,000

 
1,148,000

 
$
5.92

 
4.7
 
$
1,142,000

Non-Qualified:
500,000

 
$
4.24

 
6.7
 
$
597,000

 
490,000

 
$
4.23

 
6.7
 
$
588,000


The weighted average grant-date fair value of options granted in the first nine-months of fiscal 2013 and fiscal 2012 was $2.83 and $0.98, respectively. The total intrinsic value of options exercised during the first nine months of fiscal 2013 and fiscal 2012 was $148,000 and $91,000, respectively. As of November 2, 2013, total unrecognized compensation cost related to stock options was $1,439,000 and is expected to be recognized over a weighted average period of approximately 0.7 years.
On November 25, 2013, subsequent to the November 2, 2013 balance sheet date, the Company granted 471,000 non-qualified 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 $5.57 and each option will vest in three equal annual installments beginning November 25, 2014. The aggregate market value of the stock options at the date of the award was $2,080,000 and will be amortized as compensation expense over the three-year vesting period.
Restricted Stock (Notes)
Restricted Stock
Restricted Stock
Compensation expense recorded for the third quarter of fiscal 2013 and fiscal 2012 relating to restricted stock grants was $162,000 and $319,000, respectively. Compensation expense recorded in the first nine-months of fiscal 2013 and fiscal 2012 relating to restricted stock grants was $564,000 and $1,331,000, respectively. As of November 2, 2013, there was $289,000 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 0.5 years. The total fair value of restricted stock vested during the first nine-months of fiscal 2013 and fiscal 2012 was $2,036,000 and $598,000, respectively.
On June 19, 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 November 2, 2013, 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

On June 13, 2012, the Company granted a total of 50,000 shares of restricted stock to five non-management board members as part of the Company's annual director compensation program. These restricted stock awards vested on June 18, 2013. The aggregate market value of the restricted stock at the date of the award was $85,000 and was 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 November 2, 2013 and changes during the nine-month period then ended is as follows:
 
Shares
 
Weighted
Average
Grant Date
Fair Value
Non-vested outstanding, February 2, 2013
772,000

 
$3.00
Granted
44,000

 
$5.15
Vested
(443,000
)
 
$4.04
Forfeited
(17,000
)
 
$2.02
Non-vested outstanding, November 2, 2013
356,000

 
$2.02

On November 25, 2013, subsequent to the November 2, 2013 balance sheet date, 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 will be amortized as compensation expense over the three-year vesting period.
Net Income (Loss) Per Common Share (Notes)
Net Income (Loss) Per Common Share
Net Loss Per Common Share
Basic net loss per share is computed by dividing reported loss by the weighted average number of shares of common stock outstanding for the reported period. Diluted 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 net 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:
 
 
Three-Month Periods Ended
 
Nine-Month Periods Ended
 
 
November 2,
2013
 
October 27,
2012
 
November 2,
2013
 
October 27,
2012
Net loss (a)
 
$
(1,217,000
)
 
$
(3,675,000
)
 
$
(993,000
)
 
$
(16,259,000
)
Weighted average number of shares of common stock outstanding — Basic
 
49,604,860

 
48,931,464

 
49,412,646

 
48,807,749

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

 

 

 

Weighted average number of shares of common stock outstanding — Diluted
 
49,604,860

 
48,931,464

 
49,412,646

 
48,807,749

Net loss per common share
 
$
(0.02
)
 
$
(0.08
)
 
$
(0.02
)
 
$
(0.33
)
Net loss per common share — assuming dilution
 
$
(0.02
)
 
$
(0.08
)
 
$
(0.02
)
 
$
(0.33
)
(a) The net loss for the nine-month period ended November 2, 2013 includes costs related to an activist shareholder response of $344,000. The net loss for the nine-month period ended October 27, 2012 includes a loss on debt extinguishment charge totaling $500,000 incurred during the first quarter of fiscal 2012.
(b) For the three-month periods ended November 2, 2013 and October 27, 2012, approximately 6,475,000 and 4,233,000, respectively, incremental in-the-money potentially dilutive common share options and warrants have been excluded from the computation of diluted earnings per share, as the effect of their inclusion would be antidilutive. For the nine-month periods ended November 2, 2013 and October 27, 2012, approximately 6,010,000 and 3,838,000 incremental in-the-money potentially dilutive common share stock options and warrants have been excluded from the computation of diluted loss 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 multichannel electronic retailing. The Company markets, sells and distributes its products to consumers primarily through television and online via its ShopHQ website. 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
 
Nine-Month Periods Ended
 
 
November 2,
2013
 
October 27,
2012
 
November 2,
2013
 
October 27,
2012
Jewelry & Watches
 
$
58,868

 
$
63,975

 
$
190,135

 
$
204,388

Home & Consumer Electronics
 
39,485

 
35,056

 
119,460

 
94,782

Beauty, Health & Fitness
 
18,919

 
19,558

 
54,056

 
54,008

Fashion & Accessories
 
16,355

 
8,995

 
44,781

 
28,796

All other (primarily shipping & handling revenue)
 
13,691

 
10,008

 
38,804

 
27,346

Total
 
$
147,318

 
$
137,592

 
$
447,236

 
$
409,320

Income Taxes
Income Taxes
Income Taxes
At February 2, 2013, the Company had federal net operating loss carryforwards ("NOLs") of approximately $300 million, and state NOL's of approximately $128 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 third quarter and nine months ended November 2, 2013, the income tax provision included a non-cash tax charge of approximately $290,000 and $870,000, 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. 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 $290,000 of additional non-cash income tax expense over the remainder of fiscal 2013.
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 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 one of the Company's vendors relating to a particular shipment of goods to the Company. After a lengthy investigation, the vendor was criminally charged and recently pleaded guilty in federal court to using fraudulent invoices to defraud U.S. Customs of duties. After the vendor refused a request to indemnify the Company for its risk, in December 2009, the Company commenced litigation against the vendor in the U.S. District Court of Minnesota for breach of contract. The vendor then filed counterclaims for payments it claimed were owed by the Company. The case was favorably settled by the parties on November 5, 2013 with this vendor paying all of the Company's attorneys' fees and costs and the Company paying only undisputed amounts owed to the vendor. We anticipate the case will be dismissed by the court in the near future.
Related Party Transactions
Related Party Transactions
Related Party Transactions
Relationship with Creative Commerce and International Commerce
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. Edwin Garrubbo, who was formerly a member of the Company's Board of Directors, is the majority owner of both Creative Commerce and International Commerce. The Company paid Creative Commerce and International Commerce approximately $652,000 during the nine-month period ended October 27, 2012 relating to these services. Mr. Garrubbo has not been a director of the Company since June 13, 2012.
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 November 2, 2013, 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. 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 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. 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, 2013.
On May 11, 2012, the Company amended its trademark license agreement for the use of the ShopNBC brand name with NBCU, extending the term of the license agreement through January 2014. As consideration for the amendment, the Company paid NBCU $4,000,000 upon execution and paid an additional $2,830,000 on May 15, 2013.
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 2012, ended on February 2, 2013, and consisted of 53 weeks. Fiscal 2013 will end on February 1, 2014, and will contain 52 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)
 
November 2, 2013
 
February 2, 2013
 
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Gross
Carrying
Amount
 
Accumulated
Amortization
Finite-lived intangible assets:
 
 
 
 
 
 
 
 
 
  NBCU trademark license - second renewal
0.25
 
$
6,830,000

 
$
(5,831,000
)
 
$
6,830,000

 
$
(2,833,000
)
 
 
 
 
 
 
 
 
 
 
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 2013
 
Fiscal 2012
Expected volatility
100%
 
97% - 98%
Expected term (in years)
5 - 6 years
 
6 years
Risk-free interest rate
1.1% - 1.8%
 
1.0%
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 November 2, 2013 and changes during the nine-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 2, 2013
2,500,000

 
$
3.73

 
2,098,000

 
$
6.23

 
1,169,000

 
$
5.88

 
525,000

 
$
4.12

Granted
120,000

 
$
3.61

 
50,000

 
$
3.73

 

 
$

 

 
$

Exercised
(8,000
)
 
$
1.97

 
(10,000
)
 
$
2.36

 
(10,000
)
 
$
2.36

 
(25,000
)
 
$
1.69

Forfeited or canceled

 
$

 
(2,000
)
 
$
10.41

 
(8,000
)
 
$
2.95

 

 
$

Balance outstanding,
November 2, 2013
2,612,000

 
$
3.75

 
2,136,000

 
$
6.19

 
1,151,000

 
$
5.93

 
500,000

 
$
4.24

Options exercisable at
November 2, 2013
1,171,000

 
$
3.85

 
2,069,000

 
$
6.14

 
1,151,000

 
$
5.93

 
397,000

 
$
4.11

The following table summarizes information regarding stock options outstanding at November 2, 2013:
 
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:
2,612,000

 
$
3.75

 
9.0
 
$
3,807,000

 
2,574,000

 
$
3.77

 
9.0
 
$
3,714,000

2004 Incentive:
2,136,000

 
$
6.19

 
5.1
 
$
2,047,000

 
2,129,000

 
$
6.18

 
5.1
 
$
2,047,000

2001 Incentive:
1,151,000

 
$
5.93

 
4.7
 
$
1,142,000

 
1,148,000

 
$
5.92

 
4.7
 
$
1,142,000

Non-Qualified:
500,000

 
$
4.24

 
6.7
 
$
597,000

 
490,000

 
$
4.23

 
6.7
 
$
588,000

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 November 2, 2013 and changes during the nine-month period then ended is as follows:
 
Shares
 
Weighted
Average
Grant Date
Fair Value
Non-vested outstanding, February 2, 2013
772,000

 
$3.00
Granted
44,000

 
$5.15
Vested
(443,000
)
 
$4.04
Forfeited
(17,000
)
 
$2.02
Non-vested outstanding, November 2, 2013
356,000

 
$2.02
Net Income (Loss) Per Common Share (Tables)
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
A reconciliation of net 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:
 
 
Three-Month Periods Ended
 
Nine-Month Periods Ended
 
 
November 2,
2013
 
October 27,
2012
 
November 2,
2013
 
October 27,
2012
Net loss (a)
 
$
(1,217,000
)
 
$
(3,675,000
)
 
$
(993,000
)
 
$
(16,259,000
)
Weighted average number of shares of common stock outstanding — Basic
 
49,604,860

 
48,931,464

 
49,412,646

 
48,807,749

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

 

 

 

Weighted average number of shares of common stock outstanding — Diluted
 
49,604,860

 
48,931,464

 
49,412,646

 
48,807,749

Net loss per common share
 
$
(0.02
)
 
$
(0.08
)
 
$
(0.02
)
 
$
(0.33
)
Net loss per common share — assuming dilution
 
$
(0.02
)
 
$
(0.08
)
 
$
(0.02
)
 
$
(0.33
)
(a) The net loss for the nine-month period ended November 2, 2013 includes costs related to an activist shareholder response of $344,000. The net loss for the nine-month period ended October 27, 2012 includes a loss on debt extinguishment charge totaling $500,000 incurred during the first quarter of fiscal 2012.
(b) For the three-month periods ended November 2, 2013 and October 27, 2012, approximately 6,475,000 and 4,233,000, respectively, incremental in-the-money potentially dilutive common share options and warrants have been excluded from the computation of diluted earnings per share, as the effect of their inclusion would be antidilutive. For the nine-month periods ended November 2, 2013 and October 27, 2012, approximately 6,010,000 and 3,838,000 incremental in-the-money potentially dilutive common share stock options and warrants have been excluded from the computation of diluted loss 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
 
Nine-Month Periods Ended
 
 
November 2,
2013
 
October 27,
2012
 
November 2,
2013
 
October 27,
2012
Jewelry & Watches
 
$
58,868

 
$
63,975

 
$
190,135

 
$
204,388

Home & Consumer Electronics
 
39,485

 
35,056

 
119,460

 
94,782

Beauty, Health & Fitness
 
18,919

 
19,558

 
54,056

 
54,008

Fashion & Accessories
 
16,355

 
8,995

 
44,781

 
28,796

All other (primarily shipping & handling revenue)
 
13,691

 
10,008

 
38,804

 
27,346

Total
 
$
147,318

 
$
137,592

 
$
447,236

 
$
409,320

General (Details)
9 Months Ended
Nov. 2, 2013
Households
General [Abstract]
 
Household Broadcast Penetration, Number of Households
87,000,000 
Basis of Financial Statement Presentation (Details)
3 Months Ended 12 Months Ended
Nov. 2, 2013
Oct. 27, 2012
Feb. 1, 2014
Feb. 2, 2013
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
 
 
 
Number of Weeks in Fiscal Year, Minimum
 
 
364 days 
 
Number of Weeks in Fiscal Year, Maximum
 
 
 
371 days 
Number Of Weeks In Fiscal Period
P13W 
P13W 
 
 
Fair Value Measurements (Details) (USD $)
9 Months Ended
Nov. 2, 2013
Feb. 2, 2013
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 
Fair Value Inputs, Discount Rate
10.00% 
 
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 $)
0 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 3 Months Ended 9 Months Ended
May 16, 2013
May 12, 2012
Nov. 2, 2013
Oct. 27, 2012
Nov. 2, 2013
Oct. 27, 2012
Feb. 2, 2013
Feb. 1, 2014
Feb. 2, 2013
Operating and Broadcast Rights [Member]
Nov. 2, 2013
Operating and Broadcast Rights [Member]
Nov. 2, 2013
Second Renewal of Licensing Agreements [Member]
Feb. 2, 2013
Second Renewal of Licensing Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Finite-Lived Intangible Assets, Weighted-Average Useful Life
 
 
 
 
 
 
 
 
 
 
0 years 3 months 
 
Finite-Lived Intangible Assets, Gross
 
 
 
 
 
 
 
 
 
 
$ 6,830,000 
$ 6,830,000 
Finite-Lived Intangible Assets, Accumulated Amortization
 
 
 
 
 
 
 
 
 
 
(5,831,000)
(2,833,000)
Indefinite-Lived License Agreements
 
 
12,000,000 
 
12,000,000 
 
12,000,000 
 
12,000,000 
12,000,000 
 
 
Impairment of Intangible Assets (Excluding Goodwill)
 
 
 
 
 
 
 
 
11,100,000 
 
 
 
Payments to Acquire Intangible Assets
2,830,000 
4,000,000 
 
 
2,830,000 
4,000,000 
 
 
 
 
 
 
License Agreement Covenant, Minimum Unrestricted Cash Plus Available Credit
 
 
8,000,000 
 
 
 
 
 
 
 
 
 
Amortization of Intangible Assets
 
 
999,000 
1,000,000 
2,998,000 
 
3,048,000 
 
 
 
 
 
Future Amortization Expense, Remainder of Fiscal Year
 
 
 
 
 
 
 
$ 3,997,000 
 
 
 
 
Credit Agreements (Details) (USD $)
3 Months Ended 9 Months Ended 0 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 0 Months Ended
Nov. 2, 2013
Oct. 27, 2012
Nov. 2, 2013
Oct. 27, 2012
May 1, 2013
2012 Line Of Credit Agreement - PNC Bank, N.A. [Member]
Nov. 2, 2013
2012 Line Of Credit Agreement - PNC Bank, N.A. [Member]
Oct. 27, 2012
2012 Line Of Credit Agreement - PNC Bank, N.A. [Member]
Nov. 2, 2013
2012 Line Of Credit Agreement - PNC Bank, N.A. [Member]
Oct. 27, 2012
2012 Line Of Credit Agreement - PNC Bank, N.A. [Member]
Feb. 9, 2012
2012 Line Of Credit Agreement - PNC Bank, N.A. [Member]
Oct. 27, 2012
2010 Credit Agreement - Crystal Financial, LLC [Member]
Apr. 28, 2012
2010 Credit Agreement - Crystal Financial, LLC [Member]
May 1, 2013
LIBOR [Member]
2012 Line Of Credit Agreement - PNC Bank, N.A. [Member]
May 1, 2013
Year One [Member]
2012 Line Of Credit Agreement - PNC Bank, N.A. [Member]
May 1, 2013
Year Two [Member]
2012 Line Of Credit Agreement - PNC Bank, N.A. [Member]
May 1, 2013
Year Three [Member]
2012 Line Of Credit Agreement - PNC Bank, N.A. [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of Credit Facility, Maximum Borrowing Capacity
 
 
 
 
$ 50,000,000 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Maturity Date Range, End
 
 
 
 
5 years 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Basis Spread on Variable Rate
 
 
 
 
 
 
 
 
 
 
 
 
3.00% 
 
 
 
Line of Credit Facility, Capacity Available for Trade Purchases
 
 
 
 
 
 
 
 
 
6,000,000 
 
 
 
 
 
 
Line of Credit Facility, Remaining Borrowing Capacity
 
 
 
 
 
12,000,000 
 
12,000,000 
 
 
 
 
 
 
 
 
Debt Early Termination Fee
 
 
 
 
 
 
 
 
 
 
 
 
 
3.00% 
1.00% 
0.50% 
Interest Expense, Debt
 
 
 
 
 
355,000 
379,000 
1,081,000 
1,104,000 
 
 
 
 
 
 
 
Debt Instrument, Covenant Compliance, Minimum Unrestricted Cash Requirement
 
 
 
 
 
6,000,000 
 
6,000,000 
 
 
 
 
 
 
 
 
Debt Instrument, Covenant Compliance, Minimum Unrestricted Cash Threshold for Additional Covenants
 
 
 
 
 
12,000,000 
 
12,000,000 
 
 
 
 
 
 
 
 
Deferred Finance Costs, Noncurrent, Net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gains (Losses) on Extinguishment of Debt
(500,000)
 
 
 
 
 
 
 
500,000 
 
 
 
 
Write off of Deferred Debt Issuance Cost
 
 
 
 
 
 
 
 
 
 
$ 2,300,000 
 
 
 
 
 
Stock Grant Volatility (Details)
9 Months Ended
Nov. 2, 2013
Oct. 27, 2012
Share-based Compensation [Abstract]
 
 
Expected Volatility Rate, Minimum
100.00% 
97.00% 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Maximum
100.00% 
98.00% 
Risk Free Interest Rate, Minimum
1.10% 
1.00% 
Risk Free Interest Rate, Maximum
1.80% 
1.00% 
Expected Term
6 years 
6 years 
Grant Term Limit
10 years 
 
Award Vesting Period
3 years 
 
Exercise Term Limit
10 years 
 
Stock Option Activity (Details) (USD $)
9 Months Ended 0 Months Ended 9 Months Ended
Nov. 2, 2013
Oct. 27, 2012
Nov. 25, 2013
2011 Omnibus Incentive Plan [Member]
Oct. 3, 2012
2011 Omnibus Incentive Plan [Member]
Nov. 2, 2013
2011 Omnibus Incentive Plan [Member]
Nov. 2, 2013
2004 Omnibus Incentive Stock Plan [Member]
Nov. 2, 2013
2001 Omnibus Stock Plan [Member]
Nov. 2, 2013
Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
 
 
 
 
 
 
Balance outstanding at beginning of period
 
 
 
 
2,500,000 
2,098,000 
1,169,000 
525,000 
Granted
 
 
471,000 
 
120,000 
50,000 
Exercised
 
 
 
 
(8,000)
(10,000)
(10,000)
(25,000)
Forfeited or canceled
 
 
 
 
(2,000)
(8,000)
Balance outstanding at end of period
 
 
 
 
2,612,000 
2,136,000 
1,151,000 
500,000 
Options exercisable
 
 
 
 
1,171,000 
2,069,000 
1,151,000 
397,000 
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
 
 
 
 
$ 3.73 
$ 6.23 
$ 5.88 
$ 4.12 
Granted, weighted average grant date fair value
$ 2.83 
$ 0.98 
$ 5.57 
$ 4.00 
$ 3.61 
$ 3.73 
$ 0.00 
$ 0.00 
Exercised, weighted average exercise price
 
 
 
 
$ 1.97 
$ 2.36 
$ 2.36 
$ 1.69 
Forfeited or canceled, weighted average grant date fair value
 
 
 
 
$ 0.00 
$ 10.41 
$ 2.95 
$ 0.00 
Balance outstanding at end of period, weighted average exercise price
 
 
 
 
$ 3.75 
$ 6.19 
$ 5.93 
$ 4.24 
Options exercisable, weighted average exercise price
 
 
 
 
$ 3.85 
$ 6.14 
$ 5.93 
$ 4.11 
Outstanding Stock Options (Details) (USD $)
9 Months Ended
Nov. 2, 2013
Feb. 2, 2013
2011 Omnibus Incentive Plan [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Options outstanding
2,612,000 
2,500,000 
Options outstanding, weighted average exercise price
$ 3.75 
$ 3.73 
Options outstanding, weighted average remaining contractual term
9 years 
 
Options outstanding, aggregate intrinsic value
$ 3,807,000 
 
Vested or expected to vest, outstanding
2,574,000 
 
Vested or expected to vest, outstanding, weighted average exercise price
$ 3.77 
 
Vested or expected to vest, outstanding, weighted average remaining contractual term
9 years 
 
Vested or expected to vest, outstanding, aggregate intrinsic value
3,714,000 
 
2004 Omnibus Incentive Stock Plan [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Options outstanding
2,136,000 
2,098,000 
Options outstanding, weighted average exercise price
$ 6.19 
$ 6.23 
Options outstanding, weighted average remaining contractual term
5 years 1 month 6 days 
 
Options outstanding, aggregate intrinsic value
2,047,000 
 
Vested or expected to vest, outstanding
2,129,000 
 
Vested or expected to vest, outstanding, weighted average exercise price
$ 6.18 
 
Vested or expected to vest, outstanding, weighted average remaining contractual term
5 years 1 month 6 days 
 
Vested or expected to vest, outstanding, aggregate intrinsic value
2,047,000 
 
2001 Omnibus Stock Plan [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Options outstanding
1,151,000 
1,169,000 
Options outstanding, weighted average exercise price
$ 5.93 
$ 5.88 
Options outstanding, weighted average remaining contractual term
4 years 8 months 12 days 
 
Options outstanding, aggregate intrinsic value
1,142,000 
 
Vested or expected to vest, outstanding
1,148,000 
 
Vested or expected to vest, outstanding, weighted average exercise price
$ 5.92 
 
Vested or expected to vest, outstanding, weighted average remaining contractual term
4 years 8 months 12 days 
 
Vested or expected to vest, outstanding, aggregate intrinsic value
1,142,000 
 
Stock Option [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Options outstanding
500,000 
525,000 
Options outstanding, weighted average exercise price
$ 4.24 
$ 4.12 
Options outstanding, weighted average remaining contractual term
6 years 8 months 12 days 
 
Options outstanding, aggregate intrinsic value
597,000 
 
Vested or expected to vest, outstanding
490,000 
 
Vested or expected to vest, outstanding, weighted average exercise price
$ 4.23 
 
Vested or expected to vest, outstanding, weighted average remaining contractual term
6 years 8 months 12 days 
 
Vested or expected to vest, outstanding, aggregate intrinsic value
$ 588,000 
 
Narrative (Details) (USD $)
3 Months Ended 9 Months Ended 0 Months Ended 9 Months Ended 0 Months Ended 9 Months Ended 0 Months Ended
Nov. 2, 2013
Oct. 27, 2012
Nov. 2, 2013
Oct. 27, 2012
Nov. 2, 2013
Minimum [Member]
Nov. 25, 2013
2011 Omnibus Incentive Plan [Member]
Oct. 3, 2012
2011 Omnibus Incentive Plan [Member]
Nov. 2, 2013
2011 Omnibus Incentive Plan [Member]
Oct. 3, 2012
Market Based Stock Options Awards [Member]
Nov. 2, 2013
2004 Omnibus Incentive Stock Plan [Member]
Jun. 19, 2013
Restricted Stock [Member]
Nov. 2, 2013
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Allocated Share-based Compensation Expense
$ 556,000 
$ 406,000 
$ 1,804,000 
$ 1,072,000 
 
 
 
 
 
 
 
 
Document Period End Date
 
 
Nov. 02, 2013 
 
 
 
 
 
 
 
 
 
Number of Omnibus Stock Plans
 
 
 
 
 
 
 
 
 
 
Number of shares authorized
 
 
 
 
 
 
 
6,000,000 
 
4,000,000 
 
 
Purchase price of common stock, percent
 
 
 
 
100.00% 
 
 
 
 
 
 
 
Award Vesting Period
 
 
3 years 
 
3 years 
 
 
 
 
 
12 months 
 
Granted, weighted average grant date fair value
 
 
$ 2.83 
$ 0.98 
 
$ 5.57 
$ 4.00 
$ 3.61 
 
$ 3.73 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Total Intrinsic Value
 
 
148,000 
91,000 
 
 
 
 
 
 
 
 
Unrecognized compensation cost related to non-vested awards
1,439,000 
 
1,439,000 
 
 
 
 
 
 
 
 
289,000 
Period for recognition of unrecognized compensation cost
 
 
0 years 8 months 12 days 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement, Options, Grants in Period, Gross
 
 
 
 
 
471,000 
 
120,000 
2,125,000 
50,000 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grant Date Market Value
 
 
 
 
 
$ 2,080,000 
 
 
 
 
 
 
Market Based Stock Option Awards (Details) (USD $)
3 Months Ended 9 Months Ended 0 Months Ended 9 Months Ended 0 Months Ended 0 Months Ended 3 Months Ended 9 Months Ended 0 Months Ended
Nov. 2, 2013
Oct. 27, 2012
Nov. 2, 2013
Oct. 27, 2012
Nov. 25, 2013
2011 Omnibus Incentive Plan [Member]
Oct. 3, 2012
2011 Omnibus Incentive Plan [Member]
Nov. 2, 2013
2011 Omnibus Incentive Plan [Member]
Feb. 2, 2013
2011 Omnibus Incentive Plan [Member]
Oct. 3, 2012
Market Based Stock Options Awards [Member]
tranche
Nov. 2, 2013
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]
Nov. 2, 2013
Restricted Stock [Member]
Oct. 27, 2012
Restricted Stock [Member]
Nov. 2, 2013
Restricted Stock [Member]
Oct. 27, 2012
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
 
 
$ 2,368,000 
$ 2,403,000 
 
 
 
 
 
 
 
 
 
 
$ 162,000 
$ 319,000 
$ 564,000 
$ 1,331,000 
 
 
 
Allocated Share-based Compensation Expense
556,000 
406,000 
1,804,000 
1,072,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Granted
 
 
 
 
471,000 
 
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
 
 
 
 
 
 
2,612,000 
2,500,000 
 
2,125,000 
 
 
 
 
 
 
 
 
 
 
 
Granted, weighted average grant date fair value
 
 
$ 2.83 
$ 0.98 
$ 5.57 
$ 4.00 
$ 3.61 
 
 
 
$ 0.93 
$ 0.95 
$ 0.95 
 
 
 
 
 
$ 1.48 
$ 1.39 
$ 1.31 
Number of tranches
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of consecutive trading days
 
 
 
 
 
20 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expected Term
 
 
6 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 9 Months Ended
Nov. 25, 2013
Jun. 19, 2013
Oct. 3, 2012
Jun. 14, 2012
Nov. 30, 2011
Nov. 2, 2013
Oct. 27, 2012
Nov. 2, 2013
Oct. 27, 2012
Feb. 2, 2013
Jun. 13, 2012
Nov. 18, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
 
 
 
 
 
 
 
$ 2,368,000 
$ 2,403,000 
 
 
 
Document Period End Date
 
 
 
 
 
 
 
Nov. 02, 2013 
 
 
 
 
Unrecognized compensation cost related to non-vested awards
 
 
 
 
 
1,439,000 
 
1,439,000 
 
 
 
 
Award Vesting Period
 
 
 
 
 
 
 
3 years 
 
 
 
 
Restricted Stock [Member]
 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
 
 
 
 
 
162,000 
319,000 
564,000 
1,331,000 
 
 
 
Unrecognized compensation cost related to non-vested awards
 
 
 
 
 
289,000 
 
289,000 
 
 
 
 
Weighted average remaining contractual term
 
 
 
 
 
 
 
0 years 5 months 19 days 
 
 
 
 
Restricted stock vested in period, total fair value
 
 
 
 
 
 
 
2,036,000 
598,000 
 
 
 
Granted
436,000 
44,000 
300,000 
50,000 
453,000 
 
 
44,000 
 
 
 
 
Award Vesting Period
 
12 months 
 
 
 
 
 
 
 
 
 
 
Total grant date fair value
2,426,000 
228,000 
425,000 
 
 
 
 
 
 
 
85,000 
816,000 
Number of non-management board members granted shares
 
$ 6 
 
 
 
 
 
 
 
 
$ 5 
 
Non-vested shares outstanding, end of period
 
 
150,000 
 
 
356,000 
 
356,000 
 
772,000 
 
 
Restricted Stock Non-Vested Restricted Stock Table (Details) (USD $)
0 Months Ended 3 Months Ended 9 Months Ended
Nov. 25, 2013
Jun. 19, 2013
Oct. 3, 2012
Jun. 14, 2012
Nov. 30, 2011
Nov. 2, 2013
Oct. 27, 2012
Nov. 2, 2013
Oct. 27, 2012
Jun. 13, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
Share-based compensation
 
 
 
 
 
 
 
$ 2,368,000 
$ 2,403,000 
 
Restricted Stock [Member]
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
Share-based compensation
 
 
 
 
 
162,000 
319,000 
564,000 
1,331,000 
 
Number of non-management board members granted shares
 
$ 6 
 
 
 
 
 
 
 
$ 5