EDEN PRAIRIE, Minn., Jan. 14 /PRNewswire-FirstCall/ -- ShopNBC today announced organizational changes and cost-saving measures as a result of a business review conducted by ShopNBC management with the assistance of management consulting firm Alvarez & Marsal. "I am very pleased with the speed and comprehensive nature of this business review," said John Buck, ShopNBC Interim CEO. "These actions have been reviewed and endorsed by our senior management team and our Board of Directors. The substantial cost reductions and margin improvements identified in this review position ShopNBC for significant financial improvement in 2008."
As a result of the business review, the company's organizational structure was simplified and streamlined to bring greater focus on profitability and accountability in key business units. As part of the restructuring, ShopNBC reduced its salaried workforce by 10% predominantly at its Eden Prairie, MN headquarters. These reductions were announced today and are effective immediately. The company had previously decreased its salaried workforce by 12% in May 2007.
"This restructuring was a difficult yet necessary process," said Buck. "Impacted team members were offered competitive severance and outplacement services."
Another conclusion of the business review was to reevaluate partnerships with product vendors and major suppliers with a focus on increasing gross margins and reducing company operating expenses, respectively. "We have a great group of vendors," said Buck. "In 2008 we will be working with these key vendors to increase our margins, and to identify new and unique products that build strong relationships with our customers and maximize our gross margin dollars per hour."
"While this has been a challenging business review, we emerge very excited about the future prospects for ShopNBC," said Buck. "We have a unique set of assets that will support the long-term growth of our business and, with the cost saving measures initiated today and last May, we are prepared to deliver sustained profitability in 2008."
Fiscal 2007 Financial Results
The company is reaffirming its annual guidance of full year sales growth in the low single digits with adjusted EBITDA of $5 to $10 million for fiscal 2007. The company plans to announce its fourth quarter and fiscal 2007 full-year results in late March 2008, following the end of its fiscal year on February 2, 2008, and to hold an earnings call following the announcement. A discussion of the financial outlook for fiscal 2008 and more detailed information on the one-time costs and estimated financial benefits from the actions announced today will be provided at that time. Complete details of the earnings call will be released in early March 2008.
About ShopNBC
ShopNBC is one of the top three television shopping networks in the United States. For more information, please visit http://www.shopnbc.com/.
Forward-Looking Information
This release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are accordingly subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained herein due to various important factors, including (but not limited to): consumer spending and debt levels; interest rates; competitive pressures on sales, pricing and gross profit margins; the level of cable distribution for the Company's programming and the fees associated therewith; the success of the Company's e-commerce and rebranding initiatives; the performance of its equity investments; the success of its strategic alliances and relationships; the ability of the Company to manage its operating expenses successfully; risks associated with acquisitions; changes in governmental or regulatory requirements; litigation or governmental proceedings affecting the Company's operations; and the ability of the Company to obtain and retain key executives and employees. More detailed information about those factors is set forth in the Company's filings with the Securities and Exchange Commission, including the Company's annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. The Company is under no obligation (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
