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HSN, Inc. Reports Second Quarter 2013 Results

Highlights for the Second Quarter 2013:

• Diluted EPS From Continuing Operations Increased 30% to $0.79 Per Share
• Net Sales Increased 6% With Digital Sales Up 10%
• Adjusted EBITDA Increased 7%

ST. PETERSBURG, Fla.,听Aug. 1, 2013 (GLOBE NEWSWIRE) -- HSN, Inc. (Nasdaq:HSNI) reported results for the second quarter ended June 30, 2013 for HSN, Inc. ("HSNi" or "Company") and its two operating segments, HSN and Cornerstone.

Second Quarter 2013 Results vs Second Quarter 2012 Results

• HSNi's net sales grew 6% over the prior year to $812.6 million.听HSN's net sales increased 5% to $526.2 million, including 10% growth in digital sales.听Cornerstone's net sales increased 8% to $286.4 million, including 10% growth in digital sales.
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• HSNi's Adjusted EBITDA increased 7% to $85.2 million.听These results were driven by a 6% increase in net sales offset by a 20 basis point decrease in gross margin and a 5% increase in operating expenses (excluding non-cash charges).听Operating income increased 9% to $71.3 million.听
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• Diluted EPS from continuing operations increased 30% to $0.79 compared to $0.61 in the prior year.
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• During the second quarter, HSNi repurchased approximately 0.9 million shares of its common stock at a cost of $49.8 million, or an average cost of $52.95 per share.听From inception of the share repurchase program in September 2011 through July 31, 2013, HSNi repurchased a total of 8.4 million shares at an aggregate cost of $365.5 million, representing an average cost of $43.31 per share.

"Our strong financial performance during the second quarter is a result of the uniqueness of our customer experiences, the power of our digital platforms and the quality of our brands and products," said Mindy Grossman, CEO of HSN, Inc. "Sales for the quarter were up 6%, digital sales increased 10% and EPS grew 30%. In addition, we continued returning value to shareholders through our share repurchase and cash dividend programs."

HSN Segment Results for the Second Quarter 2013

HSN's net sales were $526.2 million, an increase of 5% from the prior year.听Digital sales grew 10% with penetration increasing 160 basis points to 35.4%.听 Sales grew in home design, household, electronics and apparel & accessories, offset by lower sales in jewelry and culinary.听Net sales were favorably affected by lower return rates.听The average price point decreased 4% while units shipped increased 7% primarily due to an increase in clearance activity.听听听

Gross profit increased 3% to $187.5 million.听Gross margin decreased 60 basis points to 35.6% primarily due to an increase in shipping and handling promotions.听

Operating expenses (excluding non-cash charges) increased 1% to $130.3 million.听Adjusted EBITDA increased 8% to $57.1 million compared to $52.7 million in the prior year.听Operating income increased 8% to $47.0 million compared to $43.3 million in the prior year.

Cornerstone Segment Results for the Second Quarter 2013

Cornerstone's net sales were $286.4 million, an increase of 8% from the prior year.听The increase in net sales was driven by sales growth in the home brands. Digital sales grew 10% with penetration increasing 120 basis points to 62.9%.听

Gross profit increased 9% to $121.3 million.听Gross margin increased 30 basis points to 42.4% primarily due to higher product margins.听

Operating expenses (excluding non-cash charges) increased 10% to $93.3 million largely due to an increase in selling and marketing costs, particularly catalog production and distribution costs, and reorganization costs.听Adjusted EBITDA increased 4% to $28.0 million.听Operating income, which was positively impacted by a decrease in stock-based compensation expense, increased 10% to $24.3 million.

Liquidity and Capital Resources

As of June 30, 2013, HSNi had cash and cash equivalents of $92.0 million compared to $222.1 million at December 31, 2012 and $181.3 million at June 30, 2012. 听Net cash provided by operating activities in the six months ended June 30, 2013 was $31.4 million compared to cash used of $3.0 million in the prior year, an improvement of $34.4 million, primarily due to improved operating performance and changes in working capital.听

Effective August 1, 2013, HSNi's board of directors approved a quarterly cash dividend of $0.18 per share payable September 18, 2013 to shareholders of record as of September 4, 2013.听

During the second quarter, HSNi repurchased approximately 0.9 million shares of its common stock at a cost of $49.8 million, or an average cost of $52.95 per share.听From inception of the share repurchase program in September 2011 through July 31, 2013, HSNi repurchased a total of 8.4 million shares at an aggregate cost of $365.5 million, representing an average cost of $43.31 per share. 听HSNi is authorized to purchase up to 10 million shares under the repurchase program authorized in September 2011.

OTHER INFORMATION

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

This press release may contain forward-looking statements relating to the future performance of HSNi, its operating segments and its consolidated subsidiaries that are based on current expectations, forecasts and assumptions. These statements relate to expectations concerning matters that are not historical fact.听These forward-looking statements are based largely on information currently available to our management and on our current expectations, assumptions, plans, estimates, judgments and projections about our business and our industry, and such statements involve inherent risks and uncertainties.听Although we believe our expectations are based on reasonable estimates and assumptions, they are not guarantees of performance and there are a number of known and unknown risks, uncertainties, contingencies and other factors (many of which are outside our control) that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.听Factors that could cause or contribute to such differences include but are not limited to:听the influence of the macroeconomic environment and its impact on consumer confidence and spending levels; changes in our relationships with pay television operators, vendors, manufacturers and other third parties; changes in shipping and handling costs, particularly if we are unable to offset them; any technological or regulatory developments that could negatively impact the way we do business, including developments requiring us to collect and remit state and local sales and use taxes; risks associated with possible systems failures and/or security breaches, including any security breach that results in the theft, transfer or unauthorized disclosure of customer, employee or company information, or the failure to comply with various laws applicable to HSNi in the event of such a breach; HSNi's business prospects and strategy, including whether HSNi's initiatives and investments will be effective; our ability to offer new or innovative products and services through various platforms in a cost effective manner and consumer acceptance of these products and services; and the loss of any key member of our senior management team. 听More information about potential factors that could affect HSNi's business and financial results is included in our filings with the U.S. Securities and Exchange Commission.听 Other unknown or unpredictable factors that could also adversely affect HSNi's business, financial condition and results of operations may arise from time to time. 听In light of these risks and uncertainties, any forward-looking statements may not prove to be accurate.听All written or oral forward-looking statements that are made or attributable to us are expressly qualified in their entirety by this cautionary notice.听Accordingly, you should not place undue reliance on any forward-looking statements, which only reflect the views of HSNi management as of the date of this press release.听Such statements speak only to the date such statements are made and HSNi does not undertake to update any forward-looking statements.听Historical results should not be considered as an indication of future performance.

Conference Call

Mindy Grossman, Chief Executive Officer, and Judy Schmeling, Chief Operating Officer and Chief Financial Officer, will hold a conference call on Thursday, August 1, 2013 at 9:00 a.m., Eastern Time, to discuss these results.听Those interested in participating in the conference call should dial 877-307-0246 or 224-357-2394 at least five minutes prior to the call.听There will also be a simultaneous audio webcast available via HSNi's website at .

A replay of the conference call can be accessed until Thursday, August 15, 2013 by dialing 800-585-8367 or 404-537-3406, plus the pass code 13814363 and will also be hosted on the company's website for a limited time.听

jvid视频 HSN, Inc.

HSN, Inc. (Nasdaq:HSNI) is a $3.3 billion interactive multichannel retailer with strong direct-to-consumer expertise among its two operating segments, HSN and Cornerstone. HSNi offers innovative, differentiated retail experiences on TV, online, via mobile devices, in catalogs, and in brick and mortar stores. HSN, a leading interactive multichannel retailer which offers a curated assortment of exclusive products combined with top brand names, now reaches 95 million homes (24 hours a day, seven days a week, live 364 days a year). HSN.com offers a differentiated digital experience by leveraging content, community and commerce. In addition to its existing media platforms, HSN is the industry leader in transactional innovation, including services such as HSN Shop by Remote^庐, the only service of its kind in the U.S., the HSN Shopping App for mobile handheld devices and HSN on Demand^庐. Cornerstone comprises leading home and apparel lifestyle brands including Ballard Designs^庐, Chasing Fireflies^庐, Frontgate^庐, Garnet Hill^庐, Grandin Road^庐, Improvements^庐 and TravelSmith^庐. Cornerstone distributes more than 300 million catalogs annually, operates eight separate digital sales sites and operates 11 retail and outlet stores.

HSN, INC.'S PRINCIPLES OF FINANCIAL REPORTING

HSNi reports Adjusted EBITDA, Adjusted Net Income and Adjusted EPS, all of which are supplemental measures to GAAP. These measures are among the primary metrics by which we evaluate the performance of our businesses, on which our internal budgets are based and by which management is compensated. We believe that investors should have access to, and we are obligated to provide, the same set of tools that we use in analyzing our results. 听These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. HSNi endeavors to compensate for the limitations of the non-GAAP measures presented by providing the comparable GAAP measures with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measures. We encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures contained in this release and which we discuss below.

Definitions of Non-GAAP Measures

Adjusted EBITDA is defined as operating income excluding, if applicable: (1)听non-cash charges including: (a) stock-based compensation expense, (b)听amortization of intangibles, (c)听depreciation and gains and losses on asset dispositions, and (d)听goodwill, long-lived asset and intangible asset impairments; (2)听pro forma adjustments for significant acquisitions; and (3)听other significant items.听Significant items, while periodically affecting our results, may vary significantly from period to period and have a disproportionate effect in a given period, thereby affecting the comparability of results.听Adjusted EBITDA is not a measure determined in accordance with GAAP, and should not be considered a substitute for operating income, net income or any other measure determined in accordance with GAAP. Adjusted EBITDA is used as a measurement of operating efficiency and overall financial performance and HSNi believes it to be a helpful measure for those evaluating companies in the retail and media industries.听Adjusted EBITDA should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Adjusted EBITDA has certain limitations in that it does not take into account the impact to HSNi's statement of operations of certain expenses, gains and losses that are excluded from the company's definition of Adjusted EBITDA.

Adjusted Net Income is defined as net income available to common shareholders excluding, net of tax effects, if applicable: (1) goodwill, long-lived asset and intangible asset impairments, (2)听pro forma adjustments for significant acquisitions, (3) discontinued operations and (4)听other significant items.听Significant items, while periodically affecting our results, may vary significantly from period to period and have a disproportionate effect in a given period, thereby affecting the comparability of results.听 We believe Adjusted Net Income is useful to investors because it represents HSNi's consolidated results taking into account charges which are not allocated to the operating businesses such as interest expense and taxes, but excluding the effects of goodwill and asset impairments, significant acquisition-related adjustments, discontinued operations and certain other significant items.

Adjusted EPS is defined as Adjusted Net Income divided by diluted weighted average shares outstanding for Adjusted EPS purposes.听 We believe Adjusted EPS is useful to investors because it represents, on a per share basis, HSNi's consolidated results, taking into account charges which are not allocated to the operating businesses such as interest expense and taxes, but excluding the effects of goodwill and asset impairments, significant acquisition-related adjustments, discontinued operations and certain other significant items.听 Adjusted Net Income and Adjusted EPS have certain limitations in that they do not take into account the impact of goodwill and asset impairments, significant acquisition-related adjustments, discontinued operations and certain other significant items.听Therefore, we think it is important to evaluate these measures along with our consolidated statement of operations.

CONTACT: Felise Glantz Kissell (Analysts/Investors)
         727-872-7529
         felise.kissell@hsn.net

         Gigi Ganatra Duff (Media)
         727-872-4808
         gigi.ganatraduff@hsn.net

Released August 1, 2013