2. 2
This document may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements
may be identified by words such as anticipate, believe, estimate, expect, intend, predict, hope, should, plan, will or similar expressions. Any statements
contained herein that are not statements of historical fact may be deemed forward-looking statements. These statements are based on management's current
expectations and accordingly are 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 preferences, spending and debt levels; the general economic and credit
environment; interest rates; seasonal variations in consumer purchasing activities; the ability to achieve the most effective product category mixes to
maximize sales and margin objectives; competitive pressures on sales; pricing and gross sales margins; the level of cable and satellite distribution for our
programming and the associated fees; our ability to establish and maintain acceptable commercial terms with third-party vendors and other third parties with
whom we have contractual relationships, and to successfully manage key vendor relationships and develop key partnerships and proprietary brands; our
ability to manage our operating expenses successfully and our working capital levels; our ability to remain compliant with our credit facilities covenants; our
ability to successfully transition our brand name and corporate name; customer acceptance of our new branding strategy and our repositioning as a digital
commerce company; the market demand for television station sales; changes to our management and information systems infrastructure; challenges to our
data and information security; changes in governmental or regulatory requirements; litigation or governmental proceedings affecting our operations;
significant public events that are difficult to predict, or other significant television-covering events causing an interruption of television coverage or that directly
compete with the viewership of our programming; our ability to obtain and retain key executives and employees; our ability to attract new customers and
retain existing customers; changes in shipping costs; our ability to offer new or innovative products and customer acceptance of the same; changes in
customers viewing habits of television programming; and the risks identified under “Risk Factors” in our recently filed Form 10-K and any additional risk
factors identified in our periodic reports since the date of such Form 10-K. More detailed information about those factors is set forth in our filings with the
Securities and Exchange Commission, including our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. You are
cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this announcement. We are under no obligation (and
expressly disclaim any such obligation) to update or alter our forward-looking statements whether as a result of new information, future events or otherwise.
Adjusted EBITDA
EBITDA represents net income (loss) for the respective periods excluding depreciation and amortization expense, interest income (expense) and income
taxes. We define Adjusted EBITDA as EBITDA excluding non-operating gains (losses); activist shareholder response costs; executive and management
transition costs; distribution center consolidation and technology upgrade costs; Shareholder Rights Plan costs and non-cash share-based compensation
expense. We have included the term “Adjusted EBITDA” in our EBITDA reconciliation in order to adequately assess the operating performance of our
television and online businesses and in order to maintain comparability to our analyst's coverage and financial guidance, when given. Management believes
that the term Adjusted EBITDA allows investors to make a more meaningful comparison between our business operating results over different periods of time
with those of other similar companies. In addition, management uses Adjusted EBITDA as a metric to evaluate operating performance under our
management and executive incentive compensation programs. Adjusted EBITDA should not be construed as an alternative to operating income (loss), net
income (loss) or to cash flows from operating activities as determined in accordance with generally accepted accounting principles and should not be
construed as a measure of liquidity. Adjusted EBITDA may not be comparable to similarly entitled measures reported by other companies. We have included
a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, on Slide 12 of this presentation.
Data in this presentation may be unaudited.
Percentage changes represent Q2 2016 as compared to Q2 2015.
Safe Harbor Statement
3. Company: Evine
Headquarters: Eden Prairie, MN
Additional Locations: Bowling Green, KY
Employees: 1250
Exchange / Ticker: NASDAQ.GS / EVLV
Market Cap.: $100 million
2015 Revenue: $693.3 million
2015 Adj. EBITDA: $9.2 million
Digital commerce company with long-
term distribution contracts in 88 million
cable and satellite television homes
Merges entertainment with shopping
via TV, online, and mobile devices;
creating an interactive, and community-
driven environment
New leadership team with substantial
retail, media & entertainment, and e-
Commerce experience
Introduced refocused strategic plan
designed to build shareholder value
3
Company Overview
4. Bob Rosenblatt
Chief Executive
Officer
40 years experience:
• Tommy Hilfiger
• HSN
• Bloomingdale’s
• Boards
(Ideeli.com,
RetailNext,
Newgistics)
Tim Peterman
CFO & Head of
Operations, CPA
25 years experience:
• J. Peterman
• E.W. Scripps
• IAC
• Sinclair Broadcast
• Tribune Company
• KPMG
Nicole Ostoya
Chief Marketing
Officer & Head of
Broadcasting
20 years experience:
• Co-Founder of The
Cocktail Lab,
Boldface, Gold
Grenade
• Studio USA
• LVMH Brands
• Nordstrom
Damon Schramm
SVP General Counsel
& Corporate
Secretary
25 years experience:
• Lakes
Entertainment, Inc.
• Gray Plant Mooty
• Boards (Make-A-
Wish Foundation,
Animal Humane
Society)
Michael Henry
Chief Merchandising
Officer
35 years experience:
• Eastern Home
Shopping
• QVC Italia
• HSN
• Lancôme, L'Oréal
• YSL Beauty
Sunil Verma
Chief Digital Officer
20 years experience:
• Macy’s
• The Children’s
Place
• Ideeli.com
• Vineyard Vines
4
Evine Leadership Team
5. Evine is part of a 3 member oligopoly generating $9.5B in annual U.S. revenues*
Strategic focus on contribution margin and profitability beginning to yield results
Emerging Brands gaining traction and acceptance from market place
Established Brands continuing to provide stable cash flows and financial impact
Improved Distribution through Bowling Green Facility with new WMS system
Utilizing new technologies in mobile and logistics to drive better connectivity between
internet, TV, and mobile platforms
Future Expansion of TV Properties to improve customer penetration
New Management Team Additions – Chief Executive, Chief Marketing, Chief
Merchandising, and Chief Digital Officers
*$9.5 billion in US revenue for QVCUS, HSN (excluding Cornerstone), and Evine.
5
Investment Highlights
6. *Includes QVC domestic sales, HSN (excl. Cornerstone) and Evine
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
$9.0
$10.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Sales(Billions)
10-Year Industry CAGR = 3%
10-Year GDP CAGR = 1.4%
6
Industry Sales Growth
7. Driving Long Term
Sustainable Growth
and Profitability
Strengthen Internal Culture
Drive Innovation &
Efficiency
Grow Customer Base
Improve Quality of
Merchandise
Drive Profitability
7
2016 Strategic Plan –
Focused on Profitable Growth
11. During fiscal 2014, Evine began an initiative to consolidate its
distribution facility and to upgrade technology in an effort to support
increased levels of shipments and units
New sortation and warehouse management systems were phased
into production during the first half of 2016
The strategic initiative included adding:
• ~350,000 (for a total of 600,000) sq. ft. to its existing distribution
facility, which was completed in fiscal 2015
• New high-speed parcel shipping and item sortation system
coupled with a new warehouse management system
Fulfillment Center: Bowling Green, KY
11
Improving Distribution
13. 13
Well-Positioned for Dynamic Retail Landscape
The Merchant’s Ideal Relationship is “Directly With The Customer”
Merchant
Traditional
Media is
Declining
Brick &
Mortar
is
Declining
Consumer
“Direct to
Consumer”
is
Growing
- Amazon
- Jet.com
- QVC
- HSN
- William Sonoma
- Evine
- Dell
- Expedia
- Wayfair
Traditional
Media
Traditional
Retail
14. 1950s 1960 1970 1980 1990 2000 2010 2020s
TV Stations Dominated Video Distribution
MSO/Cable Dominated Video Distribution
ISPs, On-Demand and OTT Distribution Will Dominate Video Distribution In The Future
“We Will Build Our Distribution Footprint On The Best Technology of The Day”
14
Content Distribution Opportunities
15. “It is not just how many homes – It is also how many channels in each home.”
Invest In Higher Quality HD Distribution Rollout
Key 2015 Metrics QVC* HSN* Evine
Total U.S. Net Revenue $6.257 million $2.542 million $0.693 million
Number of TV households1 107 million 94 million 88 million
Revenue per Home $58/HH $27/HH $8/HH
Cable Fees and
Rate Structure*
5% of TV rev
(Est. ~ $2.50/HH)
Blended
(Est.~ $2.30/HH)
Fixed fee
(Avg. $1.15/HH)
HD Presence2 56 million 55 million 15 million
Second Network
QVC Plus
54 million
HSN 2
50 million
Evine Too
2.2 million
Total Estimated Channel
Count3 217 million 200 million 105 million
Cable Channel Positioning4 87% 83% 32%
*Updated as of January 2016
1 Home counts and cable fees are from annual report/investor decks/analyst reports/assumptions
2 HD presence includes cable, satellite and telecom homes per investor presentations or SNL Kagan reporting
3 Estimated channel count is total homes, or primary channel feeds, plus HD and secondary channels
4 Percentage of cable TV HHs on channels 2 to 50 per SNL Kagan reporting
15
Competitive Landscape
18. Liquidity, Debt & NOLs
I. Liquidity:
As of July 30, 2016 (000’s)
PNC 5.0% Revolving Line of Credit Current Capacity: $72,000 *
($90M Total Revolver Capacity – subject to Borrowing Base)
Current Borrowings (60,900)
Credit Line Availability (at 7/30/16) 11,100
Cash, including restricted cash 40,100
Total Potential Liquidity 51,200
Less: PNC Required Minimum Liquidity (10,000)
Net Available Liquidity $41,200
II. Total Debt Outstanding (7/30/16):
PNC 5.0% Revolver $59,900
PNC 6.5% Term Loan 11,709
GACP 12% Term Loan 16,717
Total Debt $88,326
*Does not include an additional $25M accordion in the current PNC Credit Facility,
available only at PNC’s discretion.
Net Operating Losses – NOLs
NOL Balances:
$312M Federal
$200M State
18
Financial Stats
