Valley Media Announces Seasonal Replenishment Agreement with Wherehouse Entertainment

Business Wire, Nov 2, 1999

WOODLAND, Calif.--(BUSINESS WIRE)--Nov. 2, 1999--

Valley Media, Inc. (Nasdaq: VMIX), a recognized leader in the full-line distribution of music and video entertainment products, today announced it has signed an agreement with national retailer Wherehouse Entertainment to fulfill a wide range of music titles exclusively for the chain through this holiday season. The agreement took effect on October 5th, 1999 and is valid for four months.

"We pride ourselves on our product replenishment capabilities," said Lee Negip, Valley's Director of National Sales. "We've built a substantial distribution network with the systems and scalability necessary to support this type of arrangement. Our goal with this kind of chain agreement is simple - offer fast, efficient inventory replenishment, assuring stores are in stock with the product they need when they need it, maximizing turns and profits. We are very excited about working with Wherehouse Entertainment in this role," added Negip.

Under the agreement, Valley will supply 547 Wherehouse Music stores with all music product excluding Wherehouse's top selling 7,000 items. Valley will leverage its catalog of over 280,000 items to provide this service.

"We've worked with Valley before in this capacity and have been pleased with their service and results," said Kevin Milligan, Wherehouse's Vice President of Music Merchandising. "Sourcing our replenishment needs with Valley during this busy season helps keep our purchasing and logistical efforts very focused. We're pleased to be working with Valley in this capacity again," added Milligan.

About Valley Media:

Valley Media (Nasdaq: VMIX) is a recognized leader in Internet fulfillment, the full-line distribution of music, video, DVD product and independent distribution, publications and proprietary database products. Valley Media operates facilities in seven states with primary distribution facilities in Louisville, KY, and Woodland, CA, where its corporate headquarters are located. Additional information regarding Valley Media is available at www.valley-media.com.

About Wherehouse Entertainment:

Wherehouse Entertainment is the third-largest music retailer in the United States with annual revenues over $800 million and close to 30 years experience. The Torrance, California based retailer owns and operates approximately 600 stores in 33 states.

This press release may contain forward-looking statements made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are identified by words such as "will," "expects," "anticipates," "plans," or "intends" and by other descriptions of future circumstances or conditions. Actual results may differ materially from those projected in these forward-looking statements. Factors that could affect Valley Media's actual results include, without limitation, risks and uncertainties related to the following factors: intense competition, customers' ability or preference to buy product direct, facilities and systems integration upgrades, new electronic delivery technologies and copyright or royalty disputes. More information about these and other factors that could negatively affect Valley Media's financial performance and the value of its common stock is contained in Valley Media's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K. Readers of the 10-K should pay particular attention to the sections entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Factors Affecting Operating Results."