Shop At Home, Inc. Announces Fiscal 2002 Results; Revenue and EBITDA Improve Over Prior Year

Business Wire, Sept 6, 2002

Business Editors

NASHVILLE, Tenn.--(BUSINESS WIRE)--Sept. 6, 2002

Shop At Home, Inc. (Nasdaq:SATH), a 16-year old nationally televised home shopping service, which owns and operates five television stations, today reported results for its fourth quarter and 2002 fiscal year ended June 30, 2002. The Company posted annual net revenues of $195.8 million and an EBITDA (consolidated earnings before interest, taxes, depreciation and amortization) loss of $10.4 million, both representing an improvement over fiscal year 2001 annual results of $177.6 million and a $29.3 million loss, respectively. Net loss for the year was $22.6 million, or 54 cents per share, compared to $10.2 million, or 51 cents per share, for fiscal year 2001. The net loss for fiscal 2001 includes an extraordinary gain of $48.9 million from the March 2001 sale of its Houston television station. The gain was used primarily to offset the operating losses of 2001.

Results for the fourth quarter also showed considerable improvement and significant growth with revenues of $53.5 million and an EBITDA loss of $2.7 million, compared to $39.9 million and a $12.0 million loss, respectively, for the same period last year.

Other significant improvements made throughout the year include:

-- Reduction in operating expenses

-- Improvement in gross margin

-- Reduction in returned items

-- Reduction of chargebacks

-- Expansion of product mix

-- Increase in household reach

In August 2002, Shop At Home entered into a strategic agreement to sell 70% of its television and Internet home shopping network to The E.W. Scripps Company for $49.5 million. The transaction is scheduled for approval of Shop At Home shareholders at a meeting to be held as soon as possible. Shop At Home will maintain a 30% interest in the network and will also retain ownership of its five full-power television stations, certain wireless spectrum and tax-loss carry-forward benefits. Upon close of the transaction, Scripps has agreed to loan the Company $47.5 million payable in three years. Shop At Home plans to use the purchase price and the loan proceeds to retire debt and for working capital purposes.

On August 15, 2002, Scripps purchased $3.0 million of newly authorized Preferred Stock. The shares of Preferred Stock will mature on April 15, 2005, at which time Shop At Home will be obligated to redeem the shares for a price equal to their original purchase price plus accrued and unpaid dividends.

The agreement with Scripps is consistent with previously announced plans to explore a strategic partnership which could bring to Shop At Home funding resources as well as added value to core business operations.

The Company plans to file today its annual report on Form 10-K for the year ended June 30, 2002 with the Securities and Exchange Commission.

Conference Call and Webcast

As noted in the Company's September 5, 2002 press release, a conference call to discuss Fiscal Year 2002 Year End Earnings will be held at 3:00 Central Time on Friday, September 6, 2002. A live listen-only web-cast of the conference call will be available for 90 days on the Company's website at www.shopathometv.com/corporate/news-index.html or by dial-in instant replay at 1-888-562-2764. The dial-in instant replay will be available through September 13, 2002.

About Shop At Home

Shop At Home, Inc. is a premier retailer of specialty consumer products through the use of interactive electronic media including broadcast, cable and satellite television and the Company's Internet site, www.shopathometv.com. Shop At Home owns full power television stations in San Francisco (KCNS, Channel 38), Boston (WMFP, Channel 62), Cleveland (WOAC, Channel 67), Raleigh-Durham (WRAY, Channel 30) and Bridgeport (WSAH, Channel 43), which covers a portion of the New York market. The Company was listed as the 21st largest television station group owner in the United States in a recent ranking in Broadcasting & Cable magazine "The Top 25 TV Groups".

"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995 -- This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21 E of the Securities Exchange Act of 1934. Forward-looking statements include information relating to possible or assumed future results of operations of the Company, including those preceded by, followed by or that include the words "believes," "projects," "expects," "anticipates" or similar expressions. These statements reflect the current views of the Company with respect to future events. The following important factors, in addition to those described in the Company's filings with the SEC, could affect the future results of the Company, and could cause those results to differ materially from those expressed in the forward-looking statements: general economic and business conditions; anticipated trends in the Company's business; existing and future regulations affecting the Company's business; the Company's successful implementation of its business strategy; fluctuations in the Company's operating results; technological changes in the television and Internet industry; restrictions imposed by the terms of the Company's indebtedness; significant competition in the sale of consumer products through electronic media; the Company's dependence on exclusive arrangements with vendors; the Company's ability to achieve broad recognition of its brand names; employing and retaining key personnel; and legal uncertainties and possible security breaches associated with the Internet. These forward-looking statements are made as of the date of this press release, and the Company undertakes no obligation to update or revise them, whether as a result of new information, future events or any other reason.