SHOP AT HOME INC /TN/
8-K, 2000-05-31
CATALOG & MAIL-ORDER HOUSES
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                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                    FORM 8-K

                                 CURRENT REPORT

                       Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934

         Date of Report (Date of earliest event reported): May 31, 2000



                               SHOP AT HOME, INC.
                           --------------------------
             (Exact name of registrant as specified in its charter)




           Tennessee                0-25596              62-1282758
        -----------------------------------------------------------------
           (State or other        (Commission          (IRS Employer
            jurisdiction of        File Number)         Identification No.)
            incorporation)



              5388 Hickory Hollow Parkway, Antioch, Tennessee 37013
           ----------------------------------------------------------
          (Address, including zip code, of principal executive office)

                                 (615) 263-8000
               --------------------------------------------------
              (Registrant's telephone number, including area code)



Item 5.  Other Events

         On April 14,  2000,  Shop At Home,  Inc.  held a  conference  call with
certain  financial  analysts to announce and discuss the Company's third quarter
financial results.  These results were filed with the SEC on the Form 10-Q filed
April 13, 2000.  The Company has posted on its Internet  site,  collectibles.com
under the "About Us" section the transcript of this Conference Call. The Company
has elected to  voluntarily  file a copy of this  transcript on this Form 8-K to
ensure that the contents of such conference call are fully disseminated and that
any  investor  of Shop At Home,  Inc.  has full  access  to such  transcript.  A
transcript of the April 14, 2000,  Financial  Conference Call is attached hereto
as Exhibit 99.1.

         The  Transcript  of the  April  14,  2000,  Financial  Conference  Call
contains  forward-looking  statements  within  the  meaning  of  Section  27A of
Securities Act of 1933 and Section 21E of the  Securities  Exchange Act of 1934,
including  certain  statements  about the  Company's  anticipated  future plans,
strategies and  initiatives to increase the Company's  revenues,  profit margins
and gross profits,  certain positive trends were noted that Management  believed
would continue,  and Management made certain  predictions  concerning the future
financial  performance of collectibles.com  and the Company.  Actual results may
differ materially from these statements for a number of reasons as are discussed
from time to time in Shop At Home's SEC  reports,  including  but not limited to
the registration statement filed on Form S-3 on July 1, 1999, the report on Form
10-K/A for the year ended June 30, 1999  (Business and  Management's  Discussion
and Analysis of Financial Condition and Results of Operations),  the Form 10-Q's
for quarters since the 10-K/A was filed, and any recently filed 8-K forms.

                                    SIGNATURE

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                  SHOP AT HOME, INC.
                                  (Registrant)



                                  By: /s/ George J. Phillips
                                  -------------------------------
                                  George J. Phillips
                                  Vice President and General Counsel

Date: May 31, 2000

<PAGE>



                              SHOP AT HOME NETWORK
                             Moderator: Kent Lillie
                          April 14, 2000/8:00 a.m. CDT
                                     Page 1




                              SHOP AT HOME NETWORK
                                 April 14, 2000
                                  8:00 a.m. CDT




Coordinator                Good  morning,  and  welcome  to  the  Shop  at  Home
                           Network's third quarter earnings  release  conference
                           call.  I would now like to introduce  your  moderator
                           for today's  meeting,  Dawn Woods,  Vice President of
                           Corporate  Communications  and Treasurer.  Ms. Woods,
                           you may begin when ready.

D. Woods                   Good   morning,  and   welcome   to  Shop  at  Home's
                           third quarter  conference  call.  Here with me on the
                           call this  morning  are Kent  Lillie,  the  company's
                           President and Chief Executive  Officer;  Arthur Tech,
                           Executive Vice President and Chief Financial Officer;
                           John  Robertson,  Executive  Vice President and Chief
                           Operating  Officer  for the  Network;  and Tim Engle,
                           President of collectibles.com.

                           Our release was sent out yesterday  afternoon and the
                           10Q  is   now   available   on   Edgar.   After   the
                           presentation,   we  will  take  questions  about  the
                           quarter's     results    for    the    Network    and
                           collectibles.com.  You may direct your  questions  to
                           any of those present.

                           Before  we  begin,  I  would  like  to say  that  any
                           statements made today on behalf of Shop at Home, with
                           regard  to  the   expectation  of  future   revenues,
                           earnings,  coverage  and other  performance  factors;
                           including any statements  regarding the plans for the
                           objective of management  for future  operations;  are
                           forward-looking  statements  for  purposes of the SEC
                           statutes.

                           It is now my pleasure to introduce Kent Lillie.

K. Lillie:                 Good  morning.  I'm  proud  today  to report that the
                           company continues  to  post  outstanding  results  in
                           virtually all of our reporting metrics, including our
                           25th consecutive quarter  of  year-over-year  revenue
                           growth. And  that  was  at  44% [increase  over  last
                           year], a new  record, as  well  as  a  third  quarter
                           record EBITDA increase of 100% and a record total for
                           third   quarter,  which   is   our   17th   quarterly
                           year-over-year improvement, once again  demonstrating
                           that we  can  grow  EBITDA  at  a  rate  faster  than
                           revenue.

                           We  also  continue  to  show   impressive   gains  in
                           household  growth and revenue per household,  the two
                           most important drivers in our core business. Further,
                           we now have four months of  outstanding  results from
                           collectibles.com,  which  is  exceeding  even our own
                           aggressive  forecast  and  performing   substantially
                           above the  numbers  estimated  in our  offering  last
                           July.

                           Arthur Tek, the company's CFO, will highlight some of
                           the quarter's results.

A. Tek:                    Thanks, Kent. Revenues for the quarter ended March 31
                           were $53.6 million, a 44% increase over last year, as
                           Kent mentioned.  The growth rate of  44%  during  the
                           quarter equals our long-term growth rate since 1997.

                           Also, we narrowly missed achieving an all time record
                           for quarter  revenues.  But in light of the fact that
                           the March  quarter is the slowest for most  retailers
                           and broadcasters, we think we did relatively well.

                           EBITDA    for   our    core    business,    excluding
                           collectibles.com,  doubled  to  $2  million  from  $1
                           million last year,  thus increasing more rapidly than
                           revenue.  Although collectibles.com recorded negative
                           EBITDA  of $2.7  million,  this was  better  than our
                           expectations.

                           We were  particularly  pleased with revenue growth on
                           the Web site.  Net revenue  was $1.5  million for the
                           quarter.  Since the site  launched in November,  each
                           month has shown growth in sales.

                           Looking at our expenses,  our gross margin  decreased
                           to 36% as we sold more  electronics and coins,  which
                           have lower  margins than most of our other  products.
                           This  change in  merchandising  mix is in response to
                           our customer's demand. We will strive to recoup lower
                           margins with higher revenues.

                           It is notable that our Web site margin is higher,  at
                           38%  versus  36%  for  the  Company,  reflecting  the
                           margins we achieve on most collectibles  products and
                           less emphasis on electronics.

                           Salaries and wages increased  almost in proportion to
                           sales, excluding  collectibles.com.  We are investing
                           in the human  capital  needed to take our  Company to
                           the next level.

                           Transponder  and cable carriage costs  decreased as a
                           percentage  of  sales,  as we were  able  to  utilize
                           approximately   $600,000   of  these   payments   for
                           advertising collectibles.com. We also continue to add
                           cable carriage on a cost efficient basis.

                           General and administrative  expenses were up 79%, but
                           almost all of this  increase  was due to the addition
                           of  collectibles.com.  Depreciation  and amortization
                           increased  because of the  acquisition in June of our
                           New  York  TV   station   and   because  of  the  new
                           enterprise-wide information system.

                           Interest expense  increased because of $10 million in
                           bank debt  outstanding.  Net loss for the quarter was
                           $3.5 million or $.12 a share.  Looking briefly at our
                           balance  sheet,  we  added  no new  debt  during  the
                           quarter nor do we have any current debt payable other
                           than some small capital  leases.  Our working capital
                           at March 31 totaled $16.4  million,  which we believe
                           is sufficient for our operations.

                           As Dawn mentioned, our 10Q was filed last night.  To
                           calculate EBITDA by segment, look at note five and
                           simply add depreciation and amortization to operating
                           income.  Kent.

K. Lillie:                 I   think   it's   important   to  note  that   we're
                           releasing  this  quarter's  results  a full two weeks
                           ahead of our historical release date. The fundamental
                           reason is that thanks to our  technology and business
                           groups and our new technology platform, we can.

                           Second,  we're anxious to  communicate  to the market
                           our  continued   growing   Network  results  and  the
                           outstanding performance of collectibles.com.  I would
                           also  like to  reemphasize  that we  have  grown  our
                           number of gross cable household reach to more than 58
                           million and our full-time  equivalents  to just under
                           25 million, at 24.6.

                           And  that's  as of  the  moment,  which  adds  to our
                           position  as one of the  most  powerful  distribution
                           systems  in the  world,  and to remind  you that this
                           Network is one of the proprietary fundamentals to the
                           current and long-term success of  collectibles.com in
                           our converged strategy.

                           I'm proud now to introduce  John  Robertson,  who has
                           the  sometimes  daunting  task of running our Network
                           operations.

J. Robertson:              Thanks,   Kent.  As   Arthur   noted,   the   Network
                           results were very  positive.  In today's  economy,  I
                           think it's truly  remarkable to find a business model
                           as solid as ours is that is posting  growth in excess
                           of 40% in sales,  and EBITDA  that is  doubling  that
                           sales   growth   rate.   Still,   to  my   management
                           expectations,  our organization must continue to make
                           improvements    in   margin   and   in   our   system
                           effectiveness.

                           First,  regarding  margin.  Our gross margins for the
                           Network declined by just over one point. This was due
                           to a change in mix showing  much higher  growth rates
                           in coins  and  electronics  growing  faster  than our
                           traditional growth category of sports.

                           We've had to merchandise to consumer  demand.  But we
                           have strengthened our organization in both the sports
                           and  jewelry  categories  to be more  effective  with
                           these  categories that we believe have huge potential
                           in the future.

                           Secondly,  concerning  our  system,  we  continue  to
                           realize  the  value  of our  world  class  technology
                           system. Yet, a full quarter had to transpire to allow
                           us to fully surface and quickly  correct the one-time
                           cost    that    naturally    progressed    from   the
                           enterprise-wide information system conversion,  which
                           we launched  on October  26. I remember  that day. It
                           was my second day with the organization.

                           I  remind  you that we are a 24x7  business,  and the
                           speed and  effectiveness of our system conversion has
                           been outstanding. I'm proud of our people and the way
                           we've embraced this new technology.

                           But even with these  challenges,  we posted some very
                           noteworthy Network  accomplishments.  Revenue for our
                           five  stations  that we've owned and  operated for at
                           least  one  year  increased  by 47%.  This is a clear
                           indication   that  with  our   continued   growth  in
                           households,  we  can  also  grow  our  share  of  the
                           customer and our customer's loyalty.

                           This past quarter, we launched our Deal of the Day as
                           an effort to sell additional  items to the households
                           over and above  what they would  normally  buy during
                           that time slot. We also increased our sales capacity.

                           We  implemented  a  new  interactive  voice  response
                           system on the sales side and will soon  implement the
                           same system on the service side to help our customers
                           serve  themselves  to their orders and to their order
                           related questions. Such technology improvements lower
                           the costs associated with each call dramatically.

                           It also  improves our order taking  productivity,  in
                           this  case  by 44%.  Additionally,  we've  added  32%
                           operator capacity with an overflow call center. We'll
                           soon increase our total sales center capacity by 47%.
                           I hope you can  observe  that we're  ready to support
                           higher  sales   volumes  that  will  result  from  an
                           increased broadcast reach.

                           But  most   noteworthy   is  our  increase  in  sales
                           effectiveness.  The  rates  for  converting  incoming
                           calls to orders have increased since December by 12%.
                           And the trend continues to rise even this month.

                           At the last call, we mentioned to you that we'd focus
                           on the  product,  the  customer  experience,  and the
                           culture.  Just to update you, since that call,  we've
                           increased  the  number  of  vendors  offered  on  the
                           Network by double  digits.  We've also  continued  to
                           improve  our  terms  with  each  of our  vendors  and
                           strengthened our offering of exclusive product.

                           For the customer  experience,  we've launched several
                           database  marketing  efforts during the quarter,  and
                           these  initial   tests  have  shown  very   promising
                           results.  This  quarter,  we'll  kick off with a very
                           aggressive   database  marketing  plan  to  both  the
                           Network and collectibles.com customers.

                           We   continue  to  improve   our   customer   service
                           effectiveness   and  our  shipping  and   fulfillment
                           metrics,  which lead to greater customer satisfaction
                           and repurchase rates.

                           Improving  the  customer  experience,  which  is  our
                           operational  theme for this year,  is truly a journey
                           and not a destination.  We still have a ways to go to
                           meet my expectations in this area.

                           With respect to our culture,  we have  launched a new
                           training   program  to  help   broaden   the  skills,
                           leadership  abilities,  and growth for our employees.
                           We've also begun  specific  recruiting  and retention
                           strategies to establish  ourselves as the employer of
                           choice.  We've  added key team  members and I believe
                           our leadership is the strongest it has ever been.

                           As we finish  this  fiscal  year and begin a new one,
                           our management  team has identified two key strategic
                           imperatives   that  must  have  our   focus.   First,
                           optimizing the supply chain.  We're taking deliberate
                           steps to make our buyers  more  effective  by process
                           improvements internally.

                           We're also continuing to increase the product variety
                           and  our  margins.  Part  of  this  is  coming  as  a
                           byproduct of the exclusive vendor agreements that Tim
                           Engle and his team at  collectibles.com  are  signing
                           up, for the  Internet  side.  Also  improvements  are
                           coming from better sourcing  because of our scale and
                           strength as a retailer.

                           Secondly,   an  imperative  is  to  improve  customer
                           satisfaction.  We will improve our  repurchase  rates
                           through tighter quality control, merchandise analysis
                           that results from our  state-of-the-art  systems, and
                           product   selections  and  more   effective   product
                           presentation.

                           We'll also  improve  our  ability  to solve  customer
                           issues  in  the  first  phone  call  through   better
                           processes and training and a  comprehensive  customer
                           contact management and service system.

                           In summary,  our actual  growth  rates and our growth
                           potential  are  truly   extraordinary.   Margins  are
                           improving  on  each  product  category  and  we  have
                           significantly  increased our  infrastructure in order
                           to take more orders.  These two  factors,  along with
                           the improvements I previously  mentioned,  will drive
                           greater gross profit.

                           Every  day,  we  see  and  implement opportunities to
                           integrate  the  Network  in  collectibles.com into an
                           interactive  shopping  experience   in  a   broadband
                           delivery environment.  Kent.

K. Lillie:                 One  of   the  most  important   results  that   John
                           mentioned was our improved sales on our own stations,
                           some of which we've  operated and  programmed  for as
                           long  as five  years.  A 47%  year-over-year  revenue
                           growth is  outstanding,  and would be in any business
                           sector further  validation of the  effectiveness  and
                           cost  efficiency of owning rather than renting a good
                           portion of our distribution system.

                           Incidentally,  we've grown  revenue in all six of our
                           markets,  our owned and operated station markets, for
                           every  quarter  that we have owned each  station.  As
                           John  mentioned,  one of our most important goals for
                           the upcoming quarters is to begin to unlock the value
                           of  our  existing  database  of  almost  2.5  million
                           customers,  a  tremendous  asset that we're  about to
                           mine.

                           Tim Engle now gets to report the excellent results of
                           our online business, collectibles.com.

T. Engle:                  With   our   first  full  quarter  under  our  belts,
                           I'm pleased to announce that our gross sales for this
                           most recent quarter exceeded $1.8 million,  up almost
                           1600% from last year.  It also  exceeded all Internet
                           sales  for the past ten  months  combined,  since the
                           launch of collectibles.com, by a factor of two times.

                           In fact,  we were able to sustain  month to month net
                           revenue  growth at a rate of 19%.  These results came
                           after being  operational  for just four months and as
                           we continue to operate in our beta launch mode.

                           Much of our success this quarter was  accomplished by
                           continuing  to optimize the  convergence  of both the
                           Internet and broadcast platforms, continued additions
                           to  our  exclusive  agreements,   expanded  marketing
                           relationships, and our great employees.

                           Let's  first  review  critical  metrics.   First  and
                           foremost is revenue and gross profit.  As part of our
                           $1.8 million in gross revenue,  over $760,000 or 42%,
                           was shipped in March, speaking to the ramp up we were
                           experiencing with  collectibles.com  and our momentum
                           coming into the new quarter.

                           Most impressive is our average order was in excess of
                           $250.  The ability to leverage  this metric speaks to
                           the  opportunity  we have  as we  continue  to  build
                           traffic.

                           Additionally,  we were able to achieve  gross margins
                           of  38%,   keeping  our   commitment   to   long-term
                           profitability  and our ability to find a new standard
                           for e-tailers.

                           As  we  continue  to  sign  more  Internet  exclusive
                           agreements with leading  manufacturers and brands, we
                           anticipate   maintaining,   perhaps  even   improving
                           margins beyond our current performance.

                           Also,  we would  estimate that our browsers for third
                           quarter  were 368,000 or 3.5 times  December  levels.
                           Additionally,   our   March   browsers   of   147,000
                           represented an increase of 41% over December.

                           Another   dramatic   improvement  was  in  sales  per
                           browser. During our first full month of operations in
                           December,  we were very pleased to achieve and report
                           a sale per browser of $4.43.  And I'm very  delighted
                           to announce that we have continued to improve on this
                           critical measurement,  increasing it to $5.22 for the
                           month of March,  an  increase of over 18%. We believe
                           that the  ongoing  improvements  made to our site and
                           increased  product  selection have attributed to this
                           extraordinary  number.  It is our judgment that if we
                           can increase what our customers see and the length of
                           time they stay on our site,  we will continue to show
                           impressive sales per browser results.

                           To that end,  we have  seen both page  views and time
                           spent  on the  site  increase  since  our  launch  in
                           November.  Total page views have  increased over 75%,
                           with  page   views  per   browser   increasing   23%.
                           Additionally,  time  spent on the  site in March  was
                           17.5  minutes,  up from the December  average of 13.5
                           minutes.

                           Comparing  this to the top 15  television  Web sites,
                           collectibles.com  posted  third on a list,  exceeding
                           such brands as NBC,  ABC,  CBS,  CNN, and Disney.  We
                           continue  to see first  time  customer  purchases  on
                           collectibles.com.

                           In fact, last quarter, I reported that our first time
                           purchases  were over  91%.  This  meant  that we were
                           attracting  buyers who had never  bought from Shop at
                           Home or collectibles.com. For that first full quarter
                           of  operations,  we were able to improve this already
                           impressive number to 95%, reinforcing our belief that
                           with our powerful integrated platform,  we can extend
                           our reach to an entirely new  customer  base and thus
                           increase total sales.

                           Now let's  review  some of the  function of the site.
                           Much of our  success  in the above  metrics is due to
                           continued improvements in function realized since our
                           launch in  November.  Our images are among the finest
                           on the Internet,  including the addition of our large
                           view  function that allows our customer to expand the
                           product image to almost screen size.

                           We continue to implement  innovative and  proprietary
                           video  productions,  blending  exclusive  product and
                           relevant  content such as our  promotion  that blends
                           the  excitement  of the colorful  rock band,  Kiss in
                           their final  farewell tour this summer with exclusive
                           products from Gartland USA.

                           Additionally,  we have  added an "e-mail to a friend"
                           function  allowing  anyone  to send  direct  links of
                           product to a friend, thus encouraging  referral-based
                           customer   acquisition.   We  have  added  electronic
                           coupons, allowing for more effective marketing to our
                           customers,  both  Network  and  Internet.  One of the
                           major  changes  this  quarter was the redesign of our
                           front page,  increasing  the number of products shown
                           to our  diverse  audience.  Also,  as part of a major
                           marketing initiative,  we have added function,  which
                           allows  other sites to come to  collectibles.com  and
                           apply for  affiliate  relationships,  the  results of
                           which I will speak to later.

                           Many of the features discussed in our last conference
                           call are on target and to be completed  this quarter.
                           This would include Auctions, the Gift Registry,  Wish
                           List,  Category  Community Pages, and improved search
                           engines. All have been designed and prioritized based
                           on the ability to drive greater sales.

                           I'd  like  now to  discuss  some  agreements  and our
                           marketing  initiatives  of this  past  quarter.  As I
                           mentioned in our last call,  one of the  cornerstones
                           of   collectibles.com   strategy   is  to   establish
                           exclusive  agreements  with  manufacturers  to  build
                           traffic and protect retail margins.

                           To that end, I am pleased  to  announce  that we have
                           signed over 55 exclusive agreements,  an 83% increase
                           from our  last  call  just a few  short  months  ago.
                           Recent   announcements   include   Fitz  and   Floyd,
                           Castart's  popular  Dreamcycles,  Lee Middleton dolls
                           and Fleer,  among others. In addition to manufacturer
                           agreements,  we  have  announced  an  agreement  with
                           Krause   Publications,   the  leading   publisher  of
                           collectibles  content  in the  country.  With over 50
                           magazines and 700 reference  books,  Krause's is in a
                           position  to  provide   collectibles.com  with  rich,
                           abundant   content   that  will   build  a  sense  of
                           community.

                           Additionally,    the    relationship    will    allow
                           collectibles.com  and Shop at Home to market  special
                           product offers to their  customers in a very targeted
                           approach.

                           An example of the potential the  relationship  brings
                           is the participation and prominence  collectibles.com
                           will have in  Krause's  upcoming  Rosemont  collector
                           show in  Chicago.  This  show  is one of the  largest
                           events in the  country,  attracting  virtually  every
                           manufacturer in the figurine/collectibles industry.

                           Recent marketing initiatives have been selected based
                           on their  ability to attract a very  specific type of
                           customer. As an example, collectibles.com's brand and
                           products   are   prominently   displayed   throughout
                           baseball  season  during a sports  show on Fox Sports
                           Net,  with   households  in  excess  of  66  million.
                           Additionally,  relationships have been developed that
                           will  allow our brand  and  products  to be viewed by
                           millions of prospective Internet users, including the
                           upcoming  Dick Butkus sports  awards  launching  late
                           this month,  and targeted e-mail  campaigns with some
                           of the nation's largest sports gaming companies.

                           We made a  commitment  in our last call to launch and
                           have in place over 3,000  affiliate  Web sites linked
                           to  collectibles.com.  We are well within our goal of
                           achieving  that and exceeding  that,  with over 1,300
                           affiliates  in the process of tying their  viewers to
                           our sites as we speak.

                           To  conclude,  I  would  report  that  the  state  of
                           collectibles.com,  and the  convergence  of both  the
                           Network  with our  Internet  strategy,  is  extremely
                           healthy and  exceeding our initial  expectations.  We
                           are  enthusiastic  that this  business  model has now
                           been  successfully  validated,  as  reflected  in our
                           recent  results  and of  the  relationships  we  have
                           formed today. Thank you. Kent.

K. Lillie:                 I'd  like   to   emphasize   that    collectibles.com
                           growth is almost 20% compounded  month to month since
                           we launched  in  December.  And during  that  growth,
                           we're  continuing  to maintain  what I believe is the
                           highest or among the highest gross profit  margins in
                           business to consumer sales on the Internet, and again
                           with  no  apparent  cannibalization  of our  existing
                           customer base.

                           Despite  the  continued  high  double  digit top line
                           growth  of  our  Network,   collectibles.com   should
                           comprise  as much as 5% of our  total  sales  for the
                           June  quarter,  as we continue to ramp  revenue at an
                           accelerated pace.

                           In  closing,  I would like to say that we continue to
                           seek both  directly and through our  representatives,
                           new strategic and business relationships and will, of
                           course, report to the market when appropriate. In the
                           meantime,  we will  continue  to prove  our  business
                           model and to become a leader in  commerce  in the new
                           converged medium.

                           The  audio  and text of this  call  will be posted on
                           collectibles.com, as soon as they are ready, from MCI
                           WorldCom.  Thank you all for joining us this  morning
                           and we'll now open this discussion to questions.

Coordinator:               Our first question comes from Michael Legg from
                           Prudential Securities.

M. Legg:                   Good  morning.  Could  you  talk  a  little bit about
                           the  Internet  in  general   having   impact  on  the
                           merchandise  sales you saw on the broadcast  platform
                           and what  that  might be doing to your  gross  profit
                           margin?

T. Engle:                  I'm not sure we understand the question, Mike.

M. Legg:                   The  gross   profit  came  in  at  36%,  which  is on
                           the broadcast  side, a little bit below last quarter.
                           When you look at all the different  collectible sites
                           and things of that nature  coming out on the Internet
                           from an e-commerce perspective, is that impacting the
                           mix that you're selling on the broadcast platform and
                           if so,  what  is it  doing  from a  pricing  pressure
                           perspective?

T. Engle:                  From   a   margin    perspective,    collectibles.com
                           over time will improve overall Network  margins.  Not
                           only our mix is going to be towards higher end margin
                           product  due  to  our  exclusive   agreements   we're
                           signing,  but  also  just as  we've  become  a larger
                           percentage  of sales of the total  company,  you will
                           see margins improve. Does that answer your question?

M. Legg:                   I'm  going  to  ask  you  from  the  other  side.  As
                           collectibles.com  being  one  Internet  site but your
                           competitive Internet sites also, as they're out there
                           doing as you're saying  because the  collectibles.com
                           is  doing  very  well on a  gross  profit  basis  and
                           expecting to increase that, is that  cannibalizing or
                           impacting  the pricing  that you are able to offer on
                           the broadcast side?

J. Robertson:              Michael,  this is John Robertson.  I don't think that
                           that's why we're seeing  an  erosion of margin on the
                           Network side.  I think we're seeing  a  little bit of
                           decline in margin on the Network side due to consumer
                           demand.

                           The release of the state quarter  program has been an
                           incredible  firestorm  in the  coin  category.  And I
                           think you will  agree  that  overall,  consumers  are
                           still   demanding  the  latest  in   technology   and
                           gadgetry.  Those are two categories that we represent
                           and support.

                           That's  where we've seen the change in the mix.  It's
                           just as a result of consumer demand.

T. Engle:                  As   John   mentioned,   most  of  our   margins  are
                           beginning   to   increase   again   in  most  of  our
                           categories.   It's  just   that  the   lower   margin
                           categories,  coins  and  electronics,  are  a  bigger
                           percentage of our overall sales. So it brings it down
                           ... there. But that should stabilize at this point.

M. Legg:                   Tim,  can  you  talk  a  little bit about what you're
                           expecting for the next 12 months on collectibles.com,
                           from   both   a   revenue  and  a   marketing   spend
                           perspective?

T. Engle:                  From a marketing perspective, our strategy has always
                           been to create  relationships  with  companies  whose
                           customer  base  reflects  a  propensity  to  buy  the
                           products that we sell.  So you  will  see in the next
                           12 months, certainly in the next six  months, we will
                           announce marketing  relationships  that  will  really
                           reflect that philosophy, going after  very  specific,
                           very   targeted   audiences  so  we  can  get  higher
                           conversion rates when they do come into the site.

                           From a product perspective,  we are going to continue
                           to, I think at an  increasing  rate,  sign  exclusive
                           agreements,  because  momentum  begets  momentum  and
                           we're seeing that in the marketplace now,  especially
                           over the last three months.

                           Since we've  launched,  I will tell you that the word
                           out on the street in the collectibles  business is we
                           are  the  player  and  we  are  one  of  the  largest
                           collectible  Web sites out  there  today,  if not the
                           largest collectible Web site. Certainly that gives us
                           a tremendous advantage.  The other thing I'll mention
                           to you,  Michael,  is to be able to go out and  speak
                           with  manufacturers,  with just  relationships in the
                           marketing  agreements  and be able to tout  and  have
                           this   converged    strategy   as   our   jewel,   is
                           unbelievable.  It really is a major advantage we have
                           in the marketplace,  that no one is competing with me
                           against. I'm just not running into competition when I
                           walk into those venues.

A. Tek:                    And Michael, in terms of where we see it going from a
                           profitability point of view,  our  goal  is  to  make
                           collectibles.com EBITDA positive within  the  next 12
                           months.

M. Legg:                   Where's your credit line at now, Art?

A. Tek:                    We have drawn $10 million and have $10 million
                           remaining.

M. Legg:                   Thanks a lot.

Coordinator:               Our next question comes from Bill Meyers from
                           Robertson Stevens.

B. Meyers:                 Thanks.   A  couple   of   quick    questions;    the
                           first is sort of conceptual. With an increasing focus
                           on the collectibles.com portion of the business, have
                           you given any  consideration to renaming the company,
                           seeing  that  there's a real  disconnect  between the
                           Shop at Home  branded  name and the  collectibles.com
                           Web site?

K. Lillie:                 Bill,    we     continue     to     evaluate    every
                           possibility  to  improve  the   performance  of  this
                           company  and the  perception  of the  company.  So of
                           course we do. I read with  interest  your  quote that
                           you think we should rebrand collectibles.com. I'm not
                           sure we're  ready to do that yet  particularly,  with
                           all the heat that the dot-com world is under today.

                           But where we're going is a converged  medium and that
                           changes the whole world of  dot-com's  and  broadcast
                           and   broadcast   networks.   So  we're  not  looking
                           backwards for an identity.  We're looking forward for
                           an identity.

B. Meyers:                 I'm    just     concerned     that    people    don't
                           necessarily   know   that   Shop   at  Home  is  also
                           collectibles  and if they're  watching  Shop at Home,
                           they might not find collectibles.

K. Lillie:                 We   agree   to   the   challenge    of    marketing,
                           simultaneously,  two  brands.  We  clearly  recognize
                           that. And we needed to get some performance under our
                           belts with collectibles.com before we really consider
                           some merged brand or merged name.

                           Obviously,  we're the first mover in the collectibles
                           retail  space of this  size  dot-com  or dot BAM.  So
                           there's an awful lot of opportunity there for us. And
                           something to do with that brand name is a likely part
                           of that branding strategy for the company.

B. Meyers:                 And    then    also    with   the    collectibles.com
                           portion,  where's the Yahoo  agreement  right now? Is
                           that  still set to expire in May or have  there  been
                           discussions about extending that relationship?

K. Lillie:                 The Yahoo agreement?

B. Meyers                  Yes.

K. Lillie:                 Again,  we  don't  speculate  on   pending   business
                           agreements. So it would not be appropriate to comment
                           on that, I think, in this context.

B. Meyers:                 One  quick  question  on  the  core   business,   has
                           there been any progress made on the conversion rates?
                           Or also, I guess,  on the return  levels on just Shop
                           at Home over the year, distributed business?

J. Roberson:               Yes.  I   don't  know  if  you  heard   my   comment.
                           What is very impressive,  I think this is a result of
                           both  better  training  of our  people  and  improved
                           technology.  But our conversion  rates for converting
                           incoming calls to orders  increased since December by
                           12%.  And we're  continuing  to see an increase  even
                           this month, the month of April.

B. Meyers:                 So what is the current rate now?  Is  it  sort of the
                           mid 50's?  Is it close to 60?

J. Roberson:               On the last week, we have a week, we reported this in
                           the last week.  It was at 58%.

B. Meyers:                 Thanks very much.

Coordinator:               Our next question comes from Mark Stimson from
                           Friedman, Billings and Ramsey.

M. Stimson:                Good    morning,   gentlemen.    Question   back   to
                           the margins. I think last quarter, you mentioned some
                           programs  that  you  were  going  to put in  place to
                           increase the number and I wondered if you're going to
                           keep with those or what other plans you have, I guess
                           just a little more detail on that,  the core business
                           I guess.

J. Roberson:               There's   several   things   working   there.   First
                           of all,  be clear that our  margins in each  category
                           are  actually  on the  increase.  And  this is due to
                           better  negotiation,  better sourcing,  maturing as a
                           retail organization.

                           I also hope that you're  sensing what we're  building
                           from a sales  infrastructure  point  of  view.  We've
                           increased our pipeline for taking orders.  We can now
                           work on lower price points.

                           This will  reduce  return  rates.  It will,  I think,
                           improve  margins,  allow us to source more  exclusive
                           and innovative  product. So the capacity is there and
                           we're  realizing  even  already some of the fruits of
                           that.

                           The drive there is  increase  total  profit  dollars.
                           That's   simply  a  function  of  the  mix  that  the
                           consumers choose from your offering.

M. Stimson:                Then  I   think   to   collectibles.com,   there  was
                           something mentioned about Fox Sports Net, more of the
                           promotion,  cross promote type of thing and I sort of
                           missed  that.  Could you give a little more detail on
                           that? I'd appreciate it.

T. Engle:                  That's   basically    what   that   is.   There's   a
                           segment of the  sports  industry  called the  Fantasy
                           Sports and Fox Sports Net runs on its  Network.  It's
                           regional throughout the country; on two times a week,
                           a 30-minute  show with Goose  Gossage  this  baseball
                           season,  and we are a very prominent  sponsor of that
                           show.

                           And by  the  way,  we  were  able  to  leverage  that
                           relationship  with  product  too.  So we were able to
                           give them product and not necessarily spend, leverage
                           our margin on product at retail value to help pay for
                           that  show.  So again,  we're  being  smart  with our
                           marketing dollars.

M. Stimson:                And  then also you mentioned too that you were ranked
                           third with something, I think.

T. Engle:                  We   were   ranked   third   in  time  spent  on  the
                           site.   When  you  compare  us  to  other   broadcast
                           companies  that move people to their  sites,  we were
                           third  on a list of the top 15. I mean,  I of  course
                           interjected  third into that list.  But we were third
                           when you compared with time on the site.

M. Stimson:                So who would be the ones that are kind of  on  either
                           side of you?

T. Engle:                  The  ones  that,  the  only  two  that  beat us were,
                           I believe,  Nickelodeon  and ESPN.  Then I  mentioned
                           Disney;  I didn't  mention  MTV,  but CBS,  Discovery
                           Channel, most of the big names.

M. Stimson:                So you're ahead of those guys.  Thank you very much.

K. Lillie:                 That's  longer  than  we  probably  all  would   like
                           to have had in this call this  morning.  So thank you
                           for  joining  us.  Feel  free to call  Dawn or Arthur
                           anytime  today.  Thank you all very much for  joining
                           us.

"Safe Harbor"  Statement Under the Private  Securities  Litigation Reform Act of
1995 - This  Conference  Call  contains  forward-looking  statements  within the
meaning  of  Section  27A of  Securities  Act of  1933  and  Section  21E of the
Securities  Exchange  Act of  1934,  including  statements  regarding  projected
revenue and distribution  growth,  the future  performance of Shop At Home, Inc.
and collectibles.com  and the anticipated impact of new management  initiatives.
Actual  results may differ  materially  from those which may be identified for a
number of  reasons  as are  discussed  from  time to time in Shop At Home's  SEC
reports,  including but not limited to the registration  statement filed on Form
S-3 on July 1, 1999,, the report on Form 10-K/A for the year ended June 30, 1999
(Business and  Management's  Discussion and Analysis of Financial  Condition and
Results of Operations), the Form 10-Q's for quarters since the 10-K/A was filed,
and any recently filed 8-K forms.



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