The improvement came as the company’s pro forma revenue rose 13 percent to $1.03 billion for the quarter ended Dec. 31, up from revenue of $908 million in the prior-year period.
The pro forma P&L, released by USA Networks last week, reflects the new media player’s pending deals to acquire online travel service Expedia and sell its entertainment assets, like cable channels USA and Sci-Fi, to Vivendi Universal Entertainment. VUE is a new joint venture, announced Dec. 17, between USA Networks and Paris-based Vivendi Universal, which will be controlled by Vivendi, as reported. When the Vivendi transaction closes, USA Networks will be renamed USA Interactive and comprise the half-dozen interactive operating units — HSN, Ticketmaster, Hotel Reservations Network, Expedia, Precision Response and Match.com — plus its emerging interactive divisions — HSN International, CitySearch and B2B service providers Styleclick and E-Commerce Solutions.
At HSN, fourth-quarter EBITDA, flowing from U.S.-based business, advanced 3 percent to $75.7 million, as sales climbed 9 percent to $495.3 million. Apparel and accessories accounted for 12 percent, or $59.4 million, of that volume, the same share as a year ago. Home goods contributed the biggest chunk of revenue: 53 percent, or $262.5 million. HSN’s fourth-quarter EBITDA grew at a slower pace than its sales, USA noted, owing to the construction of a fulfillment facility in California, aimed at decreasing the network’s delivery times to West Coast customers and to continuing investments in technology at HSN.com. HSN.com produced 10 percent of HSN’s U.S. sales in its most recently completed quarter, or $49.5 million, up 125 percent from a year ago — and more than the Web site transacted for all of 2000.
Picking up the sales pace at HSN.com were the 735,000 new customers the e-tailer claimed in the final quarter of 2001.
Looking ahead, USA projected pro forma, U.S.-based EBITDA at HSN will expand 32 percent in 2002, to about $285 million for the full year, versus $216 million in 2001, as sales balloon 19 percent, to roughly $1.8 billion, up from $1.55 billion. If it meets those estimates, HSN’s U.S. business would contribute 47 percent of USA Interactive’s pro forma EBITDA this year, down from 60 percent in 2001, reflecting the addition of Expedia’s cash flow. (Expedia’s pro forma EBITDA is expected to reach $91 million for 2002, a 49 percent surge over $61 million last year.)
During January, Home Shopping Network’s U.S. sales advanced 20 percent above prior-year levels, triggering the positive outlook reported by USA last week.
Meanwhile, HSN International, which comprises Home Shopping Espanol and HSN Germany, is expected to produce positive cash flow of $12 million this year, versus a loss before interest, taxes, depreciation and amortization of $23 million in 2001, as sales increase 27 percent to $404 million from $319 million.
Overall, USA anticipates its pro forma EBITDA will hit $607 million this year, up 41 percent from $359 million in 2001, on a 21 percent pickup in sales, to roughly $4.6 billion, compared with $3.8 billion in 2001 — with HSN providing much of that lift.