UPDATE: Valley Media Will Appear Before Nasdaq Review Panel Next Month25 May, 2001 By: Joan Villa
Distributor Valley Media will appear before a Nasdaq review panel next month to plead for a six-month extension to turn the company around andavoid delisting.
The Woodland, Calif.-based wholesaler appealed a Nasdaq staff determination that the stock, under the symbol VMIX, could be delisted after trading under $1 for more than 90 days. The company is also in violation of Nasdaq’s requirement to maintain a minimum $5 million market value, based on the number of publicly held shares.
Unlike hundreds of other stocks in danger of delisting, Valley is "nota dot-com looking for a reason to exist; it’s a company with a valid business presence" and $800 million in annual sales, president and c.o.o. James P. Miller says. "Most companies in turnaround run out of money and don’t get the job done. That’s not going to happento us."
Although he’s quick to admit "there has been no good news on the profitability standpoint for a number of quarters," he says Valley hasachieved positive cash flow. Further, he promises profitability in the fiscal third quarter ending Dec. 31 and for the full fiscal year closing March 31, 2002.
"We would expect as our turnaround gets more public and people see what we’ve done, our stock will trade near book value and that would push us above the $1 level and into compliance," he says.
Miller estimates that Valley’s net worth exceeds $40 million. However, in the last 90 market days, Valley traded at a high of $1.125 per share for five days in late March, and struck a low of 50 cents April 6. To bein compliance on both Nasdaq requirements, Miller says the stock must trade at or above $1.02 for 90 days. "The fact the stock is trading downis due to problems we’ve had over the last year to 18 months," he acknowledges. "We believe those problems are behind us."
Valley had been returning and writing off excess inventory and writing off excess debt from several large accounts. All the changes and belt-tightening are behind the company, Miller adds. "We believe we’re in the rightbusinesses," he says, "focusing on audio, video sellthrough anddirect-to-consumer fulfillment opportunities. That’s where we’re goingto be profitable."