DOWN IN THE VALLEY

Valley Media just announced their 2000 4Q and fiscal year-end results, and when Founder, Chairman and interim CEO Barney Cohen says, "We have concluded a very challenging year," he's not kidding. Net income decreased from $4.4 million in fiscal 1999 to a loss of $4.6 million in fiscal 2000. And although net sales for fiscal 2000 were fairly flat, increasing 0.3% from $889 million to $891.5 million, Valley's core business of full-line distribution (which serves traditional music, video and other retailers) fell $14.7%. The two bright spots would be a huge increase in their e-Fulfillment biz (Amplifed.com), increasing by a whopping 51% and a solid increase of 13.1% for their indie distribution arm Distribution North America (DNA).

Cohen, who took back the reins after the recent departure of former CEO Rob Cain, said in a statement: "We are doing what it takes to restore the equity value of our company." He sites a number of reasons for the disappointing results, including "a difficult warehouse relocation and relatively flat sales, while we failed to adequately adjust inventory, staffing levels and other infrastructure costs." Cohen says that they have now reduced inventories by approximately $74 million and reduced staff by some 350 people.

Wall Street showed no reaction to the release as the stock closed flat yesterday at $4.