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"We were required to recognize additional reserves for bad debts and to take a charge related to the restructuring of our deal with Amplified Holdings. Unfortunately, these requirements obscure a number of operational improvements in our current business."
——Valley Media's Barney Cohen
HOW GREEN IS MY VALLEY?
Valley Media Reports 3Q Net Sales Down, Fingers Point To Restructured Amplified Deal
Valley Media today released its 3Q results, reporting an 11.7% decrease in net sales compared to this time last year.

Net sales for 3Q were $260 million, down from $294.5 million last year. Valley Founder, Chairman and CEO (and sure-handed third baseman) Barney Cohen said the company would post a net loss of $6.2 million (or 73 cents a share), compared to net income of $1.1 million (or 13 cents a share) for last year's 3Q.

"We were required to recognize additional reserves for bad debts and to take a charge related to the restructuring of our deal with Amplified Holdings," Cohen said. "Unfortunately, these requirements obscure a number of operational improvements in our current business."

Valley recognized a nearly $4 million pre-tax loss as its percentage of Amplified's financial losses for the past nine months. Valley had not recognized any losses associated with Amplified since pacting with the company in April 2000. The two companies all but "un-merged" in December (hitsdailydouble.com, 12/5).

"No cash is involved," said Cohen, "but we wanted to be conservative in our accounting treatment. This action is an accounting requirement, not a comment on Amplified's future. We remain committed to their success."

Cohen noted that New Media and Full-Line sales lagged behind last year's results, but Sell-Through Video and Independent Distribution showed solid improvement over last year. He also pointed out that selling and administrative costs, before non-cash additions to reserves, were $4.4 million less than last year, a decrease of 18%.

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