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Martha Stewart Living Omnimedia Reports Third Quarter 2013 Results

      Martha Stewart Living Omnimedia Reports Third Quarter 2013 Results

PR Newswire

NEW YORK, Oct. 29, 2013

NEW YORK, Oct. 29, 2013 /PRNewswire/ --Martha Stewart Living Omnimedia, Inc.
(NYSE: MSO) today announced its results for the third quarter ended September
30, 2013. The Company reported revenue for the third quarter of $33.8 million.

Ken West, Executive Vice President and Chief Financial Officer said, "Third
quarter results reflect solid growth in Merchandising offset by lower
Publishing revenues. In Publishing, we've taken strategic steps to refocus
our operations around our Martha Stewart Living and Martha Stewart Weddings
titles as well as our digital properties. The print titles continue to
perform favorably in their competitive sets and have seen positive traction in
advertising sales year-to-date, despite broader industry pressures.
Merchandising generated improved operating income of 11%. Our recently
announced revised agreement with J.C. Penney assures the availability of
Martha-branded products in targeted categories at J.C. Penney stores and
online. These recent developments are encouraging, but we have much more work
ahead. Our primary objective remains driving sustainable performance
improvement at MSLO over the long-term by capitalizing on the strong
engagement that our brands have with consumers across our media platforms and
at retail. We welcome our newly appointed CEO, Dan Dienst, who brings a strong
operating background and financial discipline to the Company, as we intensify
our efforts to reposition the Company for profitability."

Third Quarter 2013 Summary

Total revenues were $33.8 million in the third quarter of 2013, compared to
$43.5 million in the third quarter of 2012 as growth in Merchandising revenues
was offset by lower revenues from Publishing and Broadcasting, which reflect
the Company's strategic decisions last year to end the publication of two
print titles and exit live television programming production.

Total operating loss for the third quarter of 2013 was $(4.1) million compared
with a loss of $(50.7) million in the prior-year period. Total operating loss
for the third quarter of 2012 included a $(44.3) million non-cash impairment
charge reflecting the write-down of goodwill related to the Company's
publishing segment.

Basic and diluted net loss per share was $(0.06) for the third quarter of
2013, compared to a loss of $(0.76) for the third quarter of 2012.

Third Quarter 2013 Results by Segment

Three Months Ended, September 30

(unaudited, in thousands)
                          2013               2012
REVENUES
Publishing                $     19,401   $    27,572
Merchandising             14,153             13,233
Broadcasting              294                2,744
Total Revenues            $     33,848   $    43,549


OPERATING (LOSS) / INCOME
Publishing                $    (6,260)   $   (51,264)
Merchandising             9,479              8,525
Broadcasting              (214)              281
Corporate                 (7,081)            (8,231)
Total Operating Loss      $    (4,076)   $   (50,689)



Recent Business Highlights

  oMSLO continues to engage consumers via social media, demonstrated by more
    than 8.1 million fans and followers across all social media, a 239% growth
    in followers on Pinterest in the last year and 1.5 million page views for
    the #bestsummerever campaign. MSLO also recently launched
    #MarthaToTheRescue, where Martha responds to tweets addressed to her via
    Vine and Instagram Videos.
  oMSLO won a min Integrated Marketing Award for Most Creative Use of New
    Technology for "Pinspiration" with Martha Stewart, and was a finalist in
    five other categories.
  oMartha Stewart Essentials, a new line of six supplements created
    specifically for women, which have been produced in partnership with
    nutritional supplement developer Inergetics, launched in Walgreen stores
    nationwide in September.
  oIn the quarter, MSLO published its 80^th and 81^st books, Martha Stewart's
    Favorite Crafts for Kids and Martha Stewart's Cakes.
  oIn October, the Company held its second annual "American Made" program,
    where makers, doers and creative entrepreneurs from across the country
    gathered in New York City for networking sessions and panels celebrating
    the spirit of innovation.
  oShowcasing his line of professional kitchenware, food and cutlery
    products, Emeril Lagasse returned to QVC on October 16 during the
    "Emeril's Kitchen" broadcast with additional shows scheduled for December,
    January and February plus well into the spring.

Publishing

Revenues in the third quarter of 2013 were $19.4 million, compared to $27.6
million in the prior year's third quarter. The comparison reflects the impact
of the Publishing restructuring, which included the transition of Everyday
Food from print to a digital brand, the closing of Whole Living, and a
reduction in the number of issues of Martha Stewart Living published
annually. In the 2013 third quarter, MSLO published two issues of Martha
Stewart Living, compared with three in the year-ago period. The two issues
published generated improved advertising sales compared with the same year-ago
issues.

Operating loss was $(6.3) million for the third quarter of 2013, compared to
$(51.3) million in the prior year, which included a $(44.3) million non-cash
impairment charge reflecting the write-down of goodwill.

Merchandising

Revenues increased 7% to $14.2 million for the third quarter of 2013, as
compared to $13.2 million in the prior year's third quarter, benefitting from
royalty revenue recognition from the Company's relationship with J.C. Penney.

Operating income was $9.5 million for the third quarter of 2013 as compared to
$8.5 million in the third quarter of 2012.

Broadcasting

Revenue in the third quarter of 2013 was $0.3 million, compared to $2.7
million in the third quarter of 2012, reflecting the Company's exit from live
television programming production last year.

Operating loss was $(0.2) million for the third quarter of 2013 compared to
operating income of $0.3 million in the third quarter of 2012.

Corporate

Corporate expenses were $(7.1) million in the third quarter of 2013 compared
to $(8.2) million in the prior year's quarter, due to lower executive
compensation and reduced legal expenses in the 2013 period.

The Company will host a conference call with analysts and investors on October
29, 2013 at 8:30am EDT that will be broadcast live over the Internet at
www.marthastewart.com/ir, and an archived version will be available through
November 12, 2013.

About Martha Stewart Living Omnimedia, Inc.

Martha Stewart Living Omnimedia, Inc. (MSLO) is a leading provider of original
"how-to" information, inspiring and engaging consumers with unique lifestyle
content and high-quality products. MSLO is organized into the following
business segments: Publishing, Merchandising and Broadcasting. MSLO is listed
on the New York Stock Exchange under the ticker symbol MSO.

Forward-Looking Statements

This press release may contain certain statements that we believe are, or may
be considered to be, "forward-looking statements," as that term is defined in
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements generally can be identified by the use of statements that include
phrases such as we "may," "will," "should," "could," "expects," "intends,"
"plans," "anticipates," "believes," "estimates," "potential" or "continue" or
other similar references to future periods or the negative of these terms.

Forward-looking statements are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and our actual results
may differ materially from those contemplated by the forward-looking
statements. Such forward-looking statements include: adverse reactions to
publicity relating to Martha Stewart or Emeril Lagasse by consumers,
advertisers and business partners; loss of the services of Ms. Stewart or Mr.
Lagasse; continued management turnover; failure to realize the anticipated
benefits from transitioning certain of our media brands from print publication
to digital distribution; inability to successfully capitalize on digital,
mobile and video initiatives, including establishing relationships with
additional distribution partners; softening of or increased competition in the
domestic advertising market; failure by the economy to sustain any meaningful
recovery and other economic developments that limit consumers' discretionary
spending or affect the value of our assets or access to credit or other funds;
inability to expand merchandising and licensing programs or the loss or
failure of existing programs, including as a result of litigation or disputes
with merchandising segment partners; inability to grow our online presence;
failure to successfully implement our cost savings initiatives; failure to
protect our intellectual property; changes in media consumption behavior;
increases in paper, postage, freight or printing costs; weakening in
circulation, particularly in newsstand sales; operational or financial
problems at any of our business partners; our inability to successfully and
profitably develop or introduce new products; consolidation of our principal
print business vendors, which may lead to increased prices and service delays;
and failure to predict, respond to and influence trends in consumer taste
and/or shifts in business strategies.

Certain of these and other factors are discussed in more detail in the
Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form
10-Q filed with the Securities and Exchange Commission, especially under the
heading "Risk Factors," which may be accessed through the SEC's website at
http://www.sec.gov/.

Martha Stewart Living Omnimedia, Inc.
Consolidated Statements of Operations
Three Months Ended September 30,
(unaudited, in thousands, except share and per share amounts)
REVENUES                        2013                  2012
Publishing                      $      19,401   $      27,572
Merchandising                   14,153                13,233
Broadcasting                    294                   2,744
Total revenues                  33,848                43,549
Production, distribution and    (16,579)              (24,487)
editorial
Selling and promotion           (10,401)              (13,028)
General and administrative      (10,097)              (10,972)
Depreciation and amortization   (847)                 (1,003)
Restructuring charges           —                     (491)
Goodwill impairment             —                     (44,257)
OPERATING LOSS                  (4,076)               (50,689)
Interest income, net            194                   327
Other expense, net              (76)                  (106)
LOSS BEFORE INCOME TAXES        (3,958)               (50,468)
Income tax provision            (337)                 (410)
NET LOSS                        $      (4,295)  $     (50,878)
LOSS PER SHARE - BASIC AND
DILUTED
Net loss                        $               $      
                                (0.06)               (0.76)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
Basic and diluted               67,490,820            67,271,211





Martha Stewart Living Omnimedia, Inc.
Consolidated Statements of Operations
Nine Months Ended September 30,
(unaudited, in thousands, except share and per share amounts)
REVENUES                          2013                     2012
Publishing                        $        68,073   $     87,208
Merchandising                     41,776                   41,355
Broadcasting                      3,421                    12,701
Total revenues                    113,270                  141,264
Production, distribution and      (56,332)                 (78,877)
editorial
Selling and promotion             (32,348)                 (37,954)
General and administrative        (31,456)                 (33,636)
Depreciation and amortization     (2,940)                  (3,028)
Restructuring charges             (675)                    (1,268)
Goodwill impairment               —                        (44,257)
Gain on sale of subscriber list,  2,724                    —
net
OPERATING LOSS                    (7,757)                  (57,756)
Interest income, net              571                      908
Other (expense) / income, net     (486)                    862
LOSS BEFORE INCOME TAXES          (7,672)                  (55,986)
Income tax provision              (1,076)                  (1,209)
NET LOSS                          $        (8,748)  $    (57,195)
LOSS PER SHARE - BASIC AND
DILUTED
Net loss                          $                $      (0.85)
                                  (0.13)
WEIGHTED AVERAGE COMMON SHARES

OUTSTANDING
Basic and diluted                 67,366,285               67,198,281



Martha Stewart Living Omnimedia, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
                                                      September     December
                                                      30,           31,
                                                      2013          2012
                                                      (unaudited)
ASSETS
CURRENT ASSETS
                                                      $        $    
 Cash and cash equivalents                                
                                                      14,479       19,925
 Short-term investments                      21,265        29,182
 Restricted cash and investments             5,009         —
 Accounts receivable, net                    28,646        38,073
 Paper inventory                             3,593         4,580
 Deferred television production costs        150           434
 Other current assets                        3,810         3,335
 Total     76,952        95,529
current assets
PROPERTY AND EQUIPMENT, net                           8,594         10,738
GOODWILL                                              850           850
OTHER INTANGIBLE ASSETS, net                          45,200        45,203
OTHER NONCURRENT ASSETS, net                          1,637         1,940
 Total    $        $    
assets                                                  133,233   
                                                                    154,260
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
                                                      $        $    
 Accounts payable and accrued liabilities                 
                                                      12,849       12,770
 Accrued payroll and related costs           4,856         9,316
 Current portion of deferred subscription    7,310         13,168
revenue
 Current portion of other deferred revenue   4,590         5,605
 Total    29,605        40,859
current liabilities
DEFERRED SUBSCRIPTION REVENUE                         3,193         4,478
OTHER DEFERRED REVENUE                                —             1,113
DEFERRED INCOME TAX LIABILITY                         8,042         7,117
OTHER NONCURRENT LIABILITIES                          4,628         5,177
 Total    45,468        58,744
liabilities
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
 Series A Preferred Stock, 1 share issued
and outstanding in 2013
 and 2012                                    —             —
 Class A Common Stock, $0.01 par value,
350,000,000 shares
 authorized: 41,599,948 and 41,220,689
shares issues in 2013 and
 2012, respectively; 41,540,548 and
41,161,289 shares outstanding
 in 2013 and 2012, respectively              416           412
 Class B Common Stock, $0.01 par value,
150,000,000 shares
 authorized: 25,984,625 shares issued and outstanding in
2013
 and 2012                                    260           260
 Capital in excess of par value              341,555       340,586
 Accumulated deficit                         (253,277)     (244,529)
 Accumulated other comprehensive loss        (414)         (438)
                                                      88,540        96,291
 Less: Class A treasury stock - 59,400       (775)         (775)
shares at cost
 Total   87,765        95,516
shareholders' equity
 Total   $        $    
liabilities and shareholders' equity                    133,233   
                                                                    154,260



SOURCE Martha Stewart Living Omnimedia, Inc.

Website: http://www.marthastewart.com
Contact: Katherine Nash, Martha Stewart Living Omnimedia, Inc. Investor
Relations, 212-827-8348, knash@marthastewart.com