Martha Stewart Living Omnimedia Reports Fourth Quarter and Full Year 2013 Results

  Martha Stewart Living Omnimedia Reports Fourth Quarter and Full Year 2013
                                   Results

PR Newswire

NEW YORK, Feb. 25, 2014

NEW YORK, Feb. 25, 2014 /PRNewswire/ --Martha Stewart Living Omnimedia, Inc.
(NYSE: MSO) today announced its results for the fourth quarter and full year
ended December 31, 2013. The Company reported net income for the fourth
quarter of $7.0 millionand net loss for the full year of $(1.8) million.

"We ended the full year with a $54.5 million improvement in Operating Income
from the prior year. In the fourth quarter just completed, growth in
Merchandising was offset by anticipated lower revenues from Publishing which
was expected due to the restructuring that took place in the prior year to
reduce our print title count from four to two," said Dan Dienst, Chief
Executive Officer. "As promised, we also took some aggressive and important
steps in the last quarter of 2013 to align our cost structure with marketplace
realities and more importantly to become nimbler, more efficient, generators
of ideas, inspirations, content and product. We also promised to put to bed
several pieces of notable and distracting litigation, and we did so." Mr.
Dienst continued, "With some of the best, brightest and most passionate
employees in our business lines – all of whom have embraced our new way of
chasing opportunities as One Company - we are very excited about the
groundwork we will lay in 2014 for tapping our esteemed brand's fullest
potential."

Fourth Quarter 2013 Summary

Total revenues were $47.4 million in the fourth quarter of 2013, compared to
$56.4 million in the fourth quarter of 2012 as the 2012 publishing
restructuring resulted in lower revenues partially offset by growth in
Merchandising.

Total operating income for the fourth quarter of 2013 was $5.9 million
compared with $1.4 million in the prior-year period. 

Basic and diluted net income per share was $0.12 for the fourth quarter of
2013, compared to $0.02 for the fourth quarter of 2012.

Full-Year 2013 Summary

Total revenues were $160.7 million in 2013, compared to $197.6 million in
2012.

Total operating loss for the full year 2013 was $(1.9) million compared to an
operating loss of $(56.4) million in 2012. Included in 2012 results
wasa$(44.3) million non-cash impairment charge reflecting the write-down of
goodwill related to the Company's publishing segment.

Net loss per share was $(0.03) for the full year 2013, compared to a net loss
per share of $(0.83) in 2012.

Fourth Quarter 2013 Results by Segment

Three Months Ended December 31

(unaudited, in thousands)




                          2013        2012
REVENUES
Publishing                $ 28,420     $ 35,332
Merchandising             18,216         16,219
Broadcasting              769            4,812
Total Revenues            $ 47, 405    $ 56,363


OPERATING (LOSS) / INCOME
Publishing                $ (1,787)    $ (2,343)
Merchandising             13,640         11,330
Broadcasting              343            2,953
Corporate                 (6,336)        (10,580)
Total Operating Income    $ 5,860     $  1,360

Recent Business Highlights

  oMSLO continues to engage consumers via social media, demonstrated by
    almost 9 million fans and followers across all its platforms including 1
    million fans on Facebook and almost 3 million followers on Twitter.
  oIn December, Martha Stewart Living won Adweek's Hot List Award for Hottest
    Women's Magazine.
  oFor the second year in a row, Martha Stewart Living was recognized by
    Apple as one of the best newsstand apps of the year.
  oAfter highly popular first and second seasons, the third season of Martha
    Stewart's Cooking School started airing on PBS this month and the third
    season of Martha Bakes is scheduled to air in April.
  oUnique visitors online and on mobile increased 13% in the fourth quarter
    over the prior year.
  oTotal digital revenue for the full year 2013 grew 13% over the prior year
    period. 

Publishing

Revenues in the fourth quarter of 2013 were $28.4 million, compared to $35.3
million in the prior year's fourth quarter. In the 2013 fourth quarter, MSLO
published two issues of Martha Stewart Living, compared with three in the
prior year period. The two published issues generated improved advertising
sales compared with the same 2012 issues. Partially offsetting the decline in
print revenue was an increase in digital revenue in the quarter.

Operating loss was $(1.8) million for the fourth quarter of 2013, compared to
$(2.3) million in the prior year.

Merchandising

Revenues increased 12% to $18.2 million for the fourth quarter of 2013, as
compared to $16.2 million in the prior year's fourth quarter, benefitting from
royalty revenue recognition, new in 2013, from the Company's relationship with
J.C. Penney.

Operating income was $13.6 million for the fourth quarter of 2013 as compared
to $11.3 million in the fourth quarter of 2012.

Broadcasting

Revenue in the fourth quarter of 2013 was $0.8 million, compared to $4.8
million in the fourth quarter of 2012, primarily due to non-recurring items in
the prior year related to our historical Broadcasting operations.

Operating income was $0.3 million for the fourth quarter of 2013 compared to
operating income of $3.0 million in the fourth quarter of 2012.

Corporate

Corporate expenses were $(6.3) million in the fourth quarter of 2013 compared
to $(10.6) million in the prior year's quarter, due to a reimbursement from
our insurance carrier related to the Macy's litigation and lower executive
compensation.

The Company will host a conference call with analysts and investors on
February 25, 2014 at 8:30am EST that will be broadcast live over the Internet
at www.marthastewart.com/ir, and an archived version will be available through
March 11, 2014.

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; 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 December 31,
(unaudited, in thousands, except share and per share amounts)
REVENUES                        2013                  2012
Publishing                      $      28,420   $      35,332
Merchandising                   18,216                16,219
Broadcasting                    769                   4,812
Total revenues                  47,405                56,363
Production, distribution and    (16,789)              (24,470)
editorial
Selling and promotion           (12,685)              (14,499)
General and administrative      (8,489)               (11,512)
Depreciation and amortization   (818)                 (979)
Restructuring charges           (2,764)               (3,543)
OPERATING INCOME                5,860                 1,360
Interest income, net            222                   294
Other expense, net              (97)                  (150)
INCOME BEFORE INCOME TAXES      5,985                 1,504
Income tax benefit /            991                   (394)
(provision)
NET INCOME                      $       6,976  $       1,110
INCOMEPER SHARE - BASIC AND
DILUTED
Net income- Basic               $              $       
                                0.12                 0.02
Net income- Diluted             $              $       
                                0.12                 0.02
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
Basic                          57,630,635            67,330,288
Diluted                         58,011,584            67,621,961



Martha Stewart Living Omnimedia, Inc.
Consolidated Statements of Operations
Twelve Months Ended December 31,
(unaudited, in thousands, except share and per share amounts)
REVENUES                            2013               2012
Publishing                          $           $    122,540
                                    96,493
Merchandising                       59,992             57,574
Broadcasting                        4,190              17,513
Total revenues                      160,675            197,627
Production, distribution and        (73,121)           (103,347)
editorial
Selling and promotion               (45,033)           (52,453)
General and administrative          (39,945)           (45,148)
Depreciation and amortization       (3,758)            (4,007)
Restructuring charges               (3,439)            (4,811)
Goodwill impairment                 —                  (44,257)
Gain on sale of subscriber list,    2,724              —
net
OPERATING LOSS                      (1,897)            (56,396)
Interest income, net                792                1,202
Other (expense) / income, net       (583)              711
LOSS BEFORE INCOME TAXES            (1,688)            (54,483)
Income tax provision                (84)               (1,602)
NET LOSS                            $           $    (56,085)
                                    (1,772)
LOSS PER SHARE - BASIC AND DILUTED
Net loss                            $          $      (0.83)
                                    (0.03)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
Basic and diluted                   64,912,368         67,231,463



Martha Stewart Living Omnimedia, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
                                                      December 31,   December
                                                      2013           31,
                                                      (unaudited)    2012
ASSETS
CURRENT ASSETS
                                                      $        $    
 Cash and cash equivalents                     21,884      
                                                                     19,925
 Short-term investments                      19,268         29,182
 Restricted cash and investments             5,072          —
 Accounts receivable, net                    39,694         38,073
 Paper inventory                             2,901          4,580
 Deferred television production costs        228            434
 Other current assets                        3,648          3,335
 Total     92,695         95,529
current assets
PROPERTY AND EQUIPMENT, net                           7,961          10,738
GOODWILL                                              850            850
OTHER INTANGIBLE ASSETS, net                          45,200         45,203
OTHER NONCURRENT ASSETS                               1,661          1,940
 Total    $        $    
assets                                                 148,367      
                                                                     154,260
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
                                                      $        $    
 Accounts payable and accrued liabilities      12,464      
                                                                     13,132
 Accrued payroll and related costs           8,665          9,316
 Current portion of deferred subscription    7,632          13,168
revenue
 Current portion of other deferred revenue   17,227         5,605
 Total    45,988         40,859
current liabilities
DEFERRED SUBSCRIPTION REVENUE                         3,587          4,478
OTHER DEFERRED REVENUE                                17,307         1,113
DEFERRED INCOME TAX LIABILITY                         7,094          7,117
OTHER NONCURRENT LIABILITIES                          3,916          4,815
 Total    77,892         58,744
liabilities
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
 Series A Preferred Stock, zero issued and
outstanding in 2013,                                  —              —
 1 share issued and outstanding in 2012
 Class A Common Stock, $0.01 par value,
350,000,000 shares
 authorized: 30,704,491 and 41,220,689
shares issues in 2013 and
 2012, respectively; 30,645,091 and
41,161,289 shares outstanding
 in 2013 and 2012, respectively              307            412
 Class B Common Stock, $0.01 par value,
150,000,000 shares
 authorized: 25,984,625 shares issued and
outstanding in 2013 and
                                                      260            260
 2012
 Capital in excess of par value              342,213        340,586
 Accumulated deficit                         (271,051)      (244,529)
 Accumulated other comprehensive loss        (479)          (438)
                                                      71,250         96,291
 Less: Class A treasury stock - 59,400       (775)          (775)
shares at cost
 Total   70,475         95,516
shareholders' equity
 Total   $        $    
liabilities and shareholders' equity                   148,367      
                                                                     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
 
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