NEW YORK, Mar 4, 2004 /PRNewswire-FirstCall via COMTEX/ -- Martha Stewart Living
Omnimedia, Inc. (NYSE: MSO) today announced its results for the fourth quarter
and full-year periods ended December 31, 2003.
Revenues for the fourth quarter of 2003 were $70.9 million, compared to
$77.6 million in the prior year's quarter. Operating income for the fourth
quarter was $5.8 million, compared to an operating loss of $3.4 million for
the fourth quarter of 2002. Operating income before depreciation and
amortization and restructuring charges ("OIDA") for the fourth quarter of 2003
was $9.4 million, compared to $7.0 million in the same period last year.
Earnings per share from continuing operations were $0.10 for the fourth
quarter of 2003, compared to a loss of $0.03 in the 2002 quarter. The fourth
quarter of 2002 and full-year results included restructuring charges of $7.7
million, or $0.09 per share net of tax. Excluding the restructuring charges,
operating income would have been $4.3 million in the fourth quarter of 2002
and earnings per share would have been $0.06.
For the year ended December 31, 2003, revenues were $245.8 million
compared to $295.0 million in 2002. Operating income (loss) was $(6.4)
million in 2003, compared to $20.0 million in 2002, and diluted loss per share
from continuing operations was $(0.04) in 2003, compared to earnings per share
of $0.27 in the prior year, including the impact of the restructuring charges.
Excluding the impact of the restructuring charges, operating income would have
been $27.7 million, and diluted earnings per share from continuing operations
would have been $0.36 in 2002.
Sharon L. Patrick, President and Chief Executive Officer, said, "We are
pleased that fourth quarter results are better than expected. Nevertheless,
we continued to feel the negative impact of the events surrounding Martha
Stewart's personal legal situation. Our improved fourth quarter results are
principally due to: recognition in the quarter of the aggregate minimum
guarantees under the Kmart licensing agreement and continuing success of the
Martha Stewart Signature furniture with Bernhardt collections in the
Merchandising segment; better than expected circulation results and increased
productivity from our Publishing segment; and the improved performance of our
now smaller, more niche-focused catalog, Martha Stewart: The Catalog For
Living, from our Internet/Direct Commerce segment. Moreover, shoppers'
response to our expanded collection of Martha Stewart Everyday Holiday
products was enthusiastic, underscoring once again that consumer demand for
our high value products remains stable under difficult circumstances. Our
large and loyal core base of readers, viewers, and customers continues to seek
the unique blend of "how-to" expertise, quality, affordability and style that
defines our brand, and MSO continues to deliver.
"During this time of uncertainty, we continued to manage MSO for the
long-term, investing to grow our core brand equity, controlling costs wherever
so doing does not conflict with our overriding goals. As such, we will
continue to invest in new brands and brand labels like Everyday Food and
Petkeeping with Marc Morrone, both successfully launched in 2003. Our
financial condition remains strong, with $169 million in cash and short-term
investments and no debt, which gives us the ability to continue our long-term
management philosophy and investment strategy. As the trial approaches
conclusion, we have prepared for the various possible outcomes and are focused
on strategies to grow the value of the business and improve the future
financial performance."
Fourth Quarter 2003 Results By Segment
Publishing
Revenues in the quarter were $33.1 million, compared to $45.7 million in
the year-ago period. Operating income and OIDA were each $3.9 million for the
quarter, compared to $15.5 million for each in the year-ago period. The
results reflect lower advertising and circulation revenue from Martha Stewart
Living magazine in the quarter, investment spending in Everyday Food, and a
decline in profitability of our Special Interest Publications. The
publication schedule was consistent with last year with the exception of our
new magazine, Everyday Food, which published two issues in the current period.
During the quarter, Everyday Food, which recently was named Launch of the Year
in Folio: magazine, completed its first major subscriber acquisition effort.
As a result of the strong consumer response, we now expect the circulation of
Everyday Food in the first half of 2004 to well exceed our stated rate base of
500,000.
Television
Revenues in the fourth quarter of 2003 were $5.9 million, compared to $6.4
million in the prior year's quarter. Operating income for the fourth quarter
of 2003 was a loss of $(2.8) million, compared to $0.2 million in the fourth
quarter of 2002. The current quarter operating income includes $1.7 million of
accelerated depreciation related to the write-down to fair-value of certain
television studio assets. OIDA was a loss of $(0.9) million for this year's
fourth quarter, compared to $0.6 million in the prior year's fourth quarter.
The decline in profitability was due primarily to the combined impact of lower
license fee revenue with higher production costs, as well as increased
marketing expenses related to the Company's nationally syndicated daily show.
Merchandising
Revenues in the fourth quarter of 2003 were $22.5 million, compared to
$11.8 million in the prior year quarter. Revenues in the 2003 quarter reflect
the recognition of the aggregate minimum royalties due under our agreement
with Kmart, but not category minimum amounts. The amount of royalties
recognized under minimum guarantee provisions in the agreement was $10.2
million in the period. The quarter also benefited from the positive consumer
acceptance of the Martha Stewart Signature furniture with Bernhardt
collections. Fourth quarter 2003 operating income was $18.3 million, compared
to $7.1 million in the fourth quarter of 2002. OIDA was $18.5 million,
compared to $7.3 million in the prior year's quarter. During the quarter we
also successfully expanded the Martha Stewart Everyday Holiday collection at
Kmart. This collection expansion was well received by shoppers decorating for
the holidays.
The results for the quarter exclude royalties of $3.3 million ($4.5
million as of January 31, 2004) related to guarantees for certain product
categories as provided for in our agreement with Kmart. As previously
disclosed, Kmart recently filed an action against the company in which it
asserts that it is required to pay only certain royalties, which exclude
royalties resulting from the category minimum guarantee. As a result of the
litigation, we have not recognized the category minimums in our current year
revenue. The company believes that the license agreement is unambiguous and
that Kmart's interpretation is inconsistent with the agreement, and MSO
intends to vigorously defend this action and enforce the terms of the
agreement.
Internet/Direct Commerce
Revenues were $9.4 million, compared to $13.7 million in the same period a
year ago. The lower revenues in the quarter were due to lower product sales
and lower advertising revenues. The lower product sales were primarily a
result of our efforts to circulate fewer catalogs and focus on more efficient
circulation levels. Operating loss was $(1.2) million for the fourth quarter
of 2003, compared to $(8.1) million in the fourth quarter of 2002, excluding
restructuring charges. OIDA was $(1.0) million in the 2003 quarter, compared
to $(7.3) million in the year-ago period, excluding restructuring charges. The
reduced loss is primarily a result of more efficient catalog circulation, the
favorable results of inventory disposition programs, and more efficient
fulfillment operations. The segment also continues to benefit from cost
savings initiatives begun in the early part of 2003. Depreciation and
amortization in the fourth quarter of 2003 was $0.2 million, compared to $0.7
million in the fourth quarter of 2002, primarily as a result of a write down
of costs associated with the Company's website taken in the fourth quarter of
2002.
Corporate Overhead
Corporate overhead, including depreciation and amortization, was $12.3
million, compared to $10.4 million in the prior year's quarter. Corporate
overhead, before depreciation and amortization, was $11.2 million for the
fourth quarter of 2003, compared to $9.1 million in the fourth quarter of
2002. The current quarter includes $1.3 million of expense resulting from a
November 2003 stock option exchange program. The principal component of the
expense is the non-cash amortization of the value of restricted stock units
issued in exchange for employee stock options.
Depreciation and Amortization
Depreciation and amortization of $3.6 million in the fourth quarter of
2003 compares to $2.7 million for the fourth quarter 2002. The current
quarter includes $1.7 million of accelerated depreciation related to the
impairment of certain long-lived assets related to our television studio
resulting from the application of FAS 144 "Accounting for the Impairment or
Disposal of Long-Lived Assets". Offsetting the increase was lower
depreciation in the 2003 quarter resulting from a write down of costs
associated with the Company's website taken in the fourth quarter of 2002.
Full-year 2003 Operating Results
Revenues for the year ended December 31, 2003, were $245.8 million,
compared to $295.0 million for the year ended December 31, 2002. Operating
income (loss) was $(6.4) million for the year ended December 31, 2003,
compared to $20.0 million for the year ended December 31, 2002, while OIDA for
the year ended December 31, 2003, was $3.3 million, compared to $39.3 million
in the same period one year ago. Prior period operating income includes the
impact of the fourth quarter restructuring charge of $7.7 million related to
the Internet/Direct Commerce segment. Excluding the charge, operating income
would have been $27.7 million for the year ended December 31, 2002. For the
year ended December 31, 2003, net loss from continuing operations was $(1.9)
million or $(0.04) per share, this compares to net income from continuing
operations of $13.3 million, or $0.27 per share, in the year ending December
31, 2002.
The results for the year ended December 31, 2002, included the cumulative
effect of an accounting change resulting from the adoption of FAS 142 that
resulted in the reduction to the carrying value of the Company's goodwill by
$5.0 million ($3.1 million after tax).
Trends and Outlook
James Follo, Chief Financial and Administrative Officer, commented, "The
results for the fourth quarter reflect our disciplined strategy, which allows
us to reduce operating costs where appropriate, while making investment
decisions that will create long-term value. During the year, we significantly
reduced the operating losses of our Internet/Direct Commerce business, while
investing in new growth opportunities.
First quarter 2004 results will reflect increased pressure on advertising
revenues resulting primarily from the ongoing trial of Martha Stewart.
Accordingly, our current expectation for this quarter is for a loss per share
of approximately $(0.20). Nevertheless, the strength of our balance sheet,
with no debt and a large cash balance, means we are well provisioned to
continue to manage the business with a long-term view."
Basis of Presentation
The Company believes OIDA is an appropriate measure when evaluating the
operating performance of its business segments and the Company on a
consolidated basis. OIDA is used externally by the Company's investors,
analysts, and industry peers. OIDA is among the primary metrics used by
management for planning and forecasting of future periods, and is considered
an important indicator of the operational strength of the Company's
businesses. The Company believes the presentation of this measure is relevant
and useful for investors because it allows investors to view performance in a
manner similar to the method used by the Company's management and makes it
easier to compare the Company's results with other companies that have
different capital structures or tax rates. The Company believes OIDA should
be considered in addition to, not as a substitute for, operating income
(loss), net income (loss), cash flows, and other measures of financial
performance prepared in accordance with generally accepted accounting
principles ("GAAP"). As OIDA is not a measure of performance calculated in
accordance with GAAP, this measure may not be comparable to similarly titled
measures employed by other companies. A reconciliation of OIDA to operating
income (loss) is provided in the financial statements included with this
release.
Martha Stewart Living Omnimedia, Inc. (MSO) is a leading provider of
original how-to information that turns dreamers into doers, inspiring and
engaging consumers with unique content and high-quality products for the home.
MSO's creative experts develop content within eight core areas -- Home,
Cooking and Entertaining, Gardening, Crafts, Holiday, Keeping, Weddings, and
Baby and Kids -- that provide consumers with ideas and products to celebrate
their homes and the domestic arts. MSO is organized into four business
segments -- Publishing, Television, Merchandising and Internet/Direct
Commerce.
The Company will host a conference call with analysts and investors at
12:00 pm ET that will be broadcast live over the Internet at
www.marthastewart.com.
This press release contains certain "forward-looking statements," as that
term is defined in the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are not historical facts and can be
identified by the use of terminology such as "may," "will," "should," "could,"
"expects," "plans," and "intends." The Company's actual results may differ
materially from those projected in these statements, and factors that could
cause such differences include further adverse reaction to the prolonged and
continued negative publicity relating to Martha Stewart by consumers,
advertisers and business partners; a loss of the services, or diminution in
the reputation, of Ms. Stewart; further adverse reaction by the Company's
consumers, advertisers and business partners to the uncertainty relating to
the nature of the resolution of the criminal and civil proceedings currently
underway against Ms. Stewart concerning a sale of non-Company stock by Ms.
Stewart and any adverse resolution of such proceedings; adverse resolution of
some or all of the Company's ongoing litigation; any loss of the services of
the Company's key personnel; downturns in national and/or local economies;
shifts in our business strategies; a softening of the domestic advertising
market; changes in consumer reading, purchasing and/or television viewing
patterns; unanticipated increases in paper, postage or printing costs;
operational or financial problems at any of our contractual business partners;
the receptivity of consumers to our new product introductions; and changes in
government regulations affecting the Company's industries. Certain of these
and other factors are discussed in more detail in the Company's filings with
the Securities and Exchange Commission, especially under the heading
"Management's Discussion and Analysis", which may be accessed through the
SEC's World Wide Web site at http://www.sec.gov. The Company is under no
obligation to update any forward-looking statements after the date of this
release.
Martha Stewart Living Omnimedia, Inc.
Consolidated Statements of Operations
Three Months Ended December 31,
(in thousands, except per share amounts)
2003 2002 % change
REVENUES
Publishing $33,111 $45,668 -27.5%
Television 5,922 6,357 -6.8%
Merchandising 22,452 11,786 90.5%
Internet/Direct Commerce 9,377 13,746 -31.8%
Total revenues 70,862 77,557 -8.6%
OPERATING COSTS AND EXPENSES
Production, distribution
and editorial 33,802 46,502 -27.3%
Selling and promotion 13,388 11,149 20.1%
General and administrative 14,274 12,951 10.2%
Depreciation and amortization 3,589 2,655 35.2%
Restructuring charge (a) -- 7,692 nm
Total operating costs
and expenses 65,053 80,949 -19.6%
OPERATING INCOME (LOSS) 5,809 (3,392) nm
Interest income, net 349 517 -32.5%
INCOME (LOSS) BEFORE INCOME TAXES 6,158 (2,875) nm
Income tax benefit (provision) (1,310) 1,446 nm
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE LOSS FROM
DISCONTINUED OPERATIONS 4,848 (1,429) nm
Loss from discontinued operations,
net of tax benefit (204) (573) 64.4%
NET INCOME (LOSS) $4,644 $(2,002) nm
EARNINGS (LOSS) PER SHARE -
BASIC AND DILUTED
Income (Loss) from continuing
operations $0.10 $(0.03)
Loss from discontinued
operations (0.00) (0.01)
Net Income (Loss) $0.09 $(0.04)
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 49,451 49,446
Diluted 49,581 49,446
Martha Stewart Living Omnimedia, Inc.
Segment Information
Three Months Ended December 31,
(in thousands)
2003 2002 % change
REVENUES
Publishing $33,111 $45,668 -27.5%
Television 5,922 6,357 -6.8%
Merchandising 22,452 11,786 90.5%
Internet/Direct Commerce 9,377 13,746 -31.8%
Total revenues 70,862 77,557 -8.6%
OPERATING INCOME (LOSS) BEFORE
DEPRECIATION AND AMORTIZATION
Publishing 3,937 15,518 -74.6%
Television (852) 586 nm
Merchandising 18,478 7,304 153.0%
Internet/Direct Commerce (1,005) (7,326) 86.3%
Operating Income before
Depreciation and Amortization
before Corporate Overhead 20,558 16,082 27.8%
Corporate Overhead (11,160) (9,127) -22.3%
Operating Income before
Depreciation and Amortization 9,398 6,955 35.1%
Depreciation and amortization (3,589) (2,655) -35.2%
Restructuring charge (a) -- (7,692) nm
OPERATING INCOME (LOSS) 5,809 (3,392) nm
Interest income, net 349 517 -32.5%
INCOME (LOSS) BEFORE INCOME TAXES 6,158 (2,875) nm
Income tax benefit (provision) (1,310) 1,446 nm
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE LOSS FROM
DISCONTINUED OPERATIONS 4,848 (1,429) nm
Loss from discontinued operations,
net of tax benefit (204) (573) 64.4%
NET INCOME (LOSS) $4,644 $(2,002) nm
Martha Stewart Living Omnimedia, Inc.
Consolidated Statements of Operations
Year Ended December 31,
(in thousands, except per share amounts)
2003 2002 % change
REVENUES
Publishing $135,936 $182,600 -25.6%
Television 25,704 26,680 -3.7%
Merchandising 53,395 48,896 9.2%
Internet/Direct Commerce 30,813 36,873 -16.4%
Total revenues 245,848 295,049 -16.7%
OPERATING COSTS AND EXPENSES
Production, distribution
and editorial 136,370 161,644 -15.6%
Selling and promotion 51,722 44,423 16.4%
General and administrative 54,492 49,666 9.7%
Depreciation and amortization 9,669 11,631 -16.9%
Restructuring charge (b) -- 7,692 nm
Total operating costs
and expenses 252,253 275,056 -8.3%
OPERATING INCOME (LOSS) (6,405) 19,993 nm
Interest income, net 1,439 2,120 -32.1%
INCOME (LOSS) BEFORE INCOME TAXES (4,966) 22,113 nm
Income tax benefit (provision) 3,043 (8,799) nm
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE LOSS FROM
DISCONTINUED OPERATIONS AND
CUMULATIVE EFFECT OF ACCOUNTING
CHANGE (1,923) 13,314 nm
Loss from discontinued operations,
net of tax benefit (848) (2,909) 70.8%
INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE (2,771) 10,405 nm
Cumulative effect of accounting
change, net of tax benefit -- (3,137) nm
NET INCOME (LOSS) $(2,771) $7,268 nm
EARNINGS (LOSS) PER SHARE -
BASIC AND DILUTED
Income (Loss) from continuing
operations $(0.04) $0.27
Loss from discontinued
operations (0.02) (0.06)
Cumulative effect of accounting
change -- (0.06)
Net Income (Loss) $(0.06) $0.15
WEIGHTED AVERAGE SHARES
OUTSTANDING
Basic 49,389 49,250
Diluted 49,389 49,343
Martha Stewart Living Omnimedia, Inc.
Segment Information
Year Ended December 31,
(in thousands)
2003 2002 % change
REVENUES
Publishing $135,936 $182,600 -25.6%
Television 25,704 26,680 -3.7%
Merchandising 53,395 48,896 9.2%
Internet/Direct Commerce 30,813 36,873 -16.4%
Total revenues 245,848 295,049 -16.7%
OPERATING INCOME (LOSS) BEFORE
DEPRECIATION AND AMORTIZATION
Publishing 19,762 62,675 -68.5%
Television 358 4,282 -91.6%
Merchandising 38,387 33,605 14.2%
Internet/Direct Commerce (15,053) (26,683) 43.6%
Operating Income before
Depreciation and Amortization
before Corporate Overhead 43,454 73,879 -41.2%
Corporate Overhead (40,190) (34,563) -16.3%
Operating Income (Loss)
before Depreciation and
Amortization 3,264 39,316 -91.7%
Depreciation and
amortization (9,669) (11,631) 16.9%
Restructuring charge (b) -- (7,692) nm
OPERATING INCOME (LOSS) (6,405) 19,993 nm
Interest income, net 1,439 2,120 -32.1%
INCOME (LOSS) BEFORE INCOME TAXES (4,966) 22,113 nm
Income tax benefit (provision) 3,043 (8,799) nm
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE LOSS FROM
DISCONTINUED OPERATIONS AND
CUMULATIVE EFFECT OF ACCOUNTING
CHANGE (1,923) 13,314 nm
Loss from discontinued operations,
net of tax benefit (848) (2,909) 70.8%
INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE (2,771) 10,405 nm
Cumulative effect of accounting
change, net of tax benefit -- (3,137) nm
NET INCOME (LOSS) $(2,771) $7,268 nm
Martha Stewart Living Omnimedia, Inc.
Consolidated Balance Sheets
(in thousands, except per share amounts)
December 31, December 31,
2003 2002
ASSETS
CURRENT ASSETS
Cash and cash equivalents $165,566 $158,840
Short-term investments 3,100 20,110
Accounts receivable, net 39,758 37,796
Inventories, net 7,485 8,654
Deferred television production costs 3,465 4,179
Deferred income taxes 10,682 7,028
Other current assets 4,422 4,756
Total current assets 234,478 241,363
PROPERTY, PLANT, AND EQUIPMENT, net 22,673 31,288
INTANGIBLE ASSETS, net 44,257 44,257
DEFERRED INCOME TAXES 3,224 2,827
OTHER NONCURRENT ASSETS 4,470 4,807
Total assets $309,102 $324,542
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $26,628 $40,517
Accrued payroll and related costs 10,360 9,385
Income taxes payable 167 323
Current portion of deferred subscription income 23,833 24,932
Total current liabilities 60,988 75,157
DEFERRED SUBSCRIPTION INCOME 7,133 7,715
OTHER NONCURRENT LIABILITIES 4,316 5,035
Total liabilities 72,437 87,907
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Class A common stock, $0.01 par value, 350,000
shares authorized: 19,628 and 19,342 shares
issued in 2003 and 2002, respectively 196 194
Class B common stock, $0.01 par value, 150,000
shares authorized: 30,059 and 30,295 shares
outstanding in 2003 and 2002, respectively 301 303
Capital in excess of par value 183,744 181,629
Unamortized restricted stock (307) (993)
Retained earnings 53,506 56,277
237,440 237,410
Less class A treasury stock - 59 shares at cost (775) (775)
Total shareholders' equity 236,665 236,635
Total liabilities and shareholders'
equity $309,102 $324,542
Martha Stewart Living Omnimedia, Inc.
Supplemental Disclosures Regarding Non- GAAP Financial Information
Three Months Ended December 31,
(in thousands)
The following table presents segment and consolidated financial
information, including a reconciliation of operating income, a GAAP measure,
and Operating Income before Depreciation and Amortization (OIDA), a non-GAAP
measure. In order to reconcile OIDA to operating income, depreciation and
amortization are added back to operating income.
2003 2002 % change
REVENUES
Publishing $33,111 $45,668 -27.5%
Television 5,922 6,357 -6.8%
Merchandising 22,452 11,786 90.5%
Internet/Direct Commerce 9,377 13,746 -31.8%
Total Revenues 70,862 77,557 -8.6%
OPERATING INCOME (LOSS)
Publishing 3,895 15,479 -74.8%
Television (2,811) 180 nm
Merchandising 18,310 7,146 156.2%
Internet/ Direct Commerce (1,238) (8,072) 84.7%
Operating Income before
Corporate Overhead 18,156 14,733 23.2%
Corporate Overhead (12,347) (10,433) -18.3%
Restructuring Charge -- (7,692) nm
Total Operating Income 5,809 (3,392) nm
DEPRECIATION AND AMORTIZATION
Publishing 42 39 7.7%
Television 1,959 406 382.5%
Merchandising 168 158 6.3%
Internet/ Direct Commerce 233 746 -68.8%
Corporate Overhead 1,187 1,306 -9.1%
Total Depreciation and
Amortization 3,589 2,655 35.2%
OPERATING INCOME (LOSS) BEFORE
DEPRECIATION AND AMORTIZATION AND
RESTRUCTURING CHARGE
Publishing 3,937 15,518 -74.6%
Television (852) 586 nm
Merchandising 18,478 7,304 153.0%
Internet/ Direct Commerce (1,005) (7,326) 86.3%
Operating Income before
Depreciation and Amortization
and before Corporate
Overhead 20,558 16,082 27.8%
Corporate Overhead (11,160) (9,127) -22.3%
Operating Income (Loss) Before
Depreciation and Amortization
and Restructuring Charge $9,398 $6,955 35.1%
Martha Stewart Living Omnimedia, Inc.
Supplemental Disclosures Regarding Non- GAAP Financial Information
Year Ended December 31,
(in thousands)
The following table presents segment and consolidated financial
information, including a reconciliation of operating income, a GAAP measure,
and Operating Income before Depreciation and Amortization (OIDA), a non-GAAP
measure. In order to reconcile OIDA to operating income, depreciation and
amortization are added back to operating income.
2003 2002 % change
REVENUES
Publishing $135,936 $182,600 -25.6%
Television 25,704 26,680 -3.7%
Merchandising 53,395 48,896 9.2%
Internet/Direct Commerce 30,813 36,873 -16.4%
Total Revenues 245,848 295,049 -16.7%
OPERATING INCOME (LOSS)
Publishing 19,597 62,517 -68.7%
Television (2,616) 2,589 nm
Merchandising 37,716 32,972 14.4%
Internet/ Direct Commerce (16,013) (29,550) 45.8%
Operating Income before
Corporate Overhead 38,684 68,528 -43.6%
Corporate Overhead (45,089) (40,843) -10.4%
Restructuring Charge -- (7,692) nm
Total Operating Income (6,405) 19,993 nm
DEPRECIATION AND AMORTIZATION
Publishing 165 158 4.4%
Television 2,974 1,693 75.7%
Merchandising 671 633 6.0%
Internet/ Direct Commerce 960 2,867 -66.5%
Corporate Overhead 4,899 6,280 -22.0%
Total Depreciation and
Amortization 9,669 11,631 -16.9%
OPERATING INCOME (LOSS) BEFORE
DEPRECIATION AND AMORTIZATION AND
RESTRUCTURING CHARGE
Publishing 19,762 62,675 -68.5%
Television 358 4,282 -91.6%
Merchandising 38,387 33,605 14.2%
Internet/ Direct Commerce (15,053) (26,683) 43.6%
Operating Income before
Depreciation and
Amortization and before
Corporate Overhead 43,454 73,879 -41.2%
Corporate Overhead (40,190) (34,563) -16.3%
Total Operating Income
(Loss) Before Depreciation
and Amortization and
restructuring charge $3,264 $39,316 -91.7%
Martha Stewart Living Omnimedia, Inc.
Endnotes
(a) The fourth quarter of 2002 operating results include the following
restructuring charges:
Net loss from Net income from
continuing continuing
operations, operations,
Pre-tax After-tax including excluding
restructuring restructuring Diluted restructuring restructuring
charge charge EPS charge charge
Inventory
write-down
(1) $(1,605) $(963) $(0.02) $ --
Fixed asset
write-down
(2) (6,087) (3,652) (0.07) --
Total
restructuring
charges $(7,692) $(4,615) $(0.09) $(0.03) $0.06
(b) The full year of 2002 operating results include the following
restructuring charges:
Net income Net income
from from
continuing continuing
operations, operations,
Pre-tax After-tax including excluding
restructuring restructuring Diluted restructuring restructuring
charge charge EPS charge charge
Inventory
write-down
(1) $(1,605) $(963) $(0.02) $ --
Fixed asset
write-down
(2) (6,087) (3,652) (0.07) --
Total
restructuring
charges $(7,692) $(4,615) $(0.09) $0.27 $0.36
(1) Inventory write-down reduces the carrying value of inventory held by
the Company's commerce operation to an estimated recoverable amount.
(2) Asset impairment write-down reduces the carrying value of the commerce
portion of the Company's website, to net realizable value.
SOURCE Martha Stewart Living Omnimedia, Inc.
Investors - James Follo, Chief Financial and Administrative
Officer, +1-212-827-8218, or Media - Elizabeth Estroff, Corporate
Communications, +1-212-827-8281, both of Martha Stewart Living Omnimedia,
Inc.
http://www.marthastewart.com
