- Announces Expanded Relationship with KB Home
- Fourth Quarter Revenue Increases 40% to $85 Million
- Reports Fourth Quarter OIDA of $11.7 Million, Ahead of $11.0 Million Estimate
NEW YORK, Feb. 22 /PRNewswire-FirstCall/ -- Martha Stewart Living
Omnimedia, Inc. (NYSE: MSO) today announced its results for the fourth
quarter, which reflect operating improvement in each of its business segments.
Revenues for the fourth quarter of 2005 were $84.5 million, up 40% from
$60.2 million in the prior year's quarter. Operating income before
depreciation and amortization, and non-cash equity compensation ("OIDA") for
the fourth quarter of 2005 was $11.7 million, compared to an OIDA loss of
$(1.8) million in the same period last year. Operating income for the fourth
quarter was $2.5 million, compared to an operating loss of $(9.5) million for
the fourth quarter of 2004. Income per share from continuing operations was
$0.06 for the fourth quarter of 2005, compared to a loss per share from
continuing operations of $(0.14) in the fourth quarter of 2004.
Susan Lyne, President and Chief Executive Officer, said: "The results for
the quarter show meaningful improvement in all areas of our business. Results
outpaced expectations in every segment. Advertising pages in Martha Stewart
Living increased 133% in the quarter, and 44% for the full-year period. We
expect this trend to continue, with first quarter pages trending up 70%.
Consumer trends are equally robust; newsstand sales were up 10% year over year
for the second half of 2005, while direct mail response rates for Martha
Stewart Living paced at record highs. Martha Stewart Living continues to have
the highest cover price and average annual subscription price of our
competitive set."
"Based on positive initial consumer response, we are expanding the scope
of our relationship with KB Home beyond the initial development in Cary, North
Carolina. We have concluded an agreement to help design Martha Stewart homes
in multiple communities across the country, including Atlanta, Orlando,
Houston, Charlotte, Las Vegas, Southern California and Daytona Beach, and to
create a line of interior and exterior home products or design options
("Martha's Choices") to be offered exclusively in KB Studios nationwide.
"Last month, we announced a licensing initiative with EK Success and GTCR
Golder Rauner to design and distribute Martha Stewart Crafts products. The
first line of Martha Stewart Crafts products will focus on the fast-growing $3
billion scrap booking market. The launch of the line in late 2006 or early
2007 will coincide with a strategic build out of our internet site that will
offer tools and applications for crafters, as well as a host of digital
templates and ideas.
"Our web initiative is not limited to crafting. We continue to develop
other popular areas of our web content, including recipes, holidays, kids and
weddings. The internet represents a significant opportunity for the company
and we will be reinvesting some near-term advertising gains to position the
company to take full advantage of the growing digital marketplace.
"Our focus today is on creating value, this year and over the long-term.
We will do this by maximizing the near-term benefits of the growth in ad
revenues, while reinvesting to support future drivers such as the KB Home and
Crafts initiatives, as well as the Internet. We have set aggressive but
attainable targets for 2006 and are intent on meeting them. Based on the
current trends in the business, we expect to be free-cash-flow positive in
2006."
Fourth Quarter 2005 Results by Segment
Publishing
Revenues in the fourth quarter of 2005 rose sharply to $41.1 million,
compared to $26.1 million in the fourth quarter of 2004, an increase of 57%.
The revenue growth was driven by higher advertising revenue in Martha Stewart
Living. Advertising pages in Martha Stewart Living increased 133% in the
quarter, ahead of our previous guidance. Everyday Food also showed strong
operating profit growth in the quarter, driven by more profitable circulation
results and higher advertising revenue. The quarter also benefited from
revenue related to The Martha Rules book.
We currently expect the strong growth in ad pages and revenue to continue
into 2006. Based on current trends, we expect first quarter advertising pages
in Martha Stewart Living to increase approximately 70% year-over-year,
resulting in a significant year-over-year improvement in this segment's
results. Circulation trends continue to be strong, with renewal and new
subscriber response rates at record highs. Martha Stewart Living was recently
listed as one of the 10 best circulation performers in 2005 by Capell's
Circulation Report. Later this year, we will be testing and investing in
Blueprint, a new magazine aimed at a younger demographic. Blueprint will
build on Martha Stewart Living's core areas of expertise and adds fashion,
beauty, health, fitness, travel, technology, and culture. The first test
issue will be available on newsstands in May 2006 with an initial rate base of
250,000.
OIDA loss for Publishing was $(0.3) million, compared to a loss of $(11.1)
million in the fourth quarter of 2004. Operating loss was $(1.1) million for
the fourth quarter of 2005, compared to an operating loss of $(11.3) million
in the fourth quarter of 2004.
Broadcasting (Includes Television and Radio)
Revenues in the fourth quarter of 2005 were $11.0 million, compared to
$1.1 million in the fourth quarter of 2004. The quarter included contribution
from our new syndicated daily show for the full period, which did not exist in
the prior year. The segment results also include six weeks of revenue for
Martha Stewart Living Radio, which launched in mid-November. Ratings for our
syndicated show appear to have settled into a natural base and our spot
advertising is sold out for the remainder of Season 1. "MARTHA" has been
recently nominated for six daytime Emmy awards and The New York Times named it
one of the best television shows of 2005. We continue to focus on making the
show entertaining and informative. Season 2 has been cleared in more than 90%
of the U.S. television households. Sales of our DVDs were below our initial
forecast. We are working with our partner to modify the program, focusing on
more gift-driven events and related content. OIDA was a loss of $(0.1)
million for the fourth quarter of 2005, compared to a loss of $(1.4) million
in the prior year's fourth quarter. Operating loss for the fourth quarter of
2005 was $(0.9) million, compared to an operating loss of $(1.4) million in
the fourth quarter of 2004.
Merchandising
Revenues in the fourth quarter of 2005 were $28.0 million, compared to
$23.7 million in the fourth quarter of 2004. The revenue increase was driven
by the contractual minimum royalty guarantees from our program with Kmart.
Actual sales of our Martha Stewart Everyday products at Kmart declined
modestly in the quarter, with weakness in soft home partially offset by sales
related to our recently introduced furniture line - Everyday Rooms. In the
coming quarters, we will focus on developing and executing on our expanded
relationship with KB Home and the launch of Martha Stewart Crafts products, as
well as other licensing opportunities that further expand the reach of our
brands. Both opportunities represent exciting long-term growth initiatives.
During the quarter we recorded the true-up payment of $16.6 million related to
our annual minimum guarantees with Kmart. OIDA was $23.4 million in the
current period, compared to $20.0 million in the prior year's quarter. OIDA
was affected by higher costs in the quarter related to increases in staffing
as we invest to support our new product launches. Fourth-quarter 2005
operating income was $23.2 million, compared to $19.8 million in the fourth
quarter of 2004.
Internet/Direct Commerce
Revenues in the fourth quarter of 2005 were $4.3 million, compared to $9.3
million in the same period a year ago, when the Internet/Direct Commerce
business included revenue from our now discontinued catalog. Advertising
revenue increased substantially in the quarter. Over the next year, we will
be reinvesting our advertising revenue growth into developing a longer-term
internet platform that will offer our robust how-to content and tools across
our brands. Revenue in the period also reflects good growth in our online
flower business. OIDA was $0.3 million in the fourth quarter of 2005,
compared to a loss of $(0.8) million in the fourth quarter of 2004. Operating
income was $0.1 million for the fourth quarter of 2005, compared to an
operating loss of $(1.1) million in the fourth quarter of 2004.
Corporate Expenses
Corporate expenses, before depreciation and amortization and non-cash
equity compensation, were $11.6 million in fourth quarter of 2005 compared to
$8.5 million in the fourth quarter of 2004. The increase in corporate
expenses is primarily related to higher consulting and professional fees
associated with our new partner initiatives. Corporate expenses, including
depreciation and amortization and non-cash equity compensation, were $18.8
million, compared to $15.5 million in the prior year's quarter. Higher levels
of non-cash equity compensation in the current year's quarter principally
relate to the vesting of certain shares covered by a warrant granted in
connection with the airing of "The Apprentice: Martha Stewart."
Full-year 2005 Operating Results
Revenues for the year ended December 31, 2005, were $209.5 million,
compared to $187.4 million for the year ended December 31, 2004. Operating
loss was $(78.3) million for the year ended December 31, 2005, compared to
$(60.0) million for the year ended December 31, 2004, while OIDA for the year
ended December 31, 2004, was $(25.9) million, compared to $(43.8) million in
the same period one year ago. For the year ended December 31, 2005, net loss
from continuing operations was $(75.3) million or $(1.48) per share. This
compares to net loss from continuing operations of $(59.1) million, or $(1.19)
per share, in the year ending December 31, 2004. The current year results
include non-cash charges totaling $31.8 million ($0.62 per share) relating to
the vesting of certain warrants granted in connection with the airing of "The
Apprentice: Martha Stewart," a show in which we have no economic interest, but
which provided significant promotional value, as well as warrants granted in
connection with the production of our new syndicated television show.
Trends and Outlook
Howard Hochhauser, VP, Finance and Investor Relations, commented: "Based
on current trends in the business, we expect our full-year 2006 revenue to be
in the range of $270 million - $280 million, with OIDA in the range of $10
million - $12 million, including an investment in Blueprint magazine of $5
million, as well as $3 million in expenses associated with the development of
our Internet business. Due to the impact of non-cash charges, we expect to
report an operating loss of $(9) million - $(11) million. We anticipate that
all business segments will show year-over-year improvements in operating
results. Publishing will benefit principally from the higher advertising
revenues and page growth, while Broadcasting will benefit from the revenues
from the 'MARTHA' program as well as from Martha Stewart Living Radio. While
our Internet business was profitable in the fourth quarter, we plan on
reinvesting the incremental advertising revenue to build a more robust site
that will lead to longer-term shareholder rewards. For the first quarter of
2006 we are expecting revenue of $60 million, OIDA loss of in the range of
$(3.0) - $(3.5) million and an operating loss in the range of $(8.5) - $(9.0)
million."
Use of Non-GAAP Financial Information
The Company believes OIDA, a non-GAAP financial measure, 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 the 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. (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 four
business segments: Publishing, Broadcasting, Merchandising, and
Internet/Direct Commerce. Martha Stewart Living Omnimedia, Inc. is listed on
the New York Stock Exchange under the ticker symbol MSO.
The Company will host a conference call with analysts and investors at
12:00 p.m. EST that will be broadcast live over the Internet at
http://www.marthastewart.com/ir.
We have included in this press release 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
but instead represent only our current beliefs regarding future events, many
of which, by their nature, are inherently uncertain and outside of our
control. These statements can be identified by terminology such as "may,"
"will," "should," "could", "expects," "intends," "plans," "anticipates,"
"believes," "estimates," "potential" or "continue" or the negative of these
terms or other comparable terminology. The Company's actual results may differ
materially from those projected in these statements, and factors that could
cause such differences include: adverse reactions to publicity relating to
Martha Stewart by consumers, advertisers and business partners; an adverse
resolution to the pending SEC enforcement proceeding against Ms. Stewart
arising from her personal sale of non-Company stock; adverse resolution of
some or all of the Company's ongoing litigation; downturns in national and/or
local economies; shifts in our business strategies; a loss of the services of
Ms. Stewart; a loss of the services of other key personnel; 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 of
Financial Condition and Results of Operations", 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)
2005 2004 % change
REVENUES
Publishing $41,139 $26,130 57.4 %
Broadcasting 11,022 1,069 nm
Merchandising 27,954 23,680 18.0 %
Internet/Direct Commerce 4,346 9,333 -53.4 %
Total Revenues 84,461 60,212 40.3 %
OPERATING COSTS AND EXPENSES
Production, distribution and
editorial 34,727 29,447 -17.9 %
Selling and promotion 21,233 20,506 -3.5 %
General and administrative 16,841 12,018 -40.1 %
Non-cash equity compensation 6,810 6,030 -12.9 %
Depreciation and amortization 2,315 1,696 -36.5 %
Total operating costs and expenses 81,926 69,697 -17.5 %
OPERATING INCOME (LOSS) 2,535 (9,485) nm
Interest income, net 731 607 20.4 %
INCOME (LOSS) BEFORE INCOME TAXES 3,266 (8,878) nm
Income tax benefit (provision) (200) 1,658 nm
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE LOSS FROM
DISCONTINUED OPERATIONS 3,066 (7,220) nm
Loss from discontinued operations (120) (109) -10.1 %
NET INCOME (LOSS) $2,946 $(7,329) nm
INCOME (LOSS) PER SHARE -
BASIC AND DILUTED
Income (loss) from continuing
operations $0.06 $(0.14)
Loss from discontinued operations (0.00) (0.00)
Net income (loss) $0.06 $(0.15)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
Basic 51,112 50,119
Diluted 52,104 50,119
Martha Stewart Living Omnimedia, Inc.
Segment Information
Three Months Ended December 31,
(in thousands)
2005 2004 % change
REVENUES
Publishing $41,139 $26,130 57.4 %
Broadcasting 11,022 1,069 nm
Merchandising 27,954 23,680 18.0 %
Internet/Direct Commerce 4,346 9,333 -53.4 %
Total Revenues 84,461 60,212 40.3 %
OPERATING INCOME (LOSS) BEFORE DEPRECIATION
AND AMORTIZATION AND NON-CASH EQUITY
COMPENSATION
Publishing (341) (11,115) nm
Broadcasting (135) (1,356) nm
Merchandising 23,404 20,009 17.0 %
Internet/Direct Commerce 320 (824) nm
Operating Income before Depreciation and 23,248 6,714 nm
Amortization and Corporate Expense and
Non-Cash Equity Compensation
Corporate Expense (11,588) (8,473) -36.8 %
Operating Income (Loss) before
Depreciation and Amortization
and Non-Cash Equity Compensation 11,660 (1,759) nm
Non-cash equity compensation (6,810) (6,030) -12.9 %
Depreciation and amortization (2,315) (1,696) -36.5 %
OPERATING INCOME (LOSS) 2,535 (9,485) nm
Interest income, net 731 607 20.4 %
INCOME (LOSS) BEFORE INCOME TAXES 3,266 (8,878) nm
Income tax benefit (provision) benefit (200) 1,658 nm
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE LOSS FROM DISCONTINUED OPERATIONS 3,066 (7,220) nm
Loss from discontinued operations (120) (109) -10.1 %
NET INCOME (LOSS) $2,946 $(7,329) nm
Martha Stewart Living Omnimedia, Inc.
Consolidated Statements of Operations
Twelve Months Ended December 31,
(in thousands, except per share amounts)
2005 2004 % change
REVENUES
Publishing $125,765 $95,960 31.1 %
Broadcasting 16,591 10,580 56.8 %
Merchandising 55,848 53,386 4.6 %
Internet/Direct Commerce 11,258 27,512 -59.1 %
Total Revenues 209,462 187,438 11.8 %
OPERATING COSTS AND EXPENSES
Production, distribution and
editorial 105,932 116,204 8.8 %
Selling and promotion 67,475 59,351 -13.7 %
General and administrative 61,989 55,716 -11.3 %
Non-cash equity compensation 44,580 9,499 nm
Depreciation and amortization 7,797 6,672 -16.9 %
Total operating costs
and expenses 287,773 247,442 -16.3 %
OPERATING LOSS (78,311) (60,004) -30.5 %
Interest income, net 3,423 1,799 90.3 %
LOSS BEFORE INCOME TAXES (74,888) (58,205) -28.7 %
Income tax provision (407) (868) 53.1 %
LOSS FROM CONTINUING OPERATIONS BEFORE
LOSS FROM DISCONTINUED OPERATIONS (75,295) (59,073) -27.5 %
Loss from discontinued operations (494) (526) 6.1 %
NET LOSS $(75,789) $(59,599) -27.2 %
LOSS PER SHARE - BASIC AND DILUTED
Loss from continuing operations $(1.48) $(1.19)
Loss from discontinued operations (0.01) (0.01)
Net loss $(1.49) $(1.20)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 50,991 49,712
Basic and Diluted 50,991 49,712
Martha Stewart Living Omnimedia, Inc.
Segment Information
Twelve Months Ended December 31,
(in thousands except per share amounts)
2005 2004 % change
REVENUES
Publishing $125,765 $95,960 31.1 %
Broadcasting 16,591 10,580 56.8 %
Merchandising 55,848 53,386 4.6 %
Internet/Direct Commerce 11,258 27,512 -59.1 %
Total Revenues 209,462 187,438 11.8 %
OPERATING INCOME (LOSS) BEFORE
DEPRECIATION AND AMORTIZATION AND
NON-CASH EQUITY COMPENSATION
Publishing (12,194) (24,000) 49.2 %
Broadcasting (8,318) (8,478) 1.9 %
Merchandising 40,123 37,115 8.1 %
Internet/Direct Commerce (2,548) (7,874) 67.6 %
Operating Income (Loss) before 17,063 (3,237) nm
Depreciation and Amortization
and Corporate Expense and
Non-Cash Equity Compensation
Corporate Expense (42,997) (40,596) -5.9 %
Operating Loss before Depreciation and
Amortization and Non-Cash Equity
Compensation (25,934) (43,833) 40.8 %
Non-cash equity compensation (44,580) (9,499) nm
Depreciation and amortization (7,797) (6,672) -16.9 %
OPERATING LOSS (78,311) (60,004) -30.5 %
Interest income, net 3,423 1,799 90.3 %
LOSS BEFORE INCOME TAXES (74,888) (58,205) -28.7 %
Income tax provision (407) (868) 53.1 %
LOSS FROM CONTINUING OPERATIONS BEFORE
LOSS FROM DISCONTINUED OPERATIONS (75,295) (59,073) -27.5 %
Loss from discontinued operations (494) (526) 6.1 %
NET LOSS $(75,789) $(59,599) -27.2 %
Martha Stewart Living Omnimedia, Inc.
Consolidated Balance Sheets
(in thousands, except per share amounts)
December 31, December 31,
2005 2004
ASSETS
CURRENT ASSETS
Cash and cash equivalents $20,249 $104,647
Short-term investments 83,788 35,309
Accounts receivable, net 55,381 31,332
Inventories, net 3,910 5,229
Deferred television production costs 6,507 --
Income taxes receivable 519 6,321
Other current assets 4,366 3,573
Total current assets 174,720 186,411
PROPERTY, PLANT AND EQUIPMENT, net 19,797 17,175
INTANGIBLE ASSETS, net 53,680 54,264
OTHER NONCURRENT ASSETS 5,631 6,828
Total assets $253,828 $264,678
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $28,545 $25,604
Accrued payroll and related costs 7,488 9,407
Income taxes payable 476 412
Current portion of deferred subscription
revenue 31,060 27,160
Current portion of deferred revenue 6,578 --
Total current liabilities 74,147 62,583
DEFERRED SUBSCRIPTION REVENUE 8,688 7,668
DEFERRED REVENUE 7,321 3,438
OTHER NONCURRENT LIABILITIES 3,041 3,361
Total liabilities 93,197 77,050
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Class A common stock, $0.01 par value, 350,000
shares authorized: 24,882 and 21,660 shares
outstanding in 2005 and 2004, respectively 249 217
Class B common stock, $0.01 par value, 150,000
shares authorized: 26,873 and 29,123 shares
outstanding in 2005 and 2004, respectively 269 291
Capital in excess of par value 253,615 196,781
Unamortized restricted stock (10,845) (2,793)
Accumulated deficit (81,882) (6,093)
161,406 188,403
Less class A treasury stock - 59 shares at cost (775) (775)
Total shareholders' equity 160,631 187,628
Total liabilities and shareholders' equity $253,828 $264,678
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, including non-cash
equity compensation, (OIDA), a non-GAAP measure. In order to reconcile OIDA
to operating income, depreciation and amortization and non-cash equity
compensation are added back to operating income.
2005 2004 % change
OPERATING INCOME (LOSS)
Publishing $(1,063) $(11,334) nm
Broadcasting (913) (1,413) 35.4 %
Merchandising 23,190 19,819 17.0 %
Internet/Direct Commerce 81 (1,071) nm
Operating Income before Corporate
Expenses 21,295 6,001 nm
Corporate Expense (18,760) (15,486) -21.1 %
Total Operating Income (Loss) 2,535 (9,485) nm
DEPRECIATION AND AMORTIZATION
Publishing 245 203 -20.7 %
Broadcasting 712 57 nm
Merchandising 216 190 -13.7 %
Internet/Direct Commerce 229 247 7.3 %
Corporate Expense 913 999 8.6 %
Total Depreciation and Amortization 2,315 1,696 -36.5 %
NON-CASH EQUITY COMPENSATION
Publishing 477 16 nm
Broadcasting 66 -- nm
Merchandising (2) -- nm
Internet/Direct Commerce 10 -- nm
Corporate Expense 6,259 6,014 nm
Total Non-Cash Equity Compensation 6,810 6,030 nm
OPERATING INCOME (LOSS) BEFORE DEPRECIATION
AND AMORTIZATION AND NON-CASH
EQUITY COMPENSATION
Publishing (341) (11,115) 96.9 %
Broadcasting (135) (1,356) 90.0 %
Merchandising 23,404 20,009 17.0 %
Internet/Direct Commerce 320 (824) 138.8 %
Operating Income before
Depreciation and Amortization,
Non-Cash Equity Compensation and
Corporate Expenses 23,248 6,714 246.3 %
Corporate Expense (11,588) (8,473) -36.8 %
Total Operating Income (Loss) Before
Depreciation and Amortization and
Non-Cash Equity Compensation $11,660 $(1,759) 762.9 %
Martha Stewart Living Omnimedia, Inc.
Supplemental Disclosures Regarding Non-GAAP Financial Information
Twelve 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, including non-cash
equity compensation, (OIDA), a non-GAAP measure. In order to reconcile OIDA
to operating income, depreciation and amortization and non-cash equity
compensation are added back to operating income.
2005 2004 % change
OPERATING INCOME (LOSS)
Publishing $(15,278) $(24,615) 37.9 %
Broadcasting (27,060) (8,708) nm
Merchandising 39,048 36,427 7.2 %
Internet/Direct Commerce (3,537) (8,861) 60.1 %
Operating Loss before Corporate
Expenses (6,827) (5,757) -18.6 %
Corporate Expense (71,484) (54,247) -31.8 %
Total Operating Loss (78,311) (60,004) -30.5 %
DEPRECIATION AND AMORTIZATION
Publishing 987 472 -109.1 %
Broadcasting 1,321 230 -474.3 %
Merchandising 845 760 -11.2 %
Internet/Direct Commerce 951 987 3.6 %
Corporate Expense 3,693 4,223 12.6 %
Total Depreciation and Amortization 7,797 6,672 -16.9 %
NON-CASH EQUITY COMPENSATION
Publishing 2,097 143 nm
Broadcasting 17,421 -- nm
Merchandising 230 (72) nm
Internet/Direct Commerce 38 -- nm
Corporate Expense 24,794 9,428 nm
Total Non-Cash Equity Compensation 44,580 9,499 nm
OPERATING INCOME (LOSS) BEFORE DEPRECIATION
AND AMORTIZATION AND NON-CASH
EQUITY COMPENSATION
Publishing (12,194) (24,000) 49.2 %
Broadcasting (8,318) (8,478) 1.9 %
Merchandising 40,123 37,115 8.1 %
Internet Direct Commerce (2,548) (7,874) 67.6 %
Operating Income (Loss) before
Depreciation and Amortization,
Non-Cash Equity Compensation,
and Corporate Expenses 17,063 (3,237) nm
Corporate Expense (42,997) (40,596) -5.9 %
Operating Loss Before Depreciation and
Amortization and
Non-Cash Equity Compensation $(25,934) $(43,833) 40.8 %
Martha Stewart Living Omnimedia, Inc.
Supplemental Disclosures Regarding Non-GAAP Financial Information
Fourth Quarter Guidance Reconciliation
(in millions)
The following table presents consolidated financial information, including
a reconciliation of operating income, a GAAP measure, and Operating Income
before Depreciation and Amortization, including non-cash equity compensation,
(OIDA), a non-GAAP measure. In order to reconcile OIDA to operating income,
depreciation and amortization and non-cash equity compensation are added back
to operating income.
FIRST QUARTER GUIDANCE RECONCILIATION
Guidance Range
Operating Loss $(9.0) - $(8.5)
Depreciation and Amortization 2.5 2.5
Non-cash Equity Compensation 3.0 3.0
Operating Loss Before Depreciation and
Amortization and Non-Cash Equity Compensation $(3.5) - $(3.0)
FULL YEAR 2006 GUIDANCE RECONCILIATION
Guidance Range
Operating Loss $(11.0) - $(9.0)
Depreciation and Amortization 9.5 9.5
Non-cash Equity Compensation 11.5 11.5
Operating Income Before Depreciation and
Amortization and Non-Cash Equity Compensation $10.0 - $12.0
SOURCE Martha Stewart Living Omnimedia, Inc.
CONTACT: Investors - Howard Hochhauser, VP, Finance and Investor
Relations, of Martha Stewart Living Omnimedia, Inc., +1-212-827-8530;
Media - Elizabeth Estroff, AVP, Corporate Communications, of Martha Stewart
Living Omnimedia, Inc., +1-212-827-8281/
/Web site: http://www.marthastewart.com /
(MSO)
