NEW YORK, Aug 3, 2004 /PRNewswire-FirstCall via COMTEX/ -- Martha Stewart Living
Omnimedia, Inc. (NYSE: MSO) today announced its results for the second quarter
and six-month period ended June 30, 2004.
Revenues for the second quarter of 2004 were $44.0 million, compared to
$65.8 million in the prior year's quarter. Operating loss for the second
quarter was $(19.3) million, compared to operating income of $1.5 million for
the second quarter of 2003. Operating income before depreciation and
amortization, including the amortization of non-cash stock compensation,
("OIDA") for the second quarter of 2004 was a loss of $(16.6) million,
compared to OIDA of $3.7 million in the same period last year. Loss per share
from continuing operations was $(0.39) for the second quarter of 2004,
compared to income per share from continuing operations of $0.02 in the second
quarter of 2003.
Sharon L. Patrick, President and Chief Executive Officer, said, "Our
second quarter results, while reflecting losses due to the negative effects of
Martha Stewart's personal legal situation, primarily on the Company's
advertising performance, were nevertheless in line with our expectations and
previous guidance. We remain encouraged by the support for the Company from
our large, stalwart core base of readers, viewers and shoppers who remain
loyal to our publications and quality products; and by our significant
financial resources. Those resources - $158 million in cash and short-term
securities and no debt - will allow us to manage through this period and
invest in our future.
"Given the recent developments in Martha Stewart's legal situation, we are
moving ahead with a substantial amount of the uncertainty behind us. As we
have said before, we continue to manage the Company for the long-term,
carefully deploying our significant resources. Consistent with that approach,
we have recently taken strategic actions, including adjusting staffing levels
in our television business to reflect that we have placed the Martha Stewart
Living program on hiatus for Season 12 and taking steps to transition our
Internet/Direct Commerce segment to focus primarily on the delivery of our
inspired and original 'how-to' information for the home through our website.
Furthermore, we continue to make progress to evolve our brands from expert
personality to trusted brand labels on a step-by-step basis with an eye to
future growth.
"We announced today that we have signed a multi-year agreement with PBS
presenting station WETA in Washington, D.C., to distribute our newest
television series, Everyday Food, on PBS stations nationwide - 26 weekly
episodes featuring an ensemble cast of the Company's highly talented cooks,
who bring to life the simple, delicious recipes and techniques from the pages
of the magazine. We expect this new program will generate additional demand
for our Everyday Food magazine.
"At the same time, we are taking additional steps to continue to reduce
losses in our Internet/Direct Commerce business and to ensure that we invest
our resources in areas that offer the Company its best return on investment.
Accordingly, by year end 2004, we will eliminate our direct commerce business.
However, we will continue our profitable direct-to-consumer floral business,
marthasflowers, as well as our content website, marthastewart.com.
"In addition, we have recently expanded our Board of Directors to include
significant experience over a broad range of industries, including branding,
advertising, retail and television. Senior management, along with the Board,
is focused on restoring the Company to profitability and building value for
our shareholders."
Second Quarter 2004 Results By Segment
Publishing
Revenues in the second quarter of 2004 were $23.7 million, compared to
$39.6 million in the second quarter of 2003. Operating loss was $(5.3)
million for the second quarter of 2004, compared to operating income of $9.3
million in the second quarter of 2003. OIDA was a loss of $(5.2) million,
compared to income of $9.4 million in the second quarter of 2003. The results
primarily reflect lower advertising revenue in the quarter from Martha Stewart
Living magazine due to the combined effect of lower advertising pages and
lower advertising rates as a result of the rate base reduction effective with
the January 2004 issue. Subscription revenue was also lower in the quarter
due principally to fewer subscriptions sold. The quarter also reflects our
planned investment spending in Everyday Food, primarily in subscriber
acquisition. We have increased the rate base of Everyday Food from 500,000 to
750,000, effective with the July 2004 issue.
Television
Revenues in the second quarter of 2004 were $3.1 million, compared to $6.6
million in the second quarter of 2003. Operating loss for the second quarter
of 2004 was $(3.5) million, compared to breakeven in the second quarter of
2003. OIDA was a loss of $(3.5) million for the second quarter of 2004,
compared to OIDA of $0.4 million in the prior year's second quarter. The
decline in profitability was due to a variety of factors, including a
reduction in license fees and advertising revenue from our nationally
syndicated daily show; the December 31, 2003, expiration of certain cable
licensing agreements; and severance costs. The quarter also included the
write-down of deferred television production costs of $1.5 million, resulting
from the early termination of a cable television licensing agreement.
Merchandising
Revenues in the second quarter of 2004 were $10.9 million, compared to
$11.8 million in the second quarter of 2003. The decline in revenue was due
to a mix of factors, including the overall weak retail environment as well as
continuing impact from Kmart store closings that took place in the early part
of 2003. Second quarter 2004 operating income was $5.3 million, compared to
$7.8 million in the second quarter of 2003. OIDA was $5.5 million in the
current period, compared to $8.0 million in the prior year's quarter.
Operating income and OIDA were negatively affected by $1.5 million of non-
recurring professional fees related to the renegotiation of the Kmart contract
incurred in the quarter. The decline in royalty revenue from sales at Kmart
in the quarter will not impact full year results from operations, as we are
paid based on guaranteed annual amounts.
Internet/Direct Commerce
Revenues in the second quarter of 2004 were $6.4 million, compared to $7.8
million in the same period a year ago. The lower revenues in the quarter were
due to lower catalog-related product sales, partially offset by higher revenue
from marthasflowers, our direct-to-consumer floral business. The lower
commerce revenue was principally due to lower catalog circulation. Operating
loss was $(2.4) million for the second quarter of 2004, compared to $(4.6)
million in the second quarter of 2003. OIDA was $(2.2) million in the second
quarter of 2004, compared to $(4.3) million in the second quarter of 2003.
The better year-over-year results were achieved by a significant reduction in
catalog circulation, combined with improvements in our floral business.
As previously noted, in the interest of managing MSO's long-term financial
strength, the Company has decided to discontinue The Catalog for Living by the
end of 2004. Going forward, the segment will focus on delivering expert "how-
to" content through our website, driving subscription magazine orders for our
publishing group, and continuing to grow our direct-to-consumer floral
business, marthasflowers, while exploring licensing and other alternative
distribution opportunities for its products through our merchandising segment.
While the Company has made significant progress over the past 18 months in
improving the segment's financial performance, we concluded that focusing
attention and resources on other areas of the business with greater growth
potential would ultimately allow the Company to achieve improved financial
performance. We do not expect that charges to operations during the remainder
of 2004 related to severance and inventory will be material to our results of
operations.
Corporate Overhead
Corporate overhead, including depreciation and amortization and the
amortization of non-cash stock compensation, was $13.3 million, compared to
$11.1 million in the prior year's quarter. Corporate overhead, before
depreciation and amortization and the amortization of non-cash stock
compensation, was $11.3 million for the second quarter of 2004, compared to
$9.8 million in the second quarter of 2003. The current quarter includes
higher compensation-related costs, including the costs of certain Company-wide
retention programs.
Amortization of Non-Cash Stock Compensation
Amortization of non-cash stock compensation expense was $1.0 million in
the second quarter of 2004 compared to $0.1 million for the second quarter of
2003. The expense in the 2004 quarter principally relates to the amortization
of the value of restricted stock units granted in connection with a November
2003 stock option exchange program.
Depreciation and Amortization
Depreciation and amortization was $1.6 million in the second quarter of
2004 compared to $2.1 million for the second quarter of 2003. The lower
depreciation in the current quarter was a result of lower depreciation of
television studio assets that were fully depreciated in 2003.
Six Month 2004 Operating Results
Revenues for the six months ended June 30, 2004, were $88.5 million,
compared to $123.8 million for the six months ended June 30, 2003. Operating
loss was $(36.6) million for the six months ended June 30, 2004, compared to
$(6.0) million for the six months ended June 30, 2003, while OIDA for the six
months ended June 30, 2004, was $(30.8) million, compared to $(1.6) million in
the same period one year ago. For the six month period ending June 30, 2004,
net loss from continuing operations was $(39.3) million, or $(0.79) per share,
compared to a net loss from continuing operations of $(3.1) million, or
$(0.06) per share, in the six month period ending June 30, 2003.
Trends and Outlook
James Follo, Chief Financial and Administrative Officer, commented, "As a
result of a comprehensive review of our businesses, we have reduced the cost
structure in our television segment, eliminated certain aspects of our
Internet/Direct Commerce segment and invested in new growth opportunities.
Our financial resources remain significant, which will enable us to manage
through this transition period. Our outlook for the third quarter is for a
loss of approximately $(0.50) per share, reflecting higher marketing costs in
the quarter and seasonal aspects of our business. The fourth quarter of 2004
results will reflect substantially reduced losses compared to third quarter
levels largely due to the significant amount of revenues to be recognized by
our merchandising segment as a result of certain minimum royalty guarantees."
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 noon ET that will be broadcast live over the Internet at
http://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 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 further adverse reaction to the prolonged and continued
negative publicity relating to Martha Stewart by consumers, advertisers and
business partners; further adverse reaction by the Company's consumers,
advertisers and business partners to the outcome of Ms. Stewart's trial and
related sentencing arising from a sale of non-Company stock by Ms. Stewart; a
loss of the services of Ms. Stewart; a loss of the services of other key
personnel; an adverse resolution to the SEC enforcement proceeding currently
underway 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 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 June 30,
(in thousands, except per share amounts)
2004 2003 % change
REVENUES
Publishing $23,722 $39,617 -40.1 %
Television 3,056 6,588 -53.6 %
Merchandising 10,903 11,763 -7.3 %
Internet/Direct Commerce 6,365 7,814 -18.5 %
Total revenues 44,046 65,782 -33.0 %
OPERATING COSTS AND EXPENSES
Production, distribution and
editorial 30,411 35,448 -14.2 %
Selling and promotion 14,393 13,699 5.1 %
General and administrative 15,877 12,934 22.8 %
Amortization of non-cash stock
compensation expense (a) 1,026 144 nm
Depreciation and amortization 1,635 2,054 -20.4 %
Total operating costs and expenses 63,342 64,279 -1.5 %
OPERATING INCOME (LOSS) (19,296) 1,503 nm
Interest income, net 319 395 -19.2 %
INCOME (LOSS) BEFORE INCOME TAXES (18,977) 1,898 nm
Income tax provision (189) (665) 71.6 %
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE LOSS FROM
DISCONTINUED OPERATIONS (19,166) 1,233 nm
Loss from discontinued operations, net
of tax benefit in 2003 (127) (302) 57.9 %
NET INCOME (LOSS) $(19,293) $931 nm
INCOME (LOSS) PER SHARE -
BASIC AND DILUTED
Income (loss) from continuing
operations $(0.39) $0.02
Loss from discontinued operations (0.00) (0.01)
Net income (loss) $(0.39) $0.02
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 49,572 49,488
Diluted 49,572 49,627
Martha Stewart Living Omnimedia, Inc.
Segment Information
Three Months Ended June 30,
(in thousands)
2004 2003 % change
REVENUES
Publishing $23,722 $39,617 -40.1 %
Television 3,056 6,588 -53.6 %
Merchandising 10,903 11,763 -7.3 %
Internet/Direct Commerce 6,365 7,814 -18.5 %
Total revenues 44,046 65,782 -33.0 %
OPERATING INCOME (LOSS) BEFORE
DEPRECIATION AND AMORTIZATION
Publishing (5,209) 9,427 nm
Television (3,472) 387 nm
Merchandising 5,516 7,988 -30.9 %
Internet/Direct Commerce (2,177) (4,308) 49.5 %
Operating Income (Loss) before
Depreciation and Amortization
and Corporate Overhead (5,342) 13,494 nm
Corporate Overhead (11,293) (9,793) -15.3 %
Operating Income (Loss) before
Depreciation and Amortization (16,635) 3,701 nm
Amortization of non-cash stock
compensation expense (1,026) (144) nm
Depreciation and amortization (1,635) (2,054) 20.4 %
OPERATING INCOME (LOSS) (19,296) 1,503 nm
Interest income, net 319 395 -19.2 %
INCOME (LOSS) BEFORE INCOME TAXES (18,977) 1,898 nm
Income tax provision (189) (665) 71.6 %
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE LOSS FROM
DISCONTINUED OPERATIONS (19,166) 1,233 nm
Loss from discontinued operations, net
of tax benefit in 2003 (127) (302) 57.9 %
NET INCOME (LOSS) $(19,293) $931 nm
Martha Stewart Living Omnimedia, Inc.
Consolidated Statements of Operations
Six Months Ended June 30,
(in thousands, except per share amounts)
2004 2003 % change
REVENUES
Publishing $47,632 $73,678 -35.4 %
Television 7,233 13,203 -45.2 %
Merchandising 21,692 22,091 -1.8 %
Internet/Direct Commerce 11,978 14,833 -19.2 %
Total revenues 88,535 123,805 -28.5 %
OPERATING COSTS AND EXPENSES
Production, distribution and
editorial 59,352 71,049 -16.5 %
Selling and promotion 28,612 26,495 8.0 %
General and administrative 31,393 27,836 12.8 %
Amortization of non-cash stock
compensation expense (b) 2,480 267 nm
Depreciation and amortization 3,309 4,195 -21.1 %
Total operating costs and
expenses 125,146 129,842 -3.6 %
OPERATING LOSS (36,611) (6,037) -496.5 %
Interest income, net 681 797 -14.6 %
LOSS BEFORE INCOME TAXES (35,930) (5,240) -574.2 %
Income tax benefit (provision) (3,332) 2,184 nm
LOSS FROM CONTINUING OPERATIONS BEFORE
LOSS FROM DISCONTINUED OPERATIONS (39,262) (3,056) nm
Loss from discontinued operations, net
of tax benefit in 2003 (288) (523) 44.9 %
NET LOSS $(39,550) $(3,579) nm
LOSS PER SHARE - BASIC AND DILUTED
Loss from continuing operations $(0.79) $(0.06)
Loss from discontinued operations (0.01) (0.01)
Net Loss $(0.80) $(0.07)
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 49,518 49,560
Diluted 49,518 49,560
Martha Stewart Living Omnimedia, Inc.
Segment Information
Six Months Ended June 30,
(in thousands)
2004 2003 % change
REVENUES
Publishing $47,632 $73,678 -35.4 %
Television 7,233 13,203 -45.2 %
Merchandising 21,692 22,091 -1.8 %
Internet/Direct Commerce 11,978 14,833 -19.2 %
Total revenues 88,535 123,805 -28.5 %
OPERATING INCOME (LOSS) BEFORE
DEPRECIATION AND AMORTIZATION
Publishing (9,721) 14,490 nm
Television (5,362) 1,008 nm
Merchandising 12,208 15,204 -19.7 %
Internet/Direct Commerce (4,613) (12,335) 62.6 %
Operating Income (Loss) before
Depreciation and Amortization
and Corporate Overhead (7,488) 18,367 nm
Corporate Overhead (23,334) (19,942) -17.2 %
Operating Loss before Depreciation and
Amortization (30,822) (1,575) nm
Amortization of non-cash stock
compensation expense (2,480) (267) nm
Depreciation and amortization (3,309) (4,195) 21.1 %
OPERATING LOSS (36,611) (6,037) -506.4 %
Interest income, net 681 797 -14.6 %
LOSS BEFORE INCOME TAXES (35,930) (5,240) -562.9 %
Income tax benefit (provision) (3,332) 2,184 nm
LOSS FROM CONTINUING OPERATIONS BEFORE
LOSS FROM DISCONTINUED OPERATIONS (39,262) (3,056) nm
Loss from discontinued operations, net
of tax benefit in 2003 (288) (523) 44.9 %
NET LOSS $(39,550) $(3,579) -1005.0 %
Martha Stewart Living Omnimedia, Inc.
Consolidated Balance Sheets
(in thousands, except per share amounts)
June 30, December 31,
2004 2003
ASSETS (unaudited)
CURRENT ASSETS
Cash and cash equivalents $119,462 $165,566
Short-term investments 38,891 3,100
Accounts receivable, net 17,736 39,758
Inventories, net 9,234 7,485
Deferred television production costs 1,448 3,465
Income taxes receivable 5,771 5,658
Deferred income taxes, net 1,833 5,024
Other current assets 6,046 4,422
Total current assets 200,421 234,478
PROPERTY, PLANT, AND EQUIPMENT, net 19,870 22,673
INTANGIBLE ASSETS, net 44,257 44,257
DEFERRED INCOME TAXES 3,224 3,224
OTHER NONCURRENT ASSETS 4,440 4,470
Total assets $272,212 $309,102
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $24,663 $26,628
Accrued payroll and related costs 12,245 10,360
Income taxes payable 692 167
Current portion of deferred subscription
income 23,532 23,833
Total current liabilities 61,132 60,988
DEFERRED SUBSCRIPTION INCOME 7,028 7,133
OTHER NONCURRENT LIABILITIES 4,211 4,316
Total liabilities $72,371 $72,437
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Class A common stock, $0.01 par value, 350,000
shares authorized: 20,328 and 19,628 shares
issued in 2004 and 2003, respectively 203 196
Class B common stock, $0.01 par value, 150,000
shares authorized: 29,423 and 30,059 shares
outstanding in 2004 and 2003, respectively 294 301
Capital in excess of par value 186,207 183,744
Unamortized restricted stock (44) (307)
Retained earnings 13,956 53,506
200,616 237,440
Less class A treasury stock - 59 shares at cost (775) (775)
Total shareholders' equity 199,841 236,665
Total liabilities and
shareholders' equity $272,212 $309,102
Martha Stewart Living Omnimedia, Inc.
Supplemental Disclosures Regarding Non- GAAP Financial Information
Three Months Ended June 30,
(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 the
amortization of non-cash stock compensation, (OIDA), a non-GAAP measure. In
order to reconcile OIDA to operating income, depreciation and amortization are
added back to operating income.
2004 2003 % change
OPERATING INCOME (LOSS)
Publishing $(5,321) $9,335 nm
Television (3,531) 2 nm
Merchandising 5,314 7,808 -31.9 %
Internet/ Direct Commerce (2,426) (4,552) 46.7 %
Operating Income (Loss)
before Corporate Overhead (5,964) 12,593 nm
Corporate Overhead (13,332) (11,090) -20.2 %
Total Operating Income (Loss) (19,296) 1,503 nm
DEPRECIATION AND AMORTIZATION
Publishing 61 41 48.8 %
Television 59 385 -84.7 %
Merchandising 190 168 13.1 %
Internet/ Direct Commerce 249 244 2.0 %
Corporate Overhead 1,076 1,216 -11.5 %
Total Depreciation and
Amortization 1,635 2,054 -20.4 %
AMORTIZATION OF NON-CASH
STOCK COMPENSATION
Publishing 51 51 --
Television -- -- --
Merchandising 12 12 --
Internet/ Direct Commerce -- -- --
Corporate Overhead 963 81 nm
Total Amortization 1,026 144 nm
OPERATING INCOME (LOSS) BEFORE DEPRECIATION AND AMORTIZATION
AND AMORTIZATION OF NON-CASH STOCK COMPENSATION
Publishing (5,209) 9,427 -155.3 %
Television (3,472) 387 nm
Merchandising 5,516 7,988 -30.9 %
Internet/ Direct Commerce (2,177) (4,308) 49.5 %
Operating Income (Loss) before
Depreciation and Amortization,
Amortization of Non-Cash Stock
Compensation and before
Corporate Overhead (5,342) 13,494 nm
Corporate Overhead (11,293) (9,793) -15.3 %
Operating Income (Loss) Before
Depreciation and Amortization and
Amortization of Non-Cash
Stock Compensation $(16,635) $3,701 nm
Martha Stewart Living Omnimedia, Inc.
Supplemental Disclosures Regarding Non- GAAP Financial Information
Six Months Ended June 30,
(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 the
amortization of non-cash stock compensation, (OIDA), a non-GAAP measure. In
order to reconcile OIDA to operating income, depreciation and amortization are
added back to operating income.
2004 2003 % change
OPERATING INCOME (LOSS)
Publishing $(9,946) $14,306 nm
Television (5,478) 229 nm
Merchandising 11,803 14,842 -20.5 %
Internet/ Direct Commerce (5,105) (12,804) 60.1 %
Operating Income (Loss)
before Corporate Overhead (8,726) 16,573 nm
Corporate Overhead (27,885) (22,610) -23.3 %
Total Operating Loss (36,611) (6,037) nm
DEPRECIATION AND AMORTIZATION
Publishing 123 82 50.0 %
Television 116 779 -85.1 %
Merchandising 380 337 -12.8 %
Internet/ Direct Commerce 492 491 -.2 %
Corporate Overhead 2,198 2,506 -12.3 %
Total Depreciation and
Amortization 3,309 4,195 -21.1 %
AMORTIZATION OF NON-CASH STOCK COMPENSATION EXPENSE (BENEFIT)
Publishing 102 102 --
Television -- -- --
Merchandising 25 25 --
Internet/ Direct Commerce -- (22) nm
Corporate Overhead 2,353 162 nm
Total Amortization 2,480 267 nm
OPERATING INCOME (LOSS) BEFORE DEPRECIATION AND AMORTIZATION
AND AMORTIZATION OF NON-CASH STOCK COMPENSATION
Publishing (9,721) 14,490 nm
Television (5,362) 1,008 nm
Merchandising 12,208 15,204 -19.7 %
Internet/ Direct Commerce (4,613) (12,335) 62.6 %
Operating Income (Loss) before
Depreciation and Amortization,
Amortization of Non-Cash Stock
Compensation and before
Corporate Overhead (7,488) 18,367 nm
Corporate Overhead (23,334) (19,942) -17.0 %
Operating Loss Before Depreciation
and Amortization and Amortization
of Non-Cash Stock Compensation $(30,822) $(1,575) nm
Martha Stewart Living Omnimedia, Inc.
Supplemental Disclosures Regarding Allocation of Amortization
of non-cash Stock Compensation Expense
Three and Six Months Ended June 30,
(in thousands)
(a) The amortization of non-cash stock compensation expense for the three
month periods ended June 30, should be allocated as follows:
2004 2003
Production, distribution and editorial $25 $25
Selling and promotion 25 25
General and administrative 976 94
Total 1,026 144
(b) The amortization of non-cash stock compensation expense for the six
month periods ended June 30, should be allocated as follows:
2004 2003
Production, distribution and editorial $50 $50
Selling and promotion 50 50
General and administrative 2,380 167
Total 2,480 267
Investors
Howard Hochhauser
VP Finance and Investor Relations
212-827-8530
Media
Elizabeth Estroff
AVP, Corporate
Communications
212-827-8281
Both of of Martha Stewart Living Omnimedia
Inc.
