Press Releases
Martha Stewart Living Omnimedia Announces 4Q and 2011 Results
By admin

NEW YORK -- Martha Stewart Living Omnimedia, Inc. today announced its results for the fourth quarter and full year ended Dec. 31, 2011. The Company reported revenue for the fourth quarter and full year 2011 of $61.7 million and $221.4 million, respectively.

Lisa Gersh, president and chief operating officer, said, "Our fourth quarter results were in line with our expectations and underscore the importance of our work to return Martha Stewart Living Omnimedia to growth and profitability. We have assembled an energized team that is focused on delivering on our strategic priorities, and we anticipate beginning to show the benefits of our actions in the second half of 2012, with a strong emphasis on improved execution in our print advertising sales. We also anticipate revenue and margins in our merchandising business to show continued improvement this year, and see the longer-term outlook for this business as bullish in light of our new alliance with J.C. Penney and, as announced earlier this week, the extension of our relationship with The Home Depot through 2016."

Fourth Quarter 2011 Summary

Revenues were $61.7 million in the fourth quarter of 2011, compared to $72.6 million in the fourth quarter of 2010, primarily due to lower advertising revenue that impacted both our publishing and broadcasting segments, as anticipated, partially offset by higher merchandising revenue.

Adjusted EBITDA for the fourth quarter of 2011 was $3.3 million, compared to $5.6 million in the prior year period.

Operating loss for the fourth quarter of 2011 was $(0.04) million compared with $3.4 million in the prior-year period. Included in the fourth quarter of 2011 was a $1.3 million restructuring charge related to severance costs and staffing adjustments.

Fourth quarter 2011 net income benefitted from approximately $5.0 million of other income, primarily reflecting a gain on the sale of the Company's equity interest in WeddingWire.

Basic and diluted net income per share was $0.07 for the fourth quarter of 2011, compared to $0.08 and $0.07, respectively for the fourth quarter of 2010.

In December, the Company declared and paid a special one-time dividend of $0.25 per share aggregating $16.7 million, and paid off the remaining $6 million debt originating from the purchase of the assets related to Emeril Lagasse's media and merchandising business. MSLO ended 2011 with $49.5 million in cash, cash equivalents and short-term investments.

Full-Year 2011 Summary

Revenues were $221.4 million in 2011, compared to $230.8 million in 2010.

Adjusted EBITDA for the full-year 2011 was a loss of $(4.0) million, compared to Adjusted EBITDA of $1.4 million in the prior year.

Operating loss for the full-year 2011 was $(18.6) million, compared to an operating loss of $(8.7) million in 2010. Included in the 2011 results were restructuring charges of $5.1 million.

Net loss per share was $(0.28) for the full-year 2011, compared to a net loss per share of $(0.18) in 2010, inclusive of the impacts of the restructuring charges which were partially offset by higher other income as noted above.

Fourth Quarter 2011 Results by Segment

Three Months Ended, December 31

(unaudited, in thousands)



2011

2010

REVENUES

  Publishing

$    38,798

$    44,627

  Broadcasting

9,766

16,358

  Merchandising

13,130

11,606

Total Revenues

$    61,694

$    72,591






ADJUSTED EBITDA

  Publishing

$        1,676

$         4,714

  Broadcasting

(763)

920

  Merchandising

8,809

7,024

  Corporate

(6,455)

(7,071)

Total Adjusted EBITDA

$        3,267

$         5,587





OPERATING INCOME/ (LOSS)





  Publishing(1)

$        886

$         4,440

  Broadcasting(1)

(1,126)

777

  Merchandising(1)

8,776

6,848

  Corporate(1)

(8,574)

(8,647)

  Total Operating Income(1)

$         (38)

$         3,418











(1) The Company recorded restructuring charges in the fourth quarter of 2011 totaling (in thousands) $1,324, allocated as follows: Publishing: $478; Broadcasting: $246; Merchandising: $13; and Corporate: $587.



Publishing

Revenues in the fourth quarter of 2011 were $38.8 million, compared to $44.6 million in the prior year's fourth quarter, primarily due to lower print and digital advertising revenues.  

Adjusted EBITDA was $1.7 million in the fourth quarter of 2011, compared to $4.7 million in the prior year's quarter, primarily due to a decline in print and digital advertising sales. During January 2012, as part of a strategic move to align the Company's sales and marketing team around its magazine brands, MSLO began to build out the ad sales team with the goal of capturing more ad dollars and expects to see the benefits of this investment in the second half of 2012.

Operating income was $0.9 million for the fourth quarter of 2011, compared to $4.4 million in the prior year's quarter.

Highlights for the Quarter

  • According to comScore Unified data, unique visitors across MSLO's websites increased 7% in the quarter compared to the prior-year period.
  • Subscriptions were up across all titles and each magazine delivered readers in excess of its rate base in the quarter.
  • Martha's 75th book, Martha's Entertaining, was published in October, followed by Everyday Food: Light in December.
  • Martha Stewart Living's Egg Dyeing 101 app was named "Best Single-Purpose Educational App" at Advertising Age's annual Media Vanguard Awards in November.

 

Broadcasting

Revenues in the fourth quarter of 2011 were $9.8 million, compared to $16.4 million in the fourth quarter of 2010, a decline that was anticipated in light of lower programming and advertising revenue.

Adjusted EBITDA was a loss of $(0.8) million for the fourth quarter of 2011 compared to adjusted EBITDA of $0.9 million in the prior year's fourth quarter as cost reductions helped offset the decline in revenue.

Operating loss for the fourth quarter of 2011 was $(1.1) million compared to operating income of $0.8 million in 2010.

Highlights for the Quarter

  • MSLO delivered 26 new episodes of Petkeeping with Marc Morrone, which began airing in January.
  • The primetime special Martha's Halloween premiered on Hallmark Channel.
  • The Company extended its agreement to provide programming 24 hours a day, seven days a week on the Martha Stewart Living Radio channel on SiriusXM channel 110.
  • Martha will be hosting the 45th Pillsbury Bake-Off Contest with a series of segments leading up to the finals, and concluding with the announcement of the grand-prize winner via live broadcast on "The Martha Stewart Show" on Hallmark Channel on March 27.

 

Merchandising

Revenues were up 13% to $13.1 million for the fourth quarter of 2011, as compared to $11.6 million in the prior year's fourth quarter, primarily due to strong sales of the Martha Stewart Living line at The Home Depot.

Adjusted EBITDA was $8.8 million for the fourth quarter of 2011, up from $7.0 million in the prior year's fourth quarter.

Operating income was $8.8 million for the fourth quarter of 2011, up from $6.8 million in the fourth quarter of 2010.  

Highlights for the Quarter

  • The Company announced a strategic alliance with J.C. Penney Company, Inc., joining forces to build distinct Martha Stewart stores in jcpenney department stores and to jointly develop an e-commerce site, featuring Martha Stewart products, know-how and advice.  The stores and website are expected to launch in 2013. The alliance includes a 10-year commercial agreement and a $38.5 million strategic investment by J.C. Penney in MSLO which was completed in December 2011.
  • Under the Company's new partnership with Avery, initial shipments of the new Martha Stewart Home Office product line were delivered to Staples® stores nationwide.
  • The Martha Stewart Living line at The Home Depot continued to perform well, with particularly strong sales in the specialty paint program, which was introduced in 2011, and in holiday merchandise.
  • Performance in the quarter for the Martha Stewart Collection at Macy's was driven by textiles.
  • Martha Stewart Pets marked its first anniversary at PetSmart registering strong growth across the entire product line, particularly in apparel, bedding and toys.
  • Emeril's business benefited from two appearances on HSN in the quarter, as well as his first appearance on The Shopping Channel in Canada.

 

Corporate

Adjusted EBITDA reflects charges of $(6.5) million in the fourth quarter of 2011 compared to charges of $(7.1) million in the prior year's quarter.  Total Corporate expenses were $(8.6) million, including $(0.6) million of the total $(1.3) million restructuring charge, in the fourth quarter of 2011 compared to total Corporate expenses of $(8.6) million in the prior year's quarter.

 

 

 

Martha Stewart Living Omnimedia, Inc.

Consolidated Statements of Operations

Three Months Ended December 31,

(unaudited, in thousands, except share and per share data)

2011

2010


REVENUES

Publishing

$    38,798

$     44,627



Broadcasting

9,766

16,358



Merchandising

13,130

11,606




Total revenues

61,694

72,591




OPERATING COSTS AND EXPENSES

Production, distribution and editorial

33,138

39,454



Selling and promotion

14,814

17,399



General and administrative

11,425

11,377



Depreciation and amortization

1,031

943



Restructuring charges

1,324

—




Total operating costs and expenses

61,732

69,173


OPERATING (LOSS) / INCOME

(38)

3,418




OTHER INCOME /(EXPENSE)

Interest expense, net

(218)

(4)



Gain on sale of short-term investments

—

1,109



Gain on equity securities

—

8



Net gain on sale of cost-based investment

7,647

—



Other-than-temporary loss on cost-based investments

(2,724)

—



      Total other income

4,705

1,113



INCOME BEFORE INCOME TAXES

4,667

4,531









      Income tax provision

(470)

(427)











NET INCOME

$   4,197

$      4,104









INCOME PER SHARE – BASIC AND DILUTED





      Net income — Basic

$      0.07

$    0.08


      Net income — Diluted

$      0.07

$    0.07









WEIGHTED AVERAGE COMMON SHARES OUTSTANDING





      Basic

59,014,889

54,512,490


      Diluted

59,605,829

55,789,142















Martha Stewart Living Omnimedia, Inc.

Consolidated Statements of Operations

Twelve Months Ended December 31,

(unaudited, in thousands, except share and per share data)

2011

2010


REVENUES

Publishing

$    140,857

$      145,573



Broadcasting

31,962

42,434



Merchandising

48,614

42,806




Total revenues

221,433

230,813




OPERATING COSTS AND EXPENSES

Production, distribution and editorial

127,084

128,194



Selling and promotion

57,208

60,288



General and administrative

46,641

46,362



Depreciation and amortization

3,978

4,632



Restructuring charges

5,116

—




Total operating costs and expenses

240,027

239,476


OPERATING LOSS

(18,594)

(8,663)




OTHER INCOME /(EXPENSE)

Interest expense, net

(283)

(66)



Loss on sale of fixed asset

—

(647)



Gain on sale of short-term investments

—

1,512



Gain / (loss) on equity securities

15

(15)



Net gain on sale of cost-based investment

7,647

—



Other-than-temporary loss on cost-based investments

(2,724)

—



      Total other income

4,655

784



LOSS BEFORE INCOME TAXES

(13,939)

(7,879)









      Income tax provision

(1,580)

(1,717)











NET LOSS

$    (15,519)

$     (9,596)









LOSS PER SHARE – BASIC AND DILUTED





      Net Loss

$    (0.28)

$         (0.18)









WEIGHTED AVERAGE COMMON SHARES OUTSTANDING





      Basic and diluted

55,880,896

54,440,490















Martha Stewart Living Omnimedia, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)




December 31,
2011
(unaudited)

December 31,
2010

ASSETS          


CURRENT ASSETS      


         Cash and cash equivalents

$       38,453

$        23,204

         Short-term investments

11,051

10,091

         Accounts receivable, net

48,237

59,250

         Inventory

7,225

5,309

         Deferred television production costs

—

2,413

         Other current assets

4,858

4,772

                   Total current assets

109,824

105,039





PROPERTY, PLANT AND EQUIPMENT, net

13,396

14,507

GOODWILL, net

45,107

45,107

OTHER INTANGIBLE ASSETS, net

45,215

46,547

OTHER NONCURRENT ASSETS, net

2,578

11,114

                   Total assets

$    216,120

$      222,314

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

         Accounts payable and accrued liabilities

$    23,728

$       30,062

         Accrued payroll and related costs

7,008

6,541

         Current portion of deferred subscription revenue

16,018

18,734

         Current portion of other deferred revenue

5,147

4,732

         Current portion loan payable

—

1,500

                   Total current liabilities

51,901

61,569

DEFERRED SUBSCRIPTION REVENUE

3,975

4,529

OTHER DEFERRED REVENUE

2,333

1,413

LOAN PAYABLE

—

7,500

DEFERRED INCOME TAX LIABILITY

5,874

4,527

OTHER NONCURRENT LIABILITIES

4,090

3,743

                   Total liabilities

68,173

83,281

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY

     Class A common stock, $0.01 par value, 350,000,000 shares authorized:
     40,893,964 and 28,753,212 shares issued and outstanding in 2011 and 2010,
     respectively

409

288

     Class B common stock, $0.01 par value, 150,000,000 shares authorized:  
     25,984,625 and 26,317,960 shares issued and outstanding in 2011 and 2010,
     respectively

260

263

     Series A Preferred Stock, one share issued and outstanding in 2011

—

—

     Capital in excess of par value

336,661

295,576

     Accumulated deficit

(188,442)

(156,201)

     Accumulated other comprehensive loss

(166)

(118)

148,722

139,808

     Less: class A treasury stock – 59,400 shares at cost

(775)

(775)

                   Total shareholders' equity

147,947

139,033

                   Total liabilities and shareholders' equity

$    216,120

$   222,314
















Martha Stewart Living Omnimedia, Inc.

Supplemental Disclosures Regarding Non-GAAP Financial Information

Three Months Ended December 31,

(unaudited, in thousands)


The following table presents segment and consolidated financial information, including a reconciliation of net income/(loss), a GAAP measure, and adjusted EBITDA, a non-GAAP measure. In order to reconcile adjusted EBITDA to net income, non-cash equity compensation, depreciation and amortization, restructuring charges, other income/(expense) and income taxes are added back to net income.






2011

2010



ADJUSTED EBITDA

 Publishing

$    1,676

$    4,714


 Broadcasting

(763)

920


 Merchandising

8,809

7,024


 Corporate

(6,455)

(7,071)


Adjusted EBITDA

3,267

5,587


NON-CASH EQUITY COMPENSATION





 Publishing

82

69


 Broadcasting

6

13


 Merchandising

12

168


 Corporate

850

976


   Total Non-Cash Equity Compensation

950

1,226


DEPRECIATION AND AMORTIZATION

 Publishing

230

205


 Broadcasting

111

130


 Merchandising

8

8


 Corporate

682

600


   Total Depreciation and Amortization

1,031

943


RESTRUCTURING CHARGES

 Publishing

478

—

 Broadcasting

246

—

 Merchandising

13

—

 Corporate

587

—

   Total Restructuring Charges

1,324

—

OPERATING INCOME / (LOSS)

 Publishing

886

4,440


 Broadcasting

(1,126)

777


 Merchandising

8,776

6,848


 Corporate

(8,574)

(8,647)


    Total Operating (loss) / income

(38)

3,418









OTHER INCOME / (EXPENSE)





 Interest expense, net

(218)

(4)


 Gain on sale of short-term investments

—

1,109


 Gain on equity securities

—

8


 Net gain on sale of cost-based investment

7,647

—


 Other-than-temporary loss on cost-based investments

(2,724)

—


 Total other income

4,705

1,113



INCOME BEFORE INCOME TAXES

4,667

4,531










 Income tax provision

(470)

(427)










NET INCOME

$    4,197

$   4,104













Martha Stewart Living Omnimedia, Inc.

Supplemental Disclosures Regarding Non-GAAP Financial Information

Twelve Months Ended December 31,

(unaudited, in thousands)


The following table presents segment and consolidated financial information, including a reconciliation of net income/(loss), a GAAP measure, and adjusted EBITDA, a non-GAAP measure. In order to reconcile adjusted EBITDA to net loss, non-cash equity compensation, depreciation and amortization, restructuring charges, other income/(expense) and income taxes are added back to net loss.






2011

2010



ADJUSTED EBITDA

 Publishing

$    (4,180)

$      4,329


 Broadcasting

(3,603)

(470)


 Merchandising

30,241

25,847


 Corporate

(26,462)

(28,336)


Adjusted EBITDA

(4,004)

1,370


NON-CASH EQUITY COMPENSATION







Publishing

682

552


Broadcasting

67

230


Merchandising

224

803


Corporate

4,523

3,816


   Total Non-Cash Equity Compensation

5,496

5,401


DEPRECIATION AND AMORTIZATION

 Publishing

774

1,127


 Broadcasting

470

878


 Merchandising

32

43


 Corporate

2,702

2,584


   Total Depreciation and Amortization

3,978

4,632


RESTRUCTURING CHARGES

 Publishing

828

—

 Broadcasting

600

—

 Merchandising

13

—

 Corporate

3,675

—

   Total Restructuring Charges

5,116

—

OPERATING (LOSS) / INCOME

 Publishing

(6,464)

2,650


 Broadcasting

(4,740)

(1,578)


 Merchandising

29,972

25,001


 Corporate

(37,362)

(34,736)


    Total Operating Loss

(18,594)

(8,663)









OTHER INCOME / (EXPENSE)





 Interest expense, net

(283)

(66)


 Loss on sale of fixed asset

—

(647)


 Gain on sale of short-term investments

—

1,512


 Gain / (loss) on equity securities

15

(15)


 Net gain on sale of cost-based investment

7,647

—


 Other-than-temporary loss on cost-based investments

(2,724)

—


 Total other income

4,655

784



LOSS BEFORE INCOME TAXES

(13,939)

(7,879)










 Income tax provision

(1,580)

(1,717)










NET LOSS

$   (15,519)

$   (9,596)













Source: Martha Stewart Living Omnimedia, Inc.

 

 

.

Have something to say? Share your thoughts with us in the comments below.

RELATED ARTICLES

RECENT ARTICLES