Exhibit 99.1
Martha Stewart Living Omnimedia Reports Fourth Quarter and Full-Year 2009 Results
- Improved Overall Performance in the Quarter with Significant Gains in Internet; Revenue Growth in Broadcasting and Signs of Recovery in Print
- Positive Year-Over-Year Sales Growth in Key Merchandising Partnerships
NEW YORK, Feb. 17 /PRNewswire-FirstCall/ — Martha Stewart Living Omnimedia, Inc. (NYSE: MSO) today announced its results for the fourth quarter and for the year ended December 31, 2009. The company reported revenue for the fourth quarter and full year of $87.6 million and $244.8 million, respectively.
Charles Koppelman, Executive Chairman and Principal Executive Officer, said, “In 2009, we continued to execute on our strategic goal of diversifying and expanding our Merchandising business with the addition of The Home Depot and other best-in-class partnerships. We are focused on strengthening our Broadcasting presence as evidenced by our recent announcement to offer a range of Martha Stewart-branded programming on Hallmark Channel and the addition of ‘The Emeril Lagasse Show’ in primetime on Ion Television. We’re very pleased with these exciting new developments and the significant year-over-year growth in our Internet segment this year. We see many opportunities before us as we focus on building on our strong foundation and taking our Company into a new era.”
Addressing Merchandising performance, Robin Marino, President and Chief Executive Officer of Merchandising, stated, “Our Merchandising business had a strong quarter and a solid year with notably positive year-over-year retail sales of theMartha Stewart Collectionat Macy’s andMartha Stewart Craftsat Michaels. We’re excited about our relationship with The Home Depot, where ourMartha Stewart Livingline of outdoor furniture and ourMartha Stewart Cleanline began rolling out in stores in January 2010. We’re also looking forward to the launch of our paint program at The Home Depot next month followed by the introduction of products in additional categories. With these businesses, along with our forthcomingMartha Stewart Petsline at PetSmart, we believe we are further strengthening our position in key categories where we have strong brand equity and see potential for growth.”
Fourth Quarter 2009 Summary
Revenues rose 20% to $87.6 million in the fourth quarter of 2009, compared to $72.9 million in the fourth quarter of 2008. The fourth quarter of 2009 included the expected recognition of $10 million of previously deferred Kmart royalties as non-cash revenue as well as the minimum guarantee true-up and earned royalties from Kmart.
Adjusted EBITDA was $23.1 million for the fourth quarter of 2009, an improvement from $10.4 million in the prior-year period. The fourth quarter of 2009 included the $10 million non-cash Kmart revenue described above, the minimum guarantee true-up and earned royalties, as well as a $3 million cash make-whole payment partially offset by the 2009 bonus expense. The fourth quarter of 2008 benefited from a reversal of a significant portion of the year’s bonus accrual.
Operating income for the fourth quarter of 2009 was $21.3 million, compared to an operating loss of $(4.5) million for the fourth quarter of 2008. The fourth quarter of 2009 included an impairment charge adjustment of $1.2 million recorded in the Merchandising segment. The fourth quarter of 2008 included an impairment charge of $(9.3) million in the Publishing segment.
Basic and diluted net income per share were $0.38 and $0.37, respectively, for the fourth quarter of 2009, compared to basic and diluted net loss per share of $(0.15) for the fourth quarter of 2008. The fourth quarter of 2009 included an impairment charge adjustment of $1.2 million recorded in the Merchandising segment. Net loss in the 2008 quarter was impacted by an impairment charge of $(9.3) million in the Publishing segment.
Full-Year 2009 Summary
Revenues were $244.8 million in 2009, compared to $284.3 million in 2008.
Adjusted EBITDA for full-year 2009 was $15.3 million, compared to $15.0 million in the prior-year period.
Operating loss for the full-year 2009 was $(12.0) million, compared to an operating loss of $(10.9) million for the full-year 2008. Included in the 2009 results is an impairment charge of $(11.4) million in the Merchandising segment, and included in the 2008 results is an impairment charge of $(9.3) million in the Publishing segment. When excluding the impairment charges recorded in both years, operating loss for the full-year 2009 was $(0.5) million, compared to an operating loss of $(1.5) million for the full-year 2008.
Net loss per share was $(0.27) for the full-year 2009, compared to a net loss per share of $(0.29) for the full-year 2008. Included in the 2009 results is an impairment charge of $(11.4) million or $(0.21) per share in the Merchandising segment, and included in the 2008 results is an impairment charge of $(9.3) million or $(0.18) per share in the Publishing segment. When excluding the impairment charges recorded in both years, net loss per share was $(0.06) for the full-year 2009, compared to a net loss per share of $(0.12) for the full-year 2008.
Fourth Quarter 2009 Results by Segment
| | | | | | | | | |
| | | Three Months Ended, December 31 | |
| | | (unaudited, in thousands) | |
| | | 2009 | | | 2008 | |
| REVENUES | | | | | | | | |
| Publishing | | $ | 40,043 | | | $ | 41,938 | |
| Broadcasting | | | 14,252 | | | | 11,092 | |
| Internet | | | 7,576 | | | | 5,889 | |
| Merchandising | | | 25,700 | | | | 13,935 | |
| | | | | | | |
| Total Revenues | | $ | 87,571 | | | $ | 72,854 | |
| | | | | | | |
| | | | | | | | | |
| ADJUSTED EBITDA | | | | | | | | |
| Publishing | | $ | 3,497 | | | $ | 5,585 | |
| Broadcasting | | | 3,612 | | | | 1,286 | |
| Internet | | | 2,587 | | | | 1,420 | |
| Merchandising | | | 23,783 | | | | 9,421 | |
| Corporate | | | (10,388 | ) | | | (7,349 | ) |
| | | | | | | |
| Total Adjusted EBITDA | | $ | 23,091 | | | $ | 10,363 | |
| | | | | | | |
| | | | | | | | | |
| OPERATING INCOME/(LOSS) | | | | | | | | |
| Publishing | | $ | 3,578 | | | $ | (4,498 | ) |
| Broadcasting | | | 2,871 | | | | (795 | ) |
| Internet | | | 2,181 | | | | 928 | |
| Merchandising | | | 24,594 | | | | 9,262 | |
| Corporate | | | (11,923 | ) | | | (9,410 | ) |
| | | | | | | |
| Total Operating Income/(Loss) | | $ | 21,301 | | | $ | (4,513 | ) |
| | | | | | | |
Publishing
Revenues in the fourth quarter of 2009 were $40.0 million, compared to $41.9 million in the prior year’s fourth quarter, driven mainly by a decrease in subscription revenues that was offset partially by ad page growth atMartha Stewart Livingand the timing of special issues.
Adjusted EBITDA was $3.5 million in the fourth quarter of 2009, compared to $5.6 million in the prior year’s quarter.
Operating income was $3.6 million for the fourth quarter of 2009, compared to an operating loss of $(4.5) million in the fourth quarter of 2008. Included in the 2008 results is an impairment charge of $(9.3) million.
Highlights
| | • | | Ad revenue increased for the first time since the second quarter of 2008. |
| | • | | Emeril 20-40-60: Fresh Food FasthitThe New York Timesbestseller list shortly after publication in late October. |
| | • | | A newEveryday Foodcookbook,Everyday Food: Fresh Flavor Fast, is slated for publication on February 23. |
Broadcasting
Revenues in the fourth quarter of 2009 were $14.3 million, compared to $11.1 million in the fourth quarter of 2008, primarily due to increased integration revenue.
Adjusted EBITDA was $3.6 million for the fourth quarter of 2009, up from $1.3 million in the prior year’s fourth quarter.
Operating income was $2.9 million for the fourth quarter of 2009, compared to a loss of $(0.8) million in the fourth quarter of 2008.
Highlights
| | • | | The company announced a new, multi-year strategic partnership to develop a range of new and original series and primetime specials to air on Hallmark Channel. As part of the agreement, the Emmy-winning daily television seriesThe Martha Stewart Showwill move to Hallmark Channel beginning in September 2010. |
| | • | | Last month, MSLO announced that Chef Emeril Lagasse will be hosting a new weekly, primetime entertainment series,The Emeril Lagasse Show, on ION Television, one of the fastest growing U.S. television networks. The show will debut in Spring 2010. |
| | • | | On Martha Stewart Living Radio, Chef Emeril Lagasse introduced his first live call-in radio show, “Cooking with Emeril,” and Martha expanded the frequency of her weekly, live call-in show “Ask Martha” to two days a week. |
| | • | | The sixth season ofEveryday Foodpremiered on PBS on January 9th.Everyday Foodhas been the No. 1 cooking show on PBS for the last five years. |
Internet
Revenues increased to $7.6 million in the fourth quarter of 2009, compared to $5.9 million in the fourth quarter of 2008. Ad revenue was up 31% in the quarter versus the prior year’s quarter.
Adjusted EBITDA was $2.6 million in the fourth quarter of 2009, an improvement from $1.4 million in the fourth quarter of 2008.
Operating income was $2.2 million in the fourth quarter of 2009, compared with $0.9 million in the fourth quarter of 2008.
Highlights
| | • | | MSLO’s digital properties had record traffic growth in December with 85 million page views and 5 million unique visitors, according to comScore. |
| | • | | For the quarter, consumer engagement across MSLO’s websites showed continued strength with page views up 85% year-over-year and monthly unique visitors up 73% in the same period. |
| | • | | The Company introduced an e-commerce channel on marthastewart.com, showcasing and promoting products while also providing access to more than 1,400 Martha Stewart-branded products in a single, virtual location. |
| | • | | Earlier this week, MSLO launched “Martha’s Everyday Food™,” a recipe-and-shopping-list iPhone and iPod touch application powered by ZipList, Inc., a customizable multiplatform digital grocery and shopping service. |
Merchandising
Revenues were $25.7 million for the fourth quarter of 2009, as compared to $13.9 million in the prior year’s fourth quarter. The fourth quarter of 2009 included the $10 million non-cash Kmart revenue previously described as well as the minimum guarantee true-up and earned royalties.
Adjusted EBITDA was $23.8 million for the fourth quarter of 2009, compared to $9.4 million in the prior year’s fourth quarter. This year’s fourth quarter included a $3 million cash make-whole payment.
Operating income was $24.6 million for the fourth quarter of 2009, compared to $9.3 million in the fourth quarter of 2008.
Highlights
| | • | | In December, MSLO announced plans to introduce an exclusiveMartha Stewart Livingbrand of interior and exterior paint at The Home Depot Stores across the United States and Canada beginning in March 2010. |
| | • | | TheMartha Stewart Livingbrand of Outdoor Living products andMartha Stewart Clean, a branded line of all-natural cleaning solutions that launched in the quarter, began rolling out in The Home Depot stores in January 2010. |
| | • | | TheMartha Stewart Collectionexclusively at Macy’s had positive year-over-year sales growth with strong performance in textiles, food preparation and decorative housewares. |
| | • | | Martha Stewart Craftscontinued to deliver a strong performance at Michaels with double-digit sales growth year-over-year. |
| | • | | Product assortment forMartha Stewart Petshas been finalized and manufacturing is underway in anticipation of the Spring 2010 launch at PetSmart stores. |
Corporate
Total Corporate expenses were $(11.9) million in the fourth quarter of 2009, compared to $(9.4) million in the prior year’s quarter. Adjusted EBITDA loss was $(10.4) million in the current quarter, compared to a loss of $(7.3) million in the prior-year period. The increased loss was primarily due to a combination of the impact of the bonus expense and increased severance in the fourth quarter of 2009 and the positive impact of the reversal of the bonus accrual last year.
The Company will host a conference call with analysts and investors on February 17 at 11:00 a.m. EST that will be broadcast live over the Internet atwww.marthastewart.com/ir.
Use of Non-GAAP Financial Information
In addition to using net income to assess the organization’s overall financial health, Company management uses net income before interest, taxes, depreciation, amortization non-cash equity compensation and impairment charges (“adjusted EBITDA”), a non-GAAP financial measure, to evaluate the performance of our businesses on a real-time basis. Adjusted EBITDA is considered an important indicator of operational strength, is a direct component of the Company’s annual compensation program, and is a significant factor in helping our management determine how to allocate resources and capital. Adjusted EBITDA is used in addition to and in conjunction with results presented in accordance with GAAP. Management considers adjusted EBITDA to be a critical measure of operational health because it captures all of the revenue and ongoing operating expenses of our businesses without the influence of (i) interest charges, which result from our capital structure, not our ongoing business efforts, (ii) taxes, which relate to the overall organizational financial return, not that of any one business, (iii) the capital expenditure costs associated with depreciation and amortization, which are a function of historical decisions on infrastructure and capacity, (iv) the cost of non-cash equity compensation which, as a function of our stock price, can be highly variable, is not necessarily an indicator of current operating performance for any individual business unit, and is amortized over the appropriate period, and (v) non-cash impairment charges, which are impacted by macro-economic conditions and do not necessarily reflect operating performance.
Adjusted EBITDA provides a means to directly evaluate the ability of our business operations to generate returns on a real-time basis. We provide disclosure of adjusted EBITDA because we believe it is useful for investors to have means to assess our performance as we do. While adjusted EBITDA is a customized non-GAAP measure, it also provides a means to analyze value and compare our operating capabilities to those of companies with which we compete, many of which have different compensation plans, depreciation and amortization costs, capital structures and tax burdens. But please note that our non-GAAP results may differ from similar measures used by other companies, even if similar terms are used to identify such measures.
A limitation of adjusted EBITDA is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues for our overall organization. Management evaluates the costs of such tangible and intangible assets through other financial measures such as capital expenditures. Management also evaluates the cost of capitalized tangible and intangible assets by analyzing returns provided on the capital dollars deployed. A further limitation of adjusted EBITDA is that it does not include stock compensation expense related to our workforce. Adjusted EBITDA should be considered in addition to, and not as a substitute for, net income or other measures of financial performance reported in accordance with GAAP.
About Martha Stewart Living Omnimedia, Inc.
Martha Stewart Living Omnimedia, Inc. (MSLO) is a leading provider of original “how-to” information, inspiring and engaging consumers with unique lifestyle content and high-quality products. MSLO is organized into four business segments: Publishing, Broadcasting, Internet, and Merchandising. MSLO is listed on the New York Stock Exchange under the ticker symbol MSO.
Forward-Looking Statements
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 include estimates of future financial performance, potential opportunities, expected product line expansions and additions, future acceptability of our content and our businesses and other statements that 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 or Emeril Lagasse by consumers, advertisers and business partners; further downturns in national and/or local economies; shifts in our business strategies; a loss of the services of Ms. Stewart or Mr. Lagasse; a loss of the services of other key personnel; a further 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; the inability to add to our partnerships or capitalize on existing partnerships; 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 most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission, especially under the heading “Risk Factors,” which may be accessed through the SEC’s World Wide Web site athttp://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,
(unaudited, in thousands, except per share amounts)
| | | | | | | | | |
| | | 2009 | | | 2008 | |
| REVENUES | | | | | | | | |
| Publishing | | $ | 40,043 | | | $ | 41,938 | |
| Broadcasting | | | 14,252 | | | | 11,092 | |
| Internet | | | 7,576 | | | | 5,889 | |
| Merchandising | | | 25,700 | | | | 13,935 | |
| | | | | | | |
| Total revenues | | | 87,571 | | | | 72,854 | |
| | | | | | | |
| | | | | | | | | |
| OPERATING COSTS AND EXPENSES | | | | | | | | |
| Production, distribution and editorial | | | 34,310 | | | | 31,619 | |
| Selling and promotion | | | 17,762 | | | | 19,545 | |
| General and administrative | | | 13,485 | | | | 13,303 | |
| Depreciation and amortization | | | 1,881 | | | | 3,551 | |
| Impairment charge | | | (1,168 | ) | | | 9,349 | |
| | | | | | | |
| Total operating costs and expenses | | | 66,270 | | | | 77,367 | |
| | | | | | | |
| OPERATING INCOME/(LOSS) | | | 21,301 | | | | (4,513 | ) |
| | | | | | | | | |
| OTHER INCOME/(EXPENSE) | | | | | | | | |
| Interest expense, net | | | (11 | ) | | | (49 | ) |
| Loss on equity securities | | | — | | | | (1,456 | ) |
| Other expense | | | — | | | | (277 | ) |
| | | | | | | |
| Total other income/(expense) | | | (11 | ) | | | (1,782 | ) |
| | | | | | | | | |
| INCOME/(LOSS) BEFORE INCOME TAXES | | | 21,290 | | | | (6,295 | ) |
| | | | | | | | | |
| Income tax provision | | | (537 | ) | | | (1,717 | ) |
| | | | | | | |
| | | | | | | | | |
| NET INCOME/(LOSS) | | $ | 20,753 | | | $ | (8,012 | ) |
| | | | | | | |
| | | | | | | | | |
| INCOME/(LOSS) PER SHARE — BASIC AND DILUTED | | | | | | | | |
| Net income/(loss) — Basic | | $ | 0.38 | | | $ | (0.15 | ) |
| | | | | | | |
| Net income/(loss) — Diluted | | $ | 0.37 | | | $ | (0.15 | ) |
| | | | | | | |
| | | | | | | | | |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | | | | | | | | |
| Basic | | | 54,065 | | | | 53,668 | |
| Diluted | | | 55,620 | | | | 53,668 | |
Martha Stewart Living Omnimedia, Inc.
Consolidated Statements of Operations
Twelve Months Ended December 31,
(unaudited, in thousands, except per share amounts)
| | | | | | | | | |
| | | 2009 | | | 2008 | |
| REVENUES | | | | | | | | |
| Publishing | | $ | 128,981 | | | $ | 163,540 | |
| Broadcasting | | | 46,111 | | | | 47,328 | |
| Internet | | | 17,119 | | | | 15,576 | |
| Merchandising | | | 52,566 | | | | 57,866 | |
| | | | | | | |
| Total revenues | | | 244,777 | | | | 284,310 | |
| | | | | | | |
| | | | | | | | | |
| OPERATING COSTS AND EXPENSES | | | | | | | | |
| Production, distribution and editorial | | | 121,522 | | | | 136,709 | |
| Selling and promotion | | | 59,333 | | | | 71,504 | |
| General and administrative | | | 56,584 | | | | 69,632 | |
| Depreciation and amortization | | | 7,874 | | | | 7,973 | |
| Impairment charge | | | 11,432 | | | | 9,349 | |
| | | | | | | |
| Total operating costs and expenses | | | 256,745 | | | | 295,167 | |
| | | | | | | |
| OPERATING LOSS | | | (11,968 | ) | | | (10,857 | ) |
| | | | | | | | | |
| OTHER (EXPENSE) / INCOME | | | | | | | | |
| Interest (expense) / income, net | | | (101 | ) | | | 490 | |
| Loss on equity securities | | | (547 | ) | | | (2,221 | ) |
| Other expense | | | (236 | ) | | | (763 | ) |
| | | | | | | |
| Total other expense | | | (884 | ) | | | (2,494 | ) |
| | | | | | | | | |
| LOSS BEFORE INCOME TAXES | | | (12,852 | ) | | | (13,351 | ) |
| | | | | | | | | |
| Income tax provision | | | (1,726 | ) | | | (2,314 | ) |
| | | | | | | |
| | | | | | | | | |
| NET LOSS | | $ | (14,578 | ) | | $ | (15,665 | ) |
| | | | | | | |
| | | | | | | | | |
| LOSS PER SHARE — BASIC AND DILUTED | | | | | | | | |
| Net Loss | | $ | (0.27 | ) | | $ | (0.29 | ) |
| | | | | | | |
| | | | | | | | | |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | | | | | | | | |
| Basic and diluted | | | 53,880 | | | | 53,360 | |
Martha Stewart Living Omnimedia, Inc.
Consolidated Balance Sheets
(in thousands, except per share amounts)
| | | | | | | | | |
| | | December 31, | | | December 31, | |
| | | 2009 | | | 2008 | |
| | | (unaudited) | | | | | |
| ASSETS | | | | | | | | |
| CURRENT ASSETS | | | | | | | | |
| Cash and cash equivalents | | $ | 25,384 | | | $ | 50,204 | |
| Short-term investments | | | 13,085 | | | | 9,915 | |
| Accounts receivable, net | | | 56,364 | | | | 52,500 | |
| Inventory | | | 5,166 | | | | 6,053 | |
| Deferred television production costs | | | 3,788 | | | | 4,076 | |
| Other current assets | | | 5,709 | | | | 3,752 | |
| | | | | | | |
| Total current assets | | | 109,496 | | | | 126,500 | |
| | | | | | | |
| | | | | | | | | |
| PROPERTY, PLANT AND EQUIPMENT, net | | | 17,268 | | | | 14,422 | |
| GOODWILL, net | | | 45,107 | | | | 45,107 | |
| OTHER INTANGIBLE ASSETS, net | | | 47,070 | | | | 48,205 | |
| OTHER NONCURRENT ASSETS, net | | | 10,850 | | | | 27,051 | |
| | | | | | | |
| Total assets | | $ | 229,791 | | | $ | 261,285 | |
| | | | | | | |
| | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| CURRENT LIABILITIES | | | | | | | | |
| Accounts payable and accrued liabilities | | $ | 26,752 | | | $ | 28,019 | |
| Accrued payroll and related costs | | | 7,495 | | | | 7,525 | |
| Current portion of deferred subscription income | | | 18,587 | | | | 22,597 | |
| Current portion of other deferred revenue | | | 4,716 | | | | 7,582 | |
| | | | | | | |
| Total current liabilities | | | 57,550 | | | | 65,723 | |
| | | | | | | |
| | | | | | | | | |
| DEFERRED SUBSCRIPTION REVENUE | | | 5,672 | | | | 6,874 | |
| OTHER DEFERRED REVENUE | | | 2,759 | | | | 13,334 | |
| LOAN PAYABLE | | | 13,500 | | | | 19,500 | |
| DEFERRED INCOME TAX LIABILITY | | | 3,200 | | | | 1,854 | |
| OTHER NONCURRENT LIABILITIES | | | 3,290 | | | | 3,005 | |
| | | | | | | |
| Total liabilities | | | 85,971 | | | | 110,290 | |
| | | | | | | |
| | | | | | | | | |
| COMMITMENTS AND CONTINGENCIES | | | | | | | | |
| SHAREHOLDERS’ EQUITY | | | | | | | | |
| Class A common stock, $0.01 par value, 350,000 shares authorized: 28,313 and 28,204 shares outstanding in 2009 and 2008, respectively | | | 283 | | | | 282 | |
| Class B common stock, $0.01 par value, 150,000 shares authorized: 26,690 shares outstanding in 2009 and 2008 | | | 267 | | | | 267 | |
| Capital in excess of par value | | | 290,387 | | | | 283,248 | |
| Accumulated deficit | | | (146,605 | ) | | | (132,027 | ) |
| Accumulated other comprehensive income | | | 263 | | | | — | |
| | | | | | | |
| | | | 144,595 | | | | 151,770 | |
| | | | | | | |
| Less class A treasury stock — 59 shares at cost | | | (775 | ) | | | (775 | ) |
| | | | | | | |
| Total shareholders’ equity | | | 143,820 | | | | 150,995 | |
| | | | | | | |
| Total liabilities and shareholders’ equity | | $ | 229,791 | | | $ | 261,285 | |
| | | | | | | |
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/(loss), depreciation and amortization, non- cash equity compensation, and non-cash impairment charges are added back to net income/(loss).
| | | | | | | | | |
| | | 2009 | | | 2008 | |
| | | | | | | | | |
| ADJUSTED EBITDA | | | | | | | | |
| Publishing | | $ | 3,497 | | | $ | 5,585 | |
| Broadcasting | | | 3,612 | | | | 1,286 | |
| Internet | | | 2,587 | | | | 1,420 | |
| Merchandising | | | 23,783 | | | | 9,421 | |
| Corporate | | | (10,388 | ) | | | (7,349 | ) |
| | | | | | | |
| Adjusted EBITDA | | | 23,091 | | | | 10,363 | |
| | | | | | | |
| Publishing | | | (136 | ) | | | 641 | |
| Broadcasting | | | 188 | | | | 203 | |
| Internet | | | (83 | ) | | | 57 | |
| Merchandising | | | 344 | | | | 141 | |
| Corporate | | | 764 | | | | 934 | |
| | | | | | | |
| Total Non-Cash Equity Compensation | | | 1,077 | | | | 1,976 | |
| | | | | | | |
| |
| DEPRECIATION AND AMORTIZATION | | | | | | | | |
| Publishing | | | 55 | | | | 93 | |
| Broadcasting | | | 553 | | | | 1,878 | |
| Internet | | | 489 | | | | 435 | |
| Merchandising | | | 13 | | | | 18 | |
| Corporate | | | 771 | | | | 1,127 | |
| | | | | | | |
| Total Depreciation and Amortization | | | 1,881 | | | | 3,551 | |
| | | | | | | |
| | | | | | | | | |
| IMPAIRMENT CHARGE | | | | | | | | |
| Publishing | | | — | | | | 9,349 | |
| Merchandising | | | (1,168 | ) | | | — | |
| | | | | | | |
| Total Impairment Charge | | | (1,168 | ) | | | 9,349 | |
| | | | | | | |
| | | | | | | | | |
| OPERATING INCOME/(LOSS) | | | | | | | | |
| Publishing | | | 3,578 | | | | (4,498 | ) |
| Broadcasting | | | 2,871 | | | | (795 | ) |
| Internet | | | 2,181 | | | | 928 | |
| Merchandising | | | 24,594 | | | | 9,262 | |
| Corporate | | | (11,923 | ) | | | (9,410 | ) |
| | | | | | | |
| Total Operating Income/(Loss) | | | 21,301 | | | | (4,513 | ) |
| | | | | | | |
| | | | | | | | | |
| OTHER INCOME/(EXPENSE) | | | | | | | | |
| Interest expense, net | | | (11 | ) | | | (49 | ) |
| Income on equity securities | | | — | | | | (1,456 | ) |
| Other expense | | | — | | | | (277 | ) |
| | | | | | | |
| Total other income/(expense) | | | (11 | ) | | | (1,782 | ) |
| | | | | | | | | |
| INCOME/(LOSS) BEFORE INCOME TAXES | | | 21,290 | | | | (6,295 | ) |
| | | | | | | | | |
| Income tax provision | | | (537 | ) | | | (1,717 | ) |
| | | | | | | |
| | | | | | | | | |
| NET INCOME/(LOSS) | | $ | 20,753 | | | $ | (8,012 | ) |
| | | | | | | |
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 income/(loss), depreciation and amortization, non- cash equity compensation, and non-cash impairment charges are added back to net income/(loss).
| | | | | | | | | |
| | | 2009 | | | 2008 | |
| | | | | | | | | |
| ADJUSTED EBITDA | | | | | | | | |
| Publishing | | $ | 3,547 | | | $ | 19,007 | |
| Broadcasting | | | 8,418 | | | | 6,165 | |
| Internet | | | (292 | ) | | | (2,829 | ) |
| Merchandising | | | 38,613 | | | | 33,986 | |
| Corporate | | | (35,001 | ) | | | (41,338 | ) |
| | | | | | | |
| Adjusted EBITDA | | | 15,285 | | | | 14,991 | |
| | | | | | | |
| Publishing | | | 1,083 | | | | 2,855 | |
| Broadcasting | | | 889 | | | | 807 | |
| Internet | | | 150 | | | | 230 | |
| Merchandising | | | 1,468 | | | | 1,038 | |
| Corporate | | | 4,357 | | | | 3,596 | |
| | | | | | | |
| Total Non-Cash Equity Compensation | | | 7,947 | | | | 8,526 | |
| | | | | | | |
| | | | | | | | | |
| DEPRECIATION AND AMORTIZATION | | | | | | | | |
| Publishing | | | 241 | | | | 379 | |
| Broadcasting | | | 1,389 | | | | 2,578 | |
| Internet | | | 1,950 | | | | 1,737 | |
| Merchandising | | | 62 | | | | 90 | |
| Corporate | | | 4,232 | | | | 3,189 | |
| | | | | | | |
| Total Depreciation and Amortization | | | 7,874 | | | | 7,973 | |
| | | | | | | |
| | | | | | | | | |
| IMPAIRMENT CHARGE | | | | | | | | |
| Publishing | | | — | | | | 9,349 | |
| Merchandising | | | 11,432 | | | | — | |
| | | | | | | |
| Total Impairment Charge | | | 11,432 | | | | 9,349 | |
| | | | | | | |
| | | | | | | | | |
| OPERATING (LOSS) / INCOME | | | | | | | | |
| Publishing | | | 2,223 | | | | 6,424 | |
| Broadcasting | | | 6,140 | | | | 2,780 | |
| Internet | | | (2,392 | ) | | | (4,796 | ) |
| Merchandising | | | 25,651 | | | | 32,858 | |
| Corporate | | | (43,590 | ) | | | (48,123 | ) |
| | | | | | | |
| Total Operating Loss | | | (11,968 | ) | | | (10,857 | ) |
| | | | | | | |
| | | | | | | | | |
| OTHER (EXPENSE) / INCOME | | | | | | | | |
| Interest (expense) / income, net | | | (101 | ) | | | 490 | |
| Loss on equity securities | | | (547 | ) | | | (2,221 | ) |
| Other expense | | | (236 | ) | | | (763 | ) |
| | | | | | | |
| Total other expense | | | (884 | ) | | | (2,494 | ) |
| | | | | | | | | |
| LOSS BEFORE INCOME TAXES | | | (12,852 | ) | | | (13,351 | ) |
| | | | | | | | | |
| Income tax provision | | | (1,726 | ) | | | (2,314 | ) |
| | | | | | | |
| | | | | | | | | |
| NET LOSS | | $ | (14,578 | ) | | $ | (15,665 | ) |
| | | | | | | |
CONTACT: Media — Elizabeth Estroff, SVP, Corporate Communications, +1-212-827-8281; or Investors — Katherine Nash, Director, Corporate Communications and Investor Relations, +1-212-827-8722, both for Martha Stewart Living Omnimedia, Inc.
