Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 1-May-15 | |
Entity Information | ||
Entity Registrant Name | MARTHA STEWART LIVING OMNIMEDIA INC | |
Entity Central Index Key | 1091801 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Trading Symbol | MSO | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | FALSE | |
Common Stock | ||
Entity Information | ||
Entity Common Stock, Shares Outstanding | 57,388,277 | |
Class A Common Stock | ||
Entity Information | ||
Entity Common Stock, Shares Outstanding | 32,403,652 | |
Class B Common Stock | ||
Entity Information | ||
Entity Common Stock, Shares Outstanding | 24,984,625 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS | ||
Cash and cash equivalents | $25,113 | $11,439 |
Short-term investments | 27,968 | 36,816 |
Accounts receivable, net | 12,083 | 30,319 |
Other current assets | 2,581 | 3,108 |
Total current assets | 67,745 | 81,682 |
PROPERTY AND EQUIPMENT, net | 4,401 | 4,106 |
INTANGIBLE ASSET - TRADEMARKS | 34,700 | 34,700 |
OTHER NONCURRENT ASSETS | 989 | 991 |
Total assets | 107,835 | 121,479 |
CURRENT LIABILITIES | ||
Accounts payable and accrued liabilities | 9,498 | 14,753 |
Accrued payroll and related costs | 2,027 | 5,706 |
Current portion of other deferred revenue | 14,691 | 16,090 |
Total current liabilities | 26,216 | 36,549 |
OTHER DEFERRED REVENUE | 8,552 | 10,119 |
DEFERRED INCOME TAX LIABILITY | 4,041 | 3,755 |
OTHER NONCURRENT LIABILITIES | 2,376 | 2,371 |
Total liabilities | 41,185 | 52,794 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS’ EQUITY | ||
Capital in excess of par value | 345,549 | 345,021 |
Accumulated deficit | -278,694 | -276,109 |
Accumulated other comprehensive loss | -3 | -24 |
Shareholders' equity before treasury stock | 67,425 | 69,460 |
Less: Class A treasury stock – 59,400 shares at cost | -775 | -775 |
Total shareholders’ equity | 66,650 | 68,685 |
Total liabilities and shareholders’ equity | 107,835 | 121,479 |
Class A Common Stock | ||
SHAREHOLDERS’ EQUITY | ||
Common Stock | 323 | 322 |
Class B Common Stock | ||
SHAREHOLDERS’ EQUITY | ||
Common Stock | $250 | $250 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Class A Common Stock | ||
Common Stock, par value (in dollars per share) | $0.01 | $0.01 |
Common Stock, shares authorized | 350,000,000 | 350,000,000 |
Common Stock, shares issued | 32,335,687 | 32,260,936 |
Common Stock, shares outstanding | 32,276,287 | 32,201,536 |
Treasury stock, shares | 59,400 | 59,400 |
Class B Common Stock | ||
Common Stock, par value (in dollars per share) | $0.01 | $0.01 |
Common Stock, shares authorized | 150,000,000 | 150,000,000 |
Common Stock, shares issued | 24,984,625 | 24,984,625 |
Common Stock, shares outstanding | 24,984,625 | 24,984,625 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
REVENUES | ||
Total revenues | $17,052 | $33,268 |
Production, distribution and editorial | -7,787 | -15,413 |
Selling and promotion | -1,206 | -8,097 |
General and administrative | -9,958 | -8,909 |
Depreciation and amortization | -454 | -3,039 |
OPERATING LOSS | -2,353 | -2,190 |
Interest income / (expense) and other, net | 34 | -432 |
LOSS BEFORE INCOME TAXES | -2,319 | -2,622 |
Income tax (provision) / benefit | -266 | 19 |
NET LOSS | -2,585 | -2,603 |
LOSS PER SHARE – BASIC AND DILUTED | ||
Net loss (in usd per share) | ($0.05) | ($0.05) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||
Basic and diluted (in shares) | 57,207,627 | 56,680,826 |
Publishing | ||
REVENUES | ||
Total revenues | 5,712 | 19,506 |
Depreciation and amortization | -56 | -170 |
OPERATING LOSS | -2,128 | -2,750 |
Merchandising | ||
REVENUES | ||
Total revenues | 10,973 | 13,084 |
Depreciation and amortization | -9 | -19 |
OPERATING LOSS | 7,482 | 9,300 |
Broadcasting | ||
REVENUES | ||
Total revenues | 367 | 678 |
Depreciation and amortization | 0 | -1 |
OPERATING LOSS | ($12) | $193 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Loss (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | ||
Net loss | ($2,585) | ($2,603) |
Other comprehensive (loss) / income: | ||
Amounts reclassified for net realized (gains) / losses on available-for-sale securities included in net loss | -1 | 491 |
Net unrealized gains / (losses) on available-for-sale securities occurring during the period | 22 | -38 |
Other comprehensive income | 21 | 453 |
Total comprehensive loss | ($2,564) | ($2,150) |
Consolidated_Statement_of_Shar
Consolidated Statement of Shareholders' Equity (USD $) | Total | Capital in Excess of Par Value | Accumulated Deficit | Accumulated Other Comprehensive Loss | Class A Treasury Stock | Class A Common Stock | Class B Common Stock |
In Thousands, unless otherwise specified | Common Stock | Common Stock | |||||
Balance at Dec. 31, 2014 | $68,685 | $345,021 | ($276,109) | ($24) | ($775) | $322 | $250 |
Balance, shares at Dec. 31, 2014 | -59 | 32,261 | 24,985 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | -2,585 | -2,585 | |||||
Other comprehensive income | 21 | 21 | |||||
Issuance of shares of stock in conjunction with stock option exercises, shares | 14 | ||||||
Issuance of shares of stock in conjunction with stock option exercises | 61 | 61 | 0 | ||||
Issuance of shares of stock and restricted stock, net of cancellations and tax withholdings, shares | 61 | ||||||
Issuance of shares of stock and restricted stock, net of cancellations and tax withholdings | -107 | -108 | 1 | ||||
Non-cash equity compensation | 575 | 575 | |||||
Balance at Mar. 31, 2015 | $66,650 | $345,549 | ($278,694) | ($3) | ($775) | $323 | $250 |
Balance, shares at Mar. 31, 2015 | -59 | 32,336 | 24,985 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | ($2,585) | ($2,603) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Non-cash revenue | -1,660 | -1,768 |
Depreciation and amortization | 454 | 3,039 |
Non-cash equity compensation | 575 | 601 |
Deferred income tax expense / (benefit) | 286 | -54 |
Other non-cash charges, net | 22 | 535 |
Changes in operating assets and liabilities | ||
Accounts receivable, net | 18,236 | 19,899 |
Accounts payable and accrued liabilities and other | -5,905 | -599 |
Accrued payroll and related costs | -3,679 | -3,491 |
Other deferred revenue | -1,306 | 1,116 |
Other changes | 603 | 1,883 |
Total changes in operating assets and liabilities | 7,949 | 18,808 |
Net cash provided by operating activities | 5,041 | 18,558 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | -100 | -305 |
Purchases of short-term investments | -12,471 | -25,498 |
Sales of short-term investments | 21,250 | 2,471 |
Net cash provided / (used in) by investing activities | 8,679 | -23,332 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds received from stock option exercises | 61 | 890 |
Shares withheld in payment of employee tax obligations | -107 | 0 |
Change in restricted cash | 0 | 14 |
Net cash (used in) / provided by financing activities | -46 | 904 |
Net increase / (decrease) in cash and cash equivalents | 13,674 | -3,870 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 11,439 | 21,884 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | $25,113 | $18,014 |
General
General | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General |
Martha Stewart Living Omnimedia, Inc., together with its subsidiaries, is herein referred to as “we,” “us,” “our,” or the “Company.” | |
The information included in the foregoing interim consolidated financial statements is unaudited. In the opinion of management, all adjustments, all of which are of a normal recurring nature and necessary for a fair presentation of the results of operations for the interim periods presented, have been reflected therein. The results of operations for interim periods do not necessarily indicate the results to be expected for the entire year. These unaudited consolidated financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K, as amended, filed with the Securities and Exchange Commission (the “SEC”) with respect to the Company’s fiscal year ended December 31, 2014 (the “2014 Form 10-K”) which may be accessed through the SEC’s website at http://www.sec.gov. | |
The preparation of financial statements in conformity with United States generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Management does not expect such differences to have a material effect on the Company’s consolidated financial statements. |
Significant_Accounting_Policie
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies |
Recent accounting standards | |
In April 2015, the Financial Accounting Standards Board ("FASB") issued a proposal for a one-year deferral of the effective date for Accounting Standards Update 2014-09 Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). Under this proposal, the standard would be effective for public entities for annual reporting periods beginning after 15 December 2017 and interim periods therein. ASU 2014-09 completes the joint effort by the FASB and the International Accounting Standards Board to improve financial reporting by creating common revenue recognition guidance for GAAP and international financial reporting standards ("IFRS"). The joint project clarifies the principles for recognizing revenue and develops a common revenue standard for GAAP and IFRS. Specifically, it removes inconsistencies and weaknesses in revenue requirements, provides a more robust framework for addressing revenue issues, improves comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets, provides more useful information to users of financial statements through improved disclosure requirements and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. The core principle contemplated by ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. The Company was originally required to adopt ASU 2014-09 on January 1, 2017. Subsequently, the FASB proposed a one-year deferral of the effective date for this standard. If the deferral is adopted, the Company would now be required to adopt the standard on January 1, 2018. Early application is not permitted. The update may be applied using one of two methods: retrospective application to each prior reporting period presented, or retrospective application with the cumulative effect of initially applying the update recognized at the date of initial application. The Company is currently evaluating the transition method that will be elected and the impact of the update on its financial statements and disclosures. | |
The Company’s significant accounting policies are discussed in detail in its 2014 Form 10-K, specifically in Note 2, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements. |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair Value Measurements | Fair Value Measurements | |||||||||||||||
The Company categorizes its assets measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability. The three levels of the fair value hierarchy are: | ||||||||||||||||
• | Level 1: Observable inputs such as quoted prices for identical assets and liabilities in active markets obtained from independent sources. | |||||||||||||||
• | Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs that are derived principally from or corroborated by observable market data. The fair values of the Company’s level 2 securities are primarily obtained from observable market prices for identical underlying securities that may not be actively traded. | |||||||||||||||
• | Level 3: Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available in the circumstances, about the assumptions market participants would use in pricing the asset or liability. | |||||||||||||||
The Company has no liabilities that are measured at fair value on a recurring basis. The following tables present the Company’s assets that are measured at fair value on a recurring basis: | ||||||||||||||||
31-Mar-15 | ||||||||||||||||
(in thousands) | Quoted | Significant | Significant | Total | ||||||||||||
Market | Other | Unobservable | Fair Value | |||||||||||||
Prices in | Observable | Inputs | Measurements | |||||||||||||
Active | Inputs | (Level 3) | ||||||||||||||
Markets for | (Level 2) | |||||||||||||||
Identical | ||||||||||||||||
Assets | ||||||||||||||||
(Level 1) | ||||||||||||||||
Short-term investments: | ||||||||||||||||
Fixed income mutual fund | $ | 2,492 | $ | — | $ | — | $ | 2,492 | ||||||||
U.S. government and agency securities | — | 1,313 | — | 1,313 | ||||||||||||
Corporate obligations | — | 12,018 | — | 12,018 | ||||||||||||
Other fixed income securities | — | 871 | — | 871 | ||||||||||||
International securities | — | 11,274 | — | 11,274 | ||||||||||||
Total | $ | 2,492 | $ | 25,476 | $ | — | $ | 27,968 | ||||||||
31-Dec-14 | ||||||||||||||||
(in thousands) | Quoted | Significant | Significant | Total | ||||||||||||
Market | Other | Unobservable | Fair Value | |||||||||||||
Prices in | Observable | Inputs | Measurements | |||||||||||||
Active | Inputs | (Level 3) | ||||||||||||||
Markets for | (Level 2) | |||||||||||||||
Identical | ||||||||||||||||
Assets | ||||||||||||||||
(Level 1) | ||||||||||||||||
Short-term investments: | ||||||||||||||||
Fixed income mutual fund | $ | 2,492 | $ | — | $ | — | $ | 2,492 | ||||||||
U.S. government and agency securities | — | 951 | — | 951 | ||||||||||||
Corporate obligations | — | 22,145 | — | 22,145 | ||||||||||||
Other fixed income securities | — | 491 | — | 491 | ||||||||||||
International securities | — | 10,311 | — | 10,311 | ||||||||||||
Municipal obligations | — | 426 | — | 426 | ||||||||||||
Total | $ | 2,492 | $ | 34,324 | $ | — | $ | 36,816 | ||||||||
Assets measured at fair value on a nonrecurring basis | ||||||||||||||||
The Company’s non-financial assets, such as intangible assets and property and equipment, are not required to be measured at fair value on a recurring basis. The Company evaluates the recoverability of its indefinite-lived intangible asset by performing impairment tests on an annual basis, as of each October 1, or when events or changes in circumstances indicate that the carrying amounts may not be recoverable. Any resulting asset impairment requires that the asset be recorded at its fair value. The Company's valuation methods to determine fair value utilize significant Level 3 unobservable inputs, which include discount rates, long-term growth rates and royalty rates. |
ShortTerm_Investments
Short-Term Investments | 3 Months Ended |
Mar. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-Term Investments | Short-Term Investments |
The Company's investments consist of marketable debt securities that are classified as available-for-sale and presented as "Short-term investments," a component of current assets on the consolidated balance sheets. The Company's available-for-sale securities represent investments available for current operations and may be sold prior to their stated maturities for strategic or operational reasons. The available-for-sale debt securities are carried at fair value, with the unrealized gains and losses reported in "Accumulated other comprehensive loss." The amortized cost of the available-for-sale debt securities is adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest method. Such amortization is netted against the related interest income and both are included in "Interest income / (expense) and other, net" in the consolidated statements of operations. | |
Realized gains and losses are classified as other income or expense and included in "Interest income / (expense) and other, net" in the consolidated statements of operations. The cost of securities sold is based on the specific identification method. | |
As of March 31, 2015 and December 31, 2014, the Company's amortized cost of its available-for-sale securities approximated fair value. Gross unrealized losses of $(0.02) million as of March 31, 2015 were partially offset by gross unrealized gains of $0.01 million. Gross unrealized losses were $(0.03) million as of December 31, 2014, with gross unrealized gains that were insignificant. The Company considered the declines in market value of its marketable available-for-sale securities investment portfolio to be temporary in nature and did not consider any of its investments other-than-temporarily impaired as of March 31, 2015 and as of December 31, 2014. Contractual maturities for the Company's available-for-sale securities are generally within two years of March 31, 2015. | |
During the three months ended March 31, 2015, the gross realized gains and losses on sales of available-for-sale marketable securities and amounts reclassified out of accumulated other comprehensive loss were insignificant. During the three months ended March 31, 2014, the gross realized gains and losses on sales of available-for-sale marketable securities were $0.03 million and $(0.5) million, respectively, and presented net as "Interest income / (expense) and other, net" on the consolidated statements of operations. Included in the realized gains and losses on sales of available-for-sale marketable securities were gains reclassified out of accumulated other comprehensive loss of $0.03 million and losses reclassified of $(0.5) million. See Note 5, Accumulated Other Comprehensive Loss, in these Notes to Consolidated Financial Statements for further information. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Equity [Abstract] | ||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss | |||||||
Accumulated other comprehensive income / (loss), included as a component of shareholders' equity, consists of unrealized gains and losses affecting equity that, under GAAP, are excluded from net income / (loss). For the Company, accumulated other comprehensive loss is impacted by unrealized gains / (losses) on available-for-sale securities as of the reporting period date and by reclassification adjustments resulting from sales or maturities of available-for-sale securities. The components of accumulated other comprehensive loss as of March 31, 2015 and December 31, 2014 are set forth in the schedule below: | ||||||||
(in thousands) | Unrealized Gains/(Losses) on Available-for-Sale Securities | Total Accumulated Other Comprehensive Loss | ||||||
Balance at December 31, 2014 | $ | (24 | ) | $ | (24 | ) | ||
Amounts reclassified for net realized gains on available-for-sale securities included in net loss * | (1 | ) | (1 | ) | ||||
Net unrealized gains on available-for-sale securities occurring during the period | 22 | 22 | ||||||
Balance at March 31, 2015 | $ | (3 | ) | $ | (3 | ) | ||
* Amounts reclassified for previously unrealized losses on available-for-sale securities are included in "Interest income /(expense) and other, net" in the consolidated statements of operations. |
Credit_Facilities
Credit Facilities | 3 Months Ended |
Mar. 31, 2015 | |
Debt Disclosure [Abstract] | |
Credit Facilities | Credit Facilities |
On May 19, 2014, the Company entered into an Amendment to the Amended and Restated Loan Agreement between the Company and Bank of America, N.A., dated February 14, 2012, (the "Amended Credit Agreement"), which provided for the continued arrangement for a line of credit with Bank of America, N.A. of $5.0 million. Borrowings under this line of credit are available for investment opportunities, working capital, and the issuance of letters of credit. The annual interest rate on outstanding amounts is equal to a floating rate of 1-month LIBOR Daily Floating Rate plus 1.85%. The annual unused commitment fee is equal to 0.25%. The Amended Credit Agreement expires on June 30, 2015, at which time outstanding amounts borrowed under the agreement, if any, become due and payable. The Company intends to renew its facility on similar or comparable terms. As of March 31, 2015 and December 31, 2014, the Company had no outstanding borrowings against its line of credit, but had outstanding letters of credit of $1.0 million on both dates. |
Fixed_Assets_net
Fixed Assets, net | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Capital Leases of Lessor [Abstract] | ||||
Fixed Assets, net | Fixed Assets, net | |||
On February 1, 2015, the Company acquired computer equipment pursuant to a capital lease. The minimum lease payments of $0.7 million through February 1, 2017, the end of the lease term, are as follows: | ||||
Cash Payments (in thousands) | ||||
2015 | $ | 230 | ||
2016 | 230 | |||
2017 | 230 | |||
The present value of these minimum lease payments was $0.7 million, with imputed interest of $0.01 million. The present value of the minimum lease payments, along with associated accumulated amortization of the capital lease of $0.04 million, were included within "Property and Equipment, net" on the consolidated balance sheet as of March 31, 2015. Ownership of the computer equipment transfers to the Company at the end of the lease term. Accordingly, the computer equipment under this capital lease is being amortized over three years, consistent with the Company's normal depreciation policy for owned computer assets. | ||||
Depreciation and amortization expense was $0.5 million during the three months ended March 31, 2015, which included $0.04 million of amortization of assets recorded under a capital lease. For the three months ended March 31, 2014, depreciation and amortization expense was $3.0 million, which included $2.1 million from the non-recurring accelerated amortization of leasehold improvements related to the consolidation of the Company's primary office space during February 2014. |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes |
The Company follows ASC Topic 740, Income Taxes (“ASC 740”). Under the asset and liability method of ASC 740, deferred assets and liabilities are recognized for the future costs and benefits attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The Company periodically reviews the requirements for a valuation allowance and makes adjustments to such allowances when changes in circumstances result in changes in the Company’s judgment about the future realization of deferred tax assets. The Company intends to maintain a valuation allowance until evidence would support the conclusion that it is more likely than not that the deferred tax assets will be realized. | |
The Company recorded $0.3 million of net tax expense during the three months ended March 31, 2015. The tax expense was attributable to differences between the financial statement carrying amounts of past acquisitions of certain indefinite-lived intangible assets and their respective tax bases. | |
ASC 740 further establishes guidance on the accounting for uncertain tax positions. As of March 31, 2015, the liability for uncertain tax positions balance is zero. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for the years before 2005 and state examinations for the years before 2003. The Company does not anticipate that the liability will change significantly over the next 12 months. |
Industry_Segments
Industry Segments | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||
Industry Segments | Industry Segments | |||||||||||||||||||
The Company is a globally recognized lifestyle company committed to providing consumers with inspiring content and well-designed, high quality products. The Company’s business segments are currently Publishing, Merchandising and Broadcasting. | ||||||||||||||||||||
The Publishing segment primarily consists of the Company’s operations related to producing content for Martha Stewart Living, Martha Stewart Weddings and books, as well as for the content-driven website, marthastewart.com, and for digital distribution of video content. In October 2014, the Company entered into a Magazine, Content Creation and Licensing Agreement (the “MS Living Agreement”) with Meredith Corporation (“Meredith”), and, effective November 1, 2014, the Company discontinued publication of Martha Stewart Living and the Company's digital operations. Pursuant to the MS Living Agreement, Meredith assumed control of advertising sales, circulation and production of Martha Stewart Living and hosting, operating, maintaining, and providing advertising sales and related functions for marthastewart.com, marthastewartweddings.com and related digital assets. The Company will continue to own its underlying intellectual property, and create and provide all editorial content for Martha Stewart Living, marthastewart.com and marthastewartweddings.com. | ||||||||||||||||||||
Concurrently with the MS Living Agreement, the parties also entered into the Magazine Publishing Agreement (the “MS Weddings Agreement”). Pursuant to the MS Weddings Agreement, Meredith assumed responsibility for advertising sales, circulation and production of Martha Stewart Weddings and related special interest publications, including Martha Stewart's Real Weddings, in the United States and Canada. The Company will continue to own its underlying intellectual property, and create and provide all editorial content for Martha Stewart Weddings and related special interest publications. The MS Weddings Agreement provides that Meredith will provide these services on a cost-plus basis. Meredith began delivering editions starting with the February 2015 issue of Martha Stewart Living and the Winter 2015 issue of Martha Stewart Weddings. For further discussion of our partnership with Meredith, see the Notes to Consolidated Financial Statements in our 2014 Form 10-K, specifically Note 1, The Company and Note 2, Summary of Significant Accounting Policies. | ||||||||||||||||||||
The Merchandising segment primarily consists of the Company’s operations related to the design and branding of merchandise and related collateral and packaging materials that are manufactured and distributed by its retail and wholesale partners in exchange for royalty income and, in certain agreements, design fees. The Merchandising segment also includes the licensing of talent services for television programming produced by or on behalf of third parties. | ||||||||||||||||||||
The Broadcasting segment consists of the Company's limited television production operations and television content library licensing. | ||||||||||||||||||||
Segment information for the three months ended March 31, 2015 and 2014 is as follows: | ||||||||||||||||||||
(in thousands) | Publishing | Merchandising | Broadcasting | Corporate | Consolidated | |||||||||||||||
2015 | ||||||||||||||||||||
Revenues | $ | 5,712 | $ | 10,973 | $ | 367 | $ | — | $ | 17,052 | ||||||||||
Non–cash equity compensation | (44 | ) | (14 | ) | — | (517 | ) | (575 | ) | |||||||||||
Depreciation and amortization | (56 | ) | (9 | ) | — | (389 | ) | (454 | ) | |||||||||||
Operating (loss) / income | (2,128 | ) | 7,482 | (12 | ) | (7,695 | ) | (2,353 | ) | |||||||||||
2014 | ||||||||||||||||||||
Revenues | $ | 19,506 | $ | 13,084 | $ | 678 | $ | — | $ | 33,268 | ||||||||||
Non–cash equity compensation | (58 | ) | (53 | ) | (1 | ) | (489 | ) | (601 | ) | ||||||||||
Depreciation and amortization | (170 | ) | (19 | ) | (1 | ) | (2,849 | ) | (3,039 | ) | ||||||||||
Operating (loss) / income | (2,750 | ) | 9,300 | 193 | (8,933 | ) | (2,190 | ) | ||||||||||||
Other_Information
Other Information | 3 Months Ended |
Mar. 31, 2015 | |
Other Information [Abstract] | |
Other Information | Other Information |
Production, distribution and editorial expenses; selling and promotion expenses; and general and administrative expenses are each presented exclusive of depreciation and amortization, which are disclosed separately on the Company's consolidated statements of operations. Additionally, certain prior year amounts have been reclassified to conform to the current year presentation. |
Legal_Matters
Legal Matters | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Matters | Legal Matters |
The Company is party to legal proceedings in the ordinary course of business, including product liability claims for which the Company is indemnified by its licensees. None of these proceedings is deemed material. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2015 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Assets Measured At Fair Value | The following tables present the Company’s assets that are measured at fair value on a recurring basis: | |||||||||||||||
31-Mar-15 | ||||||||||||||||
(in thousands) | Quoted | Significant | Significant | Total | ||||||||||||
Market | Other | Unobservable | Fair Value | |||||||||||||
Prices in | Observable | Inputs | Measurements | |||||||||||||
Active | Inputs | (Level 3) | ||||||||||||||
Markets for | (Level 2) | |||||||||||||||
Identical | ||||||||||||||||
Assets | ||||||||||||||||
(Level 1) | ||||||||||||||||
Short-term investments: | ||||||||||||||||
Fixed income mutual fund | $ | 2,492 | $ | — | $ | — | $ | 2,492 | ||||||||
U.S. government and agency securities | — | 1,313 | — | 1,313 | ||||||||||||
Corporate obligations | — | 12,018 | — | 12,018 | ||||||||||||
Other fixed income securities | — | 871 | — | 871 | ||||||||||||
International securities | — | 11,274 | — | 11,274 | ||||||||||||
Total | $ | 2,492 | $ | 25,476 | $ | — | $ | 27,968 | ||||||||
31-Dec-14 | ||||||||||||||||
(in thousands) | Quoted | Significant | Significant | Total | ||||||||||||
Market | Other | Unobservable | Fair Value | |||||||||||||
Prices in | Observable | Inputs | Measurements | |||||||||||||
Active | Inputs | (Level 3) | ||||||||||||||
Markets for | (Level 2) | |||||||||||||||
Identical | ||||||||||||||||
Assets | ||||||||||||||||
(Level 1) | ||||||||||||||||
Short-term investments: | ||||||||||||||||
Fixed income mutual fund | $ | 2,492 | $ | — | $ | — | $ | 2,492 | ||||||||
U.S. government and agency securities | — | 951 | — | 951 | ||||||||||||
Corporate obligations | — | 22,145 | — | 22,145 | ||||||||||||
Other fixed income securities | — | 491 | — | 491 | ||||||||||||
International securities | — | 10,311 | — | 10,311 | ||||||||||||
Municipal obligations | — | 426 | — | 426 | ||||||||||||
Total | $ | 2,492 | $ | 34,324 | $ | — | $ | 36,816 | ||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Equity [Abstract] | ||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive loss as of March 31, 2015 and December 31, 2014 are set forth in the schedule below: | |||||||
(in thousands) | Unrealized Gains/(Losses) on Available-for-Sale Securities | Total Accumulated Other Comprehensive Loss | ||||||
Balance at December 31, 2014 | $ | (24 | ) | $ | (24 | ) | ||
Amounts reclassified for net realized gains on available-for-sale securities included in net loss * | (1 | ) | (1 | ) | ||||
Net unrealized gains on available-for-sale securities occurring during the period | 22 | 22 | ||||||
Balance at March 31, 2015 | $ | (3 | ) | $ | (3 | ) | ||
* Amounts reclassified for previously unrealized losses on available-for-sale securities are included in "Interest income /(expense) and other, net" in the consolidated statements of operations. |
Fixed_Assets_net_Tables
Fixed Assets, net (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Capital Leases of Lessor [Abstract] | ||||
Schedule of Minimum Lease Payments | The minimum lease payments of $0.7 million through February 1, 2017, the end of the lease term, are as follows: | |||
Cash Payments (in thousands) | ||||
2015 | $ | 230 | ||
2016 | 230 | |||
2017 | 230 | |||
Industry_Segments_Tables
Industry Segments (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||
Segment Information | Segment information for the three months ended March 31, 2015 and 2014 is as follows: | |||||||||||||||||||
(in thousands) | Publishing | Merchandising | Broadcasting | Corporate | Consolidated | |||||||||||||||
2015 | ||||||||||||||||||||
Revenues | $ | 5,712 | $ | 10,973 | $ | 367 | $ | — | $ | 17,052 | ||||||||||
Non–cash equity compensation | (44 | ) | (14 | ) | — | (517 | ) | (575 | ) | |||||||||||
Depreciation and amortization | (56 | ) | (9 | ) | — | (389 | ) | (454 | ) | |||||||||||
Operating (loss) / income | (2,128 | ) | 7,482 | (12 | ) | (7,695 | ) | (2,353 | ) | |||||||||||
2014 | ||||||||||||||||||||
Revenues | $ | 19,506 | $ | 13,084 | $ | 678 | $ | — | $ | 33,268 | ||||||||||
Non–cash equity compensation | (58 | ) | (53 | ) | (1 | ) | (489 | ) | (601 | ) | ||||||||||
Depreciation and amortization | (170 | ) | (19 | ) | (1 | ) | (2,849 | ) | (3,039 | ) | ||||||||||
Operating (loss) / income | (2,750 | ) | 9,300 | 193 | (8,933 | ) | (2,190 | ) | ||||||||||||
Fair_Value_Measurements_Assets
Fair Value Measurements (Assets Measured At Fair Value) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | $27,968 | $36,816 |
Fixed income mutual fund | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 2,492 | 2,492 |
U.S. government and agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 1,313 | 951 |
Corporate obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 12,018 | 22,145 |
Other fixed income securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 871 | 491 |
International securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 11,274 | 10,311 |
Municipal obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 426 | |
Quoted Market Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 2,492 | 2,492 |
Quoted Market Prices in Active Markets for Identical Assets (Level 1) | Fixed income mutual fund | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 2,492 | 2,492 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 25,476 | 34,324 |
Significant Other Observable Inputs (Level 2) | U.S. government and agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 1,313 | 951 |
Significant Other Observable Inputs (Level 2) | Corporate obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 12,018 | 22,145 |
Significant Other Observable Inputs (Level 2) | Other fixed income securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 871 | 491 |
Significant Other Observable Inputs (Level 2) | International securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 11,274 | 10,311 |
Significant Other Observable Inputs (Level 2) | Municipal obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | $426 |
ShortTerm_Investments_Details
Short-Term Investments (Details) (Debt Securities, USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Schedule of Available-for-sale Securities | |||
Available-for-sale debt securities, gross unrealized loss | ($0.02) | ($0.03) | |
Available-for-sale debt securities, gross unrealized gain | 0.01 | ||
Contractual maturity | 2 years | ||
Available-for-sale debt securities, gross realized gain | 0.03 | ||
Available-for-sale debt securities, gross realized loss | -0.5 | ||
Reclassification out of Accumulated Other Comprehensive Income | |||
Schedule of Available-for-sale Securities | |||
Available-for-sale debt securities, gross realized gain | 0.03 | ||
Available-for-sale debt securities, gross realized loss | ($0.50) |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss (Schedule of Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | ($24) | |
Reclassifications from accumulated other comprehensive income (loss) | -1 | [1] |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 22 | |
Ending balance | -3 | |
Unrealized Gains/(Losses) on Available-for-Sale Securities | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | -24 | |
Reclassifications from accumulated other comprehensive income (loss) | -1 | [1] |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 22 | |
Ending balance | ($3) | |
[1] | Amounts reclassified for previously unrealized losses on available-for-sale securities are included in "Interest income /(expense) and other, net" in the consolidated statements of operations. |
Credit_Facilities_Details
Credit Facilities (Details) (USD $) | 0 Months Ended | |||
19-May-14 | Mar. 31, 2015 | Dec. 31, 2014 | 19-May-14 | |
Debt Disclosure [Abstract] | ||||
Line of credit facility, current borrowing capacity | $5,000,000 | |||
Spread over LIBOR | 1.85% | |||
Unused commitment fees | 0.25% | |||
Outstanding borrowing under line of credit | 0 | 0 | ||
Outstanding letters of credit | $1,000,000 | $1,000,000 | ||
Interest rate description | 1-month LIBOR Daily Floating Rate plus 1.85% |
Fixed_Assets_net_Details
Fixed Assets, net (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Feb. 01, 2015 | |
Property, Plant and Equipment | |||
Minimum payments through the end of the lease term | $700,000 | ||
Depreciation and amortization | 454,000 | 3,039,000 | |
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2015 minimum lease payments | 230,000 | ||
2016 minimum lease payments | 230,000 | ||
2017 minimum lease payments | 230,000 | ||
Present value of minimum lease payments | 700,000 | ||
Imputed interest of present value of these minimum lease payments | 10,000 | ||
Computer Hardware And Software [Member] | |||
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Leasehold Improvements | |||
Property, Plant and Equipment | |||
Depreciation and amortization | 2,100,000 | ||
Property and Equipment, net | |||
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
Accumulated amortization of the capital lease | $40,000 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Tax (benefit) / provision | ($266,000) | $19,000 |
Unrecognized tax benefits | $0 |
Industry_Segments_Industry_Inf
Industry Segments (Industry Information) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Segment Reporting Information | ||
Revenues | $17,052 | $33,268 |
Non–cash equity compensation | -575 | -601 |
Depreciation and amortization | -454 | -3,039 |
Operating (loss) / income | -2,353 | -2,190 |
Publishing | ||
Segment Reporting Information | ||
Revenues | 5,712 | 19,506 |
Non–cash equity compensation | -44 | -58 |
Depreciation and amortization | -56 | -170 |
Operating (loss) / income | -2,128 | -2,750 |
Merchandising | ||
Segment Reporting Information | ||
Revenues | 10,973 | 13,084 |
Non–cash equity compensation | -14 | -53 |
Depreciation and amortization | -9 | -19 |
Operating (loss) / income | 7,482 | 9,300 |
Broadcasting | ||
Segment Reporting Information | ||
Revenues | 367 | 678 |
Non–cash equity compensation | 0 | -1 |
Depreciation and amortization | 0 | -1 |
Operating (loss) / income | -12 | 193 |
Corporate | ||
Segment Reporting Information | ||
Revenues | 0 | 0 |
Non–cash equity compensation | -517 | -489 |
Depreciation and amortization | -389 | -2,849 |
Operating (loss) / income | ($7,695) | ($8,933) |