1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 2001
COMMISSION FILE NUMBER 001-15395
Martha Stewart Living Omnimedia, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 52-2187059
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
11 West 42nd Street 10036
New York, NY (Zip Code)
(Address of principal executive offices)
Registrant's Telephone Number, Including Area Code: (212) 827-8000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding at
Class August 9, 2001
Class A, $0.01 par value 14,808,419
Class B, $0.01 par value 33,888,375
----------
Total 48,696,794
==========
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Martha Stewart Living Omnimedia, Inc.
Index to Form 10-Q
Page
----
Part I. Financial information
Item 1. Financial Statements 2
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9
Part II. Other Information
Item 4. Submission of matters to a vote of security 13
holders
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
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PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Martha Stewart Living Omnimedia, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share amounts)
June 30, December 31,
2001 2000
-------- --------
(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $123,346 $127,425
Accounts receivable, net 41,245 48,993
Inventories 12,145 9,433
Deferred television production costs 4,408 3,949
Other current assets 5,756 6,013
-------- --------
Total current assets 186,900 195,813
-------- --------
PROPERTY, PLANT AND EQUIPMENT, net 41,992 37,349
-------- --------
INTANGIBLE ASSETS, net 49,374 47,207
-------- --------
OTHER ASSETS 18,681 17,045
-------- --------
Total assets $296,947 $297,414
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 35,566 $ 48,340
Accrued payroll and related costs 7,339 7,190
Income taxes payable 452 2,590
Current portion of deferred subscription income 29,827 28,782
-------- --------
Total current liabilities 73,184 86,902
-------- --------
DEFERRED SUBSCRIPTION INCOME 8,909 8,614
-------- --------
OTHER NONCURRENT LIABILITIES 4,777 5,782
-------- --------
Total liabilities 86,870 101,298
-------- --------
SHAREHOLDERS' EQUITY
Class A common stock, $.01 par value, 350,000 shares
authorized; 14,808 and 14,559 shares outstanding in 2001
and 2000, respectively 148 146
Class B common stock, $.01 par value, 150,000 shares
authorized; 33,888 outstanding in 2001 and 2000 339 339
Capital in excess of par value 171,080 168,528
Retained earnings 38,510 27,103
-------- --------
Total shareholders' equity 210,077 196,116
-------- --------
Total liabilities and shareholders' equity $296,947 $297,414
======== ========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
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Martha Stewart Living Omnimedia, Inc.
Condensed Consolidated Income Statements
(unaudited, in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ --------------------------
2001 2000 2001 2000
------- ------- -------- --------
Revenues
Publishing $42,182 $43,132 $ 89,653 $ 88,101
Television 6,899 6,990 13,343 14,333
Merchandising 8,796 5,968 16,624 12,158
Internet/Direct Commerce 11,813 13,103 21,314 23,747
------- ------- -------- --------
Total revenues 69,690 69,193 140,934 138,339
------- ------- -------- --------
Operating costs and expenses
Production, distribution and editorial 36,990 36,511 72,745 72,644
Selling and promotion 10,976 11,334 23,409 22,537
General and administrative 10,629 10,481 21,561 20,832
Depreciation and amortization 3,226 2,324 5,942 4,436
------- ------- -------- --------
Total operating costs and expenses 61,821 60,650 123,657 120,449
------- ------- -------- --------
Income from operations 7,869 8,543 17,277 17,890
Interest income, net 1,096 1,313 2,392 2,698
------- ------- -------- --------
Income before income taxes 8,965 9,856 19,669 20,588
Income tax provision 3,766 3,904 8,262 9,055
------- ------- -------- --------
Net income $ 5,199 $ 5,952 $ 11,407 $ 11,533
======= ======= ======== ========
Earnings per share
Basic $ 0.11 $ 0.12 $ 0.23 $ 0.24
======= ======= ======== ========
Diluted $ 0.11 $ 0.12 $ 0.23 $ 0.23
======= ======= ======== ========
Weighted average common shares outstanding
Basic 48,608 48,277 48,562 48,946
Diluted 49,081 48,704 49,129 50,090
The accompanying notes are an integral part of these condensed consolidated
financial statements.
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Martha Stewart Living Omnimedia, Inc.
Consolidated Statement of Shareholders' Equity
For the Six Months Ended June 30, 2001
(unaudited, in thousands)
Class A Class B
common stock common stock
------------------ ------------------
Capital in
excess of par Retained
Shares Amount Shares Amount value earnings Total
------ ------ ------ ------ ----- -------- -----
Balance at January 1, 2001 14,559 $146 33,888 $339 $168,528 $27,103 $196,116
Net income for the period -- -- -- -- -- 11,407 11,407
Issuance of shares for stock option
exercises 249 2 -- -- 2,552 -- 2,554
------ ---- ------ ---- -------- ------- --------
Balance at June 30, 2001 14,808 $148 33,888 $339 $171,080 $38,510 $210,077
====== ==== ====== ==== ======== ======= ========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
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Martha Stewart Living Omnimedia, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
Six Months Ended
June 30,
2001 2000
--------- ---------
Cash flows from operating activities
Net income $ 11,407 $ 11,533
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 5,942 4,436
Changes in operating assets and liabilities (11,492) (2,890)
--------- ---------
Net cash provided by operating activities 5,857 13,079
--------- ---------
Cash flows from investing activities
Equity investment -- (13,297)
Acquisition of business (3,830) --
Capital expenditures (8,660) (6,181)
--------- ---------
Net cash used in investing activities (12,490) (19,478)
--------- ---------
Cash flows from financing activities
Repurchase of common stock -- (32,488)
Proceeds received from stock option exercises 2,554 --
--------- ---------
Net cash provided by (used in) financing activities 2,554 (32,488)
--------- ---------
Net decrease in cash (4,079) (38,887)
Cash and cash equivalents, beginning of period 127,425 154,749
--------- ---------
Cash and cash equivalents, end of period $ 123,346 $ 115,862
========= =========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
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Martha Stewart Living Omnimedia, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited, in thousands, except
per share data)
1. Accounting policies
a. General
Martha Stewart Living Omnimedia, Inc., together with its subsidiaries, is
herein referred to as the "Company."
The information included in the foregoing interim condensed consolidated
financial statements is unaudited. In the opinion of management, all
adjustments 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 herein. The results of operations for
interim periods are not necessarily indicative of the results to be
expected for the entire year. These condensed consolidated financial
statements are unaudited and should be read in conjunction with the
audited financial statements included in the Company's Annual Report on
Form 10-K filed with the Securities and Exchange Commission with respect
to its fiscal year ended December 31, 2000.
b. Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles 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.
c. Intangible assets
Intangible assets, representing the excess of purchase price over net
assets acquired, are being amortized over twenty years. Management
reassesses quarterly the appropriateness of both the carrying value and
remaining life of intangible assets, principally based on forecasts of
future undiscounted cash flows.
d. Income taxes
The Company follows Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." Under the asset and liability method of
SFAS 109, 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.
e. New Accounting pronouncements
In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible
Assets" ("SFAS 142"). Under SFAS 142, goodwill is no longer subject to
amortization over its estimated useful life. Rather, goodwill is subject
to an annual assessment for impairment by applying a fair-value based
test. The standard is effective beginning January 1, 2002. The Company has
yet to determine the impact of the standard on its financial position and
results of operations.
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Martha Stewart Living Omnimedia, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited, in thousands, except
per share data)
2. Inventories
The components of inventories are as follows:
June 30, December 31,
2001 2000
------- ------
Paper $ 5,413 $4,151
Product merchandise 6,732 5,282
------- ------
$12,145 $9,433
======= ======
3. Earnings per share
Earnings per share are computed in accordance with SFAS No. 128, "Earnings
Per Share". Basic earnings per share are calculated by dividing net income
by the weighted-average number of common shares outstanding during each
period. Diluted earnings per share include the determinants of basic
earnings per share and, in addition, give effect to dilutive potential
common shares.
4. Industry segments
The Company is a leading creator of original "how to" content and related
products for homemakers and other consumers. The Company's business
segments are Publishing, Television, Merchandising and Internet/Direct
Commerce. The Publishing segment primarily consists of the Company's
magazine operations, and also those related to its book, radio, newspaper
and music operations. The Television segment consists of the Company's
television production operations that produce television programming that
airs in syndication in the United States and on cable in the United
States, Canada and certain other international markets, weekly segments on
CBS's The Early Show broadcast, as well as periodic prime time specials.
The Merchandising segment consists of the Company's operations related to
the design of merchandise and related promotional and packaging materials
that are distributed by its retail and manufacturing partners in exchange
for royalty income. The Internet/Direct Commerce segment comprises the
Company's operations relating to the Martha by Mail catalog, a wedding
registry and gift business, and the website marthastewart.com.
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Martha Stewart Living Omnimedia, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited, in thousands, except
per share data)
Revenues for each segment are presented in the condensed consolidated
income statements. Income (loss) from operations for each segment were as
follows:
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2001 2000 2001 2000
-------- -------- -------- --------
Publishing $ 15,238 $ 16,331 $ 32,553 $ 33,770
Television 888 1,341 1,189 2,648
Merchandising 8,468 5,923 16,027 12,052
Internet/Direct Commerce (6,898) (5,440) (12,860) (11,410)
-------- -------- -------- --------
Total before corporate 17,696 18,155 36,909 37,060
charges
Corporate charges (9,827) (9,612) (19,632) (19,170)
-------- -------- -------- --------
Income from operations $ 7,869 $ 8,543 $ 17,277 $ 17,890
======== ======== ======== ========
5. Acquisition of The Wedding List
In March 2001, the Company acquired certain assets and liabilities of The
Wedding List, a wedding registry and gift business. The purchase price was
approximately $3.8 million. Goodwill of approximately $3.6 million,
recognized from the transaction based upon a preliminary estimate of the
purchase price, is being amortized over twenty years.
6. Supplemental Cash Flow Information
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2001 2000 2001 2000
-------- -------- -------- --------
Cash paid for interest $ 109 $ 158 $ 231 $ 363
Cash paid for income taxes $8,170 $6,546 $10,400 $6,889
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
In this report, the terms "we," "us," "our" and "MSO" refer to Martha Stewart
Living Omnimedia, Inc., and its subsidiaries.
RESULTS OF OPERATIONS
COMPARISON OF THREE MONTHS ENDED JUNE 30, 2001 TO THREE MONTHS ENDED JUNE
30, 2000
Three Months Ended
June 30,
---------------------------
2001 2000
------- -------
(in thousands, except per share amounts)
Revenues
Publishing $42,182 $43,132
Television 6,899 6,990
Merchandising 8,796 5,968
Internet/Direct Commerce 11,813 13,103
------- -------
Total revenues 69,690 69,193
------- -------
Operating costs and expenses
Production, distribution and editorial 36,990 36,511
Selling and promotion 10,976 11,334
General and administrative 10,629 10,481
Depreciation and amortization 3,226 2,324
------- -------
Total operating costs and expenses 61,821 60,650
------- -------
Income from operations 7,869 8,543
------- -------
Interest income (expense), net 1,096 1,313
------- -------
Income before income taxes 8,965 9,856
Income tax provision 3,766 3,904
------- -------
Net income $ 5,199 $ 5,952
======= =======
Earnings per share - basic $ 0.11 $ 0.12
======= =======
Earnings per share - diluted $ 0.11 $ 0.12
======= =======
Revenues. Total revenues increased $.5 million to $69.7 million for the three
months ended June 30, 2001, from $69.2 million for the three months ended June
30, 2000. Publishing revenues decreased $.9 million, or 2%, to $42.2 million for
the three months ended June 30, 2001, from $43.1 million for the three months
ended June 30, 2000. This decrease was primarily due to a decrease in
advertising revenues as a result of a decrease in advertising pages sold in the
Martha Stewart Living magazine which was partially offset by revenues from the
initial issue of Martha Stewart Kids. Television revenues were comparable for
both periods. Merchandising revenues increased $2.8 million, or 47%, to $8.8
million for the three months ended June 30, 2001, from $6.0 million for the
three months ended June 30, 2000, primarily as a result of additional revenues
from the sale of our Martha Stewart Everyday products sold at Kmart, which
reflected the launch of a new housewares product line. Internet/Direct Commerce
revenues decreased $1.3 million, or 10%, to $11.8 million for the three months
ended June 30, 2001, from $13.1 million for the three months ended June 30,
2000, due to lower advertising of $.6 million and lower product sales of $.7
million.
Production, distribution and editorial. Production, distribution and editorial
expenses increased $.5 million, or 1%, to $37.0 million for the three months
ended June 30, 2001, from $36.5 million for the three months ended June 30,
2000. Publishing segment costs increased $1.1 million primarily from the
expenses associated with the initial publication of Martha Stewart Kids.
Internet/Direct Commerce expenses decreased by $.6 million primarily due to a
reduction in catalogue production and distribution costs due to lower catalog
circulation and reductions in outside consulting fees, offset by costs of $.9
million associated
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with the acquired Wedding List business.
Selling and promotion. Selling and promotion expenses decreased $.3 million, or
3%, to $11.0 million for the three months ended June 30, 2001, from $11.3
million for the three months ended June 30, 2000. Publishing segment costs
decreased $1.2 million resulting from lower circulation costs. Internet/Direct
Commerce costs increased $.6 million primarily from the acquired business.
General and administrative. General and administrative expenses were comparable
for both periods at $10.6 million and $10.5 million for the three months ended
June 30, 2001 and June 30, 2000, respectively.
Depreciation and amortization. Depreciation and amortization increased $.9
million, or 39%, to $3.2 million for the three months ended June 30, 2001, from
$2.3 million for the three months ended June 30, 2000. The increase is primarily
due to depreciation of capital expenditures incurred for our new office
facility, which we began occupying in December 2000.
Interest income, net. Interest income, net was $1.1 million for the three months
ended June 30, 2001, compared to $1.3 million for the three months ended June
30, 2000, due primarily to lower interest rates during the 2001 quarter.
Income tax provision. Income tax provision for the three months ended June 30,
2001 was $3.8 million, representing a 42% effective income tax rate. Income tax
provision for the three months ended June 30, 2000 was $3.9 million,
representing a 39.6% effective income tax rate. The low rate in 2000 primarily
reflected an adjustment for a shift to tax free interest income earned on
invested cash.
Net income. Net income was $5.2 million for the three months ended June 30,
2001, compared to net income of $6.0 million for the three months ended June 30,
2000, as a result of the above mentioned factors.
COMPARISON OF SIX MONTHS ENDED JUNE 30, 2001 TO SIX MONTHS ENDED JUNE 30,
2000
Six Months Ended
June 30,
-------------------------------
2001 2000
-------- --------
(in thousands, except per share amounts)
Revenues
Publishing $ 89,653 $ 88,101
Television 13,343 14,333
Merchandising 16,624 12,158
Internet/Direct Commerce 21,314 23,747
-------- --------
Total revenues 140,934 138,339
-------- --------
Operating costs and expenses
Production, distribution and
editorial 72,745 72,644
Selling and promotion 23,409 22,537
General and administrative 21,561 20,832
Depreciation and amortization 5,942 4,436
-------- --------
Total operating costs and
expenses 123,657 120,449
-------- --------
Income from operations 17,277 17,890
-------- --------
Interest income (expense), net 2,392 2,698
-------- --------
Income before income taxes 19,669 20,588
Income tax provision 8,262 9,055
-------- --------
Net income $ 11,407 $ 11,533
======== ========
Earnings per share - basic $ 0.23 $ 0.24
======== ========
Earnings per share - diluted $ 0.23 $ 0.23
======== ========
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Revenues. Total revenues increased $2.6 million, or 2%, to $140.9 million for
the six months ended June 30, 2001, from $138.3 million for the six months ended
June 30, 2000. Publishing revenues increased $1.6 million, or 2%, to $89.7
million for the six months ended June 30, 2001, from $88.1 million for the six
months ended June 30, 2000. This increase was primarily due to revenues from the
publication of a custom published magazine, Martha Stewart Everyday Garden, and
the initial publication of Martha Stewart Kids, partially offset by lower
advertising revenues in Martha Stewart Living magazine due to lower advertising
pages sold. Television revenues decreased $1.0 million, or 7%, to $13.3 million
for the six months ended June 30, 2001 from $14.3 million for the six months
ended June 30, 2000. The decrease is due primarily to lower syndication
advertising revenues on the Martha Stewart Living program due to lower ratings
and lower cable television advertising revenues due primarily to advertising
market conditions and lower ratings. Merchandising revenues increased $4.4
million, or 36%, to $16.6 million for the six months ended June 30, 2001, from
$12.2 million for the six months ended June 30, 2000, primarily as a result of
additional revenues received from our Martha Stewart Everyday products sold at
Kmart, which included the launch of a new housewares product line.
Internet/Direct Commerce revenues decreased $2.4 million, or 10%, to $21.3
million for the six months ended June 30, 2001, from $23.7 million for the six
months ended June 30, 2000, due to lower advertising of $1.3 million and lower
product sales of $1.1 million.
Production, distribution and editorial. Production, distribution and editorial
expenses were comparable at $72.7 million for the six months ended June 30, 2001
and $72.6 million for the six months ended June 30, 2000. Publishing segment
costs increased $2.9 million primarily from the publication of Martha Stewart
Everyday Garden and Martha Stewart Kids. Internet/Direct Commerce costs
decreased $2.8 million due primarily to lower catalog production and
distribution costs due to lower catalog circulation, reductions in outside
consulting fees and a decrease in cost of goods sold and fulfillment costs, each
as a result of lower product sales. These costs were partially offset by $1.3
million of costs associated with the acquired Wedding List business.
Selling and promotion. Selling and promotion expenses increased $.9 million, or
4% to $23.4 million for the six months ended June 30, 2001 from $22.5 million
for the six months ended June 30, 2000 primarily attributable to Internet/Direct
Commerce cost increases of $1.1 million. Internet/Direct Commerce costs
increased primarily due to increased promotional spending of $.4 million and
costs of $.6 million primarily from the acquired business.
General and administrative. General and administrative expenses increased $0.8
million, or 4%, to $21.6 million for the six months ended June 30, 2001, from
$20.8 million for the six months ended June 30, 2000. The higher expenses have
been incurred primarily as a result of higher occupancy costs related to our new
office facility, which we began occupying in December 2000.
Depreciation and amortization. Depreciation and amortization increased $1.5
million, or 34% to $5.9 million for the six months ended June 30, 2001, from
$4.4 million for the six months ended June 30, 2000. The increase is
attributable to higher levels of property and equipment associated with our new
facility.
Interest income, net. Interest income, net was $2.4 million for the six months
ended June 30, 2001, compared to $2.7 million for the six months ended June 30,
2000, due to lower average cash balances and lower interest rates during 2001.
Income tax provision. Income tax provision for the six months ended June 30,
2001 was $8.3 million, representing a 42% effective income tax rate. Income tax
provision for the six months ended June 30, 2001 was $9.1 million, representing
a 44.2% effective income tax rate. The lower rate in 2001 is due to the effect
of tax-free interest income earned on invested cash.
Net income. Net income was $11.4 million for the six months ended June 30, 2001,
compared to net income of $11.5 million for the six months ended June 30, 2000,
as a result of the above mentioned factors.
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LIQUIDITY AND CAPITAL RESOURCES
Cash flows from operating activities were $5.9 and $13.1 million during the six
months ended June 30, 2001, and 2000, respectively, resulting primarily from net
earnings in the period offset by payments for accounts payable and accrued
liabilities. Payments for accounts payable and accrued liabilities in the six
months ended June 30, 2001 exceeded the prior year primarily as a result of
payments for our new office facility and our internet technology upgrade
project.
Cash flows used in investing activities were $12.5 million for the six months
ended June 30, 2001, reflecting a $3.8 million net asset purchase of The Wedding
List, and $8.7 million of capital expenditures, primarily for our internet
technology upgrade project. Cash flows used in investing activities were $19.5
million during the six months ended June 30, 2000, reflecting an investment in
Bluelight.com of $13.3 million and capital expenditures of $6.2 million.
Subsequent to June 30, 2001, the company received cash of $13.3 million, in
exchange for its stock in Bluelight.com. The amount received was equal to the
company's carrying value in the investment.
Cash flows provided by financing activities for the six months ended June 30,
2001 were $2.6 million, representing proceeds received from the exercise of
employee stock options. Cash used in financing activities was $32.5 million
during the six months ended June 30, 2000 representing repurchased Class A
common stock from Time Publishing Ventures Inc.
We have a line of credit with Bank of America in the amount of $10.0 million,
which is available to us for seasonal working capital requirements and general
corporate purposes. As of June 30, 2001, we had no outstanding borrowings under
this facility.
We believe that our available cash balances, together with any cash generated
from operations and any funds available under existing credit facilities, will
be sufficient to meet our operating and recurring cash needs for foreseeable
periods.
SEASONALITY AND QUARTERLY FLUCTUATIONS
Several of our businesses can experience fluctuations in quarterly performance.
For example, Martha Stewart Living magazine was published eleven times in 2000:
three issues in each of the first, second and fourth quarters and two issues in
the third quarter. In 2001, Martha Stewart Living magazine will be published
twelve times. Martha Stewart Weddings is published four times annually: one
issue in each of the second and third quarters and two issues in the fourth
quarter. In addition, we periodically publish special interest publications,
such as Martha Stewart Baby, Martha Stewart Kids, and Martha Stewart Holiday.
Furthermore, the number of advertising pages per issue tends to be higher in
issues published in the fourth quarter. Revenue and income from operations for
the Television segment tend to be higher in the fourth quarter due to generally
higher ratings and the broadcast of prime time television specials.
Internet/Direct Commerce segment revenues also tend to be higher in the fourth
quarter due to increased consumer spending during that period. Revenues from the
Merchandising segment can vary significantly from quarter to quarter due to new
product launches and the seasonal nature of certain products.
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PART II: OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) We held our 2001 Annual Meeting of Stockholders on May 2, 2001.
(c) The following matter was acted upon at the meeting by holders of Class A
Common Stock and Class B Common Stock voting as one class with the following
results:
Election of directors to hold office until our next annual meeting. The
vote on this matter was as follows:
BROKER
FOR VOTE WITHHELD NON-VOTES
-------------- --------------- --------------
Charlotte L. Beers 351,333,511 36,323 0
L. John Doerr 351,336,030 33,804 0
Arthur C. Martinez 351,336,243 33,591 0
Sharon Patrick 351,131,996 237,838 0
Naomi O. Seligman 351,331,645 38,189 0
Martha Stewart 351,136,720 233,114 0
ITEM 5: OTHER INFORMATION
Cautionary Statement Pursuant to The Private Securities Litigation Reform
Act of 1995
We have included in this Quarterly Report 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 belief regarding future events, many of which, by their nature, are
inherently uncertain and outside of our control. It is possible that our actual
results may differ, possibly materially, from the anticipated results indicated
in these forward-looking statements. These statements can be identified by
terminology such as "may," "will," "should," "could," "expects," "intends,"
"plans," "anticipates," "believes," "estimates," "potential" or "continue" or
the negative of these terms or other comparable terminology. Our actual results
may differ materially from those projected in these statements, and factors that
could cause such differences include, but are not limited to, downturns in
national and/or local economies; a softening of the domestic advertising market;
changes in consumer reading, purchasing and/or television viewing patterns;
unanticipated increases in paper, postage or printing costs; technological
developments affecting products or methods of distribution such as the Internet
or e-commerce; operational problems at any of our contractual business partners;
the receptivity of consumers to our product introductions; and changes in
government regulations affecting our industries. Additional information
regarding some of these and other important factors that could cause actual
results to differ from those in our forward-looking statements is contained in
the prospectus forming part of our registration statement on Form S-1 (File No.
333-84001) under the caption "Risk Factors."
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The following exhibits are filed as part of this report:
EXHIBIT
NUMBER EXHIBIT TITLE
------ -------------
10.1 -- Lease, dated as of October 1,
2000, between Newtown Group Properties
Limited Partnership and Martha Stewart
Living Omnimedia, Inc.
10.2 -- Termination of Leases, etc.,
dated as of October 1, 2000, between
Newtown Group Properties Limited
Partnership and Martha Stewart Living
Omnimedia, Inc.
10.3 -- License Agreement, dated June 21,
2001, by and between MSO IP Holdings,
Inc. and Kmart Corporation.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed by the Company during the period
covered by this report.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MARTHA STEWART LIVING OMNIMEDIA, INC.
Date: August 14, 2001 By: /s/ James Follo
------------------------------------------
Name: James Follo
Title: Executive Vice President, Chief
Financial Officer
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INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT TITLE
------ -------------
10.1 -- Lease, dated as of October 1,
2000, between Newtown Group Properties
Limited Partnership and Martha Stewart
Living Omnimedia, Inc.
10.2 -- Termination of Leases, etc.,
dated as of October 1, 2000, between
Newtown Group Properties Limited
Partnership and Martha Stewart Living
Omnimedia, Inc.
10.3 -- License Agreement, dated June 21,
2001, by and between MSO IP Holdings,
Inc. and Kmart Corporation.
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