EXHIBIT 99.1
MARTHA STEWART LIVING OMNIMEDIA, INC.
ANNOUNCES SECOND QUARTER RESULTS
NEW YORK, NEW YORK, AUGUST 3, 2004 -- Martha Stewart Living Omnimedia,
Inc.
(NYSE: MSO) today announced its results for the second quarter and six-month
period ended June 30, 2004.
Revenues for the second quarter of 2004 were $44.0 million, compared to $65.8
million in the prior year's quarter. Operating loss for the second quarter was
$(19.3) million, compared to operating income of $1.5 million for the second
quarter of 2003. Operating income before depreciation and amortization,
including the amortization of non-cash stock compensation, ("OIDA") for the
second quarter of 2004 was a loss of $(16.6) million, compared to OIDA of $3.7
million in the same period last year. Loss per share from continuing operations
was $(0.39) for the second quarter of 2004, compared to income per share from
continuing operations of $0.02 in the second quarter of 2003.
Sharon L. Patrick, President and Chief Executive Officer, said, "Our second
quarter results, while reflecting losses due to the negative effects of Martha
Stewart's personal legal situation, primarily on the Company's advertising
performance, were nevertheless in line with our expectations and previous
guidance. We remain encouraged by the support for the Company from our large,
stalwart core base of readers, viewers and shoppers who remain loyal to our
publications and quality products; and by our significant financial resources.
Those resources - $158 million in cash and short-term securities and no debt -
will allow us to manage through this period and invest in our future.
"Given the recent developments in Martha Stewart's legal situation, we are
moving ahead with a substantial amount of the uncertainty behind us. As we have
said before, we continue to manage the Company for the long-term, carefully
deploying our significant resources. Consistent with that approach, we have
recently taken strategic actions, including adjusting staffing levels in our
television business to reflect that we have placed the Martha Stewart Living
program on hiatus for Season 12 and taking steps to transition our
Internet/Direct Commerce segment to focus primarily on the delivery of our
inspired and original `how-to' information for the home through our website.
Furthermore, we continue to make progress to evolve our brands from expert
personality to trusted brand labels on a step-by-step basis with an eye to
future growth.
"We announced today that we have signed a multi-year agreement with the PBS
presenting station WETA in Washington D.C., to distribute our newest television
series Everyday Food on PBS stations nationwide - 26 weekly episodes featuring
an ensemble cast of the Company's highly talented cooks, who bring to life the
simple, delicious recipes and techniques from the pages of the magazine. We
expect this new program will generate additional demand for our Everyday Food
magazine.
"At the same time, we are taking additional steps to continue to reduce losses
in our Internet/Direct Commerce business and to ensure that we invest our
resources in areas that offer the Company its best return on investment.
Accordingly, by year end 2004, we will eliminate our direct commerce business.
However, we will continue our profitable direct-to-consumer floral business,
marthasflowers, as well as our content website, marthastewart.com.
"In addition, we have recently expanded our Board of Directors to include
significant experience over a broad range of industries, including branding,
advertising, retail and television. Senior management, along with the Board, is
focused on restoring the Company to profitability and building value for our
shareholders."
SECOND QUARTER 2004 RESULTS BY SEGMENT
PUBLISHING
Revenues in the second quarter of 2004 were $23.7 million, compared to $39.6
million in the second quarter of 2003. Operating loss was $(5.3) million for the
second quarter of 2004, compared to operating income of $9.3 million in the
second quarter of 2003. OIDA was a loss of $(5.2) million, compared to income of
$9.4 million in the second quarter of 2003. The results primarily reflect lower
advertising revenue in the quarter from Martha Stewart Living magazine due to
the combined effect of lower advertising pages and lower advertising rates as a
result of the rate base reduction effective with the January 2004 issue.
Subscription revenue was also lower in the quarter due principally to fewer
subscriptions sold. The quarter also reflects our planned investment spending in
Everyday Food, primarily in subscriber acquisition. We have increased the rate
base of Everyday Food from 500,000 to 750,000, effective with the July 2004
issue.
TELEVISION
Revenues in the second quarter of 2004 were $3.1 million, compared to $6.6
million in the second quarter of 2003. Operating loss for the second quarter of
2004 was $(3.5) million, compared to breakeven in the second quarter of 2003.
OIDA was a loss of $(3.5) million for the second quarter of 2004, compared to
OIDA of $0.4 million in the prior year's second quarter. The decline in
profitability was due to a variety of factors, including a reduction in license
fees and advertising revenue from our nationally syndicated daily show; the
December 31, 2003 expiration of certain cable licensing agreements; and
severance costs. The quarter also included the write-down of deferred television
production costs of $1.5 million, resulting from the early termination of a
cable television licensing agreement.
MERCHANDISING
Revenues in the second quarter of 2004 were $10.9 million, compared to $11.8
million in the second quarter of 2003. The decline in revenue was due to a mix
of factors, including the overall weak retail environment as well as continuing
impact from Kmart store
closings that took place in the early part of 2003. Second quarter 2004
operating income was $5.3 million, compared to $7.8 million in the second
quarter of 2003. OIDA was $5.5 million in the current period, compared to $8.0
million in the prior year's quarter. Operating income and OIDA were negatively
affected by $1.5 million of non-recurring professional fees related to the
renegotiation of the Kmart contract incurred in the quarter. The decline in
royalty revenue from sales at Kmart in the quarter will not impact full year
results from operations, as we are paid based on guaranteed annual amounts.
INTERNET/DIRECT COMMERCE
Revenues in the second quarter of 2004 were $6.4 million, compared to $7.8
million in the same period a year ago. The lower revenues in the quarter were
due to lower catalog-related product sales, partially offset by higher revenue
from marthasflowers, our direct-to-consumer floral business. The lower commerce
revenue was principally due to lower catalog circulation. Operating loss was
$(2.4) million for the second quarter of 2004, compared to $(4.6) million in the
second quarter of 2003. OIDA was $(2.2) million in the second quarter of 2004,
compared to $(4.3) million in the second quarter of 2003. The better
year-over-year results were achieved by a significant reduction in catalog
circulation, combined with improvements in our floral business.
As previously noted, in the interest of managing MSO's long-term financial
strength, the Company has decided to discontinue The Catalog for Living by the
end of 2004. Going forward, the segment will focus on delivering expert "how-to"
content through our website, driving subscription magazine orders for our
publishing group, and continuing to grow our direct-to-consumer floral business,
marthasflowers, while exploring licensing and other alternative distribution
opportunities for its products through our merchandising segment. While the
Company has made significant progress over the past 18 months in improving the
segment's financial performance, we concluded that focusing attention and
resources on other areas of the business with greater growth potential would
ultimately allow the Company to achieve improved financial performance. We do
not expect that charges to operations during the remainder of 2004 related to
severance and inventory will be material to our results of operations.
CORPORATE OVERHEAD
Corporate overhead, including depreciation and amortization and the amortization
of non-cash stock compensation, was $13.3 million, compared to $11.1 million in
the prior year's quarter. Corporate overhead, before depreciation and
amortization and the amortization of non-cash stock compensation, was $11.3
million for the second quarter of 2004, compared to $9.8 million in the second
quarter of 2003. The current quarter includes higher compensation-related costs,
including the costs of certain Company-wide retention programs.
AMORTIZATION OF NON-CASH STOCK COMPENSATION
Amortization of non-cash stock compensation expense was $1.0 million in the
second quarter of 2004 compared to $0.1 million for the second quarter of 2003.
The expense in the 2004 quarter principally relates to the amortization of the
value of restricted stock units granted in connection with a November 2003 stock
option exchange program.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization was $1.6 million in the second quarter of 2004
compared to $2.1 million for the second quarter of 2003. The lower depreciation
in the current quarter was a result of lower depreciation of television studio
assets that were fully depreciated in 2003.
SIX MONTH 2004 OPERATING RESULTS
Revenues for the six months ended June 30, 2004, were $88.5 million, compared to
$123.8 million for the six months ended June 30, 2003. Operating loss was
$(36.6) million for the six months ended June 30, 2004, compared to $(6.0)
million for the six months ended June 30, 2003, while OIDA for the six months
ended June 30, 2004, was $(30.8) million, compared to $(1.6) million in the same
period one year ago. For the six month period ending June 30, 2004, net loss
from continuing operations was $(39.3) million, or $(0.79) per share, compared
to a net loss from continuing operations of $(3.1) million, or $(0.06) per
share, in the six month period ending June 30, 2003.
TRENDS AND OUTLOOK
James Follo, Chief Financial and Administrative Officer, commented, "As a result
of a comprehensive review of our businesses, we have reduced the cost structure
in our television segment, eliminated certain aspects of our Internet/Direct
Commerce segment and invested in new growth opportunities. Our financial
resources remain significant, which will enable us to manage through this
transition period. Our outlook for the third quarter is for a loss of
approximately $(0.50) per share, reflecting higher marketing costs in the
quarter and seasonal aspects of our business. The fourth quarter of 2004 results
will reflect substantially reduced losses compared to third quarter levels
largely due to the significant amount of revenues to be recognized by our
merchandising segment as a result of certain minimum royalty guarantees."
BASIS OF PRESENTATION
The Company believes OIDA is an appropriate measure when evaluating the
operating performance of its business segments and the Company on a consolidated
basis. OIDA is used externally by the Company's investors, analysts, and
industry peers. OIDA is among the primary metrics used by management for
planning and forecasting of future periods, and is considered an important
indicator of the operational strength of the Company's businesses. The Company
believes the presentation of this measure is relevant and useful for investors
because it allows investors to view performance in a manner similar to the
method used by the Company's management and makes it easier to compare the
Company's results with other companies that have different capital structures or
tax rates. The Company believes OIDA should be considered in addition to, not as
a substitute for, operating income (loss), net income (loss), cash flows, and
other measures of financial performance prepared in accordance with generally
accepted accounting principles ("GAAP"). As OIDA is not a measure of performance
calculated in accordance with GAAP, this measure may not be comparable to
similarly titled measures employed by other companies. A reconciliation of OIDA
to operating income (loss) is provided in the financial statements included with
this release.
Martha Stewart Living Omnimedia, Inc. (MSO) is a leading provider of original
"how-to" information that turns dreamers into doers, inspiring and engaging
consumers with unique content and high-quality products for the home. MSO's
creative experts develop content within eight core areas - Home, Cooking and
Entertaining, Gardening, Crafts, Holiday, Keeping, Weddings, and Baby and Kids -
that provide consumers with ideas and products to celebrate their homes and the
domestic arts. MSO is organized into four business segments - Publishing,
Television, Merchandising and Internet/Direct Commerce.
The Company will host a conference call with analysts and investors at 12:00
noon ET that will be broadcast live over the Internet at www.marthastewart.com.
###
This press release contains certain "forward-looking statements," as that term
is defined in the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are not historical facts but instead represent only
our current beliefs regarding future events, many of which, by their nature, are
inherently uncertain and outside of our control. These statements can be
identified by terminology such as "may," "will," "should," "could," "expects,"
"intends," "plans," "anticipates," "believes," "estimates," "potential" or
"continue" or the negative of these terms or other comparable terminology. The
Company's actual results may differ materially from those projected in these
statements, and factors that could cause such differences include further
adverse reaction to the prolonged and continued negative publicity relating to
Martha Stewart by consumers, advertisers and business partners; further adverse
reaction by the Company's consumers, advertisers and business partners to the
outcome of Ms. Stewart's trial and related sentencing arising from a sale of
non-Company stock by Ms. Stewart; a loss of the services of Ms. Stewart; a loss
of the services of other key personnel; an adverse resolution to the SEC
enforcement proceeding currently underway against Ms. Stewart arising from her
personal sale of non-Company stock; adverse resolution of some or all of the
Company's ongoing litigation; downturns in national and/or local economies;
shifts in
our business strategies; a softening of the domestic advertising market; changes
in consumer reading, purchasing and/or television viewing patterns;
unanticipated increases in paper, postage or printing costs; operational or
financial problems at any of our contractual business partners; the receptivity
of consumers to our new product introductions; and changes in government
regulations affecting the Company's industries. Certain of these and other
factors are discussed in more detail in the Company's filings with the
Securities and Exchange Commission, especially under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations", which
may be accessed through the SEC's World Wide Web site at http://www.sec.gov. The
Company is under no obligation to update any forward-looking statements after
the date of this release.
CONTACT: Investors - Howard Hochhauser, VP Finance and Investor Relations of
Martha Stewart Living Omnimedia, Inc., 212-827-8530; Media - Elizabeth Estroff,
AVP, Corporate Communications, of Martha Stewart Living Omnimedia, Inc.,
212-827-8281.
Martha Stewart Living Omnimedia, Inc.
Consolidated Statements of Operations
Three Months Ended June 30,
(in thousands, except per share amounts)
2004 2003 % change
---------- ---------- ----------
REVENUES
Publishing $ 23,722 $ 39,617 -40.1%
Television 3,056 6,588 -53.6%
Merchandising 10,903 11,763 -7.3%
Internet/Direct Commerce 6,365 7,814 -18.5%
-------- -------- -------
Total revenues 44,046 65,782 -33.0%
-------- -------- -------
OPERATING COSTS AND EXPENSES
Production, distribution and editorial 30,411 35,448 -14.2%
Selling and promotion 14,393 13,699 5.1%
General and administrative 15,877 12,934 22.8%
Amortization of non-cash stock
compensation expense (a) 1,026 144 nm
Depreciation and amortization 1,635 2,054 -20.4%
-------- -------- -------
Total operating costs and expenses 63,342 64,279 -1.5%
-------- -------- -------
OPERATING INCOME (LOSS) (19,296) 1,503 nm
Interest income, net 319 395 -19.2%
-------- -------- -------
INCOME (LOSS) BEFORE INCOME TAXES (18,977) 1,898 nm
Income tax provision (189) (665) 71.6%
-------- -------- -------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE LOSS FROM DISCONTINUED OPERATIONS (19,166) 1,233 nm
-------- -------- -------
Loss from discontinued operations, net of tax
benefit in 2003 (127) (302) 57.9%
-------- -------- -------
NET INCOME (LOSS) $(19,293) $ 931 nm
======== ======== =======
INCOME (LOSS) PER SHARE - BASIC AND DILUTED
Income (loss) from continuing operations $ (0.39) $ 0.02
Loss from discontinued operations (0.00) (0.01)
-------- --------
Net income (loss) $ (0.39) $ 0.02
======== ========
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 49,572 49,488
Diluted 49,572 49,627
Martha Stewart Living Omnimedia, Inc.
Segment Information
Three Months Ended June 30,
(in thousands)
2004 2003 % change
-------- -------- --------
REVENUES
Publishing $ 23,722 $ 39,617 -40.1%
Television 3,056 6,588 -53.6%
Merchandising 10,903 11,763 -7.3%
Internet/Direct Commerce 6,365 7,814 -18.5%
-------- -------- -------
Total revenues 44,046 65,782 -33.0%
-------- -------- -------
OPERATING INCOME (LOSS) BEFORE DEPRECIATION AND AMORTIZATION
Publishing (5,209) 9,427 nm
Television (3,472) 387 nm
Merchandising 5,516 7,988 -30.9%
Internet/Direct Commerce (2,177) (4,308) 49.5%
-------- -------- -------
Operating Income (Loss) before Depreciation (5,342) 13,494 nm
and Amortization and Corporate Overhead
Corporate Overhead (11,293) (9,793) -15.3%
-------- -------- -------
Operating Income (Loss) before Depreciation
and Amortization (16,635) 3,701 nm
Amortization of non-cash stock compensation expense (1,026) (144) nm
Depreciation and amortization (1,635) (2,054) 20.4%
-------- -------- -------
OPERATING INCOME (LOSS) (19,296) 1,503 nm
Interest income, net 319 395 -19.2%
-------- -------- -------
INCOME (LOSS) BEFORE INCOME TAXES (18,977) 1,898 nm
Income tax provision (189) (665) 71.6%
-------- -------- -------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE LOSS FROM DISCONTINUED OPERATIONS (19,166) 1,233 nm
-------- -------- -------
Loss from discontinued operations, net of tax
benefit in 2003 (127) (302) 57.9%
-------- -------- -------
NET INCOME (LOSS) $(19,293) $ 931 nm
======== ======== =======
Martha Stewart Living Omnimedia, Inc.
Consolidated Statements of Operations
Six Months Ended June 30,
(in thousands, except per share amounts)
2004 2003 % change
---------- ---------- ----------
REVENUES
Publishing $ 47,632 $ 73,678 -35.4%
Television 7,233 13,203 -45.2%
Merchandising 21,692 22,091 -1.8%
Internet/Direct Commerce 11,978 14,833 -19.2%
---------- ---------- ----------
Total revenues 88,535 123,805 -28.5%
---------- ---------- ----------
OPERATING COSTS AND EXPENSES
Production, distribution and editorial 59,352 71,049 -16.5%
Selling and promotion 28,612 26,495 8.0%
General and administrative 31,393 27,836 12.8%
Amortization of non-cash stock
compensation expense (b) 2,480 267 nm
Depreciation and amortization 3,309 4,195 -21.1%
---------- ---------- ----------
Total operating costs and expenses 125,146 129,842 -3.6%
---------- ---------- ----------
OPERATING LOSS (36,611) (6,037) -496.5%
Interest income, net 681 797 -14.6%
---------- ---------- ----------
LOSS BEFORE INCOME TAXES (35,930) (5,240) -574.2%
Income tax benefit (provision) (3,332) 2,184 nm
---------- ---------- ----------
LOSS FROM CONTINUING OPERATIONS BEFORE LOSS
FROM DISCONTINUED OPERATIONS (39,262) (3,056) nm
---------- ---------- ----------
Loss from discontinued operations, net of tax
benefit in 2003 (288) (523) 44.9%
---------- ---------- ----------
NET LOSS $ (39,550) $ (3,579) nm
========== ========== ==========
LOSS PER SHARE - BASIC AND DILUTED
Loss from continuing operations $ (0.79) $ (0.06)
Loss from discontinued operations (0.01) (0.01)
---------- ----------
Net Loss $ (0.80) $ (0.07)
========== ==========
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 49,518 49,560
Diluted 49,518 49,560
Martha Stewart Living Omnimedia, Inc.
Segment Information
Six Months Ended June 30,
(in thousands)
2004 2003 % change
-------- --------- --------
REVENUES
Publishing $ 47,632 $ 73,678 -35.4%
Television 7,233 13,203 -45.2%
Merchandising 21,692 22,091 -1.8%
Internet/Direct Commerce 11,978 14,833 -19.2%
-------- --------- --------
Total revenues 88,535 123,805 -28.5%
-------- --------- --------
OPERATING INCOME (LOSS) BEFORE DEPRECIATION AND AMORTIZATION
Publishing (9,721) 14,490 nm
Television (5,362) 1,008 nm
Merchandising 12,208 15,204 -19.7%
Internet/Direct Commerce (4,613) (12,335) 62.6%
-------- --------- --------
Operating Income (Loss) before Depreciation (7,488) 18,367 nm
and Amortization and Corporate Overhead
Corporate Overhead (23,334) (19,942) -17.2%
-------- --------- --------
Operating Loss before Depreciation and Amortization (30,822) (1,575) nm
Amortization of non-cash stock compensation expense (2,480) (267) nm
Depreciation and amortization (3,309) (4,195) 21.1%
-------- --------- --------
OPERATING LOSS (36,611) (6,037) -506.4%
Interest income, net 681 797 -14.6%
-------- --------- --------
LOSS BEFORE INCOME TAXES (35,930) (5,240) -562.9%
Income tax benefit (provision) (3,332) 2,184 nm
-------- --------- --------
LOSS FROM CONTINUING OPERATIONS BEFORE LOSS FROM DISCONTINUED OPERATIONS (39,262) (3,056) nm
-------- --------- --------
Loss from discontinued operations, net of tax benefit in 2003 (288) (523) 44.9%
-------- --------- --------
NET LOSS $(39,550) $ (3,579) -1005.0%
======== ========= ========
Martha Stewart Living Omnimedia, Inc.
Consolidated Balance Sheets
(in thousands, except per share amounts)
June 30, December 31,
2004 2003
--------- ---------
(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 119,462 $ 165,566
Short-term investments 38,891 3,100
Accounts receivable, net 17,736 39,758
Inventories, net 9,234 7,485
Deferred television production costs 1,448 3,465
Income taxes receivable 5,771 5,658
Deferred income taxes, net 1,833 5,024
Other current assets 6,046 4,422
--------- ---------
TOTAL CURRENT ASSETS 200,421 234,478
--------- ---------
PROPERTY, PLANT, AND EQUIPMENT, net 19,870 22,673
--------- ---------
INTANGIBLE ASSETS, net 44,257 44,257
--------- ---------
DEFERRED INCOME TAXES 3,224 3,224
--------- ---------
OTHER NONCURRENT ASSETS 4,440 4,470
--------- ---------
TOTAL ASSETS $ 272,212 $ 309,102
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 24,663 $ 26,628
Accrued payroll and related costs 12,245 10,360
Income taxes payable 692 167
Current portion of deferred subscription
income 23,532 23,833
--------- ---------
TOTAL CURRENT LIABILITIES 61,132 60,988
--------- ---------
DEFERRED SUBSCRIPTION INCOME 7,028 7,133
OTHER NONCURRENT LIABILITIES 4,211 4,316
--------- ---------
TOTAL LIABILITIES $ 72,371 $ 72,437
--------- ---------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Class A common stock, $0.01 par value, 350,000
shares authorized: 20,328 and 19,628 shares
issued in 2004 and 2003, respectively 203 196
Class B common stock, $0.01 par value, 150,000
shares authorized: 29,423 and 30,059 shares
outstanding in 2004 and 2003, respectively 294 301
Capital in excess of par value 186,207 183,744
Unamortized restricted stock (44) (307)
Retained earnings 13,956 53,506
--------- ---------
200,616 237,440
Less class A treasury stock - 59 shares at cost (775) (775)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 199,841 236,665
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 272,212 $ 309,102
========= =========
Martha Stewart Living Omnimedia, Inc.
Supplemental Disclosures Regarding Non- GAAP Financial Information
Three Months Ended June 30,
(in thousands)
The following table presents segment and consolidated financial
information, including a reconciliation of operating income, a GAAP measure, and
Operating Income before Depreciation and Amortization, including the
amortization of non-cash stock compensation, (OIDA), a non-GAAP measure. In
order to reconcile OIDA to operating income, depreciation and amortization are
added back to operating income.
2004 2003 % change
-------- -------- ---------
OPERATING INCOME (LOSS)
Publishing $ (5,321) $ 9,335 nm
Television (3,531) 2 nm
Merchandising 5,314 7,808 -31.9%
Internet/ Direct Commerce (2,426) (4,552) 46.7%
-------- -------- -------
Operating Income (Loss) before
Corporate Overhead (5,964) 12,593 nm
Corporate Overhead (13,332) (11,090) -20.2%
-------- -------- -------
TOTAL OPERATING INCOME (LOSS) (19,296) 1,503 nm
-------- -------- -------
DEPRECIATION AND AMORTIZATION
Publishing 61 41 48.8%
Television 59 385 -84.7%
Merchandising 190 168 13.1%
Internet/ Direct Commerce 249 244 2.0%
Corporate Overhead 1,076 1,216 -11.5%
-------- -------- -------
TOTAL DEPRECIATION AND AMORTIZATION 1,635 2,054 -20.4%
-------- -------- -------
AMORTIZATION OF NON-CASH STOCK COMPENSATION
Publishing 51 51 --
Television -- -- --
Merchandising 12 12 --
Internet/ Direct Commerce -- -- --
Corporate Overhead 963 81 nm
-------- -------- -------
TOTAL AMORTIZATION 1,026 144 nm
-------- -------- -------
OPERATING INCOME (LOSS) BEFORE DEPRECIATION AND AMORTIZATION
AND AMORTIZATION OF NON-CASH STOCK COMPENSATION
Publishing (5,209) 9,427 -155.3%
Television (3,472) 387 nm
Merchandising 5,516 7,988 -30.9%
Internet/ Direct Commerce (2,177) (4,308) 49.5%
-------- -------- -------
Operating Income (Loss) before Depreciation
and Amortization, Amortization of Non-
Cash Stock Compensation and before
Corporate Overhead (5,342) 13,494 nm
-------- -------- -------
Corporate Overhead (11,293) (9,793) -15.3%
OPERATING INCOME (LOSS) BEFORE DEPRECIATION
AND AMORTIZATION AND AMORTIZATION OF NON-
CASH STOCK COMPENSATION $(16,635) $ 3,701 nm
-------- -------- -------
Martha Stewart Living Omnimedia, Inc.
Supplemental Disclosures Regarding Non- GAAP Financial Information
Six Months Ended June 30,
(in thousands)
The following table presents segment and consolidated financial
information, including a reconciliation of operating income, a GAAP measure, and
Operating Income before Depreciation and Amortization, including the
amortization of non-cash stock compensation, (OIDA), a non-GAAP measure. In
order to reconcile OIDA to operating income, depreciation and amortization are
added back to operating income.
2004 2003 % change
-------- -------- --------
OPERATING INCOME (LOSS)
Publishing $ (9,946) $ 14,306 nm
Television (5,478) 229 nm
Merchandising 11,803 14,842 -20.5%
Internet/ Direct Commerce (5,105) (12,804) 60.1%
-------- -------- ------
Operating Income (Loss) before
Corporate Overhead (8,726) 16,573 nm
Corporate Overhead (27,885) (22,610) -23.3%
-------- -------- ------
TOTAL OPERATING LOSS (36,611) (6,037) nm
-------- -------- ------
DEPRECIATION AND AMORTIZATION
Publishing 123 82 50.0%
Television 116 779 -85.1%
Merchandising 380 337 -12.8%
Internet/ Direct Commerce 492 491 -.2%
Corporate Overhead 2,198 2,506 -12.3%
-------- -------- ------
TOTAL DEPRECIATION AND AMORTIZATION 3,309 4,195 -21.1%
-------- -------- ------
AMORTIZATION OF NON-CASH STOCK COMPENSATION EXPENSE (BENEFIT)
Publishing 102 102 --
Television -- -- --
Merchandising 25 25 --
Internet/ Direct Commerce -- (22) nm
Corporate Overhead 2,353 162 nm
-------- -------- ------
TOTAL AMORTIZATION 2,480 267 nm
-------- -------- ------
OPERATING INCOME (LOSS) BEFORE DEPRECIATION AND AMORTIZATION
AND AMORTIZATION OF NON-CASH STOCK COMPENSATION
Publishing (9,721) 14,490 nm
Television (5,362) 1,008 nm
Merchandising 12,208 15,204 -19.7%
Internet/ Direct Commerce (4,613) (12,335) 62.6%
-------- -------- ------
Operating Income (Loss) before
Depreciation and Amortization,
Amortization of Non-Cash Stock
Compensation and before Corporate
Overhead (7,488) 18,367 nm
-------- -------- ------
Corporate Overhead (23,334) (19,942) -17.0%
-------- -------- ------
OPERATING LOSS BEFORE DEPRECIATION AND
AMORTIZATION AND AMORTIZATION OF NON-CASH
STOCK COMPENSATION $(30,822) $ (1,575) nm
-------- -------- ------
Martha Stewart Living Omnimedia, Inc.
Supplemental Disclosures Regarding Allocation of Amortization
of non-cash Stock Compensation Expense
Three and Six Months Ended June 30,
(in thousands)
(a) The amortization of non-cash stock compensation expense for the three month
periods ended June 30, should be allocated as follows:
2004 2003
------ ----
Production, distribution and editorial $ 25 $ 25
Selling and promotion 25 25
General and administrative 976 94
------ ----
TOTAL 1,026 144
====== ====
(b) The amortization of non-cash stock compensation expense for the six month
periods ended June 30, should be allocated as follows:
2004 2003
------ ----
Production, distribution and editorial $ 50 $ 50
Selling and promotion 50 50
General and administrative 2,380 167
------ ----
TOTAL 2,480 267
====== ====