Martha Stewart Living Omnimedia posts narrower loss thanks to reduced costs
Publishing revenues in the third quarter of 2013 were $19.4 million, compared to $27.6 million in the prior year’s third quarter
NEW YORK, NY – Oct. 29, 2013 — Martha Stewart Living Omnimedia, Inc. (NYSE: MSO) today announced its results for the third quarter ended September 30, 2013. The Company reported revenue for the third quarter of $33.8 million.
Ken West, Executive Vice President and Chief Financial Officer said, “Third quarter results reflect solid growth in Merchandising offset by lower Publishing revenues. In Publishing, we’ve taken strategic steps to refocus our operations around our Martha Stewart Living and Martha Stewart Weddings titles as well as our digital properties. The print titles continue to perform favorably in their competitive sets and have seen positive traction in advertising sales year-to-date, despite broader industry pressures. Merchandising generated improved operating income of 11%. Our recently announced revised agreement with J.C. Penney assures the availability of Martha-branded products in targeted categories at J.C. Penney stores and online. These recent developments are encouraging, but we have much more work ahead. Our primary objective remains driving sustainable performance improvement at MSLO over the long-term by capitalizing on the strong engagement that our brands have with consumers across our media platforms and at retail. We welcome our newly appointed CEO, Dan Dienst, who brings a strong operating background and financial discipline to the Company, as we intensify our efforts to reposition the Company for profitability.”
Third Quarter 2013 Summary
Total revenues were $33.8 million in the third quarter of 2013, compared to $43.5 million in the third quarter of 2012 as growth in Merchandising revenues was offset by lower revenues from Publishing and Broadcasting, which reflect the Company’s strategic decisions last year to end the publication of two print titles and exit live television programming production.
Total operating loss for the third quarter of 2013 was $(4.1) million compared with a loss of $(50.7) million in the prior-year period. Total operating loss for the third quarter of 2012 included a $(44.3) million non-cash impairment charge reflecting the write-down of goodwill related to the Company’s publishing segment.
Basic and diluted net loss per share was $(0.06) for the third quarter of 2013, compared to a loss of $(0.76) for the third quarter of 2012.
Third Quarter 2013 Results by Segment
Recent Business Highlights
- MSLO continues to engage consumers via social media, demonstrated by more than 8.1 million fans and followers across all social media, a 239% growth in followers on Pinterest in the last year and 1.5 million page views for the #bestsummerever campaign. MSLO also recently launched #MarthaToTheRescue, where Martha responds to tweets addressed to her via Vine and Instagram Videos.
- MSLO won a min Integrated Marketing Award for Most Creative Use of New Technology for “Pinspiration” with Martha Stewart, and was a finalist in five other categories.
- Martha Stewart Essentials, a new line of six supplements created specifically for women, which have been produced in partnership with nutritional supplement developer Inergetics, launched in Walgreen stores nationwide in September.
- In the quarter, MSLO published its 80th and 81st books, Martha Stewart’s Favorite Crafts for Kids and Martha Stewart’s Cakes.
- In October, the Company held its second annual “American Made” program, where makers, doers and creative entrepreneurs from across the country gathered in New York City for networking sessions and panels celebrating the spirit of innovation.
- Showcasing his line of professional kitchenware, food and cutlery products, Emeril Lagasse returned to QVC on October 16 during the “Emeril’s Kitchen” broadcast with additional shows scheduled for December, January and February plus well into the spring.
Revenues in the third quarter of 2013 were $19.4 million, compared to $27.6 million in the prior year’s third quarter. The comparison reflects the impact of the Publishing restructuring, which included the transition of Everyday Food from print to a digital brand, the closing of Whole Living, and a reduction in the number of issues of Martha Stewart Living published annually. In the 2013 third quarter, MSLO published two issues of Martha Stewart Living, compared with three in the year-ago period. The two issues published generated improved advertising sales compared with the same year-ago issues.
Operating loss was $(6.3) million for the third quarter of 2013, compared to $(51.3) million in the prior year, which included a $(44.3) million non-cash impairment charge reflecting the write-down of goodwill.
Revenues increased 7% to $14.2 million for the third quarter of 2013, as compared to $13.2 million in the prior year’s third quarter, benefitting from royalty revenue recognition from the Company’s relationship with J.C. Penney.
Operating income was $9.5 million for the third quarter of 2013 as compared to $8.5 million in the third quarter of 2012.
Revenue in the third quarter of 2013 was $0.3 million, compared to $2.7 million in the third quarter of 2012, reflecting the Company’s exit from live television programming production last year.
Operating loss was $(0.2) million for the third quarter of 2013 compared to operating income of $0.3 million in the third quarter of 2012.
Corporate expenses were $(7.1) million in the third quarter of 2013 compared to $(8.2) million in the prior year’s quarter, due to lower executive compensation and reduced legal expenses in the 2013 period.