NEW YORK, Nov. 5, 2015 /PRNewswire/ -- Martha Stewart
Living Omnimedia, Inc. (NYSE: MSO) today announced its financial
results for the third quarter ended September 30, 2015.
Third Quarter 2015 Summary
"Third quarter results came in line with expectations reflecting
the continued realization of cost savings initiatives and
third-party partnerships put in place at the start of the fiscal
year," said CEO Dan Dienst. "Our
planned merger with Sequential Brands Group remains on track and
our combined proxy statement/prospectus has been mailed to
shareholders and a Special Meeting of Shareholders to approve the
merger is scheduled for December 2,
2015 with an effective closing shortly thereafter."
Dan Dienst added, "As we approach
the 25th anniversary of the first issue of
Martha Stewart Living
magazine, our entire organization looks forward to helping write
this next exciting chapter of our Company."
Revenues totaled $17.5 million in
the third quarter of 2015, compared to $29.6
million in the third quarter of 2014. The anticipated
decline was primarily due to the Company's partnership with
Meredith Corporation under which we no longer recognize advertising
and circulation revenue from Martha
Stewart Living and only receive a share of digital
revenues (in exchange for licensing out sales, printing,
distribution and hosting costs) as well as lower Merchandising
revenues.
Total operating loss for the third quarter of 2015 was
$(1.3) million, inclusive of
$1.1 million in merger transaction
costs, compared to total operating loss of $(14.9) million in the third quarter of 2014. The
prior-year comparable period included an $(11.4) million non-cash impairment charge
recorded in the Company's merchandising segment.
Basic and diluted net loss per share was $(0.03) for the third quarter of 2015 compared to
$(0.19) for the third quarter of
2014.
Third Quarter 2015 Results by Segment
Three Months Ended
September 30,
(unaudited, in
thousands)
|
|
|
|
2015
|
|
2014
|
|
REVENUES
|
|
Publishing
|
$ 5,323
|
|
$ 15,781
|
|
Merchandising
|
11,669
|
|
13,691
|
|
Broadcasting
|
468
|
|
139
|
|
Total
Revenues
|
$ 17,460
|
|
$ 29,611
|
|
OPERATING (LOSS) /
INCOME
|
|
|
|
|
Publishing
|
$ (2,404)
|
|
$
(6,246)
|
|
Merchandising
|
8,298
|
|
(1,548)
|
|
Broadcasting
|
305
|
|
(36)
|
|
Corporate
|
(7,478)
|
|
(7,020)
|
|
Total Operating
Loss
|
$
(1,279)
|
|
$ (14,850)
|
|
|
|
|
|
|
|
|
|
|
|
Publishing
Revenues in the third quarter of 2015 were $5.3 million, compared to $15.8 million in the prior year's third quarter
reflecting our agreement with Meredith Corporation which resulted
in the Company's elimination of recognizing advertising and
circulation revenue from Martha Stewart
Living and a digital advertising revenue share
arrangement.
Operating loss was $(2.4) million
for the third quarter of 2015, compared to $(6.2) million in the prior year's third quarter
primarily due to cost reductions from our partnership with
Meredith.
Merchandising
Revenues for the third quarter of 2015 were $11.7 million, compared to $13.7 million in the prior year's third quarter
due to the expiration of certain partnerships as well as lower
sales at The Home Depot. The decline in revenue was partially
offset by increased revenue from our partnership with
PetSmart.
Operating income was $8.3 million
for the third quarter of 2015 as compared to an operating loss of
$(1.5) million in the third quarter
of 2014. Last year's third quarter included a non-cash
impairment charge of $(11.4)
million.
Broadcasting
Revenues for the third quarter of 2015 were $0.5 million, compared to $0.1 million in the prior year's third
quarter.
Operating income was $0.3 million
the third quarter of 2015 compared to an operating loss of
$(0.04) million in the third quarter
of 2014.
Corporate
Corporate expenses were $(7.5)
million in the third quarter of 2015 compared to
$(7.0) million in the prior year's
quarter. The increase was primarily due to merger transaction costs
of $1.1 million, which was partially
offset by reduced headcount.
Sequential Brands Group Transaction Update
On Friday, October
23rd, the registration statement on Form S-4
filed by Singer Madeline Holdings, Inc. (the "Registration
Statement") was declared effective by the Securities and Exchange
Commission (the "SEC") and on October
27th, a combined proxy statement/prospectus filed
with the SEC by MSLO on Schedule 14A. The combined proxy
statement/prospectus, which contains important information about
the proposed merger transaction, including how to vote on the
transaction, has been mailed to MSLO stockholders. The MSLO Board
of Directors established a record date of October 26, 2015 and has scheduled a special
meeting of stockholders for December 2,
2015 at 9:00am in order to
obtain the requisite stockholder approval for the
transaction. The Company anticipates that the transaction
will close shortly after the vote.
Investor Call and Webcast
The Company will host a conference call with analysts and
investors on Thursday, November 5,
2015 at 8:30am ET that will be
broadcast live over the Internet at www.marthastewart.com/ir, and
an archived version will be available through November 20, 2015.
About Martha Stewart Living Omnimedia, Inc.
Martha Stewart Living Omnimedia, Inc. (MSLO) is a globally
recognized lifestyle company committed to providing consumers with
inspiring content and well-designed, high quality products. MSLO is
listed on the New York Stock Exchange under the ticker symbol
MSO.
Forward-Looking Statements
This press release may contain certain statements that we
believe are, or may be considered to be, "forward-looking
statements," as that term is defined in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are based
on current expectations and are indicated by words or phrases such
as "anticipate," "estimate," "expect," "intend," "believe,"
"continue," "potential" or similar words or phrases and involve
known and unknown risks, uncertainties, and other factors which may
cause actual results, performance, or achievements to be materially
different from the future results, performance, or achievements
expressed in or implied by such forward-looking statements.
Such forward-looking statements include: the continued
success of our brands and the reputation and popularity of
Martha Stewart and Emeril Lagasse;
adverse reactions to publicity relating to Ms. Stewart or Mr.
Lagasse by consumers, advertisers and business partners; loss of
the services of Ms. Stewart or Mr. Lagasse; our ability to
successfully implement our growth strategies; our ability to
develop new or expand existing merchandising and licensing programs
or the loss or failure of existing programs, including as a result
of litigation or disputes with our partners; failure to predict,
respond to and influence trends in consumer taste; our inability to
successfully and profitably develop or introduce new products and
services; our inability to predict, respond to or influence trends
that are appealing to the public; our dependence on our partnership
with Meredith Corporation for ongoing publication, distribution and
exploitation of our magazines and continued hosting, advertising
and other services related to our websites and a potential
disruption in this relationship; increased competition for our
print and digital content and our consumer products; continued weak
and uncertain worldwide economic conditions; our ability to
retain key employees; the cost of defending certain litigations we
are party to, which have been and may continue to be significant;
our inability to realize the value recorded for intangible assets
which could results in impairment charges; and failure to
protect our intellectual property.
Certain of these and other factors are discussed in more detail
in the Company's most recent Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q filed with the Securities and
Exchange Commission, especially under the heading "Risk Factors,"
which may be accessed through the SEC's website at
http://www.sec.gov/.
Additional Information and Where To Find It
In connection with the proposed merger transaction, on
July 29, 2015, Singer Madeline
Holdings, Inc. ("TopCo") filed with the SEC a registration
statement, as amended (the "Registration Statement"). The
Registration Statement was declared effective by the SEC on
October 23, 2015 and includes a
combined proxy statement/prospectus filed with the SEC by MSLO on
October 27, 2015 on Schedule 14A,
which forms a part of the TopCo Registration Statement. The
proxy statement/prospectus and other relevant documents have been
mailed to MSLO stockholders. The Registration Statement and
the proxy statement/prospectus contain important information about
the proposed transaction and related matters. BEFORE MAKING
ANY VOTING DECISION, MSLO'S STOCKHOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS IN THEIR
ENTIRETY AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION
WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE IN THE
REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER
AND THE PARTIES TO THE MERGER. MSLO's stockholders may obtain a
free copy of the Registration Statement, the proxy
statement/prospectus and other relevant documents filed or
furnished with the SEC (when they become available) by MSLO,
Sequential and TopCo at the SEC's website at
http://www.sec.gov. In addition, MSLO's stockholders
may request a free copy of the proxy statement/prospectus and
other of MSLO's filings with the SEC from MSLO's website at
www.marthastewart.com/IR or by directing a request to: Martha
Stewart Living Omnimedia, Inc., Attn: Corporate Secretary, 601 West
26th Street, New York, New
York 10001 or knash@marthastewart.com.
Participants in the Solicitation
The directors, executive officers and certain other members of
management and employees of MSLO may be deemed "participants" in
the solicitation of proxies from stockholders of MSLO in favor of
the proposed merger. Information regarding the persons who may,
under the rules of the SEC, be considered participants in the
solicitation of the stockholders of MSLO in connection with the
proposed merger is set forth in the proxy statement/prospectus and
the other relevant documents to be filed with the SEC. You can find
information about MSLO's executive officers and directors in its
Annual Report on Form 10-K filed with the SEC on March 6, 2015, Amendment No. 1 to the Annual
Report on Form 10-K/A filed with the SEC on April 27, 2015 and in its definitive proxy
statement filed with the SEC on Schedule 14A on April 7, 2014. Information about Sequential's
directors and executive officers is available in Sequential's proxy
statement for its 2015 Annual Meeting of Stockholders filed with
the SEC on April 16, 2015. Additional
information regarding the participants in the proxy solicitation,
and a description of their direct and indirect interests, is
contained in the Registration Statement and the proxy
statement/prospectus.
No Offer or Solicitation
This communication and the information contained herein shall
not constitute an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the U.S. Securities Act of 1933,
as amended.
Martha Stewart Living
Omnimedia, Inc.
|
Consolidated
Statements of Operations
|
Three Months Ended
September 30,
|
(unaudited, in
thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
2015
|
|
2014
|
|
|
|
|
|
Publishing
|
|
$
5,323
|
|
$
15,781
|
Merchandising
|
|
11,669
|
|
13,691
|
Broadcasting
|
|
468
|
|
139
|
Total
revenues
|
|
17,460
|
|
29,611
|
|
|
|
|
|
Production,
distribution and editorial
|
|
(7,271)
|
|
(13,988)
|
Selling and
promotion
|
|
(1,327)
|
|
(9,081)
|
General and
administrative
|
|
(8,532)
|
|
(9,259)
|
Depreciation and
amortization
|
|
(550)
|
|
(783)
|
Impairment of
trademark and goodwill
|
|
—
|
|
(11,350)
|
Merger transaction
costs
|
|
(1,059)
|
|
—
|
|
|
|
|
|
OPERATING
LOSS
|
|
(1,279)
|
|
(14,850)
|
|
|
|
|
|
Interest income and
other, net
|
|
110
|
|
52
|
|
|
|
|
|
LOSS BEFORE INCOME
TAXES
|
|
(1,169)
|
|
(14,798)
|
|
|
|
|
|
Income tax
(provision) / benefit
|
|
(310)
|
|
3,733
|
|
|
|
|
|
NET
LOSS
|
|
$
(1,479)
|
|
$
(11,065)
|
|
|
|
|
|
LOSS PER SHARE –
BASIC AND DILUTED
|
|
|
|
|
Net loss
|
|
$
(0.03)
|
|
$
(0.19)
|
|
|
|
|
|
WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING
|
|
|
|
|
Basic and
diluted
|
|
57,476,330
|
|
57,074,872
|
Martha Stewart Living
Omnimedia, Inc.
|
Consolidated
Statements of Operations
|
Nine Months Ended
September 30,
|
(unaudited, in
thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
2015
|
|
2014
|
|
|
|
|
|
Publishing
|
|
$
17,176
|
|
$
57,516
|
Merchandising
|
|
34,650
|
|
41,494
|
Broadcasting
|
|
930
|
|
1,489
|
Total
revenues
|
|
52,756
|
|
100,499
|
|
|
|
|
|
Production,
distribution and editorial
|
|
(22,104)
|
|
(44,697)
|
Selling and
promotion
|
|
(3,586)
|
|
(27,343)
|
General and
administrative
|
|
(27,559)
|
|
(27,254)
|
Depreciation and
amortization
|
|
(1,458)
|
|
(4,651)
|
Impairment of
trademark and goodwill
|
|
—
|
|
(11,350)
|
Merger transaction
costs
|
|
(4,129)
|
|
—
|
|
|
|
|
|
OPERATING
LOSS
|
|
(6,080)
|
|
(14,796)
|
|
|
|
|
|
Interest income /
(expense) and other, net
|
|
167
|
|
(513)
|
|
|
|
|
|
LOSS BEFORE INCOME
TAXES
|
|
(5,913)
|
|
(15,309)
|
|
|
|
|
|
Income tax
(provision) / benefit
|
|
(885)
|
|
3,408
|
|
|
|
|
|
NET
LOSS
|
|
$
(6,798)
|
|
$
(11,901)
|
|
|
|
|
|
LOSS PER SHARE -
BASIC AND DILUTED
|
|
|
|
|
Net loss
|
|
$
(0.12)
|
|
$
(0.21)
|
|
|
|
|
|
WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING
|
|
|
|
|
Basic and
diluted
|
|
57,365,909
|
|
56,908,036
|
Martha Stewart Living
Omnimedia, Inc.
|
Consolidated Balance
Sheets
|
(in thousands, except
share and per share amounts)
|
|
|
|
|
|
|
|
September 30,
2015
(unaudited)
|
|
December 31,
2014
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash and cash equivalents
|
|
$
4,680
|
|
$
11,439
|
Short-term investments
|
|
37,152
|
|
36,816
|
Accounts receivable, net
|
|
14,348
|
|
30,319
|
Other current assets
|
|
2,766
|
|
3,108
|
Total current assets
|
|
58,946
|
|
81,682
|
|
|
|
|
|
PROPERTY AND
EQUIPMENT, net
|
|
3,898
|
|
4,106
|
INTANGIBLE ASSET-
TRADEMARKS
|
|
34,700
|
|
34,700
|
OTHER NONCURRENT
ASSETS
|
|
976
|
|
991
|
Total assets
|
|
$
98,520
|
|
$
121,479
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
6,018
|
|
$
14,753
|
Accrued payroll and related costs
|
|
1,777
|
|
5,706
|
Current portion of deferred revenue
|
|
16,515
|
|
16,090
|
Total current liabilities
|
|
24,310
|
|
36,549
|
|
|
|
|
|
DEFERRED
REVENUE
|
|
5,387
|
|
10,119
|
DEFERRED INCOME TAX
LIABILITY
|
|
4,612
|
|
3,755
|
OTHER NONCURRENT
LIABILITIES
|
|
1,812
|
|
2,371
|
Total liabilities
|
|
36,121
|
|
52,794
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
Class A Common Stock, $0.01 par value, 350,000,000
shares
|
|
|
|
authorized: 32,571,468 and 32,260,936 shares issues in 2015
and
|
|
|
|
2014, respectively; 32,512,068 and 32,201,536 shares
outstanding
|
|
|
in 2015 and 2014, respectively
|
|
325
|
|
322
|
Class B Common Stock, $0.01 par value, 150,000,000
shares
|
|
|
|
authorized: 24,984,625 shares issued and
|
|
|
|
|
outstanding in 2015 and 2014, respectively
|
|
250
|
|
250
|
Capital in excess of par value
|
|
345,522
|
|
345,021
|
Accumulated deficit
|
|
(282,907)
|
|
(276,109)
|
Accumulated other comprehensive loss
|
|
(16)
|
|
(24)
|
|
|
63,174
|
|
69,460
|
Less: Class A treasury stock - 59,400 shares at cost
|
|
(775)
|
|
(775)
|
Total shareholders' equity
|
|
62,399
|
|
68,685
|
Total liabilities and shareholders' equity
|
$
98,520
|
|
$
121,479
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/martha-stewart-living-omnimedia-reports-third-quarter-2015-financial-results-300172941.html
SOURCE Martha Stewart Living Omnimedia, Inc.