8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report: April 30, 2009
Date of earliest event reported: April 30, 2009

MARTHA STEWART LIVING OMNIMEDIA, INC.

(Exact Name of Registrant as Specified in Charter)

DELAWARE	001-15395	52-2187059
(State or Other Jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification No.)

11 WEST 42ND STREET NEW YORK, NY	10036
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 827-8000

NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02. Results of Operations and Financial Condition.

On April 30, 2009, the Registrant announced via a press release its preliminary results of operations for its quarter ended March 31, 2009. A copy of the press release is attached as Exhibit 99.1 hereto. The information in this report shall not be treated as filed for purposes of the Securities Exchange Act of 1934, as amended

ITEM 9.01 Financial Statements and Exhibits.

(d)	Exhibit		Description
		99.1	Press release dated April 30, 2009 by the Registrant, reporting its preliminary results of operations for the quarter ended March 31, 2009 (furnished and not filed herewith as described in Item 2.02).

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 hereunto duly authorized.

	MARTHA STEWART LIVING OMNIMEDIA, INC. (Registrant)
Date: April 30, 2009		By:	/s/ William C. Stern
			William C. Stern
			General Counsel

INDEX OF EXHIBITS

(d)	Exhibit		Description
		99.1	Martha Stewart Living Omnimedia, Inc. Press Release dated April 30, 2009.

EX-99.1

EXHIBIT 99.1

Martha Stewart Living Omnimedia Reports
First Quarter 2009 Results

Internet Advertising Growth, Stability in Broadcasting, Solid Performance in New Merchandising Offerings Underscore Brand
Strength, Lend Support in Challenging Print Advertising Market

New York, New York — April 30, 2009 — Martha Stewart Living Omnimedia, Inc. (NYSE: MSO) today announced its results for the first quarter ended March 31, 2009. The Company reported revenue for the first quarter of $50.4 million, reflecting continued growth in Internet advertising revenue, stability in the Broadcasting segment, and new Merchandising initiatives, somewhat offset by a challenging magazine advertising market and expected lower guarantees and sales from Kmart as the relationship winds down.

Charles Koppelman, Executive Chairman and Principal Executive Officer, said, “MSLO’s first quarter was consistent with our expectations. We believe our strong brands and broad visibility across media platforms and the nation’s retail store shelves are helping the Company hold its own in this recessionary environment. The Company also continues to balance investments in key growth initiatives with careful management of its healthy balance sheet.”

Mr. Koppelman added, “In our Media businesses, Publishing continues to feel the impact of the challenging print ad market, but we were encouraged by overall growth in subscriptions to our magazines, which underscores what we see as the inherent value in our print brands and their connection with readers. Our other media platforms are performing solidly as Internet advertising continues to grow and Broadcasting benefits from continued strength in The Martha Stewart Show‘s core demographic and the addition of Emeril’s programming. Our cross-platform or ‘omni’ programs are also gaining increasing traction and visibility in the marketing community.”

Addressing Merchandising performance, Robin Marino, President and Chief Executive Officer of Merchandising, said, “We continue to execute on our diversification strategy for our Merchandising business. First quarter performance was aided by our Emeril business and our program with 1-800-FLOWERS.COM. We continue to expand distribution of our popular crafts line as consumers look for affordable activities to engage in at home. Our Martha Stewart Collection at Macy’s continues to perform, and we’re excited to learn that we are Macy’s largest volume brand in their home business.”

First Quarter 2009 Summary

Revenues were $50.4 million in the first quarter of 2009, compared to $67.8 million in the first quarter of 2008. Lower revenues primarily reflect declines in print advertising revenue during a challenging period for the magazine industry, as well as the expected decrease in the minimum royalty guarantees and sales from Kmart compared with a year ago. The Company’s Broadcasting and Internet segments performed solidly, as did new Merchandising initiatives.

Operating loss for the first quarter of 2009 was $(15.5) million, compared to $(4.5) million for the first quarter of 2008. Included in the results is an impairment charge of $(7.1) million related to an equity investment. When excluding the impairment charge recorded in the quarter, operating loss was $(8.4) million for the quarter.

Adjusted EBITDA loss for the first quarter of 2009 was $(5.0) million, compared to $(1.2) million in the prior year period. The negative impact to adjusted EBITDA from revenue declines was partially offset by cost savings in the Publishing and Merchandising segments as well as the reduction of the compensation accrual and lower compensation costs across the businesses.

Net loss per share was $(0.31) for the first quarter of 2009, compared to $(0.08) for the first quarter of 2008. Included in the results is an impairment charge of $(7.1) million or $(0.13) per share for the quarter related to an equity investment. When excluding the impairment charge recorded in the quarter, net loss per share was $(0.18) for the quarter.

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First Quarter 2009 Results by Segment

	Three Months Ended, March 31
	(unaudited, in thousands)
	2009			2008
REVENUES
Publishing	$	28,361		$	40,792
Broadcasting		10,514			10,562
Internet		2,622			3,414
Merchandising		8,933			13,066
Total Revenues	$	50,430		$	67,834
ADJUSTED EBITDA
Publishing	$	(1,363	)	$	2,406
Broadcasting		1,031			522
Internet		(1,539	)		(1,810	)
Merchandising		5,499			6,982
Corporate		(8,630	)		(9,344	)
Total Adjusted EBITDA	$	(5,002	)	$	(1,244	)
OPERATING (LOSS)/INCOME
Publishing	$	(1,872	)	$	1,656
Broadcasting		834			175
Internet		(2,032	)		(2,247	)
Merchandising		(1,776	)		6,596
Corporate		(10,639	)		(10,715	)
Total Operating Loss	$	(15,485	)	$	(4,535	)

Publishing

Revenues in the first quarter of 2009 were $28.4 million, compared to $40.8 million in the prior year’s first quarter, due to lower advertising pages, timing of special issues and softness in newsstand revenue.

Operating loss was $(1.9) million for the first quarter of 2009, compared to operating income of $1.7 million in the first quarter of 2008.

Adjusted EBITDA loss was $(1.4) million in the first quarter of 2009, compared to adjusted EBITDA of $2.4 million in the prior year’s quarter. The decreases in advertising and circulation revenues were partially offset by savings in production and consumer marketing costs, as well as lower compensation costs, and the reduction of the compensation accrual.

Highlights

• Subscribers increased in the quarter across all of our titles.

• Martha Stewart’s Encyclopedia of Crafts debuted at #2 on The New York Times Best Seller List. It has also appeared on the best-seller lists in The Wall Street Journal and Publishers Weekly.

• Emeril Lagasse’s new book, Emeril at the Grill: A Cookbook for All Seasons, hit bookstores nationwide on April 28th.

Broadcasting

Revenues in the first quarter of 2009 were $10.5 million, compared to $10.6 million in the first quarter of 2008.

Operating income was $0.8 million for the first quarter of 2009, compared to operating income of $0.2 million in the first quarter of 2008.

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Adjusted EBITDA was $1.0 million for the first quarter of 2009, up from $0.5 million in the prior year’s first quarter due to the addition of Emeril programming and the reduction of the compensation accrual.

Highlights

• The Martha Stewart Show continues to resonate with its core demographic of women ages 25 to 49.

• Fine Living Network has renewed Whatever, Martha!, the critically-acclaimed series featuring co-hosts Alexis Stewart and Jennifer Koppelman Hutt, for a second season.

• Production for the second season of Emeril Green on Discovery’s Planet Green network is underway.

Internet

Revenues were $2.6 million in the first quarter of 2009, compared to $3.4 million in the first quarter of 2008. Excluding revenue from Martha Stewart Flowers, which was previously recorded in the Internet segment and is now recorded in Merchandising, revenues were up compared to the prior year’s quarter.

Operating loss was $(2.0) million in the first quarter of 2009, compared to operating loss of $(2.2) million in the first quarter of 2008.

Adjusted EBITDA loss was $(1.5) million in the first quarter of 2009, compared to $(1.8) million in the prior year’s quarter, reflecting the reduction of the compensation accrual.

Highlights

• Digital ad revenue grew 13% compared to the prior year’s quarter.

• Page views increased 49% over the prior year’s quarter.

• We successfully launched a new pets channel primarily sponsored by Nestlé Purina PetCare at www.marthastewart.com/pets.

Merchandising

Revenues were $8.9 million for the first quarter of 2009, as compared to $13.1 million in the prior year’s first quarter. As anticipated, the 2009 first quarter results included lower contractual minimum royalty guarantees and sales from Kmart as the relationship winds down. Excluding Kmart revenues in both years, Merchandising revenues increased compared to the prior year’s quarter. Results this quarter included our Emeril Lagasse business and Martha Stewart for 1-800-FLOWERS.COM.

Operating loss was $(1.8) million for the first quarter of 2009, compared to operating income of $6.6 million in the first quarter of 2008. The decline reflects an impairment charge of $(7.1) million related to an equity investment.

Adjusted EBITDA was $5.5 million for the first quarter of 2009, compared to $7.0 million in the prior year’s first quarter, reflecting lower compensation costs, the reduction of the compensation accrual and a continued focus on cost management.

Highlights

• The Martha Stewart Collection continues to reasonate with Consumers at Macy’s. Some of our top-selling categories this quarter were gadgets, cookware and bakeware.

• Martha Stewart Crafts has continued to benefit from expanded distribution and integrated marketing initiatives.

• During the quarter, we signed a new licensing agreement with The Hain Celestial Group to develop Martha Stewart Clean, a line of natural home cleaning products.

• Emeril Lagasse’s branded coffee line with Timothy’s, his line of cookware with All-Clad, and food products with B&G contributed to the quarter.

Corporate

Total Corporate expenses were $(10.6) million in the first quarter of 2009, compared to $(10.7) million in the prior year’s quarter. Adjusted EBITDA loss was $(8.6) million in the first quarter of 2009, compared to $(9.3) million in the prior year’s quarter. The decrease in expenses in the quarter was largely due to the reduction of the compensation accrual and lower compensation costs, partially offset by an increase in severance and facility-related charges.

The Company will host a conference call with analysts and investors on April 30th at 11:00 a.m. ET that will be broadcast live over the Internet at www.marthastewart.com/ir.

Use of Non-GAAP Financial Information

In addition to using net income to assess the organization’s overall financial health, Company management uses net income before interest, taxes, depreciation, amortization non-cash equity compensation and impairment charges (“adjusted EBITDA”), a non-GAAP

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financial measure, to evaluate the performance of our businesses on a real-time basis. Adjusted EBITDA is considered an important indicator of operational strength, is a direct component of the Company’s annual compensation program, and is a significant factor in helping our management determine how to allocate resources and capital. Adjusted EBITDA is used in addition to and in conjunction with results presented in accordance with GAAP. Management considers adjusted EBITDA to be a critical measure of operational health because it captures all of the revenue and ongoing operating expenses of our businesses without the influence of (i) interest charges, which result from our capital structure, not our ongoing business efforts, (ii) taxes, which relate to the overall organizational financial return, not that of any one business, (iii) the capital expenditure costs associated with depreciation and amortization, which are a function of historical decisions on infrastructure and capacity, (iv) the cost of non-cash equity compensation which, as a function of our stock price, can be highly variable, is not necessarily an indicator of current operating performance for any individual business unit, and is amortized over the appropriate period, and (v) non-cash impairment charges, which are impacted by macro-economic conditions and do not necessarily reflect operating performance.

Adjusted EBITDA provides a means to directly evaluate the ability of our business operations to generate returns on a real-time basis. We provide disclosure of adjusted EBITDA because we believe it is useful for investors to have means to assess our performance as we do. While adjusted EBITDA is a customized non-GAAP measure, it also provides a means to analyze value and compare our operating capabilities to those of companies with which we compete, many of which have different compensation plans, depreciation and amortization costs, capital structures and tax burdens. But please note that our non-GAAP results may differ from similar measures used by other companies, even if similar terms are used to identify such measures.

A limitation of adjusted EBITDA is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues for our overall organization. Management evaluates the costs of such tangible and intangible assets through other financial measures such as capital expenditures. Management also evaluates the cost of capitalized tangible and intangible assets by analyzing returns provided on the capital dollars deployed. A further limitation of adjusted EBITDA is that it does not include stock compensation expense related to our workforce. Adjusted EBITDA should be considered in addition to, and not as a substitute for, net income or other measures of financial performance reported in accordance with GAAP.

About Martha Stewart Living Omnimedia, Inc.

Martha Stewart Living Omnimedia, Inc. (MSLO) is a leading provider of original “how-to” information, inspiring and engaging consumers with unique lifestyle content and high-quality products. MSLO is organized into four business segments: Publishing, Broadcasting, Internet, and Merchandising. MSLO is listed on the New York Stock Exchange under the ticker symbol MSO.

Forward-Looking Statements

We have included in this press release 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 include estimates of future financial performance, potential opportunities, expected product line expansions and additions, future acceptability of our content and our businesses and other statements that 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: adverse reactions to publicity relating to Martha Stewart or Emeril Lagasse by consumers, advertisers and business partners; further downturns in national and/or local economies; shifts in our business strategies; a loss of the services of Ms. Stewart or Mr. Lagasse; a loss of the services of other key personnel; a further 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 most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, especially under the heading “Risk Factors,” 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: Media - Elizabeth Estroff, SVP, Corporate Communications, +1-212-827-8281; or Investors - Katherine Nash, Director, Corporate Communications and Investor Relations, +1-212-827-8722, both for Martha Stewart Living Omnimedia, Inc.

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Martha Stewart Living Omnimedia, Inc.
Consolidated Statements of Operations
Three Months Ended, March 31,
(unaudited, in thousands, except per share amounts)

	2009			2008
REVENUES
Publishing	$	28,361		$	40,792
Broadcasting		10,514			10,562
Internet		2,622			3,414
Merchandising		8,933			13,066
Total revenues		50,430			67,834
OPERATING COSTS AND EXPENSES
Production, distribution and editorial		28,170			36,037
Selling and promotion		14,781			18,714
General and administrative		14,113			16,262
Depreciation and amortization		1,751			1,356
Impairment charge		7,100			—
Total operating costs and expenses		65,915			72,369
OPERATING LOSS		(15,485	)		(4,535	)
OTHER (EXPENSE) / INCOME
Interest (expense) / income, net		(8	)		483
Loss on equity securities		(757	)		—
Loss in equity interest		(236	)		—
Total other (expense) / income		(1,001	)		483
LOSS BEFORE INCOME TAXES		(16,486	)		(4,052	)
Income tax provision		(358	)		(182	)
NET LOSS	$	(16,844	)	$	(4,234	)
LOSS PER SHARE — BASIC AND DILUTED
Net Loss	$	(0.31	)	$	(0.08	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING		53,766			52,722

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Martha Stewart Living Omnimedia, Inc.
Consolidated Balance Sheets
(in thousands, except per share amounts)

	March 31,			December 31,
	2009			2008
	(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	49,744		$	50,204
Short-term investments		9,855			9,915
Accounts receivable, net		37,205			52,500
Inventory		6,483			6,053
Deferred television production costs		4,597			4,076
Income taxes receivable		41			40
Other current assets		6,608			3,712
Total current assets		114,533			126,500
PROPERTY, PLANT AND EQUIPMENT, net		13,088			14,422
GOODWILL AND OTHER INTANGIBLE ASSETS, net		93,309			93,312
INVESTMENT IN EQUITY INTEREST, net		5,512			5,749
OTHER NONCURRENT ASSETS		12,109			21,302
Total assets	$	238,551		$	261,285
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	19,920		$	27,877
Accrued payroll and related costs		6,181			7,525
Income taxes payable		97			142
Current portion of deferred subscription income		22,686			22,597
Current portion of other deferred revenue		19,554			7,582
Total current liabilities		68,438			65,723
DEFERRED SUBSCRIPTION REVENUE		6,374			6,874
OTHER DEFERRED REVENUE		4,953			13,334
LOAN PAYABLE		18,000			19,500
DEFERRED INCOME TAX LIABILITY		2,197			1,854
OTHER NONCURRENT LIABILITIES		3,179			3,005
Total liabilities		103,141			110,290
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
Class A common stock, $0.01 par value, 350,000 shares authorized: 28,151 and 28,204 shares outstanding in 2009 and 2008, respectively		282			282
Class B common stock, $0.01 par value, 150,000 shares authorized: 26,690 shares outstanding in 2009 and 2008		267			267
Capital in excess of par value		284,641			283,248
Accumulated deficit		(148,871	)		(132,027	)
Accumulated other comprehensive loss		(134	)		—
		136,185			151,770
Less class A treasury stock — 59 shares at cost		(775	)		(775	)
Total shareholders’ Equity		135,410			150,995
Total liabilities and shareholders’ equity	$	238,551		$	261,285

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Martha Stewart Living Omnimedia, Inc.
Supplemental Disclosures Regarding Non-GAAP Financial Information
Three Months Ended March 31,
(unaudited, in thousands)

           The following table presents segment and consolidated financial information, including a reconciliation of operating income/(loss), a GAAP measure, and adjusted EBITDA, a non-GAAP measure. In order to reconcile adjusted EBITDA to operating income, depreciation and amortization, non-cash equity compensation, and non-cash impairment charges are added back to operating income/(loss).

	2009			2008
ADJUSTED EBITDA
Publishing	$	(1,363	)	$	2,406
Broadcasting		1,031			522
Internet		(1,539	)		(1,810	)
Merchandising		5,499			6,982
Corporate		(8,630	)		(9,344	)
Adjusted EBITDA		(5,002	)		(1,244	)
NON-CASH EQUITY COMPENSATION
Publishing		435			651
Broadcasting		128			238
Internet		41			59
Merchandising		157			362
Corporate		871			625
Total Non-Cash Equity Compensation		1,632			1,935
DEPRECIATION AND AMORTIZATION
Publishing		74			99
Broadcasting		69			109
Internet		452			378
Merchandising		18			24
Corporate		1,138			746
Total Depreciation and Amortization		1,751			1,356
IMPAIRMENT ON MERCHANDISING EQUITY INVESTMENT		7,100			-
OPERATING INCOME / (LOSS)
Publishing		(1,872	)		1,656
Broadcasting		834			175
Internet		(2,032	)		(2,247	)
Merchandising		(1,776	)		6,596
Corporate		(10,639	)		(10,715	)
Total Operating Loss		(15,485	)		(4,535	)
OTHER (EXPENSE) / INCOME
Interest (expense) / income, net		(8	)		483
Loss on equity securities		(757	)		-
Loss in equity interest		(236	)		-
Total other (expense) / income		(1,001	)		483
LOSS BEFORE INCOME TAXES		(16,486	)		(4,052	)
Income tax provision		(358	)		(182	)
NET LOSS	$	(16,844	)	$	(4,234	)

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