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 (Date of earliest event reported): November 1, 2011 (November 1, 2011)
MARTHA STEWART LIVING OMNIMEDIA,
INC.
(Exact name of registrant as
specified in its charter)
Delaware | 001-15395 | 52-2187059 | ||
(State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
601 W. 26th Street New York, NY |
10001 | |
(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 November 1, 2011, Martha Stewart Living Omnimedia, Inc. (the “Company”) announced via press release its preliminary results of operations for its quarter ended September 30, 2011. A copy of the press release is attached as Exhibit 99.1 hereto. The information contained in this report shall be treated as furnished and not 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 November 1, 2011 by the Company, reporting its preliminary results of operations for the quarter ended September 30, 2011 (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. |
||||
Date: November 1, 2011
|
By: | /s/ Daniel Taitz | ||
|
||||
|
Chief Administrative Officer and
General Counsel |
EXHIBIT INDEX
Exhibit
|
Description | |
|
||
99.1
|
Press release dated November 1, 2011 by the Company, reporting its preliminary results of operations for the quarter ended September 30, 2011 (furnished and not filed herewith as described in Item 2.02). |
Three Months Ended, September 30 | ||||||||
(unaudited, in thousands) | ||||||||
2011 | 2010 | |||||||
REVENUES |
||||||||
Publishing |
$ | 33,242 | $ | 34,318 | ||||
Broadcasting |
6,626 | 5,795 | ||||||
Merchandising |
12,336 | 9,575 | ||||||
Total Revenues |
$ | 52,204 | $ | 49,688 | ||||
ADJUSTED EBITDA |
||||||||
Publishing |
$ | (2,768 | ) | $ | (842 | ) | ||
Broadcasting |
(803 | ) | (3,459 | ) | ||||
Merchandising |
7,388 | 5,464 | ||||||
Corporate |
(6,160 | ) | (6,739 | ) | ||||
Total Adjusted EBITDA |
$ | (2,343 | ) | $ | (5,576 | ) | ||
OPERATING (LOSS)/INCOME |
||||||||
Publishing1 |
$ | (3,585 | ) | $ | (1,113 | ) | ||
Broadcasting1 |
(1,320 | ) | (4,074 | ) | ||||
Merchandising |
7,179 | 5,501 | ||||||
Corporate1 |
(11,568 | ) | (8,222 | ) | ||||
Total Operating Loss1 |
$ | (9,294 | ) | $ | (7,908 | ) | ||
1 | The Company recorded restructuring charges in the third quarter of 2011 totaling (in thousands) $3,792, allocated as follows: Publishing: $350; Broadcasting: $354; and Corporate: $3,088. |
| According to comScore Unified data, unique visitors across MSLOs websites increased 22% and page views were up 28% over the prior years period. |
| Marthas 74th book, Martha Stewarts Handmade Holiday Crafts, was published in late September. |
| Chef Emeril Lagasses newest cookbook, Sizzling Skillets and Other One-Pot Wonders, made its debut in late September. It is Emerils 16th title. |
| MSLO began offering a digital subscription plan for the iPad editions of Martha Stewart Living and Everyday Food magazines, and last month they became available on Apples Newsstand, a key feature of iOS 5. |
| MSLO named two new hires for its television business: Geoffrey A. Darby as General Manager for the TV business and Michael Morrison as Executive Producer of The Martha Stewart Show. |
| The Martha Stewart Show had its season seven premiere on Hallmark Channel on September 26, anchoring a block of programming that includes new seasons of Martha Bakes and Mad Hungry with Lucinda Scala Quinn. |
| Emerils Table, a new series featuring Emeril Lagasse, premiered on Hallmark Channel on September 26. |
| The Martha Stewart Collection at Macys performed well in the quarter and continues to be the No. 1 brand in the retailers home category, led by strong sales in textiles and tabletop. |
| The Martha Stewart Living line at The Home Depot demonstrated solid performance in the quarter driven by strength in storage and organization, outdoor furniture, kitchen cabinetry and décor. |
| Martha Stewart Crafts benefited from strong sales at Michaels and Jo-Ann Fabrics and Crafts as well as the expansion of the craft line with the launch of Martha Stewart Crafts Paint and the Martha Stewart Crafts Yarn program. |
| Martha Stewart Pets at PetSmart expanded its assortment with the introduction of a new product line for cats at PetSmart. |
| Emerils business also had a solid quarter driven by three successful appearances on HSN and the expansion of his coffee line with Timothys. |
| MSLO announced that the Company will launch a new line of home office products, Martha Stewart Home Office with Avery®, exclusively at Staples; the line will debut in early 2012. |
2011 | 2010 | |||||||
REVENUES |
||||||||
Publishing |
$ | 33,242 | $ | 34,318 | ||||
Broadcasting |
6,626 | 5,795 | ||||||
Merchandising |
12,336 | 9,575 | ||||||
Total revenues |
52,204 | 49,688 | ||||||
OPERATING COSTS AND EXPENSES |
||||||||
Production, distribution and editorial |
29,361 | 29,184 | ||||||
Selling and promotion |
15,073 | 14,803 | ||||||
General and administrative |
12,245 | 11,982 | ||||||
Depreciation and amortization |
1,027 | 1,627 | ||||||
Restructuring charge |
3,792 | | ||||||
Total operating costs and expenses |
61,498 | 57,596 | ||||||
OPERATING LOSS |
(9,294 | ) | (7,908 | ) | ||||
OTHER INCOME / (EXPENSE) |
||||||||
Interest income, net |
61 | 46 | ||||||
Loss on sale of fixed asset |
| (647 | ) | |||||
Gain on sale of short-term investments |
| 403 | ||||||
Loss on equity securities |
(190 | ) | (5 | ) | ||||
Total other expense |
(129 | ) | (203 | ) | ||||
LOSS BEFORE INCOME TAXES |
(9,423 | ) | (8,111 | ) | ||||
Income tax provision |
(278 | ) | (475 | ) | ||||
NET LOSS |
$ | (9,701 | ) | $ | (8,586 | ) | ||
LOSS PER SHARE BASIC AND DILUTED |
||||||||
Net loss |
$ | (0.18 | ) | $ | (0.16 | ) | ||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
||||||||
Basic and Diluted |
54,990 | 54,487 |
2011 | 2010 | |||||||
REVENUES |
||||||||
Publishing |
$ | 102,059 | $ | 100,945 | ||||
Broadcasting |
22,195 | 26,076 | ||||||
Merchandising |
35,484 | 31,200 | ||||||
Total revenues |
159,738 | 158,221 | ||||||
OPERATING COSTS AND EXPENSES |
||||||||
Production, distribution and editorial |
91,078 | 85,837 | ||||||
Selling and promotion |
42,394 | 42,889 | ||||||
General and administrative |
38,084 | 37,887 | ||||||
Depreciation and amortization |
2,947 | 3,689 | ||||||
Restructuring charge |
3,792 | | ||||||
Total operating costs and expenses |
178,295 | 170,302 | ||||||
OPERATING LOSS |
(18,557 | ) | (12,081 | ) | ||||
OTHER (EXPENSE) / INCOME |
||||||||
Interest expense, net |
(65 | ) | (62 | ) | ||||
Loss on sale of fixed asset |
| (647 | ) | |||||
Gain on sale of short-term investments |
| 403 | ||||||
Income / (loss) on equity securities |
15 | (24 | ) | |||||
Total other expense |
(50 | ) | (330 | ) | ||||
LOSS BEFORE INCOME TAXES |
(18,607 | ) | (12,411 | ) | ||||
Income tax provision |
(1,109 | ) | (1,289 | ) | ||||
NET LOSS |
$ | (19,716 | ) | $ | (13,700 | ) | ||
LOSS PER SHARE BASIC AND DILUTED |
||||||||
Net Loss |
$ | (0.36 | ) | $ | (0.25 | ) | ||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
||||||||
Basic and diluted |
54,825 | 54,416 |
September 30, | December 31, | |||||||
2011 | 2010 | |||||||
(unaudited) | ||||||||
ASSETS |
||||||||
CURRENT ASSETS |
||||||||
Cash and cash equivalents |
$ | 14,989 | $ | 23,204 | ||||
Short-term investments |
10,535 | 10,091 | ||||||
Accounts receivable, net |
45,635 | 59,250 | ||||||
Inventory |
8,518 | 5,309 | ||||||
Deferred television production costs |
2,811 | 2,413 | ||||||
Other current assets |
6,394 | 4,772 | ||||||
Total current assets |
88,882 | 105,039 | ||||||
PROPERTY, PLANT AND EQUIPMENT, net |
13,970 | 14,507 | ||||||
GOODWILL, net |
45,107 | 45,107 | ||||||
OTHER INTANGIBLE ASSETS, net |
46,538 | 46,547 | ||||||
OTHER NONCURRENT ASSETS, net |
8,969 | 11,114 | ||||||
Total assets |
$ | 203,466 | $ | 222,314 | ||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||
CURRENT LIABILITIES |
||||||||
Accounts payable and accrued liabilities |
$ | 28,514 | $ | 30,062 | ||||
Accrued payroll and related costs |
7,917 | 6,541 | ||||||
Current portion of deferred subscription revenue |
13,714 | 18,734 | ||||||
Current portion of other deferred revenue |
6,585 | 4,732 | ||||||
Current portion of loan payable |
3,000 | 1,500 | ||||||
Total current liabilities |
59,730 | 61,569 | ||||||
DEFERRED SUBSCRIPTION REVENUE |
4,123 | 4,529 | ||||||
OTHER DEFERRED REVENUE |
3,165 | 1,413 | ||||||
LOAN PAYABLE |
3,000 | 7,500 | ||||||
DEFERRED INCOME TAX LIABILITY |
5,537 | 4,527 | ||||||
OTHER NONCURRENT LIABILITIES |
4,026 | 3,743 | ||||||
Total liabilities |
79,581 | 83,281 | ||||||
COMMITMENTS AND CONTINGENCIES |
||||||||
SHAREHOLDERS EQUITY |
||||||||
Class A common stock, $0.01 par value, 350,000,000 shares authorized: 29,501,969 and
28,753,212 shares outstanding in 2011 and 2010, respectively |
295 | 288 | ||||||
Class B common stock, $0.01 par value, 150,000,000 shares authorized: 25,984,625 and
26,317,960 shares outstanding in 2011 and 2010, respectively |
260 | 263 | ||||||
Capital in excess of par value |
300,232 | 295,576 | ||||||
Accumulated deficit |
(175,917 | ) | (156,201 | ) | ||||
Accumulated other comprehensive loss |
(210 | ) | (118 | ) | ||||
124,660 | 139,808 | |||||||
Less: class A treasury stock 59,400 shares at cost |
(775 | ) | (775 | ) | ||||
Total shareholders equity |
123,885 | 139,033 | ||||||
Total liabilities and shareholders equity |
$ | 203,466 | $ | 222,314 | ||||
2011 | 2010 | |||||||
ADJUSTED EBITDA |
||||||||
Publishing |
$ | (2,768 | ) | $ | (842 | ) | ||
Broadcasting |
(803 | ) | (3,459 | ) | ||||
Merchandising |
7,388 | 5,464 | ||||||
Corporate |
(6,160 | ) | (6,739 | ) | ||||
Adjusted EBITDA |
(2,343 | ) | (5,576 | ) | ||||
NON-CASH EQUITY COMPENSATION |
||||||||
Publishing |
273 | 18 | ||||||
Broadcasting |
35 | 3 | ||||||
Merchandising |
201 | (50 | ) | |||||
Corporate |
1,623 | 734 | ||||||
Total Non-Cash Equity Compensation |
2,132 | 705 | ||||||
DEPRECIATION AND AMORTIZATION |
||||||||
Publishing |
194 | 253 | ||||||
Broadcasting |
128 | 612 | ||||||
Merchandising |
8 | 13 | ||||||
Corporate |
697 | 749 | ||||||
Total Depreciation and Amortization |
1,027 | 1,627 | ||||||
RESTRUCTURING CHARGE |
||||||||
Publishing |
350 | | ||||||
Broadcasting |
354 | | ||||||
Corporate |
3,088 | | ||||||
Total Restructuring Charge |
3,792 | | ||||||
OPERATING (LOSS) / INCOME |
||||||||
Publishing |
(3,585 | ) | (1,113 | ) | ||||
Broadcasting |
(1,320 | ) | (4,074 | ) | ||||
Merchandising |
7,179 | 5,501 | ||||||
Corporate |
(11,568 | ) | (8,222 | ) | ||||
Total Operating Loss |
(9,294 | ) | (7,908 | ) | ||||
OTHER INCOME / (EXPENSE) |
||||||||
Interest income, net |
61 | 46 | ||||||
Loss on sale of fixed asset |
| (647 | ) | |||||
Gain on sale of short-term investments |
| 403 | ||||||
Loss on equity securities |
(190 | ) | (5 | ) | ||||
Total other expense |
(129 | ) | (203 | ) | ||||
LOSS BEFORE INCOME TAXES |
(9,423 | ) | (8,111 | ) | ||||
Income tax provision |
(278 | ) | (475 | ) | ||||
NET LOSS |
$ | (9,701 | ) | $ | (8,586 | ) | ||
2011 | 2010 | |||||||
ADJUSTED EBITDA |
||||||||
Publishing |
$ | (5,856 | ) | $ | (385 | ) | ||
Broadcasting |
(2,842 | ) | (1,389 | ) | ||||
Merchandising |
21,431 | 18,824 | ||||||
Corporate |
(20,005 | ) | (21,267 | ) | ||||
Adjusted EBITDA |
(7,272 | ) | (4,217 | ) | ||||
NON-CASH EQUITY COMPENSATION |
||||||||
Publishing |
600 | 482 | ||||||
Broadcasting |
61 | 217 | ||||||
Merchandising |
211 | 635 | ||||||
Corporate |
3,674 | 2,841 | ||||||
Total Non-Cash Equity Compensation |
4,546 | 4,175 | ||||||
DEPRECIATION AND AMORTIZATION |
||||||||
Publishing |
543 | 922 | ||||||
Broadcasting |
359 | 748 | ||||||
Merchandising |
24 | 35 | ||||||
Corporate |
2,021 | 1,984 | ||||||
Total Depreciation and Amortization |
2,947 | 3,689 | ||||||
RESTRUCTURING CHARGE |
||||||||
Publishing |
350 | | ||||||
Broadcasting |
354 | | ||||||
Corporate |
3,088 | | ||||||
Total Restructuring Charge |
3,792 | | ||||||
OPERATING (LOSS) / INCOME |
||||||||
Publishing |
(7,349 | ) | (1,789 | ) | ||||
Broadcasting |
(3,616 | ) | (2,354 | ) | ||||
Merchandising |
21,196 | 18,154 | ||||||
Corporate |
(28,788 | ) | (26,092 | ) | ||||
Total Operating Loss |
(18,557 | ) | (12,081 | ) | ||||
OTHER (EXPENSE) / INCOME |
||||||||
Interest expense, net |
(65 | ) | (62 | ) | ||||
Loss on sale of fixed asset |
| (647 | ) | |||||
Gain on sale of short-term investments |
| 403 | ||||||
Income / (loss) on equity securities |
15 | (24 | ) | |||||
Total other expense |
(50 | ) | (330 | ) | ||||
LOSS BEFORE INCOME TAXES |
(18,607 | ) | (12,411 | ) | ||||
Income tax provision |
(1,109 | ) | (1,289 | ) | ||||
NET LOSS |
$ | (19,716 | ) | $ | (13,700 | ) | ||