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Industry Segments
 9 Months Ended
Sep. 30, 2014
Segment Reporting [Abstract]  
Industry Segments
Industry Segments
The Company is an integrated media and merchandising company providing consumers with inspiring lifestyle content and well-designed, high-quality products. The Company is organized into three business segments: Publishing; Merchandising; and Broadcasting.
The Publishing segment primarily consists of the Company’s operations related to its magazines (Martha Stewart Living, Martha Stewart Weddings and special weddings issues) and books, as well as its digital operations, which include the content-driven website, marthastewart.com, and the digital distribution of video content. Publishing segment results can vary from quarter to quarter due to publication schedules and seasonality of certain types of advertising. Certain costs vary from quarter to quarter, particularly newsstand marketing costs associated with the distribution of the Company's magazines.
Subsequent to the Company's fiscal quarter ended September 30, 2014, the Company entered into two agreements on October 14, 2014 with Meredith Corporation (“Meredith”), whereby Meredith will assume responsibility for advertisement sales, circulation and production in the United States and Canada of the Martha Stewart Living, Martha Stewart Weddings and related special weddings magazines, and will host, operate, maintain, and provide advertisement sales and related functions for marthastewart.com, marthastewartweddings.com and the Company's related digital assets, including its vast video library. The Company will continue to create and provide all editorial content for these magazines and digital properties. The agreements are effective November 1, 2014 and Meredith will begin delivering editions starting with the February 2015 issue of Martha Stewart Living and the Winter 2015 issue of Martha Stewart Weddings. See Note 13, Subsequent Events, for further discussion of these Publishing segment agreements.
The Merchandising segment primarily consists of the Company’s operations related to the design and branding of merchandise and related collateral and packaging materials that are manufactured and distributed by its retail and wholesale partners in exchange for royalty income. Revenues from the Merchandising segment can vary significantly from quarter to quarter due to changes in product mix, new product launches and the performance of certain seasonal product lines. The Merchandising segment also includes the licensing of talent services for television programming produced by or on behalf of third parties.
The Broadcasting segment consists of the Company's limited television production operations, television content library licensing and satellite radio operations.
Segment information for the three months ended September 30, 2014 and 2013 is as follows:
(in thousands)
Publishing
 
Merchandising
 
Broadcasting
 
Corporate
 
Consolidated
2014
 
 
 
 
 
 
 
 
 
Revenues *
$
15,781

 
$
13,691

 
$
139

 
$
—

 
$
29,611

Non–cash equity compensation
(28
)
 
(10
)
 
—

 
(436
)
 
(474
)
Depreciation and amortization
(135
)
 
(11
)
 
(1
)
 
(636
)
 
(783
)
Impairment of trademark and goodwill
—

 
(11,350
)
 
—

 
—

 
(11,350
)
Operating loss
(6,246
)
 
(1,548
)
 
(36
)
 
(7,020
)
 
(14,850
)
2013
 
 
 
 
 
 
 
 
 
Revenues
$
19,401

 
$
14,153

 
$
294

 
$
—

 
$
33,848

Non–cash equity compensation
(85
)
 
(57
)
 
(1
)
 
(276
)
 
(419
)
Depreciation and amortization
(200
)
 
(12
)
 
(1
)
 
(634
)
 
(847
)
Operating (loss) / income
(6,260
)
 
9,479

 
(214
)
 
(7,081
)
 
(4,076
)

Segment information for the nine months ended September 30, 2014 and 2013 is as follows:
(in thousands)
Publishing
 
Merchandising
 
Broadcasting
 
Corporate
 
Consolidated
2014
 
 
 
 
 
 
 
 
 
Revenues *
$
57,516

 
$
41,494

 
$
1,489

 
$
—

 
$
100,499

Non–cash equity compensation
(111
)
 
(89
)
 
(1
)
 
(1,312
)
 
(1,513
)
Depreciation and amortization
(458
)
 
(40
)
 
(3
)
 
(4,150
)
 
(4,651
)
Impairment of trademark and goodwill
—

 
(11,350
)
 
—

 
—

 
(11,350
)
Operating (loss) / income
(10,746
)
 
18,747

 
26

 
(22,823
)
 
(14,796
)
Total Assets ***
13,230

 
43,451

 
894

 
60,717

 
118,292

2013
 
 
 
 
 
 
 
 
 
Revenues
$
68,073

 
$
41,776

 
$
3,421

 
$
—

 
$
113,270

Non–cash equity compensation **
(330
)
 
(181
)
 
(7
)
 
(863
)
 
(1,381
)
Depreciation and amortization
(729
)
 
(39
)
 
(26
)
 
(2,146
)
 
(2,940
)
Restructuring charges **
(140
)
 
(392
)
 
—

 
(143
)
 
(675
)
Gain on sale of subscriber list, net
2,724

 
—

 
—

 
—

 
2,724

Operating (loss) / income
(12,994
)
 
26,872

 
1,812

 
(23,447
)
 
(7,757
)
* Included in revenues is the pro rata recognition of non-cash revenue that resulted from the return of 11 million shares of the Company's Class A Common Stock from J.C. Penney in October 2013 pursuant to a contract amendment with J.C. Penney, which resulted in an initial increase to deferred revenue of $24.9 million that is recognized ratably as non-cash revenue through June 30, 2017. For the three and nine months ended September 30, 2014, these non-cash revenues totaled $1.7 million and $5.0 million, respectively.
** As disclosed on the Company's Consolidated Statements of Cash Flows, total non-cash equity compensation expense was $1.4 million during the nine months ended September 30, 2013. Included in non-cash equity compensation expense were net reversals of expense of approximately $0.03 million, which was generated in connection with restructuring activities. Accordingly, these amounts are reflected as restructuring charges in the Company's 2013 Consolidated Statements of Operations.
*** In accordance with ASC 280, Segment Reporting, total assets are disclosed as of September 30, 2014 in order to reflect the material change in the Merchandising segment’s intangible asset and goodwill from the amount disclosed as of December 31, 2013. See Note 6, Intangible Asset and Goodwill, for discussion of the impairment charges which reduced these asset values.