One-Time Charge Boosts MSLO 3Q Loss to $50.9 Million
NEW YORK-A non-cash, one-time charge of $44.3 million combined with a sales falloff to push Martha Stewart Living Omnimedia's third-quarter net loss to $50.9 million.
Without that charge, MSLO's net loss for the quarter, which ended on Sept. 30, would have been $6.6 million, compared to a $9.3 million net loss in the second quarter of last year. Operating costs, including the charge, rose 53.2 percent in dollars and were 216.4 percent of revenues. Absent the charge, operating costs fell 18.7 percent in dollars and 204 basis points as a percentage of sales, to 114.8 percent.
Total revenues in the quarter were $43.5 million, down 16.6 percent from last year's third quarter. These included a 17.1 percent drop in revenues from MSLO's publishing segment and a 58.6 percent fall in revenues from the broadcasting segment. Merchandising revenues, which encompass sales of Martha Stewart-branded products in a variety of retail channels, increased by 7.3 percent in the quarter.
Lisa Gersh, MSLO's president and CEO, said the results were in line with the company's expectations, "but not our ambitions for the company." Gersh said MSLO has taken steps to reduce the costs in its print and broadcasting operations this year. "We are transitioning our content operations to digital, mobile and video platforms that feature lower fixed costs and align with evolving consumer preferences for how and where they engage with our content," she said.
Gersh added that the merchandising segment is generating "attractive growth. Overall, we believe we have made significant progress in executing our strategy and anticipate that we will begin to deliver the bottom-line benefits of this work in 2013."