Martha Stewart Living Omnimedia Inc. (MSO) filed Quarterly Report for the period ended 2009-09-30.
Martha Stewart Living Omnimedia Inc. is a leading creator of original `how to` content and related products for homemakers and other consumers. The company leverages the well-known `Martha Stewart` brand name across a broad range of media and retail outlets, providing consumers with the `how to` ideas, products and other resources they need to raise the quality of living in and around their homes. Martha Stewart Living Omnimedia Inc. has a market cap of $304.7 million; its shares were traded at around $5.55 with and P/S ratio of 1.1.
Highlight of Business Operations:
Publishing revenues decreased 22% for the three months ended September 30, 2009 from the prior-year period. Advertising revenue decreased $4.8 million due to the decrease in pages in Martha Stewart Living, Everyday Food and Body + Soul. The decrease in advertising pages was accompanied by a decrease in advertising rates at Martha Stewart Living, partially offset by modestly higher advertising rates at Body + Soul and Everyday Food driven in part by a higher circulation rate base. Circulation revenue decreased $2.0 million largely due to higher agency commissions and lower effective subscription rate per copy in the third quarter of 2009 for Martha Stewart Living, Everyday Food and Body + Soul as compared with the prior-year period, offset in part by higher subscriber volume at Everyday Food and Body + Soul. Circulation revenue also decreased as a result of lower newsstand unit volume of Martha Stewart Living and Everyday Food. The decline in newsstand revenue from these two magazines was fully offset by the publication during the third quarter of 2009 of a Halloween special issue; no special interest publications were included in the prior-year period. Revenue related to our books business decreased $0.8 million primarily due to the timing of delivery and acceptance of manuscripts related to our multi-book agreements with Clarkson Potter/Publishers for Martha Stewart books and Harper Studios for Emeril Lagasse books.
Production, distribution and editorial expenses decreased $1.3 million, primarily due to savings related to lower volume of pages and lower paper costs. Additionally, art and editorial story and staff costs decreased partly due to lower headcount. Selling and promotion expenses decreased $1.6 million due to lower marketing program and advertising staff costs, lower circulation marketing costs and lower fulfillment rates associated with Martha Stewart Living. These decreases were partially offset by costs associated with the publication of a Halloween special issue in the third quarter of 2009. General and administrative expenses were essentially flat as compared to the prior-year period primarily due to lower headcount and related costs which were largely offset by higher facilities-related expenses primarily due to reallocating rent charges to reflect current utilization. The increase in our Publishing segment has offsetting decreases in our Merchandising and Corporate segments.
Broadcasting revenues decreased 23% for the three months ended September 30, 2009 from the prior-year period. Advertising revenue decreased $1.6 million primarily due to the decline in household ratings for The Martha Stewart Show as well as modestly lower rates. Advertising revenues also decreased due to the timing of advertiser spending for integrations. Licensing and other revenue decreased $1.7 million primarily due to lower revenue from Emeril Lagasse’s television programming as the result of certain one-time payments in the prior-year period partially offset by revenue related to the conclusion of our TurboChef relationship.
Production, distribution and editorial expenses decreased $1.5 million due to production cost savings related to season 4 of The Martha Stewart Show which ended in September 2009, as compared to the prior year’s season 3, as well as lower distribution fees. Selling and promotion expenses decreased due to lower marketing expense for the launch of season 5 as compared to the launch of season 4 in September 2008. Depreciation and amortization increased $0.4 million due to the amortization of the content library acquired with the Emeril Lagasse businesses.
Production, distribution and editorial costs and selling and promotion expenses both increased $0.3 million due to higher headcount and related costs. General and administrative expenses decreased $0.3 million due to reduced headcount in management staffing.
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