Nov. 4, 2009 (PR Newswire) -- NEW YORK, Nov. 4 /PRNewswire-FirstCall/ -- Martha Stewart Living Omnimedia, Inc. (NYSE: MSO) today announced its results for the third quarter ended September 30, 2009. The Company reported revenue for the third quarter of $49.8 million, as the recessionary environment continued to impact advertising revenue. Ongoing merchandising businesses performed well in the quarter while the announcement of a new relationship with The Home Depot® and an upcoming line of pet-related products at PetSmart underscore the strength of the brand and its appeal to consumers.

Charles Koppelman, Executive Chairman and Principal Executive Officer, said, "Martha Stewart brands continue to attract a loyal customer base as demonstrated by our steady print subscriber bases, strong 'omni' marketing programs, and growing online user metrics. We are already seeing improved results in Publishing and strong results in Internet advertising in the fourth quarter. The enduring popularity of our products, even in difficult economic times, is encouraging as we continue to build and expand our Merchandising business. We look forward to January, when we begin a new era for Martha Stewart Living Omnimedia with The Home Depot, giving us a distribution platform at the world's largest home improvement retailer."

Robin Marino, President and Chief Executive Officer of Merchandising, stated: "Retail sales of Martha Stewart products were solid in the quarter, with a strong performance by the Martha Stewart Collection at Macy's and Martha Stewart Crafts at Michaels. Our new relationship with The Home Depot and our upcoming pet accessories line at PetSmart further diversify our business and broaden our reach. With these solid businesses in place, we are delivering on our long-term vision to partner with the best and offer our high-quality products where consumers expect to find us."

Third Quarter 2009 Summary

Revenues were $49.8 million in the third quarter of 2009, compared to $66.5 million in the third quarter of 2008. The decrease in revenue is primarily attributable to declines in advertising revenue and lower merchandising revenues partially due to the final revenue true-up from Sears Canada in last year's third quarter.

Operating loss for the third quarter of 2009 was $(11.7) million, compared to $(3.5) million for the third quarter of 2008.

Adjusted EBITDA loss for the third quarter of 2009 was $(5.6) million, compared to Adjusted EBITDA of $0.6 million in the prior-year period. The third quarter of 2008 included charges related to staff reductions and other non-recurring corporate costs, which negatively impacted the operating loss by $3.5 million and Adjusted EBITDA by $3.2 million.

Net loss per share was $(0.22) for the third quarter of 2009, compared to $(0.07) for the third quarter of 2008.

Third Quarter 2009 Results by Segment

Three Months Ended, September 30
(unaudited, in thousands)

2009              2008
---------         ---------
REVENUES
Publishing                                $27,053           $34,544
Broadcasting                               11,036            14,320
Internet                                    2,761             3,032
Merchandising                               8,931            14,616
---------         ---------
Total Revenues                            $49,781           $66,512
=========         =========

ADJUSTED EBITDA
Publishing                                $(1,457)           $2,972
Broadcasting                                1,893             2,979
Internet                                   (1,415)           (1,054)
Merchandising                               4,252             8,765
Corporate                                  (8,850)          (13,084)
---------         ---------
Total Adjusted EBITDA                     $(5,577)             $578
=========         =========

OPERATING (LOSS)/INCOME
Publishing                                $(2,480)           $2,088
Broadcasting                                  757             2,546
Internet                                   (2,070)           (1,509)
Merchandising                               3,524             8,581
Corporate                                 (11,412)          (15,238)
---------         ---------
Total Operating (Loss)/Income            $(11,681)          $(3,532)
=========         =========

Publishing

Revenues in the third quarter of 2009 were $27.1 million, compared to $34.5 million in the prior year's third quarter, due to a decline in advertising pages, subscription revenue and lower newsstand sales.

Operating loss was $(2.5) million for the third quarter of 2009, compared to operating income of $2.1 million in the third quarter of 2008.

Adjusted EBITDA loss was $(1.5) million in the third quarter of 2009, compared to Adjusted EBITDA of $3.0 million in the prior year's quarter.

Highlights

--  The December issue of Martha Stewart Living arrives on newsstands this
month; it will be the biggest issue of the year and bigger than last
year's December issue.
--  Martha Stewart's Dinner at Home hit The New York Times' bestseller list
within days of its October 13th publication.
--  Martha Stewart Weddings, the bestselling bridal magazine on newsstands,
is celebrating its fifteenth anniversary, a milestone that coincides
with the November launch of the brand's first-ever national online
Luxury Wedding Expo and a special issue dedicated to destination
weddings.

--  MSLO was honored for excellence at Media Industry Newsletter's
Integrated Marketing Awards in September.

Broadcasting

Revenues in the third quarter of 2009 were $11.0 million, compared to $14.3 million in the third quarter of 2008. Revenues declined due to certain one-time payments in the prior-year period related to Emeril programming and a decrease in overall advertising revenue, partially offset by the benefit of accelerating revenue due to the termination of a marketing agreement.

Operating income was $0.8 million for the third quarter of 2009, compared to operating income of $2.5 million in the third quarter of 2008.

Adjusted EBITDA was $1.9 million for the third quarter of 2009, compared to $3.0 million in the prior year's third quarter.

Highlights

--  The Martha Stewart Show launched its fifth season on September 14th
shortly after receiving a Daytime Emmy Award for Art Direction/Set
Direction/Scenic Design for the show's fourth season.
--  The second season of "Whatever, Martha!" on Fine Living Network
premiered on September 23rd and remains one of the network's top-rated
original series.

--  Martha Stewart Living Radio on SIRIUS channel 112 and XM Radio 157 is
preparing for its three-day Thanksgiving hotline featuring 30 chefs and
other experts in 30 hours, including Martha, Emeril, Mario Batali, Lidia
Bastianich, Nigella Lawson, Thomas Keller, Jean-Georges Vongerichten and
more.

Internet

Revenues were $2.8 million in the third quarter of 2009, compared to $3.0 million in the third quarter of 2008. Page views increased from the prior-year period but revenues declined modestly due to timing of advertiser spending and lower advertising rates.

Operating loss was $(2.1) million in the third quarter of 2009, compared to $(1.5) million in the third quarter of 2008.

Adjusted EBITDA loss was $(1.4) million in the third quarter of 2009, compared to $(1.1) million in the third quarter of 2008.

Highlights

--  MSLO's digital properties had record traffic in October with 131.4
million page views and 5.6 million unique visitors.
--  Consumer engagement across MSLO's websites continued to be strong in the
third quarter; page views increased 73% and unique visitors grew 39%
year-over-year while page views per unique visitor increased 25% in the
same period.

--  Traffic to Martha's blog surged to 11.4 million page views, compared to
2.2 million page views in the prior year's quarter.

Merchandising

Revenues were $8.9 million for the third quarter of 2009, as compared to $14.6 million in the prior year's third quarter. The prior-year results benefited from the final revenue true-up from Sears Canada, a relationship that ended in the third quarter of 2008. In addition, the 2009 third quarter results include expected lower royalty revenue from Kmart as the relationship winds down.

Operating income was $3.5 million for the third quarter of 2009, compared to $8.6 million in the third quarter of 2008.

Adjusted EBITDA was $4.3 million for the third quarter of 2009, compared to $8.8 million in the prior year's third quarter. Excluding Kmart and Sears Canada in both periods, Adjusted EBITDA increased 27% from the prior year's third quarter.

Highlights

--  MSLO and The Home Depot announced an agreement to develop an exclusive
Martha Stewart Living brand of home improvement products in select
categories, including Outdoor Living, Home Storage and Organization and
Home Décor. Products are expected to start rolling out in The Home
Depot stores across both the U.S. and Canada beginning in January 2010.
Both companies are in the process of developing additional product
offerings that will be available in 2010, and more details will be
announced in the first part of next year.
--  The Martha Stewart Collection exclusively at Macy's continues to perform
well, benefiting from expanded food preparation offerings and a refined
textile assortment. Year-over-year sales trends in the quarter were
positive.
--  MSLO entered into a multi-year relationship with Age Group Ltd to
manufacture, market and sell pet-care products, which will be available
at PetSmart, Inc., the largest specialty retailer of services and
solutions for pets. The line is expected to launch in the second quarter
of 2010.
--  Last month, MSLO announced plans with The Hain Celestial Group and Hain
Pure Protein to introduce a new Martha Stewart-branded food line at
retail, including poultry, baking mixes and dried pastas using all
natural, healthy ingredients.