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Martha Stewart Living Omnimedia Reports Third Quarter 2015 Financial Results

The following excerpt is from the company's SEC filing.

Update On MSLOs Merger With Sequential Brands Group

NEW YORK, Nov. 5, 2015 /PRNewswire/ Martha Stewart Living Omnimedia, Inc. (NYSE: MSO) today announced its financial results for the third quarter ended September 30, 2015.

Third Quarter 2015 Summary

Third quarter results came in line with expectations reflecting the continued realization of cost savings initiatives and third-party partnerships put in place at the start of the fiscal year, said CEO Dan Dienst. Our planned merger with Sequential Brands Group remains on track and our combined proxy statement/prospectus has been mailed t o shareholders and a Special Meeting of Shareholders to approve the merger is scheduled for December 2, 2015 with an effective closing shortly thereafter.

Dan Dienst added, As we approach the 25

anniversary of the first issue of

magazine, our entire organization looks forward to helping write this next exciting chapter of our Company.

Revenues totaled $17.5 million in the third quarter of 2015, compared to $29.6 million in the third quarter of 2014. The anticipated decline was primarily due to the Companys partnership with Meredith Corporation under which we no longer recognize advertising and circulation revenue from

and only receive a share of digital revenues (in exchange for licensing out sales, printing, distribution and hosting costs) as well as lower Merchandising revenues.

Total operating loss for the third quarter of 2015 was $(1.3) million, inclusive of $1.1 million in merger transaction costs, compared to total operating loss of $(14.9) million in the third quarter of 2014. The prior -year comparable period included an $(11.4) million non-cash impairment charge recorded in the Companys merchandising segment.

Basic and diluted net loss per share was $(0.03) for the third quarter of 2015 compared to $(0.19) for the third quarter of 2014.

Third Quarter 2015 Results by Segment

Three Months Ended September 30,

(unaudited, in thousands)

REVENUES

Publishing

5,323

15,781

11,669

13,691

Broadcasting

Total Revenues

17,460

29,611

OPERATING (LOSS) / INCOME

(2,404

(6,246

(1,548

Corporate

(7,478

(7,020

Total Operating Loss

(1,279

(14,850

Publishing

Revenues in the third quarter of 2015 were $5.3 million, compared to $15.8 million in the prior years third quarter reflecting our agreement with Meredith Corporation which resulted in the Companys elimination of recognizing advertising and circulation revenue from

and a digital advertising revenue share arrangement.

Operating loss was $(2.4) million for the third quarter of 2015, compared to $(6.2) million in the prior years third quarter primarily due to cost reductions from our partnership with Meredith.

Revenues for the third quarter of 2015 were $11.7 million, compared to $13.7 million in the prior years third quarter due to the expiration of certain partnerships as well as lower sales at The Home Depot. The decline in revenue was partially offset by increased revenue from our partnership with PetSmart.

Operating income was $8.3 million for the third quarter of 2015 as compared to an operating loss of $(1.5) million in the third quarter of 2014. Last years third quarter included a non-cash impairment charge of $(11.4) million.

Broadcasting

Revenues for the third quarter of 2015 were $0.5 million, compared to $0.1 million in the prior years third quarter.

Operating income was $0.3 million the third quarter of 2015 compared to an operating loss of $(0.04) million in the third quarter of 2014.

Corporate

Corporate expenses were $(7.5) million in the third quarter of 2015 compared to $(7.0) million in the prior years quarter. The increase was primarily due to merger transaction costs of $1.1 million, which was partially offset by reduced headcount.

Sequential Brands Group Transaction Update

On Friday, October 23

, the registration statement on Form S-4 filed by Singer Madeline Holdings, Inc. (the Registration Statement) was declared effective by the Securities and Exchange Commission (the SEC) and on October 27

, a combined proxy statement/prospectus filed with the SEC by MSLO on Schedule 14A. The combined proxy statement/prospectus, which contains important information about the proposed merger transaction, including how to vote on the transaction, has been...


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