Martha Stewart Living CEO: Company's Best Years Are Still Ahead
Turnaround expert Dan Dienst, a former metals executive, on his second earnings call says his team has done away with "cumbersome internal hierarchies" to make the firm a "hungry, efficient machine."
New Martha Stewart Living Omnimedia CEO Dan Dienst on Tuesday provided an update on his turnaround strategy for the lifestyle media company, saying that "the best years of our company are indeed ahead of us."
During his second earnings conference call since joining the company, the former metals industry executive, who has become known as a turnaround expert, told analysts that "we have been busy." Martha Stewart Living had announced the appointment of Dienst as CEO in late October.
Highlighting that the company has been reevaluating how to run more efficiently and nimbly, he said, "We have gone hard at our costs" and cut staff and eliminated "cumbersome internal hierarchies" and "legacy silos" to make the firm a "hungry, efficient machine."
Dienst also mentioned a new centralized content unit before saying that Martha Stewart Living continues to focus on the question "What do we want to be when we grow up?" But the CEO said a key focus for the company going forward will be "ferociously protecting and investing in our brand."
He also cited international expansion as an opportunity, given that the company has been focused on the U.S. He said his firm is currently evaluating opportunities in India and other growing or emerging markets abroad.
He also highlighted that the company has "unshackled ourselves from external distractions," particularly disputes with the likes of J.C. Penney and Macy's, which have been settled in recent months.
He called both companies "esteemed partners" and said the Macy's litigation was particularly "embarrassing." Dienst added that he was "deeply grateful" to Macy's leadership for giving his team a chance to reinvigorate the partnership.
Dienst didn't detail new TV programming plans but said the firm's publishing operations are looking to maximize digital revenue opportunities.
Martha Stewart Living on Tuesday reported fourth-quarter earnings of $7.0 million, compared with a year-ago loss of $1.8 million. Revenue of $47.4 million was down from $56.4 million in the year-ago period as growth in the merchandising business was offset by lower broadcasting and publishing results.
Broadcasting revenue in the quarter amounted to $800,000, compared with $4.8 million in the year-ago period. The firm cited "non-recurring items in the prior year related to our historical broadcasting operations." Broadcasting unit operating profit fell from $3.0 million to $300,000.
"We ended the full year with a $54.5 million improvement in operating income from the prior year," Dienst said about full-year results. "As promised, we also took some aggressive and important steps in the last quarter of 2013 to align our cost structure with marketplace realities, and more importantly to become nimbler, more efficient generators of ideas, inspirations, content and product. We also promised to put to bed several pieces of notable and distracting litigation, and we did so."
He added: "With some of the best, brightest and most passionate employees in our business lines -- all of whom have embraced our new way of chasing opportunities as One Company -- we are very excited about the groundwork we will lay in 2014 for tapping our esteemed brand's fullest potential."