Martha Stewart Living First-Quarter Loss Expands
NEW YORK -- Martha Stewart Living Omnimedia on Wednesday reported a higher first-quarter loss as its broadcasting division swung to a loss after the recognition of a Hallmark Channel license fee had boosted its year-ago performance.
The company posted a quarterly loss of $7.1 million, compared with a loss of $3.9 million in the year-ago period.
Revenue declined slightly from $53.2 million to $52.7 million.
The first quarter of 2010 had included the recognition of $7.2 million in revenue that couldn't be replicated in the latest period, including an approximately $5 million exclusive license fee from Hallmark Channel, which has used MSLO content to establish a lifestyle programming block, the company said. Excluding year-ago one-time revenue items, revenue would have risen 16 percent in the latest period, management said.
MSLO broadcasting revenue declined from $12.1 million to $7.8 million. The year-ago period had included the $5 million Hallmark Channel license fee.
The broadcasting unit swung to a first-quarter operating loss of $1.8 million from a year-ago profit of $3.2 million.
"Our broadcasting team is continuing to build an attractive block of programming on Hallmark Channel," said Charles Koppelman, executive chairman and principal executive officer. On an earnings conference call, he said MSLO remains focused on driving value from the Hallmark partnership, highlighting once again that its success for MSLO should be measured in more ways than just ratings. For example, having The Martha Stewart Show on Hallmark eliminates a distribution fee that the firm used to pay in syndication, and there is room for the development of further shows with Hallmark, he mentioned.
First-quarter merchandising unit revenue at MSLO grew thanks to partnerships with Home Depot and Macy's, and publishing revenue also rose.
"We believe the transformation of the company is beginning to take hold as we seek to broaden our portfolio of engaging content and quality products," said Koppelman. "We feel we're positioned to deliver profitable growth as we execute on our business plan in 2011 and beyond."
On the conference call on Wednesday, management said broadcasting financials will be about flat in the current second quarter compared to the year-ago period. Executives also touted further upside potential for Emeril Lagasse and other company talent. Without providing details, Koppelman said several personalities could be ripe for "brand extensions."
Analysts did not ask about a recent suggestion that MSLO could follow the lead of Playboy Enterprises and go private in a Martha Stewart-led buyout.