|Martha Stewart's company is suffering massive losses as advertisers continue to abandon its media properties.
MARTHA STEWART GETS PRISON TIME AND FINE
But Is Allowed to Go Free on Bail During Appeal
MARTHA STEWART GUILTY ON ALL COUNTS
Verdict Expected to Impact Her Already-Troubled Company
MARTHA STEWART COMPANY POSTS FIRST FULL-YEAR LOSS
Trial Shadows Earnings Report; 'Contingency Plans' Being Reviewed
KMART FILES SUIT AGAINST MARTHA STEWART COMPANY
Marketing Partners Issue Conflicting News Releases
MARTHA STEWART MAGAZINE LOSES MORE GROUND
Ad Pages Drop 34.6% in 2003; Advertisers Continue Move to Other Publications
'MARTHA STEWART LIVING' MAGAZINE CUTS RATE BASE 22%
Guaranteed Circulation Goes From 2.3 Million to 1.8 Million
MAJOR ADVERTISERS DROP FROM 'MARTHA STEWART LIVING'
Many Big 2002 Spenders Place No Ads in 2003
MARTHA STEWART OMNIMEDIA EARNINGS PLUMMET
The company posted a net loss of $19.3 million, compared to a net gain of $931,000 for the same period last year. Revenues for the quarter fell 33.1% to $44.0 million.
Sharon Patrick, Omnimedia's president-CEO, said the plunge is "due primarily to advertising [results] negatively affected by Martha Stewart's personal legal circumstances."
Ms. Patrick also spoke to the unique bind the company finds itself in; Ms. Stewart is now at a juncture where what may be best for her personally -- such as an appeal of her verdict, which Ms. Stewart has indicated she is pursuing -- is at odds with what's best for Omnimedia and its investors, who would be best served by a quick resolution, even if this involves Ms. Stewart serving time in prison.
"At the end of the day the company believes that only when Martha puts incarceration behind her and/or has successfully completed the appeals process -- and, as importantly, is no longer the subject of chronic negative media attention and events -- will large numbers of advertisers return" to the company.
Ad pages down 53%
Ad pages at its single largest property, the flagship magazine Martha Stewart Living, declined 53% in the quarter, said Chief Financial Officer James Follo. This represents a worsening of previous trends. Mr. Follo forecast the company would record overall operating losses for both the third and fourth quarters, although he said minimum merchandising revenue guarantees would mean fourth-quarter losses would be narrower than those of previous period.
An upcoming trade media campaign, with the Martha-free tagline "Take a new look at Living," will debut this month.
The company announced plans to discontinue its mail-order Living catalog. It will also launch a new TV show, Everyday Food, on a Washington, D.C., PBS affiliate in January.