Martha Stewart Living Omnimedia, Inc. has announced its financial results for the second quarter ended June 30, 2015. Revenues totaled $18.2 million in the second quarter of 2015, compared to $37.6 million in the second quarter of 2014.
The anticipated decline was primarily due to MSLO’s agreement with Meredith Corporation under which it now only receives a share of digital revenues, as well as lower merchandising revenues. Total operating loss for the second quarter of 2015 was $2.4 million, compared to total operating income of $2.2 million in the prior-year period, according to the company. Included in second quarter 2015 results was $2.1 million in corporate expenses related to legal and financial advisory fees associated with its proposed merger transaction with Sequential and a non-recurring charge of $0.7 million related to the buyout of a legacy publishing segment contract. Excluding these two non-recurring charges, consolidated operating income for the second quarter 2015 would have been approximately $0.3 million, according to the company.
“Second quarter results were consistent with our previously announced expectations as we continue to realize cost savings from our partnership with Meredith Corporation,” said MSLO CEO Dan Dienst. “While we are pleased by exceeding our ‘cost avoidance’ projections, we eagerly await our partner Meredith Corporation’s sales progress as we move into late 2015 and into 2016.”
“We are excited about our pending merger agreement with Sequential Brands Group, which best positions MSLO for long-term success by allowing the company’s design and creative resources to tap into Sequential’s commercial expertise to grow and expand the Martha Stewart brand, both domestically and abroad,” Dienst added.
As previously reported, on June 22, 2015, MSLO announced that it had signed a definitive agreement with Sequential Brands Group, Inc. pursuant to which Sequential will acquire 100% of the company’s outstanding shares for aggregate consideration valued at $6.15 per share, payable 50% in stock and 50% in cash. The merger is expected to close in the last quarter of 2015.
In MSLO’s merchandising segment, it reported that revenues were $12 million for the second quarter of 2015 compared to $14.7 million in the prior year’s second quarter due to the expiration of certain partnerships such as Avery, which has been replaced with a direct partnership with Staples that is scheduled to hit shelves in early 2016, as well as lower sales at The Home Depot. The decline in revenue was partially offset by increased revenue from its partnership with PetSmart.
Merchandising operating income was $8.7 million for the second quarter of 2015 as compared to $11 million in the second quarter of 2014.