Martha Stewart's 4th Quarter Results

Year Defined by MSLO's New Partnerships, Acquisitions, and DiversificationCompany on Track to Seize New Opportunities in 2009 and Beyond

NEW YORK, Feb. 25 /PRNewswire-FirstCall/ -- Martha Stewart Living Omnimedia, Inc. (NYSE: MSO) today announced its results for the fourth quarter and for the year ended December 31, 2008. The company reported revenue for the fourth quarter and full year of $72.9 million and $284.3 million, respectively, as existing and newly acquired brands affirmed their resiliency in an increasingly challenging economic environment.

Charles Koppelman, Executive Chairman of the Board, said, "In 2008, anticipating the sunset of our Kmart business, we grew our brand portfolio with the addition of Chef Emeril Lagasse, made strategic investments in innovative digital platforms, broadened the availability and scope of our retail products, delivered compelling integrated marketing programs via our 'omni' platform, and began to expand our reach into international markets. The economic environment is challenging for everyone, but the diversity we have built into the business model coupled with the exceptional value proposition we offer lends us great support heading into 2009. We see many exciting opportunities before us and we will go after the best of those opportunities as we move forward."

Fourth Quarter 2008 Summary
Revenues were $72.9 million in the fourth quarter of 2008, compared to $118.5 million in the fourth quarter of 2007. Kmart contractual minimums accounted for $1.2 million in the fourth quarter of 2008. Kmart contractual minimums and Blueprint accounted for $38.4 million in the fourth quarter of 2007. Excluding Kmart contractual minimums for both quarters and Blueprint for the fourth quarter of 2007, revenues were $71.7 million in the fourth quarter of 2008, compared to $80.1 million in the fourth quarter of 2007.
Adjusted EBITDA for the fourth quarter of 2008 was $10.4 million, compared to $38.3 million in the prior-year period. Adjusted EBITDA for the quarter benefited from cost-saving measures, including compensation-related savings. The 2008 period reflected the anticipated reduction of minimum payments under the Kmart contract. Contributions to Adjusted EBITDA from the Kmart minimum were $1.2 million in the 2008 period and $36.5 million in the 2007 period.
Operating loss for the fourth quarter of 2008 was $(4.5) million, compared to operating income of $33.0 million for the fourth quarter of 2007.
Net loss per share was $(0.15) for the fourth quarter of 2008, compared to net income per share of $0.63 for the fourth quarter of 2007. Net loss in the 2008 quarter was impacted by a non-cash intangible asset impairment charge of ($9.3) million related to the Publishing segment, which is a loss per share of $(0.17). When excluding the impairment charge recorded in the fourth quarter, earnings per share was $0.02.