Martha Stewart Living Omnimedia, Inc. Announces Fourth Quarter and Full-Year 2007 Results

Martha Stewart Living Omnimedia, Inc. Announces Fourth Quarter and Full-Year 2007 Results

Returns to Annual Profitability;

Internet Advertising Growth Continues Through the Quarter;

Merchandising and Internet Businesses Show Good Growth

NEW YORK, Feb. 19 /PRNewswire-FirstCall/ -- Martha Stewart Living Omnimedia, Inc. (NYSE:MSO) today announced its results for the fourth quarter and for the year ended December 31, 2007, reporting a 22% increase in fourth quarter revenue to $118.5 million, led by double-digit growth in its Publishing, Merchandising, and Internet segments.

Susan Lyne, President and Chief Executive Officer, said, "MSO completed its return to profitability in 2007, entering 2008 as a healthier and more diverse business. Our established brands continue to grow while the results from our newer brands and initiatives show great promise. Martha Stewart Living enjoyed a year of robust gains in advertising pages and revenues. Our Martha Stewart Collection at Macy's is off to an excellent start despite a soft retail market. We are seeing renewed interest in our broadcast TV programming, and strong user and advertising trends at our revitalized Internet sites. While we will maintain a close eye on the economy in general and on the advertising marketplace specifically, we are nonetheless executing a number of growth initiatives intended to build sustainable profitability and cash flow into the Company."

Fourth Quarter 2007 Summary

Revenues rose 22% to $118.5 million, compared to $97.0 million for the fourth quarter of 2006. The fourth quarter results were principally driven by royalty revenue from the Company's merchandising relationship with Kmart. The fourth quarter also included initial royalties from the recently launched Martha Stewart Collection at Macy's, as well as improved Internet performance. Publishing revenue growth was negatively impacted in the quarter by a change in the timing of revenue recognition related to our book deal with Clarkson Potter. This will result in a portion of revenue being deferred from fourth quarter of 2007 into the first quarter of 2008.

Operating income for the fourth quarter of 2007 was $33.0 million, compared to $14.6 million for the fourth quarter of 2006.

Adjusted EBITDA for the fourth quarter of 2007 was $38.3 million, compared to $21.5 million in the prior year period.

The prior year period's results included a one-time gain of $3.2 million in revenue and $2.8 million in EBITDA related to the termination of our DVD agreement with Warner Home Video.

Net income per share from continuing operations was $0.63 for the fourth quarter of 2007, compared to $0.31 for the fourth quarter of 2006.

Full-Year 2007 Summary

Revenues rose 14% to $327.9 million, compared to $288.3 million for the full-year 2006. The full-year results were principally driven by strength in Merchandising and Publishing.

Operating income for the full-year 2007 was $7.7 million, compared to a loss of $(2.8) million for the full-year 2006.

Adjusted EBITDA for full-year 2007 was $34.4 million, compared to $19.6 million in the prior year period.

Net income per share from continuing operations was $0.20 for the full- year 2007, compared to a loss of $(0.33) for the full-year 2006.

   Fourth Quarter 2007 Results by Segment    Publishing  

Revenues in the fourth quarter of 2007 rose 15% to $49.4 million from $43.1 million in the prior year's fourth quarter. Publishing revenue growth was led by strong advertising gains at Martha Stewart Living.

Operating loss was $(1.1) million for the fourth quarter of 2007, compared to an operating loss of $(2.2) million in the fourth quarter of 2006.

Adjusted EBITDA was $0.1 million in the fourth quarter of 2007, compared to a loss of $(1.3) million in the fourth quarter of 2006.

   Highlights    -- Total ad revenue increased 30% in the quarter, with pages up 12% at      Martha Stewart Living, 9% at Everyday Food, and 8% at Body + Soul. Ad      revenue growth exceeded page growth, maintaining a strong and steady      trend of rate growth from last year.   -- Comparable first quarter 2008 advertising revenue is currently trending      up approximately 5% and our ability to predict is limited.   -- Beginning in 2008, the company raised the rate base at several      magazines across its magazine portfolio. Martha Stewart Living is      currently at 2,000,000, Everyday Food at 900,000, and Body + Soul at      550,000.   -- Martha Stewart's Wedding Cakes, the third title under its new agreement      with Clarkson Potter was published in the quarter. Under this      agreement, which was amended in December to include an additional two      books, Clarkson Potter will publish 12 books over a multi-year period.      The next book, Martha Stewart's Cookies, is due out in March.     Internet  

Revenues were $7.2 million in the fourth quarter of 2007 compared to $5.4 million in the fourth quarter of 2006, with advertising revenue increasing 60%.

Operating income was $0.7 million in the fourth quarter of 2007, compared with $0.2 million in the fourth quarter of 2006.

Adjusted EBITDA was $1.3 million in the fourth quarter of 2007, compared to $0.3 million in the fourth quarter of 2006.

   Highlights    -- Fourth quarter traffic showed solid gains, with page views increasing      year over year by 30%, 40%, and 50% respectively during each successive      month of the quarter. These strong traffic and engagement trends      continued into the first quarter of 2008, with January page views up      33% year-over-year.   -- Advertising revenue for the first quarter is currently trending up      approximately 35% year over year.   -- In November, MSLO launched Martha's Circle, a collection of leading      lifestyle sites and blogs serving as a network for advertisers. Through      Martha's Circle, the company is creating a highly selective lifestyle      network comprised of content and community, enabling advertisers to      extend their buy beyond marthastewart.com to reach similar consumers.     Broadcasting  

Revenues in the fourth quarter of 2007 were $12.1 million, compared to $13.4 million in the fourth quarter of 2006. The prior year's quarter included a one-time gain of $3.2 million in revenue and $2.8 million in EBITDA related to the termination of our DVD agreement with Warner Home Video. Excluding the one-time gain, revenue would have increased $1.9 million due to higher advertising revenue and revenue related to additional cable distribution of our TV programming.

Operating income was $0.3 million for the fourth quarter of 2007, compared with breakeven in the fourth quarter of 2006.

Adjusted EBITDA was $0.8 million for the fourth quarter of 2007, compared to $3.1 million in the prior year's fourth quarter. Excluding the one-time gain described above, EBITDA would have increased $0.5 million on a year-over- year basis due to an increase in advertising revenue and additional distribution of television programs.

   Highlights    -- The company's new broadcasting initiatives, including the primetime      airing of The Martha Stewart Show on a day-delay on the Scripps-owned      Fine Living Network, and the half-hour daily Martha Stewart Crafts      series on the DIY Network, contributed to the performance in the      quarter. The quarter also recognized revenue from the sale of three      holiday specials on the Fine Living Network and the renewal of two      wedding specials by the Style Network.   -- Ratings for the nationally syndicated The Martha Stewart Show improved      in December compared to the September premiere period. The Company's      financial performance in broadcasting continued to benefit from reduced      production costs and a growing concentration of younger female viewers.   -- Martha Stewart on Demand, an advertising-supported, free video-on      demand service available to Comcast and Cox digital cable customers,      launched in October. It provides 24/7 access to 10 hours of Martha      Stewart programming, half of which is refreshed each month.     Merchandising  

Revenues were $49.8 million for the fourth quarter of 2007, as compared to $35.2 million in the prior year's fourth quarter. The current quarter included revenue from recently launched partnerships, including the Martha Stewart Collection at Macy's, which launched at the end of the third quarter. The results included the contractual minimum royalty guarantees from Kmart.

Operating income was $43.4 million for the fourth quarter of 2007, compared to $29.5 million in the fourth quarter of 2006.

Adjusted EBITDA was $44.0 million for the fourth quarter of 2007, compared to $30.1 million in the prior year's fourth quarter.

   Highlights    -- The Martha Stewart Collection exclusively at Macy's had a successful      holiday selling season, with the enameled cast iron cookware,      whiteware, and Trousseau bedding performing especially well.   -- In December, the company offered a holiday ham, the first item in its      co-branded food line with Costco, followed in January by soups.      Throughout 2008, Kirkland Signature Martha Stewart will roll out frozen      appetizers, entrees and desserts; refrigerated appetizers, dips/spreads      and entrees; and grocery products.   -- In January 2008, the company launched the new Martha Stewart Collection      with Wedgwood tabletop line exclusively at Macy's. With the      introduction of this line, the Martha Stewart Collection became the      number one brand on Macy's bridal registry.     Corporate Expenses  

Total Corporate expenses were $(10.4) million in the fourth quarter of 2007, compared to $(13.0) million in the prior year's quarter. Adjusted EBITDA loss was $(7.9) million in the current period, compared to $(10.6) million in the prior year period. The decline in corporate expenses was primarily due to savings in compensation costs.

Trends and Outlook

Howard Hochhauser, Chief Financial Officer, commented, "Despite the current economic conditions in which we operate, and the deferral of a portion of our Clarkson Potter book revenue into 2008, our results were on target with our expectations and represented good performance across each of our businesses. Given the uncertain economic climate, our ability to predict into 2008 is limited, but we believe the business is fundamentally healthy. Improved revenue diversity, operating discipline and a clean balance sheet all provide underlying support if current economic conditions persist, as well as the resources to address marketplace opportunities as they arise."

For the first quarter of 2008, we are expecting revenue in the range of $66.0 to 67.0 million, operating loss in the range of $(5.0) to $(4.0) million and adjusted EBITDA in the range of $(2.0) to $(1.0) million.

For the full-year 2008, we are expecting revenue of approximately $300.0 million, operating income in the range of $9.5 - $14.5 million and adjusted EBITDA in the range of $23.0 - $28.0 million.

   This guidance excludes any impact from the transactions announced today.    Other Developments   Today the company also announced two strategic deals.  

The company has reached an agreement with Chef Emeril Lagasse to acquire all of the assets related to the business of Emeril Lagasse, other than the restaurant and foundation-related assets. The purchase price is $50 million, $45 in cash and $5 million in stock, at closing, and could reach up to $70 million if certain performance targets are realized in 2011 and 2012.

In addition, MSLO announced a series of transactions with WeddingWire (www.weddingwire.com), a localized wedding platform that combines an online marketplace with planning tools and a social community. The deal includes the acquisition by MSLO of approximately 40 percent of the equity in WeddingWire and a commercial agreement related to software and content licensing and media sales.

The Company issued separate press releases related to each of these transactions today.

Use of Non-GAAP Financial Information

In addition to using net income to assess the organization's overall financial health, Company management uses net income before interest, taxes, depreciation, amortization and non-cash equity compensation ("adjusted EBITDA"), a non-GAAP financial measure, to evaluate the performance of our businesses on a real-time basis. Adjusted EBITDA is considered an important indicator of operational strength, is a direct component of the Company's annual compensation program, and is a significant factor in helping our management determine how to allocate resources and capital. Adjusted EBITDA is used in addition to and in conjunction with results presented in accordance with GAAP. Management considers adjusted EBITDA to be a critical measure of operational health because it captures all of the revenue and ongoing operating expenses of our businesses without the influence of (i) interest charges, which result from our capital structure, not our ongoing business efforts, (ii) taxes, which relate to the overall organizational financial return, not that of any one business, (iii) the capital expenditure costs associated with depreciation and amortization, which are a function of historical decisions on infrastructure and capacity, and (iv) the cost of non- cash equity compensation which, as a function of our stock price, can be highly variable, is not necessarily an indicator of current operating performance for any individual business unit, and is amortized over the appropriate period.

Adjusted EBITDA provides a means to directly evaluate the ability of our business operations to generate returns on a real-time basis. We provide disclosure of adjusted EBITDA because we believe it is useful for investors to have means to assess our performance as we do. While adjusted EBITDA is a customized non-GAAP measure, it also provides a means to analyze, value and compare our operating capabilities to those of companies with whom we compete, many of which have different compensation plans, depreciation and amortization costs, capital structures and tax burdens. But please note that our non-GAAP results may differ from similar measures used by other companies, even if similar terms are used to identify such measures.

A limitation of adjusted EBITDA is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues for our overall organization. Management evaluates the costs of such tangible and intangible assets through other financial measures such as capital expenditures. Management also evaluates the cost of capitalized tangible and intangible assets by analyzing returns provided on the capital dollars deployed. A further limitation of adjusted EBITDA is that it does not include stock compensation expense related to our workforce. Adjusted EBITDA should be considered in addition to, and not as a substitute for, net income or other measures of financial performance reported in accordance with GAAP.

Martha Stewart Living Omnimedia, Inc. (MSLO) is a leading provider of original "how-to" information, inspiring and engaging consumers with unique lifestyle content and high-quality products. MSLO is organized into four business segments: Publishing, Broadcasting, Merchandising, and Internet. MSLO is listed on the New York Stock Exchange under the ticker symbol MSO.

The Company will host a conference call with analysts and investors on February 19th, at 10:00 a.m. ET that will be broadcast live over the Internet at www.marthastewart.com/ir.

We have included in this press release certain "forward-looking statements," as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not historical facts but instead represent only our current beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of our control. These statements can be identified by terminology such as "may," "will," "should," "could," "expects," "intends," "plans," "anticipates," "believes," "estimates," "potential" or "continue" or the negative of these terms or other comparable terminology. The Company's actual results may differ materially from those projected in these statements, and factors that could cause such differences include: adverse reactions to publicity relating to Martha Stewart by consumers, advertisers and business partners; downturns in national and/or local economies; shifts in our business strategies; a loss of the services of Ms. Stewart; a loss of the services of other key personnel; a softening of the domestic advertising market; changes in consumer reading, purchasing and/or television viewing patterns; unanticipated increases in paper, postage or printing costs; operational or financial problems at any of our contractual business partners; the receptivity of consumers to our new product introductions; and changes in government regulations affecting the Company's industries. Certain of these and other factors are discussed in more detail in the Company's most recent Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission, especially under the heading "Risk Factors", which may be accessed through the SEC's World Wide Web site at http://www.sec.gov/. The Company is under no obligation to update any forward- looking statements after the date of this release.

                   Martha Stewart Living Omnimedia, Inc.                   Consolidated Statements of Operations                      Three Months Ended, December 31,            (unaudited, in thousands, except per share amounts)                                        2007            2006         Fav/Unf   REVENUES     Publishing                      $49,416         $43,124         14.6%     Merchandising                    49,807          35,192         41.5%     Internet                          7,206           5,367         34.3%     Broadcasting                     12,055          13,356         -9.7%       Total revenues                118,484          97,039         22.1%    OPERATING COSTS AND EXPENSES     Production, distribution      and editorial                   41,185          37,638         -9.4%     Selling and promotion            26,977          25,911         -4.1%     General and administrative       15,657          17,033          8.1%     Depreciation and amortization     1,699           1,882          9.7%       Total operating costs        and expenses                  85,518          82,464         -3.7%    OPERATING INCOME                   32,966          14,575            nm      Interest income, net                450             916        -50.9%     Legal settlement                      -           1,110            nm    INCOME BEFORE INCOME TAXES         33,416          16,601            nm      Income tax provision               (108)           (387)           nm    NET INCOME                        $33,308         $16,214            nm    NET INCOME PER SHARE    -- BASIC AND DILUTED               $0.63           $0.31    WEIGHTED AVERAGE COMMON    SHARES OUTSTANDING     Basic                            52,551          51,641     Diluted                          52,650          52,560                      Martha Stewart Living Omnimedia, Inc.                   Consolidated Statements of Operations                      Twelve Months Ended December 31,                  (in thousands, except per share amounts)                                       2007            2006          Fav/Unf                                  (unaudited)   REVENUES     Publishing                     $183,727        $156,559         17.4%     Merchandising                    84,711          69,504         21.9%     Internet                         19,189          15,775         21.6%     Broadcasting                     40,263          46,503        -13.4%       Total revenues                327,890         288,341         13.7%    OPERATING COSTS AND EXPENSES      Production, distribution      and editorial                  154,851         138,213        -12.0%     Selling and promotion            89,179          74,190        -20.2%     General and administrative       68,584          70,173          2.3%     Depreciation and amortization     7,562           8,598         12.0%       Total operating costs        and expenses                 320,176         291,174        -10.0%    OPERATING INCOME/(LOSS)             7,714          (2,833)           nm      Interest income, net              2,771           4,511        -38.6%     Legal settlement                    432         (17,090)           nm    INCOME/(LOSS) BEFORE    INCOME TAXES                      10,917         (15,412)           nm      Income tax provision               (628)           (838)           nm    INCOME/(LOSS) FROM CONTINUING    OPERATIONS BEFORE LOSS FROM    DISCONTINUED OPERATIONS           10,289         (16,250)           nm    Loss from discontinued operations       -            (745)           nm    NET INCOME/(LOSS)                 $10,289        $(16,995)           nm    INCOME/(LOSS) PER SHARE    -- BASIC AND DILUTED     Income/(Loss) from      continuing operations            $0.20          $(0.32)     Loss from discontinued      operations                       (0.00)          (0.01)     Net income/(loss)                 $0.20          $(0.33)    WEIGHTED AVERAGE COMMON    SHARES OUTSTANDING     Basic                            52,449          51,312     Diluted                          52,696          51,312                      Martha Stewart Living Omnimedia, Inc.                        Consolidated Balance Sheets                  (in thousands, except per share amounts)                                                December 31,   December 31,                                                  2007           2006                                               (unaudited)   ASSETS   CURRENT ASSETS       Cash and cash equivalents                 $30,536        $28,528       Short-term investments                     26,745         35,321       Accounts receivable, net                   94,195         70,319       Inventories, net                            4,933          4,448       Deferred television production costs        5,316          4,609       Income taxes receivable                       513            482       Other current assets                        3,921          3,857             Total current assets                166,159        147,564    PROPERTY, PLANT AND EQUIPMENT, net             17,086         19,616   INTANGIBLE ASSETS, net                         53,605         53,605   OTHER NON-CURRENT ASSETS                       18,417          7,262             Total assets                       $255,267       $228,047    LIABILITIES AND SHAREHOLDERS' EQUITY   CURRENT LIABILITIES       Accounts payable and        accrued liabilities                      $27,425        $28,053       Accrued payroll and related costs          13,863         13,646       Income taxes payable                        1,246          1,011       Current portion of deferred        subscription income                       25,578         28,884       Current portion of deferred revenue         5,598          3,159             Total current liabilities            73,710         74,753    DEFERRED SUBSCRIPTION REVENUE                   9,577         10,032   DEFERRED REVENUE                               14,482          9,845   OTHER NON-CURRENT LIABILITIES                   1,969          2,460             Total liabilities                    99,738         97,090    COMMITMENTS AND CONTINGENCIES    SHAREHOLDERS' EQUITY       Class A common stock, $0.01 par value,        350,000 shares authorized: 26,738        and 26,109 shares issued in 2007        and 2006, respectively                       267            261       Class B common stock, $0.01 par value,        150,000 shares authorized: 26,722        and 26,791 shares outstanding in        2007 and 2006, respectively                  267            268       Capital in excess of par value            272,132        257,014       Accumulated deficit                      (116,362)      (125,811)                                                 156,304        131,732        Less class A treasury stock -        59 shares at cost                           (775)          (775)             Total shareholders' equity          155,529        130,957             Total liabilities and              shareholders' equity              $255,267       $228,047                      Martha Stewart Living Omnimedia, Inc.     Supplemental Disclosures Regarding Non-GAAP Financial Information                      Three Months Ended December 31,                         (unaudited, in thousands)   

The following table presents segment and consolidated financial information, including a reconciliation of operating income/(loss), a GAAP measure, and adjusted EBITDA, a non-GAAP measure. In order to reconcile adjusted EBITDA to operating income, depreciation and amortization and non-cash equity compensation are added back to operating income/(loss).

                                                       2007          2006   ADJUSTED EBITDA     Publishing                                         $131       $(1,345)     Merchandising                                    43,980        30,089     Internet                                          1,304           269     Broadcasting                                        781         3,077     Adjusted EBITDA before Corporate Expenses        46,196        32,090     Corporate Expenses                               (7,853)      (10,556)   Adjusted EBITDA                                    38,343        21,534    NON-CASH EQUITY COMPENSATION     Publishing                                          887           715     Merchandising                                       464           283     Internet                                            252           109     Broadcasting                                        227         2,262     Corporate Expenses                                1,848         1,708       Total Non-Cash Equity Compensation              3,678         5,077    DEPRECIATION AND AMORTIZATION     Publishing                                          303           142     Merchandising                                        90           257     Internet                                            394           (59)     Broadcasting                                        254           768     Corporate Expenses                                  658           774       Total Depreciation and Amortization             1,699         1,882    OPERATING INCOME/(LOSS)     Publishing                                       (1,059)       (2,202)     Merchandising                                    43,426        29,549     Internet                                            658           219     Broadcasting                                        300            47   Operating Income before Corporate Expenses         43,325        27,613   Corporate Expenses                                (10,359)      (13,038)       Total Operating Income                         32,966        14,575       Interest income, net                              450           916       Legal settlement                                    -         1,110    INCOME BEFORE INCOME TAXES                         33,416        16,601        Income tax provision                             (108)         (387)    NET INCOME                                        $33,308       $16,214                      Martha Stewart Living Omnimedia, Inc.     Supplemental Disclosures Regarding Non-GAAP Financial Information                      Twelve Months Ended December 31,                         (unaudited, in thousands)   

The following table presents segment and consolidated financial information, including a reconciliation of operating income/(loss), a GAAP measure, and adjusted EBITDA, a non-GAAP measure. In order to reconcile adjusted EBITDA to operating income, depreciation and amortization and non- cash equity compensation are added back to operating income/(loss).

                                                       2007           2006    ADJUSTED EBITDA     Publishing                                      $17,023         $9,341     Merchandising                                    59,159         48,517     Internet                                         (4,394)          (206)     Broadcasting                                      1,548          4,416     Adjusted EBITDA before Corporate Expenses        73,336         62,068     Corporate Expenses                              (38,942)       (42,492)   Adjusted EBITDA                                    34,394         19,576    NON-CASH EQUITY COMPENSATION     Publishing                                        4,297          2,715     Merchandising                                     1,555            967     Internet                                            501            208     Broadcasting                                      6,866          3,006     Corporate Expenses                                5,899          6,915       Total Non-Cash Equity Compensation             19,118         13,811    DEPRECIATION AND AMORTIZATION     Publishing                                        1,188            600     Merchandising                                       375          1,021     Internet                                          1,242            117     Broadcasting                                      2,201          3,026     Corporate Expenses                                2,556          3,834       Total Depreciation and Amortization             7,562          8,598    OPERATING INCOME (LOSS)     Publishing                                       11,538          6,026     Merchandising                                    57,229         46,529     Internet                                         (6,137)          (531)     Broadcasting                                     (7,519)        (1,616)   Operating Income before Corporate Expenses         55,111         50,408   Corporate Expenses                                (47,397)       (53,241)       Total Operating Income/(Loss)                   7,714         (2,833)       Interest income, net                            2,771          4,511       Legal settlement                                  432        (17,090)    INCOME/(LOSS) BEFORE INCOME TAXES                  10,917        (15,412)       Income tax provision                             (628)          (838)    INCOME/(LOSS) FROM CONTINUING OPERATIONS    BEFORE LOSS FROM DISCONTINUED OPERATIONS          10,289        (16,250)   Loss from discontinued operations                       -           (745)    NET INCOME/(LOSS)                                 $10,289       $(16,995)                      Martha Stewart Living Omnimedia, Inc.     Supplemental Disclosures Regarding Non-GAAP Financial Information                          Guidance Reconciliation                  (in millions, except per share amounts)   

The following table presents segment and consolidated financial information, including a reconciliation of operating income/(loss), a GAAP measure, and adjusted EBITDA, a non-GAAP measure. In order to reconcile adjusted EBITDA to operating income/(loss), depreciation and amortization and non-cash equity compensation are added back to operating income/(loss).

   First Quarter Guidance Reconciliation                                                         Guidance Range   Adjusted EBITDA                                  $ (2.0)    .     $  (1.0)        Depreciation and Amortization                 (1.0)             (1.0)        Non-Cash Equity Compensation                  (2.0)             (2.0)   Operating Loss                                     (5.0)    .        (4.0)   Interest Income                                     1.0               1.0   Pre-tax Loss                                       (4.0)    .        (3.0)   Income Taxes                                          -                 -   Net Loss                                           (4.0)    .        (3.0)   Loss Per Share                                  $ (0.08)    .     $ (0.06)   Avg. Diluted Shares Outstanding                    52.6              52.6      Full Year 2008 Guidance Reconciliation                                                         Guidance Range   Adjusted EBITDA                                 $  23.0     .    $  28.0        Depreciation and Amortization                 (5.5)            (5.5)        Non-Cash Equity Compensation                  (8.0)            (8.0)   Operating Income                                    9.5     .       14.5   Interest Income                                     4.0              4.0   Pre-tax Income                                     13.5     .       18.5   Income Taxes                                          -                -   Net Income                                         13.5     .       18.5   Earnings Per Share                                $0.26     .      $0.35   Avg. Diluted Shares Outstanding                    52.6             52.6  

First Call Analyst:
FCMN Contact: eestroff@marthastewart.com

Source: Martha Stewart Living Omnimedia, Inc.

CONTACT: Elizabeth Estroff, SVP, Corporate Communications of Martha
Stewart Living Omnimedia, Inc., +1-212-827-8281, eestroff@marthastewart.com

Web site: http://www.marthastewart.com/
http://www.marthastewart.com/ir
http://www.weddingwire.com/

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