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Martha Stewart Living Omnimedia Inc. Message Board

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  • apostate_001 apostate_001 Jan 10, 2006 5:25 PM Flag

    Accounting for KMart Revenue

    More regarding forcasting MSO's 4th quarter results:

    Q3's Total Operating Loss was $26.8M

    MERCHANDISING: As outlined in my previous post on this thread, Merchadising OIDA is likely to jump from $4.3M to $23.5M (per Folla), being a net improvement of $19.2M quarter-over-quarter.

    PUBLISHING: CEO Lyne has been bragging that advertising pages are up 100% (year-over-year).
    Subscription rates have been increased. No doubt publication costs will also be up. If Lyne's forcast is true or partially true, this could mean a net improvement for Pub OIDA by, say, $3M to $5M, quarter-over-quarter.

    TELEVISION: 3Q only contained 2 weeks of Martha's new tv show's revenue. Thus Q4 will also reflect a substantial improvement in rev. Folla said in the Nov. conf call: "Television revenues are expected to be approximately $11 million, as we benefit from a full quarter with the new syndicated show and the launch of our DVDs. OIDA loss for the third quarter will approximate $1 million." If Folla is correct, the television OIDA loss of just $1.0M will reflect a $2.0M improvement quarter-over-quarter.

    INTERNET and DIRECT MARKETING: (Forget this, too small of a segment to be consequential.)

    CORPORATE EXPENSES: For Q3 this item was a devastating -$23.8M, partly because it included a $10.8M charge for the Apprentice warrants. For Q4 that charge will only be $5.5M, which means roughly $5.3M less will be deducted from OIDA.

    Summary: Merchandising ($19.2), Pub ($3M), TV ($2M), and CorpEx ($5.3) adds up to $29.5M of improvements quarter-over-quarter. Given Q3's loss was $26.8, you might prepare yourself for a lot of ballyhoo about how MSO is now in the black! --- temporarily.

    My Conclusion: These numbers are as good as it gets (especially for Merchandising). Strong Sell

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