Martha Stewart Living Omnimedia, Inc. Announces Second Quarter 2006 Results

NEW YORK, July 26 /PRNewswire-FirstCall/ -- Martha Stewart Living Omnimedia, Inc. today announced its results for the second quarter, showing substantial gains that underscore the overall strength of the Company's business segments. The Company also announced that its Board of Directors approved a special one-time dividend of $0.50 per share.

President and Chief Executive Officer Susan Lyne said: "Our second quarter results confirm that the Company is on very strong footing with revenues up 47%, operating results improving considerably, and each business segment outperforming our guidance. Publishing and Internet delivered significant increases in advertising revenue, while Broadcasting performed well and was a strong driver of demand for our brand. In addition, we recently announced several new Merchandising partnerships, including agreements with Kodak Imaging Network, Inc., Quality Home Brands, LLC and FLOR, Inc. These new agreements are part of our growing portfolio of strategic initiatives with such companies as Macy's, KB Home and EK Success to diversify our revenue stream and thoughtfully leverage our brand.

"We have a clear roadmap for growth that gives us confidence in the future of our business and in our ability to increase shareholder value. We have successfully navigated a difficult period and are enjoying significant gains in advertising revenue and new business opportunities. With the health and vigor of the Company renewed, we are in a position to return value to our shareholders with this special dividend, while continuing to invest in our business."

Revenues rose 47% to $67.4 million compared to $46.0 million for the second quarter of 2005, driven by strong performance in Publishing and Internet, along with the inclusion of results from MARTHA, our nationally syndicated daily television show, and the Martha Stewart Living Radio channel on Sirius Satellite Radio.

Operating loss for the second quarter decreased to $(1.8) million, compared to $(34.2) million for the second quarter of 2005. The second quarter results benefited from an increase in high margin advertising revenue. Results for the quarter included a one-time newsstand expense reduction adjustment of $3.2 million ($0.06 per share). The prior period included a $16.8 million ($0.33 per share) non-cash charge related to the vesting of a portion of a warrant granted in connection with the production of our syndicated television show.

Adjusted EBITDA for the second quarter of 2006 was $3.2 million, compared to an adjusted EBITDA loss of $(11.2) million for the second quarter of 2005.

Loss per share from continuing operations was $(0.01) for the second quarter of 2006, ahead of a prior year second quarter loss of $(0.65) and ahead of consensus estimate of $(0.16).

Second Quarter 2006 Results by Segment Publishing

Revenues in the second quarter of 2006 grew 29% to $40.9 million, driven by higher advertising pages and rates, led by a 47 % increase in ad pages at Martha Stewart Living, and a 22% increase in pages at Everyday Food.

Operating income was $6.1 million for the second quarter of 2006, compared to an operating loss of $(3.3) million in the second quarter of 2005, benefiting from significantly higher ad sales and a one-time newsstand expense reduction adjustment of $3.2 million related to the settlement of certain newsstand-related fees. Results include an investment in Blueprint magazine of $1.7 million as we develop the magazine and build our staff.

Adjusted EBITDA was $6.9 million, compared to an adjusted EBITDA loss of $(2.6) million in the second quarter of 2005.

Highlights -- Total advertising revenue increased 66% or $9.0 million on continued rate increases, with ad pages up 47% at Martha Stewart Living, and 22% at Everyday Food. The quarter saw particular category strength in food and household equipment. -- Based on current trends, we expect the growth in ad pages to continue, with an expected third quarter increase of 45% at Martha Stewart Living and 60% at Everyday Food. -- Body and Soul's rate base, having increased to 350,000 in March 2006 from 275,000, increased to 400,000 in July 2006. -- This quarter marked the debut of Blueprint magazine. Our first test issue, with an initial rate base of 250,000, was well received by readers and advertisers alike. The magazine has attracted new advertisers and ad categories that do not appear in our other publications. In August, we will publish the second test issue of Blueprint, followed by six more issues in 2007. Broadcasting

Revenues in the second quarter of 2006 rose to $11.8 million from $1.8 million in the second quarter of 2005. The quarter included revenue from MARTHA, our nationally syndicated daily show, and the Martha Stewart Living Radio channel on Sirius Satellite Radio, neither of which existed in the prior year.

Operating income was $0.4 million for the second quarter of 2006, compared to an operating loss of $(20.1) million in the second quarter of 2005. Results from the prior year's quarter include a non-cash charge of $16.8 million associated with the vesting of a portion of a warrant granted in connection with the production of the syndicated TV program.

Adjusted EBITDA was $1.2 million for the second quarter of 2006, compared to an adjusted EBITDA loss of $(2.7) million in the prior year's second quarter.

Highlights -- Our hour-long nationally syndicated show, MARTHA, completed its first season, during which it garnered six Daytime Emmy Award nominations and one win for outstanding achievement in art direction/set direction/scenic design. In what is an otherwise sluggish market, the show is registering solid CPM gains. -- The Broadcasting segment announced three significant new hires. Richard Claflin joined the Company as Vice President of Programming. Jill Boulet is the new Vice President of Marketing, Broadcasting. Elizabeth Aiello is the new Vice President, General Manager of Martha Stewart Living Radio. Merchandising

Revenues were $10.2 million for the second quarter of 2006, as compared to $10.2 million in the prior year's second quarter. The quarter included revenue from our relationship with KB Home, which offset modestly lower sales of our Martha Stewart Everyday products at Kmart. The decline in royalty revenue from sales at Kmart in the quarter will not impact full-year results from operations, as we expect to be paid based on guaranteed annual amounts.

Operating income was $5.1 million for the second quarter of 2006, compared to $5.9 million in the second quarter of 2005. The decrease is due largely to investment in personnel to support the growing number of merchandising initiatives we have forged in recent months.

Adjusted EBITDA was $5.6 million for the second quarter of 2006, compared to $6.3 in the second quarter of 2005.

Highlights We continue to expand our portfolio of new and promising initiatives. -- Yesterday marked the grand opening of our second branded community in our groundbreaking collaboration with KB Home. KB Home Hampton Oaks: Created with Martha Stewart near Atlanta, Georgia, follows our first highly successful Martha Stewart-branded KB Home community in Cary, North Carolina. -- During the second quarter, we announced an agreement with Quality Home Brands, LLC, a manufacturer of leading brands of lighting and home décor products, to create a new line of Martha Stewart-branded lighting and ceiling fans. Initial products are expected to be introduced in Spring 2007 and will be available through independent lighting and furniture dealers. -- We also signed an agreement with FLOR, Inc., an eco-friendly manufacturer of residential, high-style modular floor coverings, to manufacture a new line of Martha Stewart-branded carpet tiles; the products will be available through the FLOR catalog and online at http://www.florcatalog.com/ beginning in the second half of 2007. Internet

Revenues rose 107% to $4.6 million, driven chiefly by higher ad sales resulting from increases in both web traffic and ad rates.

Operating income was breakeven in the second quarter of 2006, compared with an operating loss of $1.1 million in the second quarter of 2005. Results benefited from higher ad rates offset slightly by higher operating costs as we invest in staff and technology in advance of the website's relaunch in first quarter 2007.

Adjusted EBITDA was $0.1 million in the second quarter of 2006, compared to a loss of $(0.9) million in the second quarter of 2005.

Highlights -- Advertising revenue grew to $2.1 million from $0.2 million, benefiting from a 117% increase in page views year-over-year and higher CPMs. -- Marthasflowers.com revenue grew to $2.5 million from $2.1 million. -- Last month, we announced a multiyear agreement with Kodak to develop a line of Martha Stewart-branded personalized photo products. The new line, which will be available on the KODAK EASYSHARE Gallery website and at marthastewart.com, is expected to launch in September with a large selection of holiday offerings such as cards and Photo Books. Additional products and new categories will be introduced at the end of the year and throughout 2007. -- We continue to make progress as we move from mapping and designing our new website to building it in anticipation of the website's relaunch in the first quarter of 2007. We will be increasing headcount during the second half of 2006 to support both the relaunch and our new business with Kodak. -- We recently announced three important new management hires. Thomas Mueller has been named Vice President, Creative Director. Christine Cook assumes the role of Vice President, Interactive Advertising Sales, and Robert Kernen is the Assistant Vice President and Director of Product Management. Corporate Expenses

Corporate expenses, including depreciation and amortization and non-cash equity compensation, were a loss of $(13.4) million, compared to $(15.7) million in the prior year's quarter. Corporate expenses, before depreciation and amortization and non-cash equity compensation, declined 6% to $10.7 million. The decrease was driven largely by lower professional fees and employee-related costs.

Trends and Outlook

Howard Hochhauser, Chief Financial Officer, commented: "Our business continues to strengthen. Based on the current trends, we expect to report significant year-over-year improvements in operating results in the third quarter and for the full year. Publishing, the significant earnings driver for the current quarter, will benefit principally from higher advertising revenues and page growth, partially offset by investment spending on Blueprint. Broadcasting will continue to benefit from our Martha Stewart Living Radio channel on SIRIUS Satellite Radio in the third quarter and for the full year, partially offset by lower profit expectations for season two of the MARTHA television show due to the loss of our cable distribution along with additional promotional spending to launch the second season. Merchandising and Internet will add personnel to support new product line launches, including the launch of our Martha Stewart Collection at Macy's and our digital photo products initiative with Kodak, while Internet will also be investing to support the launch of our improved website in the first quarter of 2007. With our strong results from this quarter, we will be able to accelerate our investment in Blueprint, our Internet business and our Martha Stewart Collection at Macy's.

"For the third quarter of 2006, we are expecting revenue in the range of $55 - $57 million, operating income loss in the range of $(10.5) to $(11.5) million and an adjusted EBITDA loss in the range of $(5.5) to $(6.5) million. We remain comfortable with our previous full-year revenue guidance of $270 - $280 million. We will be investing some of the gains from the second quarter to support the roll-out of our new merchandising initiatives and accelerate the investment in Blueprint magazine. Taking together the second quarter upside with the additional investment, we expect to report a full year operating loss in the range of $(6.0) to $(8.0) million with adjusted EBITDA in the range of $12 - $14 million, including an investment in Blueprint magazine of $6 million, as well as nearly $4 million in expenses associated with the development of our Internet business, and the incremental expenses relating to our new merchandising initiatives of $1 million. This compares to prior guidance of adjusted EBITDA in the range of $10-$12 million."

Stock-Based Compensation

In accordance with a new accounting rule, FASB Staff Accounting Bulletin No. 107, stock-based compensation is no longer presented as a separate line on our income statement. The stock-based compensation is now presented in the same line as cash compensation paid to the same individuals. Stock-based compensation recognized in prior periods has been reclassified to conform to the presentation in the current period. In the second quarter, the charge related to stock-based compensation was $2.7 million as compared to $21.3 million in the prior year period.

Special Dividend

Last week, our Board of Directors approved a special one-time dividend of $0.50 per share. The special dividend will be payable on September 14, 2006, to stockholders of record on August 31, 2006.

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. Martha Stewart Living Omnimedia, Inc. is listed on the New York Stock Exchange under the ticker symbol MSO.

The Company will host a conference call with analysts and investors at 10:00 a.m. ET that will be broadcast live over the Internet at http://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; an adverse resolution to the pending SEC enforcement proceeding against Ms. Stewart arising from her personal sale of non-Company stock; adverse resolution of some or all of the Company's ongoing litigation; 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 Annual Report on Form 10-K 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, June 30 (unaudited, in thousands, except per share amounts) 2006 2005 % change REVENUES Publishing $40,888 $31,707 29.0% Broadcasting 11,757 1,847 nm Merchandising 10,165 10,162 0.0% Internet 4,634 2,235 107.3% 67,444 45,951 46.8% OPERATING COSTS AND EXPENSES Production, distribution and editorial 35,507 25,753 -37.9% Selling and promotion 14,052 16,239 13.5% General and administrative 17,447 36,449 52.1% Depreciation and amortization 2,236 1,720 -30.0% Total operating costs and expenses 69,242 80,161 13.6% OPERATING LOSS (1,798) (34,210) nm Interest income, net 1,356 890 52.4% LOSS BEFORE INCOME TAXES (442) (33,320) nm Income tax provision (229) (59) nm LOSS FROM CONTINUING OPERATIONS BEFORE LOSS FROM DISCONTINUED OPERATIONS (671) (33,379) nm Loss from discontinued operations (499) (120) nm NET LOSS $(1,170) $(33,499) nm LOSS PER SHARE - BASIC AND DILUTED Loss from continuing operations $ (0.01) $ (0.65) Loss from discontinued operations $ (0.01) (0.00) Net loss $ (0.02) $ (0.65) WEIGHTED AVERAGE COMMON SHARES OUTSTANDING Basic and Diluted 51,176 51,166 Martha Stewart Living Omnimedia, Inc. Consolidated Statements of Operations Six Months Ended June 30 (unaudited, in thousands, except per share amounts) 2006 2005 % change REVENUES Publishing $77,176 $57,062 35.2% Broadcasting 23,077 2,644 nm Merchandising 21,442 19,554 9.7% Internet 7,582 5,357 41.4% Total revenues 129,277 84,617 52.8% OPERATING COSTS AND EXPENSES Production, distribution and editorial 68,250 49,998 -36.5% Selling and promotion 30,802 33,377 7.7% General and administrative 35,269 51,827 31.9% Depreciation and amortization 4,444 3,407 -30.4% Total operating costs and expenses 138,765 138,609 -0.1% OPERATING LOSS (9,488) (53,992) nm Interest income, net 2,402 1,659 44.8% LOSS BEFORE INCOME TAXES (7,086) (52,333) nm Income tax provision (296) (82) nm LOSS FROM CONTINUING OPERATIONS BEFORE LOSS FROM DISCONTINUED OPERATIONS (7,382) (52,415) nm Loss from discontinued operations (622) (252) nm NET LOSS $(8,004) $(52,667) nm LOSS PER SHARE - BASIC AND DILUTED Loss from continuing operations $ (0.14) $ (1.03) Loss from discontinued operations $ (0.01) $ (0.00) Net loss $ (0.16) $ (1.03) WEIGHTED AVERAGE COMMON SHARES OUTSTANDING Basic and Diluted 51,192 51,015 Martha Stewart Living Omnimedia, Inc. Consolidated Balance Sheets (in thousands, except per share amounts) June 30, December 31, 2006 2005 (unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $36,226 $20,249 Short-term investments 79,318 83,788 Accounts receivable, net 37,527 55,381 Inventories, net 4,141 3,910 Deferred television production costs 5,268 6,507 Income taxes receivable 519 519 Other current assets 3,542 4,366 Total current assets 166,541 174,720 PROPERTY, PLANT, AND EQUIPMENT, net 19,300 19,797 INTANGIBLE ASSETS, net 53,605 53,680 OTHER NONCURRENT ASSETS 6,653 5,631 Total assets $246,099 $253,828 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued liabilities $22,892 $28,545 Accrued payroll and related costs 9,313 7,488 Income taxes payable 735 476 Current portion of deferred subscription income 28,424 31,060 Current portion of deferred royalty revenue 6,321 6,578 Total current liabilities 67,685 74,147 DEFERRED SUBSCRIPTION REVENUE 9,678 8,688 DEFERRED REVENUE 7,593 7,321 OTHER NONCURRENT LIABILITIES 2,656 3,041 Total liabilities 87,612 93,197 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Class A common stock, $0.01 par value, 350,000 shares authorized: 25,305 and 24,882 shares issued in 2006 and 2005, respectively 253 249 Class B common stock, $0.01 par value, 150,000 shares authorized: 26,791 and 26,873 shares outstanding in 2006 and 2005, respectively 268 269 Capital in excess of par value 248,627 242,770 Accumulated deficit (89,886) (81,882) 159,262 161,406 Less class A treasury stock - 59 shares at cost (775) (775) Total shareholders' equity 158,487 160,631 Total liabilities and shareholders' equity $246,099 $253,828 Martha Stewart Living Omnimedia, Inc. Supplemental Disclosures Regarding Non-GAAP Financial Information Three Months Ended June 30, (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).

2006 2005 Adjusted EBITDA Publishing $6,905 $(2,595) Broadcasting 1,238 (2,664) Merchandising 5,610 6,274 Internet 110 (897) Adjusted EBITDA before Corporate Expenses 13,863 118 Corporate Expenses (10,690) (11,332) Adjusted EBITDA 3,173 (11,214) NON-CASH EQUITY COMPENSATION Publishing 708 453 Broadcasting 59 17,293 Merchandising 238 122 Internet 36 10 Corporate Expenses 1,694 3,398 Total Non-Cash Equity Compensation 2,735 21,276 DEPRECIATION AND AMORTIZATION Publishing 135 248 Broadcasting 755 101 Merchandising 254 209 Internet 68 239 Corporate Expenses 1,024 923 Total Depreciation and Amortization 2,236 1,720 OPERATING INCOME (LOSS) Publishing 6,062 (3,296) Broadcasting 424 (20,058) Merchandising 5,118 5,943 Internet 6 (1,146) Operating Income (Loss) before Corporate Expenses 11,610 (18,557) Corporate Expenses (13,408) (15,653) Total Operating Loss (1,798) (34,210) Interest income, net 1,356 890 LOSS BEFORE INCOME TAXES (442) (33,320) Income tax provision (229) (59) LOSS FROM CONTINUING OPERATIONS BEFORE LOSS FROM DISCONTINUED OPERATIONS (671) (33,379) Loss from discontinued operations (499) (120) NET LOSS $(1,170) $(33,499) Martha Stewart Living Omnimedia, Inc. Supplemental Disclosures Regarding Non-GAAP Financial Information Six Months Ended June 30, (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).

2006 2005 Adjusted EBITDA Publishing $7,746 $(10,286) Broadcasting 1,886 (4,827) Merchandising 12,334 12,375 Internet 159 (2,145) Adjusted EBITDA before Corporate Expenses 22,125 (4,883) Corporate Expenses (21,462) (21,207) Adjusted EBITDA 663 (26,090) NON-CASH EQUITY COMPENSATION Publishing 1,418 1,243 Broadcasting 279 17,365 Merchandising 515 207 Internet 53 19 Corporate Expenses 3,442 5,661 Total Non-Cash Equity Compensation 5,707 24,495 DEPRECIATION AND AMORTIZATION Publishing 319 495 Broadcasting 1,500 147 Merchandising 508 418 Internet 103 491 Corporate Expenses 2,014 1,856 Total Depreciation and Amortization 4,444 3,407 OPERATING INCOME (LOSS) Publishing 6,009 (12,024) Broadcasting 107 (22,339) Merchandising 11,311 11,750 Internet 3 (2,655) Operating Income/(Loss) before Corporate Expenses 17,430 (25,268) Corporate Expenses (26,918) (28,724) Total Operating Income/(Loss) (9,488) (53,992) Interest income, net 2,402 1,659 LOSS BEFORE INCOME TAXES (7,086) (52,333) Income tax provision (296) (82) LOSS FROM CONTINUING OPERATIONS BEFORE LOSS FROM DISCONTINUED OPERATIONS (7,382) (52,415) Loss from discontinued operations (622) (252) NET LOSS $(8,004) $(52,667) Martha Stewart Living Omnimedia, Inc. Supplemental Disclosures Regarding Non-GAAP Financial Information Guidance Reconciliation (in millions)

The following table presents segment and consolidated financial information, including a reconciliation of operating income, 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.

Third Quarter Guidance Reconciliation Guidance Range Adjusted EBITDA $ (6.5) . $ (5.5) Depreciation and Amortization 2.0 2.0 Non-cash Equity Compensation 3.0 3.0 Operating Loss (11.5) - (10.5) Interest Income 1.0 1.0 Pre-tax Income (10.5) - (9.5) Income Taxes - - Net Income (10.5) - (9.5) Earnings Per Share $ (0.20) . $ (0.18) Avg. Diluted Shares Outstanding 51.5 51.5 Full Year 2006 Guidance Reconciliation Guidance Range Adjusted EBITDA $ 12.0 - $ 14.0 Depreciation and Amortization 9.0 9.0 Non-cash Equity Compensation 11.0 11.0 Operating Loss (8.0) - (6.0) Interest Income 4.0 4.0 Pre-tax Income (4.0) - (2.0) Income Taxes - - Net Income (4.0) - (2.0) Earnings Per Share $ (0.08) - $ (0.04) Avg. Diluted Shares Outstanding 51.5 51.5