Stewart’s Firm Sees More Losses

Martha Stewart Living Omnimedia Inc. on Monday said it might face further operating losses, additional litigation and the loss of key employees as a result of the criminal conviction of its founder and corporate namesake.

In a filing with the Securities and Exchange Commission, the media and merchandising company said it might change some of its brands and publishing content and cut costs after the conviction of Stewart in March for lying to investigators about a personal stock sale. She was forced to resign as an officer and a member of the company’s board.

The company said it was mulling over the fate of the Martha Stewart Living television program, whose availability has been dramatically reduced because of the loss of coverage from Viacom Inc.’s CBS television stations, thus resulting in lower license fees and advertising revenue.

“We believe that the combined impact of lower license fees, reduction in household coverage of our flagship syndicated television program and contract expirations will result in losses in the television segment in 2004,” the company said.

The firm, which last week posted a wider first-quarter loss as advertising revenue fell, said it might sustain “substantial operating losses in future periods” and that its cash position might be materially adversely affected. Moreover, it said it might be “deprived of Ms. Stewart’s services for a period of time.”

Stewart is scheduled to be sentenced June 17.