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Martha Stewart Shuffles Deck

Sandy Brown

Martha Stewart Living Omnimedia (MSO - Cramer's Take - Stockpickr) said financial chief James Follo will resign in March.

The company said Follo will stay until the company files its annual report with regulators on form 10-K. Howard Hochhauser, vice president for finance and investor relations, will become acting CFO upon Follo's departure.

Follo has been with the New York company through particularly turbulent times, including the incarceration of its namesake founder and her eventual re-emergence onto the media landscape. The company has had mixed financial results recently, with a couple of money-losing quarters despite some heady deals.

Martha Stewart lost $26 million, or 51 cents a share, for the third quarter ended Sept. 30, compared with a year-ago loss of $15 million, or 30 cents a share. Latest-period numbers included a charge of $11 million, or 21 cents a share, related to the vesting of warrants granted in connection with the airing of The Apprentice: Martha Stewart. That expense rankled some on Wall Street, because it showed shareholders are footing the bill for a show in which they "have no economic interest," as the company said in October.

Still, Chief Executive Susan Lyne has done an admirable job nailing down deals with satellite radio operation Sirius (SIRI - Cramer's Take - Stockpickr) for a Martha-branded channel that launched last month, a syndicated daytime TV show that has achieved 90% clearances across the U.S. market and other deals like a home video agreement with Time Warner's (TWX - Cramer's Take - Stockpickr) DVD distribution branch.

"While we are disappointed that Jim has decided to move on, we appreciate all that he has done for MSLO in more than seven years with the company," Lyne said in a statement. "He skillfully guided our finances through a particularly challenging period, and did it with professionalism and dedication. On a personal level, I am grateful to have had his good counsel in my first year at MSLO."

"My time at MSLO has been stimulating, rewarding and challenging," Follo said. "This Company has outstanding assets and a strategy to capitalize on them. It has dealt with the difficulties of the past few years admirably and I am confident the Company has the financial management in place to continue its progress. I believe this is the right time for me to explore the next stage of my professional career."

Follo has served as the company's CFO since March 2001 and has held his current position since October 2003.

Martha Stewart Living dropped 8 cents to $19.42.

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