- The Washington Times - Monday, March 7, 2005

NEW YORK (AP) — A beaming Martha Stewart returned to work yesterday, blowing a kiss and waving as she arrived to speak to cheering employees.

“All of you are my heroes,” Stewart told the gathering.

After five months in prison and a weekend spent more comfortably at her 153-acre suburban estate, Stewart spoke to staffers at Martha Stewart Living Omnimedia Inc. in Manhattan, as members of the press looked on.

Stewart, who has barely paused since she was released from a federal women’s prison in Alderson, W.Va., on Friday, addressed a staff diminished by layoffs in her absence. Although her company’s stock has recovered from its low after her conviction, its price has fallen roughly 19 percent since her release — wiping away more than $300 million in the company’s market capitalization.

Shares of Martha Stewart Living Omnimedia fell $2.78, or 9.04 percent, to $27.97 on the New York Stock Exchange yesterday. The stock has traded in a 52-week range of $8.25 to $37.45.

“It’s really wonderful to be back. I’ve missed you, as you can imagine. I’ve thought about you every single day,” Stewart said. The several hundred employees gave her a standing ovation and applauded several other times as she spoke.

Stewart, 63, said she had had “the tremendous privilege” of meeting a cross-section of people in prison and “learned a great deal about our country.”

Investors, counting on a positive bounce from Stewart’s return, have bid up her company’s stock to triple the level it was when she was convicted March 5, 2004, of lying about a stock sale.

Still, the company is struggling. Last week, it reported a fourth-quarter loss of $7.3 million, compared with a profit of $2.4 million for the year-ago period — reflecting continued declining magazine advertising revenue and the hiatus of its syndicated daily cooking show starring Stewart.

Stewart will have to make some adjustments in her new working life.

She will be answering to a new chief executive officer and president, Susan Lyne, who replaced longtime confidante Sharon Patrick in November. Miss Lyne greeted Stewart with a hug before the speech.

Stewart also will be required to show up to work with an electronic ankle bracelet under the terms of her five-month home detention.

The arrangement allows her 48 hours a week to work outside the home.

And she will be commuting the 40 miles to her office from her home in Katonah, in Westchester County.

Outside of her corporate duties, she also is scheduled to work on two television programs, which could challenge her confinement. She might be allowed to do some taping on her grounds — if she gets a town permit.

But when she’s not on the job, Stewart will be confined to her home, unable to roam the grounds of her country estate.

Stewart was convicted of obstructing justice and lying to the government about her 2001 sale of nearly 4,000 shares of the biotechnology company ImClone Systems Inc., run by longtime friend Sam Waksal. He also was sent to prison.

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