Playboy Reports Decreased Net Income

CHICAGO, November 7: Playboy Enterprises has recorded a
third quarter net profit of $1.1 million, less than half of last year’s $3.2
million, but better than the net loss the company had anticipated.

Revenues in the quarter rose 2 percent to $82.3 million, but
operating income was down 31 percent to $3.7 million.

Commenting on the results, chairman and CEO Christie Hefner
noted, "The quarter's results
reflected the continued strength of our growth businesses of global licensing
and new digital media, both of which reported double-digit profit gains. The
domestic TV business remains in transition and publishing challenging. Our goal
is to maintain our leadership position. To that end, in TV, we just launched
new movie networks, which offer consumers better programming, packaging and
scheduling. In addition, we continue to encourage operators to offer and market
Playboy TV as a subscription-on-demand package, which we believe is a
compelling new product.”

Entertainment revenues rose 5 percent to $50.2 million,
delivering a segment income of $5.8 million, 18 percent down on Q3 2005. In
domestic TV, increased revenues from Playboy TV as a subscription service and
from video-on-demand distribution of the movie services were offset by lower
cable and satellite pay-per-view revenues for both Playboy TV and the movie
networks. This resulted in a 19-percent decline in revenues to $20.5 million.
International revenues, however, were up 17 percent, to $14.3 million, led by
the strong performance of the U.K. networks.