First-Quarter Loss for Playboy

CHICAGO, May 6: Playboy Enterprises has recorded a Q1 loss
of $3.1 million, versus the $1.5 million profit in the year-ago period, on
revenues of $78.5 million.

Playboy posted an 8-percent drop in revenues as a result of
“structural and economic pressures” on its U.S. business. The loss, meanwhile,
included approximately $1.1 million in charges related to restructuring and
severance expenses.

Commenting on the results, Christie
Hefner, Playboy’s chairman and CEO, noted: "The quarter's results
reflected the dual challenges of structural transformation in our traditional
media business and a difficult U.S. economy. Our international operations and
our core licensing business, which generates a significant portion of revenue
from overseas sales, showed solid growth in the quarter. Our publishing and
domestic entertainment businesses continue to face unprecedented change in the
way consumers access and use media content. We believe we are making good
strategic progress in streamlining our operations and improving the future
performance prospects of these businesses through steps like the recently
completed sale of the assets of our Andrita television studio, the outsourcing
of our e-commerce business and reductions in overhead as well as print
manufacturing and editorial expense. However, our goal is not just to contain
costs; it is to build shareholder value by generating profitable and
sustainable revenue growth. Our brand and our ability to extend the Playboy
lifestyle to consumers over a variety of platforms will drive these gains.”

In the entertainment segment, first-quarter segment income
was $2.7 million, down from $4.3 million in the prior year period, on a
6-percent decline in revenues to $47.9 million. U.S. TV revenues were down 16
percent to $16.5 million. But international TV revenues rose 6 percent to $14.7
million, primarily reflecting higher sales from European networks. Online
revenues declined 3 percent to $15.2 million.

—By Mansha Daswani