Playboy Enterprises Reports Improved Q1 Results

CHICAGO, May 8: Net profit at Playboy Enterprises almost
doubled to $1.5 million in the first quarter, with revenues up 4 percent to
$85.4 million.

"The quarter's results demonstrate our belief in the
very significant upside of our licensing business and strong growth potential
of our newer digital media businesses,” said Christie Hefner, Playboy’s
chairman and CEO. “Moreover, we are responding to changing dynamics in the
domestic TV and publishing industries.”

Hefner continued: "In the Entertainment Group, we
believe the domestic TV business has now stabilized, excluding cash adjustments
in the first quarter, as strong gains in VOD are offsetting linear network
declines. Our online pay services again reported significant revenue gains as
did our international TV business, and we continue to believe that online and
international will be profit drivers in the years ahead. Given the
stabilization of the domestic TV business, the outlook for continued growth in
our newer digital media businesses, and cost cuts implemented in programming
and staffing, we believe that Entertainment Group profits in the last nine
months of 2007 will be in line with those reported in the last nine months of
2006.”

First quarter 2007 operating income for the Entertainment
Group was $4.3 million, down from $7.9 million in the prior year period, on a 1
percent decline in revenues to $50.9 million. Total U.S. TV revenues were down
12 percent to $19.7 million, but international revenues were up 12 percent to
$13.8 million, while online/mobile revenues were up 2 percent to $15.7 million.