Playboy Posts Improved Third Quarter Results

CHICAGO, November 7: Third quarter net income at Playboy
Enterprises more than doubled to $2.6 million, up from last year’s $1.1 million, but revenues remained
flat at $82.8 million.

Boosted by improved results in the entertainment and
licensing businesses, third quarter operating income was $4.2 million, up 11
percent from $3.7 million in the year-ago period. These gains were partially
offset by higher corporate administration and promotion expenses, which rose to
$7.9 million from $5.8 million last year.

In the entertainment group, segment income jumped 23 percent
to $7.2 million from $5.8 million last year. However, third quarter revenues
for the group dipped to $49.6 million from $50.2 million in the year-ago
period. Meanwhile, U.S. television revenues declined to $17.6 million in the
third quarter from $20.5 million last year. Improved results from European
networks and favorable foreign currency exchange rate fluctuations contributed
to a 15-percent gain in international TV revenues in the third quarter over the
previous year to $14.3 million. Online and mobile revenues were flat at $15.3
million as growth in e-commerce and advertising sales this year were offset by
lower revenues from paysites and mobile platforms compared to last year.

Led by increased sales of consumer products and royalties
from a licensing deal with the Palms Casino Resort, Playboy’s licensing group
posted a 37-percent gain in segment income to $6.3 million from $4.6 million in
the prior year, while there was a 35-percent increase in revenue to $10.1
million from $7.5 million.

In the publishing group, segment income continued to fall,
with a loss of $1.4 million in the third quarter, while revenues fell 6 percent
to $23.1 million. Despite a 4-percent increase in third quarter advertising
revenues versus last year, Playboy magazine revenues were down in the quarter
due to lower newsstand and subscription circulation.

—By Irene Lew