Playboy Posts Q4 Loss

CHICAGO, February 13:
Playboy Enterprises has recorded a $1.1 million net loss for the fourth
quarter, versus the $3.7 million profit posted in the year-ago period, on flat
revenues of $85.9 million.

The fourth quarter results
included a $1.9 million charge, due primarily to the sale of assets related to
the company's Andrita television studio, which is expected to be completed in
March 2008, as well as a tax benefit of $2.6 million, primarily related to the
U.K. television operations. The fourth quarter 2006 results included a $1.8
million charge related to a legal settlement and a $2.6 million tax benefit.

Entertainment revenues for
the period were $50.7 million, down on the year-ago period’s $52.1 million. A
shortfall in U.S. TV revenues, which fell from $18.8 million to $16.9 million,
were partly made up for by increases in international TV revenues, to $14.1
million, and online/mobile, to $17.7 million. Net income in the entertainment
segment dropped from $4.7 million to $2.5 million.

Publishing revenues were
flat at $24.7 million, delivering a larger loss of $1.5 million. But licensing
revenues gained 18 percent to $10.5 million, posting a net income of $6.9
million.

Christie Hefner, the
chairman and CEO of Playboy Enterprise, noted: "Looking ahead, our
strategy is to grow the company leveraging both the 'high tech' and 'high
touch' attributes of the Playboy brand. In the media businesses, our first goal
is to return our online and mobile properties to strong growth drivers. These
efforts will entail investments in technology, marketing and content, which
should begin to show results by the end of the year. In addition to creating
revenue-enhancing opportunities, our second goal in 2008 is to look for ways to
improve margins in our media businesses, both by narrowing our focus to those
initiatives with the most promise and by reducing our cost structure. We are
finalizing two deals to that end. We expect next month to complete the sale of
the assets of our Andrita television studio, which will benefit us financially
while still allowing us to continue using those state-of-the-art production
facilities. In addition, we are completing a deal to outsource our e-commerce
and catalog business to a company with significant experience in merchandising
lifestyle brands. We believe that this deal will improve profitability in what
historically has been a very low- margin business and allow our licensing
business to generate much higher sales through the e-commerce distribution
platform than they previously have been able to achieve.”

—By Mansha Daswani