Playboy Attributes Rise in 4Q Profits to Internet, TV

Gretchen Gallen
NEW YORK – Playboy Enterprises reported $14.5 million in net profit for the fourth quarter 2004, compared to a $6.7 million loss in the previous year, returning the company to profitability, raisings the company's share price by 43 cents to $12.72, and outpacing analysts' forecasts.

Playboy attributes revenue growth to its U.S. and international television channels, website subscriptions, cable video-on-demand, satellite and overall lower programming amortization compared to the same time last year. Profits were also announced from the company's international wireless deals that feature Playboy content.

Playboy's holdings include Playboy magazine, adult cable TV channel Spice and a licensing business that markets the trademark Playboy bunny on clothing and other products.

"As a result of the solid performance in our key businesses and our improved financial position, we delivered on our 2004 projections and are well positioned for 2005," Playboy's CEO Christie Hefner said. "The year's results also benefited from lower interest expense due to the debt restructuring we completed last April."

Playboy's filing with the Securities and Exchange Commission reported an operating income for the 2004 fourth quarter of $13.6 million, up 54 percent from the $8.9 million recorded in the 2003 fourth quarter. However, Playboy's Licensing and Publishing Groups recorded lower quarter-over-quarter results, due to revenue and operating income generated in the 2003 fourth quarter, despite the company's 50th Anniversary and the sale of art, manuscripts and memorabilia, which generated $1.8 million of income.

For the overall year of 2004, Playboy reported net income of $10 million, compared to a 2003 net loss of $7.6 million, or $0.31 per basic and diluted share. Playboy's 2004 fourth quarter also included an insurance recovery of $5.6 million.

Playboy said it expects its earnings in 2005 to increase to around 40-45 cents per share.