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PLAYBOY ENTERPRISES POSTS 9 PERCENT REVENUES INCREASE FOR THE THIRD QUARTER OF FISCAL 1992; OPERATING INCOME UP 5 PERCENT

 PLAYBOY ENTERPRISES POSTS 9 PERCENT REVENUES INCREASE FOR
 THE THIRD QUARTER OF FISCAL 1992; OPERATING INCOME UP 5 PERCENT
 CHICAGO, April 28 /PRNewswire/ -- Playboy Enterprises, Inc. (NYSE: PLAA, PLA; Pacific), today reported a 5 percent increase in operating income to $.7 million for the third quarter of fiscal 1992, which ended March 31, 1992. Both the Entertainment Group businesses and Playboy magazine had strong quarters, with the magazine posting a 59 percent increase in earnings on a 4 percent rise in revenues.
 Fiscal 1992 third quarter revenues rose 9 percent to $45.6 million largely due to significant growth from catalogs as well as Playboy magazine and the company's home video line. Net income for the third quarter was $.9 million, or $.05 per share, comparable to the prior year quarter.
 Net income for the third quarters of fiscal 1992 and fiscal 1991 included extraordinary items of $.4 million and $.5 million, respectively, which represent the utilization of tax loss carryforwards. Playboy had approximately $29 million in operating loss carryforwards remaining for tax purposes as of March 31, 1992.
 Nine Months Results
 Operating income for the first nine months of fiscal 1992 was $2.1 million, up 38 percent from the prior year period. Fiscal 1992 nine-month revenues increased 9 percent to $141.0 million primarily attributable to significant growth from catalogs, Playboy magazine's solid performance and strong entertainment sales. Excluding the impact of $1.4 million of interest income from a state tax refund in fiscal 1991, net income for the first nine months of fiscal 1992 would have increased 31 percent over the same period last year.
 The Publishing Group, particularly Playboy magazine and catalogs, led the earnings growth. Playboy magazine earnings were up 27 percent to $5.5 million for the nine-month period, and catalog earnings climbed 136 percent to $1.5 million.
 The Entertainment Group posted a 29 percent increase in operating income to $2.4 million.
 Product Marketing's profits declined 30 percent to $1.9 million largely due to increased spending on promotional events and activities and legal expenses related to a contract dispute with a former distributor.
 Publishing
 The Publishing Group reported a 9 percent revenues increase to $36.4 million and a 10 percent decline in earnings to $2.6 million for the quarter ended March 31, 1992.
 Playboy magazine's revenues increased 4 percent to $24.4 million for the third quarter due to the impact of the ongoing national roll-out of a $4.95 newsstand cover price combined with favorable newsstand sales adjustments to second quarter issues plus a higher average base subscription price. Overall, revenues from newsstand sales rose 16 percent and subscription revenues grew 6 percent for the third quarter compared to the same period last year. Advertising revenues for the third quarter of fiscal 1992 were down 11 percent on a 13 percent decline in ad pages. Despite ad sales being off, Playboy magazine's operating income for the quarter rose by 59 percent to $1.5 million.
 Earnings for Playboy-related businesses declined 15 percent to $2.2 million for the quarter due primarily to higher manufacturing costs for newsstand specials and lower revenues from the company's 900-number telephone lines.
 Catalog earnings grew 5 percent to $.4 million for the quarter ended March 31, 1992 compared to the same period last year while revenues climbed 50 percent to $6.7 million.
 The company recently has made two significant acquisitions to grow its catalog business. In addition to purchasing the Blackhawk Films catalog from Republic Pictures in December 1991, Critics' Choice Video, Inc., last week agreed to acquire the customer file, video inventory and certain other assets of Postings, a specialty entertainment catalog published by Random House subsidiary Publishers Central Bureau.
 "These acquisitions solidify Critics' Choice Video's position as the leading consumer catalog of prerecorded movies in the United States," said Playboy Chairman and CEO Christie Hefner. "We are merging the customer files of Postings and Blackhawk Films with those of Critics' Choice Video, and we expect a strong response from the new customer base. Both acquisitions tie in closely to our long-term strategy to develop our direct marketing and catalog businesses by leveraging our database assets and strengths," Hefner continued.
 As anticipated, the company also incurred losses from its investment in SV Entertainment. The monthly entertainment magazine was launched in October 1991 through a venture with PEI subsidiary Lake Shore Press, Inc., and Spectradyne, Inc., an affiliate of the Davis Companies, and is distributed nationwide to 600,000 hotel rooms that carry the Spectravision pay-per-view service. Lake Shore Press oversees editorial, advertising and production for SV Entertainment while Spectradyne handles distribution.
 Entertainment
 The Entertainment Group reported a 61 percent increase in earnings to $1.4 million on a 16 percent increase in revenues to $7.3 million for the third quarter of fiscal 1992. Increased pay television revenues and higher domestic and international home video sales were leading contributors to the group's performance.
 Pay television operating income was up 23 percent mainly due to solid pay-per-view revenues growth, which more than offset an anticipated decline in monthly subscription revenues. Pay-per-view revenues grew 65 percent for the quarter while the number of addressable homes to which Playboy's pay-per-night service is available grew to 6.3 million. Through an agreement with Time Warner New York City Cable Group, the company's Playboy At Night pay-per-view service recently became available to 650,000 homes in New York City.
 Third quarter fiscal 1992 operating income from the international distribution of Playboy programming was up 23 percent on a 15 percent rise in revenues as a result of increased home video sales in Germany and a newly signed agreement with Videomaximo S.A., which expands Playboy home video distribution to Mexico.
 Effective with the second quarter of fiscal 1992, EI modified the amortization of television and video production costs as a result of growth of Playboy's overseas television business and management's revised estimate of the useful life of the company's programming. The company has increased its allocation of production costs to the international market and is now amortizing them at a faster rate. Additionally, costs allocated to the domestic pay television business are now amortized on a straight-line basis over a period of three years compared to a two-year period in the past. This change in accounting estimate resulted in a $.8 million and $1.3 million net decrease in programming expense, respectively, for the third quarter and nine months ended March 31, 1992. Amortization of programming costs increased $.1 million and $1.2 million for the third quarter and nine months, respectively, over last year, after the effect of the change in amortization.
 Product Marketing
 Product Marketing earnings for the third quarter of fiscal 1992 declined 36 percent to $.6 million on a 5 percent revenues decline when compared to the same period a year ago, primarily due to lower domestic licensing revenues and legal expenses related to a contract dispute with a former distributor.
 Corporate Administration and Promotion
 Fiscal 1992 third quarter corporate administration and promotion expenses were down 3 percent from the same period last year.
 Playboy Enterprises, Inc., is an international publishing and entertainment company that publishes Playboy magazine and related media, including newsstand specials and calendars; licenses 15 foreign editions of Playboy magazine; operates a direct marketing business, including the Playboy and Critics' Choice Video catalogs; creates and distributes programming for domestic pay television, worldwide home video and international television; and markets the Playboy trademarks on apparel, accessories and products for consumers around the world. The company's publishing interests also include a 20 percent stake in the duPont Registry and a partnership in SV Entertainment.
 PLAYBOY ENTERPRISES, INC. AND SUBSIDIARIES
 Condensed Statements of Consolidated Operations
 (Unaudited, in thousands, except per share amounts)
 Quarters ended March 31 1992 1991
 Net revenue
 Publishing $ 36,416 $ 33,412
 Entertainment 7,260 6,247
 Product marketing 1,880 1,971
 Total net revenues $ 45,556 $ 41,630
 Operating Income
 Publishing $ 2,626 $2,919
 Entertainment 1,411 879
 Product marketing 630 978
 Corporate administration & promotion (3,987) (4,131)
 Total operating income 680 645
 Investment income, net 449 485
 Other, net (66) 23
 Income before income taxes
 and extraordinary item 1,063 1,153
 Income tax expense (628) (762)
 Income before extraordinary item 435 391
 Extraordinary item - tax
 benefit resulting from
 utilization of loss carryforwards 433 509
 Net income $ 868 $ 900
 Income per common share:
 Income before extraordinary item $ .03 $ .03
 Extraordinary item .02 .02
 Net income $ .05 $ .05
 Weighted average number
 of common shares outstanding 18,527 18,509
 PLAYBOY ENTERPRISES, INC. AND SUBSIDIARIES
 Condensed Statements of Consolidated Operations
 (Unaudited, in thousands, except per share amounts)
 Nine months ended March 31 1992 1991
 Net revenues
 Publishing $ 114,191 $ 105,462
 Entertainment 21,184 18,610
 Product Marketing 5,601 5,717
 Total net revenues $ 140,976 $ 129,789
 Operating income
 Publishing $ 10,149 $ 9,379
 Entertainment 2,362 1,828
 Product marketing 1,859 2,650
 Corporate administration & promotion (12,274) (12,341)
 Total operating income 2,096 1,516
 Investment income, net 1,644 2,742
 Other, net (35) 250
 Income before income taxes
 and extraordinary item 3,705 4,508
 Income tax expense (2,012) (2,573)
 Income before extraordinary item 1,693 1,935
 Extraordinary item -
 tax benefit resulting
 from utilization of loss carryforwards 1,304 1,713
 Net income $2,997 $3,648
 Income per common share:
 Income before extraordinary item $.09 $.11
 Extraordinary item .07 .09
 Net income $.16 $.20
 Weighted average number of
 common shares outstanding: 18,518 18,580
 -0- 4/28/92
 /CONTACT: Terri Tomcisin of Playboy Enterprises, 312-751-8017, or 312-751-8000, ext. 2655/
 (PLAA) CO: Playboy Enterprises Inc. ST: Illinois IN: ENT SU: ERN


TS -- NY017 -- 3564 04/28/92 08:48 EDT
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