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PLAYBOY ENTERPRISES REPORTS FOURTH QUARTER AND FISCAL 1993 RESULTS

 CHICAGO, Aug. 4 /PRNewswire/ -- Playboy Enterprises, Inc. (NYSE: PLA) today reported an operating loss for the fiscal fourth quarter ended June 30 of $.3 million versus operating income of $.4 million in the fiscal 1992 quarter. The company had hoped to record revenues on two major overseas television transactions, which would have led to an increase in operating income for the quarter and to the fourth consecutive year of operating income gains.
 Based on how the two deals were completed, the resulting revenues and operating income are expected to be reported over the next two years. The quarter's results also were affected by $.4 million of a fiscal 1993 total of $.9 million in non-recurring restructuring charges resulting from streamlining certain businesses and administrative units. As a result of the weak fourth quarter, fiscal 1993 operating income declined to $1.0 million from $2.5 million last year.
 In addition to the restructuring costs, the company reported one- time expenses in fiscal 1993 of $1.4 million for moves to larger catalog space and new offices in New York and Los Angeles and in fiscal 1992 of $1.1 million for move-related costs. Excluding the one time and non- recurring expenses, operating income for fiscal 1993 would have been $.5 million for the fourth quarter and $3.3 million for the year versus $1.4 million and $3.6 million for the fiscal 1992 quarter and year, respectively.
 For the fourth quarter, the company reported a net loss of $.5 million, or $.03 per share, versus net income of $.5 million, or $.03 per share, in last year's quarter. Revenues were $55.7 million, up 5 percent from last year.
 Net income for fiscal 1993 was $.4 million, or $.02 per share, compared to $3.5 million, or $.19 per share, in fiscal 1992. Revenues rose 11 percent to $214.9 million for the year.
 Publishing
 Publishing Group operating income was $4.0 million for the quarter, up 53 percent from the $2.6 million reported last year. Playboy magazine results nearly doubled to $3.0 million. Playboy revenues rose 2 percent with a 1 percent increase in subscription revenues and a 5 percent increase in advertising revenues more than offsetting a 6 percent decline in newsstand revenues. Lower manufacturing expenses also contributed to the operating income improvement. Advertising pages for the quarter rose almost 12 percent compared to the prior year. Catalog operating income grew 51 percent to $1.5 million, reflecting improved results at both the Critics' Choice Video and Playboy catalogs. Revenues for the group rose 9 percent for the quarter to $41.4 million. Improved results for Playboy magazine and the catalog business contributed to the 13 percent increase in fiscal 1993 Publishing Group operating income to $14.4 million on a 7 percent increase in revenues to $162.8 million.
 Playboy magazine reported a 14% increase in operating income to $7.9 million as margins benefitted from lower paper prices and ongoing efforts to reduce manufacturing costs. The magazine's revenues were down 1 percent as a 13 percent decline in newsstand revenues more than offset a 5 percent increase in subscription revenues and stable advertising revenues. Ad pages were up 2 percent for the year. Catalog operating income nearly doubled to $4.9 million due to increased circulation and higher response rates for Critics' Choice Video. Playboy-related operating income was down modestly. The year's results also included $.6 million in one-time move-related expenses.
 Entertainment
 For the fourth quarter, the Entertainment Group reported an operating loss of $.6 million, compared to operating income of $1.3 million in the fiscal 1992 quarter. In addition to the absence of revenues from the two international deals previously discussed, the fourth quarter was affected by a decline in home video revenues as compared to the fiscal 1992 quarter. Pay television revenues rose, even though monthly subscriber revenues were down. As of June 30, 1993, the company's programming was available on a pay-per-view basis to 9.1 million homes, up 25 percent from 7.3 million at the end of fiscal 1992.
 Fourth quarter revenues from the three major Entertainment Group businesses were essentially flat at $9.9 million.
 Commenting on the company's pay television business, Playboy Enterprises Chairman and Chief Executive Officer Christie Hefner said: "In the past few months, our pay TV growth has been unexpectedly slowed by the uncertainty surrounding cable re-regulation and the resulting delay in the launch and marketing of the Playboy TV network on both a pay-per-view and monthly basis in certain systems. We continue to believe that ultimately re-regulation will benefit pay-per-view services as operators seek unregulated sources of revenues."
 Entertainment Group operating income for fiscal 1993 was $1.8 million compared to $3.7 million in the previous year. Revenues were up 31 percent to $42.6 million reflecting strong growth in all three Entertainment Group businesses. Pay television revenues rose 15 percent to $21.3 million led by a 33 percent improvement in pay-per-view revenues, while home video was up 45 percent to $10.1 million and international was up 80 percent to $9.8 million. As anticipated, the increased cash investment in programming resulted in a planned $4.6 million increase in amortization expense. Before programming expense and moves, fiscal 1993 operating income rose 17 percent to $16.1 million from $13.7 million in the previous year. In both years, the Entertainment Group reported move-related expenses, totaling $.8 million in fiscal 1993 and $1.1 million in fiscal 1992.
 Product Marketing
 Product Marketing broke even for the quarter, with operating income from international business more than offsetting restructuring charges related to the company's decision to close the unprofitable segments of its special events business.
 Fiscal 1993 operating income for Product Marketing declined to $1.0 million from $2.7 million, due to the repositioning of the domestic product licensing business as well as restructuring expenses and losses relating to the special events business. Revenues increased 7 percent to $9.5 million with international licensing reporting a 10 percent gain to $4.3 million, due to increased activities in the Far East.
 Other Items
 Corporate Administration and Promotion expense declined by 15 percent for the quarter to $3.7 million and by 3 percent for the full year to $16.2 million.
 As part of non-operating income, the company reported a $.7 million gain on the sale of its Elk Grove facility, formerly headquarters of the catalog division, in the fiscal 1993 fourth quarter, and a $.5 million gain on the sale of the Chicago Mansion in the previous year's quarter.
 In addition, the company reported minority interest expense of $.2 million for the fourth quarter and $.9 million for fiscal 1993 related to its 80 percent interest in the Critics' Choice Video catalog, compared to $.1 million for both the quarter and full year in fiscal 1992. The company will not report minority interest expense for Critics' Choice Video in fiscal 1994 because it will purchase the remaining 20 percent interest in the catalog during the first quarter for $3 million.
 The company also reported net interest expense in fiscal 1993 of $.1 million for the year and $.2 million for the quarter, versus net interest income of $1.8 million and $.2 million for the fiscal 1992 year and quarter, respectively. The company used its investments to fund entertainment programming and recent office moves.
 Net income for fiscal 1992 included extraordinary items of $.4 million and $1.7 million for the quarter and year respectively, which represent the utilization of tax loss carryforwards.
 Discussing the quarter and year, Hefner said: "The postponement of revenues related to the two international television deals, the slowdown in pay television growth and the weak newsstand sales had a disproportionately negative impact on operating results for the quarter and year because of the higher margins on incremental revenues in these businesses. Overall, we remain confident that we are pursuing the strategies that will allow our company to grow and to deliver long-term value to our stockholders."
 Playboy Enterprises, Inc. is an international publishing and entertainment company that publishes Playboy magazine and related media, including newsstand specials and calendars; 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.
 PLAYBOY ENTERPRISES, INC. AND SUBSIDIARIES
 Condensed Statements of Consolidated Operations
 (unaudited -- in thousands, except per share amounts)
 Quarters Ended
 June 30,
 1993 1992
 Net Revenues
 Publishing:
 Playboy Magazine $ 25,401 $ 25,018
 Playboy-Related Businesses 5,398 5,019
 Catalogs 10,604 8,065
 Other - 54
 Total Publishing 41,403 38,156
 Entertainment:
 Pay Television 5,270 5,047
 Domestic Home Video 2,652 2,898
 International 1,998 1,994
 Other 809 1,416
 Total Entertainment 10,729 11,355
 Product Marketing 3,528 3,262
 Total net revenues $ 55,660 $ 52,773
 Operating Income (Loss)
 Publishing:
 Playboy Magazine $ 2,969 $ 1,493
 Playboy-Related Businesses 1,681 1,918
 Catalogs 1,490 990
 Other (2,165) (1,799)
 Total Publishing 3,975 2,602
 Entertainment (623) 1,311
 Product Marketing (1) 817
 Corporate Administration & Promotion (3,693) (4,342)
 Total operating income (loss) (342) 388
 Investment income (expense), net (231) 184
 Minority interest (243) (118)
 Other, net 673 427
 Income (loss) before income taxes and
 extraordinary item (143) 881
 Income tax expense (258) (752)
 Income (loss) before extraordinary item (401) 129
 Extraordinary item - tax benefit (charge)
 resulting from utilization
 of loss carryforwards (137) 384
 Net income (loss) $ (538) $ 513
 Income (loss) per common share:
 Income (loss) before extraordinary item $ (.02) $ .01
 Extraordinary item (.01) .02
 Net income (loss) $ (.03) $ .03
 Weighted average number of
 common shares outstanding 19,803 18,530
 PLAYBOY ENTERPRISES, INC. AND SUBSIDIARIES
 Condensed Statements of Consolidated Operations
 (unaudited -- in thousands, except per share amounts)
 Years Ended
 June 30,
 1993 1992
 Net Revenues
 Publishing:
 Playboy Magazine $ 101,181 $ 102,171
 Playboy-Related Businesses 22,008 21,737
 Catalogs 39,411 28,054
 Other 163 385
 Total Publishing 162,763 152,347
 Entertainment:
 Pay Television 21,313 18,454
 Domestic Home Video 10,133 7,009
 International 9,822 5,447
 Other 1,329 1,629
 Total Entertainment 42,597 32,539
 Product Marketing 9,515 8,863
 Total net revenues $ 214,875 $ 193,749
 Operating Income
 Publishing:
 Playboy Magazine $ 7,947 $ 6,991
 Playboy-Related Businesses 8,426 9,097
 Catalogs 4,888 2,472
 Other (6,909) (5,809)
 Total Publishing 14,352 12,751
 Entertainment 1,811 3,673
 Product Marketing 1,015 2,676
 Corporate Administration & Promotion (16,152) (16,616)
 Total operating income 1,026 2,484
 Investment income (expense), net (131) 1,828
 Minority interest (860) (118)
 Other, net 444 392
 Income before income taxes and
 extraordinary item 479 4,586
 Income tax expense (114) (2,764)
 Income before extraordinary item 365 1,822
 Extraordinary item - tax benefit
 resulting from utilization
 of loss carryforwards - 1,688
 Net income $ 365 $ 3,510
 Income per common share:
 Income before extraordinary item $ .02 $ .10
 Extraordinary item - .09
 Net income $ .02 $ .19
 Weighted average number of
 common shares outstanding 18,871 18,521
 -0- 8/4/93
 /CONTACT: Martha O. Lindeman of Playboy, 312-440-5493/
 (PLA)


CO: Playboy Enterprises, Inc. ST: Illinois IN: PUB ENT SU: ERN

SH -- NY028 -- 9275 08/04/93 10:26 EDT
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