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PLAYBOY ENTERPRISES REPORTS OPERATING INCOME, REVENUES IMPROVED IN FISCAL 1992

 PLAYBOY ENTERPRISES REPORTS OPERATING INCOME, REVENUES IMPROVED
 IN FISCAL 1992
 CHICAGO, Aug. 5 /PRNewswire/ -- Playboy Enterprises, Inc. (NYSE, PSE: PLA, PLAA), today reported that fiscal 1992 operating income increased 8 percent to $2.5 million after a $1.1 million expense associated with the Entertainment Group's move to new headquarters. Both the publishing and entertainment businesses reported profit increases. Revenues for the year rose 11 percent to $193.7 million.
 Net income for fiscal 1992, which ended June 30, 1992, was $3.5 million, or $.19 per share, compared to $4.5 million, or $.24 per share, in the prior year. The results include unusual items in both years: in fiscal 1991, $1.4 million of interest income from a state tax refund and, in fiscal 1992, the move expense of $1.1 million partially offset by a gain of $.5 million from the sale of a note related to the disposition of one of the company's former properties. Excluding these items from both years, net income for fiscal 1992 increased 29 percent to $4.1 million, or $.22 per share, from $3.1 million, or $.17 per share.
 For the fourth quarter of fiscal 1992, operating income declined to $.4 million from $.8 million due primarily to $1.0 million of expenses for the Entertainment Group's move. Revenues for the quarter rose 19 percent to $52.8 million.
 Net income for the quarter was $.5 million, or $.03 per share, compared to $.9 million, or $.04 per share, in the fiscal 1991 quarter. Excluding the fourth quarter move expenses and the $.5 million gain, fourth quarter net income rose to $1.0 million, or $.05 per share.
 Playboy Enterprises Chairman and Chief Executive Officer Christie Hefner said: "We are especially pleased with the significant profit increases in our fast-growing catalog and television businesses. Although magazine advertising remains weak and may continue to depress earnings, Playboy magazine and our other businesses were able to deliver meaningful growth, leading to significant improvement in consolidated operating results for the year."
 Publishing
 The Publishing Group reported fiscal 1992 operating income of $12.8 million, up 4 percent from last year. The improvement primarily was due to a 14 percent increase in Playboy magazine operating income to $7.0 million and a 261 percent increase in catalog operating income to $2.5 million. These gains were mostly offset by lower earnings from the Playboy-related businesses, such as publication of newsstand specials and foreign editions, and losses from SV Entertainment, a monthly magazine that the company launched with Spectradyne, Inc., in October 1991.
 Revenues for the Publishing Group in fiscal 1992 increased 8 percent to $152.3 million driven by a 55 percent increase in catalog revenues.
 For the fiscal 1992 fourth quarter, Publishing Group operating income declined 11 percent to $2.6 million. Playboy magazine earnings were down 17 percent to $1.5 million as advertising pages declined 16 percent reflecting a weakness in the advertising market that is continuing in the first quarter of fiscal 1993. The company's catalog business contributed fourth quarter operating income of $1.0 million versus $55,000 last year. Fourth quarter publishing results also included a loss from SV Entertainment. In light of current advertising conditions, the company has restructured the product to be a simpler cable guide to be published on a month-to-month contract basis.
 Revenues for the Publishing Group in the fourth quarter were up 8 percent to $38.2 million due to a 77 percent increase in catalog revenues. The gain was primarily due to Critics' Choice Video catalog, which benefitted from an expanded buyers' file and acquisitions of two competing catalogs in fiscal 1992.
 Entertainment
 The Entertainment Group reported operating income of $3.7 million in fiscal 1992, up 26 percent from the previous year. Excluding the costs of the group's headquarters move, operating income rose 65 percent to $4.8 million. The increase reflected gains in all three core entertainment businesses -- domestic pay television, home video and international sales. Revenues for the group rose 30 percent to $32.5 million.
 For the fourth quarter, Entertainment Group operating income increased 20 percent to $1.3 million. Excluding expenses related to the move, operating income rose 110 percent to $2.3 million. A 71 percent increase in pay-per-view revenues, continued growth in the number and sales of home video titles and the addition of new markets and sales of more programming overseas all contributed to the profit improvement. Monthly subscriptions to the company's cable service, which had been declining, leveled out during the quarter, totaling approximately 285,000 at year end. At June 30, 1992, the company's pay television service was available on a pay-per-view basis to 7.3 million U.S. homes, up 55 percent from 4.7 million at the end of fiscal 1991, reflecting new distribution relationships with both Time-Warner NYC and Continental Cablevision. Entertainment Group revenues for the quarter rose 79 percent to $11.4 million.
 The company increased its investment in programming during the fiscal year ended June 30, 1992, to $16.6 million, up from $15.9 million in the previous year.
 Effective with the second quarter of fiscal 1992, the company modified the amortization of television and video production costs as a result of growth in 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 now are 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 $1.9 million and $.7 million net decrease in programming expense, respectively, for the 1992 fiscal year and fourth quarter. Amortization of programming costs increased $1.4 million and $.2 million for the fiscal year and fourth quarter, respectively, over last year, after the effect of the change in estimate.
 Product and Event Marketing
 Fiscal 1992 operating income for Product and Event Marketing declined 23 percent to $2.7 million. Although both international product licensing and Sarah Coventry reported improved results, operating income from domestic product licensing, promotional events and Special Editions, Ltd., declined, resulting in the overall downturn. The company had expected that the repositioning of its domestic licensed products, which began last year, would result in lower revenues and operating profit in fiscal 1992, continuing into fiscal 1993.
 Fiscal 1992 revenues for Product and Event Marketing rose 6 percent to $8.9 million.
 Fourth quarter operating income for the group was essentially flat at $.8 million with gains in international product licensing and Sarah Coventry offset by declines in the other businesses. Revenues for the quarter increased 23 percent to $3.3 million.
 Other Items
 Corporate administration and promotion expenses were essentially flat for the year at $16.6 million.
 Fourth quarter and fiscal 1992 results also were affected by declines in investment income in part due to lower invested balances. The company has invested significant portions of its cash and investments in catalog-related acquisitions, office relocations and entertainment programming.
 Results for both fiscal 1992 and 1991 include extraordinary items of $1.7 million and $2.2 million, respectively, which represent the utilization of tax loss carryforwards. As of June 30, 1992, Playboy had approximately $31 million in operating loss carryforwards remaining for tax purposes.
 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 1992 1991
 Net Revenues
 Publishing:
 Playboy Magazine $ 25,018 $ 25,601
 Playboy-Related Businesses 5,019 5,093
 Catalogs 8,065 4,557
 Other 54 -
 Total Publishing 38,156 35,251
 Entertainment:
 Pay Television 5,047 4,263
 Domestic Home Video 2,898 814
 International 1,994 1,189
 Other 1,416 94
 Total Entertainment 11,355 6,360
 Product and Event Marketing 3,262 2,642
 Total net revenues $ 52,773 $ 44,253
 Operating Income
 Publishing:
 Playboy Magazine $ 1,493 $ 1,796
 Playboy-Related Businesses 1,918 2,262
 Catalogs 990 55
 Other (1,799) (1,204)
 Total Publishing 2,602 2,909
 Entertainment 1,311 1,088
 Product and Event Marketing 817 837
 Corporate Administration & Promotion (4,342) (4,060)
 Total operating income 388 774
 Investment income, net 184 482
 Other, net 309 126
 Income from continuing operations before
 income taxes and extraordinary item 881 1,382
 Income tax expense (752) (906)
 Income from continuing operations
 before extraordinary item 129 476
 Loss from discontinued operations - (120)
 Income before extraordinary item 129 356
 Extraordinary item - tax benefit
 resulting from utilization
 of loss carryforwards 384 506
 Net income $ 513 $ 862
 Income (loss) per common share:
 Income (loss) before extraordinary item:
 From continuing operations $ .01 $ .02
 From discontinued operations - (.01)
 Total .01 .01
 Extraordinary item applicable to:
 Continuing operations .02 .03
 Net income $ .03 $ .04
 Weighted average number of
 common shares outstanding 18,530 18,510
 Years ended June 30 1992 1991
 Net Revenues
 Publishing:
 Playboy Magazine $ 102,171 $ 100,295
 Playboy-Related Businesses 21,737 22,283
 Catalogs 28,054 18,135
 Other 385 -
 Total Publishing 152,347 140,713
 Entertainment:
 Pay Television 18,454 17,773
 Domestic Home Video 7,009 2,668
 International 5,447 3,454
 Other 1,629 1,075
 Total Entertainment 32,539 24,970
 Product and Event Marketing 8,863 8,359
 Total net revenues $ 193,749 $ 174,042
 Operating Income
 Publishing:
 Playboy Magazine $ 6,991 $ 6,122
 Playboy-Related Businesses 9,097 10,272
 Catalogs 2,472 684
 Other (5,809) (4,790)
 Total Publishing 12,751 12,288
 Entertainment 3,673 2,916
 Product and Event Marketing 2,676 3,487
 Corporate Administration & Promotion (16,616) (16,401)
 Total operating income 2,484 2,290
 Investment income, net 1,828 3,224
 Other, net 274 376
 Income from continuing operations before
 income taxes and extraordinary item 4,586 5,890
 Income tax expense (2,764) (3,479)
 Income from continuing operations
 before extraordinary item 1,822 2,411
 Loss from discontinued operations - (120)
 Income before extraordinary item 1,822 2,291
 Extraordinary item - tax benefit
 resulting from utilization
 of loss carryforwards 1,688 2,219
 Net income $ 3,510 $ 4,510
 Income (loss) per common share:
 Income (loss) before extraordinary item:
 From continuing operations $ .10 $ .13
 From discontinued operations - (.01)
 Total .10 .12
 Extraordinary item applicable to:
 Continuing operations .09 .12
 Net income $ .19 $ .24
 Weighted average number of
 common shares outstanding 18,521 18,563
 -0- 8/5/92
 /CONTACT: Terri Tomcisin (media), 312-751-8000, ext. 2655, or Martha Lindeman (investors), ext. 2650, both of Playboy Enterprises/
 (PLAA) CO: Playboy Enterprises, Inc. ST: Illinois IN: ENT SU: ERN


GK -- NY010 -- 6950 08/05/92 09:12 EDT
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