Playboy Quarterly Loss Narrows on Lower Charges
NEW YORK - Playboy Enterprises cut its fourth-quarter loss in half as the adult entertainment company had lower charges and posted record licensing results for the quarter and full year.
Meanwhile, a legal settlement with DirecTV over a content payment dispute and costs associated with a planned sale of the company to founder Hugh Hefner were drags on the bottom line.
Playboy recorded a quarterly loss of $14.7 million, compared with a year-ago loss of $27.8 million. Both periods included charges. The latest one included a $12.5 million charge related to the DirecTV settlement, while the year-ago period featured $28.6 million of impairment and restructuring charges.
Looking only at the performance of its business units, Playboy's segment profit fell from $2.1 million to $600,000. Quarterly revenue declined 9 percent to $55 million.
Fourth-quarter licensing segment profit nearly doubled to $9.7 million, but that was offset by weaker performance in the company's media businesses and increased corporate expenses.
The firm's entertainment unit posted a segment loss of $900,000 as satellite TV giant DirecTV withheld payment for the company's TV programming, which last year amounted to lost revenue of $3.4 million.
"In spite of the challenges created by a weak economy, changes in how consumers use media, the loss of a critical customer's revenues in the second half and the burden of expenses related to the potential going-private transaction, we made significant progress in our businesses during 2010," said Playboy CEO Scott Flanders. "Our 2010 results demonstrate the viability of our brand management strategy. Our licensing business recorded its most profitable full year and single quarter ever as well as improved operating margins, all of which reflected the completion of new licensing agreements, continued growth in our relationships with existing licensees, and the rollout of new product lines and categories."