Playboy Enterprises’ publishing operations Group saw revenues decrease one percent to $23.3 million in the first quarter 2007 compared to revenues of $23.5 million reported in the same period in 2006. Operating loss was $2.4 million in the first quarter, comparable to losses reported in the same period last year. Publishing revenues accounted for 27 percent of total company revenues of $85.4 million.
Playboy magazine revenues remained flat for the quarter at $19.2 million, due to a 22 percent increase in advertising sales which was offset by an eight percent decrease in circulation revenues. Although special issue sales were down for the quarter, this was offset by revenue gains generated from international circulation, which saw an increase of 12 percent in revenues. The company reported that lowered manufacturing and overhead costs will benefit the company in the second half of the year and predicts second quarter ad pages to increase by six percent, and ad revenue for the second quarter to decline two percent.
The first quarter financial results remain consistent with the Publishing Group’s reported earnings over the past few years, which continue to show slight revenue losses. "We remain focused on reducing the cost structure of our publishing business. We already have lowered manufacturing and overhead costs, and are making additional reductions that will benefit us in the second half of the year," Playboy chairman and CEO Christie Hefner said in a statement. "We continue to believe that the 2007 Publishing Group results will be consistent with the performance of the past few years."
Enterprise operating income for the first quarter, however, saw a 10 percent increase to $3.9 million, while revenues saw a four percent jump from $82.1 million reported in the same period last year. Playboy credits the rise in revenue to its Licensing business which posted $11.2 million in revenues in the quarter, a 51 percent increase over the same period last year.
The company’s online/mobile revenues also showed progress, up two percent to $15.7 million, accounting for 18 percent of the company’s overall revenues. "The quarter’s results demonstrate our belief in the very significant upside of our Licensing business and strong growth potential of our newer digital media businesses," said Hefner.
Playboy Publishing Group Net Revenues
Domestic Magazine Subscription
Domestic Magazine Newsstand
Domestic Magazine Advertising
Total Domestic Magazine
Special Editions and Other
Total Publishing Revenue
Source: Playboy Enterprises Inc. Condensed Consolidated Statements of Operations