Playboy Reports $27 Million Q3 Net Losses

CHICAGO—Despite net third-quarter losses totaling $27.4 million, Playboy Enterprises CEO Scott Flanders sounded an optimistic note in his earnings call Tuesday, telling reporters that the company is “making significant progress to rectify ill-advised domestic TV deals.” The losses, reported Folio, were “driven predominantly by $25.8 million in impairment and restructuring fees.”

Flanders also said there was no news to report regarding Playboy Founder Hugh Hefner’s offer to pay $5.50 per share in cash for all of Playboy Enterprises’ outstanding shares of Class A and Class B common stock.

According to Folio, when asked whether Hefner’s offer was a rebuff of current management, Flanders said, “Mr. Hefner has not discussed with me his reasons for making the purchase offer,” and added he is not included in board discussions concerning the offer.

Overall, 2010 has not been great for the iconic company in the middle of a profound restructuring. “Through the first nine months,” reported Folio, “Playboy reported a net loss of $33.8 million on $160.2 million in revenue. During the first three quarters last year, the company generated $179.8 million in revenue and reported a loss of $23.5 million.”

Ironically, considering its longstanding role as a necessary loss leader for the company, Playboy magazine saw a slight uptick in sales during Q3, from $9.4 million last year to $10 million. Circulation revenues increased by 20 percent year to year, as the company published three issues during the third quarter, compared with two last year.

Playboy’s print/digital segment reported $21.7 million in revenue during the third quarter compared to $22.9 million during the same period last year, but profits for the quarter were $1.3 million versus $400,000 during the same quarter last year.

“We’re ahead of schedule on breaking even,” said Flanders of the magazine. “We’re delighted that we did so in Q3 [it was expected that the magazine would stabilize next year]. We will invest in the magazine aggressively. The plan, as we reach break-even, is to invest more money in covers, content and promotion in order to ensure that the magazine reaches full potential as the ambassador of the brand.”

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