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Playboy turns it on

Mag sales lead way as Q2 revs rise 8%

NEW YORK — The Bunny is back.

Set to celebrate its flagship magazine’s 50th anniversary, Playboy Enterprises on Wednesday proved it’s back on the road to financial health with revenues up 8% for the second quarter to $76 million thanks in part to a healthy showing from revamped flagship Playboy magazine, which enjoyed healthy newsstand gains even while ad revenues dipped slightly.

More importantly, Chicago-based Playboy showed a huge 70% improvement in its bottom line for the quarter, posting a net loss of $900,000, down from a loss of $3.1 million in the year-ago period. The change of fortunes was spurred by operating income that more than doubled to $5.5 million from $2.2 million last year, thanks to major turnarounds in its online and publishing businesses, which buttressed continuing growth in its core TV and licensing operations.

Screened out

One major weak spot was in worldwide DVD/homevideo. Revenues in that sector dropped 62% over Q2 in 2002 to a mere $1.4 million.

Fortunately, Playboy’s domestic and overseas TV networks filled the void. Playboy Channel Intl. increased its sales to $8.4 million from $3.65 million due to its increased ownership (and full earnings consolidation) of its Latin American operations.

Overall, the entertainment group posted total revenues up 10% over last year to $33.8 million, while publishing revenues jumped 7% to $28.8 million. Company has high hopes for Playboy’s 50th anniversary issue, which will come out in December.

High expectations

Based on its newfound momentum, company predicted that it will record a 150% increase in 2003 operating income to $22 million.

Playboy is still wrestling with a potentially painful debt repayment that could be averted if founder Hugh Hefner (and father of CEO Christie Hefner) agrees to swap his $16.7 million in preferred stock into common shares.