Playboy Posts Loss as It Mulls Hugh Hefner and FriendFinder Bids
Its net loss for the quarter ended June 30 was $5.4 million, or 16 cents a share, versus a net loss in second-quarter 2009 of $8.7 million, or 26 cents a share, a year earlier. Revenue fell 10% to $56.2 million from $62.2 million, the Chicago-based company said in a statement. The results included a restructuring charge of $1.6 million related to the closing of the company's New York office. Analysts were expecting a loss of 15 cents. Licensing was the only bright spot in the quarter.
Shares of Playboy have soared nearly 60% over the past six months as investors hoped that Chief Executive Scott Flanders would be able to turn around the adult-entertainment company. The stock price also jumped after the news of Hefner's buyout bid and a competing offer from Penthouse magazine parent, FriendFinder, came out. No deal has been made to date.
By segment within Playboy, the Entertainment Group's second-quarter 2010 income was $1.6 million, down from $2 million in the same period last year as revenues fell to $22.7 million from $23.8 million. The Print/Digital Group reported a loss of $1.2 million as improved digital results were more than offset by $1.6 million of higher litigation expense. Revenue fell to $20.9 million from $28.3 million. the 2010 second quarter. Playboy magazine circulation and advertising revenues declined as expected compared to last year, reflecting both the company's decision to lower the magazine's rate base by 42% and to publish one double issue last year.
Segment income for the Licensing Group rose 35% to $6.4 million in the 2010 second quarter compared to $4.8 million last year on 24% growth in revenues to $12.4 million from $10.1 million. Higher sales of consumer products in Europe, Asia and Latin America primarily were responsible for the segment's top- and bottom-line growth in the 2010 second quarter compared to last year.
Any buyer of Playboy will need the plenty of patience while waiting for a turnaround.