Exhibit 99.1
[Playboy Logo]
FOR IMMEDIATE RELEASE Investor Contact:
Martha Lindeman
312-373-2430
Media Contact:
Linda Marsicano
312-373-2447
PLAYBOY ANNOUNCES COST REDUCTION PLAN
CHICAGO, Wednesday, July 19, 2006 -- Playboy Enterprises, Inc. (PEI)
(NYSE: PLA, PLAA) today said that as part of its previously announced
cost reduction plan it will be reducing the company's annual programming
and editorial budgets by approximately $4.5 million, while also lowering
other discretionary expenses. The company also said that it is
eliminating approximately 30 positions, roughly half of which are
presently open. Including an approximate $0.06 per share restructuring
charge, PEI said that it expects to report a loss in the range of $0.10
to $0.13 per share for the second quarter ended June 30, 2006. The
company plans to report full second-quarter earnings the week of August
7, 2006.
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Playboy Enterprises is a brand-driven, international multimedia entertainment
company that publishes editions of Playboy magazine around the world; operates
Playboy and Spice television networks and distributes programming globally via
DVD and a network of websites including Playboy.com, a leading men's lifestyle
and entertainment website; and licenses the Playboy trademarks internationally
for a range of consumer products and services.
FORWARD-LOOKING STATEMENTS
This release contains "forward-looking statements," including statements in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, as to expectations, beliefs, plans, objectives and future financial
performance, and assumptions underlying or concerning the foregoing. We use
words such as "may," "will," "would," "could," "should," "believes,"
"estimates," "projects," "potential," "expects," "plans," "anticipates,"
"intends," "continues" and other similar terminology. These forward-looking
statements involve known and unknown risks, uncertainties and other factors,
which could cause our actual results, performance or outcomes to differ
materially from those expressed or implied in the forward-looking statements.
The following are some of the important factors that could cause our actual
results, performance or outcomes to differ materially from those discussed in
the forward-looking statements:
1) Foreign, national, state and local government regulation, actions or
initiatives, including:
a) attempts to limit or otherwise regulate the sale, distribution
or transmission of adult-oriented materials, including print,
television, video, and online materials,
b) limitations on the advertisement of tobacco, alcohol and other
products which are important sources of advertising revenue for
us, or
c) substantive changes in postal regulations or rates which could
increase our postage and distribution costs;
2) Risks associated with our foreign operations, including market
acceptance and demand for our products and the products of our
licensees;
3) Our ability to manage the risk associated with our exposure to foreign
currency exchange rate fluctuations;
4) Changes in general economic conditions, consumer spending habits,
viewing patterns, fashion trends or the retail sales environment which,
in each case, could reduce demand for our programming and products and
impact our advertising revenues;
5) Our ability to protect our trademarks, copyrights and other
intellectual property;
6) Risks as a distributor of media content, including our becoming subject
to claims for defamation, invasion of privacy, negligence, copyright,
patent or trademark infringement, and other claims based on the nature
and content of the materials we distribute;
7) The risk our outstanding litigation could result in settlements or
judgments which are material to us;
8) Dilution from any potential issuance of common or convertible preferred
stock or convertible debt in connection with financings or acquisition
activities;
9) Competition for advertisers from other publications, media or online
providers or any decrease in spending by advertisers, either generally
or with respect to the adult male market;
10) Competition in the television, men's magazine, Internet and product
licensing markets;
11) Attempts by consumers or private advocacy groups to exclude our
programming or other products from distribution;
12) Our television, Internet and wireless businesses' reliance on third
parties for technology and distribution, and any changes in that
technology and/or unforeseen delays in its implementation which might
affect our plans and assumptions;
13) Risks associated with losing access to transponders and competition for
transponders and channel space;
14) Failure to maintain our agreements with multiple system operators and
direct-to-home operators on favorable terms, as well as any decline in
our access to, and acceptance by, direct-to-home and/or cable systems
and the possible resulting deterioration in the terms, cancellation of
fee arrangements or pressure on splits with operators of these systems;
15) Risks that we may not realize the expected increased sales and profits
and other benefits from acquisitions;
16) Any charges or costs we incur in connection with restructuring measures
we may take in the future;
17) Risks associated with the financial condition of Claxson Interactive
Group, Inc., our Playboy TV-Latin America, LLC, joint venture partner;
18) Increases in paper, printing or postage costs;
19) Risks associated with revenue guarantees under our cable distribution
agreements;
20) Effects of the national consolidation of the single-copy magazine
distribution system; and
21) Risks associated with the viability of our primarily subscription- and
e-commerce-based Internet model.