CHICAGO, Oct 21 /PRNewswire/ -- Playboy Enterprises, Inc. (PEI) (NYSE: PLA, PLAA) today said it expects that results for the third quarter ended September 30, 2010, will include a non-cash write-down, which is primarily related to television programming inventory. This charge, according to preliminary estimates, is likely to be in excess of $20 million. The company said that, in addition, the quarter's results are expected to include bad debt expense of approximately $1 million and domestic TV contra revenues of approximately $3 million, which reflect DirecTV, Inc.'s failure to make payments for TV programming it receives from the company.
DirecTV is withholding payments in conjunction with a lawsuit filed in California Superior Court alleging that Playboy was in breach of its contract. PEI believes that DirecTV is wrongfully withholding payment and that its allegations are unfounded and premature. Playboy is vigorously defending the lawsuit.
The company said that it will release full third-quarter earnings on November 9, 2010.
Playboy is one of the most recognized and popular consumer brands in the world. Playboy Enterprises, Inc. is a media and lifestyle company that markets the brand through a wide range of media properties and licensing initiatives. The company publishes Playboy magazine in the United States and abroad and creates content for distribution via television networks, websites, mobile platforms and radio. Through licensing agreements, the Playboy brand appears on a wide range of consumer products in more than 150 countries as well as retail stores and entertainment venues.
This release contains “forward-looking statements,” 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. We want to caution you not to place undue reliance on any forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
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:
- Foreign, national, state and local government regulations, actions or initiatives, including:
- attempts to limit or otherwise regulate the sale, distribution or transmission of adult-oriented materials, including print, television, video, Internet and mobile materials;
- attempts to limit or otherwise regulate the sale or distribution of certain consumer products sold by our licensees; or
- limitations on the advertisement of tobacco, alcohol and other products which are important sources of advertising revenue for us;
- Risks associated with our foreign operations, including market acceptance and demand for our products and the products of our licensees and other business partners;
- Our ability to effectively manage our exposure to foreign currency exchange rate fluctuations;
- Further 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 and licensing revenues;
- Our ability to protect our trademarks, copyrights and other intellectual property;
- 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;
- The risk our outstanding litigation could result in settlements or judgments which are material to us;
- Dilution from any potential issuance of common stock or convertible debt in connection with financings or acquisition activities;
- Further competition for advertisers from other publications, media or online providers or decreases in spending by advertisers, either generally or with respect to the men’s market;
- Competition in the television, men’s magazine, Internet, mobile and product licensing markets;
- Attempts by consumers, distributors, merchants or private advocacy groups to exclude our programming or other products from distribution;
- Our television, Internet and mobile businesses’ reliance on third parties for technology and distribution, and any changes in that technology, distribution and/or delays in implementation which might affect our plans, assumptions and financial results;
- Risks associated with losing access to transponders or technical failure of transponders or other transmitting or playback equipment that is beyond our control;
- Competition for channel space on linear or video-on-demand television platforms;
- Failure to maintain our agreements with multiple system operators and direct-to-home, or DTH, operators on favorable terms, as well as any decline in our access to households or acceptance by DTH, cable and/or telephone company systems and the possible resulting cancellation of fee arrangements, pressure on splits or other deterioration of contract terms with operators of these systems;
- Risks that we may not realize the expected sales and profits and other benefits from acquisitions;
- Any charges or costs we incur in connection with restructuring measures we have taken or may take in the future;
- Increases in paper, printing, postage or other manufacturing costs;
- Effects of the consolidation of the single-copy magazine distribution system in the U.S. and risks associated with the financial stability of major magazine wholesalers;
- Effects of the consolidation and/or bankruptcies of television distribution companies;
- Risks associated with the viability of our subscription, ad-supported and e-commerce Internet models;
- Our ability to sublet our excess space may be negatively impacted by the market for commercial rental real estate as well as by the global economy generally;
- The risk that our common stock could be delisted from the New York Stock Exchange, or NYSE, if we fail to meet the NYSE’s continued listing requirements;
- Risks that adverse market conditions in the securities and credit markets may significantly affect our ability to access the capital markets;
- The risk that we will be unable to refinance our 3.00% convertible senior subordinated notes due 2025, or convertible notes, or the risk that we will need to refinance our convertible notes, prior to the first put date of March 15, 2012, at significantly higher interest rates;
- The risk that we are unable to either extend the maturity date of our existing credit facility beyond the current expiration date of January 31, 2011 or establish a new facility with a later maturity date and acceptable terms; and
- Further downward pressure on our operating results and/or further deterioration of economic conditions could result in further impairments of our long-lived assets, including our other intangible assets.
More detailed information about factors that may affect our performance may be found in our filings with the Securities and Exchange Commission, which are available at http://www.sec.gov or at http://www.peiinvestor.com in the Investor Relations section of our website.
SOURCE Playboy Enterprises, Inc.