November 14, 2000 03:59am
Playboy Enterprises Withdraws S-1 for Public Offering of Online Business
Source: Playboy Enterprises, Inc.
by: Company Press Release
(CHICAGO, IL) -- Playboy Enterprises, Inc. (PEI) (NYSE: PLA - news, PLAA - news) today said that it has withdrawn the registration statement relating to its proposed initial public offering of a minority interest in its Playboy.com online business due to weak market conditions.
Christie Hefner, chairman and chief executive officer of PEI, said: ``We do not believe that under current market conditions we would receive a valuation that reflects the extraordinary potential of this business. We are very pleased with the growth we've seen in our online business this year. The strength of our existing business combined with the potential of new revenue streams and the power of the Playboy brand make us confident that Playboy.com will become one of our largest and most profitable businesses.''
The company said that its Web sites generated 152.8 million page views in September, up 97% over the previous year. Revenues for the three quarters ending September 30, 2000, which include e-commerce revenues formerly recorded in our catalog division, were $18.8 million, a 132% gain over the same period last year. Losses for the year to date totaled $18.0 million, compared to $5.6 million in the prior year period.
``We are approaching profitability for Playboy.com. We believe that 2000 will be our largest investment year, and we expect that total 2001 online investments will be less than half of the approximately $25 million that will be invested in the business this year,'' said Hefner. ``In addition to our Playboy.com e-commerce, advertising and subscription businesses, we will be generating revenues from international sites, online gaming and Spice subscriptions next year. These businesses will significantly boost revenues with modest cost increases, and therefore, move us more quickly toward profitability in early 2002.''
Last week, the company announced the formation of its first international Internet joint venture with FOCUS Digital AG to launch a German Web site, Playboy.de, in which Playboy.com will receive licensing fees. The investment in the joint venture until break even will be borne by FOCUS, and Playboy.com will initially own 20%. Playboy.com will have the option to increase its stake to 49%. The company is evaluating partner options in Latin America and Japan, as well as other territories.
Playboy also said that it continues to explore various financing alternatives, including possible equity investments by several potential strategic investors. The company said that it plans to proceed with a public offering when market conditions improve.
The company will hold a conference call related to its third quarter earnings, also released today. The call is at 9 AM EST/8 AM CST and can be accessed by dialing 888-396-9929 (for domestic callers) or +1-415-228-4864 (for international callers) and by using the password: bunny. In addition, the call is being webcast. To listen to the call, visit www.playboyenterprises.com and select the financial information content section.
Playboy.com, a wholly-owned subsidiary of Playboy Enterprises, Inc. (NYSE: PLA - news), an international multimedia entertainment company, is the #1 lifestyle and entertainment destination Web site for men. Playboy.com operates Playboy-branded Web sites targeting the entertainment and lifestyle interests of young men, including: Playboy.com ( http://www.playboy.com ), an advertising and e-commerce-supported Web site that offers a range of entertainment, information and e-commerce; Playboy Cyber Club ( http://cyber.playboy.com ), a members-only subscription site featuring premium Playboy content and exclusive online events; the Playboy Store ( http://www.playboystore.com ), which sells Playboy-branded products; and Playboy Auctions ( http://auctions.playboy.com ), which auctions Playboy-branded merchandise and admission to exclusive Playboy events, and allows fans to auction their own Playboy memorabilia and collectibles. Playboy.com also operates Cyberspice.com ( http://www.cyberspice.com ), a site featuring premium adult entertainment under the Spice brand.
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 via home video and DVD globally; licenses the Playboy and Spice trademarks internationally for consumer products; is developing a Playboy-branded, location-based entertainment business anchored by casinos; and operates Playboy.com, a leading men's lifestyle and entertainment Web site.
This release contains ``forward-looking statements'' as to expectations, beliefs, plans, objectives and future financial performance, and assumptions underlying or concerning the foregoing. Such forward-looking statements involve risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The following are some of the important factors that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements: (1) government actions or initiatives, including attempts to limit or otherwise regulate the sale of adult-oriented materials, including print, video and online materials or businesses such as casino gaming, (2) changes in distribution technology and/or unforeseen delays in the implementation of such technology by the cable and satellite industries that might affect the company's plans and assumptions regarding carriage of its program services, (3) increased competition for advertisers from other publications and media or any significant decrease in spending by advertisers, either generally or with respect to the adult male market, and (4) uncertainty of market acceptance of the Internet as a medium for information, entertainment, e-commerce and advertising, an increasingly competitive environment for advertising sales, the impact of competition from other content and merchandise providers, as well as the Company's reliance on third parties for technology and distribution for its online business.