(BARCELONA) -- Private Media Group Inc. (Nasdaq: PRVT - news), a leader in high-class adult entertainment products and services since 1965 and the first such company trading on the NASDAQ National Market announces 1999 fourth quarter revenue of $5.6 million, compared to $4.3 million for the same period last year. Net income for this period was $1.4 million compared to 0.5 million for the comparable period last year. The revenue increase of 28.3% and the net income increase of 195.1% for this period compared to the same period last year, has been achieved by the very strong growth in Internet and DVD sales. This trend is accelerating and we believe that the current year will show considerable growth in revenue and more importantly a substantial increase in net income.

During 1999 the Company has experienced increased selling, general and administrative expenses related to its Internet division. During the second quarter as we previously reported the Company incurred a substantial one-off reduction in revenue which related to a non-recurring increase in magazine returns. The results for the twelve-months ending December 31, 1999 are $20.3 million in revenue, compared to $19.4 million and net income of $3.7 million, or $.24 per diluted share, compared to $4.7 million, or $.30 per diluted share for the fiscal year ended December 31, 1998.

The increase in revenue was mainly attributable to DVD and Internet sales, offset by a decrease in CD-Rom and video sales. Sales of magazines remained approximately the same in 1999 as in 1998.

DVD sales for the year ended December 31, 1999 was $1.0 million and should not be compared with the twelve-month 1998 period since the Company released only a few titles in 1998 and the market was not ready. The main part of the DVD sales took place during the three months ended December 31, 1999. The Company's 1999 release schedule for DVDs included eighteen titles and during 2000 the Company is planning to release 50 new titles and 50 back-catalogue titles. During the first quarter of the current fiscal year, the growth in DVDs has continued to accelerate.

Internet sales increased 185% to $1.9 million compared to the year ended 1998. The increase in Internet sales compared to the year ended 1998 was particularly apparent in the three months ended December 31, 1999, where it increased 249% compared to the same period in 1998. During 1999, the Company has had a number of approaches from interested parties with regards to a flotation or acquiring the Private Media Group Internet division. After due consideration the Board has taken the view that with the substantial growth potential, especially in net income, which we believe will exceed $5 million in the current year it is in shareholders interest to pursue the route of flotation. We are now at an advanced stage with regards to this transaction and shareholders will be kept fully informed of developments.

The net sales reported for 1999 does not include revenue from the agreements made and announced during 1999 concerning Penthouse/Private co-production and distribution and the UK licensing of the magazines Private Life and Private Style. Net sales arising from the agreements will be reported according to US GAAP.

Commenting on the financial results, Berth Milton, Chairman and CEO, said: ``Private Media Group has never been in a better position and I view the future with extreme confidence. The exceptional growth and very strong gains that we have seen in the fourth quarter, especially in Internet and DVD sales I see accelerating throughout the current year. We have spent substantial money from the Company's internal resources during the current year that we have written off against our profit and loss account, which I believe now puts us in a very strong position to deliver substantial gains over the coming years.''


(In USD thousands, except share amounts)
Years ended December 31,
...........................1999.........1998
Revenue.........$20,260......$19,356
Net Income.......$3,730.......$4,732

Weighted average common and common equivalent shares outstanding:
Basic..........8,423,264....7,790,835
Diluted......15,969,740...15,373,761

Net Income per common and common equivalent share:
Basic...................$0.44........$0.60
Diluted:................$0.24........$0.30

The Company's principal currency is Swedish Kronor (``SEK''). Solely for the convenience of the reader, the accompanying financial information as of December 31, 1999, 1998 and for the twelve months then ended have been translated into United States dollars (``USD'') at the rate of SEK 8.53 per USD 1.00 the exchange rate of the Swedish Riksbank on December 31, 1999. The translations should not be construed as a representation that the amounts shown could have been, or could be, converted into US dollars at that or any other rate.

Private Media Group Inc. commenced operations in 1965. Its primary business activities today include the creation, refinement and delivery of proprietary Internet sites and the licensing of its library content and brand name for Internet sites and broadcasting transmission; the acquisition, refinement and delivery of adult feature products, including unrated and adult feature DVDs, magazines, videos, and CD-Roms; the distribution and licensing of Private's total proprietary range on the Internet, including DVDs, magazines, videos, interactive services and Private Circle fashion line; the licensing of its internationally reputable brand name for product lines, including adult novelty ranges such as Private Collection; the production and control of distribution rights to its Private Dynamite energy drink; and TV Home Shopping for Private's proprietary and licensed products.

For more information, visit the Company's corporate web site at www. prvt.com

This release contains, in addition to historical information, forward- looking statements within the meaning of Section 27 A of the Securities Act 1933, as amended, and Section 21 E of the Securities Exchange Act of 1934, as amended, which reflect the Company's current judgements of those issues. However because those statements are forward-looking and apply to future events, they are subject to such risks and uncertainties, which could lead to results materially different than anticipated by the Company.