Playboy Enterprises, Inc. said that it expects to incur charges related to asset impairments and streamlining of its cost structure, which will result in an operating loss for the fourth quarter and year ending December 31, 2008. The company also announced that it will consolidate its online and publishing operations.
PEI expects to report non-cash impairment charges related to goodwill and other intangible assets in its fourth quarter 2008 results. Although the internal review and external audit of these impairments is not complete, the write-down of goodwill and other intangible assets is expected to be in excess of $100 million. The company said that it does not expect that these charges will have a material impact on its liquidity or capital resources. In addition, Playboy expects to report a fourth quarter 2008 restructuring charge of approximately $4 million relating to 2008 cost reduction initiatives.
Playboy also said that it will complete the strategic integration of publishing and online and that the combined entity will be based in the company's Chicago office. The two operations have worked cooperatively and shared an advertising sales team, but going forward the company will focus on creating brand-consistent content that extends across print and digital platforms. Although the company will keep a small editorial and sales presence in New York, it expects to sublet its existing office space in that city and move a small number of licensing, editorial and other publishing positions to its Chicago office.
In addition to reducing expense related to its New York office, Playboy said that it is continuing efforts to streamline operations across the company, which will include the elimination of additional positions and reduction of other expenses.
The company believes that in the first two quarters of 2009 it will report additional restructuring charges as well as relocation and other move-related expenses related to the initiatives announced today. The company plans to provide further detail on the impairment charges, workforce reductions and other anticipated savings and charges when it releases 2008 fourth quarter and full-year results on Wednesday, February 18, 2009.
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 in more than 100 countries on a wide range of consumer products, entertainment locations and retail stores.
