Earnings Call Excerpt
Playboy Enterprises Q4 2005 Earnings Conference Call Transcript (PLA)
February 14, 2006
Executives:
Christie Hefner, Chairman of the Board and Chief Executive Officer
Linda G. Havard, Executive Vice President, Finance and Operations and Chief Financial Officer
Analysts:
Michael L. Savner with Banc of America Securities
Dennis McAlpine with McAlpine Associates
David Bank with RBC Capital Markets
David Miller with Sanders Morris Harris Group
Lucas Binder with UBS
Scott Coleman with Credence Capital
Melissa Otto
David Leibowtiz
Presentation:
Operator:
Good day. All sites are online in listen only mode. At this time it is my pleasure to hand off the conference to your moderator, Miss Martha Lindeman.
Martha Lindeman
Good morning everyone and welcome to the 4th quarter conference call. If you need a copy of our release or earnings supplement, you can look on our website at www. peiinvestor.com or you can call the lovely Erisa at 312-373-2432. During the call today, we will be making forward looking statements pursuant to the safe harbor provision of the securities litigation reform act. These statements reflect our current beliefs and plans. They are not guaranteed and involve risks and uncertainties that could cause our actual results to differ materially from those discussed today. We are under no obligation to update these statements. I refer you to the safe harbor language in today’s release which describes some of the factors which could cause our results to differ from today’s discussion.
During this call we also may make reference to non-gap measures. This information, including a reconciliation to the related gap measure is available on today’s release.
With me today are Linda Havard who will walk you through the details of the quarter and Christie Hefner who will discuss the outlook for the year.
Starting with you Linda.
Linda Havard, Executive Vice President, Finance and Operations and Chief Financial Officer
Thank you Martha and good morning everyone. We’re pleased that we were able to deliver on our guidance for the year, despite the challenges in the domestic magazine business. As we projected in November, the Publishing Group experienced it’s weakest quarter of the year in the 4th quarter beset by higher non-controllable costs and continued pressure on advertising and newsstand sales. Playboy magazine ad revenues declined nearly 24% in the quarter reflecting the same industry trends we have seen through the year. Including the shift of advertising dollars to the Internet, to cable, and to sponsorships as well as to consolidation among advertisers. These challenges extend to newsstand sales as well where our decline was emblematic of what other men’s titles are experiencing. On the expense side, manufacturing is our largest cost and paper prices are now nearly 25% higher than they were a year ago.
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