LOS ANGELES (Reuters) - Playboy Enterprises Inc, which publishes the world's most widely read adult entertainment magazine, will stop making DVDs to save about $12 million a year, and focus on distributing its content online, the company said in a regulatory filing.
Shutting its DVD operations will cost 80 jobs and $2 million in restructuring charges, according to the filing on Wednesday with the U.S. Securities and Exchange Commission.
With another $4 million taken against archival materials and a receivable, the company anticipates taking $6 million in charges against operating income for the third quarter ended September 30, which is expected to result in a net loss for the quarter.
Playboy spokeswoman Martha Lindeman said the DVD business was accounted for on the company's earnings statements under “Other" along with Playboy radio and its Alta Loma production company. In the first half of 2008, that line item was $2.9 million, compared to the first half of 2007 when it was $3.4 million. Lindeman said the DVD business was the largest of the three in that classification.
Playboy said in the filing that it expects to see some benefits from the cuts in the fourth quarter of 2008, and the full effects next year.
The company announced restructuring plans two months ago with an eye on saving $10 million a year.
In August, Playboy posted a second-quarter loss of $2.1 million, or 6 cents a share, compared with net income of $1.9 million, or 6 cents a share, a year ago. Revenue fell 14 percent to $73.4 million.
Shutting its DVD operations will cost 80 jobs and $2 million in restructuring charges, according to the filing on Wednesday with the U.S. Securities and Exchange Commission.
With another $4 million taken against archival materials and a receivable, the company anticipates taking $6 million in charges against operating income for the third quarter ended September 30, which is expected to result in a net loss for the quarter.
Playboy spokeswoman Martha Lindeman said the DVD business was accounted for on the company's earnings statements under “Other" along with Playboy radio and its Alta Loma production company. In the first half of 2008, that line item was $2.9 million, compared to the first half of 2007 when it was $3.4 million. Lindeman said the DVD business was the largest of the three in that classification.
Playboy said in the filing that it expects to see some benefits from the cuts in the fourth quarter of 2008, and the full effects next year.
The company announced restructuring plans two months ago with an eye on saving $10 million a year.
In August, Playboy posted a second-quarter loss of $2.1 million, or 6 cents a share, compared with net income of $1.9 million, or 6 cents a share, a year ago. Revenue fell 14 percent to $73.4 million.
