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Playboy Enterprises, Inc (PLA) reported a loss of 83cents per share for 2009's fourth quarter (see earnings call transcript here). Sounds like a lot for a stock trading at 3.34, but it's inclusive of a $28.6million charge to erase from the balance sheet some goodwill (fake intangible assets) from acquisitions made years ago.

Excluding that, they made $800k, or 3cents per share versus the two analyst estimates of -6cents and +4cents per share. Q4 revenues of $61million were closer to the lower analyst revenue estimate. From the prepared management remarks, the company will attempt to use their strong brand to increase shareholder value over the coming years.

Flanders said:

Earlier today we announced a deal with IMG to outsource our Asian licensing business. This follows our November announcement of an agreement with American Media, Inc. to handle most of the non-editorial operations of Playboy magazine. These partnerships illustrate our strategic direction and represent the first steps in our repositioning.

Going forward, we will refine our focus around the management of the Playboy brand and lifestyle. Core creative competencies will remain in-house, but we will seek to identify partners who can effectively manage and build our businesses. In executing this strategy, our goal is to create a leaner organization and to remove cost centers and overhead, while building relationships that create value for the brand, our businesses and our shareholders.

As the deals we've signed demonstrate, we are making progress in transforming the company. This work continues, and our direction is clear. Evaluations of each of our businesses are underway and ongoing, as are discussions with potential partners.

We will be putting the pieces of our new structure together in 2010 and expect to begin to see significant financial benefits from this transition next year. The media businesses will remain challenged through this year, although the domestic magazine business will benefit from our recently announced partnership with AMI in the 2010 second half. With new licensees in place and consumer spending showing signs of improvement, the Licensing Group is expected to report solid improvement in 2010 revenue and profits. In total, we expect double-digit percentage growth in segment income for 2010, but, more importantly, our goal this year is to position the company for much greater future profitability in 2011 and beyond by focusing on our core strengths and better optimizing the use of the brand.

Licensing is definitely the future for Playboy. Their print and media divisions have the insurmountable long term task of charging money for something that is largely available for free (just RELAX. I uh, heard it somewhere....). But with their massive brand recognition and increasing mainstream acceptance (more women than men buy Playboy-trademark consumer goods), they have a chance to rectify this sad sad situation below. Playboy's market value IS in this image, it's just too small to show up in the chart...

(click here for clearer image)


Disclosure: No position

Source: On Playboy's Tragic Brand Destruction