Playboy (PLA) refinances debt, raises guidance for 2005

| About: Playboy Enterprises (PLA)
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Playboy Enterprises (ticker: PLA) announced plans to refinance its debt, thereby reducing interest expenses.  As a result, PLA raised its adjusted earnings guidance for 2005.

  • PLA announced plans to issue $100 million of 3% convertible debt
  • PLA will use the proceeds to retire $80 million of 11% notes and repurchase $5 million of Class B common stock.
  • The refinancing will result in a $19 million refinancing charge which will result in a GAAP EPS of $0.01-$(0.04) for 2005
  • The refinancing will reduce interest expense by $4.6 million in 2005 and $5.8 million annually thereafter
  • As a result, PLA increased its 2005 EPS forecast to $0.54 - $0.59 from $0.40 - $0.45
  • The consensus EPS estimate was $0.48 prior to the announcement