CHICAGO, March 10 /PRNewswire-FirstCall/ -- Playboy Enterprises, Inc. (PEI) today said that it was adjusting its previously announced earnings guidance of $0.40-$0.45 per share, excluding stock-based compensation expense, as a result of the anticipated closing of its recently announced refinancing. Excluding a one-time charge related to the refinancing, the company expects earnings per share in the range of $0.54- $0.59, on a comparable basis.

Yesterday, the Company announced the pricing of $100.0 million of 3.00% convertible senior subordinated notes. Proceeds, together with available cash, will be used to fund the repurchase of $80.0 million of the 11% senior secured notes and $5.0 million of its Class B common stock.

Christie Hefner, Chairman and CEO of Playboy Enterprises said: "The transaction creates a more flexible, lower cost capital structure." The refinancing will result in interest expense savings of approximately $4.6 million for the remainder of 2005 and approximately $5.8 million on an annual basis.

The Company expects to record a one-time charge of approximately $19.0 million in the first quarter of 2005 resulting from the early retirement of the 11% senior secured notes. Taking this charge into account, the Company's guidance is now in the range of a net loss of $0.04 per share to net income of $0.01 per share, excluding stock-based compensation expense.

The tender offer and convertible note offering are expected to close on March 15, 2005. In connection with the note offering, the Company has granted the initial purchasers a 13-day option to purchase an additional $15.0 million principal amount of convertible notes to cover overallotments.

Playboy Enterprises is a brand-driven, international multimedia entertainment company that publishes editions of Playboy magazine around the world; operates Playboy and Spice television networks and distributes programming globally via DVD and a network of Websites including Playboy.com, a leading men's lifestyle and entertainment Web site; and licenses the Playboy and Spice trademarks internationally for a range of consumer products and services.

FORWARD-LOOKING STATEMENTS

This release contains "forward-looking statements," as to expectations, beliefs, plans, objectives and future financial performance, and assumptions underlying or concerning the foregoing. We use words such as "may," "will," "would," "could," "should," "believes," "estimates," "projects," "potential," "expects," "plans," "anticipates," "intends," "continues," and other similar terminology. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which could cause our actual results, performance or outcomes to differ materially from those expressed or implied in the forward-looking statements. The following are some of the important factors that could cause our actual results, performance or outcomes to differ materially form those discussed in the forward-looking statements:

1) Foreign, national, state and local government regulation, actions or initiatives, including: a) attempts to limit or otherwise regulate the sale, distribution or transmission of adult-oriented materials, including print, television, video and online materials, b) limitations on the advertisement of tobacco, alcohol and other products which are important sources of advertising revenue for us, or c) substantive changes in postal regulations or rates which could increase our postage and distribution costs; 2) Risks associated with our foreign operations, including market acceptance and demand for our products and the products of our licensees; 3) Our ability to manage the risk associated with our exposure to foreign currency exchange rate fluctuations; 4) Changes in general economic conditions, consumer spending habits, viewing patterns, fashion trends or the retail sales environment which, in each case, could reduce demand for our programming and products and impact our advertising revenues; 5) Our ability to protect our trademarks, copyrights and other intellectual property; 6) Risks as a distributor of media content, including our becoming subject to claims for defamation, invasion of privacy, negligence, copyright, patent or trademark infringement, and other claims based on the nature and content of the materials we distribute; 7) The risk our outstanding litigation could result in settlements or judgments which are material to us; 8) Dilution from any potential issuance of common or convertible preferred stock or convertible debt in connection with financings or acquisition activities; 9) Competition for advertisers from other publications, media or online providers or any decrease in spending by advertisers, either generally or with respect to the adult male market; 10) Competition in the television, men's magazine, Internet and product licensing markets; 11) Attempts by consumers or private advocacy groups to exclude our programming or other products from distribution; 12) Our television and Internet businesses' reliance on third parties for technology and distribution, and any changes in that technology and/or unforeseen delays in its implementation which might affect our plans and assumptions; 13) Risks associated with losing access to transponders and competition for transponders and channel space; 14) The impact of industry consolidation, any decline in our access to , and acceptance by, DTH and/or cable systems and the possible resulting deterioration in the terms, cancellation of fee arrangements or pressure on margin splits with operators of these systems; 15) Risks that we may not realize the expected increased sales and profits and other benefits from acquisitions and the restructuring of our international TV joint ventures; 16) Any charges or costs we incur in connection with cost restructuring measures we may take in the future; 17) Risks associated with the financial condition of Claxon Interactive Group Inc., our Playboy TV-Latin America, LLC joint venture partner; 18) Increases in paper or printing costs; 19) Effects of the national consolidation of the single-copy magazine distribution system; and 20) Risks associated with the viability of our primarily subscription- and e-commerce-based Internet model.

CONTACT: Media-Investors, Martha Lindeman of Playboy Enterprises, Inc.,
+1-312-373-2430