BARCELONA, Spain, Aug. 12 /PRNewswire-FirstCall/ -- Private Media Group
Inc. (Nasdaq: PRVT) a worldwide leader in premium-quality adult entertainment
products announced today its results for the three months ending June 30,
2008.
As a result of the Company's continuing transition from traditional to
digital content distribution, sales decreased to 5.2 million euro for the
three-month period ended June 30, 2008. The Company reported a net loss of 0.8
million euro for the three months ended June 30.
Commenting on some important factors relating to the business going
forward, Private Media Group, Inc., CFO, Johan Gillborg stated: "During the
first quarter of 2008 restructuring plans were developed in response to the
shift of the Company's business model from traditional physical delivery of
our content to digital new media distribution. The plans consist of three main
features a) reorganizing distribution of physical products, b) reviewing and
revising content requirements and related costs, and c) consolidating
operations in line with our new business model.
"With respect to the reorganization of distribution of physical products,
we have outsourced our DVD distribution in France to a third party and closed
down our subsidiary. As a result we will make savings of EUR 0.5 million per
year in overheads and we expect sales volumes to increase significantly. We
are continuing to review our model for distribution of physical products and
additional changes are expected.
"With respect to revising content requirements and related costs we have
analyzed sales statistics for newly produced content vs. compilations,
reviewed demand for newly produced content from digital new media distribution
vs. traditional physical delivery and analyzed sales statistics with respect
to our content mix. The result of this review is a reduction in the average
number of releases per month by 2.5, a change in the mix and an expected
average saving in investment in video library of approximately EUR 0.5 million
per quarter, starting in the second quarter of this year. We do not believe
that the revised content strategy will have any impact on sales since our
digital new media distribution is mainly dependent on our expansive library
and not on new releases, unlike the traditional business. We have also
renegotiated agreements with third parties relating to content acquisition and
post-production cost.
"We have also reviewed our magazine production and distribution and
reduced the number of new publications from four to two, as from the third
quarter this year. We have replaced the two cancelled publications with back
catalogue magazines. We do not believe this will have any material impact on
sales since we distribute all our magazines together with back catalogue DVDs
and research has indicated that consumers are primarily interested in the
DVDs.
"With respect to consolidating operations, we are reviewing all our
processes in order to take advantage of technological advances and potential
outsourcing opportunities, and in order to eliminate duplicate functions.
During the six-month period ending June 30, 2008 we have reduced the Company's
headcount, including employees and temporary agency employees, by 15 to 108.
"We expect to continue to focus on cost reductions and expect additional
restructuring actions in the near term." Mr. Gillborg concluded.
Financial Highlights
(In thousands of euro, except per share amounts) Three months ended
June 30,
2008 2007
Net Sales 5,200 6,031
Net loss (826) 23
Weighted average common and common
equivalent shares outstanding:
Basic 53,587,408 53,148,166
Diluted n/a 53,216,639
Earnings (loss) per share:
Basic (0.02) 0.00
Diluted (0.02) 0.00
NOTES TO THE EDITOR:
About Private Media Group
With its 40 year track record, NASDAQ listed Private Media Group is a
brand-driven world leader in adult entertainment and distributes premium
quality content globally via a wide range of platforms including more than 900
million mobile telephone handsets, IPTV/VOD, broadband Internet, television
broadcasting, DVDs and magazines. Private Media Group owns the worldwide
rights to its extensive archive of high-quality content, and also licenses its
Private and "Silver Girls" trademarks internationally for a select range of
luxury consumer products. Private's vision is to be the world's preferred
content provider of adult entertainment to consumers anywhere, at any time and
across all distribution platforms and devices.
Disclaimer
This release contains, in addition to historical information, forward-
looking statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which reflect the Company's current judgments of those issues.
However, because those statements are forward-looking and apply to future
events, they are subject to such risks and uncertainties, which could lead to
results materially different than anticipated by the Company.
For further information please contact:
Johan Gillborg
Chief Financial Officer
Private Media Group
Tel +34 93 620 80 90
johan.gillborg@private.com
SOURCE Private Media Group
Johan Gillborg, Chief Financial Officer of Private Media Group, +34 93 620 80
90, johan.gillborg@private.com
