Penthouse Publisher Can't Meet Interest Payments

TBO.com ^ | 3/29/02

[Tumbleweed_Connection]

The auditor for General Media Inc., publisher of Penthouse and other magazines, has said there is substantial doubt about the company's ability to continue as a going concern.

In the company's annual report filed late Thursday with the Securities and Exchange Commission, Grant Thornton LLP, the auditor, said the company's liabilities exceeded its assets by $22.3 million at the end of last year and it is unlikely that it can earn enough to make all its interest payments due in 2002.

The privately held New York-based company said it had laid off 39 employees, 26 percent of its total work force, in February.

The company also said it doesn't believe it can make interest payments of about $7 million and amortization payments of $5.8 million in 2002.

The company is negotiating with the holders of the notes to reduce payments.

If the company doesn't make the payments, the trustee for the notes could assume control over the company and substantially all of its assets, including its registered trademarks.

In its annual report, General Media said it posted a net loss of $9.9 million for 2001, compared with a net gain of $3.8 million in 2000.

Revenue decreased by $10.6 million to $65.4 million for 2001, the filing said.

The company said it has experienced a steady decline in the number of newsstand copies of Penthouse magazine and its affiliate publications sold over the past several years.

General Media attributes the decline to the change in social climate toward men's magazines, together with the proliferation of retail video outlets and the increased market share of cable television and the Internet.

[Chad Fairbanks]

First Enron, then Global Crossing, now Penthouse... Oh! The Humanity!

[TADSLOS]

The company said it has experienced a steady decline in the number of newsstand copies of Penthouse magazine and its affiliate publications sold over the past several years.

Well, after awhile all their pictures and fantasy stories look and read the same....not that I would have any first hand knowledge, I'm just saying, ya' know?

[537 Votes]

Considering how much free pornography is just a click away on the internet, it's a wonder that any of the old porno magazines are still around. People really must be reading the articles!

[hchutch]

Looks like Penthouse will soon become a collectible.

[Oldeconomybuyer]

Maybe Playboy can do an issue on "The Women of Penthouse"?

[JennysCool]

May have to change the name to "Poorhouse."

[pikachu]

Well, unlike Enron & Global crossing, we know what the Penthouse auditors were looking at!

[Rubber Ducky]

Didn't Playboy shutter the last of their Bunny Clubs (somewhere in Iowa as I recall) precisely because of the competition? There was raunchier stuff available nearly everywhere.

[Tumbleweed_Connection]

Wrong. It's Bush in all cases.

[Texbob]

Good! Close them down.

[KarlInOhio]

Dear Penthouse Forum,

I never believed that your income statements were real, until something happened to me that I just had to share.

[Robert_Paulson2]

The internet is recreating the whole concept of media, and communication. The old style porno industry is on its way out. It is passe.

[Pablo64]

"Aaawwww...to bad, so sad. Good bye and good riddance, smut peddlers!"

This is no loss for society.

[Rockitz]

No victory yet. I don't think Larry Flynt is going down. This is just his publisher. The only problem this causes Larry is that he has to find a new publisher.

[Young Rhino]

This is no loss for society.

Any time that good-looking women can't come together for some pictorial loving is in fact a dark day for society.

[VRWC_minion]

Auditors are required to observe the inventory. Are the models considered inventory ?

[AppyPappy]

Their skateboard magazine has been hammered for disrepecting 9/11 widows.

[AppyPappy]

This isn't Flynt. It's Bob Guiccioni.