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PRVT » Topics » Inventories

These excerpts taken from the PRVT 10-Q filed May 15, 2009.

3. Inventories

Inventories consist of the following:

 

     December 31,    March 31,
     2008    2009
     EUR    EUR
     (in thousands)

Magazines for sale and resale

    2,394    2,405

DVDs

    2,330    2,383

Other

    314    328
         
   5,038    5,117
         

 

- 8 -

PRIVATE MEDIA GROUP, INC.

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED)

Inventories

Inventories are valued at the lower of cost or market, with cost principally determined on an average basis. Inventories principally consist of DVD’s, videocassettes and magazines held for sale or resale. The inventory is written down to the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional write-downs may be required.

These excerpts taken from the PRVT 10-K filed Apr 15, 2009.

Inventories

Inventories are valued at the lower of cost or market, with cost principally determined on an average basis. Inventories principally consist of DVD’s, videocassettes and magazines held for sale or resale. The inventory is written down to the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional write-downs may be required.

Inventories

SIZE="2">Inventories are valued at the lower of cost or market, with cost principally determined on an average basis. Inventories principally consist of DVD’s, videocassettes and magazines held for sale or resale. The inventory is written down
to the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional write-downs may be required.

STYLE="margin-top:18px;margin-bottom:0px">Results of Operations

2008 compared to 2007

Net sales. Our net sales in 2008 were EUR 19.7 million compared to EUR 25.0 million in 2007, a decrease of EUR
5.3 million, or 21%. Net sales in general were affected by the weakening dollar by EUR 0.3 million

DVD & Magazine sales
decreased EUR 3.2 million, or 29%, to EUR 7.7 million. The reduction in DVD & Magazine sales was primarily attributable to an industry wide decrease in DVD sales (see discussion under Outlook below). Due to the weakening
dollar9 and the restructuring of our web sites, Internet sales decreased EUR 0.2 million to EUR 4.4 million compared to the same period last
year. Broadcasting sales decreased EUR 1.3 million, to EUR 5.8 million as a result of the absence of sales of EUR 2.25 million from a non-recurring title licensing deal for German speaking Europe in 2007 offset primarily by an
increase in video on demand sales via IPTV. Wireless sales decreased EUR 0.6 million to EUR 2.0 million in the period as a result of a re-organization of content delivery structure. The re-organization was completed in the fall of 2008.

 





9Our Internet sites collect a significant part of their sales from US customers.

SIZE="1"> 


- 35 -







Going forward, we expect Internet, Broadcasting and Wireless sales to increase (see discussion under
Outlook below).

Net sales in general were affected by changes in exchange rates. The annual average dollar exchange rate for the
fiscal year 2008 compared to 2007 decreased 7% which reduced all our sales in dollar by the same percentage. Fluctuations in exchange rates between the euro and the dollar can affect the comparability of our results from year to year. We translate
our consolidated subsidiaries whose functional currency is not the euro into the euro for reporting purposes. Income statement amounts are translated into euros using the average exchange rate for the fiscal year. The balance sheet is translated at
the year-end exchange rate.

Cost of Sales. Our cost of sales was EUR 13.5 million for 2008 compared to EUR 12.3 million
for 2007, an increase of EUR 1.2 million, or 10%. Cost of sales as a percentage of sales was 69% for 2008 compared to 49% for 2007. We incur no cost of sales in dollars and subsequently we did not benefit from the weakening dollar in 2008
compared to 2007.

Included in cost of sales is printing, processing and duplication, amortization of library and Internet, broadcasting
and wireless costs. Printing, processing and duplication cost was EUR 5.4 million for 2008 compared to EUR 4.1 million for 2007, an increase of EUR 1.3 million, or 32%. The increase was primarily the result of a program to reduce
inventory of DVDs and magazines. Printing, processing and duplication cost as a percentage of DVD & Magazine sales was 70% for 2008 compared to 37% for 2007. The increase was the result of an increase in sales volume sold at a lower average
price as part of the program to reduce inventory of DVDs and magazines. Amortization of library was EUR 6.3 million for 2008 compared to EUR 6.8 million for 2007, a decrease of EUR 0.5 million. Amortization of library does not vary with
sales since it reflects the amortization of our investments in content which has been available for sale for a period of three to five years. The decrease was the result of lower amounts invested in content released during the period subject to
amortization in 2008 compared to 2007. Internet, broadcasting and wireless costs was EUR 1.8 million for 2008 compared to EUR 1.4 million for 2008, an increase of EUR 0.4 million. Internet, Broadcasting and Wireless cost as a percentage of
related sales was 15% for 2008 compared to 10% for the same period last year. The increase was primarily the result of increased Internet cost.

SIZE="2">Gross Profit. Our gross profit for 2008 was EUR 6.2 million, or 31% of net sales, compared to EUR 12.7 million, or 51% of net sales for 2007. This represented a decrease of EUR 6.5 million, or 51%, compared to 2007.
The decrease in gross profit of EUR 6.5 million was primarily the result of a EUR 4.5 million decrease in contribution to gross profit from DVD & Magazine sales, a EUR 2.5 million decrease in contribution to gross profit from
Internet, Broadcasting and Wireless sales offset by the decrease in amortization of library of EUR 0.5 million. As the we are transitioning from traditional media to new media, our gross profit in 2008 has been impacted severally. However, during
2009, we expect gross profit to improve as new media sales is expected to increase and with low cost attached to it, positive impact on gross profit will be immediate.

FACE="Times New Roman" SIZE="2">Selling, general and administrative expenses. Our selling, general and administrative expenses were EUR 13.1 million for 2008 compared to EUR 13.6 million for 2007, a decrease of EUR 0.5 million. We
attribute the decrease in selling, general and administrative expenses to a reduction in general expenses and bad debt provision of EUR 1.1 million and EUR 0.1 million, respectively, offset by an increase in depreciation and payroll of EUR
0.6 million and EUR 0.1 million, respectively.

Operating loss. We reported an operating loss of EUR 6.9 million for
2008 compared to EUR 0.9 million for 2007, an increase of EUR 6.0 million. The decrease in operating profit was primarily the result of the decrease in gross profit offset by reduced selling, general and administrative expenses.

STYLE="margin-top:0px;margin-bottom:0px"> 


- 36 -







Interest expense. Our interest expense was EUR 0.3 million for 2008, compared to EUR
0.3 million for 2007.

Income tax benefit. Our income tax benefit was EUR 1.8 million for 2008, compared to
0.5 million for 2007. The increase in income tax benefit is a result of higher losses being recorded in jurisdictions with higher corporate tax rates.

FACE="Times New Roman" SIZE="2">Net loss. Our net loss was EUR 5.2 million for 2008, compared to EUR 0.4 million for 2007. We attribute the decrease in net income in 2008 of EUR 4.8 million to increased operating loss offset by
increased income tax benefit.

4. Inventories

Inventories consist of the following:

 

     December 31,
     2007    2008
     EUR    EUR
     (in thousands)

Magazines for sale and resale

    3,133    2,394

DVDs

    3,737    2,330

Other

    280    314
         
   7,150    5,038
         

4. Inventories

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Inventories consist of the following:

 


































































   December 31,
   2007  2008
   EUR  EUR
   (in thousands)

Magazines for sale and resale

  3,133  2,394

DVDs

  3,737  2,330

Other

  280  314
      
  7,150  5,038
      
This excerpt taken from the PRVT 10-Q filed Nov 10, 2008.

Inventories

Inventories are valued at the lower of cost or market, with cost principally determined on an average basis. Inventories principally consist of DVD’s, videocassettes and magazines held for sale or resale. The inventory is written down to the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional write-downs may be required.

This excerpt taken from the PRVT 10-Q filed Aug 11, 2008.

Inventories

Inventories are valued at the lower of cost or market, with cost principally determined on an average basis. Inventories principally consist of DVD’s, videocassettes and magazines held for sale or resale. The inventory is written down to the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional write-downs may be required.

This excerpt taken from the PRVT 10-Q filed May 12, 2008.

Inventories

Inventories are valued at the lower of cost or market, with cost principally determined on an average basis. Inventories principally consist of DVD’s, videocassettes and magazines held for sale or resale. The inventory is written down to the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional write-downs may be required.

These excerpts taken from the PRVT 10-K filed Mar 17, 2008.

4. Inventories

Inventories consist of the following:

 

     December 31,
     2006    2007
     EUR    EUR
     (in thousands)

Magazines for sale and resale

    3,341    3,133

DVDs

    4,362    3,737

Other

    571    280
         
   8,274    7,150
         

4. Inventories

FACE="Times New Roman" SIZE="2">Inventories consist of the following:

 


































































   December 31,
   2006  2007
   EUR  EUR
   (in thousands)

Magazines for sale and resale

  3,341  3,133

DVDs

  4,362  3,737

Other

  571  280
      
  8,274  7,150
      
This excerpt taken from the PRVT 10-Q filed Nov 9, 2007.

Inventories

Inventories are valued at the lower of cost or market, with cost principally determined on an average basis. Inventories principally consist of DVD’s and magazines held for sale or resale. The inventory is written down to the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional write-downs may be required.

This excerpt taken from the PRVT 10-Q filed Aug 9, 2007.

Inventories

Inventories are valued at the lower of cost or market, with cost principally determined on an average basis. Inventories principally consist of DVD’s and magazines held for sale or resale. The inventory is written down to the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional write-downs may be required.

This excerpt taken from the PRVT 10-Q filed May 10, 2007.

Inventories

Inventories are valued at the lower of cost or market, with cost principally determined on an average basis. Inventories principally consist of DVD’s and magazines held for sale or resale. The inventory is written down to the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional write-downs may be required.

This excerpt taken from the PRVT 10-K filed Apr 2, 2007.

4. Inventories

Inventories consist of the following:

 

     December 31,
     2005    2006
     EUR    EUR
     (in thousands)

Magazines for sale and resale

    3,534    3,341

Video cassettes

    299    138

DVDs

    5,484    4,362

Other

    463    433
         
   9,780    8,274
         
This excerpt taken from the PRVT 10-Q filed Nov 14, 2006.

Inventories

Inventories are valued at the lower of cost or market, with cost principally determined on an average basis. Inventories principally consist of DVD’s and magazines held for sale or resale. The inventory is written down to the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional write-downs may be required.

This excerpt taken from the PRVT 10-Q filed Aug 14, 2006.

Inventories

Inventories are valued at the lower of cost or market, with cost principally determined on an average basis. Inventories principally consist of DVD’s and magazines held for sale or resale. The inventory is written down to the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional write-downs may be required.

This excerpt taken from the PRVT 10-Q filed May 15, 2006.

Inventories

Inventories are valued at the lower of cost or market, with cost principally determined on an average basis. Inventories principally consist of DVD’s and magazines held for sale or resale. The inventory is written down to the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional write-downs may be required.

This excerpt taken from the PRVT 10-K filed Mar 31, 2006.

6. Inventories

Inventories consist of the following:

 

     December 31,
     2004
Restated		    2005
     EUR    EUR
     (in thousands)

Magazines for sale and resale

    3,955    3,534

Video cassettes

    733    299

DVDs

    3,931    5,484

Other

    241    463
         
   8,860    9,780
         

 

F - 13

PRIVATE MEDIA GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

This excerpt taken from the PRVT 10-Q filed Nov 14, 2005.

Inventories

 

Inventories are valued at the lower of cost or market, with cost principally determined on an average basis. Inventories principally consist of DVD’s, videocassettes and magazines held for sale or resale. The inventory is written down to the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional write-downs may be required.

 

This excerpt taken from the PRVT 10-Q filed Aug 11, 2005.

Inventories

 

Inventories are valued at the lower of cost or market, with cost principally determined on an average basis. Inventories principally consist of DVD’s, videocassettes and magazines held for sale or resale. The inventory is written down to the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional write-downs may be required.

 

This excerpt taken from the PRVT 10-Q filed May 16, 2005.

Inventories

 

Inventories are valued at the lower of cost or market, with cost principally determined on an average basis. Inventories principally consist of DVD’s, videocassettes and magazines held for sale or resale. The inventory is written down to the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional write-downs may be required.

 

This excerpt taken from the PRVT 10-K filed Mar 31, 2005.

5. Inventories

 

Inventories consist of the following:

 

     December 31,
     2003
    2004
     EUR    EUR
     (in thousands)

Magazines for sale and resale

    3,257    3,955

Video cassettes

    2,838    733

DVDs

    4,515    5,049

Other

    123    241
    
  
     10,733    9,978
    
  

 

F - 11

PRIVATE MEDIA GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

EXCERPTS ON THIS PAGE:

10-Q (2 sections)
May 15, 2009
10-K (4 sections)
Apr 15, 2009
10-Q
Nov 10, 2008
10-Q
Aug 11, 2008
10-Q
May 12, 2008
10-K (2 sections)
Mar 17, 2008
10-Q
Nov 9, 2007
10-Q
Aug 9, 2007
10-Q
May 10, 2007
10-K
Apr 2, 2007
10-Q
Nov 14, 2006
10-Q
Aug 14, 2006
10-Q
May 15, 2006
10-K
Mar 31, 2006
10-Q
Nov 14, 2005
10-Q
Aug 11, 2005
10-Q
May 16, 2005
10-K
Mar 31, 2005

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