Penthouse publisher can't meet interest payments

WASHINGTON - The auditor for General Media Inc., publisher of Penthouse and other magazines, has said there is substantial doubt about the company&#39;s ability to continue as a going concern. <br> <br> In the company&#39;s annual report filed late Thursday with the Securities and Exchange Commission, Grant Thornton LLP, the auditor, said the company&#39;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. <br> <br> The privately held New York-based company said it had laid off 39 employees, 26 percent of its total work force, in February. <br> <br> The company also said it doesn&#39;t believe it can make interest payments of about $7 million and amortization payments of $5.8 million in 2002. <br> <br> The company is negotiating with the holders of the notes to reduce payments. <br> <br> If the company doesn&#39;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. <br> <br> 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. <br> <br> Revenue decreased by $10.6 million to $65.4 million for 2001, the filing said. <br> <br> 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. <br> <br> General Media attributes the decline to the change in social climate toward men&#39;s magazines, together with the proliferation of retail video outlets and the increased market share of cable television and the Internet. <br> <br>

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