Q4 Revenue of
Amends Credit Facility to Eliminate Total Net Leverage Covenant Until Q2 2026
Company to Hold Question-and-Answer Session at
Comments from
“In 2023, we worked on five main goals. First, restructure the Company and move to a capital-light business model; second, reduce overhead; third, stabilize and reposition
As part of our restructuring, we sold Yandy and Lovers, two businesses that were not core to our future plans. We also organized our art and furniture collection for auction, signed contracts with two auction houses, completed one successful sale in November of fine art and plan to have two other, larger auctions in 2024, which we expect will result in the sale of a majority of our collection. We also successfully outsourced operation of our e-commerce business, eliminating approximately
We have significantly reduced our corporate overhead from approximately
At
In
We also successfully amended our credit agreement multiple times in 2023, and I am happy to announce that we have amended it again, replacing our total net leverage covenant until the second quarter of 2026 with a simple requirement to maintain a minimum cash balance of
During 2023, we continued to make significant progress on our creator platform and building a single foundation for our entire digital business. We started the year with a product that was at parity with our competitors from a feature set perspective, and we’ve continued to make improvements. Given the decline in collections from
Here are a few of the creator platform’s accomplishments from the past year:
In the 4th quarter of 2023, we rebranded the platform the ‘Playboy Club’ to make clear that it is the place to interact with the world's most beautiful and interesting women.
We introduced a paid membership tier of the
We have also launched Playboy Club’s digital currency,
In addition, we launched our proprietary affiliate program, which initially allows creators and third parties to earn commissions on new creator referrals and membership sales. We expect to continue to expand the affiliate program to give our creators additional opportunities to earn, for example by selling customers the opportunity to join a foursome at a member golf tournament or attend a meet-and-greet, giving creators avenues to earn money that no other platforms offer.
Customers and creators are responding to the new and improved
As we move forward into 2024, we believe we have a clear set of goals within each business line, accompanied by a strategy to achieve those goals.
Our goals for
In
In the rest of the world, we plan to grow our business by expanding our relationships with our top existing licensees that generate the majority of our royalties. By granting expanded rights under their existing agreements, we can quickly add new categories such as swim or activewear, as well as new retail channels, including online and in-person retailers and marketplaces. Further, we will focus new business development on categories and markets that matter most to our customers, such as cosmetics, home decorative accessories, wellness, toys, gaming, and land-based entertainment, in markets such as
Our goals for our digital business going forward are to add new creators and customers and improve the experience for existing creators and users. We will do that by: giving our creators more opportunities to earn money, by raising their profiles to gain a larger audience in a manner that best suits their long-term goals and image, and giving our customers more opportunities to spend with
Content is key to us achieving our digital goals. Accordingly, we plan to relaunch two key features that promote the women we work with and showcasing them in a new magazine. We plan to bring back the iconic Playboy Playmate franchise to highlight top creators. In addition, we plan to produce other audio and video content that promotes and celebrates our creators. Content will serve four main purposes: first, it will re-energize the brand; second, it will give our creators opportunities to be featured by
We will continue the consolidation of our legacy digital products into one platform to save costs, optimize the consumer funnel and give our creators and customers more choices. We recently made our magazine archives available as part of the paid
With the elimination of the total net leverage covenant until the second quarter of 2026, our cash on hand and the stabilization we have begun to see in our other business lines, we plan to focus on growing and marketing our digital business through content this year. While we will continue to not give specific guidance for future fiscal periods, given all the recent changes we have made to the Company, including the reduction of our overhead, we plan on reducing net loss and being EBITDA positive for the full-year 2024, and we believe we currently have the capital to invest in growth while also servicing our debt.”
Q4 2023 Financial Highlights
- Total revenue from continuing operations in the fourth quarter was
$39.4 million versus$44.9 million in the prior year period, reflecting a year-over-year decrease of 12%. Of the$5.5 million decrease in revenue,$6.8 million was attributable to the elimination ofplayboy.com e-commerce, as well as a decline in licensing, partially offset by growth inHoney Birdette and the digital business. - Net loss from continuing operations in the fourth quarter was
$9.6 million , including$8.3 million of trademark and other impairments. The adjusted EBITDA income from continuing operations was$1.1 million .
Direct-to-consumer revenue from continuing operations declined
Licensing revenue decreased 14% year-over-year in the fourth quarter of 2023 to
Digital subscriptions and content revenue was up 22% compared to a year ago, to
Net loss from continuing operations in the fourth quarter of 2023 was
Total net loss of the Company for the fourth quarter of 2023 was
Adjusted EBITDA in the fourth quarter of 2023 was
The Company ended the fourth quarter with approximately
Full Year 2023 Financial Highlights
- Total revenue from continuing operations for the year ended 2023 was
$143.0 million , as compared to$185.5 million in 2022, reflecting a year-over-year decrease of 23%. Of the$42.5 million decrease in revenue,$27.2 million was attributable to direct-to-consumer products and$16.6 million was attributable to licensing, partially offset by a$1.2 million increase in the digital and other segments. - Net loss from continuing operations for the year ended 2023 was
$186.4 million , including$154.9 million of impairments. The adjusted EBITDA loss from continuing operations was$7.3 million .
Direct-to-consumer revenue from continuing operations declined 26% year-over-year to
Licensing revenue decreased 27% year-over-year in 2023 to
Digital subscriptions and content revenue was up 10% compared to a year ago, to
Net loss from continuing operations for the year ended 2023 was
Total net loss of the Company for 2023 was
Adjusted EBITDA loss in 2023 was
Webcast Details
The Company will host a webcast at
About
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. The Company’s actual results may differ from their expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions (or the negative versions of such words or expressions) are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the Company’s expectations with respect to future performance, growth plans and anticipated financial impacts of its strategic opportunities and corporate transactions.
These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from those discussed in the forward-looking statements. Factors that may cause such differences include, but are not limited to: (1) the inability to maintain the listing of the Company’s shares of common stock on Nasdaq; (2) the risk that the Company’s completed or proposed transactions disrupt the Company’s current plans and/or operations, including the risk that the Company does not complete any such proposed transactions or achieve the expected benefits from any transactions; (3) the ability to recognize the anticipated benefits of corporate transactions, commercial collaborations, commercialization of digital assets, cost reduction initiatives and proposed transactions, which may be affected by, among other things, competition, the ability of the Company to grow and manage growth profitably, and the Company’s ability to retain its key employees; (4) costs related to being a public company, corporate transactions, commercial collaborations and proposed transactions; (5) changes in applicable laws or regulations; (6) the possibility that the Company may be adversely affected by global hostilities, supply chain delays, inflation, interest rates, foreign currency exchange rates or other economic, business, and/or competitive factors; (7) risks relating to the uncertainty of the projected financial information of the Company, including changes in the Company’s estimates of cash flows and the fair value of certain of its intangible assets, including goodwill; (8) risks related to the organic and inorganic growth of the Company’s businesses, and the timing of expected business milestones; (9) changing demand or shopping patterns for the Company’s products and services; (10) failure of licensees, suppliers or other third-parties to fulfill their obligations to the Company; (11) the Company’s ability to comply with the terms of its indebtedness and other obligations; (12) changes in financing markets or the inability of the Company to obtain financing on attractive terms; and (13) other risks and uncertainties indicated from time to time in the Company’s annual report on Form 10-K, including those under “Risk Factors” therein, and in the Company’s other filings with the
Contact:
Investors: investors@plbygroup.com
Media: press@plbygroup.com
Consolidated Statements of Operations (in thousands, except share and per share amounts) | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Net revenues | $ | 39,364 | $ | 44,889 | $ | 142,950 | $ | 185,536 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of sales | (13,447 | ) | (20,112 | ) | (54,777 | ) | (82,945 | ) | ||||||||
Selling and administrative expenses | (23,861 | ) | (36,761 | ) | (123,554 | ) | (150,535 | ) | ||||||||
Impairments | (8,252 | ) | (4 | ) | (154,884 | ) | (283,500 | ) | ||||||||
Contingent consideration fair value remeasurement (loss) gain | (50 | ) | (137 | ) | 436 | 29,173 | ||||||||||
(Loss) gain on sale of the aircraft | — | (113 | ) | — | 5,689 | |||||||||||
Other operating (expense) income, net | (49 | ) | 482 | (540 | ) | 482 | ||||||||||
Total operating expense | (45,659 | ) | (56,645 | ) | (333,319 | ) | (481,636 | ) | ||||||||
Operating income (loss) | (6,295 | ) | (11,756 | ) | (190,369 | ) | (296,100 | ) | ||||||||
Nonoperating (expense) income: | ||||||||||||||||
Interest expense | (5,707 | ) | (5,280 | ) | (23,293 | ) | (17,719 | ) | ||||||||
(Loss) gain on extinguishment of debt | — | (1,046 | ) | 6,133 | (1,266 | ) | ||||||||||
Fair value remeasurement (loss) gain | — | (1,502 | ) | 6,505 | 9,401 | |||||||||||
Other income (expense), net | 185 | 319 | 806 | (711 | ) | |||||||||||
Total nonoperating expense | (5,522 | ) | (7,509 | ) | (9,849 | ) | (10,295 | ) | ||||||||
Loss from continuing operations before income taxes | (11,817 | ) | (19,265 | ) | (200,218 | ) | (306,395 | ) | ||||||||
Benefit from income taxes | 2,178 | 9,403 | 13,770 | 55,704 | ||||||||||||
Net loss from continuing operations | (9,639 | ) | (9,862 | ) | (186,448 | ) | (250,691 | ) | ||||||||
Income (loss) from discontinued operations, net of tax | 5,881 | (373 | ) | 6,030 | (27,013 | ) | ||||||||||
Net income (loss) | (3,758 | ) | (10,235 | ) | (180,418 | ) | (277,704 | ) | ||||||||
Net income (loss) attributable to | $ | (3,758 | ) | $ | (10,235 | ) | $ | (180,418 | ) | $ | (277,704 | ) | ||||
Net loss per share from continuing operations, basic and diluted | $ | (0.13 | ) | $ | (0.21 | ) | $ | (2.60 | ) | $ | (5.28 | ) | ||||
Net income (loss) per share from discontinued operations, basic and diluted | 0.08 | (0.01 | ) | 0.07 | (0.58 | ) | ||||||||||
Net income (loss) per share, basic and diluted | $ | (0.05 | ) | $ | (0.22 | ) | $ | (2.53 | ) | $ | (5.86 | ) | ||||
Weighted average shares used in computing net loss per share, basic | 73,676,424 | 47,258,177 | 71,319,437 | 47,420,376 | ||||||||||||
Weighted average shares used in computing net loss per share, diluted | 73,676,424 | 47,258,177 | 71,319,437 | 47,420,376 |
EBITDA Reconciliation
This release presents the financial measure earnings before interest, taxes, depreciation and amortization, or “EBITDA,” and “Adjusted EBITDA” which are not financial measures under the accounting principles generally accepted in
In addition to adjusting for non-cash stock-based compensation, non-cash charges for the fair value remeasurements of certain liabilities and non-recurring non-cash impairments, asset write-downs and inventory reserve charges, we typically adjust for nonoperating expenses and income, such as non-recurring special projects, including the implementation of internal controls, non-recurring gain on the sale of assets, expenses associated with financing activities, and reorganization and severance expenses that result in the elimination or rightsizing of specific business activities or operations.
Because of these limitations, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. The Company compensates for these limitations by relying primarily on the Company’s GAAP results and using EBITDA and Adjusted EBITDA on a supplemental basis. Investors should review the reconciliation of net loss to EBITDA and Adjusted EBITDA below and not rely on any single financial measure to evaluate the Company’s business.
The following table reconciles the Company’s net income (loss) to EBITDA income or (loss) and Adjusted EBITDA income or (loss):
GAAP Net Income (Loss) to Adjusted EBITDA Reconciliation (in thousands) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Net loss | $ | (3,758 | ) | $ | (10,235 | ) | $ | (180,418 | ) | $ | (277,704 | ) | |||
Adjusted for: | |||||||||||||||
(Income) loss from discontinued operations, net of tax | (5,881 | ) | 373 | (6,030 | ) | 27,013 | |||||||||
Net loss from continuing operations | (9,639 | ) | (9,862 | ) | (186,448 | ) | (250,691 | ) | |||||||
Adjusted for: | |||||||||||||||
Interest expense | 5,707 | 5,280 | 23,293 | 17,719 | |||||||||||
Loss (gain) on extinguishment of debt | — | 1,046 | (6,133 | ) | 1,266 | ||||||||||
Benefit from income taxes | (2,178 | ) | (9,403 | ) | (13,770 | ) | (55,704 | ) | |||||||
Depreciation and amortization | 1,867 | 2,277 | 7,199 | 12,721 | |||||||||||
EBITDA | (4,243 | ) | (10,662 | ) | (175,859 | ) | (274,689 | ) | |||||||
Adjusted for: | |||||||||||||||
Stock-based compensation | 687 | 4,711 | 9,597 | 20,540 | |||||||||||
Impairments | 8,252 | 4 | 154,884 | 283,500 | |||||||||||
Contingent consideration fair value remeasurement | 50 | 137 | (436 | ) | (29,173 | ) | |||||||||
Mandatorily redeemable preferred stock fair value remeasurement | — | 1,502 | (6,505 | ) | (9,401 | ) | |||||||||
Recognition of prepaid royalty guarantees | (5,084 | ) | — | (5,084 | ) | — | |||||||||
Write-down of capitalized software | 419 | — | 5,051 | — | |||||||||||
Inventory reserve charges | — | 3,083 | 3,637 | 3,083 | |||||||||||
Loss (gain) on sale of the Aircraft | — | 113 | — | (5,689 | ) | ||||||||||
Adjustments | 1,041 | (1,525 | ) | 7,415 | 7,335 | ||||||||||
Adjusted EBITDA | $ | 1,122 | $ | (2,637 | ) | $ | (7,300 | ) | $ | (4,494 | ) |
Source:
2024 GlobeNewswire, Inc., source