Core Viewpoint - PLBY Group, Inc. has converted 25% of its Series B Convertible Preferred Stock into common stock as part of its balance sheet streamlining and deleveraging efforts [1][2]. Group 1: Conversion Details - The company converted 7,000 shares of its 28,000 Series B Stock into 3,784,688 shares of Common Stock at a conversion price of $1.85 per share, which is approximately a 23% premium to the previous securities purchase agreement price [2]. - Following the conversion, the outstanding shares of Series B Stock were reduced to 21,000, while the total shares of Common Stock increased to 93,736,325 [2]. Group 2: Future Actions - The company may consider converting additional Series B Stock in the future based on the price of Common Stock or redeeming more Series B Stock for cash [3]. Group 3: Company Overview - PLBY Group, Inc. is a global pleasure and leisure company, with its flagship brand, Playboy, recognized worldwide and available in approximately 180 countries [4]. - The company's mission focuses on creating a culture where individuals can pursue pleasure, rooted in values of equality and freedom of expression [4].

Group 1 - Playboy Enterprises announced the return of PLAYBOY magazine with Lori Harvey on the cover, available for pre-order, and set to hit newsstands on February 10, 2025 [1][2] - The reimagined magazine aims to blend nostalgia with innovation, celebrating its rich history while appealing to a new generation of readers [2] - The new issue will feature exclusive content, including an interview with Lori Harvey and a candid conversation with comedian Nikki Glaser, along with the return of the Playmate of the Year tradition [4] Group 2 - Playboy Enterprises, a subsidiary of PLBY Group, Inc., is a global leisure company with a presence in approximately 180 countries, focusing on products, content, and experiences that promote fulfilling lives [3] - The company has a legacy of over 70 years in creating groundbreaking media and hospitality experiences while advocating for cultural progress rooted in equality and freedom of expression [3]

Core Insights - PLBY Group has decided to retain its Honey Birdette business due to significant improvements in its balance sheet and operational metrics, leading to positive cash flow and growth prospects [1][2] - The company expects to be cash flow positive for the full year 2025 and aims to reduce net senior debt to below $100 million by the end of 2025 [2][5] - PLBY Group anticipates generating approximately $120 million in total revenue in 2025, supported by guaranteed royalty and licensing payments [2][5] Financial Position - As of early 2025, PLBY Group has $36 million in cash and $120 million in net senior debt [2] - The company plans to use the net proceeds from a proposed $25.4 million follow-on investment to pay down its senior debt, contingent on stockholder approval [2] Strategic Direction - The transition to an asset-light model is underway, which is expected to enhance operational efficiency and profitability [2] - The Board of Directors has decided to focus on growing the Honey Birdette business rather than exploring strategic alternatives, indicating confidence in its future value [2]

Core Viewpoint - PLBY Group has formalized a long-term exclusive licensing agreement with Byborg Enterprises, which includes a minimum guaranteed payment of $300 million over 15 years, aimed at expanding the Playboy brand and transitioning to a more profitable asset-light business model [1][3][4] Licensing Agreement - Byborg will license certain Playboy digital intellectual property and operate Playboy Plus, Playboy TV, and the Playboy Club, with annual minimum guaranteed payments of $20 million for a total of $300 million over the initial 15-year term [3] - The agreement allows for up to nine 10-year extensions based on Byborg achieving specific operational milestones [3] Securities Purchase Agreement - PLBY Group has entered into a securities purchase agreement with Byborg, selling $25 million in newly issued shares at $1.50 per share, contingent on the stock price being at or below $1.65 prior to a special meeting of stockholders [4][5] - If the stock price exceeds $1.65, Byborg can amend the terms to purchase shares at 90% of the then-current 5-day volume-weighted average share price [5][6] Shareholding and Governance - Byborg previously purchased 14.9 million shares for $22.35 million, with a lock-up period ending November 5, 2025, and will have a director appointed to PLBY Group starting in 2025 [7] Company Background - PLBY Group is a global pleasure and leisure company, with Playboy as its flagship brand, recognized worldwide and driving significant consumer spending [9] - Byborg Enterprises is a premium online entertainment company with over 70 million daily visitors, focusing on innovative technology and digital relationships [8]

Financial Data and Key Metrics Changes - The company closed a strategic investment from Byborg for over $22 million and currently has approximately $30 million in cash on the balance sheet [7] - A restructuring of debt resulted in a $66 million discount on senior debt, with a net reduction of $38 million in leverage [8] - The company issued a new $28 million convertible preferred to lenders, convertible at the company's option [8] Business Line Data and Key Metrics Changes - The digital segment currently generates about $5.4 million to $5.5 million quarterly, but experienced a loss of approximately $2 million in the past quarter [14] Market Data and Key Metrics Changes - The company is moving towards an asset-light model, with Honey Birdette being moved to discontinued operations [15] Company Strategy and Development Direction - The relaunch of the Polo magazine is not seen as a key revenue driver but as a promotional tool for creators and models, and a brand marketing vehicle [11][12] - The Byborg partnership includes a $300 million total minimum guarantee over 15 years, with $20 million annual payments [13] - The company aims for meaningful profitability through licensing deals and restructuring efforts [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategic direction, emphasizing the importance of the Byborg deal and other licensing agreements [16][18] - The company believes it is on a stable financial footing with reduced cash interest expenses and a significant cash balance [17] Other Important Information - The unsolicited bid from Cooper Hefner was unanimously rejected by the Board, which is focused on the asset-light model and partnerships [15] Q&A Session Summary Question: What kind of driver should we expect from the Polo magazine? - The magazine is not viewed as a key revenue driver but serves as a promotional and brand marketing tool [11][12] Question: Can you discuss the partnership with Byborg and performance requirements? - The partnership includes a $300 million total minimum guarantee with $20 million annual payments, which are minimum guarantees against a percentage of profits [13] Question: Thoughts on the unsolicited bid from Cooper Hefner? - The Board unanimously rejected the offer, focusing on the asset-light model and ongoing partnerships [15]

Revenue Performance - Licensing revenues from China accounted for 26% of total revenues for Q3 2024, down from 40% in Q3 2023, and 24% for the nine months ended September 30, 2024, down from 41% in the same period of 2023[158]. - Net revenues for the three months ended September 30, 2024, decreased to $12,864,000, down 21% from $16,276,000 in the same period of 2023[174]. - For the nine months ended September 30, 2024, net revenues were $32,824,000, down 36% from $51,013,000 in the same period of 2023[185]. - The decrease in net revenues for the nine months was primarily due to a $14.2 million decline in licensing revenue, largely from terminated Chinese licensing agreements[188]. - Total net revenues for the three months ended September 30, 2024, were $12.864 million, a decrease of 21% compared to $16.276 million in the prior year[211]. - Licensing segment revenues decreased by 33% to $7.377 million, primarily due to the termination of certain Chinese licensing agreements[212]. - Digital Subscriptions and Content segment revenues increased by 5% to $5.485 million[211]. - Digital Subscriptions and Content segment saw a revenue increase of $1.7 million for the nine months ended September 30, 2024, driven by the creator platform[221]. - Total net revenues for the nine months ended September 30, 2024, were $32.8 million, a decrease of 36% from $51.0 million in the prior year[218]. Financial Losses and Expenses - The company recorded a loss of $1.8 million on partial extinguishment of debt in Q1 2023, related to $45 million in prepayments of senior debt[170]. - The company experienced further declines in revenue and profitability, which may lead to additional non-cash asset impairment charges[159]. - The net loss from continuing operations for the three months ended September 30, 2024, was $33,798,000, compared to $7,050,000 in the same period of 2023, reflecting a loss increase of over 200%[174]. - The net loss attributable to PLBY Group, Inc. for the nine months ended September 30, 2024, was $66,854,000, compared to a loss of $176,660,000 in the same period last year, indicating a 62% reduction in losses[185]. - The operating loss decreased by $44.3 million for the nine months ended September 30, 2024, compared to the prior year, primarily due to non-cash impairment charges of $65.5 million in the previous year[220][233]. - The company incurred significant operating losses since going public, with an operating loss of $44.3 million for the nine months ended September 30, 2024[233]. - The company expects to continue incurring operating losses until the Digital Subscriptions and Content segment achieves profitability[234]. Impairments and Asset Write-offs - Impairments of indefinite-lived intangible assets and long-lived assets were recognized due to declines in revenue and profitability during Q3 2024[159]. - Impairments rose dramatically to $21,707,000, compared to $392,000 in the same period last year, indicating a significant write-off of assets[174]. - Impairment charges for the nine months ended September 30, 2024 included $17.0 million on goodwill and $4.7 million on internally developed software[191]. Operating Expenses - The total operating expense for the three months ended September 30, 2024, was $41,006,000, a 130% increase from $17,863,000 in the prior year[174]. - The total operating expense for the nine months ended September 30, 2024, was $77,118,000, a 50% decrease from $152,732,000 in the prior year[185]. - Selling and administrative expenses decreased by $4.0 million due to lower stock-based compensation and technology costs, among other reductions[190]. - Corporate expenses decreased by $6.0 million for the nine months ended September 30, 2024, due to reductions in payroll and consulting services[225]. Cash Flow and Financing - As of September 30, 2024, the company had cash of $9.5 million, primarily held in operating and deposit accounts[226]. - The company raised $15 million from a registered direct offering and approximately $47.6 million from a rights offering in early 2023[227][228]. - The net cash used in operating activities for the nine months ended September 30, 2024, was $19.9 million, a 41% improvement compared to $33.6 million in the prior year[246]. - Cash flows from investing activities decreased by 57%, from $863,000 in 2023 to $372,000 in 2024, primarily due to lower proceeds from asset sales[246]. - Financing activities resulted in a net cash outflow of $557,000 in 2024, a significant decrease from a net inflow of $27.3 million in the previous year, largely due to reduced long-term debt repayments[249]. - Outstanding debt obligations increased from $211.6 million as of December 31, 2023, to $217.7 million as of September 30, 2024[258]. Interest Rates and Debt - Interest expense increased due to higher interest rates on senior secured debt following amendments made in May and November 2023[193]. - As of September 30, 2024, the stated interest rates for Tranche A and Tranche B term loans were 11.46% and 9.46%, respectively, with effective interest rates of 12.08% and 13.32%[244]. - A 0.5% increase in underlying interest rates is estimated to increase annual interest expense by $1.1 million, while a 1% increase would raise it by $2.3 million[258]. - The company has not entered into any interest rate swap contracts as of September 30, 2024, to mitigate interest rate fluctuations[257]. Strategic Initiatives - The company is transitioning to a capital-light business model focused on higher margin revenue streams and lower working capital requirements[157]. - The transition of the Direct-to-Consumer segment to a licensing model resulted in no segment results presented for Q3 2024[155]. - The company aims to strategically expand its licensing business in key categories and territories, leveraging high-end designer collaborations[157]. - The company has renegotiated terms with certain Chinese licensees and terminated some agreements due to slow collections, impacting future revenue recognition[232]. Other Income and Adjustments - The increase in other income, net for the three months ended September 30, 2024, was primarily due to foreign exchange adjustments related to certain Chinese licenses[182]. - Other income increased due to foreign exchange adjustments related to certain Chinese licenses[196]. - An unrealized gain of $1.1 million was recorded for the three months ended September 30, 2024, primarily related to discontinued operations and currency fluctuations[260].

Debt and Financing - PLBY Group reduced its senior debt from approximately $218 million to approximately $152 million through a restructuring deal with lenders[2]. - The company will issue $28 million of new convertible preferred stock with a 12% annual dividend rate, maturing at the end of 2027[3]. Revenue Performance - Total revenue for Q3 2024 was $12.9 million, a decrease of 21% from $16.3 million in the prior year, primarily due to a decline in licensing revenue[7]. - Licensing revenue fell to $7.4 million, down 32% from $10.9 million in the prior year, largely due to the termination of two major licensing agreements in China[8]. - Digital subscriptions and content revenue increased by 5% to $5.5 million, up from $5.2 million in the prior year[8]. Losses and Financial Health - Net loss from continuing operations was $33.8 million, compared to a net loss of $7.1 million in Q3 2023, primarily due to impairment charges[9]. - Adjusted EBITDA loss was $1.8 million, a decline from positive Adjusted EBITDA of $1.8 million in the same quarter last year[10]. - The company reported a net loss from continuing operations of $33,798 thousand for September 2024, compared to a loss of $7,050 thousand in September 2023, indicating a significant increase in losses year-over-year[22]. - Adjusted EBITDA for September 2024 was $(1,764) thousand, a decrease from $1,831 thousand in the same period last year, reflecting a decline in operational performance[22]. - The overall EBITDA for September 2024 was $(25,484) thousand, a sharp decline from $(413) thousand in the same quarter last year, highlighting deteriorating financial health[22]. Expenses and Impairments - The company incurred interest expenses of $6,686 thousand in September 2024, slightly up from $6,620 thousand in September 2023[22]. - Depreciation and amortization expenses increased to $1,042 thousand in September 2024 from $946 thousand in the previous year, indicating higher asset utilization or investment[22]. - Stock-based compensation rose significantly to $1,502 thousand in September 2024, compared to $540 thousand in September 2023, suggesting increased employee incentives or retention efforts[22]. - Impairments recorded were $21,707 thousand in September 2024, a substantial increase from $392 thousand in the prior year, indicating potential asset write-downs[22]. - The company adjusted for various expenses totaling $511 thousand in September 2024, down from $1,312 thousand in the previous year, reflecting changes in operational adjustments[22]. Strategic Initiatives - PLBY Group anticipates $300 million in guaranteed minimums from a strategic licensing agreement with Byborg over the initial 15 years[5]. - The company is relaunching Playboy.com to target key content verticals, aiming to expand audience engagement[2]. - Playboy magazine is set to return in early 2025, with plans for a global search for the next Playmate of the Year[2]. Operational Challenges - The financial results indicate a challenging operational environment, with significant increases in losses and impairments, necessitating strategic reassessment moving forward[22].

Group 1 - PLBY Group, Inc. announced the closing of a private placement of 14.9 million newly issued shares at a price of $1.50 per share, totaling $22.35 million [1] - The shares sold are subject to a one-year lock-up period, with certain limited exceptions [1] - Following the private placement, PLBY Group has approximately 89.59 million shares of common stock outstanding [1] Group 2 - PLBY Group is a global pleasure and leisure company, primarily known for its flagship brand, Playboy, which is recognized worldwide [2] - The company aims to connect consumers with products, content, and experiences that enhance their lives, driving billions in global consumer spending [2] - PLBY Group's mission emphasizes the pursuit of pleasure as a fundamental human right, rooted in values of equality and freedom of expression [2]

LOS ANGELES, Oct. 31, 2024 (GLOBE NEWSWIRE) -- PLBY Group, Inc. (NASDAQ: PLBY), a leading pleasure and leisure lifestyle company and owner of Playboy, one of the most recognizable and iconic brands in the world, will report third quarter 2024 financial results on Tuesday, November 12, 2024, after the U.S. stock market closes. The Company will publish a press release discussing the quarter, including remarks from management, and then, at 5 p.m. Eastern Time, will host an analyst question and answer session, ...

Byborg Enterprises Agrees to Purchase 14.9 Million Shares of PLBY at $1.50 Per Share Byborg Enterprises Signs Non-Binding LOI to License Digital IP and Operate Select Playboy Digital Assets with a Commitment of $300 Million in Minimum Guaranteed Payments Over Initial 15-Year Term LOS ANGELES, Oct. 31, 2024 (GLOBE NEWSWIRE) -- PLBY Group, Inc. (NASDAQ: PLBY) (“PLBY Group” or the “Company”), owner of Playboy, one of the most recognizable and iconic brands in the world, announced today the signing of a signifi ...