PLBY (US:PLBY)2022-03-15 16:00Business Combinations and Acquisitions - The Business Combination with MCAC was completed on February 10, 2021, with an aggregate consideration of approximately $381.3 million, including 23,920,000 shares of MCAC common stock and the assumption of up to $142.1 million in net debt[233]. - The acquisition of TLA Acquisition Corp was completed for $24.9 million in cash, consolidating TLA's operations, which include 41 stores across five states, into the company's results starting March 1, 2021[240]. - The acquisition of Honey Birdette was finalized on August 9, 2021, with total consideration of $327.7 million, including $235.0 million in cash and shares valued at $92.7 million, enhancing the company's luxury lingerie portfolio[241]. - The acquisition of GlowUp Digital Inc. was completed on October 22, 2021, with total consideration valued at approximately $34.4 million, enabling the launch of a new creator-led social content platform[244]. - The company continues to assess merger and acquisition opportunities to complement organic growth, supported by operating cash flow and balance sheet flexibility[253]. Financial Performance - Net revenues increased by $98.9 million, or 67%, primarily due to higher direct-to-consumer revenue of $83.7 million from the acquisitions of TLA and Honey Birdette, along with growth on Playboy.com[277]. - The company reported an operating loss of $68.9 million for the year ended December 31, 2021, compared to an operating income of $13.6 million in 2020[275]. - The company experienced a net loss of $77.7 million for the year ended December 31, 2021, compared to a net loss of $5.3 million in 2020[275]. - Adjusted EBITDA for 2021 was $32.4 million, an increase from $28.4 million in 2020, reflecting improved operational performance[292]. - Total net revenues for 2021 reached $246.6 million, a 67% increase from $147.7 million in 2020, driven by significant growth in Direct-to-Consumer and Digital Subscriptions segments[295]. Revenue Streams - Licensing revenues from China, which constituted 48% of total revenue in 2019, decreased to 17.7% by the end of 2021 due to increased North American consumer product sales[251]. - The company plans to continue expanding its consumer products business while reducing reliance on licensing revenues from China[249]. - Direct-to-Consumer net revenues surged by $83.7 million, or 131%, in 2021 compared to 2020, largely due to acquisitions and higher e-commerce sales[298]. - Digital Subscriptions and Content net revenues increased by $12.8 million, or 61%, in 2021, primarily from sales of tokenized digital art and collectibles[300]. Expenses and Costs - Selling and administrative expenses rose by $141.4 million, or 241%, driven by higher stock-based compensation and costs associated with being a newly public company[279]. - Cost of sales increased by $39.8 million, or 53%, mainly due to increased direct-to-consumer revenue and inventory step-ups from acquisitions[278]. - Corporate expenses rose by $83.5 million, or 217%, in 2021, mainly due to increased stock-based compensation and acquisition-related costs[303]. Financing Activities - The company raised $202.9 million in net proceeds from a public offering of 4,720,000 shares at $46 per share in June 2021[248]. - The New Credit Agreement established a $160 million senior secured term loan with a maturity date of May 25, 2027, replacing the previous credit facility[245]. - The company entered into an amendment to the New Credit Agreement, obtaining a $70 million incremental term loan, increasing total term loan indebtedness to $230 million[312]. - Net cash provided by financing activities was $370.5 million for the year ended December 31, 2021, mainly from net proceeds of a public offering and long-term debt issuance[323]. Cash Flow and Liquidity - As of December 31, 2021, the company had cash of $69.2 million, which is expected to be sufficient to fund operations for at least the next 12 months[306]. - Net cash used in operating activities was $36.7 million for the year ended December 31, 2021, including a net loss of $77.7 million[320]. - Net cash used in investing activities was $273.2 million for the year ended December 31, 2021, primarily due to acquisitions and aircraft purchase[322]. Assets and Liabilities - As of December 31, 2021, the company had cash of $69.2 million and outstanding debt obligations of $237.4 million, accruing interest at a rate of 6.25%[354][355]. - The company had fixed lease commitments of $25.4 million as of December 31, 2021, with $3.4 million due in the next 12 months[318]. - The company was in compliance with financial covenants under the New Credit Agreement as of December 31, 2021[314]. Tax and Impairment - Provision for income taxes changed from a tax expense of $7.1 million in 2020 to a tax benefit of $2.8 million in 2021, primarily due to the offset of deferred tax liabilities by net operating losses[287]. - The company recorded an impairment loss of approximately $1.0 million related to digital assets during the year ended December 31, 2021[347][359]. - The company recorded no impairment charges to goodwill during the periods presented, following annual impairment tests[342]. Market and Currency Risks - Approximately 38% of the company's revenue for the year ended December 31, 2021, was derived from international customers, with expectations for this percentage to increase in future periods[357]. - The company expects that changes in foreign currency exchange rates may negatively affect revenue and operating results, particularly with significant international revenues[357]. - The market price of Ethereum fluctuated between $3,533 and $4,814 during the fourth quarter of 2021, impacting the carrying value of digital assets[359].