Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries The Beachbody Company, Inc. Announces Fourth Quarter and Full Year 2022 Financial Results By: The Beachbody Company, Inc. via Business Wire March 14, 2023 at 16:05 PM EDT Delivered Fourth Quarter Revenue In-Line with Expectations Reduced Fourth Quarter Operating Expenses by 49% Recently Completed Additional Cost-Reduction Initiatives to Further Streamline the Business The Beachbody Company, Inc. (NYSE: BODY) (“Beachbody” or the “Company”), a leading subscription health and wellness company, today announced financial results for its fourth quarter and full year ended December 31, 2022. “We were pleased to deliver another quarter of solid progress of our One-Brand strategy as we continue to focus our efforts to improve profitability and expand our total addressable market,” said Carl Daikeler, Beachbody’s Co-Founder, Chairman, and Chief Executive Officer. “While 2022 was a challenging year in many ways, I am proud of our team’s efforts to continue delivering incredibly effective fitness and nutrition solutions to millions of people, while dramatically reducing costs. As we move into 2023, I am excited for the unprecedented long-term opportunities ahead of us as we expand the positioning of our platform and simplify the business for our Partners. We remain committed to improving our profitability, returning to growth, and maximizing shareholder value all while helping people achieve their goals to lead healthy fulfilling lives.” Fourth Quarter 2022 Results Total revenue decreased 31% to $148.2 million compared to the prior year period. Digital revenue decreased 16% to $68.7 million and digital subscriptions decreased 23% to 2.0 million. Nutrition and Other revenue decreased 23% to $74.7 million and nutritional subscriptions decreased by 27% to 0.22 million. Connected Fitness revenue decreased 87% to $4.8 million and approximately 3,700 bikes were delivered in the fourth quarter. Operating loss improved by $115.7 million to $48.1 million compared to an operating loss of $163.8 in the prior year period. Net loss was $44.9 million compared to a net loss of $146.0 million in the prior year period. Adjusted EBITDA1 was $3.5 million compared to ($26.6) million in the prior year period. Cash used in operating activities was ($10.3) million compared to ($75.9) million in the prior year period, and cash used in investing activities was ($3.3) million compared to ($16.9) million in the prior year period. Total cash used in operating and investing activities was ($13.6) million compared to ($92.8) million in the prior year period. Full Year 2022 Results Total revenue decreased 21% to $692.2 million compared to 2021. Digital revenue decreased 18% to $300.7 million. Nutrition and Other revenue decreased 24% to $353.3 million. Connected Fitness revenue decreased 11% to $38.2 million. Operating loss improved by $94.1 million to $203.2 million compared to an operating loss of $297.3 million in 2021. Net loss was $194.2 million compared to a net loss of $228.4 million in 2021. Adjusted EBITDA1 was ($23.3) million compared to ($86.1) million in 2021. Cash used in operating activities was ($47.2) million compared to ($215.2) million in 2021, and cash used in investing activities was ($26.5) million compared to ($125.2) million in 2021. Total cash used in operating and investing activities was ($73.7) million compared to ($340.4) million in 2021. Cash and cash equivalents decreased 23% to $80.1 million compared to the prior year period. Key Operational and Business Metrics For the Three Months Ended December 31, For the Year Ended December 31, 2022 2021 Change v 2021 2019 Change v 2019 Pre- Covid Baseline 2022 2021 Change v 2021 2019 Change v 2019 Pre- Covid Baseline Digital Subscriptions (in millions) 1.95 2.54 (23.2%) 1.69 15.4% 1.95 2.54 (23.2%) 1.69 15.4% Nutritional Subscriptions (in millions) 0.22 0.30 (26.7%) 0.31 (29.0%) 0.22 0.30 (26.7%) 0.31 (29.0%) Total Subscriptions 2.17 2.84 (23.6%) 2.00 8.5% 2.17 2.84 (23.6%) 2.00 8.5% Average Digital Retention 96.8% 96.5% 30bps 95.6% 120bps 95.9% 95.7% 20bps 95.3% 60bps Total Streams (in millions) 23.8 30.8 (22.7%) 25.4 (6.3%) 120.5 167.1 (27.9%) 103.8 16.1% DAU/MAU 29.0% 28.9% 10bps 29.0% 0bps 30.1% 31.4% -130bps 29.2% 90bps Connected Fitness Units Delivered (in thousands) 3.7 29.7 (87.5%) 0.0 NM 31.5 36.7 (14.2%) 0.0 NM Digital $68.7 $81.9 (16.1%) $57.9 18.7% $300.7 $365.4 (17.7%) $250.8 19.9% Nutrition & Other $74.7 $97.6 (23.5%) $107.2 (30.3%) $353.3 $465.5 (24.1%) $505.0 (30.0%) Connected Fitness $4.8 $36.8 (87.0%) $0.0 NM $38.2 $42.7 (10.5%) $0.0 NM Revenue (in millions) $148.2 $216.3 (31.5%) $165.1 (10.2%) $692.2 $873.6 (20.8%) $755.8 (8.4%) Net Income/(Loss) (in millions) ($44.9) ($146.0) 69.2% $1.8 (2594.4%) ($194.2) ($228.4) 15.0% $32.3 (701.2%) Adjusted EBITDA (in millions) $3.5 ($26.6) 113.2% $19.2 (81.8%) ($23.3) ($86.1) 72.9% $78.4 (129.7%) Outlook For the first quarter of 2023 the Company expects: Total revenue of $135.0 million to $140.0 million Adjusted EBITDA loss of $3.0 million to $6.0 million In reliance on the unreasonable efforts exception provided under Regulation S-K, a reconciliation of the Company’s Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, cannot be provided without unreasonable efforts and is not provided herein because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including net income (loss) and adjustments that are made for interest expense, income tax expense (benefit), depreciation and amortization, equity-based compensation and employee incentives, impairment, inventory net realizable value, transaction costs, restructuring costs, change in fair value of warrant liabilities, non-operating items including interest income and gain on investment, and other adjustments reflected in the Company’s reconciliation of historical Adjusted EBITDA. The variability of the amounts of these items could have an unpredictable, and potentially significant, impact on the Company’s future GAAP financial results. Recent Events In January 2023, the Company executed cost-reduction initiatives intended to further streamline the business, while focusing on key growth priorities. On March 9, 2023, the Company announced a rebrand from Beachbody to BODi and the launch of an updated version of its premium digital platform, BODi. The changes support the Company’s mission to serve its millions of customers with highly effective fitness and nutrition solutions while enhancing its value proposition with the addition of a new monthly Mindset content to support the positive psychology and self-motivation of its subscribers. Additional details with regards to the launch are available on the “News” section of the Company’s website at https://investors.thebeachbodycompany.com/news/news-details/2023/Beachbody-Changes-Name-to-BODi-on-its-Mission-to-Build-the-Health-Esteem-Category/default.aspx ---------------- 1 A definition of Adjusted EBITDA and reconciliation to net loss is at the end of this release. Conference Call and Webcast Information Beachbody will host a conference call at 5:00pm ET on Tuesday, March 14, 2023, to discuss its financial results. To participate in the live call, please dial (844) 200-6205 (U.S. & Canada), or (929) 526-1599 (all other locations) and provide the conference identification number: 592668. The conference call will also be available to interested parties through a live webcast at https://investors.thebeachbodycompany.com/. A replay of the call will be available until March 21, 2023, by dialing (866) 813-9403 (U.S & Canada), or +44 (204) 525-0658 (all other locations). The replay passcode is 129200. After the conference call, a webcast replay will remain available on the investor relations section of the Company’s website for one year. About BODi and The Beachbody Company, Inc. Headquartered in Southern California, BODi is a leading digital fitness, nutrition, and mindset subscription company with over two decades of creating innovative content and nutritional supplements designed to support and enrich strong Health Esteem. The Beachbody Company, Inc. is the parent company of BODi. For more information, please visit TheBeachbodyCompany.com. Safe Harbor Statement This press release of The Beachbody Company, Inc. (“we,” “us,” “our,” and similar terms) contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are statements other than statements of historical facts and statements in future tense. These statements include but are not limited to, statements regarding our future performance and our market opportunity, including expected financial results for the first quarter and full year, the potential impact of COVID-19 on the fitness and wellness industry in general as well as our business, our business strategy, our plans, and our objectives and future operations. Forward-looking statements are based upon various estimates and assumptions, as well as information known to us as of the date hereof, and are subject to risks and uncertainties. Accordingly, actual results could differ materially due to a variety of factors, including: our ability to effectively compete in the fitness and nutrition industries; our ability to successfully acquire and integrate new operations; our reliance on a few key products; market conditions and global and economic factors beyond our control; intense competition and competitive pressures from other companies worldwide in the industries in which we operate; and litigation and the ability to adequately protect our intellectual property rights. You can identify these statements by the use of terminology such as "believe", “plans”, "expect", "will", "should," "could", "estimate", "anticipate" or similar forward-looking terms. You should not rely on these forward-looking statements as they involve risks and uncertainties that may cause actual results to vary materially from the forward-looking statements. For more information regarding the risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements, as well as risks relating to our business in general, we refer you to the "Risk Factors" section of our Securities and Exchange Commission (SEC) filings, including those risks and uncertainties included in the Form 10-K filed with the SEC on March 1, 2022 and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, which are available on the Investor Relations page of our website at https://investors.thebeachbodycompany.com and on the SEC website at www.sec.gov. All forward-looking statements contained herein are based on information available to us as of the date hereof and you should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this press release or to conform these statements to actual results or revised expectations, except as required by law. Undue reliance should not be placed on forward-looking statements. The Beachbody Company, Inc. Consolidated Balance Sheets (in thousands, except par value and share data) As of December 31, 2022 2021 Assets Current assets: Cash and cash equivalents $ 80,091 $ 104,054 Restricted cash — 3,000 Inventory, net 54,060 132,730 Prepaid expenses 13,055 15,861 Other current assets 39,248 43,727 Total current assets 186,454 299,372 Property and equipment, net 74,147 113,098 Content assets, net 34,888 39,347 Goodwill and intangible assets, net 133,370 171,533 Right-of-use assets, net 5,030 6,613 Other assets 9,506 7,649 Total assets $ 443,395 $ 637,612 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 17,940 $ 48,379 Accrued expenses 64,430 74,525 Deferred revenue 95,587 107,095 Current portion of lease liabilities 2,150 2,307 Current portion of Term Loan 1,250 — Other current liabilities 3,283 3,926 Total current liabilities 184,640 236,232 Term Loan 39,735 — Long-term lease liabilities, net 3,318 4,823 Deferred tax liabilities 181 3,165 Other liabilities 3,979 8,007 Total liabilities 231,853 252,227 Commitments and contingencies (Note 14) Stockholders’ equity: Preferred stock, $0.0001 par value; 100,000,000 sharesauthorized, none issued and outstanding as of December 31,2022 and 2021 — — Common stock, $0.0001 par value, 1,900,000,000 sharesauthorized (1,600,000,000 Class A, 200,000,000 Class X and100,000,000 Class C) — — Class A: 170,911,819 and 168,333,463 shares issued andoutstanding at December 31, 2022 and 2021, respectively; 17 17 Class X: 141,250,310 shares issued and outstanding atDecember 31, 2022 and 2021, respectively; 14 14 Class C: no shares issued and outstanding atDecember 31, 2022 and 2021 — — Additional paid-in capital 630,709 610,418 Accumulated deficit (419,235 ) (225,043 ) Accumulated other comprehensive income (loss) 37 (21 ) Total stockholders’ equity 211,542 385,385 Total liabilities and stockholders’ equity $ 443,395 $ 637,612 The Beachbody Company, Inc. Consolidated Statements of Operations (in thousands, except per share data) Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 Revenue: Digital $ 68,685 $ 81,865 $ 300,673 $ 365,412 Nutrition and other 74,735 97,600 353,331 $ 465,495 Connected fitness 4,746 36,801 38,195 42,738 Total revenue 148,166 216,266 692,199 873,645 Cost of revenue: Digital 15,510 13,454 66,419 48,312 Nutrition and other 37,491 48,628 164,753 213,307 Connected fitness 10,544 56,626 91,454 67,043 Total cost of revenue 63,545 118,708 322,626 328,662 Gross profit 84,621 97,558 369,573 544,983 Operating expenses: Selling and marketing 73,774 109,458 359,987 548,130 Enterprise technology and development 20,847 36,197 104,363 119,915 General and administrative 19,237 21,159 78,426 79,682 Restructuring — (320 ) 10,047 (320 ) Impairment of goodwill and intangible assets 18,907 94,894 19,907 94,894 Total operating expenses 132,765 261,388 572,730 842,301 Operating loss (48,144 ) (163,830 ) (203,157 ) (297,318 ) Other income (expense) Change in fair value of warrant liabilities 3,626 15,065 8,322 50,729 Interest expense (2,194 ) (46 ) (3,368 ) (536 ) Other income, net 262 49 958 3,204 Loss before income taxes (46,450 ) (148,762 ) (197,245 ) (243,921 ) Income tax benefit 1,517 2,800 3,053 15,539 Net loss $ (44,933 ) $ (145,962 ) $ (194,192 ) $ (228,382 ) Net loss per common share, basic and diluted $ (0.15 ) $ (0.48 ) $ (0.63 ) $ (0.83 ) Weighted-average common shares outstanding, basic and diluted 308,412 305,750 307,489 275,359 The Beachbody Company, Inc. Consolidated Statements of Cash Flows Year Ended December 31, (in thousands) 2022 2021 Cash flows from operating activities: Net loss $ (194,192 ) $ (228,382 ) Adjustments to reconcile net loss to net cash used in operating activities: Impairment of goodwill and intangible assets 19,907 94,894 Depreciation and amortization expense 74,848 59,597 Amortization of content assets 24,276 14,838 Provision for inventory and inventory purchase commitments 39,757 17,488 Realized losses on hedging derivative financial instruments 108 332 Gain on investment in convertible instrument — (3,114 ) Change in fair value of warrant liabilities (8,322 ) (50,729 ) Gain on lease assignment — (6,500 ) Equity-based compensation 17,620 16,413 Deferred income taxes (2,961 ) (15,862 ) Amortization of debt issuance costs 733 — Paid-in-kind interest 598 — Other non-cash items 1,219 — Changes in operating assets and liabilities: Inventory 41,510 (74,257 ) Content assets (19,787 ) (31,349 ) Prepaid expenses 2,806 (6,761 ) Other assets 4,241 (1,805 ) Accounts payable (26,705 ) 8,307 Accrued expenses (8,673 ) (11,273 ) Deferred revenue (9,563 ) 7,435 Other liabilities (4,593 ) (4,521 ) Net cash used in operating activities (47,173 ) (215,249 ) Cash flows from investing activities: Purchase of property and equipment (26,493 ) (77,911 ) Investment in convertible instrument — (5,000 ) Other investment — (5,000 ) Cash paid for acquisition, net of cash acquired — (37,280 ) Net cash used in investing activities (26,493 ) (125,191 ) Cash flows from financing activities: Proceeds from exercise of stock options 3,162 4,680 Remittance of taxes withheld from employee stock awards (308 ) (3,154 ) Debt borrowings 50,000 42,000 Debt repayments (625 ) (42,000 ) Business combination, net of issuance costs paid — 389,125 Shares withheld for tax withholdings on vesting of restricted stock (183 ) — Payment of debt issuance costs (4,485 ) — Deferred financing costs — — Holdings downstream merger — — Net cash provided by financing activities 47,561 390,651 Effect of exchange rates on cash (858 ) 16 Net increase (decrease) in cash and cash equivalents (26,963 ) 50,227 Cash, cash equivalents and restricted cash, beginning of year 107,054 56,827 Cash, cash equivalents and restricted cash, end of year $ 80,091 $ 107,054 Supplemental disclosure of cash flow information: Cash paid during the year for interest $ 2,082 $ 466 Cash paid during the year for income taxes, net 389 385 Supplemental disclosure of noncash investing activities: Property and equipment acquired but not yet paid for $ 2,025 $ 9,657 Common shares issued in connection with acquisition — 162,558 Supplemental disclosure of noncash financing activities: Warrants issued in relation to Term Loan $ 5,236 $ — The Beachbody Company, Inc. Adjusted EBITDA In addition to our results determined in accordance with accounting principles generally accepted in the United States, or GAAP, we believe the following non-GAAP financial measure of Adjusted EBITDA is useful in evaluating our operating performance. We define and calculate Adjusted EBITDA as net income (loss) adjusted for impairment of goodwill and intangible assets, depreciation and amortization, amortization of capitalized cloud computing implementation costs, amortization of content assets, interest expense, income taxes, equity-based compensation, inventory net realizable value adjustments, transaction costs, restructuring, change in fair value of warrant liabilities, and other items that are not normal, recurring, operating expenses necessary to operate the Company’s business. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are encouraged to review the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure. A reconciliation of our non-GAAP Adjusted EBITDA to GAAP net income (loss) can be found below: (in thousands) Three Months Ended December 31, Year ended December 31, 2022 2021 2022 2021 Net loss $ (44,933 ) $ (145,962 ) $ (194,192 ) $ (228,382 ) Adjusted for: Impairment of goodwill and intangible assets 18,907 94,894 19,907 94,894 Depreciation and amortization 15,990 19,040 74,848 59,597 Amortization of capitalized cloud computing implementation costs 30 168 492 672 Amortization of content assets 5,603 4,830 24,276 14,838 Interest expense 2,194 46 3,368 536 Income tax benefit (1,517 ) (2,800 ) (3,053 ) (15,539 ) Equity- based compensation 4,454 5,574 17,620 16,413 Employee incentives, expected to be settled in equity 5,466 — 5,466 — Inventory net realizable value adjustments (1) 1,295 10,082 24,864 10,082 Transaction costs — 209 — 3,028 Restructuring and platform consolidation costs (2) — (320 ) 11,718 (320 ) Change in fair value of warrant liabilities (3,626 ) (15,065 ) (8,322 ) (50,729 ) Other adjustment items (3) — 2,619 — 11,701 Non-operating (4) (320 ) 118 (257 ) (2,899 ) Adjusted EBITDA $ 3,543 $ (26,567 ) $ (23,265 ) $ (86,108 ) 1 Represents a non-cash expense to reduce the carrying value of our connected fitness inventory and related future commitments. This adjustment is included because of its unusual magnitude due to disruptions in the connected fitness market. 2 Includes restructuring expense and non-recurring personnel costs associated primarily with the consolidation of our digital platforms. 3 Incremental costs associated with COVID-19. 4 Includes interest income, and during the year ended December 31, 2021, also includes the gain on investment on the Myx convertible instrument. View source version on businesswire.com: https://www.businesswire.com/news/home/20230314005889/en/Contacts Investor Relations ICR, Inc. BeachbodyIR@icrinc.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
The Beachbody Company, Inc. Announces Fourth Quarter and Full Year 2022 Financial Results By: The Beachbody Company, Inc. via Business Wire March 14, 2023 at 16:05 PM EDT Delivered Fourth Quarter Revenue In-Line with Expectations Reduced Fourth Quarter Operating Expenses by 49% Recently Completed Additional Cost-Reduction Initiatives to Further Streamline the Business The Beachbody Company, Inc. (NYSE: BODY) (“Beachbody” or the “Company”), a leading subscription health and wellness company, today announced financial results for its fourth quarter and full year ended December 31, 2022. “We were pleased to deliver another quarter of solid progress of our One-Brand strategy as we continue to focus our efforts to improve profitability and expand our total addressable market,” said Carl Daikeler, Beachbody’s Co-Founder, Chairman, and Chief Executive Officer. “While 2022 was a challenging year in many ways, I am proud of our team’s efforts to continue delivering incredibly effective fitness and nutrition solutions to millions of people, while dramatically reducing costs. As we move into 2023, I am excited for the unprecedented long-term opportunities ahead of us as we expand the positioning of our platform and simplify the business for our Partners. We remain committed to improving our profitability, returning to growth, and maximizing shareholder value all while helping people achieve their goals to lead healthy fulfilling lives.” Fourth Quarter 2022 Results Total revenue decreased 31% to $148.2 million compared to the prior year period. Digital revenue decreased 16% to $68.7 million and digital subscriptions decreased 23% to 2.0 million. Nutrition and Other revenue decreased 23% to $74.7 million and nutritional subscriptions decreased by 27% to 0.22 million. Connected Fitness revenue decreased 87% to $4.8 million and approximately 3,700 bikes were delivered in the fourth quarter. Operating loss improved by $115.7 million to $48.1 million compared to an operating loss of $163.8 in the prior year period. Net loss was $44.9 million compared to a net loss of $146.0 million in the prior year period. Adjusted EBITDA1 was $3.5 million compared to ($26.6) million in the prior year period. Cash used in operating activities was ($10.3) million compared to ($75.9) million in the prior year period, and cash used in investing activities was ($3.3) million compared to ($16.9) million in the prior year period. Total cash used in operating and investing activities was ($13.6) million compared to ($92.8) million in the prior year period. Full Year 2022 Results Total revenue decreased 21% to $692.2 million compared to 2021. Digital revenue decreased 18% to $300.7 million. Nutrition and Other revenue decreased 24% to $353.3 million. Connected Fitness revenue decreased 11% to $38.2 million. Operating loss improved by $94.1 million to $203.2 million compared to an operating loss of $297.3 million in 2021. Net loss was $194.2 million compared to a net loss of $228.4 million in 2021. Adjusted EBITDA1 was ($23.3) million compared to ($86.1) million in 2021. Cash used in operating activities was ($47.2) million compared to ($215.2) million in 2021, and cash used in investing activities was ($26.5) million compared to ($125.2) million in 2021. Total cash used in operating and investing activities was ($73.7) million compared to ($340.4) million in 2021. Cash and cash equivalents decreased 23% to $80.1 million compared to the prior year period. Key Operational and Business Metrics For the Three Months Ended December 31, For the Year Ended December 31, 2022 2021 Change v 2021 2019 Change v 2019 Pre- Covid Baseline 2022 2021 Change v 2021 2019 Change v 2019 Pre- Covid Baseline Digital Subscriptions (in millions) 1.95 2.54 (23.2%) 1.69 15.4% 1.95 2.54 (23.2%) 1.69 15.4% Nutritional Subscriptions (in millions) 0.22 0.30 (26.7%) 0.31 (29.0%) 0.22 0.30 (26.7%) 0.31 (29.0%) Total Subscriptions 2.17 2.84 (23.6%) 2.00 8.5% 2.17 2.84 (23.6%) 2.00 8.5% Average Digital Retention 96.8% 96.5% 30bps 95.6% 120bps 95.9% 95.7% 20bps 95.3% 60bps Total Streams (in millions) 23.8 30.8 (22.7%) 25.4 (6.3%) 120.5 167.1 (27.9%) 103.8 16.1% DAU/MAU 29.0% 28.9% 10bps 29.0% 0bps 30.1% 31.4% -130bps 29.2% 90bps Connected Fitness Units Delivered (in thousands) 3.7 29.7 (87.5%) 0.0 NM 31.5 36.7 (14.2%) 0.0 NM Digital $68.7 $81.9 (16.1%) $57.9 18.7% $300.7 $365.4 (17.7%) $250.8 19.9% Nutrition & Other $74.7 $97.6 (23.5%) $107.2 (30.3%) $353.3 $465.5 (24.1%) $505.0 (30.0%) Connected Fitness $4.8 $36.8 (87.0%) $0.0 NM $38.2 $42.7 (10.5%) $0.0 NM Revenue (in millions) $148.2 $216.3 (31.5%) $165.1 (10.2%) $692.2 $873.6 (20.8%) $755.8 (8.4%) Net Income/(Loss) (in millions) ($44.9) ($146.0) 69.2% $1.8 (2594.4%) ($194.2) ($228.4) 15.0% $32.3 (701.2%) Adjusted EBITDA (in millions) $3.5 ($26.6) 113.2% $19.2 (81.8%) ($23.3) ($86.1) 72.9% $78.4 (129.7%) Outlook For the first quarter of 2023 the Company expects: Total revenue of $135.0 million to $140.0 million Adjusted EBITDA loss of $3.0 million to $6.0 million In reliance on the unreasonable efforts exception provided under Regulation S-K, a reconciliation of the Company’s Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, cannot be provided without unreasonable efforts and is not provided herein because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including net income (loss) and adjustments that are made for interest expense, income tax expense (benefit), depreciation and amortization, equity-based compensation and employee incentives, impairment, inventory net realizable value, transaction costs, restructuring costs, change in fair value of warrant liabilities, non-operating items including interest income and gain on investment, and other adjustments reflected in the Company’s reconciliation of historical Adjusted EBITDA. The variability of the amounts of these items could have an unpredictable, and potentially significant, impact on the Company’s future GAAP financial results. Recent Events In January 2023, the Company executed cost-reduction initiatives intended to further streamline the business, while focusing on key growth priorities. On March 9, 2023, the Company announced a rebrand from Beachbody to BODi and the launch of an updated version of its premium digital platform, BODi. The changes support the Company’s mission to serve its millions of customers with highly effective fitness and nutrition solutions while enhancing its value proposition with the addition of a new monthly Mindset content to support the positive psychology and self-motivation of its subscribers. Additional details with regards to the launch are available on the “News” section of the Company’s website at https://investors.thebeachbodycompany.com/news/news-details/2023/Beachbody-Changes-Name-to-BODi-on-its-Mission-to-Build-the-Health-Esteem-Category/default.aspx ---------------- 1 A definition of Adjusted EBITDA and reconciliation to net loss is at the end of this release. Conference Call and Webcast Information Beachbody will host a conference call at 5:00pm ET on Tuesday, March 14, 2023, to discuss its financial results. To participate in the live call, please dial (844) 200-6205 (U.S. & Canada), or (929) 526-1599 (all other locations) and provide the conference identification number: 592668. The conference call will also be available to interested parties through a live webcast at https://investors.thebeachbodycompany.com/. A replay of the call will be available until March 21, 2023, by dialing (866) 813-9403 (U.S & Canada), or +44 (204) 525-0658 (all other locations). The replay passcode is 129200. After the conference call, a webcast replay will remain available on the investor relations section of the Company’s website for one year. About BODi and The Beachbody Company, Inc. Headquartered in Southern California, BODi is a leading digital fitness, nutrition, and mindset subscription company with over two decades of creating innovative content and nutritional supplements designed to support and enrich strong Health Esteem. The Beachbody Company, Inc. is the parent company of BODi. For more information, please visit TheBeachbodyCompany.com. Safe Harbor Statement This press release of The Beachbody Company, Inc. (“we,” “us,” “our,” and similar terms) contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are statements other than statements of historical facts and statements in future tense. These statements include but are not limited to, statements regarding our future performance and our market opportunity, including expected financial results for the first quarter and full year, the potential impact of COVID-19 on the fitness and wellness industry in general as well as our business, our business strategy, our plans, and our objectives and future operations. Forward-looking statements are based upon various estimates and assumptions, as well as information known to us as of the date hereof, and are subject to risks and uncertainties. Accordingly, actual results could differ materially due to a variety of factors, including: our ability to effectively compete in the fitness and nutrition industries; our ability to successfully acquire and integrate new operations; our reliance on a few key products; market conditions and global and economic factors beyond our control; intense competition and competitive pressures from other companies worldwide in the industries in which we operate; and litigation and the ability to adequately protect our intellectual property rights. You can identify these statements by the use of terminology such as "believe", “plans”, "expect", "will", "should," "could", "estimate", "anticipate" or similar forward-looking terms. You should not rely on these forward-looking statements as they involve risks and uncertainties that may cause actual results to vary materially from the forward-looking statements. For more information regarding the risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements, as well as risks relating to our business in general, we refer you to the "Risk Factors" section of our Securities and Exchange Commission (SEC) filings, including those risks and uncertainties included in the Form 10-K filed with the SEC on March 1, 2022 and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, which are available on the Investor Relations page of our website at https://investors.thebeachbodycompany.com and on the SEC website at www.sec.gov. All forward-looking statements contained herein are based on information available to us as of the date hereof and you should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this press release or to conform these statements to actual results or revised expectations, except as required by law. Undue reliance should not be placed on forward-looking statements. The Beachbody Company, Inc. Consolidated Balance Sheets (in thousands, except par value and share data) As of December 31, 2022 2021 Assets Current assets: Cash and cash equivalents $ 80,091 $ 104,054 Restricted cash — 3,000 Inventory, net 54,060 132,730 Prepaid expenses 13,055 15,861 Other current assets 39,248 43,727 Total current assets 186,454 299,372 Property and equipment, net 74,147 113,098 Content assets, net 34,888 39,347 Goodwill and intangible assets, net 133,370 171,533 Right-of-use assets, net 5,030 6,613 Other assets 9,506 7,649 Total assets $ 443,395 $ 637,612 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 17,940 $ 48,379 Accrued expenses 64,430 74,525 Deferred revenue 95,587 107,095 Current portion of lease liabilities 2,150 2,307 Current portion of Term Loan 1,250 — Other current liabilities 3,283 3,926 Total current liabilities 184,640 236,232 Term Loan 39,735 — Long-term lease liabilities, net 3,318 4,823 Deferred tax liabilities 181 3,165 Other liabilities 3,979 8,007 Total liabilities 231,853 252,227 Commitments and contingencies (Note 14) Stockholders’ equity: Preferred stock, $0.0001 par value; 100,000,000 sharesauthorized, none issued and outstanding as of December 31,2022 and 2021 — — Common stock, $0.0001 par value, 1,900,000,000 sharesauthorized (1,600,000,000 Class A, 200,000,000 Class X and100,000,000 Class C) — — Class A: 170,911,819 and 168,333,463 shares issued andoutstanding at December 31, 2022 and 2021, respectively; 17 17 Class X: 141,250,310 shares issued and outstanding atDecember 31, 2022 and 2021, respectively; 14 14 Class C: no shares issued and outstanding atDecember 31, 2022 and 2021 — — Additional paid-in capital 630,709 610,418 Accumulated deficit (419,235 ) (225,043 ) Accumulated other comprehensive income (loss) 37 (21 ) Total stockholders’ equity 211,542 385,385 Total liabilities and stockholders’ equity $ 443,395 $ 637,612 The Beachbody Company, Inc. Consolidated Statements of Operations (in thousands, except per share data) Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 Revenue: Digital $ 68,685 $ 81,865 $ 300,673 $ 365,412 Nutrition and other 74,735 97,600 353,331 $ 465,495 Connected fitness 4,746 36,801 38,195 42,738 Total revenue 148,166 216,266 692,199 873,645 Cost of revenue: Digital 15,510 13,454 66,419 48,312 Nutrition and other 37,491 48,628 164,753 213,307 Connected fitness 10,544 56,626 91,454 67,043 Total cost of revenue 63,545 118,708 322,626 328,662 Gross profit 84,621 97,558 369,573 544,983 Operating expenses: Selling and marketing 73,774 109,458 359,987 548,130 Enterprise technology and development 20,847 36,197 104,363 119,915 General and administrative 19,237 21,159 78,426 79,682 Restructuring — (320 ) 10,047 (320 ) Impairment of goodwill and intangible assets 18,907 94,894 19,907 94,894 Total operating expenses 132,765 261,388 572,730 842,301 Operating loss (48,144 ) (163,830 ) (203,157 ) (297,318 ) Other income (expense) Change in fair value of warrant liabilities 3,626 15,065 8,322 50,729 Interest expense (2,194 ) (46 ) (3,368 ) (536 ) Other income, net 262 49 958 3,204 Loss before income taxes (46,450 ) (148,762 ) (197,245 ) (243,921 ) Income tax benefit 1,517 2,800 3,053 15,539 Net loss $ (44,933 ) $ (145,962 ) $ (194,192 ) $ (228,382 ) Net loss per common share, basic and diluted $ (0.15 ) $ (0.48 ) $ (0.63 ) $ (0.83 ) Weighted-average common shares outstanding, basic and diluted 308,412 305,750 307,489 275,359 The Beachbody Company, Inc. Consolidated Statements of Cash Flows Year Ended December 31, (in thousands) 2022 2021 Cash flows from operating activities: Net loss $ (194,192 ) $ (228,382 ) Adjustments to reconcile net loss to net cash used in operating activities: Impairment of goodwill and intangible assets 19,907 94,894 Depreciation and amortization expense 74,848 59,597 Amortization of content assets 24,276 14,838 Provision for inventory and inventory purchase commitments 39,757 17,488 Realized losses on hedging derivative financial instruments 108 332 Gain on investment in convertible instrument — (3,114 ) Change in fair value of warrant liabilities (8,322 ) (50,729 ) Gain on lease assignment — (6,500 ) Equity-based compensation 17,620 16,413 Deferred income taxes (2,961 ) (15,862 ) Amortization of debt issuance costs 733 — Paid-in-kind interest 598 — Other non-cash items 1,219 — Changes in operating assets and liabilities: Inventory 41,510 (74,257 ) Content assets (19,787 ) (31,349 ) Prepaid expenses 2,806 (6,761 ) Other assets 4,241 (1,805 ) Accounts payable (26,705 ) 8,307 Accrued expenses (8,673 ) (11,273 ) Deferred revenue (9,563 ) 7,435 Other liabilities (4,593 ) (4,521 ) Net cash used in operating activities (47,173 ) (215,249 ) Cash flows from investing activities: Purchase of property and equipment (26,493 ) (77,911 ) Investment in convertible instrument — (5,000 ) Other investment — (5,000 ) Cash paid for acquisition, net of cash acquired — (37,280 ) Net cash used in investing activities (26,493 ) (125,191 ) Cash flows from financing activities: Proceeds from exercise of stock options 3,162 4,680 Remittance of taxes withheld from employee stock awards (308 ) (3,154 ) Debt borrowings 50,000 42,000 Debt repayments (625 ) (42,000 ) Business combination, net of issuance costs paid — 389,125 Shares withheld for tax withholdings on vesting of restricted stock (183 ) — Payment of debt issuance costs (4,485 ) — Deferred financing costs — — Holdings downstream merger — — Net cash provided by financing activities 47,561 390,651 Effect of exchange rates on cash (858 ) 16 Net increase (decrease) in cash and cash equivalents (26,963 ) 50,227 Cash, cash equivalents and restricted cash, beginning of year 107,054 56,827 Cash, cash equivalents and restricted cash, end of year $ 80,091 $ 107,054 Supplemental disclosure of cash flow information: Cash paid during the year for interest $ 2,082 $ 466 Cash paid during the year for income taxes, net 389 385 Supplemental disclosure of noncash investing activities: Property and equipment acquired but not yet paid for $ 2,025 $ 9,657 Common shares issued in connection with acquisition — 162,558 Supplemental disclosure of noncash financing activities: Warrants issued in relation to Term Loan $ 5,236 $ — The Beachbody Company, Inc. Adjusted EBITDA In addition to our results determined in accordance with accounting principles generally accepted in the United States, or GAAP, we believe the following non-GAAP financial measure of Adjusted EBITDA is useful in evaluating our operating performance. We define and calculate Adjusted EBITDA as net income (loss) adjusted for impairment of goodwill and intangible assets, depreciation and amortization, amortization of capitalized cloud computing implementation costs, amortization of content assets, interest expense, income taxes, equity-based compensation, inventory net realizable value adjustments, transaction costs, restructuring, change in fair value of warrant liabilities, and other items that are not normal, recurring, operating expenses necessary to operate the Company’s business. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are encouraged to review the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure. A reconciliation of our non-GAAP Adjusted EBITDA to GAAP net income (loss) can be found below: (in thousands) Three Months Ended December 31, Year ended December 31, 2022 2021 2022 2021 Net loss $ (44,933 ) $ (145,962 ) $ (194,192 ) $ (228,382 ) Adjusted for: Impairment of goodwill and intangible assets 18,907 94,894 19,907 94,894 Depreciation and amortization 15,990 19,040 74,848 59,597 Amortization of capitalized cloud computing implementation costs 30 168 492 672 Amortization of content assets 5,603 4,830 24,276 14,838 Interest expense 2,194 46 3,368 536 Income tax benefit (1,517 ) (2,800 ) (3,053 ) (15,539 ) Equity- based compensation 4,454 5,574 17,620 16,413 Employee incentives, expected to be settled in equity 5,466 — 5,466 — Inventory net realizable value adjustments (1) 1,295 10,082 24,864 10,082 Transaction costs — 209 — 3,028 Restructuring and platform consolidation costs (2) — (320 ) 11,718 (320 ) Change in fair value of warrant liabilities (3,626 ) (15,065 ) (8,322 ) (50,729 ) Other adjustment items (3) — 2,619 — 11,701 Non-operating (4) (320 ) 118 (257 ) (2,899 ) Adjusted EBITDA $ 3,543 $ (26,567 ) $ (23,265 ) $ (86,108 ) 1 Represents a non-cash expense to reduce the carrying value of our connected fitness inventory and related future commitments. This adjustment is included because of its unusual magnitude due to disruptions in the connected fitness market. 2 Includes restructuring expense and non-recurring personnel costs associated primarily with the consolidation of our digital platforms. 3 Incremental costs associated with COVID-19. 4 Includes interest income, and during the year ended December 31, 2021, also includes the gain on investment on the Myx convertible instrument. View source version on businesswire.com: https://www.businesswire.com/news/home/20230314005889/en/Contacts Investor Relations ICR, Inc. BeachbodyIR@icrinc.com
Delivered Fourth Quarter Revenue In-Line with Expectations Reduced Fourth Quarter Operating Expenses by 49% Recently Completed Additional Cost-Reduction Initiatives to Further Streamline the Business
The Beachbody Company, Inc. (NYSE: BODY) (“Beachbody” or the “Company”), a leading subscription health and wellness company, today announced financial results for its fourth quarter and full year ended December 31, 2022. “We were pleased to deliver another quarter of solid progress of our One-Brand strategy as we continue to focus our efforts to improve profitability and expand our total addressable market,” said Carl Daikeler, Beachbody’s Co-Founder, Chairman, and Chief Executive Officer. “While 2022 was a challenging year in many ways, I am proud of our team’s efforts to continue delivering incredibly effective fitness and nutrition solutions to millions of people, while dramatically reducing costs. As we move into 2023, I am excited for the unprecedented long-term opportunities ahead of us as we expand the positioning of our platform and simplify the business for our Partners. We remain committed to improving our profitability, returning to growth, and maximizing shareholder value all while helping people achieve their goals to lead healthy fulfilling lives.” Fourth Quarter 2022 Results Total revenue decreased 31% to $148.2 million compared to the prior year period. Digital revenue decreased 16% to $68.7 million and digital subscriptions decreased 23% to 2.0 million. Nutrition and Other revenue decreased 23% to $74.7 million and nutritional subscriptions decreased by 27% to 0.22 million. Connected Fitness revenue decreased 87% to $4.8 million and approximately 3,700 bikes were delivered in the fourth quarter. Operating loss improved by $115.7 million to $48.1 million compared to an operating loss of $163.8 in the prior year period. Net loss was $44.9 million compared to a net loss of $146.0 million in the prior year period. Adjusted EBITDA1 was $3.5 million compared to ($26.6) million in the prior year period. Cash used in operating activities was ($10.3) million compared to ($75.9) million in the prior year period, and cash used in investing activities was ($3.3) million compared to ($16.9) million in the prior year period. Total cash used in operating and investing activities was ($13.6) million compared to ($92.8) million in the prior year period. Full Year 2022 Results Total revenue decreased 21% to $692.2 million compared to 2021. Digital revenue decreased 18% to $300.7 million. Nutrition and Other revenue decreased 24% to $353.3 million. Connected Fitness revenue decreased 11% to $38.2 million. Operating loss improved by $94.1 million to $203.2 million compared to an operating loss of $297.3 million in 2021. Net loss was $194.2 million compared to a net loss of $228.4 million in 2021. Adjusted EBITDA1 was ($23.3) million compared to ($86.1) million in 2021. Cash used in operating activities was ($47.2) million compared to ($215.2) million in 2021, and cash used in investing activities was ($26.5) million compared to ($125.2) million in 2021. Total cash used in operating and investing activities was ($73.7) million compared to ($340.4) million in 2021. Cash and cash equivalents decreased 23% to $80.1 million compared to the prior year period. Key Operational and Business Metrics For the Three Months Ended December 31, For the Year Ended December 31, 2022 2021 Change v 2021 2019 Change v 2019 Pre- Covid Baseline 2022 2021 Change v 2021 2019 Change v 2019 Pre- Covid Baseline Digital Subscriptions (in millions) 1.95 2.54 (23.2%) 1.69 15.4% 1.95 2.54 (23.2%) 1.69 15.4% Nutritional Subscriptions (in millions) 0.22 0.30 (26.7%) 0.31 (29.0%) 0.22 0.30 (26.7%) 0.31 (29.0%) Total Subscriptions 2.17 2.84 (23.6%) 2.00 8.5% 2.17 2.84 (23.6%) 2.00 8.5% Average Digital Retention 96.8% 96.5% 30bps 95.6% 120bps 95.9% 95.7% 20bps 95.3% 60bps Total Streams (in millions) 23.8 30.8 (22.7%) 25.4 (6.3%) 120.5 167.1 (27.9%) 103.8 16.1% DAU/MAU 29.0% 28.9% 10bps 29.0% 0bps 30.1% 31.4% -130bps 29.2% 90bps Connected Fitness Units Delivered (in thousands) 3.7 29.7 (87.5%) 0.0 NM 31.5 36.7 (14.2%) 0.0 NM Digital $68.7 $81.9 (16.1%) $57.9 18.7% $300.7 $365.4 (17.7%) $250.8 19.9% Nutrition & Other $74.7 $97.6 (23.5%) $107.2 (30.3%) $353.3 $465.5 (24.1%) $505.0 (30.0%) Connected Fitness $4.8 $36.8 (87.0%) $0.0 NM $38.2 $42.7 (10.5%) $0.0 NM Revenue (in millions) $148.2 $216.3 (31.5%) $165.1 (10.2%) $692.2 $873.6 (20.8%) $755.8 (8.4%) Net Income/(Loss) (in millions) ($44.9) ($146.0) 69.2% $1.8 (2594.4%) ($194.2) ($228.4) 15.0% $32.3 (701.2%) Adjusted EBITDA (in millions) $3.5 ($26.6) 113.2% $19.2 (81.8%) ($23.3) ($86.1) 72.9% $78.4 (129.7%) Outlook For the first quarter of 2023 the Company expects: Total revenue of $135.0 million to $140.0 million Adjusted EBITDA loss of $3.0 million to $6.0 million In reliance on the unreasonable efforts exception provided under Regulation S-K, a reconciliation of the Company’s Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, cannot be provided without unreasonable efforts and is not provided herein because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including net income (loss) and adjustments that are made for interest expense, income tax expense (benefit), depreciation and amortization, equity-based compensation and employee incentives, impairment, inventory net realizable value, transaction costs, restructuring costs, change in fair value of warrant liabilities, non-operating items including interest income and gain on investment, and other adjustments reflected in the Company’s reconciliation of historical Adjusted EBITDA. The variability of the amounts of these items could have an unpredictable, and potentially significant, impact on the Company’s future GAAP financial results. Recent Events In January 2023, the Company executed cost-reduction initiatives intended to further streamline the business, while focusing on key growth priorities. On March 9, 2023, the Company announced a rebrand from Beachbody to BODi and the launch of an updated version of its premium digital platform, BODi. The changes support the Company’s mission to serve its millions of customers with highly effective fitness and nutrition solutions while enhancing its value proposition with the addition of a new monthly Mindset content to support the positive psychology and self-motivation of its subscribers. Additional details with regards to the launch are available on the “News” section of the Company’s website at https://investors.thebeachbodycompany.com/news/news-details/2023/Beachbody-Changes-Name-to-BODi-on-its-Mission-to-Build-the-Health-Esteem-Category/default.aspx ---------------- 1 A definition of Adjusted EBITDA and reconciliation to net loss is at the end of this release. Conference Call and Webcast Information Beachbody will host a conference call at 5:00pm ET on Tuesday, March 14, 2023, to discuss its financial results. To participate in the live call, please dial (844) 200-6205 (U.S. & Canada), or (929) 526-1599 (all other locations) and provide the conference identification number: 592668. The conference call will also be available to interested parties through a live webcast at https://investors.thebeachbodycompany.com/. A replay of the call will be available until March 21, 2023, by dialing (866) 813-9403 (U.S & Canada), or +44 (204) 525-0658 (all other locations). The replay passcode is 129200. After the conference call, a webcast replay will remain available on the investor relations section of the Company’s website for one year. About BODi and The Beachbody Company, Inc. Headquartered in Southern California, BODi is a leading digital fitness, nutrition, and mindset subscription company with over two decades of creating innovative content and nutritional supplements designed to support and enrich strong Health Esteem. The Beachbody Company, Inc. is the parent company of BODi. For more information, please visit TheBeachbodyCompany.com. Safe Harbor Statement This press release of The Beachbody Company, Inc. (“we,” “us,” “our,” and similar terms) contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are statements other than statements of historical facts and statements in future tense. These statements include but are not limited to, statements regarding our future performance and our market opportunity, including expected financial results for the first quarter and full year, the potential impact of COVID-19 on the fitness and wellness industry in general as well as our business, our business strategy, our plans, and our objectives and future operations. Forward-looking statements are based upon various estimates and assumptions, as well as information known to us as of the date hereof, and are subject to risks and uncertainties. Accordingly, actual results could differ materially due to a variety of factors, including: our ability to effectively compete in the fitness and nutrition industries; our ability to successfully acquire and integrate new operations; our reliance on a few key products; market conditions and global and economic factors beyond our control; intense competition and competitive pressures from other companies worldwide in the industries in which we operate; and litigation and the ability to adequately protect our intellectual property rights. You can identify these statements by the use of terminology such as "believe", “plans”, "expect", "will", "should," "could", "estimate", "anticipate" or similar forward-looking terms. You should not rely on these forward-looking statements as they involve risks and uncertainties that may cause actual results to vary materially from the forward-looking statements. For more information regarding the risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements, as well as risks relating to our business in general, we refer you to the "Risk Factors" section of our Securities and Exchange Commission (SEC) filings, including those risks and uncertainties included in the Form 10-K filed with the SEC on March 1, 2022 and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, which are available on the Investor Relations page of our website at https://investors.thebeachbodycompany.com and on the SEC website at www.sec.gov. All forward-looking statements contained herein are based on information available to us as of the date hereof and you should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this press release or to conform these statements to actual results or revised expectations, except as required by law. Undue reliance should not be placed on forward-looking statements. The Beachbody Company, Inc. Consolidated Balance Sheets (in thousands, except par value and share data) As of December 31, 2022 2021 Assets Current assets: Cash and cash equivalents $ 80,091 $ 104,054 Restricted cash — 3,000 Inventory, net 54,060 132,730 Prepaid expenses 13,055 15,861 Other current assets 39,248 43,727 Total current assets 186,454 299,372 Property and equipment, net 74,147 113,098 Content assets, net 34,888 39,347 Goodwill and intangible assets, net 133,370 171,533 Right-of-use assets, net 5,030 6,613 Other assets 9,506 7,649 Total assets $ 443,395 $ 637,612 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 17,940 $ 48,379 Accrued expenses 64,430 74,525 Deferred revenue 95,587 107,095 Current portion of lease liabilities 2,150 2,307 Current portion of Term Loan 1,250 — Other current liabilities 3,283 3,926 Total current liabilities 184,640 236,232 Term Loan 39,735 — Long-term lease liabilities, net 3,318 4,823 Deferred tax liabilities 181 3,165 Other liabilities 3,979 8,007 Total liabilities 231,853 252,227 Commitments and contingencies (Note 14) Stockholders’ equity: Preferred stock, $0.0001 par value; 100,000,000 sharesauthorized, none issued and outstanding as of December 31,2022 and 2021 — — Common stock, $0.0001 par value, 1,900,000,000 sharesauthorized (1,600,000,000 Class A, 200,000,000 Class X and100,000,000 Class C) — — Class A: 170,911,819 and 168,333,463 shares issued andoutstanding at December 31, 2022 and 2021, respectively; 17 17 Class X: 141,250,310 shares issued and outstanding atDecember 31, 2022 and 2021, respectively; 14 14 Class C: no shares issued and outstanding atDecember 31, 2022 and 2021 — — Additional paid-in capital 630,709 610,418 Accumulated deficit (419,235 ) (225,043 ) Accumulated other comprehensive income (loss) 37 (21 ) Total stockholders’ equity 211,542 385,385 Total liabilities and stockholders’ equity $ 443,395 $ 637,612 The Beachbody Company, Inc. Consolidated Statements of Operations (in thousands, except per share data) Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 Revenue: Digital $ 68,685 $ 81,865 $ 300,673 $ 365,412 Nutrition and other 74,735 97,600 353,331 $ 465,495 Connected fitness 4,746 36,801 38,195 42,738 Total revenue 148,166 216,266 692,199 873,645 Cost of revenue: Digital 15,510 13,454 66,419 48,312 Nutrition and other 37,491 48,628 164,753 213,307 Connected fitness 10,544 56,626 91,454 67,043 Total cost of revenue 63,545 118,708 322,626 328,662 Gross profit 84,621 97,558 369,573 544,983 Operating expenses: Selling and marketing 73,774 109,458 359,987 548,130 Enterprise technology and development 20,847 36,197 104,363 119,915 General and administrative 19,237 21,159 78,426 79,682 Restructuring — (320 ) 10,047 (320 ) Impairment of goodwill and intangible assets 18,907 94,894 19,907 94,894 Total operating expenses 132,765 261,388 572,730 842,301 Operating loss (48,144 ) (163,830 ) (203,157 ) (297,318 ) Other income (expense) Change in fair value of warrant liabilities 3,626 15,065 8,322 50,729 Interest expense (2,194 ) (46 ) (3,368 ) (536 ) Other income, net 262 49 958 3,204 Loss before income taxes (46,450 ) (148,762 ) (197,245 ) (243,921 ) Income tax benefit 1,517 2,800 3,053 15,539 Net loss $ (44,933 ) $ (145,962 ) $ (194,192 ) $ (228,382 ) Net loss per common share, basic and diluted $ (0.15 ) $ (0.48 ) $ (0.63 ) $ (0.83 ) Weighted-average common shares outstanding, basic and diluted 308,412 305,750 307,489 275,359 The Beachbody Company, Inc. Consolidated Statements of Cash Flows Year Ended December 31, (in thousands) 2022 2021 Cash flows from operating activities: Net loss $ (194,192 ) $ (228,382 ) Adjustments to reconcile net loss to net cash used in operating activities: Impairment of goodwill and intangible assets 19,907 94,894 Depreciation and amortization expense 74,848 59,597 Amortization of content assets 24,276 14,838 Provision for inventory and inventory purchase commitments 39,757 17,488 Realized losses on hedging derivative financial instruments 108 332 Gain on investment in convertible instrument — (3,114 ) Change in fair value of warrant liabilities (8,322 ) (50,729 ) Gain on lease assignment — (6,500 ) Equity-based compensation 17,620 16,413 Deferred income taxes (2,961 ) (15,862 ) Amortization of debt issuance costs 733 — Paid-in-kind interest 598 — Other non-cash items 1,219 — Changes in operating assets and liabilities: Inventory 41,510 (74,257 ) Content assets (19,787 ) (31,349 ) Prepaid expenses 2,806 (6,761 ) Other assets 4,241 (1,805 ) Accounts payable (26,705 ) 8,307 Accrued expenses (8,673 ) (11,273 ) Deferred revenue (9,563 ) 7,435 Other liabilities (4,593 ) (4,521 ) Net cash used in operating activities (47,173 ) (215,249 ) Cash flows from investing activities: Purchase of property and equipment (26,493 ) (77,911 ) Investment in convertible instrument — (5,000 ) Other investment — (5,000 ) Cash paid for acquisition, net of cash acquired — (37,280 ) Net cash used in investing activities (26,493 ) (125,191 ) Cash flows from financing activities: Proceeds from exercise of stock options 3,162 4,680 Remittance of taxes withheld from employee stock awards (308 ) (3,154 ) Debt borrowings 50,000 42,000 Debt repayments (625 ) (42,000 ) Business combination, net of issuance costs paid — 389,125 Shares withheld for tax withholdings on vesting of restricted stock (183 ) — Payment of debt issuance costs (4,485 ) — Deferred financing costs — — Holdings downstream merger — — Net cash provided by financing activities 47,561 390,651 Effect of exchange rates on cash (858 ) 16 Net increase (decrease) in cash and cash equivalents (26,963 ) 50,227 Cash, cash equivalents and restricted cash, beginning of year 107,054 56,827 Cash, cash equivalents and restricted cash, end of year $ 80,091 $ 107,054 Supplemental disclosure of cash flow information: Cash paid during the year for interest $ 2,082 $ 466 Cash paid during the year for income taxes, net 389 385 Supplemental disclosure of noncash investing activities: Property and equipment acquired but not yet paid for $ 2,025 $ 9,657 Common shares issued in connection with acquisition — 162,558 Supplemental disclosure of noncash financing activities: Warrants issued in relation to Term Loan $ 5,236 $ — The Beachbody Company, Inc. Adjusted EBITDA In addition to our results determined in accordance with accounting principles generally accepted in the United States, or GAAP, we believe the following non-GAAP financial measure of Adjusted EBITDA is useful in evaluating our operating performance. We define and calculate Adjusted EBITDA as net income (loss) adjusted for impairment of goodwill and intangible assets, depreciation and amortization, amortization of capitalized cloud computing implementation costs, amortization of content assets, interest expense, income taxes, equity-based compensation, inventory net realizable value adjustments, transaction costs, restructuring, change in fair value of warrant liabilities, and other items that are not normal, recurring, operating expenses necessary to operate the Company’s business. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are encouraged to review the reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure. A reconciliation of our non-GAAP Adjusted EBITDA to GAAP net income (loss) can be found below: (in thousands) Three Months Ended December 31, Year ended December 31, 2022 2021 2022 2021 Net loss $ (44,933 ) $ (145,962 ) $ (194,192 ) $ (228,382 ) Adjusted for: Impairment of goodwill and intangible assets 18,907 94,894 19,907 94,894 Depreciation and amortization 15,990 19,040 74,848 59,597 Amortization of capitalized cloud computing implementation costs 30 168 492 672 Amortization of content assets 5,603 4,830 24,276 14,838 Interest expense 2,194 46 3,368 536 Income tax benefit (1,517 ) (2,800 ) (3,053 ) (15,539 ) Equity- based compensation 4,454 5,574 17,620 16,413 Employee incentives, expected to be settled in equity 5,466 — 5,466 — Inventory net realizable value adjustments (1) 1,295 10,082 24,864 10,082 Transaction costs — 209 — 3,028 Restructuring and platform consolidation costs (2) — (320 ) 11,718 (320 ) Change in fair value of warrant liabilities (3,626 ) (15,065 ) (8,322 ) (50,729 ) Other adjustment items (3) — 2,619 — 11,701 Non-operating (4) (320 ) 118 (257 ) (2,899 ) Adjusted EBITDA $ 3,543 $ (26,567 ) $ (23,265 ) $ (86,108 ) 1 Represents a non-cash expense to reduce the carrying value of our connected fitness inventory and related future commitments. This adjustment is included because of its unusual magnitude due to disruptions in the connected fitness market. 2 Includes restructuring expense and non-recurring personnel costs associated primarily with the consolidation of our digital platforms. 3 Incremental costs associated with COVID-19. 4 Includes interest income, and during the year ended December 31, 2021, also includes the gain on investment on the Myx convertible instrument. View source version on businesswire.com: https://www.businesswire.com/news/home/20230314005889/en/
