PLBY Group retains Honey Birdette, eyes growth in 2025

LOS ANGELES - PLBY Group, Inc. (NASDAQ: PLBY), known for its flagship brand Playboy, announced today that it will retain its Honey Birdette business as part of its strategic growth plan. The decision follows a notable improvement in the company's balance sheet and operational metrics, as well as the establishment of a long-term licensing agreement with Byborg Enterprises S.A. According to InvestingPro data, PLBY currently maintains a market capitalization of $146 million, with a current ratio of 1.44 indicating sufficient liquidity to meet short-term obligations.

The company, which has been transitioning to an asset-light model, expects to generate total revenue of approximately $120 million for the full year 2025. PLBY Group also anticipates being cash flow positive within the same year and aims to reduce net senior debt to below $100 million by year-end. InvestingPro analysis reveals the company currently operates with a total debt of $210.84 million and reported negative EBITDA of $18.15 million in the last twelve months. For comprehensive insights into PLBY's financial health and detailed analysis, investors can access the full Pro Research Report, available exclusively on InvestingPro.

CEO Ben Kohn stated that the company enters 2025 with a robust strategic and financial position, including $36 million of cash on hand and $120 million of net senior debt. He attributes this to significant guaranteed royalty and licensing payments, a leaner cost structure, and a stronger balance sheet due to equity investments and debt reductions. InvestingPro identifies several key challenges, including rapid cash burn and anticipated sales decline in the current year. Subscribers to InvestingPro have access to over 10 additional exclusive ProTips and comprehensive financial metrics for deeper analysis.

PLBY Group's board believes that it is not the right time to seek strategic alternatives for Honey Birdette. Instead, the focus will be on continuing to grow the business, which is expected to significantly increase its value.

Furthermore, the company plans to use the net proceeds from a proposed $25.4 million follow-on investment, pending stockholder approval, to pay down its senior debt. If the investment is not approved, the company may not pay down its senior debt as anticipated, but management still expects to achieve positive cash flow.

PLBY Group is a global pleasure and leisure company that aims to connect consumers with products, content, and experiences for more fulfilling lives. Its products and content are available in approximately 180 countries.

This news is based on a press release statement from PLBY Group, Inc. and includes forward-looking statements that involve risks and uncertainties. Actual results may differ from expectations, and the company does not undertake any obligation to update or revise any forward-looking statements.

In other recent news, PLBY Group has been actively maneuvering through significant developments. The company has entered into retention agreements with key executive officers, a strategic move to incentivize leadership continuity amidst a challenging financial period. The retention agreements involve CEO Ben Kohn, CFO Marc Crossman, and General Counsel Chris Riley, reflecting the company's acknowledgment of their contributions and the desire to manage its equity effectively.

Simultaneously, PLBY Group has been focusing on financial restructuring. Despite a 21% decrease in revenue from continuing operations due to contract issues in China, the company initiated a debt restructuring strategy, aiming to reduce its net debt by approximately $50 million in Q4 2024. This strategy was further bolstered by a $22 million strategic investment from Byborg Enterprises Inc., increasing the company's cash position to approximately $30 million and reducing its leverage by $38 million through a new convertible preferred issuance to lenders.

On the analyst front, Jefferies maintained a Hold stance on PLBY Group's stock, raising the price target to $0.90 from the previous $0.70. This adjustment followed several strategic changes, including classifying the Honey Birdette brand as Held for Sale and restructuring the company's debt. Furthermore, PLBY Group announced a partnership with Byborg Enterprises Inc., anticipated to increase recurring revenue streams, and plans to relaunch the Playboy magazine.

While the company's digital segment reported a loss of about $2 million in the past quarter, the Byborg deal and other licensing agreements are expected to contribute to PLBY Group's path to profitability. Finally, PLBY Group has regained compliance with Nasdaq's minimum bid price requirement, ensuring its standing with the market's listing requirements.

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