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NEW YORK - Tiger Capital Group’s lending platform, Tiger Finance, has provided $35 million in financing to The Beachbody Company, Inc. (NYSE:BODI), according to a press release statement issued Tuesday. The financing comes at a crucial time for the company, which InvestingPro data shows has been quickly burning through cash, with a concerning current ratio of 0.52.
The funding package, done in partnership with SG Credit Partners, includes a $25 million term loan and a $10 million uncommitted accordion. The three-year loan facility allowed the El Segundo, California-based fitness and nutrition company to retire $17.3 million of outstanding debt while adding approximately $5 million to its balance sheet.
The financing is designed to support Beachbody’s transition to a new business model and expansion in the digital fitness and nutrition space.
"Tiger’s belief in our business plan and flexible approach to lending gave us the liquidity to execute on our efforts to open new and more profitable channels of distribution," said Carl Daikeler, Beachbody Co-Founder and Chief Executive Officer.
Andy Babcock, Managing Director at Tiger Finance, said the company’s management is making strategic moves that should position Beachbody for greater profitability.
The Beachbody Company, now known as BODi, has been developing home fitness and nutrition programs for 25 years, including products such as P90X, Insanity, and 21-Day Fix. The company reports having served over 30 million customers since its founding in 1999.
The financing represents a turnaround strategy for the company as it seeks to establish more profitable distribution channels.
In other recent news, Canaccord Genuity analysts have maintained their Buy rating for Beachbody, setting a price target of $13. This decision comes as the company prepares to release its upcoming quarterly results, which are expected to provide insights into the effects of its strategic shift from a multi-level marketing model to a single-level affiliate model. The analysts anticipate that this transition may initially lead to pressure on gross margins due to the exit of MLM sellers. However, they also foresee a significant decrease in selling-related expenses, as the new model eliminates the need for MLM payouts.
Beachbody’s management has suggested that these changes could lower the revenue threshold required for profitability, potentially reducing it to around $225 million from a previous estimate of approximately $430 million. Canaccord’s projections estimate Beachbody’s revenues to be $411.5 million for fiscal year 2024 and $293.2 million for fiscal year 2025. This strategic adjustment is part of Beachbody’s broader efforts to streamline operations and cut costs. The analysts’ reaffirmation of the Buy rating indicates confidence in the company’s potential for improved financial performance. Investors are keenly awaiting the quarterly results to assess whether the affiliate model transition is setting the stage for sustainable growth and profitability.
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