8-K
Beachbody Company, Inc. (BODI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 14, 2023
The Beachbody Company, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-39735 | 85-3222090 |
|---|---|---|
| (State or other jurisdiction<br> <br>of incorporation) | (Commission<br> <br>File Number) | (I.R.S. Employer<br> <br>Identification No.) |
400 Continental Blvd, Suite 400
El Segundo, California 90245
(Address of principal executive offices)
(310) 883-9000
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br> <br>symbol(s) | Name of exchange<br> <br>on which registered |
|---|---|---|
| Class A common stock, par value $0.0001 per share | BODY | New York Stock Exchange |
| Redeemable warrants, each whole warrant exercisable for one Class A common stock at an exercise price of $11.50 | BODY WS | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
The information in this report, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is not to be incorporated by reference into any filing by The Beachbody Company, Inc. (the “Company”), under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language contained in such filing, unless otherwise expressly stated in such filing.
| Item 2.02. | Results of Operations and Financial Condition. |
|---|
On March 14, 2023, the Company announced its financial results for the quarter and year ended December 31, 2022. A copy of the Company’s press release announcing its financial results and certain other information is attached as Exhibit 99.1 to this report.
| Item 9.01. | Financial Statements and Exhibits |
|---|
(d) Exhibits.
| 99.1 | Press release dated March 14, 2023 |
|---|---|
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| The Beachbody Company, Inc.<br> <br>(Registrant) | |
|---|---|
| Date: March 14, 2023 | /s/ Blake T. Bilstad |
| Name: Blake T. Bilstad | |
| Title Chief Legal Officer and Corporate Secretary |
EX-99.1
Exhibit 99.1
The Beachbody Company, Inc. Announces Fourth Quarter and Full Year 2022 Financial Results
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
El Segundo, Calif. (March 14, 2023) – 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.<br> |
| --- | --- |
| • | Nutrition and Other revenue decreased 23% to $74.7 million and nutritional subscriptions decreased by 27% to<br>0.22 million. |
| --- | --- |
| • | Connected Fitness revenue decreased 87% to $4.7 million and approximately 3,700 bikes were delivered in the<br>fourth quarter. |
| --- | --- |
| • | Operating loss improved by $115.7 million to $48.1 million compared to an operating loss of $163.8 in<br>the prior year period. |
| --- | --- |
| • | Net loss was $44.9 million compared to a net loss of $146.0 million in the prior year period.<br> |
| --- | --- |
| • | Adjusted EBITDA^1^ was $3.5 million compared to ($26.6)<br>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<br>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.<br> |
| --- | --- |
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<br>$297.3 million in 2021. |
| --- | --- |
| • | Net loss was $194.2 million compared to a net loss of $228.4 million in 2021. |
| --- | --- |
| • | Adjusted EBITDA^1^ was ($23.3) million compared to ($86.1)<br>million in 2021. |
| --- | --- |
| • | Cash used in operating activities was ($47.2) million compared to ($215.2) million in 2021, and cash used in<br>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<br> |
| --- | --- |
Key Operational and Business Metrics
| For the Three Months Ended December 31, | For the Year Ended December 31, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2019 | 2022 | 2019 | |||||||||||
| 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% | — | 30.1% | 31.3% | -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%) |
All values are in US Dollars.
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 theCompany’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 quantifyingcertain 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 employeeincentives, impairment, inventory net realizable value, transaction costs, restructuring costs, change in fair value of warrant liabilities, non-operating items including interest income and gain oninvestment, 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’sfuture 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 parvalue and share data)
| 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<br>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 shares authorized, none issued and outstanding as<br>of December 31, 2022 and 2021 | — | — | |||
| Common stock, 0.0001 par value, 1,900,000,000 shares authorized (1,600,000,000 Class A,<br>200,000,000 Class X and 100,000,000 Class C) | — | — | |||
| Class A: 170,911,819 and 168,333,463 shares issued and outstanding at December 31, 2022<br>and 2021, respectively; | 17 | 17 | |||
| Class X: 141,250,310 shares issued and outstanding at December 31, 2022 and 2021,<br>respectively; | 14 | 14 | |||
| Class C: no shares issued and outstanding at December 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 |
All values are in US Dollars.
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
(in thousands)
| Years Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 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<br>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:
| Three Months Ended December 31, | Years ended December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | 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<br>connected fitness inventory and related future commitments. This adjustment is included because of its unusual magnitude due to disruptions in the connected fitness market. | |||||||||||
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| 2 | Includes restructuring expense and non-recurring personnel costs<br>associated primarily with the consolidation of our digital platforms. | |||||||||||
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| 3 | Incremental costs associated with COVID-19. | |||||||||||
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| 4 | Includes interest income, and during the year ended December 31, 2021, also includes the gain on<br>investment on the Myx convertible instrument. | |||||||||||
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Investor Relations
ICR, Inc.
BeachbodyIR@icrinc.com