Okay. Welcome, everybody. Thank you for coming to the presentation on the Beachbody Company, now known as BODI, B-O-D-I, which is actually our ticker symbol as well. I'm Mark Goldston, Executive Chairman. With me is Carl Deichler, who is our co-founder and CEO, and Brad Ramberg, who is our Chief Financial Officer. We're going to give you a little bit of a preamble today on where we've been and what we've done, and then we'll open it up to questions for about 15 or 20 minutes. So just to give you a little perspective, I've been at the company about two and a half years. I'm a 35-year-plus public CEO. I do turnarounds, spent my whole career doing turnarounds. Came in to join Carl and the team here two and a half years ago in June of 23, essentially to conduct a turnaround in a company that had been sort of a de-SPAC that had come off the rails a little bit. So we had financial issues we had to deal with, revenue issues, and structural issues. We said the turnaround would take about three years from June of 23. Figured it would be done roughly six months from now. We're actually about six to 12 months ahead of schedule, which is great. The company had not made EBITDA on an annual basis since 2021. We've now had eight consecutive quarters of positive EBITDA. We've had a cumulative 49-plus million dollars of EBITDA during that eight-quarter period, which we're super proud of. We also have been cash flow positive through nine months of this year. We've made $13.1 million of positive cash flow. And the seminal event was that the company turned net income positive for the quarter Q3 that we just recorded, where we put up $3.6 million. So these are major events in the company, having eight quarters of EBITDA, positive cash flow, positive net income. The thing that's probably the most amazing in all the turnarounds I've ever done in my life, I've never had anything quite like this. When I joined, our overhead was such that we had to do $900 million of revenue to break even. We now can do this on $180 million of revenue, taking the net income. If you look at the company, the overhead of the company and the cash break even has gone down by $720 million in a little over two years, which is really remarkable. Our margins have gone up a couple thousand basis points. We have a blended gross margin now, about 72.6%, which is fantastic. And we built in an enormous amount of operating leverage in the P&L by lowering the cash break even to 180. So the company does in the 230 to 250 revenue range, but the way it's structured is if you go up 50, 75, 100 million dollars in revenue, you could essentially double or more than double your profit because of all the operating leverage. So one of the things that I was really focused on when we came in was getting us in a position where we could develop and launch an innovation pipeline. So Carl and the team, they invented the fitness industry that you knew on infomercials with P90X, Insanity, etc. There's never been a question of the quality of this product and the way in which it works from an effectiveness standpoint and a value standpoint. The problem was the company was structured the wrong way. It was an MLM. A year ago this month, we killed the MLM. It was wrong for the times. At one point it worked, but MLMs today as an industry are the wrong place to be. It's a part-time workforce. Very hard to be a public company and give guidance on a quarter coming when you don't know if some man or woman is going to go to work that month. And so we got out of that, and so we are a new company starting January 1st, 2025. So we are right now in the 12th month of the new, so you can't do year over year comparisons and revenue because it's a completely different base. Today we're omnichannel, so we sell direct to consumer, we sell through the Amazon and the marketplace environments, and we have an affiliate group which is a remnant of people who were formerly in the MLM who now are just affiliates and they get paid a commission on what they sell. And we're going to be launching, for the first time ever, a virtual consumer packaged goods business. So in Q1, we're creating a retail initiative where we're taking our billion-dollar brand names, P90X, and then Insanity, and we've created a line of nutritional supplements. It's pre- and post-workout, energy sticks, whey protein, creatine, and dynamic packaging has been developed. We're pricing these products at $15 to $39 retail, and they will be in places like, you know, mass merchants like Target, Albertsons type of accounts, Costco, etc. We've hired the largest broker company in America out of St. Louis to sell these products for us. We've hired one of the largest contract fillers in America to fill these products for us. And we have one of the largest third-party logistics company in America to ship these products for us. So we do the marketing, and we do the R&D, and we have farmed everything out to turn it into a variable cost. So this is a P&L that has a massive amount of controllable, variable costs and a minimal amount of fixed costs. In terms of our overall spend, we've lowered our marketing spend from well above 40% down to 32%, 31%, which is where we think we'll level out. So when you look at this company as a turnaround, it has completely financially turned itself around. We have $34 million of cash. We refinanced our debt, which was with Blue Torch Capital. It had a maturity of February of 2026. We knew that was coming, so we refinanced that with Tiger Finance. And the good news is we took the same $25 million and we saved 44% on the amount of interest that we pay so we were at an all-in rate of in the 28 plus percent range before now we're at a cash interest of 13.2 and total interest at about 15 with all fees so we have a beautiful balance sheet with you know 10 million dollars more cash than we have in debt we have a p l that's been profitable for eight quarters or net income positive our margins are up several thousand basis points company's been completely re-architected the break even has been lowered by $720 million. And the innovation pipeline, which is retail, we're coming out with a new P90X exercise program at the same time that we launched the P90X supplement program. And we're going to put QR codes on all of the supplement packaging so that if you buy one of our $15 to $39 products, you will get one month free of P90X exercise, which is worth $35. So you almost bought the nutritional supplement for free. And then later in the year, we'll be launching energy drinks under the P90X and Insanity brand names. So we will have a retail division. We'll have an Amazon product line that's priced the right way with brand new products. We've got 900,000 digital fitness subscribers. We have about 70,000 nutritional subscribers, but we have a consumer CRM bucket of 8 million people who are former members of our franchise who we can now go out and market the new P90X supplements, the new Insanity supplements, and the new P90X exercise program, which we could never do before because our prices were artificially inflated because we were paying 40 and 50 percent commission to the MLM and everything they sold. Now that no longer exists. So we can make our products equally as effective at much more popular price points, which turns it into the consumer product company that it needs to be. So I'm thrilled. I never would have dreamed that we would have done this in two years. I'm on a time. I've literally never seen something this quick. And the beauty of it is that we built a massive amount of operating leverage into the P&L so that if we take the break even down to 180 and your revenue is up in the 230, 240 range, If you can gain $50 to $100 million of revenue, your flow-through on that is darn close to 50-plus percent. So essentially, you could find yourself in a position where you increase your sales by 25% and more than double your profit. So that's the structure that we put in place. That's the operating leverage of a turnaround, and we're really excited about the future. What we now have to do is get out there and tell the story, because we don't have a broad base of coverage. and we're getting more as we speak, and we're starting to now go out and meet with people in the micro cap environment. We've spent a lot of time talking to people in the small and mid cap environment who love our story, but our market cap is not really where they need to be to buy the stock. So we're much more focused now on the micro cap slash retail environment, and we're really bullish on the future, rightfully so, and I've got the guy with me who invented the entire industry, so I know we're flying with a good co-pilot. And Brad's been here close to 20 years. And Brad was the CFO of the company. It went from $80 million to over a billion. By the way, just as an anecdote, five, six years ago, this company did $1.3 billion in revenue, made about $140 million in EBITDA, and it had a $900 million nutritional business and a $400 million fitness business. So when you want to right-size the opportunity of the new nutritional supplement launches that we're doing with these popular price points, think about that when we had high price points, relatively unattractive, we had an almost $1 billion visit, and we never sold a product at retail. It was all sold direct. So now adding retail on top of direct-to-consumer should be a winning formula. So with that, I'll open it up to questions. Yeah.

Well, before we do that, I want to tell you that I'm excited about following the story. I think this conference is really your coming out part, if you ask me, because I think that what you delivered was an execution. You needed to show that execution to the marketplace of you delivering on lowering that expenses like you said you were going to do, which you did. You turned your profitability now. And I think the exciting part now is getting those retail price points out there, the products out there. Like you said, you had to deliver the products at $129 and $179 because you had this huge infrastructure. You couldn't even deliver a $15 product.

That's right. impossible.

You couldn't, you didn't, you had this infrastructure where you had to support.

Exactly.

So now it seems to me like a great opportunity. Um, what, in terms of the retail channels, um, when do you think that we'll start to see, um, you know, that will.

It'll roll out starting a little bit late Q1 into Q2. Uh, the broker firm that we've hired, which is the biggest in the country doing this, uh, retailers work on something called a planogram cycle. So if they plan once or twice a year they plan their section so if you show them the product now you can't get on the shelf before april it's impossible now there are some accounts that don't plan a gram and you can get in on an ad hoc basis but the big guys are planning grams so they're out selling it now we'll get responses over the next couple of weeks and then we should be in store on shelf call it april may and then it'll build towards the second half and we're being very careful not to get out over our skis. We don't want to jam anybody with inventory. We want great sell-throughs. So we're going to put the product in in manageable quantities, have it have great sell-throughs, and use that as the proxy to do a much broader role to the rest of the retail market.

That's not going to include Shakeology.

So Shakeology, which right now we sell in a 30-serve, $129 bag, is going to be in a 7-serve, $34.99 bag. so we can now get people at price points because you can't go into an Albertsons and sell a $129 product. It's not going to happen. The market basket isn't even that large.

So it's going to help us. But the market's proven for that. I mean, we've sold a billion servings of this shake direct to consumer over $4 billion in sales. We know that people love it. It was just within the closed environment of the MLM and now we get the chance to bring it to the rest of the world.

I mean, the way to think about us is many years ago when I started Net Zero and we were competing with a company called AOL. And AOL was a walled garden. So basically everything you were doing was within the walls of it. So this company, because it was an MLM, was essentially a walled garden. We couldn't really price from it the way we wanted to because you couldn't compete against the MLM. You couldn't sell at retail. You had to be not aggressive when you went out to the consuming public because you didn't want to undermine them. So it was really like having, a one-armed paper hanger. So by getting out of that at the end of the year, and they did a great job for what they did when they did it, but that's not for now. The market has passed by that industry, and so we've adapted, and the beauty is we got great. We are the Netflix of fitness, so we have 140 titles across 12 genres with 10,000 hours of video. So there is nothing you could want to do from the rank beginner for beginners only to the most advanced and we're coming out with a product in a couple of weeks that we're being admittedly cryptic about because we're so excited about it where i don't know if you guys know this enough there's 230 million adults in america there's 40 million who exercise that's really the number so 190 don't 185 million Americans are categorized as being overweight, and 75 million are clinically obese. So those people don't want six-pack abs and big arms because they don't exercise. So we've created a massive new idea that is going against the 185 million people who don't exercise to get them to exercise. And it's bite-sized, it's easy to do, it's not intimidating, and we think that we open up the aperture because we're focused on health span, improving your longevity, being able to address your problems without pharmaceuticals, and just getting you moving. And so we're really excited about that. It's going to come out in a couple of weeks. So we should have an entire 2026 to benefit from that. Yes, sir. How are you doing? Good.

And I was one of those former classes. I'm actually looking at your most recent. So on the bottom line, great job reducing the net lost. On the top line, you have three revenue streams. You have digital, nutrition, and other and connected. Each of those has come down. Each of those had come down over the nine months. And if you annualize the three months, it's still a little bit less than the nine. So you're doing probably a little bit better in the prior quarters.

Seasonality.

Seasonality. Okay. Are you going to change your segment mix? I know you've been talking about a few different things from those. or are you going to continue to expand?

That's a great question. I will tell you from a materiality threshold standpoint, when and if the retail initiative rises to the level where we would have to look at that as a separate P&L, then that potentially could become a disclosable segment.

Who's the chief operating decision maker?

His CODM would be Carl. He's the CEO. I'm the exec chairman. He's the CEO.

So you look at it as essentially one important thing?

It's a great question. Essentially, if you do these according to Hoyle, which is the only way we know how to do it we tell people when we walk into a financial meeting if there's anything in there that's showing us granularity at the EBITDA level for segments that are not reported do not show it to us so Brad is the CFO can see all of that his team can we can't once we start looking at a business at that level as a CODM then you have a segment you need to report. It's the way it works. So we're vigilant about it.

You opened the door with a comment on pharmaceuticals. So I'm curious, of those 185 million, they're getting spammed with a lot of advertisements and a lot of momentum and lower prices on pharmaceuticals. Right. So what is your strategy to take the hard route?

That's a fascinating question. Our health span strategy essentially says, if exercise were a drug, it would be a four trillion dollar drug. So high blood pressure, high cholesterol, high A1C in blood sugar, cardiovascular disease, dementia, and cancers. Every one of those things is demonstrably lowered by exercise. Only 17% of physicians recommend exercise to people who are afflicted with those conditions. What are they recommending? Pharmaceuticals. But half the people who have those afflictions don't take pharma because they don't want to take a pill. So the half of the group takes the pills. The other half of the group does nothing. They don't want to take the medicine and they don't want to do anything about it. So unfortunately, they're candidates for shorter longevity. So our approach is a kinder, gentler approach that says whether you're taking pharmaceuticals or you're not, If you have these conditions, exercise has been proven by studies at Harvard, Mayo Clinic, Johns Hopkins, to reduce or eliminate these conditions. And if we can de-stigmatize it and take the threatening aspect of the exercise away from it, then we can promote that to people as an antidote. And those people on GLP-1 drugs, which is a huge audience, the number one side effect is the loss of lean muscle mass. So we are the perfect adjunct to a rapidly expanding GLP-1 universe which will help us. Yes sir? Digital fitness subscribers and 70,000 nutritional subscribers.

Half?

Half. Yes. Yeah so the digital fitness people pay us you know $179 a year roughly and the nutritional people are on a subscription, but they can also buy one-offs. If you just want to buy a product this month, you don't have to be on the subscription. And we sell programs to people, fitness programs, if you don't want to subscribe. But we'll give you a monthly, we'll give you a semi-annual, we'll give you an annual. Yes, sir. Are you talking about nutrition? Well, so let's bifurcate. Digital fitness is about an 88 to 90 percent gross margin business we have a library of 140 titles with 10 000 hours of video and 95 percent of that is fully amortized so it is literally liquid gold there is no expense essentially associated with it in nutrition our weighted average gross margin is about 52 yes roughly so those products there's no there's no amortization to deal with it it is a product cogs issue. So you've got your cogs, you've got your retail, and there's no economies of scale in terms of amortizing equipment because we don't fill it, we farm it out. So as long as we can maintain a business that weighted averages at 72.6% gross margin, we'll sell it all day long. I mean, if you think about us using investor capital, you know, if you think about what your cost of capital is, if you have a blended 72.6% gross margin, what you want us to do is deploy the capital into something that you will sell that will give you seventy two point six percent of contribution I mean if you talk about cash on cash return that's what you want us to do so that's how we look at it okay thanks man thank you yes yes yes so Forrest Road so the the former chief strategy officer of Disney, Kevin Mayer, who's the guy who introduced me to Carl, and Tom Staggs, who was the CFO of Disney, they de-spec'd this. The company went public in 2021, reached a $3.5 billion market cap, and it's fascinating that we today have a $70 million market cap. We have an outside investor Hilco-type valuation that says our fitness library is worth $550 million, which that's the replication cost. So if we went out tomorrow and sold the fitness library for the market cap of the company, they'd hang us in Times Square. So there's something here that's a disconnect, and it was you're losing money. I mean, the company on a net income basis in 2021 lost $228 million. So, I mean, if you think about it, we had a $293 million negative free cash flow in 2020, 293 million and through nine months of this year we're positive 13.1 so people don't know that because we haven't gotten out enough to tell it so they look at the old Beachbody numbers and assume just gonna burn up they don't realize we've been profitable for two years and we're cash flow positive so to your point this is kind of the coming out we're now finally starting to address the right group of investors to invest in our stock doesn't do you any good to go to a large blue chip institution that can't even buy your stock because they can't get enough of it. So we're excited about this.

Mark, I have another question. What do you, you know, obviously you come back here next year. What do you think are going to be the most important milestones that investors should track over the next six, 12 months?

So I think that's the way we were just talking about that. We're using 2026 as the year we open up the innovation pipeline, but there's a sequencing to that. They don't just come out the door and hit home runs. So the goal should be that by Q4 of next year, well, we'll be here, so we'll have to talk about Q3 because we can't talk about Q4. But by Q4 of next year, we should be showing green shoots on that retail business. We should be showing green shoots in our subscriber base because of the new P90X and new insanity in this new 185 million person addressable program we should be showing growth in our nutritional business because of the new products we launched and we should be showing that our amazon and our dtc business has been able to take these new products at the better price points and get traction with them if we show those things then this company should be worth you know high hundreds of millions if not more because that's where it belongs so that's how i would look at it well think about it like it's great it's an anniversary issue so q1 of 2025 was the first quarter of what we said on our earnings call then was a new code so whatever we did before at the MLM is irrelevant we don't have that so now you can anniversary so when we get to q1 to 26 you've got a clean year to say how have you done seasonality wise just you know somebody asked a question q1 is number one usually indexes at about 12 112 to 120. q2 is second then q3 and q4 is by far and away always the lowest because people are eating as much as they can so they can have new year's resolutions with more than 6 000 small and micro cap companies listed if you're looking for the next Apple, then ChannelCheck truly is The Orchard.

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