Playboy, Inc 10-K for FY2022

Playboy, Inc. (PLBY)

10-K 2023-03-16 For: 2022-12-31

Added on April 10, 2026

About this 10-K

Playboy, Inc filed this 10-K on March 16, 2023, covering the fiscal year ended December 31, 2022 (FY2022).

Headline figures

Fiscal year ended December 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $266.93M; up 8.3% from $246.59M a year earlier
Net loss: $277.7M; compared with a net loss of $77.68M a year earlier
Diluted EPS: -$5.86; compared with -$2.04 a year earlier

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Delaware						37-1958714
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


			Page
Cautionary Note Regarding Forward-Looking Statements

Part I			5
Item 1. Business			5
Item 1A. Risk Factors			10
Item 1B. Unresolved Staff Comments			36
Item 2. Properties			36
Item 3. Legal Proceedings			36
Item 4. Mine Safety Disclosures			37

Part II			38
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			38
Item 6. [Reserved]			39
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations			39
Item 7A. Quantitative and Qualitative Disclosures About Market Risk			56
Item 8. Financial Statements and Supplementary Data			58
Index to Consolidated Financial Statements			58
Report of Independent Registered Public Accounting Firm (BDO USA, LLP)			59
Report of Independent Registered Public Accounting Firm (Prager Metis CPAs LLP)			61
Consolidated Statements of Operations			62
Consolidated Statements of Comprehensive Loss			63
Consolidated Balance Sheets			64
Consolidated Statements of Stockholders’ Equity			65
Consolidated Statements of Cash Flows			66
Notes to the Consolidated Financial Statements			68
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures			107
Item 9A. Controls and Procedures			107
Item 9B. Other Information			110
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections			110

Part III			111
Item 10. Directors, Executive Officers and Corporate Governance			111
Item 11. Executive Compensation			111
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			111
Item 13. Certain Relationships and Related Transactions, and Director Independence			111
Item 14. Principal Account ant Fees and Services			111

Part IV			112
Item 15. Exhibits, Financial Statement Schedules			112
Item 16. Form 10-K Summary			115

Signatures			116


	Year Ended December 31,
	2022		2021		$ Change		% Change
Net revenues	$	266,933	$	246,586	$	20,347	8	%
Costs and expenses:
Cost of sales	(129,642)		(116,752)		(12,890)		11	%
Selling and administrative expenses	(160,982)		(197,472)		36,490		(18)	%
Related party expenses	—		(250)		250		(100)	%
Impairments	(308,165)		(964)		(307,201)		*
Gain on sale of the aircraft	5,689		—		5,689		100	%
Other operating income, net	482		—		482		100	%
Total operating expense	(592,618)		(315,438)		(277,180)		88	%
Operating (loss) income	(325,685)		(68,852)		(256,833)		373	%
Nonoperating (expense) income:
Interest expense	(17,719)		(13,312)		(4,407)		33	%
Loss on extinguishment of debt	(1,266)		(1,217)		(49)		4	%
Fair value remeasurement gain	9,401		—		9,401		100	%
Other (expense) income, net	(494)		2,926		(3,420)		(117)	%
Total nonoperating expense	(10,078)		(11,603)		1,525		(13)	%
(Loss) income before income taxes	(335,763)		(80,455)		(255,308)		317	%
Benefit (expense) from income taxes	58,059		2,779		55,280		*
Net loss	(277,704)		(77,676)		(200,028)		258	%
Net loss attributable to PLBY Group, Inc.	$	(277,704)	$	(77,676)	$	(200,028)	258	%


	Year Ended December 31,
	2022		2021
Net revenues	100	%	100	%
Costs and expenses:
Cost of sales	(48.6)		(47.3)
Selling and administrative expenses	(60.3)		(80.1)
Related party expenses	—		(0.1)
Impairments	(115.4)		(0.4)
Gain on sale of the aircraft	2.1		—
Other operating income, net	0.2		—
Total operating expense	(222.0)		(127.9)
Operating (loss) income	(122.0)		(27.9)
Nonoperating (expense) income:
Interest expense	(6.6)		(5.4)
Loss on extinguishment of debt	(0.5)		(0.5)
Fair value remeasurement gain	3.5		—
Other (expense) income, net	(0.2)		1.2
Total nonoperating expense	(3.8)		(4.7)
(Loss) income before income taxes	(125.8)		(32.6)
Benefit (expense) from income taxes	21.8		1.1
Net loss	(104.0)		(31.5)
Net loss attributable to PLBY Group, Inc.	(104.0)	%	(31.5)	%


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Year Ended December 31,
	2022		2021
Net loss	$	(277,704)	$	(77,676)
Adjusted for:
Interest expense	17,719		13,312
Loss on extinguishment of debt	1,266		1,217
Benefit from income taxes	(58,059)		(2,779)
Depreciation and amortization	13,613		7,291
EBITDA	(303,165)		(58,635)
Adjusted for:
Stock-based compensation	20,540		58,446
Adjustments	12,124		9,413
Amortization of inventory step-up	—		8,089
Gain on sale of the aircraft	(5,689)		—
Contingent consideration fair value remeasurement	(29,173)		2,369
Impairments	308,165		964
Management fees and expenses	—		250
Preferred stock fair value remeasurement	(9,401)		—
Acquisition related costs	—		11,549
Adjusted EBITDA	$	(6,599)	$	32,445


			Page
Audited Consolidated Financial Statements:
Report of Independent Registered Public Accounting Firm (BDO USA, LLP; Los Angeles, California; PCAOB ID: # 243)			59
Report of Independent Registered Public Accounting Firm (Prager Metis CPAs LLP; El Segundo, California; PCAOB ID: # 4054)			61

Financial Statements:
Consolidated Statements of Operations			62
Consolidated Statements of Comprehensive Loss			63
Consolidated Balance Sheets			64
Consolidated Statements of Stockholders’ Equity			65
Consolidated Statements of Cash Flows			66
Notes to the Consolidated Financial Statements			68


	December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	31,640	$	69,245
Restricted cash	2,072		2,211
Receivables, net of allowance for credit losses	18,420		14,129
Inventories, net	33,089		39,881
Prepaid expenses and other current assets	17,760		13,416
Total current assets	102,981		138,882
Restricted cash	1,737		4,030
Property and equipment, net	17,375		26,445
Operating right of use assets	41,265		38,746
Digital assets, net	327		6,836
Goodwill	123,217		270,577
Other intangible assets, net	236,281		418,444
Contract assets, net of current portion	13,680		17,315
Other noncurrent assets	15,600		14,132
Total assets	$	552,463	$	935,407
Liabilities, Redeemable Noncontrolling Interest, and Stockholders’ Equity
Current liabilities:
Accounts payable	$	20,631	$	20,577
Accrued salaries, wages, and employee benefits	4,938		4,623
Deferred revenues, current portion	10,762		11,036
Long-term debt, current portion	2,050		2,808
Contingent consideration, at fair value	835		36,630
Operating lease liabilities, current portion	9,977		9,697
Other current liabilities and accrued expenses	33,739		32,417
Total current liabilities	82,932		117,788
Deferred revenues, net of current portion	21,406		42,532
Long-term debt, net of current portion	191,125		226,042
Deferred tax liabilities, net	25,293		91,208
Operating lease liabilities, net of current portion	36,678		35,534
Mandatorily redeemable preferred stock, at fair value	39,099		—
Other noncurrent liabilities	886		20
Total liabilities	397,419		513,124
Commitments and contingencies (Note 14)
Redeemable noncontrolling interest	(208)		(208)
Stockholders’ equity:
Preferred stock, $0.0001 par value per share, 5,000,000 shares authorized, 50,000 shares designated Series A preferred stock, of which 50,000 shares were issued as of December 31, 2022; 0 shares issued or designated as of December 31, 2021	—		—
Common stock, $0.0001 par value; 150,000,000 shares authorized at December 31, 2022 and 2021; 47,737,699 shares issued and 47,037,699 shares outstanding at December 31, 2022; 42,996,121 shares issued and 42,296,121 shares outstanding at December 31, 2021	5		4
Treasury stock, at cost: 700,000 shares and 700,000 shares at December 31, 2022 and 2021, respectively	(4,445)		(4,445)
Additional paid-in capital	617,233		586,349
Accumulated other comprehensive loss	(24,145)		(3,725)
Accumulated deficit	(433,396)		(155,692)
Total stockholders’ equity	155,252		422,491
Total liabilities, redeemable noncontrolling interest, and stockholders’ equity	$	552,463	$	935,407


	Series A Preferred Stock			Common stock
	Shares	Amount		Shares	Amount		Treasury Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
Balance at December 31, 2019, as previously reported	—	$	—	3,681,185	$	36	$	(23,453)	$	184,452	$	—	$	(78,016)	$	83,019
Retroactive application of recapitalization	—	—		16,945,064	(34)		23,453		(23,419)		—		—		—
Balance at December 31, 2019, effect of reverse acquisition (Note 1)	—	—		20,626,249	2		—		158,045		—		(72,745)		85,302
Stock-based compensation expense and vesting of restricted stock units	—	—		—	—		—		2,988		—		—		2,988
Net loss	—	—		—	—		—		—		—		(5,271)		(5,271)
Balance at December 31, 2020	—	$	—	20,626,249	$	36	$	—	$	161,033	$	—	$	(78,016)	$	83,019
Conversion of convertible promissory note	—	—		290,563	—		—		2,730		—		—		2,730
Business combination and PIPE financing	—	—		12,644,168	1		(4,445)		99,618		—		—		95,174
Secondary offering	—	—		4,720,000	1		—		202,894		—		—		202,895
Shares issued in connection with unit purchase options exercise, net exercised	—	—		247,976	—		—		—		—		—		—
Shares issued in connection with employee stock plans	—	—		301,063	—		—		—		—		—		—
Shares issued pursuant to trademark licensing agreement	—	—		109,291	—		—		5,000		—		—		5,000
Shares issued in connection with the acquisition of Honey Birdette	—	—		2,160,261	—		—		30,006		—		—		30,006
Shares issued upon exercise of stock options	—	—		608,775	—		—		2,329		—		—		2,329
Shares issued in connection with the acquisition of GlowUp	—	—		548,034	—		—		15,126		—		—		15,126
Contingent consideration in relation to acquisition of GlowUp	—	—		—	—		—		9,167		—		—		9,167
Shares issued pursuant to a license, services and collaboration agreement	—	—		39,741	—		—		1,500		—		—		1,500
Stock-based compensation expense and vesting of restricted stock units	—	—		—	—		—		56,946		—		—		56,946
Other comprehensive loss	—	—		—	—		—		—		(3,725)		—		(3,725)
Net loss	—	—		—	—		—		—		—		(77,676)		(77,676)
Balance at December 31, 2021	—	$	—	42,296,121	$	4	$	(4,445)	$	586,349	$	(3,725)	$	(155,692)	$	422,491
Shares issued in connection with options exercise, net exercised	—	—		495,052	—		—		1,924		—		—		1,924
Shares issued in connection with employee stock plans	—	—		3,759,122	1		—		—		—		—		1
Shares issued pursuant to a license, services and collaboration agreement	—	—		30,911	—		—		—		—		—		—
Shares issued in connection with asset purchase	—	—		103,570	—		—		1,333		—		—		1,333
Shares issued in connection with preferred shares agreement	50,000	—		—	—		—		—		—		—		—
Shares issued in connection with the settlement of the performance holdback contingent consideration relating to the acquisition of GlowUp	—	—		352,923	—		—		260		—		—		260
Stock-based compensation expense and vesting of restricted stock units	—	—		—	—		—		22,553		—		—		22,553
Reclassification of the fair value of the lock-up shares contingent consideration relating to the acquisition of Honey Birdette	—	—		—	—		—		4,814		—		—		4,814
Other comprehensive loss	—	—		—	—		—		—		(20,420)		—		(20,420)
Net loss	—	—		—	—		—		—		—		(277,704)		(277,704)
Balance at December 31, 2022	50,000	$	—	47,037,699	$	5	$	(4,445)	$	617,233	$	(24,145)	$	(433,396)	$	155,252



PLBY Group, Inc.
Consolidated Statements of Cash Flows (continued)
(in thousands)
	Year Ended December 31,
	2022		2021		2020
Supplemental Disclosures
Cash paid for income taxes	$	5,327	$	5,809	$	4,896
Cash paid for interest	$	15,546	$	15,020	$	13,559
Supplemental Disclosure of Non-cash Activities
Purchases of property and equipment	$	379	$	450	$	179
Common stock issued in connection with license agreement	$	—	$	5,000	$	—
Contingent consideration from acquisition of Honey Birdette and GlowUp	$	—	$	43,557	$	—
Conversion of convertible notes into common stock	$	—	$	2,730	$	—
Deferred offering costs in accounts payable	$	—	$	—	$	396
Stock issued in connection with acquisition of Honey Birdette and GlowUp	$	—	$	45,015	$	—
Right of use assets obtained in exchange for lease liabilities	$	11,959	$	2,992	$	—
Reclassification of stock receivable to treasury stock upon settlement	$	—	$	4,445	$	—
Reclassification of the fair value of the lock-up shares contingent consideration relating to the acquisition of Honey Birdette	$	4,814	$	—	$	—
Digital assets acquired in connection with sale of tokenized art and collectibles	$	—	$	7,800	$	—
Shares issued pursuant to a license, services and collaboration agreement	$	237	$	1,500	$	—
Shares issued in connection with asset purchase	$	1,333	$	—	$	—
Shares issued in connection with the settlement of the performance holdback contingent consideration relating to the acquisition of GlowUp	$	260	$	—	$	—


Cash - trust account and cash	$	54,044
Cash - PIPE Investment	46,844
Less: transaction costs paid in 2021	(977)
Net contributions from Merger and PIPE Investment	99,911
Less: transaction costs paid in 2020	(292)
Merger and PIPE Investment	$	99,619


Customer	December 31, 2022		December 31, 2021
Customer A	*		30	%
Customer B	*		15	%
Customer C	24	%	*
*Indicates the receivables for the customer did not exceed 10% of the Company’s total as of December 31, 2022 or 2021, as applicable.


	December 31, 2022
	Level 1		Level 2		Level 3		Total
Liabilities
Contingent consideration liability	$	—	$	—	$	(835)	$	(835)
Preferred stock liability	—		—		(39,099)		(39,099)
Total Liabilities	$	—	$	—	$	(39,934)	$	(39,934)


	Year Ended December 31,
	2022		2021
Net revenues
Licensing	$	60,861	$	66,055
Direct-to-consumer	186,574		147,852
Digital subscriptions and content	18,709		31,281
All other	789		1,398
Total	$	266,933	$	246,586

Operating (loss) income
Licensing	(73,979)		48,280
Direct-to-consumer	(206,962)		(3,021)
Digital subscriptions and content	(13,016)		9,386
Corporate	(32,439)		(124,632)
All other	711		1,135
Total	$	(325,685)	$	(68,852)


	Year Ended December 31,
	2022		2021
Net cash provided by (used in):
Operating activities	$	(59,609)	$	(36,742)
Investing activities	8,753		(273,176)
Financing activities	11,559		370,474


	Year Ended December 31, 2020
	Licensing		Direct-to- Consumer		Digital Subscriptions and Content		Other		Total
Licensing	$	63,562	$	—	$	—	$	—	$	63,562
Digital Subscriptions and Magazine	—		—		8,658		771		9,429
TV and Cable Programming	—		—		9,835		692		10,527
Consumer Products	—		64,116		—		28		64,144
Total revenues	$	63,562	$	64,116	$	18,493	$	1,491	$	147,662


	Year Ended December 31,
	2022		2021		2020
Point in time	$	186,748	$	159,683	$	64,116
Over time	80,185		86,903		83,546
Total revenues	$	266,933	$	246,586	$	147,662


	December 31, 2021
	Level 1		Level 2		Level 3		Total
Liabilities
Contingent consideration liability	$	—	$	—	$	(36,630)	$	(36,630)


	PSARs Liability		Contingent Consideration		Preferred Stock Liability		Total
Balance at December 31, 2020	$	858	$	—	$	—	$	858
Issuance of contingent consideration in connection with our acquisitions	—		34,390		—		34,390
PSARs liability settlement	(846)		—		—		(846)
Change in fair value and other	(12)		2,240		—		2,228
Balance at December 31, 2021	$	—	$	36,630	$	—	$	36,630
Preferred stock liability in relation to the issuance of preferred stock	—		—		45,892		45,892
Change in fair value and other	—		(30,619)		(6,793)		(37,412)
Partial settlement of the contingent consideration relating to the acquisition of GlowUp	—		(362)		—		(362)
Release of the contingent consideration relating to the acquisition of Honey Birdette	—		(4,814)		—		(4,814)
Balance at December 31, 2022	$	—	$	835	$	39,099	$	39,934


	Year Ended December 31, 2022
	Licensing		Direct-to- Consumer		Digital Subscriptions and Content		Other		Total
Licensing	$	60,861	$	—	$	—	$	—	$	60,861
Digital Subscriptions and Magazine	—		—		9,333		789		10,122
TV and Cable Programming	—		—		9,376		—		9,376
Consumer Products	—		186,574		—		—		186,574
Total revenues	$	60,861	$	186,574	$	18,709	$	789	$	266,933


	Year Ended December 31, 2021
	Licensing		Direct-to- Consumer		Digital Subscriptions and Content		Other		Total
Licensing	$	66,055	$	—	$	—	$	—	$	66,055
Digital Subscriptions and Magazine	—		—		20,827		1,398		22,225
TV and Cable Programming	—		—		10,454		—		10,454
Consumer Products	—		147,852		—		—		147,852
Total revenues	$	66,055	$	147,852	$	31,281	$	1,398	$	246,586


	Weighted- Average Life (Years)	Gross Carrying Amount		Accumulated Amortization		Impairments*		Net Carrying Amount
December 31, 2022
Trade names	11.9	$	76,619	$	(8,404)	$	(48,733)	$	19,482
Distribution agreements	15	3,720		(2,935)		—		785
Customer list	10	1,180		(315)		(865)		—
Developed technology	3	2,300		(2,300)		—		—
Total		$	83,819	$	(13,954)	$	(49,598)	$	20,267
_________________ *Includes the impairment charges on trade names of $52.3 million during the year ended December 31, 2022. The offset relates to foreign currency translation.


	Weighted- Average Life (Years)	Gross Carrying Amount		Accumulated Amortization		Impairments		Net Carrying Amount
December 31, 2021
Trade names	11.8	$	85,684	$	(3,293)	$	—	$	82,391
Distribution agreements	15	3,720		(2,687)		—		1,033
Photo and magazine archives	10	2,000		(2,000)		—		—
Customer list	10	1,180		(236)		—		944
Developed technology	3	2,300		(149)		—		2,151
Total		$	94,884	$	(8,365)	$	—	$	86,519


2023	$	2,074
2024	2,074
2025	2,074
2026	1,867
2027	1,826
Thereafter	10,352
Total	$	20,267


	Gross Goodwill		Impairments		Net Goodwill
Balance at December 31, 2020	$	504	$	—	$	504
Acquisition of TLA	16,374		—		16,374
Acquisition of Honey Birdette	223,381		—		223,381
Acquisition of GlowUp	32,603		—		32,603
Foreign currency translation adjustment	(2,285)		—		(2,285)
Balance at December 31, 2021	$	270,577	$	—	$	270,577
Foreign currency translation adjustment in relation to Honey Birdette	(13,032)		—		(13,032)
Impairments	—		(134,328)		(134,328)
Balance at December 31, 2022	$	257,545	$	(134,328)	$	123,217
*Includes the impairment charges on goodwill of $131.6 million during the year ended December 31, 2022. The offset relates to foreign currency translation.


	Number of options	Weighted- average exercise price		Weighted- average remaining contractual term (years)	Aggregate intrinsic value (in thousands)
Balance – December 31, 2021	3,211,071	$	7.77	7.9	$	60,978
Granted	—	—		—	—
Exercised	(495,052)	3.89		—	$	4,028
Forfeited and cancelled	(116,755)	9.83		—	—
Balance – December 31, 2022	2,599,264	$	8.41	7.2	$	—
Exercisable – December 31, 2022	2,112,161	$	7.02	6.9	$	—
Vested and expected to vest as of December 31, 2022	2,599,264	$	8.41	7.2	$	—


	Number of awards	Weighted- average grant date fair value per share
Unvested and outstanding balance at December 31, 2021	585,075	$	28.15
Granted	2,050,254	10.55
Vested	(343,891)	21.42
Forfeited	(232,904)	19.00
Unvested and outstanding balance at December 31, 2022	2,058,534	$	12.79


Years ending December 31:	Amounts
2023	$	12,578
2024	11,130
2025	9,386
2026	8,669
2027	5,898
Thereafter	8,453
Total undiscounted lease payments	56,114
Less: imputed interest	(9,459)
Total operating lease liabilities	$	46,655

Operating lease liabilities, current portion	$	9,977
Operating lease liabilities, noncurrent portion	$	36,678


	Minimum Lease Commitments		Sublease Income
2021	$	3,433	$	(288)
2022	3,451		(313)
2023	3,564		(322)
2024	3,828		(246)
2025	3,588		—
Thereafter	7,553		—
Total	$	25,417	$	(1,169)


Tangible net assets and liabilities:
Inventory	$	7,614
Property and equipment	1,665
Accounts payable	(1,319)
Other net assets	(3,518)
Total net assets	4,442
Intangible assets:
Trade name	4,100
Total intangible assets	4,100
Net assets acquired	8,542
Purchase consideration	24,916
Goodwill	$	16,374



Net revenues	$	44,739
Costs and expenses
Cost of sales	(19,122)
Selling and administrative expenses	(22,737)
Total costs and expenses	(41,859)
Operating income	2,880
Nonoperating income	5
Income taxes expense	(24)
Net income	$	2,861


Cash consideration	$	233,441
Stock consideration:
Transferred shares (1)	29,889
Lock-up shares (2)	25,460
Total consideration transferred	$	288,790


Net assets and liabilities:
Cash	$	3,950
Inventory	16,015
Property and equipment	5,185
Other tangible net assets (liabilities)	(12,243)
Unfavorable leasehold interest, net	(1,690)
Trade name	77,238
Deferred tax liability	(23,046)
Total net assets acquired	65,409
Purchase consideration	288,790
Goodwill	$	223,381



Net revenues	$	32,288
Costs and expenses:
Cost of sales	(14,445)
Selling and administrative expenses	(17,341)
Total costs and expenses	(31,786)
Operating income	502
Nonoperating income	559
Benefit (expense) from income taxes	2,162
Net income	$	3,223


Cash consideration (including transaction expenses paid for sellers)	$	1,142
Stock consideration	15,126
Contingent consideration	18,097
Total consideration transferred	$	34,365


	Year Ended December 31,
Net revenues:	2022		2021		2020
China	$	42,514	$	43,535	$	42,569
United States	158,200		152,410		76,365
Australia	41,877		21,379		4
UK	11,683		6,156		5,077
Other	12,659		23,106		23,647
Total	$	266,933	$	246,586	$	147,662


	December 31,
Long-lived assets:	2022		2021
Australia	$	5,747	$	6,767
United States	50,427		57,401
Other	2,466		1,023
Total	$	58,640	$	65,191