The Beachbody Company, Inc. (NYSE:BODI) recently entered into a significant amendment to its existing financing agreement, according to an 8-K filing with the Securities and Exchange Commission. On Monday, the fitness and nutrition company disclosed the adjustments to its senior secured term loan facility's terms, which include modifications to financial covenants and prepayment details.
The amendment, known as Amendment No. 6, was executed on Thursday, October 18, 2024, between Beachbody, its wholly-owned subsidiary Beachbody, LLC, the lenders involved, and Blue Torch Finance, LLC, which serves as the collateral agent and administrative agent. This amendment alters the original agreement dated August 8, 2022, which initially provided a $50 million credit facility.
Key changes include the removal of the minimum revenue covenant and the adjustment of the minimum liquidity covenant, now set at $9.5 million until December 31, 2024, and $13 million thereafter until the facility's maturity. Additionally, a new minimum EBITDA covenant has been introduced, requiring the company and its subsidiaries to maintain specified EBITDA levels post-closing.
The amendment also revises the amortization schedule, mandating additional principal payments on the outstanding term loans totaling $7 million, to be paid in installments throughout the fiscal year ending December 31, 2025.
In line with the amendment, Beachbody made a partial prepayment of $3.2 million on the term loans, including accrued interest and a $40,000 prepayment premium, on the closing date.
Furthermore, the company amended the terms of the warrants to purchase its Class A common stock, initially issued to affiliates of the lenders and Blue Torch. The exercise price of these warrants was reduced from $9.16 to $6.26 per share.
In other recent news, Beachbody Company has made significant operational changes, including a transition from a multi-level marketing commission structure to a single-level affiliate program. This strategic move is expected to reduce the company's revenue break-even point from roughly $430 million to under $225 million. As part of these changes, Beachbody has also reduced its corporate headcount by 33%. Analysts from Canaccord Genuity have maintained a Buy rating on Beachbody, despite potential short-term sales volatility due to these changes.
Beachbody has also reaffirmed its third-quarter 2024 guidance, projecting revenues between $97 million to $107 million, with adjusted EBITDA between $2 million and $6 million. However, the company also anticipates a net loss of $9 million to $13 million for the same period. In addition, Beachbody has entered into a strategic partnership with healthcare payment provider Truemed, allowing eligible customers to use their Health Savings Account or Flexible Spending Account funds to purchase nutritional supplements.
Furthermore, Beachbody has seen changes within its executive team, with Brad Ramberg stepping in as interim Chief Financial Officer. Ramberg was granted restricted stock units valued at $100,000, set to fully vest in 2025. Lastly, Singular Research adjusted its price target for Beachbody shares to $15.50, maintaining a Buy-Venture rating, following the company's second-quarter financial performance.
InvestingPro Insights
Recent financial data from InvestingPro sheds additional light on The Beachbody Company's current situation. The company's market capitalization stands at $44.61 million, reflecting its current valuation in the market. Beachbody's revenue for the last twelve months as of Q2 2024 was $477.49 million, with a notable revenue decline of 19.61% over the same period.
Two relevant InvestingPro Tips highlight important aspects of Beachbody's financial position. First, the company "holds more cash than debt on its balance sheet," which could provide some financial flexibility as it navigates its recent loan amendment. Second, Beachbody has "impressive gross profit margins," with the data showing a gross profit margin of 64.79% for the last twelve months as of Q2 2024. This strong margin could be crucial as the company works to improve its financial performance under the new loan terms.
These insights align with the article's focus on Beachbody's financial restructuring efforts. Investors seeking a more comprehensive analysis can access 11 additional InvestingPro Tips for BODI, offering a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.