Beachbody Amends Terms of $50M Loan Amid Profitability Push
The financial move comes as Beachbody is increasingly focused on becoming cashflow positive
The Beachbody Company, which now does business as BODi, has amended certain financial covenants and other terms of its $50 million term loan with Blue Torch Capital.
The decision to amend the terms of the revenue covenant is meant to better align the loan with the fitness and wellness company’s profit and free cash flow objectives, according to Carl Daikeler, Beachbody co-founder and CEO.
“The amendments reduce the revenue minimum to quarterly revenue of $100 million for each quarter through March 31, 2024, then to $120 million for each quarter thereafter,” Daikeler said. “These changes reflect the company’s focus on becoming cashflow positive.”
Daikeler has told investors that as the health and fitness company has undergone a major transition with its new name, it’s been encouraged by Google data that revealed search traffic significantly increased as consumers searched for BODi, indicating increased brand awareness.
Mark Goldston, Beachbody’s new executive chairman, said the company’s new business model is driven by its turnaround plan, which is designed to maximize profitability and cash generation from the company’s multiple revenue streams versus growth “at all costs.”
“We are committed to creating a revenue mix with higher profitability channels that produce increases in cash as a priority,” Goldston said. “The Blue Torch team has been great to work with while amending the terms of our agreement to reflect their support of these objectives.”
Goldston was appointed to his new role in June to help guide the fitness company’s transformation and unlock growth opportunities.
“Given our existing cash position and progress over the past 6 quarters, we agreed to prepay $15 million of the term loan’s principal and increase the minimum liquidity amount to $20 million through March 31, 2024, and then to $25 million thereafter,” said Marc Suidan, Beachbody’s chief financial officer. “We believe the net result is a very positive development. The amendments align with building a profitable and sustainable business and provide us with the flexibility to put our turnaround plan into place to focus on cash generation.”
A class action lawsuit was recently filed against the southern California-based company, alleging that its multilevel marketing model exploited workers in the Golden State. Beachbody told Athletech News it would vigorously defend itself against the allegations and pointed to California’s updated contractor law and network marketing distributor exemption.
More recently, BODi introduced a new workout program that targets the growing primal fitness trend, which Pinterest Predicts identified as the fitness trend of 2023. The brand has also pivoted towards the importance of mental health offerings as part of its “health-esteem” approach.
The Beachbody Company’s next earnings report is expected Aug. 8.
