PLBY Group to Restate Q2 and Q3 Financials Due to Accounting Errors, Sets Date for Q4 2023 Report

Author: Benzinga Newsdesk | March 12, 2024 08:04am

PLBY Group, Inc. (NASDAQ:PLBY) ("PLBY Group" or the "Company"), a leading pleasure and leisure lifestyle company and owner of Playboy, one of the most recognizable and iconic brands in the world, announced today that it will restate its quarterly unaudited condensed consolidated financial statements for the second and third quarters of 2023. The Company also announced that it will report its fourth quarter and full year 2023 financial results on Wednesday, March 27, 2024, after the U.S. stock market closes.

The Company and its Audit Committee, in consultation with the Company's independent registered public accounting firm, BDO USA, P.C., identified errors in the Company's accounting treatment of an impaired Chinese license contract in the second and third quarters of 2023 (which contract was ultimately terminated in the fourth quarter of 2023) and the classification of commission expense adjustments related to contract impairments recorded during such quarters.

The Company currently anticipates that correction of such errors and restatement of its second and third quarter 2023 financial statements will:

• reduce a portion of impairment expense and reduce deferred revenue in the restated periods;
  
  
   
• decrease the Company's net loss for the restated periods;
  
  
   
• increase the Company's reported Adjusted EBITDA for the restated periods;
  
  
   
• decrease the Company's total liabilities for the restated periods;
  
  
   
• have no effect on revenue or the cash flows of the Company for any period;
  
  
   
• have no effect on the Company's liquidity position; and
  
  
   
• have no effect on the Company's future operations.
   

In both the second and third quarters of 2023, the Company took impairment charges on a license contract, which were recorded in the statements of operations for each quarter. The Company believes that the impairment should have impacted its deferred revenue on the balance sheet rather than being recorded in the statements of operations for the applicable quarters. In addition, commission expense reversals should have been recorded as a reduction of the Company's cost of sales for the applicable quarters, rather than offsetting its impairment expense for such quarters. Such errors did not impact any previously filed audited financial statements.

Posted In: PLBY