Playboy Enters Long-Term License Agreement for Condoms
PLBY Group (NASDAQ: PLBY) has entered a multi-year global product license agreement with Thai Nippon Rubber Industry (TNR) for Playboy-branded condoms and lubricants. This agreement grants TNR rights to design, produce, promote, and distribute these products through various channels. PLBY Group will receive royalty payments, including minimum guarantees, on products sold under this agreement.
The deal resolves a previous legal dispute between the companies and sets the stage for growth in PLBY Group's licensing business. CEO Ben Kohn highlighted the agreement's importance as a commercial milestone, emphasizing the potential for rapid market entry and revenue capture through strategic brand and product development.
- Multi-year global license agreement for Playboy-branded condoms and lubricants
- Royalty payments with minimum guarantees to be received by PLBY Group
- Resolution of legal dispute with Thai Nippon Rubber Industry
- Potential for rapid market entry and revenue growth in the condom and lubricant category
- None.
The new multi-year global product license agreement between PLBY Group and Thai Nippon Rubber Industry (TNR) marks a significant milestone for PLBY's licensing business. Financially, this deal provides a steady stream of revenue through royalty payments, including minimum guarantees which offer added financial stability and predictability.
This agreement also resolves a legal dispute between the two companies, which could have had a negative financial impact if unresolved. The dismissal of the lawsuit with prejudice ensures there are no lingering liabilities or legal costs associated with the previous dispute, thus positively impacting the company's balance sheet.
From an investor's perspective, the agreement enhances PLBY's ability to monetize its brand without the need for significant capital investment. Licensing is a high-margin business, meaning that revenue generated from royalties contributes directly to profitability. Over the short term, the immediate financial benefit comes from the minimum guarantees. Long-term benefits include the potential for increased royalties as the branded products gain market traction globally.
PLBY Group's decision to enter a licensing agreement with TNR is strategic. TNR's reputation for innovation and quality in the condom market positions Playboy-branded products to meet high consumer expectations. The global market for condoms and lubricants is growing steadily, driven by increasing awareness of sexual health and the expansion of retail and online sales channels.
By leveraging Playboy’s globally recognized brand, PLBY Group can capture market share in this expanding sector without direct involvement in manufacturing processes. This move allows the company to focus on brand management and marketing while benefiting from TNR's manufacturing expertise and distribution networks.
In terms of brand strategy, this agreement enriches Playboy's portfolio, potentially enhancing brand visibility and consumer loyalty. Managing a well-known brand like Playboy involves ensuring product quality and aligning with consumer expectations, which TNR’s track record supports.
The settlement of the lawsuit between PLBY Group and TNR is a notable aspect of this agreement. The lawsuit's resolution with both parties not admitting liability or wrongdoing and its dismissal with prejudice eliminates legal uncertainties, reducing potential future legal costs and legal exposure.
From a legal standpoint, resolving disputes amicably through settlements can often be more cost-effective and less disruptive compared to prolonged litigation. Investors can find reassurance in the fact that legal issues have been cleared, allowing the focus to shift to business growth and revenue generation.
This agreement demonstrates PLBY Group's proactive approach in mitigating legal risks and fostering positive business relationships, which is a prudent strategy for long-term stability and growth.
Global Agreement with Thai Nippon Rubber Resolves Legal Dispute, Sets the Stage for Growth of Licensing Business
LOS ANGELES, July 16, 2024 (GLOBE NEWSWIRE) -- 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 has entered into a new, multi-year global product license agreement with Thai Nippon Rubber Industry Public Limited Company (“TNR”), a Thailand-based, manufacturer of premium condoms and lubricants, granting TNR rights to design, produce, promote and distribute condoms and lubricating gel products using PLAYBOY trademarks through multiple online and retail channels. PLBY Group will receive royalty payments, including minimum guarantees, on products sold pursuant to the agreement.
“This multi-year, global agreement with TNR, a respected condoms manufacturer known for its cutting-edge innovation, enables high-quality, Playboy-branded products to rapidly enter markets around the globe,” said Ben Kohn, Chief Executive Officer of PLBY Group. “This is an important commercial milestone for our licensing business, and we look forward to working with TNR to bring products to market and capture the revenue potential through strategic brand and product development combined with the overall size of the category opportunity.”
The new license agreement was entered into by PLBY Group and TNR concurrently with a settlement agreement pursuant to which the companies resolved a lawsuit between them in the U.S. District Court for the Central District of California. The lawsuit related to a prior license agreement pursuant to which TNR had manufactured and sold condoms under the Playboy brand. PLBY Group expects the dismissal of the lawsuit with prejudice to be entered by the court as soon as reasonably practicable. No party to the lawsuit admitted any liability or wrongdoing in connection with the settlement agreement.
About PLBY Group, Inc.
PLBY Group, Inc. is a global pleasure and leisure company connecting consumers with products, content, and experiences that help them lead more fulfilling lives. PLBY Group’s flagship consumer brand, Playboy, is one of the most recognizable brands in the world, driving billions of dollars in global consumer spending, with products and content available in approximately 180 countries. PLBY Group’s mission—to create a culture where all people can pursue pleasure—builds upon over 70 years of creating groundbreaking media and hospitality experiences and fighting for cultural progress rooted in the core values of equality, freedom of expression and the idea that pleasure is a fundamental human right. Learn more at http://www.plbygroup.com.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. The Company’s actual results may differ from their expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect”, “estimate”, “project”, “budget”, “forecast”, “anticipate”, “intend”, “plan”, “may”, “will”, “could”, “should”, “believes”, “predicts”, “potential”, “continue”, and similar expressions (or the negative versions of such words or expressions) are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the Company’s expectations with respect to future performance, growth plans and anticipated financial impacts of its strategic opportunities and corporate transactions.
These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from those discussed in the forward-looking statements. Factors that may cause such differences include, but are not limited to: (1) the inability to maintain the listing of the Company’s shares of common stock on Nasdaq; (2) the risk that the Company’s completed or proposed transactions disrupt the Company’s current plans and/or operations, including the risk that the Company does not complete any such proposed transactions or achieve the expected benefits from any transactions; (3) the ability to recognize the anticipated benefits of corporate transactions, commercial collaborations, commercialization of digital assets, cost reduction initiatives and proposed transactions, which may be affected by, among other things, competition, the ability of the Company to grow and manage growth profitably, and the Company’s ability to retain its key employees; (4) costs related to being a public company, corporate transactions, commercial collaborations and proposed transactions; (5) changes in applicable laws or regulations; (6) the possibility that the Company may be adversely affected by global hostilities, supply chain delays, inflation, interest rates, foreign currency exchange rates or other economic, business, and/or competitive factors; (7) risks relating to the uncertainty of the projected financial information of the Company, including changes in the Company’s estimates of cash flows and the fair value of certain of its intangible assets, including goodwill; (8) risks related to the organic and inorganic growth of the Company’s businesses, and the timing of expected business milestones; (9) changing demand or shopping patterns for the Company’s products and services; (10) failure of licensees, suppliers or other third-parties to fulfill their obligations to the Company; (11) the Company’s ability to comply with the terms of its indebtedness and other obligations; (12) changes in financing markets or the inability of the Company to obtain financing on attractive terms; and (13) other risks and uncertainties indicated from time to time in the Company’s annual report on Form 10-K, including those under “Risk Factors” therein, and in the Company’s other filings with the Securities and Exchange Commission. The Company cautions that the foregoing list of factors is not exclusive, and readers should not place undue reliance upon any forward-looking statements, which speak only as of the date which they were made. The Company does not undertake any obligation to update or revise any forward-looking statements to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement is based.
Contact:
Investors: FNK IR – Rob Fink / Matt Chesler, CFA – investors@plbygroup.com
Media: press@plbygroup.com
FAQ
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