LEHI,
Utah, Aug. 5, 2024 /PRNewswire/ -- Purple
Innovation, Inc. (NASDAQ: PRPL) ("Purple"), a comfort innovation
company known for creating the "World's First No Pressure™
Mattress," today announced results for the second quarter ended
June 30, 2024.
Second Quarter Financial Summary (Comparisons versus Second
Quarter 2023)1
- Net revenue increased 2.0% to $120.3
million compared to $117.9
million.
- Wholesale revenue increased 7.2% and Direct-to-Consumer (DTC)
revenue decreased 1.8%.
- Gross margin increased to 40.7% compared to 30.1%.
- Operating expenses were $63.5
million, or 52.8% of revenue compared to $75.7 million, or 64.3% of revenue.
- Operating loss was $(14.5)
million compared to an operating loss of $(40.3) million.
- Net income was $0.0 million as
compared to a net loss of $(40.5)
million.
- Adjusted net loss was $(13.8)
million, or $(0.13) per
diluted share as compared to adjusted net loss of $(23.9) million, or $(0.23) per diluted share.
- EBITDA was $10.6 million compared
to $(34.3) million.
- Adjusted EBITDA was $(4.1)
million compared to $(21.5)
million.
- Cash and cash equivalents were $23.4
million at June 30, 2024.
"Our second quarter results underscore the progress we've made
enhancing the financial profile of the Company," said Chief
Executive Officer Rob DeMartini.
"Even as industry trends further deteriorated and impacted demand,
we exceeded our adjusted EBITDA plan thanks to a number of
operational improvements and cost saving programs that drove a
significant increase in gross margins on both a year-over-year and
sequential basis. As we look forward, we remain on track for a
return to profitability in the second half of the year and are
confident that our Path to Premium Sleep strategy will continue to
gain traction in the marketplace, allowing us to take share and
deliver value to our shareholders."
|
__________________________
|
|
1
Reconciliations for non-GAAP financial measures to the most
directly comparable GAAP financial measures are included in the
"RECONCILIATION OF GAAP TO NON-GAAP MEASURES" tables at the end of
this press release.
|
Second Quarter 2024 Review
Second quarter 2024 net revenue increased 2.0% to $120.3 million, compared to $117.9 million in the second quarter of 2023.
This increase was primarily due to increased wholesale channel
revenues driven by a significant increase in wholesale floor slots,
along with the continued positive response to the Company's new
product lineup. By channel, wholesale revenue increased 7.2% and
DTC revenue decreased 1.8%. DTC net revenues declined due to lower
e-commerce revenue partially offset by growth in Purple retail
showroom revenue driven by the addition of 4 showrooms over the
previous 12 months, along with a product mix shift to higher priced
product.
Gross margin for the second quarter 2024 increased to 40.7%
compared to 30.1% in the year ago period. Excluding the liquidation
of discontinued products and other costs associated with the new
product launch in the second quarter of 2023, the increase in gross
margins was primarily attributable to improved production
efficiencies gained through the implementation of several
commercial and supply chain actions over the past year.
Operating expenses were $63.5
million, or 52.8% of net revenue for the second quarter of
2024 compared to $75.7 million, or
64.3% of net revenue in the year ago period. The reduction in
operating expenses was largely driven by a $8.3 million decrease in general and
administrative costs reflecting the non-recurrence of legal and
professional fees incurred by the Board's Special Committee in the
second quarter of 2023, along with a $5.0
million decrease in marketing and sales expense. Advertising
spend as a percentage of net revenues was 13.2% in the second
quarter of 2024 compared to 17.0% in the second quarter of
2023.
Operating loss was $(14.5) million
for the second quarter 2024 compared to $(40.3) million in the prior year period.
Net income was $0.0 million for
the second quarter 2024 compared to a net loss of $(40.5) million in the year ago period. Adjusted
net loss, which excludes adjustments for certain non-cash items and
other items the Company does not consider in the evaluation of
ongoing operational performance, including a $18.7 million gain on the change in fair value of
the warrant liability, was $(13.8)million, or $(0.13) per diluted share, compared to
$(23.9) million, or $(0.23) per diluted share in the prior year
period. Adjusted net loss has also been adjusted to reflect an
estimated effective income tax rate of 25.9% for the current year
and comparable prior year period.
EBITDA for the second quarter 2024 was $10.6 million compared to $(34.3) million in the second quarter 2023.
Adjusted EBITDA was $(4.1) million
compared to Adjusted EBITDA of $(21.5)
million in the prior year period.
Balance Sheet
As of June 30, 2024, the Company
had cash and cash equivalents of $23.4
million compared to $26.9
million as of December 31,
2023.
Inventories as of June 30, 2024
totaled $69.7 million, representing a
decrease of 11.2% compared with June 30,
2023, and an increase of 4.2% compared with December 31, 2023.
2024 Outlook
Based on first half results, couple with ongoing industry-wide
demand declines, the Company is amending its revenue outlook and
reiterating its adjusted EBITDA outlook for 2024.
Purple now expects full year net revenue to be in the range of
$490 to $510 million compared to
its prior range of $540 million to
$560 million. The Company still
expects Adjusted EBITDA to be between $(20)
million and $(10) million.
Conference Call and Webcast Information
Purple Innovation, Inc. will host a live conference call to
discuss financial results today, August 5,
2024 at 4:30 p.m. Eastern
Time. To access the call dial (844) 825-9789
(domestic) or (412) 317-5180 (international). The call
is also being webcast and can be accessed on the investor relations
section of the Company's website, investors.purple.com. After the
conference call, a webcast replay will remain available on the
investor relations section of the Company's website for 30
days.
About Purple
Purple, the leading premium mattress company with the #1 Gel
Grid technology in the world, the GelFlex® Grid,
thoughtfully engineers products that make restorative sleep
effortless for every kind of sleeper. The result of over 30 years
of innovation and in comfort technologies, Purple's GelFlex Grid is
the most significant advancement in mattresses in decades and is
proven to reduce aches and pains. It instantly adapts as you move,
balances temperature, relieves pressure and offers support in all
the right places. Purple products, including mattresses, pillows,
cushions, frames, sheets, and more, can be found online
at Purple.com, in 60 Purple stores and over 3,000 retailers
nationwide. Sleep Better. Live Purple.
Forward Looking Statements
Certain statements made in this release that are not historical
facts are "forward looking statements" within the meaning of the
"safe harbor" provisions of the United States Private Securities
Litigation Reform Act of 1995. Statements based on historical data
are not intended and should not be understood to indicate the
Company's expectations regarding future events. Forward-looking
statements provide current expectations or forecasts of future
events or determinations. These forward-looking statements are not
guarantees of future performance, conditions or results, and
involve a number of known and unknown risks, uncertainties,
assumptions and other important factors, many of which are outside
the Company's control, that could cause actual results or outcomes
to differ materially from those discussed in the forward-looking
statements. Factors that could influence the realization of
forward-looking statements include, among others: changes in
economic, financial and end-market conditions in the markets in
which we operate; fluctuations in raw material prices and cost of
labor; the financial condition of our customers and suppliers;
competitive pressures, including the need for technology
improvement, successful new product development and introduction;
changes in consumer demand, including pullbacks in consumer
spending; disruptions to our manufacturing processes; and the risk
factors outlined in the "Risk Factors" section of our Annual Report
on Form 10-K filed with the Securities and Exchange Commission on
March 12, 2024, and in our other
filings made with the SEC. The Company does not undertake any
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law.
Non-GAAP Financial Measures
EBITDA, adjusted EBITDA, adjusted net income, and adjusted net
income per diluted share are non-GAAP financial measures that
remove the impact of certain non-cash and non-recurring costs.
Management believes that the use of such non-GAAP financial
measures provides investors with additional useful information with
respect to the impact of various adjustments, which we view as a
better measure of our operating performance. Refer to the attached
table for the reconciliation of such non-GAAP financial measures to
the most comparable GAAP financial measure.
With respect to the Company's Adjusted EBITDA outlook for the
third quarter and full year 2024, a quantitative reconciliation to
the corresponding GAAP information cannot be provided without
unreasonable effort because of the inherent difficulty of
accurately forecasting the occurrence and financial impact of the
various adjusting items necessary for such reconciliation that have
not yet occurred, are out of our control, or cannot be reasonably
predicted, including but not limited to warrant liabilities and
stock based compensation. For the same reasons, the Company is
unable to assess the probable significance of the unavailable
information, which could have a material impact on its future GAAP
financial results.
Investor Contact:
Brendon
Frey, ICR
brendon.frey@icrinc.com
203-682-8200
|
PURPLE INNOVATION,
INC.
Condensed Consolidated Balance
Sheets
(unaudited – in thousands, except for par
value)
|
|
|
|
June 30,
2024
|
|
|
December 31,
2023
|
|
|
Assets
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
23,408
|
|
|
$
|
26,857
|
|
|
Accounts receivable, net
|
|
|
32,083
|
|
|
|
37,802
|
|
|
Inventories
|
|
|
69,657
|
|
|
|
66,878
|
|
|
Prepaid expenses
|
|
|
5,368
|
|
|
|
8,536
|
|
|
Other current assets
|
|
|
886
|
|
|
|
1,737
|
|
|
Total current
assets
|
|
|
131,402
|
|
|
|
141,810
|
|
|
Property and equipment,
net
|
|
|
119,465
|
|
|
|
128,661
|
|
|
Operating lease
right-of-use assets
|
|
|
90,509
|
|
|
|
95,767
|
|
|
Intangible assets,
net
|
|
|
18,711
|
|
|
|
22,196
|
|
|
Other long-term
assets
|
|
|
2,063
|
|
|
|
2,191
|
|
|
Total assets
|
|
$
|
362,150
|
|
|
$
|
390,625
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
37,452
|
|
|
$
|
49,831
|
|
|
Accrued compensation
|
|
|
9,186
|
|
|
|
5,064
|
|
|
Customer prepayments
|
|
|
4,732
|
|
|
|
5,718
|
|
|
Accrued rebates and allowances
|
|
|
8,635
|
|
|
|
13,243
|
|
|
Accrued warranty liabilities – current portion
|
|
|
8,141
|
|
|
|
9,793
|
|
|
Operating lease obligations – current portion
|
|
|
15,122
|
|
|
|
14,843
|
|
|
Other current liabilities
|
|
|
8,736
|
|
|
|
12,490
|
|
|
Total current
liabilities
|
|
|
92,004
|
|
|
|
110,982
|
|
|
Related party
debt
|
|
|
46,235
|
|
|
|
—
|
|
|
Long-term debt, net of
current portion
|
|
|
—
|
|
|
|
26,909
|
|
|
Accrued warranty
liabilities, net of current portion
|
|
|
27,291
|
|
|
|
25,798
|
|
|
Operating lease
obligations, net of current portion
|
|
|
102,217
|
|
|
|
109,094
|
|
|
Warrant
liabilities
|
|
|
24,477
|
|
|
|
—
|
|
|
Other long-term
liabilities
|
|
|
3,394
|
|
|
|
2,235
|
|
|
Total
liabilities
|
|
|
295,618
|
|
|
|
275,018
|
|
|
Commitments and
contingencies (Note 13)
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
|
Class A common stock; $0.0001 par value, 210,000 shares authorized;
107,503
issued and outstanding at June
30, 2024 and 105,507 issued and outstanding at
December 31, 2023
|
|
|
11
|
|
|
|
11
|
|
|
Class B common stock; $0.0001 par value, 90,000 shares authorized;
205 issued and
outstanding at June 30, 2024 and at
December 31, 2023
|
|
|
—
|
|
|
|
—
|
|
|
Additional paid-in capital
|
|
|
592,541
|
|
|
|
591,380
|
|
|
Accumulated deficit
|
|
|
(526,159)
|
|
|
|
(475,969)
|
|
|
Total stockholders'
equity attributable to Purple Innovation, Inc.
|
|
|
66,393
|
|
|
|
115,422
|
|
|
Noncontrolling interest
|
|
|
139
|
|
|
|
185
|
|
|
Total stockholders'
equity
|
|
|
66,532
|
|
|
|
115,607
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
362,150
|
|
|
$
|
390,625
|
|
|
PURPLE INNOVATION,
INC.
Condensed Consolidated Statements of
Operations
(unaudited – in thousands, except per share
amounts)
|
|
|
|
Three Months
Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
Revenues,
net
|
|
$
|
120,271
|
|
|
$
|
117,882
|
|
|
$
|
240,304
|
|
|
$
|
224,609
|
|
|
Cost of
revenues
|
|
|
71,331
|
|
|
|
82,408
|
|
|
|
149,644
|
|
|
|
148,557
|
|
|
Gross profit
|
|
|
48,940
|
|
|
|
35,474
|
|
|
|
90,660
|
|
|
|
76,052
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing and
sales
|
|
|
41,377
|
|
|
|
46,379
|
|
|
|
82,839
|
|
|
|
84,552
|
|
|
General and
administrative
|
|
|
18,117
|
|
|
|
26,437
|
|
|
|
37,845
|
|
|
|
50,104
|
|
|
Research and
development
|
|
|
3,986
|
|
|
|
2,925
|
|
|
|
7,652
|
|
|
|
6,297
|
|
|
Total operating
expenses
|
|
|
63,480
|
|
|
|
75,741
|
|
|
|
128,336
|
|
|
|
140,953
|
|
|
Operating
loss
|
|
|
(14,540)
|
|
|
|
(40,267)
|
|
|
|
(37,676)
|
|
|
|
(64,901)
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(4,161)
|
|
|
|
(352)
|
|
|
|
(8,635)
|
|
|
|
(554)
|
|
|
Other income,
net
|
|
|
53
|
|
|
|
37
|
|
|
|
4,447
|
|
|
|
110
|
|
|
Loss on extinguishment
of debt
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,394)
|
|
|
|
(1,217)
|
|
|
Change in fair value –
warrant liabilities
|
|
|
18,693
|
|
|
|
—
|
|
|
|
(4,906)
|
|
|
|
—
|
|
|
Total other income
(expense), net
|
|
|
14,585
|
|
|
|
(315)
|
|
|
|
(12,488)
|
|
|
|
(1,661)
|
|
|
Net income (loss)
before income taxes
|
|
|
45
|
|
|
|
(40,582)
|
|
|
|
(50,164)
|
|
|
|
(66,562)
|
|
|
Income tax benefit
(expense)
|
|
|
(54)
|
|
|
|
(72)
|
|
|
|
(113)
|
|
|
|
(144)
|
|
|
Net income
(loss)
|
|
|
(9)
|
|
|
|
(40,654)
|
|
|
|
(50,277)
|
|
|
|
(66,706)
|
|
|
Net loss attributable
to noncontrolling interest
|
|
|
(36)
|
|
|
|
(167)
|
|
|
|
(87)
|
|
|
|
(286)
|
|
|
Net income (loss)
attributable to Purple Innovation, Inc.
|
|
$
|
27
|
|
|
$
|
(40,487)
|
|
|
$
|
(50,190)
|
|
|
$
|
(66,420)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.00
|
|
|
$
|
(0.39)
|
|
|
$
|
(0.47)
|
|
|
$
|
(0.65)
|
|
|
Diluted
|
|
$
|
(0.00)
|
|
|
$
|
(0.39)
|
|
|
$
|
(0.47)
|
|
|
$
|
(0.65)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
107,489
|
|
|
|
105,079
|
|
|
|
106,755
|
|
|
|
101,760
|
|
|
Diluted
|
|
|
107,779
|
|
|
|
105,079
|
|
|
|
106,755
|
|
|
|
101,760
|
|
|
PURPLE INNOVATION,
INC.
Condensed Consolidated Statements of Cash
Flows
(unaudited - in thousands)
|
|
|
|
Three Months
Ended
June 30,
|
|
|
Six Months
Ended
June 30,
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(9)
|
|
|
$
|
(40,654)
|
|
|
$
|
(50,277)
|
|
|
$
|
(66,706)
|
|
|
Adjustments to
reconcile net loss to net cash used in
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
6,439
|
|
|
|
6,007
|
|
|
|
12,821
|
|
|
|
12,890
|
|
|
Non-cash
interest
|
|
|
1,809
|
|
|
|
416
|
|
|
|
3,372
|
|
|
|
686
|
|
|
Paid-in-kind
interest
|
|
|
2,525
|
|
|
|
—
|
|
|
|
4,375
|
|
|
|
—
|
|
|
Loss on extinguishment
of debt
|
|
|
—
|
|
|
|
—
|
|
|
|
3,394
|
|
|
|
1,217
|
|
|
Change in fair value –
warrant liabilities
|
|
|
(18,693)
|
|
|
|
—
|
|
|
|
4,906
|
|
|
|
—
|
|
|
Stock-based
compensation
|
|
|
825
|
|
|
|
1,661
|
|
|
|
1,317
|
|
|
|
2,853
|
|
|
Loss on disposal of
property and equipment
|
|
|
—
|
|
|
|
—
|
|
|
|
112
|
|
|
|
—
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(4,341)
|
|
|
|
(8,657)
|
|
|
|
5,719
|
|
|
|
11,467
|
|
|
Inventories
|
|
|
2,371
|
|
|
|
9,423
|
|
|
|
(2,779)
|
|
|
|
(5,061)
|
|
|
Prepaid expenses and
other assets
|
|
|
4,599
|
|
|
|
2,049
|
|
|
|
4,665
|
|
|
|
2,952
|
|
|
Operating leases,
net
|
|
|
(1,131)
|
|
|
|
239
|
|
|
|
(1,340)
|
|
|
|
1,315
|
|
|
Accounts
payable
|
|
|
(2,479)
|
|
|
|
2,081
|
|
|
|
(9,522)
|
|
|
|
3,304
|
|
|
Accrued
compensation
|
|
|
(602)
|
|
|
|
(5,598)
|
|
|
|
4,122
|
|
|
|
(2,709)
|
|
|
Customer
prepayments
|
|
|
738
|
|
|
|
2,624
|
|
|
|
(986)
|
|
|
|
1,025
|
|
|
Accrued rebates and
allowances
|
|
|
109
|
|
|
|
2,845
|
|
|
|
(4,608)
|
|
|
|
(3,977)
|
|
|
Accrued warranty
liabilities
|
|
|
(527)
|
|
|
|
3,165
|
|
|
|
(159)
|
|
|
|
5,063
|
|
|
Other accrued
liabilities
|
|
|
(549)
|
|
|
|
(151)
|
|
|
|
(862)
|
|
|
|
(2,372)
|
|
|
Net cash used in
operating activities
|
|
|
(8,916)
|
|
|
|
(24,550)
|
|
|
|
(25,730)
|
|
|
|
(38,053)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
|
(2,104)
|
|
|
|
(2,500)
|
|
|
|
(5,142)
|
|
|
|
(5,443)
|
|
|
Investment in
intangible assets
|
|
|
(49)
|
|
|
|
(225)
|
|
|
|
(111)
|
|
|
|
(380)
|
|
|
Net cash used in
investing activities
|
|
|
(2,153)
|
|
|
|
(2,725)
|
|
|
|
(5,253)
|
|
|
|
(5,823)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments on term
loan
|
|
|
—
|
|
|
|
—
|
|
|
|
(25,000)
|
|
|
|
(24,656)
|
|
|
Payments on revolving
line of credit
|
|
|
—
|
|
|
|
—
|
|
|
|
(5,000)
|
|
|
|
—
|
|
|
Proceeds from related
party loan
|
|
|
—
|
|
|
|
—
|
|
|
|
61,000
|
|
|
|
—
|
|
|
Payments for debt
issuance costs
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,466)
|
|
|
|
(2,898)
|
|
|
Proceeds from stock
offering
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
60,300
|
|
|
Payments for public
offering costs
|
|
|
—
|
|
|
|
(201)
|
|
|
|
—
|
|
|
|
(3,301)
|
|
|
Proportional
Representation Preferred Linked Stock
redemption fee
|
|
|
—
|
|
|
|
(105)
|
|
|
|
—
|
|
|
|
(105)
|
|
|
Tax receivable
agreement payments
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(269)
|
|
|
Net cash provided by
(used in) financing activities
|
|
|
—
|
|
|
|
(306)
|
|
|
|
27,534
|
|
|
|
29,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in
cash
|
|
|
(11,069)
|
|
|
|
(27,581)
|
|
|
|
(3,449)
|
|
|
|
(14,805)
|
|
|
Cash, beginning of the
period
|
|
|
34,477
|
|
|
|
54,530
|
|
|
|
26,857
|
|
|
|
41,754
|
|
|
Cash, end of the
period
|
|
$
|
23,408
|
|
|
$
|
26,949
|
|
|
$
|
23,408
|
|
|
$
|
26,949
|
|
PURPLE INNOVATION,
INC.
RECONCILIATION OF GAAP TO NON-GAAP
MEASURES
(In thousands)
Management believes that the use of the following non-GAAP
financial measures provides investors with additional useful
information with respect to the impact of various adjustments,
which we view as a better measure of our operating performance.
These non-GAAP financial measures are EBITDA, adjusted EBITDA,
adjusted net income, adjusted net income per diluted share and
adjusted gross profit. Other companies may calculate these non-GAAP
measures differently than we do. These non-GAAP measures have
limitations as analytical tools, and you should not consider them
in isolation or as a substitute for our financial results prepared
in accordance with GAAP.
Reconciliation of GAAP Net Income (Loss) to Non-GAAP EBITDA
and Adjusted EBITDA
A reconciliation of GAAP net income (loss) to the non-GAAP
measures of EBITDA and adjusted EBITDA is provided below. EBITDA
represents net income (loss) before interest expense, income tax
(benefit) expense, other (income) expense, net, and depreciation
and amortization. Adjusted EBITDA represents EBITDA excluding costs
incurred due to stock-based compensation expense, debt
extinguishment, changes in the fair value of the warrant liability,
nonrecurring legal fees, Board special committee costs, executive
interim and search costs, severance costs, vendor separation fee,
showroom opening costs, new production facility start-up costs and
COVID-19 related expenses. We believe EBITDA and Adjusted EBITDA
provide additional useful information with respect to the impact of
various adjustments and provide meaningful measures of our
operating performance.
|
|
Three Months
Ended
June 30,
|
|
|
Six Months
Ended
June 30,
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
|
$
|
(9)
|
|
|
|
(40,654)
|
|
|
|
(50,277)
|
|
|
|
(66,706)
|
|
|
Interest
expense
|
|
|
4,161
|
|
|
|
352
|
|
|
|
8,635
|
|
|
|
554
|
|
|
Income tax
expense
|
|
|
54
|
|
|
|
72
|
|
|
|
113
|
|
|
|
144
|
|
|
Other income,
net
|
|
|
(53)
|
|
|
|
(37)
|
|
|
|
(4,447)
|
|
|
|
(110)
|
|
|
Depreciation and
amortization
|
|
|
6,439
|
|
|
|
6,007
|
|
|
|
12,821
|
|
|
|
12,890
|
|
|
EBITDA
|
|
|
10,592
|
|
|
|
(34,260)
|
|
|
|
(33,155)
|
|
|
|
(53,228)
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value -
warrant liability
|
|
|
(18,693)
|
|
|
|
—
|
|
|
|
4,906
|
|
|
|
—
|
|
|
Loss on extinguishment
of debt
|
|
|
—
|
|
|
|
—
|
|
|
|
3,394
|
|
|
|
1,217
|
|
|
Stock-based
compensation expense
|
|
|
829
|
|
|
|
1,661
|
|
|
|
1,321
|
|
|
|
2,853
|
|
|
Vendor separation
fee
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,050
|
|
|
Loss on project
write-off
|
|
|
1,355
|
|
|
|
—
|
|
|
|
1,355
|
|
|
|
—
|
|
|
Legal fees
|
|
|
87
|
|
|
|
1,395
|
|
|
|
924
|
|
|
|
2,745
|
|
|
Board special committee
fees
|
|
|
—
|
|
|
|
8,298
|
|
|
|
—
|
|
|
|
14,160
|
|
|
Acquisition
expenses
|
|
|
—
|
|
|
|
65
|
|
|
|
—
|
|
|
|
65
|
|
|
Executive interim and
search costs
|
|
|
1,526
|
|
|
|
1,013
|
|
|
|
2,974
|
|
|
|
1,802
|
|
|
Severance
costs
|
|
|
104
|
|
|
|
267
|
|
|
|
884
|
|
|
|
586
|
|
|
Showroom opening
costs
|
|
|
57
|
|
|
|
39
|
|
|
|
58
|
|
|
|
96
|
|
|
Adjusted
EBITDA
|
|
$
|
(4,143)
|
|
|
$
|
(21,522)
|
|
|
$
|
(17,339)
|
|
|
$
|
(28,654)
|
|
Reconciliation of GAAP Net Income to non-GAAP Adjusted Net
Income and Adjusted Net Income per Diluted Share
Our presentation of adjusted net income assumes that all net
income is attributable to Purple Innovation, Inc. (i.e. there is no
allocation of net income or loss to noncontrolling interests),
which assumes the full exchange at the beginning of the period of
all outstanding Paired Securities for shares of Class A common
stock of Purple Innovation, Inc., adjusted for certain nonrecurring
items that we do not believe directly reflect our core operations.
Adjusted net income per share, diluted, is calculated by dividing
adjusted net income by the total shares of Class A common stock
outstanding plus any dilutive warrants, options and restricted
stock as calculated in accordance with GAAP and assuming the full
exchange of all outstanding Paired Securities as of the beginning
of each period presented. Adjusted net loss and adjusted net loss
per diluted share, are supplemental measures of operating
performance that do not represent, and should not be considered,
alternatives to net loss and earnings per share, as calculated in
accordance with GAAP. We believe adjusted net loss and adjusted net
loss per diluted share, supplement GAAP measures and enable us to
more effectively evaluate our performance period-over-period. A
reconciliation of net loss, the most directly comparable GAAP
measure, to adjusted net loss and the computation of adjusted net
loss per diluted share, are set forth below:
|
(in thousands, except
per share amounts)
|
|
Three Months
Ended
June 30,
|
|
|
Six Months
Ended
June 30,
|
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
Net loss
|
|
$
|
(9)
|
|
|
$
|
(40,654)
|
|
|
$
|
(50,277)
|
|
|
$
|
(66,706)
|
|
|
Income tax (benefit)
expense, as reported
|
|
|
54
|
|
|
|
72
|
|
|
|
113
|
|
|
|
144
|
|
|
Loss on extinguishment
of debt
|
|
|
—
|
|
|
|
—
|
|
|
|
3,394
|
|
|
|
1,217
|
|
|
Board special committee
fees
|
|
|
—
|
|
|
|
8,298
|
|
|
|
—
|
|
|
|
14,160
|
|
|
Change in fair value –
warrant liabilities
|
|
|
(18,693)
|
|
|
|
—
|
|
|
|
4,906
|
|
|
|
—
|
|
|
Adjusted net loss
before income taxes
|
|
|
(18,648)
|
|
|
|
(32,284)
|
|
|
|
(41,864)
|
|
|
|
(51,185)
|
|
|
Adjusted income tax
benefit(1)
|
|
|
4,830
|
|
|
|
8,362
|
|
|
|
10,843
|
|
|
|
13,257
|
|
|
Adjusted net
loss
|
|
$
|
(13,818)
|
|
|
$
|
(23,922)
|
|
|
$
|
(31,021)
|
|
|
$
|
(37,928)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net loss per
share, diluted
|
|
$
|
(0.13)
|
|
|
$
|
(0.23)
|
|
|
$
|
(0.29)
|
|
|
$
|
(0.37)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
weighted-average shares outstanding,
diluted(2)
|
|
|
107,779
|
|
|
|
105,079
|
|
|
|
106,755
|
|
|
|
102,188
|
|
|
|
(1) Represents the
estimated effective tax rate of 25.9% for the three and six months
ended June 30, 2024 and 2023, applied to adjusted net income before
income taxes. The estimated effective tax rates are what the
Company would be subject to and consist of the combined federal
statutory tax rate and the Company's blended state tax rates,
assuming no valuation allowance.
|
|
|
(2) Assumes options and
restricted stock units calculated in accordance with GAAP and the
full exchange of all outstanding Paired Securities for shares of
Class A common stock as of the beginning of the period.
|
A reconciliation of net income (loss) per share, diluted, to
adjusted net loss per diluted share is set forth below for the
three and six months ended June 30,
2024 and 2023:
|
|
For the Three Months
Ended
|
|
|
|
June 30,
2024
|
|
|
June 30,
2023
|
|
|
|
Net
Income
|
|
|
Weighted
Average
Shares,
Diluted
|
|
|
Net
Income
per
Share,
Diluted
|
|
|
Net
Income
|
|
|
Weighted
Average
Shares,
Diluted
|
|
|
Net
Income
per Share,
Diluted
|
|
|
Net income (loss)
attributable to Purple
Innovation Inc.(1)
|
|
$
|
27
|
|
|
|
107,779
|
|
|
$
|
0.00
|
|
|
$
|
(40,487)
|
|
|
|
105,079
|
|
|
$
|
(0.39)
|
|
|
Assumed exchange of
shares(2)
|
|
|
(36)
|
|
|
|
—
|
|
|
|
|
|
|
|
(167)
|
|
|
|
428
|
|
|
|
|
|
|
Net loss
|
|
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
(40,654)
|
|
|
|
|
|
|
|
|
|
|
Adjustments to arrive
at adjusted loss
before taxes(3)
|
|
|
(18,639)
|
|
|
|
|
|
|
|
|
|
|
|
8,370
|
|
|
|
|
|
|
|
|
|
|
Adjusted loss before
taxes
|
|
|
(18,648)
|
|
|
|
|
|
|
|
|
|
|
|
(32,284)
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
benefit(4)
|
|
|
4,830
|
|
|
|
|
|
|
|
|
|
|
|
8,362
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
loss
|
|
$
|
(13,818)
|
|
|
|
107,779
|
|
|
$
|
(0.13)
|
|
|
$
|
(23,922)
|
|
|
|
105,507
|
|
|
$
|
(0.23)
|
|
|
|
(1) Represents net
income (loss) attributable to Purple Innovation, Inc. and the
associated weighted average diluted shares, of Class A common stock
outstanding. For the three months ended June 30, 2024, the Paired
Securities are included in the beginning weighted average shares,
diluted.
|
|
|
(2) Assumes the full
exchange of all outstanding Paired Securities for shares of Class A
common stock as of the beginning of the period. Also assumes the
addition of net income attributable to noncontrolling interests
corresponding with the assumed exchange of the Paired Securities
for shares of Class A common stock.
|
|
|
(3) Represents the
total impact of all adjustments identified in the adjusted net
income table above to arrive at adjusted income before income
taxes. Also assumes the dilutive warrants, options and restricted
stock as calculated in accordance with GAAP.
|
|
|
(4) Represents the
estimated effective tax rate of 25.9% for the three months ended
June 30, 2024 and 2023, applied to adjusted net income before
income taxes. The estimated effective tax rates are what the
Company would be subject to and consist of the combined federal
statutory tax rate and the Company's blended state tax
rates.
|
|
|
For the Six Months
Ended
|
|
|
|
June 30,
2024
|
|
|
June 30,
2023
|
|
|
|
Net
Income
|
|
|
Weighted
Average
Shares,
Diluted
|
|
|
Net
Income
per
Share,
Diluted
|
|
|
Net
Income
|
|
|
Weighted
Average
Shares,
Diluted
|
|
|
Net
Income
per Share,
Diluted
|
|
|
Net loss attributable
to Purple Innovation Inc.(1)
|
|
$
|
(50,190)
|
|
|
|
106,755
|
|
|
$
|
(0.47)
|
|
|
$
|
(66,420)
|
|
|
|
101,760
|
|
|
$
|
(0.65)
|
|
|
Assumed exchange of
shares(2)
|
|
|
(87)
|
|
|
|
205
|
|
|
|
|
|
|
|
(286)
|
|
|
|
428
|
|
|
|
|
|
|
Net loss
|
|
|
(50,277)
|
|
|
|
|
|
|
|
|
|
|
|
(66,706)
|
|
|
|
|
|
|
|
|
|
|
Adjustments to arrive
at adjusted loss
before taxes(3)
|
|
|
8,413
|
|
|
|
|
|
|
|
|
|
|
|
15,521
|
|
|
|
|
|
|
|
|
|
|
Adjusted loss before
taxes
|
|
|
(41,864)
|
|
|
|
|
|
|
|
|
|
|
|
(51,185)
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
benefit(4)
|
|
|
10,843
|
|
|
|
|
|
|
|
|
|
|
|
13,257
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
loss
|
|
$
|
(31,021)
|
|
|
|
106,960
|
|
|
$
|
(0.29)
|
|
|
$
|
(37,928)
|
|
|
|
102,188
|
|
|
$
|
(0.37)
|
|
|
|
(1) Represents net loss
attributable to Purple Innovation, Inc. and the associated weighted
average diluted shares, of Class A common stock
outstanding.
|
|
|
(2) Assumes the full
exchange of all outstanding Paired Securities for shares of Class A
common stock as of the beginning of the period. Also assumes the
addition of net income attributable to noncontrolling interests
corresponding with the assumed exchange of the Paired Securities
for shares of Class A common stock.
|
|
|
(3) Represents the
total impact of all adjustments identified in the adjusted net
income table above to arrive at adjusted income before income
taxes. Also assumes the dilutive warrants, options and restricted
stock as calculated in accordance with GAAP.
|
|
|
(4) Represents the
estimated effective tax rate of 25.9% for the six months ended June
30, 2024 and 2023, applied to adjusted net income before income
taxes. The estimated effective tax rates are what the Company would
be subject to and consist of the combined federal statutory tax
rate and the Company's blended state tax rates, assuming no
valuation allowance.
|
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SOURCE Purple Innovation, Inc.