Returned to Positive Adjusted EBITDA and Cash Flow in Fourth QuarterGAAP Gross Margin of 42.9% in Q4; Adjusted Gross Margin improved Over 810bps in Q4 Versus Last YearGenerated Incremental Liquidity with New $19.0 Million Term Loan Increase to Support Continued Investments in Innovation and Advertising LEHI, Utah, March 13, 2025 /PRNewswire/ -- Purple Innovation, Inc. (NASDAQ: PRPL) ("Purple" or the "Company"), a comfort innovation company known for creating the "World's First No Pressure™ Mattress," today ...

Core Viewpoint - Purple Innovation, Inc. has initiated a review of strategic alternatives to maximize shareholder value following expressions of interest, considering options such as a sale or merger [1][3] Financial Performance - The company reported a return to positive Adjusted EBITDA and positive cash flow generation in the fourth quarter of 2024 [1][3] - Purple expanded its existing credit facility by $19 million, increasing the total commitment to $80 million [4] Strategic Review Process - A special committee of independent directors has been formed to evaluate potential alternatives for the company [2] - The Board has not set a timetable for the conclusion of the evaluation and will not comment further until deemed necessary [3] Advisory Support - Purple has retained Jefferies LLC as a financial advisor to assist in the review of strategic alternatives [4]

Company Overview - Purple Innovation, Inc. is recognized for creating the "World's First No Pressure™ Mattress" and is a leader in comfort innovation [1] - The company specializes in premium mattresses featuring the GelFlex® Grid technology, which is designed to enhance restorative sleep and reduce aches and pains [4] Financial Results Announcement - Purple will report its fourth quarter and full year 2024 financial results on March 13, 2025, at approximately 4:05 p.m. ET [1] - A conference call to discuss these results will take place on the same day at 4:30 p.m. ET [1] Participation Details - Investors and analysts can join the conference call by dialing 844-481-1976 for domestic calls or 412-317-0642 for international calls [2] - A live webcast of the call will also be available on the company's investor relations website [2] Replay Information - A telephone replay of the conference call will be accessible until March 27, 2025, using the number 877-344-7529 for domestic and 412-317-0088 for international calls, with Conference ID 4514096 [3] - A webcast replay will be available on the investor relations section of the company's website for 30 days following the call [3]

Core Viewpoint - Purple Innovation, Inc. has revised its revenue and EBITDA outlook for the full year of 2024, expecting net revenue between $486 million and $488 million and adjusted EBITDA between $(23) million and $(21) million, while anticipating positive cash flow and adjusted EBITDA in the fourth quarter [1][2][3]. Financial Outlook - The current full year outlook for net revenue is set at $486 million to $488 million, down from the previous expectation of $490 million to $510 million [3]. - Adjusted EBITDA is now projected to be between $(23) million and $(21) million, a decrease from the earlier guidance of $(20) million to $(10) million [3]. Strategic Milestones - The CEO highlighted the importance of achieving positive cash flow and adjusted EBITDA in the fourth quarter as a significant milestone for the company's "Path to Premium Sleep" strategy [2]. Company Background - Purple is recognized as a leading premium mattress company, known for its GelFlex® Grid technology, which aims to enhance restorative sleep and reduce discomfort for various types of sleepers [5].

Financial Data and Key Metrics Changes - Net revenue for Q3 2024 was $118.6 million, down 15.3% from $140 million in the prior year [28] - Adjusted gross margin improved by 340 basis points year-over-year to 40.5%, exceeding the 40% year-end target for the second consecutive period [8][32] - Adjusted net loss for the quarter was $8.4 million, an improvement from an adjusted net loss of $19.4 million last year [34] - Adjusted EBITDA for Q3 was negative $6.4 million, an improvement from negative $16.3 million last year [34] Business Line Data and Key Metrics Changes - Direct to consumer (DTC) net revenue was $70.8 million, down 11.7% year-over-year, with e-commerce down 16% and showrooms flat [28][12] - Wholesale net revenue was $47.8 million, down 20.1% from last year, impacted by the exit from certain customer relationships [28][30] - Showrooms performed solidly, remaining flat year-over-year, driven by an increase in average selling prices [13] Market Data and Key Metrics Changes - The overall market remains challenging, with the company experiencing softness in consumer demand due to ongoing housing market struggles [7] - The company is optimistic about maintaining market share despite industry-wide demand declines, with year-to-date performance down less than 2% compared to the previous year [47] Company Strategy and Development Direction - The company is focusing on operational efficiencies through a corporate restructure and consolidation of manufacturing facilities, expecting annual EBITDA savings of $15 million to $20 million starting in 2025 [11][25] - The Path to Premium Sleep strategy aims to enhance premium positioning and drive sustained profitable growth [25] - New product innovations are planned for early 2025, including enhancements to existing collections and new product lines [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledges continued pressure on revenue due to industry-wide demand declines but remains confident in the restructuring efforts to strengthen the business model long-term [25][37] - The company expects to finish the year at the lower end of revenue guidance, projecting revenue of $490 million to $510 million [37] Other Important Information - Cash and cash equivalents at the end of September were $23.4 million, down from $26.9 million at the end of 2023 [35] - Net inventories decreased by 16.9% year-over-year, indicating improved inventory management [35] Q&A Session Summary Question: Insights on revenue acceleration for Q4 - Management noted that post-Labor Day business has been soft, but they expect a pickup during the Black Friday promotion period [40] Question: Cash flow considerations moving forward - Management highlighted good progress on inventory management and expects to return to a normalized level of accounts payable by the end of Q4 [42] Question: Confidence in achieving profitability next year - Management is confident due to improvements in gross margin and does not assume significant volume increases in their projections [46] Question: Performance during Labor Day - Management indicated they are down less than 2% year-to-date, suggesting they may be gaining market share [47] Question: Status of operational manufacturing consolidation - Management reported that the consolidation is more than halfway complete with minimal disruptions [48] Question: Capacity utilization and EBITDA profitability - Current capacity utilization is about 70%, with a breakeven point for EBITDA lowered to $45 million a month [65][68]

Core Viewpoint - Purple Innovation reported a quarterly loss of $0.08 per share, better than the Zacks Consensus Estimate of a loss of $0.10, and an improvement from a loss of $0.18 per share a year ago, indicating a 20% earnings surprise [1] Financial Performance - The company posted revenues of $118.6 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 5.60%, and down from $140 million in the same quarter last year [2] - Over the last four quarters, Purple Innovation has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] Stock Performance - Purple Innovation shares have declined approximately 11.7% since the beginning of the year, contrasting with the S&P 500's gain of 20.1% [3] - The stock's immediate price movement will largely depend on management's commentary during the earnings call [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.06 on revenues of $132.12 million, and for the current fiscal year, it is -$0.48 on revenues of $498.05 million [7] - The estimate revisions trend for Purple Innovation is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the shares are expected to perform in line with the market in the near future [6] Industry Context - The Consumer Products - Staples industry, to which Purple Innovation belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, indicating potential challenges ahead [8]

Core Insights - Purple Innovation, Inc. reported a 15.3% decline in net revenue for Q3 2024, totaling $118.6 million, primarily due to industry-wide demand softness and reduced advertising spend [3][10] - The company achieved a GAAP gross margin of 29.7%, down 410 basis points from the previous year, but the adjusted gross margin improved by 340 basis points to 40.5% [4][27] - Adjusted EBITDA loss narrowed significantly to $(6.4) million from $(16.3) million in the prior year, indicating improved operational efficiency [7][10] Financial Performance - Q3 2024 net revenue was $118.6 million, down from $140.0 million in Q3 2023, with DTC net revenues decreasing by 11.7% and wholesale net revenues by 20.1% [3][18] - Operating expenses increased to $82.0 million, up 2.6% from $79.9 million in Q3 2023, driven by $19.8 million in restructuring-related charges [5][29] - Net loss attributable to Purple for Q3 2024 was $(39.2) million, or $(0.36) per diluted share, compared to a net loss of $(36.0) million, or $(0.34) per diluted share, in Q3 2023 [6][30] Restructuring and Operational Efficiency - The company initiated a restructuring plan in August 2024, which includes consolidating manufacturing operations and reducing headcount, expected to yield annual EBITDA savings of $15 to $20 million starting in 2025 [8][10] - Total restructuring, impairment, and related charges for Q3 2024 amounted to $32.7 million, with additional charges of $9.9 million anticipated through Q2 2025 [8][10] - The restructuring plan aims to enhance operational efficiencies and position the company to capitalize on market improvements [3][8] Balance Sheet and Cash Flow - As of September 30, 2024, cash and cash equivalents were $23.4 million, down from $26.9 million at the end of 2023, while inventories decreased by 10.5% to $59.9 million [9][10] - The company expects to be at the lower end of its guidance range for net revenue of $490 million to $510 million for the full year 2024 [10][10] Market Outlook - Despite challenges in Q3, the company remains optimistic about its Path to Premium Sleep strategy and anticipates positive adjusted EBITDA in the fourth quarter of 2024 [2][10] - The company is focused on operational improvements and aims to build on its momentum into 2025 [3][10]

Financial Performance - Third quarter 2024 net revenue decreased by 15.3% to $118.6 million, down from $140.0 million in Q3 2023[4] - Revenues for the three months ended September 30, 2024, were $118,598 thousand, a decrease of 15.2% compared to $139,996 thousand for the same period in 2023[18] - Adjusted revenues for the three months ended September 30, 2024, were $118,598 thousand, down from $143,120 thousand in the same period of 2023, reflecting a decrease of about 17%[25] - Net loss attributable to Purple Innovation for Q3 2024 was $(39.2) million, or $(0.36) per diluted share, compared to a net loss of $(36.0) million, or $(0.34) per diluted share in Q3 2023[7] - Net loss attributable to Purple Innovation Inc. for Q3 2024 was $89,418,000, compared to a net loss of $102,424,000 in Q3 2023, representing a 12.3% improvement year-over-year[44] - The net loss for Q3 2024 was $89,587,000, compared to $102,841,000 in Q3 2023, reflecting a decrease of 12.3%[44] Gross Margin and Profitability - GAAP gross margin for Q3 2024 was 29.7%, a decrease of 410 basis points from 33.8% in the prior year, while adjusted gross margin improved by 340 basis points to 40.5%[5] - Gross profit for the three months ended September 30, 2024, was $35,193 thousand, down from $47,309 thousand in the prior year, representing a decline of 25.6%[18] - Adjusted gross profit for the three months ended September 30, 2024, was $48,052 thousand, with an adjusted gross profit margin of 40.5%, compared to $53,125 thousand and 37.1% in the same period of 2023[25] Operating Expenses - Operating expenses increased by 2.6% to $82.0 million, driven by $19.8 million in restructuring-related charges[6] - Total operating expenses for the three months ended September 30, 2024, were $82,006 thousand, an increase of 2.4% from $79,923 thousand in the same period of 2023[18] - Total operating expenses for the three months ended September 30, 2024, were $82,006 thousand, compared to $79,923 thousand in the same period of 2023, indicating an increase of approximately 3%[27] - Restructuring related charges in operating expenses for the three months ended September 30, 2024, amounted to $(19,832) thousand, with no such charges in the same period of 2023[27] EBITDA and Adjusted Loss - Adjusted EBITDA loss narrowed to $(6.4) million in Q3 2024, compared to $(16.3) million in the same period last year[8] - EBITDA for the three months ended September 30, 2024, was $(27,391) thousand, compared to $(29,655) thousand for the same period in 2023, indicating an improvement in operational performance[22] - Adjusted net loss for Q3 2024 was $39,439,000, with a diluted loss per share of $0.37, compared to an adjusted net loss of $57,238,000 and a diluted loss per share of $0.55 in Q3 2023, indicating a 30.9% reduction in adjusted net loss[44] - Adjusted net loss for the three months ended September 30, 2024, was $(8,418) thousand, compared to $(19,358) thousand for the same period in 2023, showing a reduction in loss of about 57%[30] Cash and Liquidity - Cash and cash equivalents as of September 30, 2024, were $23.4 million, down from $26.9 million as of December 31, 2023[10] - Cash and cash equivalents at the end of the period were $23,399 thousand, compared to $26,606 thousand at the end of September 30, 2023[19] - The company reported a net cash used in investing activities of $(1,128) thousand for the three months ended September 30, 2024, compared to $(4,360) thousand in the same period of 2023, showing a reduction in cash outflow[19] - Cash flows from operating activities for the three months ended September 30, 2024, provided $1,119 thousand, a significant improvement from $(17,755) thousand in the prior year[19] Restructuring and Future Outlook - Total restructuring, impairment, and related charges in Q3 2024 amounted to $32.7 million, with additional charges of $9.9 million expected through Q2 2025[9] - The company anticipates annual EBITDA savings of $15 to $20 million starting in 2025 from its restructuring plan[9] - The company expects to be at the lower end of its guidance range for full-year 2024 net revenue of $490 million to $510 million[11] Tax and Shares - The company reported an adjusted income tax benefit of $13,785,000 for Q3 2024, down from $20,006,000 in Q3 2023, reflecting a decrease of 31.1%[44] - The estimated effective tax rate for the nine months ended September 30, 2024, and 2023 was 25.9%[47] - The weighted average shares, diluted, for Q3 2024 were 107,008,000, compared to 102,962,000 for Q3 2023, indicating an increase in shares outstanding[44]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Class A Common Stock, par value $0.0001 per share PRPL The NASDAQ Stock Market LLC Preferred Stock Purchase Rights N/A The NASDAQ Stock Market LLC Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☒ Emerging growth company ☐ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT ...

LEHI, Utah, Oct. 28, 2024 /PRNewswire/ -- Purple Innovation, Inc. (NASDAQ: PRPL) ("Purple"), a comfort innovation company known for creating the "World's First No Pressure™ Mattress," will report third quarter 2024 financial results on Monday, November 4, 2024 at approximately 4:05 p.m. ET. The Company will hold a conference call that day at 4:30 p.m. ET to review the financial results. Investors and analysts interested in participating in the call are invited to dial 844-481-1976 (domestic) or 412- 317-064 ...