LEHI,
Utah, May 10, 2023 /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 first quarter ended
March 31, 2023.
First Quarter Financial Summary (Comparisons versus First
Quarter 2022)1
- Net revenue decreased 23.6% to $109.4
million compared to $143.2
million.
-
- Wholesale revenue decreased 25.3% and Direct-to-Consumer (DTC)
revenue decreased 22.5%.
- Gross margin increased 340 basis points to 39.5% compared to
36.1%.
- Operating expenses were $65.2
million, or 59.6% of revenue compared to $70.0 million, or 48.9% of revenue.
-
- Advertising spend decreased 50.7% to $11.7 million, compared to $23.8 million.
- Operating loss was $(22.0)
million compared to an operating loss of $(18.4) million.
- Net loss was $(23.4) million as
compared to $(13.6) million.
-
- Adjusted net loss was $(12.0)
million, or $(0.12) per
diluted share as compared to $(16.5)
million, or $(0.24) per
diluted share.
- EBITDA was $(16.3) million
compared to $(10.6) million.
-
- Adjusted EBITDA decreased to $(4.4)
million compared to $(9.6)
million.
- Cash and cash equivalents were $54.5
million at March 31,
2023.
____________________________
|
|
|
|
|
|
|
|
|
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.
|
Chief Executive Officer Rob
DeMartini, said "Our top-line result was generally in-line
with our expectations and our improved Adjusted EBITDA reflects
both meaningful operating efficiencies, and proactive cost
management, including a significant shift in planned advertising
spend intended to support the second quarter launch of our broadest
product line ever. I am encouraged that despite lower revenue, we
were able to increase gross margins, highlighting the work we've
done right sizing our cost structure and improving the efficiency
of supply chain and manufacturing processes."
"With the second quarter underway, we have started shipping our
new mattresses to our wholesale partners ahead of their debut at
retail, including in our showrooms and website starting
May 15," continued DeMartini.
"With the improved and expanded product lineup and new brand
messaging, we are optimistic that consumer demand will accelerate
in the second half of the year. While near-term challenges
persist, we believe we are on the right path towards returning to
profitable growth and driving sustained market share gains over the
long-term."
First Quarter 2023 Review
First quarter 2023 net revenue decreased 23.6% to $109.4 million, compared to $143.2 million in the first quarter of 2022. This
decrease was primarily due to changing demand for home-related
products, inflationary pressure on discretionary consumer spending,
and an intentional 50.7% reduction in advertising spend compared
with a year ago. This decrease was also due in part to
decreased wholesale demand for our legacy mattress models due to
the upcoming launch of our new premium and luxe product lineup. By
channel, wholesale revenue decreased 25.3% and DTC revenue
decreased 22.5%. DTC net revenues declined due to lower e-commerce
revenue partially offset by growth in Purple retail showroom
revenue driven by the addition of 21 showrooms over the previous 12
months.
Gross margin for the first quarter 2023 increased to 39.5%
compared to 36.1% in the year ago period. Despite the cost
de-leveraging that occurred as a result of lower net revenues and
unit volume, gross margin increased largely due to lower materials,
labor and freight costs compared to elevated levels in the prior
year period, along with the ongoing benefit of efficiency and cost
reduction initiatives that were initiated in the first half of 2022
and became fully impactful during the second half of the year.
Operating expenses were $65.2
million, or 59.6% of net revenue for the first quarter of
2023 compared to $70.0 million, or
48.9% of net revenue in the year ago period. This reduction
in operating expenses was largely driven by a decrease in marketing
and sales expense of $11.8 million,
or 23.6%, due to the intentional reduction in advertising spend to
improve marketing efficiency, stabilize profitability and align
spending with current demand levels, including shifting
approximately $3.0 million in launch
related expenses into the second quarter of 2023. This was
partially offset by a $5.8 million
increase in general and administrative costs primarily attributable
to expenses incurred by the Board's Special Committee.
Operating loss was $(22.0) million
for the first quarter 2023 compared to $(18.4) million in the prior year period.
Net loss attributable to Purple Innovation, Inc. was
$(23.3) million for the first quarter
2023 compared to $(13.5) million in
the year ago period. As previously disclosed, the Company
determined that its outstanding warrants should be accounted for as
liabilities and recorded at fair value on the date of the
transaction and subsequently re-measured to fair value at each
reporting date. For the three months ending March 31, 2023, there was no change in the fair
value of warrant liabilities, while for the three months ended
March 31, 2022, the Company
recognized a non-cash gain of $3.9
million associated with the change in fair value of warrant
liabilities.
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 losses
associated with the extinguishment of debt and the expenses
incurred by the Board's Special Committee, was $(12.0) million, or $(0.12) per diluted share, compared to
$(16.5) million, or $(0.24) per diluted share in the prior year
period. Adjusted net income has also been adjusted to reflect an
estimated effective income tax rate of 25.9% for the current year
period and 14.9% for the comparable prior year period.
EBITDA for the first quarter 2023 was $(16.3) million compared to $(10.6) million in the first quarter 2022.
Adjusted EBITDA, which excludes the expenses of the Board's Special
Committee, legal fees, non-cash loss on extinguishment of debt,
non-cash stock-based compensation, a vendor separation fee,
executive search costs, severance and showroom opening costs, was
$(4.4) million compared to Adjusted
EBITDA of $(9.6) million in the prior
year period.
Balance Sheet
As of March 31, 2023, the Company
had cash and cash equivalents of $54.5
million compared to $41.8
million as of December 31,
2022. The increase was driven primarily by cash provided
from net proceeds of $57.2 million
received from the public offering completed in February 2023. This was partially offset by cash
used in operations of $13.5 million,
capital expenditures of $3.1 million
primarily related to additional investments made in our
manufacturing facilities and the repayment of the full $24.7 million outstanding on the credit
facility.
Inventories as of March 31, 2023
totaled $87.7 million compared with
$73.2 million as of December 31, 2022. The increase in inventories
since the end of 2022 is primarily due to the increase of finished
goods.
2023 Outlook
The Company is reiterating its 2023 outlook for full year net
revenue to be in the range of $590 to
$615 million and Adjusted EBITDA between $13 million and $17
million and gross margins in the low 40 percent range for
the full year.
Due to continued market softness and the launch of our new
products and branding not happening until May 15th, we expect second quarter to continue to
reflect softness on the top line and be in the range of Q2 a year
ago. Additionally, the $3.0M of
launch related expenses that shifted into the second quarter from
the first quarter will weigh on profitability, as it is incremental
to the start of the Company's planned Q2 step up in advertising
spend for 2023 in support of the new product launch and new brand
messaging.
Conference Call and Webcast Information
Purple Innovation, Inc. will host a live conference call to
discuss financial results today, May 10,
2023 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 is a digitally-native vertical brand with a mission
to help people feel and live better through innovative comfort
solutions. We design and manufacture a variety of innovative,
premium, branded comfort products, including mattresses, pillows,
cushions, frames, sheets and more. Our products are the result of
over 30 years of innovation and investment in proprietary and
patented comfort technologies and the development of our own
manufacturing processes. Our proprietary gel technology,
Hyper-Elastic Polymer®, underpins many of our comfort products and
provides a range of benefits that differentiate our offerings from
other competitors' products. We market and sell our products
through our direct-to-consumer online channels, traditional retail
partners, third-party online retailers and our owned retail
showrooms. For more information on Purple, visit purple.com.
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. Such forward-looking statements
include but are not limited to statements relating to our expected
continuing expansion of market share from investment in expanded
product lines, innovation and showrooms; our ability to achieve
profitability; expected improvements in performance
quarter-over-quarter and growth in the second half of the year;
expected improvement in margin rates; our ability to successfully
execute on improvement strategies, including right-sizing our cost
structure and improving supply chain and manufacturing efficiency,
and related impacts on our operating results; expected improvements
in our operating performance, including wholesale relationships;
demand for our products; expectations regarding consumer behavior;
the timing and impact of the introduction of new product lines; the
adequacy of our cash other capital resources; and expected
financial and operating results for the second quarter or full year
2023, including net revenue and Adjusted EBITDA. 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 (the
"SEC") on March 22, 2023 as amended
on Form 10-K/A filed with the SEC on May 1,
2023, 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
second quarter and full year 2023, 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
(in thousands,
except par value)
(unaudited)
|
|
|
|
March 31,
2023
|
|
|
December 31,
2022
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash
|
|
$
|
54,530
|
|
|
$
|
41,754
|
Accounts
receivable, net
|
|
|
14,442
|
|
|
|
34,566
|
Inventories,
net
|
|
|
87,681
|
|
|
|
73,197
|
Prepaid
expenses
|
|
|
7,537
|
|
|
|
7,821
|
Other current
assets
|
|
|
4,598
|
|
|
|
4,117
|
Total current
assets
|
|
|
168,788
|
|
|
|
161,455
|
Property and equipment,
net
|
|
|
134,094
|
|
|
|
136,673
|
Operating lease
right-of-use assets
|
|
|
101,593
|
|
|
|
102,541
|
Goodwill
|
|
|
4,897
|
|
|
|
4,897
|
Intangible assets,
net
|
|
|
24,304
|
|
|
|
26,221
|
Other long-term
assets
|
|
|
2,856
|
|
|
|
1,546
|
Total assets
|
|
$
|
436,532
|
|
|
$
|
433,333
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
46,835
|
|
|
$
|
46,441
|
Accrued sales
returns
|
|
|
4,118
|
|
|
|
5,107
|
Accrued
compensation
|
|
|
9,666
|
|
|
|
6,691
|
Customer
prepayments
|
|
|
2,853
|
|
|
|
4,452
|
Accrued sales
and use tax
|
|
|
1,377
|
|
|
|
2,978
|
Accrued rebates
and allowances
|
|
|
2,982
|
|
|
|
9,804
|
Operating lease
obligations – current portion
|
|
|
14,129
|
|
|
|
13,708
|
Other current
liabilities
|
|
|
7,639
|
|
|
|
8,130
|
Total current
liabilities
|
|
|
89,599
|
|
|
|
97,311
|
Debt
|
|
|
—
|
|
|
|
23,657
|
Operating lease
obligations, net of current portion
|
|
|
115,306
|
|
|
|
115,599
|
Other long-term
liabilities, net of current portion
|
|
|
17,752
|
|
|
|
17,876
|
Total
liabilities
|
|
|
222,657
|
|
|
|
254,443
|
Commitments and
contingencies (Note 14)
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Class A common
stock; $0.0001 par value, 210,000 shares authorized;
105,045
issued
and outstanding at March 31, 2023 and 91,380 issued and outstanding
at
December
31, 2022
|
|
|
11
|
|
|
|
9
|
Class B common
stock; $0.0001 par value, 90,000 shares authorized; 448 issued
and
outstanding at March 31, 2023 and 448 issued and outstanding at
December 31, 2022
|
|
|
—
|
|
|
|
—
|
Additional
paid-in capital
|
|
|
587,753
|
|
|
|
529,466
|
Accumulated
deficit
|
|
|
(374,814)
|
|
|
|
(351,514)
|
Total stockholders'
equity attributable to Purple Innovation, Inc.
|
|
|
212,950
|
|
|
|
177,961
|
Noncontrolling
interest
|
|
|
925
|
|
|
|
929
|
Total stockholders'
equity
|
|
|
213,875
|
|
|
|
178,890
|
Total liabilities and
stockholders' equity
|
|
$
|
436,532
|
|
|
$
|
433,333
|
PURPLE INNOVATION,
INC.
Condensed
Consolidated Statements of Income
(in thousands,
except per share amounts)
(unaudited)
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
Revenues,
net
|
|
$
|
109,372
|
|
|
$
|
143,179
|
|
Cost of
revenues
|
|
|
66,149
|
|
|
|
91,553
|
|
Gross profit
|
|
|
43,223
|
|
|
|
51,626
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Marketing and
sales
|
|
|
38,173
|
|
|
|
49,959
|
|
General and
administrative
|
|
|
23,667
|
|
|
|
17,888
|
|
Research and
development
|
|
|
3,372
|
|
|
|
2,143
|
|
Total operating
expenses
|
|
|
65,212
|
|
|
|
69,990
|
|
Operating
loss
|
|
|
(21,989)
|
|
|
|
(18,364)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(202)
|
|
|
|
(1,023)
|
|
Other income,
net
|
|
|
73
|
|
|
|
17
|
|
Loss on extinguishment
of debt
|
|
|
(1,217)
|
|
|
|
—
|
|
Change in fair value –
warrant liabilities
|
|
|
—
|
|
|
|
3,928
|
|
Total other income
(expense), net
|
|
|
(1,346)
|
|
|
|
2,922
|
|
Net loss before income
taxes
|
|
|
(23,335)
|
|
|
|
(15,442)
|
|
Income tax benefit
(expense)
|
|
|
(72)
|
|
|
|
1,811
|
|
Net loss
|
|
|
(23,407)
|
|
|
|
(13,631)
|
|
Net loss attributable
to noncontrolling interest
|
|
|
(107)
|
|
|
|
(129)
|
|
Net loss attributable
to Purple Innovation, Inc.
|
|
$
|
(23,300)
|
|
|
$
|
(13,502)
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.24)
|
|
|
$
|
(0.20)
|
|
Diluted
|
|
$
|
(0.24)
|
|
|
$
|
(0.20)
|
|
Weighted average common
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
98,404
|
|
|
|
67,058
|
|
Diluted
|
|
|
98,852
|
|
|
|
67,506
|
|
PURPLE
INNOVATION, INC.
Condensed Consolidated Statements of Cash
Flows
(in
thousands)
(unaudited)
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
2023
|
|
|
2022
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(23,407)
|
|
|
$
|
(13,631)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
6,883
|
|
|
|
3,842
|
|
Non-cash
interest
|
|
|
270
|
|
|
|
148
|
|
Change in fair value –
warrant liabilities
|
|
|
—
|
|
|
|
(3,928)
|
|
Loss on extinguishment
of debt
|
|
|
1,217
|
|
|
|
—
|
|
Stock-based
compensation
|
|
|
1,192
|
|
|
|
542
|
|
Deferred income
taxes
|
|
|
—
|
|
|
|
(1,912)
|
|
Changes in
operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
20,124
|
|
|
|
(3,576)
|
|
Inventories
|
|
|
(14,484)
|
|
|
|
(7,136)
|
|
Prepaid expenses and
other assets
|
|
|
903
|
|
|
|
1,021
|
|
Operating leases,
net
|
|
|
1,076
|
|
|
|
418
|
|
Accounts
payable
|
|
|
1,223
|
|
|
|
(15,900)
|
|
Accrued sales
returns
|
|
|
(989)
|
|
|
|
(1,970)
|
|
Accrued
compensation
|
|
|
2,889
|
|
|
|
2,757
|
|
Customer
prepayments
|
|
|
(1,599)
|
|
|
|
(5,993)
|
|
Accrued rebates and
allowances
|
|
|
(6,822)
|
|
|
|
(3,160)
|
|
Other accrued
liabilities
|
|
|
(1,979)
|
|
|
|
4,197
|
|
Net cash used in
operating activities
|
|
|
(13,503)
|
|
|
|
(44,281)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
(2,943)
|
|
|
|
(12,631)
|
|
Investment in intangible assets
|
|
|
(155)
|
|
|
|
(447)
|
|
Net cash used in
investing activities
|
|
|
(3,098)
|
|
|
|
(13,078)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Payments on term loan
|
|
|
(24,656)
|
|
|
|
(2,531)
|
|
Payments on revolving line of credit
|
|
|
—
|
|
|
|
(55,000)
|
|
Payments for debt issuance costs
|
|
|
(2,898)
|
|
|
|
(1,242)
|
|
Proceeds from stock offering
|
|
|
60,300
|
|
|
|
98,210
|
|
Payments for public offering costs
|
|
|
(3,100)
|
|
|
|
(5,315)
|
|
Tax receivable agreement payments
|
|
|
(269)
|
|
|
|
(5,847)
|
|
Proceeds from exercise of stock options
|
|
|
—
|
|
|
|
166
|
|
Net cash provided by
financing activities
|
|
|
29,377
|
|
|
|
28,441
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease)
in cash
|
|
|
12,776
|
|
|
|
(28,918)
|
|
Cash, cash equivalents and restricted cash, beginning of the
year
|
|
|
41,754
|
|
|
|
91,616
|
|
Cash, cash equivalents and restricted cash, end of the
period
|
|
$
|
54,530
|
|
|
$
|
62,698
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
Cash paid during the period for interest, net of amounts
capitalized
|
|
$
|
(39)
|
|
|
$
|
863
|
|
Cash paid during the period for income taxes
|
|
$
|
43
|
|
|
$
|
44
|
|
|
|
|
|
|
|
|
|
|
Supplemental schedule
of non-cash investing and financing activities:
|
|
|
|
|
|
|
|
|
Property and equipment included in accounts
payable
|
|
$
|
3,397
|
|
|
$
|
4,730
|
|
Accrued distributions
|
|
$
|
—
|
|
|
$
|
228
|
|
PURPLE INNOVATION,
INC.
RECONCILIATION OF GAAP TO NON-GAAP
MEASURES
(in thousands, except per share
amounts)
(unaudited)
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 and adjusted EBITDA.
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, net other income 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
March
31,
|
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
|
$
|
(23,407)
|
|
|
|
(13,631)
|
|
Interest
expense
|
|
|
202
|
|
|
|
1,023
|
|
Income tax (benefit)
expense
|
|
|
72
|
|
|
|
(1,811)
|
|
Other (income) expense,
net
|
|
|
(73)
|
|
|
|
(17)
|
|
Depreciation and
amortization
|
|
|
6,883
|
|
|
|
3,842
|
|
EBITDA
|
|
|
(16,317)
|
|
|
|
(10,594)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Change in fair value -
warrant liability
|
|
|
—
|
|
|
|
(3,928)
|
|
Loss on extinguishment
of debt
|
|
|
1,217
|
|
|
|
—
|
|
Stock-based
compensation expense
|
|
|
1,192
|
|
|
|
542
|
|
Vendor separation
fee
|
|
|
1,050
|
|
|
|
—
|
|
Legal fees
|
|
|
1,350
|
|
|
|
162
|
|
Board special committee
fees
|
|
|
5,862
|
|
|
|
—
|
|
Executive interim and
search costs
|
|
|
789
|
|
|
|
1,714
|
|
Severance
costs
|
|
|
368
|
|
|
|
1,278
|
|
Showroom opening
costs
|
|
|
57
|
|
|
|
676
|
|
New production facility
start-up costs
|
|
|
—
|
|
|
|
263
|
|
COVID-19 related
expenses
|
|
|
—
|
|
|
|
329
|
|
Adjusted
EBITDA
|
|
$
|
(4,432)
|
|
|
$
|
(9,558)
|
|
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 income and adjusted net
income per diluted share, are supplemental measures of operating
performance that do not represent, and should not be considered,
alternatives to net income and earnings per share, as calculated in
accordance with GAAP. We believe adjusted net income and adjusted
net income per diluted share, supplement GAAP measures and enable
us to more effectively evaluate our performance period-over-period.
A reconciliation of net income (loss), the most directly comparable
GAAP measure, to adjusted net income and the computation of
adjusted net income per diluted share, are set forth below:
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
2023
|
|
|
2022
|
|
Net loss
|
|
$
|
(23,407)
|
|
|
$
|
(13,631)
|
|
Income tax (benefit)
expense, as reported
|
|
|
72
|
|
|
|
(1,811)
|
|
Loss on extinguishment
of debt
|
|
|
1,217
|
|
|
|
—
|
|
Board special committee
fees
|
|
|
5,862
|
|
|
|
—
|
|
Change in fair value –
warrant liabilities
|
|
|
—
|
|
|
|
(3,928)
|
|
Adjusted net loss
before income taxes
|
|
|
(16,256)
|
|
|
|
(19,370)
|
|
Adjusted income
taxes(1)
|
|
|
4,210
|
|
|
|
2,886
|
|
Adjusted net
loss
|
|
$
|
(12,046)
|
|
|
$
|
(16,484)
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income per
share, diluted
|
|
$
|
(0.12)
|
|
|
$
|
(0.24)
|
|
|
|
|
|
|
|
|
|
|
Adjusted
weighted-average shares outstanding,
diluted(2)
|
|
|
98,852
|
|
|
|
67,506
|
|
|
(1) Represents the
estimated effective tax rate of 25.9% and 14.9% for the three
months ended March 31, 2023 and 2022, respectively, 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.
|
|
(2) Assumes dilutive
warrants, options and restricted stock 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 loss per share, diluted, to adjusted net
loss per share, diluted is set forth below for the three months
ended March 31, 2023 and 2022:
|
|
For the Three Months
Ended
|
|
|
|
March 31,
2023
|
|
|
March 31,
2022
|
|
|
|
Net
Income
|
|
|
Weighted
Average
Shares,
Diluted
|
|
|
Net Loss
per
Share,
Diluted
|
|
|
Net
Income
|
|
|
Weighted
Average
Shares,
Diluted
|
|
|
Net Loss
per Share,
Diluted
|
|
Net loss attributable
to Purple Innovation Inc.(1)
|
|
$
|
(23,300)
|
|
|
|
98,852
|
|
|
$
|
(0.24)
|
|
|
$
|
(13,502)
|
|
|
|
67,506
|
|
|
$
|
(0.20)
|
|
Assumed exchange
of shares(2)
|
|
|
(107)
|
|
|
|
|
|
|
|
|
|
|
|
(129)
|
|
|
|
—
|
|
|
|
|
|
Net
loss
|
|
|
(23,407)
|
|
|
|
|
|
|
|
|
|
|
|
(13,631)
|
|
|
|
|
|
|
|
|
|
Adjustments to
arrive at adjusted income before taxes(3)
|
|
|
7,151
|
|
|
|
|
|
|
|
|
|
|
|
(5,739)
|
|
|
|
|
|
|
|
|
|
Adjusted loss
before taxes
|
|
|
16,256
|
|
|
|
|
|
|
|
|
|
|
|
(19,370)
|
|
|
|
|
|
|
|
|
|
Adjusted income
taxes(4)
|
|
|
4,210
|
|
|
|
|
|
|
|
|
|
|
|
2,886
|
|
|
|
|
|
|
|
|
|
Adjusted net
loss
|
|
$
|
(12,046)
|
|
|
|
98,852
|
|
|
$
|
(0.12)
|
|
|
$
|
(16,484)
|
|
|
|
67,506
|
|
|
$
|
(0.24)
|
|
|
(1) Represents
net income attributable to Purple Innovation, Inc. and the
associated weighted average basic shares, of Class A common stock
outstanding.
|
|
(2) 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. For the three months
ended March 31, 2023 and 2022, the assumed full exchange of all
outstanding Paired Securities for shares of Class A common stock as
of the beginning of the period was included in the calculation of
the Weighted Average Shares, Diluted on the previous line as the
effect was dilutive.
|
|
(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% and 14.9% for the three
months ended December 31, 2023 and 2022, respectively, 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.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/purple-innovation-reports-first-quarter-2023-results-301821317.html
SOURCE Purple, Inc.