LEHI, Utah, March 9, 2020 /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 fourth quarter and year
ended December 31, 2019.
Fourth Quarter Financial Summary (Comparisons versus Fourth
Quarter 2018)1
- Net revenue increased 58.3% to $124.3
million, compared to $78.5
million.
- Gross margin was 47.7% compared to 34.2%.
- Operating expenses as a percent of net revenue were 45.4%
compared to 40.8%.
- Operating income was $2.8 million
compared to an operating loss of $(5.2)
million. Adjusted operating income was $3.9 million compared to an adjusted operating
loss of $(4.3) million.
- Net loss was $(12.7) million
compared to a net loss of $(5.4)
million. The fourth quarter 2019 included a $13.4 million non-cash loss associated with the
change in fair value of warrant liabilities.
- EBITDA was $(9.3) million
compared to $(4.5) million. Adjusted
EBITDA was $5.8 million compared to
$(3.7) million.
Full Year 2019 Financial Summary (Comparisons versus Full
Year 2018) 1
- Net revenue increased 49.9% to $428.4
million, compared to $285.8
million.
- Gross margin increased 470 basis points to 44.1% compared to
39.4%.
- Operating expenses as a percent of net revenue improved to
40.3% compared to 45.3%.
- Operating income increased to $16.2
million compared to an operating loss of $(16.9) million. Adjusted operating income was
$29.1 million compared to an adjusted
operating loss of $(12.9)
million.
- Net loss was $(12.4) million
compared to a net loss of $(19.6)
million. 2019 included a $6.3
million non-cash expense associated with the loss on
extinguishment of debt, a $16.8
million non-cash loss associated with the change in fair
value of warrant liabilities and a $10.1
million non-cash stock based compensation expense.
- EBITDA was $(3.0) million
compared to $(14.7) million. Adjusted
EBITDA was $33.4 million compared to
$(10.7) million.
"We delivered outstanding financial results in 2019 highlighted
by revenue growth of 50% and a significant improvement in our
balance sheet," said Joe Megibow,
Chief Executive Officer. "The combination of our top-line
performance, significant gross margin expansion, and meaningful
expense leverage, fueled a dramatic improvement in operating profit
compared with 2018. We believe our differentiated product
offering and enhanced marketing programs are driving increased
traffic to our e-commerce website, company operated showrooms and
retail partner doors. At the same time, we believe the improvements
we've made to our manufacturing, supply chain, and fulfillment
functions have created a foundation to support profitable
growth. Overall, we have great momentum as 2020 gets
underway and remain very excited about our growth prospects for the
current year and beyond."
"We continued to experience robust growth in the fourth quarter
highlighted by an acceleration in direct to consumer sales,"
continued Megibow. "It was a very successful holiday season driven
by effective marketing and promotions that fueled consumer demand
and expanded awareness of our brand and product offering. Our
performance reflects the progress we are making executing our
strategic initiatives and I am confident that we are well
positioned to build on our recent accomplishments and generate
increased shareholder value over the long-term."
Fourth Quarter 2019 Review
Fourth quarter 2019 net revenue increased 58.3% to $124.3 million, compared to $78.5 million in the fourth quarter of 2018. The
increase in net revenue was primarily due to strength in the
wholesale channel with more doors and stronger sell-through than
last year, and strong growth in the DTC channel enabled by our
website improvements and the company outlet and showrooms opened
during the second half of 2019.
Gross margin for the fourth quarter 2019 improved to 47.7%
compared to 34.2% in the year ago period. The significant
year-over-year increase in gross margin was attributable to
efficiencies in operations and logistics along with benefits from
product mix, partially offset by changes in channel mix.
Wholesale channel revenue, which carries lower gross margins than
our direct to consumer channel, comprised approximately 36% of net
revenue for the quarter, compared with approximately 25% in the
same quarter last year, and 42% in the third quarter of 2019.
Operating expenses were $56.5
million in the fourth quarter 2019 compared to $32.0 million in the prior year period. As a
percent of net revenue, operating expenses were 45.4% compared with
40.8% in the year ago period. The increase in operating expenses
was primarily attributable to higher marketing spend aimed at
driving demand in the current quarter and brand building
investments to expand awareness and fuel future demand. For
the fourth quarter 2019, marketing and sales expense as a percent
of net revenue increased to 38.6% compared with 33.0% last year due
in part to the shift of approximately $4
million of discretionary marketing investments from the
third quarter 2019 into the fourth quarter 2019.
Operating income was $2.8 million
for the fourth quarter 2019 compared to an operating loss of
$(5.2) million in the prior year
period. Adjusted operating income was $3.9
million compared to an adjusted operating loss of
$(4.3) million in fourth quarter
2018. Adjusted operating income (loss) excludes non-cash stock
based compensation, intangible asset adjustments, legal fees,
interim CFO costs, severance and executive search costs.
Net loss was $(12.7) million for
the fourth quarter 2019 compared to a net loss of $(5.4) million in the year ago period. The fourth
quarter 2019 included a $13.4 million
non-cash loss associated with the change in fair value of warrant
liabilities.
EBITDA for the fourth quarter 2019 was $(9.3) million compared to $(4.5) million in the fourth quarter 2018.
Adjusted EBITDA, which excludes the adjustment for non-cash loss
associated with the change in fair value of warrant liabilities,
intangible asset adjustments, Tax Receivable Agreement expense,
non-cash stock based compensation, legal fees, interim CFO &
consulting costs, and severance, was $5.8
million, compared to adjusted EBITDA of $(3.7) million in the prior year period.
Full Year 2019 Review
Full year 2019 net revenue increased 49.9% to $428.4 million, compared to $285.8 million in 2018. The revenue increase was
primarily due to an increase in wholesale revenue driven by an
increase of over 800 stores as compared to the same period last
year as well as an increase in DTC revenue including contributions
from the retail outlet and showrooms opened in the second half of
the year.
Gross margin for the full year 2019 was 44.1% compared to 39.4%
in the prior year. The 470 basis point increase was primarily
driven by efficiencies in operations and logistics and higher
margins due to product mix, partially offset by increased sales
with wholesale pricing.
Operating expenses were $172.8
million for 2019 compared to $129.5
million in the prior year. As a percent of net revenue,
operating expenses improved to 40.3% compared with 45.3% in the
year ago period driven by improved efficiencies in marketing
initiatives, partially offset by an increase in non-cash stock
based compensation expense related to the conversion of Class B
shares held by current employees. For 2019, marketing and
sales expense as a percent of net revenue improved to 33.1%
compared with 36.3% last year.
Operating income was $16.2
million, compared to an operating loss of $(16.9) million in the prior year. Adjusted
operating income was $29.1 million
compared to an adjusted operating loss of $(12.9) million in 2018. Adjusted operating
income (loss) excludes non-cash stock based compensation, legal
fees, interim CFO costs, severance and executive search costs,
prior year sales tax liability, and intangible asset
adjustments.
Net loss for 2019 was $(12.4)
million compared to a net loss of $(19.6) million in the year ago period. 2019
included a $6.3 million non-cash
expense associated with the loss on extinguishment of debt, a
$16.8 million non-cash loss
associated with the change in fair value of warrant liabilities and
a $10.1 million non-cash stock based
compensation expense.
EBITDA for 2019 was $(3.0) million
compared to $(14.7) million in 2018.
Adjusted EBITDA, which excludes the adjustment for non-cash expense
associated with the loss on extinguishment of debt, non-cash loss
associated with the change in fair value of warrant liabilities,
intangible asset adjustments, Tax Receivable Agreement expense,
prior year sales tax liability, non-cash stock based compensation,
legal fees, interim CFO costs, severance and executive search
costs, was $33.4 million, compared to
adjusted EBITDA of $(10.7) million
last year.
Balance Sheet
As of December 31, 2019, the
Company had cash and cash equivalents of $33.5 million compared to $12.2 million as of December 31, 2018. The increase was driven by
$22.9 million generated by cash flow
from operations, including $25.1
million increase in accounts payable resulting from the
increase in inventory net of $18.5
million increase in accounts receivable from wholesale
growth during the year. Additional cash uses relate primarily
to $10.8 million used for capital
expenditures.
Inventories as of December 31,
2019 totaled $47.6 million
compared with $22.9 million as of
December 31, 2018, as the Company was
building inventory to support planned growth with wholesale
partners, supplier delivery schedules, and in support of the
President's Day sale period.
Outlook
For the full year 2020, the Company currently
expects;
- Net revenue of $550 million to
$575 million.
- Adjusted EBITDA of $44 million to
$49 million.
- CapEx of approximately $40
million.
Webcast and Conference Call Information
Purple Innovation, Inc. will host a live conference call to
discuss financial results today, March 9,
2020 at 4:30 p.m. Eastern
Time. To access the call dial 877-425-9470 (domestic)
or 201-389-0878 (international) at 4:25 p.m.
ET and provide the Conference ID: 13700082. 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 25 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 about our outlook and
expectations for our financial results for the fiscal year ended
December 31, 2019, including EBITDA,
adjusted EBITDA, net revenue and gross margin rate, and our ability
to create sustained profitability and shareholder value. 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 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 14, 2019 and our Quarterly
Reports on form 10-Q filed with the Securities and Exchange
Commission on May 7, 2019,
August 13, 2019 and November 6, 2019. 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
Adjusted Operating Income (Loss), EBITDA, and Adjusted EBITDA
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
full year 2019, 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
Media Contact:
Alecia Pulman, ICR
purplePR@icrinc.com
646-277-1200
Purple Innovation, Inc.
For information regarding
Purple products, please contact:
Savannah Hobbs
Director of Purple Communications
savannah@purple.com
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.
|
PURPLE INNOVATION,
INC.
|
Consolidated
Balance Sheets
|
(In thousands,
except par value)
|
|
|
December 31,
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
33,478
|
|
|
$
|
12,232
|
|
Accounts receivable,
net
|
|
28,692
|
|
|
|
10,241
|
|
Inventories,
net
|
|
47,628
|
|
|
|
22,940
|
|
Prepaid
inventory
|
|
879
|
|
|
|
790
|
|
Other current
assets
|
|
3,442
|
|
|
|
1,494
|
|
Total current
assets
|
|
114,119
|
|
|
|
47,697
|
|
Property and
equipment, net
|
|
31,979
|
|
|
|
22,514
|
|
Intangible assets,
net
|
|
1,101
|
|
|
|
1,493
|
|
Other long-term
assets
|
|
525
|
|
|
|
5
|
|
Total
assets
|
$
|
147,724
|
|
|
$
|
71,709
|
|
|
|
|
|
|
|
|
|
Liabilities and
Deficit
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
$
|
50,240
|
|
|
$
|
24,828
|
|
Accrued sales
returns
|
|
7,271
|
|
|
|
5,457
|
|
Accrued
compensation
|
|
7,954
|
|
|
|
2,691
|
|
Customer
prepayments
|
|
6,258
|
|
|
|
7,522
|
|
Accrued sales
tax
|
|
5,602
|
|
|
|
5,538
|
|
Other current
liabilities
|
|
9,540
|
|
|
|
2,541
|
|
Total current
liabilities
|
|
86,865
|
|
|
|
48,577
|
|
Long-term debt,
related-party
|
|
35,399
|
|
|
|
21,411
|
|
Warrant
liabilities
|
|
21,622
|
|
|
|
—
|
|
Other long-term
liabilities, net of current portion
|
|
8,570
|
|
|
|
3,732
|
|
Total
liabilities
|
|
152,456
|
|
|
|
73,720
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Stockholders'
deficit:
|
|
|
|
|
|
|
|
Class A common stock;
$0.0001 par value, 210,000 shares authorized; 22,494 issued and
outstanding at December 31, 2019 and 9,731 issued and outstanding
at December 31, 2018
|
|
2
|
|
|
|
1
|
|
Class B common stock;
$0.0001 par value, 90,000 shares authorized; 31,394 issued and
outstanding at December 31, 2019 and 44,071 issued and outstanding
at December 31, 2018
|
|
3
|
|
|
|
4
|
|
Additional paid-in
capital
|
|
5,990
|
|
|
|
3,655
|
|
Accumulated
deficit
|
|
(8,349)
|
|
|
|
(4,322)
|
|
Total stockholders'
deficit
|
|
(2,354)
|
|
|
|
(662)
|
|
Noncontrolling
interest
|
|
(2,378)
|
|
|
|
(1,349)
|
|
Total
deficit
|
|
(4,732)
|
|
|
|
(2,011)
|
|
Total liabilities and
deficit
|
$
|
147,724
|
|
|
$
|
71,709
|
|
PURPLE INNOVATION,
INC.
|
Consolidated
Statements of Operations
|
(In thousands,
except per share amounts)
|
|
|
Three Months
Ended
December
31,
|
|
|
Year
Ended
December
31,
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues,
net
|
$
|
124,300
|
|
|
$
|
78,457
|
|
|
$
|
428,358
|
|
|
$
|
285,791
|
|
Cost of
revenues
|
|
65,064
|
|
|
|
51,614
|
|
|
|
239,387
|
|
|
|
173,189
|
|
Gross
profit
|
|
59,236
|
|
|
|
26,843
|
|
|
|
188,971
|
|
|
|
112,602
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing and
sales
|
|
47,936
|
|
|
|
25,864
|
|
|
|
141,975
|
|
|
|
103,820
|
|
General and
administrative
|
|
7,675
|
|
|
|
5,711
|
|
|
|
26,918
|
|
|
|
23,581
|
|
Research and
development
|
|
860
|
|
|
|
451
|
|
|
|
3,864
|
|
|
|
2,095
|
|
Total operating
expenses
|
|
56,471
|
|
|
|
32,026
|
|
|
|
172,757
|
|
|
|
129,496
|
|
Operating income
(loss)
|
|
2,765
|
|
|
|
(5,183)
|
|
|
|
16,214
|
|
|
|
(16,894)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(1,379)
|
|
|
|
(1,061)
|
|
|
|
(5,180)
|
|
|
|
(3,733)
|
|
Other income,
net
|
|
(329)
|
|
|
|
829
|
|
|
|
44
|
|
|
|
1,013
|
|
Loss on
extinguishment of debt
|
|
—
|
|
|
|
—
|
|
|
|
(6,299)
|
|
|
|
—
|
|
Change in fair value
– warrant liabilities
|
|
(13,386)
|
|
|
|
—
|
|
|
|
(16,758)
|
|
|
|
—
|
|
Total other expense,
net
|
|
(15,094)
|
|
|
|
(232)
|
|
|
|
(28,193)
|
|
|
|
(2,720)
|
|
Net loss before
income taxes
|
|
(12,329)
|
|
|
|
(5,415)
|
|
|
|
(11,979)
|
|
|
|
(19,614)
|
|
Income tax
expense
|
|
(400)
|
|
|
|
—
|
|
|
|
(400)
|
|
|
|
—
|
|
Net income
(loss)
|
|
(12,729)
|
|
|
|
(5,415)
|
|
|
|
(12,379)
|
|
|
|
(19,614)
|
|
Net income (loss)
attributable to noncontrolling interest
|
|
(8,576)
|
|
|
|
(4,436)
|
|
|
|
(8,352)
|
|
|
|
(15,292)
|
|
Net income (loss)
attributable to Purple Innovation, Inc.
|
$
|
(4,153)
|
|
|
$
|
(979)
|
|
|
$
|
(4,027)
|
|
|
$
|
(4,322)
|
|
Net loss per common
share—basic and diluted
|
$
|
(0.29)
|
|
|
$
|
(0.12)
|
|
|
$
|
(0.40)
|
|
|
$
|
(0.51)
|
|
Weighted average
common shares outstanding—basic and diluted
|
|
14,242
|
|
|
|
8,437
|
|
|
|
10,006
|
|
|
|
8,418
|
|
PURPLE INNOVATION,
INC.
|
Consolidated
Statements of Cash Flows
|
(In
thousands)
|
|
|
Three Months
Ended
December
31,
|
|
|
Year
Ended
December
31,
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(12,729)
|
|
|
$
|
(5,415)
|
|
|
$
|
(12,379)
|
|
|
$
|
(19,614)
|
|
Adjustments to
reconcile net income (loss) to net cash provided in operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
1,816
|
|
|
|
661
|
|
|
|
4,308
|
|
|
|
2,195
|
|
Non-cash
interest
|
|
874
|
|
|
|
742
|
|
|
|
3,313
|
|
|
|
2,510
|
|
Loss on
extinguishment of debt
|
|
—
|
|
|
|
—
|
|
|
|
6,299
|
|
|
|
—
|
|
Loss on change in
fair value - warrant liabilities
|
|
13,386
|
|
|
|
—
|
|
|
|
16,758
|
|
|
|
—
|
|
Stock-based
compensation
|
|
323
|
|
|
|
174
|
|
|
|
10,063
|
|
|
|
487
|
|
Tax Receivable
Agreement expense
|
|
501
|
|
|
|
—
|
|
|
|
501
|
|
|
|
—
|
|
Loss on disposal of
property and equipment
|
|
—
|
|
|
|
95
|
|
|
|
—
|
|
|
|
95
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase in accounts
receivable
|
|
(2,005)
|
|
|
|
(1,757)
|
|
|
|
(18,451)
|
|
|
|
(6,059)
|
|
Decrease (increase)
in inventories
|
|
(12,810)
|
|
|
|
5,740
|
|
|
|
(24,688)
|
|
|
|
(9,595)
|
|
in prepaid
inventory and other assets
|
|
378
|
|
|
|
(179)
|
|
|
|
(2,557)
|
|
|
|
(520)
|
|
Increase in accounts
payable
|
|
14,030
|
|
|
|
4,350
|
|
|
|
25,132
|
|
|
|
3,783
|
|
Increase (decrease)
in accrued sales returns
|
|
1,977
|
|
|
|
(50)
|
|
|
|
1,814
|
|
|
|
632
|
|
Increase in accrued
compensation
|
|
2,433
|
|
|
|
538
|
|
|
|
5,263
|
|
|
|
594
|
|
Increase (decrease)
in customer prepayments
|
|
(1,434)
|
|
|
|
231
|
|
|
|
(1,264)
|
|
|
|
4,309
|
|
Increase (decrease)
in other accrued liabilities
|
|
331
|
|
|
|
613
|
|
|
|
8,803
|
|
|
|
(474)
|
|
Net cash provided by
(used in) operating activities
|
|
7,071
|
|
|
|
5,743
|
|
|
|
22,915
|
|
|
|
(21,657)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
(4,802)
|
|
|
|
(1,447)
|
|
|
|
(10,459)
|
|
|
|
(11,325)
|
|
Investment in
intangible assets
|
|
(74)
|
|
|
|
(154)
|
|
|
|
(320)
|
|
|
|
(327)
|
|
Net cash used in
investing activities
|
|
(4,876)
|
|
|
|
(1,601)
|
|
|
|
(10,779)
|
|
|
|
(11,652)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from the
Business Combination
|
|
—
|
|
|
|
432
|
|
|
|
—
|
|
|
|
26,344
|
|
Proceeds from
related-party debt
|
|
—
|
|
|
|
—
|
|
|
|
10,000
|
|
|
|
24,000
|
|
Repurchase of stock
options
|
|
—
|
|
|
|
—
|
|
|
|
(97)
|
|
|
|
—
|
|
Payments on line of
credit
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(8,000)
|
|
Payments for debt
issuance costs
|
|
—
|
|
|
|
—
|
|
|
|
(758)
|
|
|
|
(367)
|
|
Payments on long-term
obligations
|
|
(10)
|
|
|
|
(7)
|
|
|
|
(35)
|
|
|
|
(29)
|
|
Net cash provided by
(used in) financing activities
|
|
(10)
|
|
|
|
425
|
|
|
|
9,110
|
|
|
|
41,948
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in
cash
|
|
2,185
|
|
|
|
4,567
|
|
|
|
21,246
|
|
|
|
8,639
|
|
Cash, beginning of
the period
|
|
31,293
|
|
|
|
7,665
|
|
|
|
12,232
|
|
|
|
3,593
|
|
Cash, end of the
period
|
$
|
33,478
|
|
|
$
|
12,232
|
|
|
$
|
33,478
|
|
|
$
|
12,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental schedule
of non-cash investing and financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and
equipment included in accounts payable
|
$
|
588
|
|
|
$
|
35
|
|
|
$
|
743
|
|
|
$
|
463
|
|
Assignment of founder
shares and sponsor warrants
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,691
|
|
Equipment acquired
through capital lease
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
386
|
|
|
$
|
—
|
|
Issuance of liability
warrants
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,864
|
|
|
$
|
—
|
|
Non-cash leasehold
improvements
|
$
|
1,938
|
|
|
$
|
—
|
|
|
$
|
1,938
|
|
|
$
|
—
|
|
Tax distribution
payable
|
$
|
308
|
|
|
$
|
—
|
|
|
$
|
308
|
|
|
$
|
—
|
|
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 and
adjusted operating income (loss). 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 Loss to Non-GAAP EBITDA and
Adjusted EBITDA
A reconciliation of GAAP net 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 certain non-cash and non-recurring
costs incurred.
|
Three Months
Ended
December
31,
|
|
|
Year
Ended
December
31,
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
$
|
(12,729)
|
|
|
$
|
(5,415)
|
|
|
$
|
(12,379)
|
|
|
$
|
(19,614)
|
|
Interest
expense
|
|
1,379
|
|
|
|
1,061
|
|
|
|
5,180
|
|
|
|
3,733
|
|
Other income,
net
|
|
(171)
|
|
|
|
(829)
|
|
|
|
(544)
|
|
|
|
(1,013)
|
|
Depreciation and
amortization
|
|
1,816
|
|
|
|
661
|
|
|
|
4,308
|
|
|
|
2,195
|
|
Income tax
expense
|
|
400
|
|
|
|
—
|
|
|
|
400
|
|
|
|
—
|
|
EBITDA
|
|
(9,305)
|
|
|
|
(4,522)
|
|
|
|
(3,035)
|
|
|
|
(14,699)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger transaction
costs
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,028
|
|
Prior year sales tax
liability
|
|
—
|
|
|
|
—
|
|
|
|
200
|
|
|
|
—
|
|
Intangible asset
adjustment
|
|
404
|
|
|
|
—
|
|
|
|
404
|
|
|
|
—
|
|
Stock-based
compensation expense
|
|
323
|
|
|
|
173
|
|
|
|
10,063
|
|
|
|
486
|
|
Debt extinguishment
and warrant liability
|
|
13,386
|
|
|
|
—
|
|
|
|
23,057
|
|
|
|
—
|
|
Tax Receivable
Agreement expense
|
|
501
|
|
|
|
—
|
|
|
|
501
|
|
|
|
—
|
|
Legal fees
|
|
390
|
|
|
|
288
|
|
|
|
809
|
|
|
|
534
|
|
Interim CFO and
consulting
|
|
30
|
|
|
|
—
|
|
|
|
706
|
|
|
|
—
|
|
Severance and CEO
search costs
|
|
30
|
|
|
|
383
|
|
|
|
730
|
|
|
|
926
|
|
Adjusted
EBITDA
|
$
|
5,759
|
|
|
$
|
(3,678)
|
|
|
$
|
33,435
|
|
|
$
|
(10,725)
|
|
Reconciliation of GAAP Operating Income (Loss) to Non-GAAP
Adjusted Operating Income (Loss)
A reconciliation of GAAP
operating income (loss) to the non-GAAP measure of adjusted
operating income (loss) is provided below. Adjusted operating
income (loss) represents GAAP operating income (loss) excluding
certain non-cash and non-recurring costs incurred.
|
Three Months
Ended
December
31,
|
|
|
Year
Ended
December
31,
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income
(loss)
|
|
2,765
|
|
|
|
(5,183)
|
|
|
|
16,214
|
|
|
|
(16,894)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merger transaction
costs
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,028
|
|
Prior year sales tax
liability
|
|
—
|
|
|
|
—
|
|
|
|
200
|
|
|
|
—
|
|
Intangible asset
adjustment
|
|
404
|
|
|
|
—
|
|
|
|
404
|
|
|
|
—
|
|
Stock-based
compensation expense
|
|
323
|
|
|
|
173
|
|
|
|
10,063
|
|
|
|
486
|
|
Legal fees
|
|
390
|
|
|
|
288
|
|
|
|
809
|
|
|
|
534
|
|
Interim CFO and
consulting
|
|
30
|
|
|
|
—
|
|
|
|
706
|
|
|
|
—
|
|
Severance and CEO
search costs
|
|
30
|
|
|
|
383
|
|
|
|
730
|
|
|
|
926
|
|
Adjusted operating
income (loss)
|
$
|
3,942
|
|
|
$
|
(4,339)
|
|
|
$
|
29,126
|
|
|
$
|
(12,920)
|
|
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SOURCE Purple Innovation, Inc.