ALPINE, Utah, March 15, 2018 /PRNewswire/ -- Purple
Innovation, Inc. (NASDAQ: PRPL) ("Purple" or the "Company"), a
comfort technology company known for creating the "World's First No
Pressure™ Mattress," today announced financial results for the
fourth quarter and year ended December 31,
2017.
Fourth Quarter Financial Summary
- Net revenue increased 156.1% to $63.0
million, compared to $24.6
million in the fourth quarter of 2016.
- Gross margin increased to 45.2% as compared to 39.8% in the
fourth quarter of 2016.
- Operating loss was $1.9 million
as compared to an operating loss of $0.2
million in the fourth quarter of 2016. Adjusted
operating loss was $0.9 million
compared to adjusted operating income of $0.4 million in the fourth quarter of 2016.
- Net loss was $2.0 million
compared to a loss of $0.2 million in
the fourth quarter of 2016.
- EBITDA was $(1.7) million
compared to $(0.2) million in the
fourth quarter of 2016. Adjusted EBITDA was $(0.6) million compared to $0.5 million in the fourth quarter of 2016.
Full Year 2017 Financial Summary
- Net revenue increased 200.6% to $196.9
million from $65.5 million in
2016.
- Gross margin increased to 44.9% as compared to 32.8% in
2016.
- Operating loss was $5.4 million
compared to an operating loss of $1.9
million in 2016. Adjusted operating loss was
$3.5 million as compared to adjusted
operating income of $2.5 million in
2016.
- Net loss was $(5.4) million
compared to $(1.9) million in
2016.
- EBITDA was $(4.6) million
compared to $(1.8) million in
2016. Adjusted EBITDA was $(2.7)
million compared to $2.6
million in 2016.
"The past two years have been a period of significant growth for
our brand and business following our entrance into the
direct-to-consumer mattress category in early 2016," commented
Terry Pearce, Co-Founder and
Chairman. "With our differentiated and patent protected
product offering, coupled with our expanded manufacturing
capabilities and digital marketing prowess, the Company is well
positioned to build on its recent momentum. We believe that we are
just beginning to scratch the surface of Purple's full potential
within the $20+ billion bedding industry and beyond as we leverage
our comfort technology into new markets. Our mission is to bring
comfort to individuals around the world, and we believe that we can
achieve this goal while also driving sustained profitability and
value for our shareholders over the long-term."
Fourth Quarter 2017 Review
Fourth quarter 2017 net revenue increased 156.1% to $63.0 million, compared to $24.6 million in the fourth quarter of 2016. The
increase in net revenue was driven primarily by higher
direct-to-consumer demand for our original Purple mattress fueled
by increased marketing investments and an improved manufacturing
capacity to fulfill orders.
Gross margin for the fourth quarter 2017 was 45.2% compared to
39.8% in the year ago period. The 540 basis point increase was
driven by multiple efficiency gains associated with scale and
manufacturing improvements combined with leveraging our fixed cost
structure on higher revenue.
Operating expenses were $30.4
million in the fourth quarter 2017 compared to $10.0 million in the prior year period. The
increase in operating expenses is primarily attributable to higher
marketing investments to expand brand awareness and drive
direct-to-consumer demand for the Company's product portfolio.
Operating loss was $1.9 million,
compared to a loss of $0.2 million in
the prior year. Adjusted operating loss was $0.9 million compared to an adjusted operating
income of $0.4 million, which
excluded one-time, non-recurring costs related to the business
combination transaction with Global Partner Acquisition Corp. The
adjusted operating income for fourth quarter 2016 excluded a loss
on disposal of property and equipment.
Full Year 2017 Review
Full year 2017 net revenue increased 200.6% to $196.9 million, compared to $65.5 million in 2016. The increase in net
revenue was driven primarily by higher direct-to-consumer demand
for our original Purple mattress and companion bedding products
fueled by increased marketing investments and an improved
manufacturing capacity to fulfill orders.
Gross margin for the full year 2017 was 44.9% compared to 32.8%
in the prior year. The increase was driven by multiple efficiency
gains associated with scale and manufacturing improvements combined
with leveraging our fixed cost structure on higher
revenue.
Operating expenses were $93.8
million for the 2017 year compared to $23.3 million in the prior year. The
increase in operating expenses is primarily attributable to higher
marketing investments to expand brand awareness and drive consumer
demand for the Company's product portfolio. In addition, general
and administrative costs increased to support the growth of the
business.
Operating loss was $5.4 million,
compared to a loss of $1.9 million in
2016. Adjusted operating loss was $3.5
million compared to an adjusted operating income of
$2.5 million. The 2017 year
adjusted operating loss excluded one-time, non-recurring costs
related to the business combination transaction with Global Partner
Acquisition Corp. as well as non-recurring legal expenses.
The adjusted operating income for 2016 excluded a loss on
disposal of property and equipment.
Balance Sheet Highlights
As of December 31, 2017, the
Company had cash and cash equivalents of $3.6 million compared to $4.0 million as of December 31, 2016. Inventories at the end
of 2017 totaled $15.8 million
compared with $5.3 million at the end
of 2016.
Transaction
On February 2, 2018 Global Partner
Acquisition Corp. a special purpose acquisition company and
predecessor to the Company ("GPAC" or the "Company"), and Purple
Innovation, LLC ("Purple") announced the completion of a business
combination, pursuant to which Purple became a wholly owned
subsidiary of the Company. Under the terms of the merger agreement
entered into by the Company, Purple and the other parties named
therein, GPAC changed its corporate name to Purple Innovation, Inc.
The Company's common stock and warrants are now listed on NASDAQ
under the symbols "PRPL" and "PRPLW".
2018 Outlook
For 2018, the Company expects net revenues to approximately
double from 2017 levels and Adjusted EBITDA to be towards the lower
end of the range established in the investor presentation filed on
January 8, 2018.
For the first quarter of 2018, the Company expects net revenue
to be between $53 million and
$56 million and adjusted EBITDA to be
in the range of $(3.5) million to
$(2.0) million.
Webcast and Conference Call Information
Purple Innovation, Inc. will host a live conference call to
discuss financial results today, March 15,
2018, at 4:30 p.m. Eastern
Time. The dial-in number for the conference call is
800-239-9838 (domestic) or 323-794-2551 (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 comfort technology company that designs and
manufactures products to improve how people sleep, sit, and
stand. It designs and manufactures a range of comfort
technology products, including mattresses, pillows, and cushions,
using its patented Hyper-Elastic Polymer technology designed to
improve comfort. The Company markets and sells its products
through its direct-to-consumer online channel, traditional retail
partners, and third party online retailers. For more
information on Purple, visit www.purple.com.
Forward Looking Statements
Certain statements made in this release 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 expectations for our financial results for the
first quarter of 2018 and the fiscal year ended December 31, 2018, as well as 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. 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.
Investor Contact:
Brendon
Frey, ICR
brendon.frey@icrinc.com
203-682-8200
Media Contact:
Alecia
Pulman/Kate Kohlbrenner,
ICR
purplePR@icrinc.com
646-277-1200
Purple Innovation, Inc.
For information regarding Purple products, please contact:
Savannah Turk
Director of Purple Communications
savannah@purple.com
|
Purple Innovation,
LLC
|
|
STATEMENTS OF
OPERATIONS
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Revenues,
net
|
|
$
63,039
|
|
$
24,591
|
|
$
196,859
|
|
$
65,473
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
34,560
|
|
14,284
|
|
108,464
|
|
39,857
|
|
Related party royalty
fees
|
|
—
|
|
528
|
|
—
|
|
4,139
|
|
Total cost of
revenues
|
|
34,560
|
|
14,812
|
|
108,464
|
|
43,996
|
|
Gross
profit
|
|
28,479
|
|
9,779
|
|
88,395
|
|
21,477
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Marketing and
sales
|
|
25,169
|
|
7,923
|
|
79,139
|
|
17,901
|
|
General and
administrative
|
|
4,766
|
|
1,798
|
|
13,229
|
|
4,643
|
|
Research and
development
|
|
483
|
|
270
|
|
1,387
|
|
792
|
|
Loss on disposal of
property and equipment
|
|
—
|
|
23
|
|
10
|
|
23
|
|
Total operating
expenses
|
|
30,418
|
|
10,014
|
|
93,765
|
|
23,359
|
|
Operating
loss
|
|
(1,939)
|
|
(235)
|
|
(5,370)
|
|
(1,882)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
Other
income
|
|
7
|
|
6
|
|
9
|
|
8
|
|
Interest
expense
|
|
(77)
|
|
(7)
|
|
(81)
|
|
(27)
|
|
Total other income
(expense)
|
|
(70)
|
|
(1)
|
|
(72)
|
|
(19)
|
|
Net loss
|
|
$
(2,009)
|
|
$
(236)
|
|
$
(5,442)
|
|
$
(1,901)
|
|
Purple Innovation,
LLC
|
|
BALANCE
SHEETS
|
|
(In
thousands)
|
|
|
|
December
31,
|
|
|
2017
|
|
2016
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
3,593
|
|
$
4,013
|
|
Accounts receivable,
net
|
|
4,182
|
|
2,328
|
|
Inventories,
net
|
|
15,799
|
|
5,335
|
|
Prepaid
inventory
|
|
2,219
|
|
675
|
|
Other current
assets
|
|
492
|
|
247
|
|
Total current
assets
|
|
26,285
|
|
12,598
|
|
Property and
equipment, net
|
|
13,464
|
|
6,104
|
|
Intangible assets,
net
|
|
1,267
|
|
130
|
|
Other long term
assets
|
|
22
|
|
10
|
|
Total
assets
|
|
$
41,038
|
|
$
18,842
|
|
|
|
|
|
|
Liabilities and
Member's Deficit
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
$
21,131
|
|
$
6,893
|
|
Accrued sales
returns
|
|
4,825
|
|
2,054
|
|
Accrued interest -
related party
|
|
—
|
|
22
|
|
Compensation and
benefits
|
|
2,097
|
|
1,810
|
|
Customer
prepayments
|
|
3,213
|
|
4,154
|
|
Accrued sales
tax
|
|
8,466
|
|
2,291
|
|
Other accrued
liabilities
|
|
1,451
|
|
1,141
|
|
Current portion of
long-term obligations
|
|
29
|
|
51
|
|
Related party notes
payable
|
|
—
|
|
300
|
|
Total current
liabilities
|
|
41,212
|
|
18,716
|
|
Long-term
obligations, net of current portion
|
|
8,117
|
|
24
|
|
Other long term
liabilities
|
|
2,251
|
|
914
|
|
Total
liabilities
|
|
51,580
|
|
19,654
|
|
Member's
deficit:
|
|
|
|
|
|
Common
units
|
|
2,260
|
|
2,260
|
|
Distributions
|
|
(4,574)
|
|
(286)
|
|
Accumulated
deficit
|
|
(8,228)
|
|
(2,786)
|
|
Total member's
deficit
|
|
(10,542)
|
|
(812)
|
|
Total liabilities and
member's deficit
|
|
$
41,038
|
|
$
18,842
|
|
Purple Innovation,
LLC
|
|
STATEMENTS OF CASH
FLOWS
|
|
(In
thousands)
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
2017
|
|
2016
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net loss
|
|
$
(5,442)
|
|
$
(1,901)
|
|
Adjustments to
reconcile net loss to net cash provided in operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
741
|
|
80
|
|
Loss on disposal of
property and equipment
|
|
10
|
|
23
|
|
Amortization of debt
issuance costs
|
|
6
|
|
—
|
|
Bad debt
|
|
1
|
|
10
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
Increase in accounts
receivable
|
|
(1,855)
|
|
(1,674)
|
|
Decrease (increase)
in inventories
|
|
(10,464)
|
|
(4,953)
|
|
Increase in prepaid
inventory and other assets
|
|
(1,761)
|
|
(922)
|
|
Increase (decrease)
in accounts payable
|
|
13,847
|
|
5,548
|
|
Increase in accrued
sales returns
|
|
2,771
|
|
2,054
|
|
Increase in accrued
compensation and benefits
|
|
287
|
|
1,491
|
|
Increase (decrease)
in customer prepayments
|
|
(941)
|
|
4,154
|
|
Increase in other
accrued liabilities
|
|
7,800
|
|
5,224
|
|
Net cash provided by
operating activities
|
|
5,000
|
|
9,134
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Purchase of property
and equipment
|
|
(7,579)
|
|
(4,689)
|
|
Investment in
intangible assets
|
|
(1,149)
|
|
(130)
|
|
Net cash used in
investing activities
|
|
(8,728)
|
|
(4,819)
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Proceeds from draw on
line of credit
|
|
8,000
|
|
—
|
|
Proceeds from
related-party notes payable
|
|
—
|
|
245
|
|
Payments on
related-party notes payable
|
|
(300)
|
|
(540)
|
|
Payments on long-term
obligations
|
|
(58)
|
|
(1)
|
|
Payments for debt
issuance costs
|
|
(46)
|
|
—
|
|
Member
distributions
|
|
(4,288)
|
|
(77)
|
|
Net cash provided by
(used in) financing activities
|
|
3,308
|
|
(373)
|
|
|
|
|
|
|
Net increase
(decrease) in cash
|
|
(420)
|
|
3,942
|
|
Cash, beginning of
the period
|
|
4,013
|
|
71
|
|
Cash, end of the
period
|
|
$
3,593
|
|
$
4,013
|
|
Purple Innovation,
LLC
|
|
RECONCILIATION OF
GAAP TO NON-GAAP MEASURES
|
|
|
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 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
loss before other income, interest expense, and depreciation and
amortization. Adjusted EBITDA represents EBITDA excluding loss on
disposal of property and equipment, nonrecurring legal fees and
costs incurred due to the business combination with GPAC, and
related party royalty fees.
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
(In
thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
GAAP net
loss
|
|
$
(2,009)
|
|
$
(236)
|
|
$
(5,442)
|
|
$
(1,901)
|
|
Other
income
|
|
(7)
|
|
(6)
|
|
(9)
|
|
(8)
|
|
Interest
expense
|
|
77
|
|
7
|
|
81
|
|
27
|
|
Depreciation and
amortization
|
|
276
|
|
42
|
|
741
|
|
80
|
|
EBITDA
|
|
(1,663)
|
|
(193)
|
|
(4,629)
|
|
(1,802)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Loss on disposal of
property and equipment
|
|
—
|
|
23
|
|
10
|
|
23
|
|
Legal fees
|
|
269
|
|
98
|
|
842
|
|
219
|
|
Business combination
costs
|
|
785
|
|
—
|
|
1,043
|
|
—
|
|
Related party royalty
fees
|
|
—
|
|
528
|
|
—
|
|
4,139
|
|
Adjusted
EBITDA
|
|
$
(609)
|
|
$
456
|
|
$
(2,734)
|
|
$
2,579
|
|
|
|
Reconciliation of
GAAP Operating Loss to Non-GAAP Adjusted Operating (Loss)
Income
A reconciliation of GAAP operating loss to the non-GAAP measure of
adjusted operating (loss) income is provided below. Adjusted
operating (loss) income represents GAAP operating loss excluding
loss on disposal of property and equipment, nonrecurring legal fees
and costs incurred due to the business combination with GPAC, and
related party royalty fees.
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
(In
thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
GAAP operating
loss
|
|
(1,939)
|
|
(235)
|
|
(5,370)
|
|
(1,882)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Loss on disposal of
property and equipment
|
|
—
|
|
23
|
|
10
|
|
23
|
|
Legal fees
|
|
269
|
|
98
|
|
842
|
|
219
|
|
Business combination
costs
|
|
785
|
|
—
|
|
1,043
|
|
—
|
|
Related party royalty
fees
|
|
—
|
|
528
|
|
—
|
|
4,139
|
|
Adjusted operating
(loss) income
|
|
$
(885)
|
|
$
414
|
|
$
(3,475)
|
|
$
2,499
|
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SOURCE Purple Innovation, Inc.