Core Viewpoint - Purple Innovation, Inc. has entered into a significant agreement with Somnigroup International, Inc. to expand its presence in Mattress Firm stores nationwide, enhancing its retail footprint and strategic supply support from Tempur Sherwood [1][3][4] Expanded Distribution - Mattress Firm will increase the number of Purple mattress slots from approximately 5,000 to a minimum of 12,000 across its national store network, showcasing Purple's premium mattress lines [4][6] - The expanded distribution is expected to generate at least $70 million in incremental annual revenue for Purple starting in 2026 [7] Strategic Supply Support - Sherwood will have the exclusive right to assemble certain product lines sold to Mattress Firm, while Purple retains the manufacturing of its GelFlex Grid technology and all related intellectual property [8][6] Substantial New Financing - Purple has secured an additional $20 million in debt financing, increasing its total principal commitment to $100 million, which will support ongoing investments in product innovation and advertising [9]

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 first quarter 2025 financial results on May 6, 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 800-715-9871 (domestic) or 646-307-1963 (international) using Conference ID 7609054 [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 May 13, 2025, by calling 800-770-2030 and entering the Conference ID [3] - A webcast replay will be available on the investor relations section of the company's website for 30 days following the call [3] Product Availability - Purple's products, including mattresses, pillows, cushions, frames, and sheets, are available online at Purple.com, in 55 Purple stores, and over 3,000 retailers nationwide [4]

Overview of Purple Innovation LLC - Purple Innovation LLC was founded by the Pearce brothers, Tony and Terry, in 2015, and is known for its innovative mattresses utilizing Hyper-Elastic Polymer material [3][4] - The company has disrupted the traditional mattress industry with its unique approach to comfort and support, offering a range of products that include the Essential, Restore Hybrid, and Rejuvenate Luxe collections [6][20] Product Features and Technology - The patented GelFlex Grid is a key feature of Purple mattresses, designed to provide support, pressure relief, and cooling benefits, with claims of reducing pain and stiffness by up to 40% [9][10] - Purple mattresses include over 1,400 air channels for enhanced breathability, allowing for effective heat dissipation and a cooler sleep experience [11] - The construction includes multiple layers, such as edge foam for support, comfort foam for body conformity, and support foam to minimize motion transfer, resulting in 21% more edge support compared to traditional memory foam mattresses [12][13] Customer Experience and Feedback - Customer reviews indicate a high level of satisfaction, with many praising the comfort and cooling features of Purple mattresses, particularly for side and back sleepers [18][51] - The company offers a 100-night sleep trial and a 10-year warranty, allowing customers to assess the mattress's suitability [20][22] - Some customers have reported issues with support for heavier individuals and have noted that the price point may be a barrier for some [19][21] Competitive Landscape - Purple mattresses are positioned against competitors like DreamCloud, Nectar, and Awara, each offering unique features and pricing structures [28][30] - The pricing for Purple mattresses ranges from $999 for the Purple Flex to $7,495 for the Rejuvenate Premier, reflecting a premium positioning in the market [29] Conclusion - Purple Innovation LLC continues to innovate within the mattress industry, focusing on comfort, support, and cooling technology, while maintaining a strong customer satisfaction rating and competitive warranty offerings [51][52]

Purple Innovation (PRPL) Q4 2024 Earnings Call March 14, 2025 01:36 AM ET Company Participants Stacy Turnof - Senior Vice PresidentRobert DeMartini - CEO & DirectorTodd Vogensen - Chief Financial OfficerBobby Griffin - Managing Director Conference Call Participants Matthew Koranda - MD & Senior Research AnalystBrian Nagel - MD & Senior Analyst - Consumer Growth & eCommerceJeremy Hamblin - Senior Research Analyst Operator Thank you for joining Purple Innovation's Fourth Quarter twenty twenty four Earnings Ca ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) Purple Innovation, Inc. is an omni-channel comfort product company leveraging proprietary Hyper-Elastic Polymer® technology, operating through DTC and wholesale channels, with a 2024 restructuring to consolidate manufacturing - The company's mission is to deliver innovative comfort solutions using its proprietary and patented **Hyper-Elastic Polymer gel technology**[19](index=19&type=chunk)[20](index=20&type=chunk) - As of December 31, 2024, the company operated **58 Purple showrooms**, with plans for future expansion despite a slight decrease from 2023[25](index=25&type=chunk) - In August 2024, the company initiated a Restructuring Plan to consolidate mattress production into its Georgia plant, expected to be completed in **Q2 2025**[49](index=49&type=chunk) Revenue Channel Distribution (2022-2024) | Channel | 2024 Net Revenue % | 2023 Net Revenue % | 2022 Net Revenue % | | :--- | :--- | :--- | :--- | | Direct-to-Consumer (DTC) | 58.1% | 58.1% | 57.7% | | Wholesale | 41.9% | 41.9% | 42.3% | [Industry and Competition](index=6&type=section&id=Item%201.%20Business%23Industry%20and%20Competition) The sleep products industry, marked by e-commerce disruption and consolidation, sees Purple differentiate through its Hyper-Elastic Polymer technology and new mattress collections, including a planned Rejuvenate re-launch in Q2 2025 - The U.S. sleep product industry has undergone significant **consolidation and vertical integration**[29](index=29&type=chunk) - In Q2 2023, Purple launched three mattress collections (Essentials, Restore, Rejuvenate), with a **Rejuvenate 2.0 re-launch** planned for **Q2 2025**[30](index=30&type=chunk) - Key competitive factors include comfort, product features, logistics, marketing, brand differentiation, innovation pace, and price[33](index=33&type=chunk) [Competitive Strengths](index=7&type=section&id=Item%201.%20Business%23What%20Makes%20Purple%20Different%3F) Purple's competitive advantage lies in its proprietary Hyper-Elastic Polymer technology, offering superior comfort benefits, protected by a strong intellectual property portfolio and proprietary manufacturing processes - The company's core differentiator is its proprietary **Hyper-Elastic Polymer technology**, offering unique benefits in pressure relief, temperature neutrality, responsiveness, and durability[34](index=34&type=chunk) - Purple holds **hundreds of patents and patent filings** covering its products and manufacturing equipment, creating a strong competitive advantage[34](index=34&type=chunk) [Growth Strategies](index=8&type=section&id=Item%201.%20Business%23Growth%20Strategies) Purple's growth strategy focuses on balanced omni-channel distribution, vertical integration, pioneering new technologies like DreamLayer grid for Rejuvenate 2.0, product differentiation marketing, and gross margin improvements - The company is pursuing a balanced **omni-channel strategy**, expanding its presence in wholesale retail partners and its own showrooms[36](index=36&type=chunk) - A key focus is pioneering new technologies, such as the new **DreamLayer grid**, featured in the **Rejuvenate 2.0 collection** launching in **Q2 2025**[36](index=36&type=chunk) - The company aims to improve gross margins through cost savings from plant consolidation, supplier diversification, and ramping up in-house pillow production[36](index=36&type=chunk) [Our Products](index=9&type=section&id=Item%201.%20Business%23Our%20Products) Purple offers a comprehensive comfort product portfolio, including mattresses across three collections featuring patented Gelflex Grid technology, eight pillow models, and complementary items like sheets, protectors, bases, and cushions - The mattress lineup includes three collections (Restore, Rejuvenate, Essentials) launched in 2023, all utilizing patented **Gelflex Grid technology** and backed by a **100-night trial** and **10-year warranty**[37](index=37&type=chunk) - The company sells **eight pillow models**, including the new **Purple Freeform™ Pillow** and **Purple DreamLayer™ Pillow**[37](index=37&type=chunk) - The product ecosystem extends to complementary items like SoftStretch sheets, a waterproof mattress protector, adjustable bases, and seat cushions[37](index=37&type=chunk) [Human Capital](index=14&type=section&id=Item%201.%20Business%23Human%20Capital) As of March 7, 2025, Purple employed approximately 1,200 people, with a 2025 human resources strategy focused on talent, organizational performance, competitive compensation, and employee recognition - As of March 7, 2025, the company had approximately **1,200 employees** across various functions[64](index=64&type=chunk) - The 2025 people strategy focuses on talent, organizational performance, competitive pay and benefits, and employee recognition[64](index=64&type=chunk) [Executive Officers](index=15&type=section&id=Item%201.%20Business%23Information%20About%20Our%20Executive%20Officers) This section lists seven executive officers, including the CEO and CFO, providing detailed biographies outlining their professional experience and tenure with the company Executive Officers | Name | Age | Title | | :--- | :--- | :--- | | Robert T. DeMartini | 63 | Director, Chief Executive Officer | | Todd E. Vogensen | 56 | Chief Financial Officer and Treasurer | | Tricia S. McDermott-Spikes | 53 | Chief Legal Officer and Secretary | | Eric S. Haynor | 61 | Chief Operating Officer | | Jeffrey L. Hutchings | 58 | Chief Innovation Officer | | Jeffery S. Kerby | 56 | Chief of Owned Retail Officer | | John J. Roddy IV | 57 | Chief People Officer | [Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant operational, financial, and regulatory risks, including indebtedness, funding needs, restructuring plan execution, stockholder influence, competitive pressures, intellectual property protection, and potential NASDAQ delisting [Risks Relating to Our Business and Our Operations](index=18&type=section&id=Item%201A.%20Risk%20Factors%23Risks%20Relating%20to%20Our%20Business%20and%20Our%20Operations) The company faces operational and financial risks from significant indebtedness, potential funding needs, challenges in its 2024 Restructuring Plan, substantial influence from Coliseum Capital, intense competition, and reliance on key suppliers - The company's indebtedness imposes restrictive covenants and substantial make-whole prepayment obligations, potentially limiting operational flexibility[82](index=82&type=chunk)[85](index=85&type=chunk) - The company has experienced recurring operating losses and negative cash flows of **$18.0 million from operations in 2024**, potentially requiring additional funding on uncertain terms[86](index=86&type=chunk) - **Coliseum Capital Management, LLC** is the largest stockholder and primary lender, beneficially owning approximately **49.9% of common stock**, exerting substantial influence over the company[94](index=94&type=chunk)[95](index=95&type=chunk) - The **2024 Restructuring Plan** may not realize intended benefits, could exceed cost estimates, and may lead to loss of experienced employees and productivity[91](index=91&type=chunk) [Regulatory and Litigation Risks](index=27&type=section&id=Item%201A.%20Risk%20Factors%23Regulatory%20and%20Litigation%20Risks) Purple is subject to extensive U.S. regulations, including costly fire retardancy standards and evolving e-commerce sales tax laws, alongside potential litigation risks from product liability, employment, or intellectual property claims - The company's products are subject to numerous regulations, including **CPSC fire retardancy standards**, requiring costly compliance and risking recalls or fines[128](index=128&type=chunk) - The company is subject to complex and evolving **e-commerce sales tax laws**, with non-compliance potentially resulting in substantial tax liabilities[129](index=129&type=chunk) - The company may be involved in legal proceedings, where adverse outcomes or associated publicity could harm its reputation and financial condition[131](index=131&type=chunk) [Risks Relating to our Intellectual Property](index=28&type=section&id=Item%201A.%20Risk%20Factors%23Risks%20Relating%20to%20our%20Intellectual%20Property) The company's success depends on protecting its intellectual property, facing risks from infringement, counterfeiting, and potential claims of infringing others' rights, alongside a license agreement restricting EU sales - The company's competitive position relies on protecting its intellectual property, but faces risks from **counterfeiting and infringement**, requiring significant enforcement resources[132](index=132&type=chunk)[133](index=133&type=chunk) - The company may face intellectual property infringement claims, potentially leading to costly litigation, injunctions, or product design alterations[134](index=134&type=chunk) - A prior license agreement with **EdiZONE, LLC** grants exclusivity for an earlier technology, potentially preventing certain mattress sales in the European Union[135](index=135&type=chunk) [Risks Relating to our Common Stock](index=29&type=section&id=Item%201A.%20Risk%20Factors%23Risks%20Relating%20to%20our%20Common%20Stock) The company's common stock faces risks including potential NASDAQ delisting, high volatility, anti-takeover provisions, and substantial dilution from future equity issuances and warrant exercises - The company's stock risks **NASDAQ delisting** if it fails to maintain the minimum **$1.00 per share bid price**[136](index=136&type=chunk) - A change of control would trigger an immediate **$131.1 million lump-sum payment** under the Tax Receivable Agreement, potentially discouraging acquisition[142](index=142&type=chunk) - Stockholders may experience substantial dilution from the exercise of **26.2 million outstanding warrants** and potential future equity or convertible debt issuances[147](index=147&type=chunk)[148](index=148&type=chunk) [Tax Risks Relating to our Structure](index=34&type=section&id=Item%201A.%20Risk%20Factors%23Tax%20Risks%20Relating%20to%20our%20Structure) The company faces significant tax risks, including a **$169.0 million** Tax Receivable Agreement liability and potential limitations on its **$310.7 million NOL carryforwards** due to ownership changes, despite protective measures - The Tax Receivable Agreement creates a potential liability of **$169.0 million** (as of Dec 31, 2024), requiring payment of **80% of certain tax benefits** to founders upon profitability[153](index=153&type=chunk) - The company's ability to use its approximately **$310.7 million in Net Operating Loss (NOL) carryforwards** may be limited by an "ownership change" under Section 382[155](index=155&type=chunk)[156](index=156&type=chunk) - The **NOL Rights Plan** and **Protective Charter Amendment**, designed to protect NOLs, may have an anti-takeover effect and adversely impact common stock value[162](index=162&type=chunk)[164](index=164&type=chunk) [Unresolved Staff Comments](index=38&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None [Cybersecurity Risk Management, Strategy, and Governance](index=38&type=section&id=Item%201C.%20Cybersecurity) The company manages cybersecurity risks through a program led by management and overseen by the Audit Committee, reporting no material breaches in 2024 - The company did not identify any cybersecurity breaches in **2024** that materially affected its business, operations, or financial condition[168](index=168&type=chunk) - Cybersecurity oversight is assigned to the **Audit Committee of the Board**, which receives regular reports from management on risk management, strategy, and incidents[172](index=172&type=chunk) - Management, led by the **Chief Technology Officer** and **Senior Director of Cybersecurity**, is responsible for the cybersecurity risk management program, including external expert engagement and third-party risk oversight[169](index=169&type=chunk)[170](index=170&type=chunk) [Properties](index=39&type=section&id=Item%202.%20Properties) As part of its 2024 Restructuring Plan, Purple is consolidating manufacturing into its **844,000 sq. ft. Georgia facility**, while maintaining leased innovation, corporate, and distribution centers, and **58 showrooms** across the U.S - The company is consolidating mattress production into its **844,000 sq. ft. Georgia manufacturing facility**, closing two Utah facilities as part of its Restructuring Plan[173](index=173&type=chunk) - As of December 31, 2024, the company leased **58 Purple showrooms**, with significant concentrations in California and Texas[173](index=173&type=chunk) - The company leases its corporate headquarters in **Lehi, Utah (30,000 sq. ft.)** and an innovation center in **Draper, Utah (61,000 sq. ft.)**[173](index=173&type=chunk) [Legal Proceedings](index=39&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in multiple legal proceedings, including founder lawsuits, a settled marketing class action, and ongoing class actions related to wage claims, website accessibility, and its NOL Rights Plan - The company is engaged in multiple lawsuits with its founders over employment agreements, tax distributions, and a lease termination[458](index=458&type=chunk)[459](index=459&type=chunk)[461](index=461&type=chunk) - A class action lawsuit alleging unlawful marketing and pricing practices was settled in **July 2024**[460](index=460&type=chunk) - The company is defending against ongoing class action lawsuits related to California employee wage claims, website accessibility, and its **NOL Rights Plan**[462](index=462&type=chunk)[526](index=526&type=chunk)[527](index=527&type=chunk) [Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=40&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Purple's Class A Common Stock trades on NASDAQ under "PRPL", has not paid dividends, and has significantly underperformed market indices over five years, with recent unregistered warrant issuances to lenders - The company's Class A Common Stock is listed on NASDAQ under the symbol **"PRPL"**[178](index=178&type=chunk) - The company has never paid cash dividends on its common stock and does not anticipate declaring any in the foreseeable future[179](index=179&type=chunk) - In January 2024 and March 2025, the company issued unregistered warrants to purchase **20.0 million** and **6.2 million shares** to its lenders in connection with debt financing[182](index=182&type=chunk) Comparative 5-Year Cumulative Total Return | | 12/31/19 | 12/31/20 | 12/31/21 | 12/31/22 | 12/31/23 | 12/31/24 | |---|---|---|---|---|---|---| | Purple Innovation, Inc. | $100.00 | $378.19 | $152.35 | $54.99 | $11.83 | $8.96 | | S&P 500 Home Furnishings Index | $100.00 | $96.04 | $109.06 | $61.16 | $61.96 | $71.32 | | The NASDAQ Stock Market (U.S.) Index | $100.00 | $143.64 | $174.36 | $116.65 | $167.30 | $215.22 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2024, net revenues decreased to **$487.9 million**, but gross margin improved to **37.1%**, and net loss narrowed to **$97.9 million**, driven by restructuring, debt refinancing, and strategic growth initiatives [Recent Developments in Our Business](index=43&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Recent%20Developments%20in%20Our%20Business) Recent developments include the **August 2024 Restructuring Plan** incurring **$36.4 million** in charges, debt refinancing with **$61.0 million** term loan and warrant issuances, and the Board's formation of a special committee to explore strategic alternatives - In August 2024, the company initiated a Restructuring Plan, resulting in **$36.4 million of charges in 2024**, with an additional **$4.6 million** expected through **Q2 2025**[191](index=191&type=chunk) - On January 23, 2024, the company borrowed **$61.0 million** under an Amended and Restated Credit Agreement, with an additional **$19.0 million** borrowed on March 12, 2025[193](index=193&type=chunk)[195](index=195&type=chunk) - In connection with debt financings, the company issued warrants to purchase **20.0 million shares** in January 2024 and **6.2 million shares** in March 2025[196](index=196&type=chunk)[197](index=197&type=chunk) - The Board has formed a special committee of independent directors to evaluate indications of interest and explore potential strategic alternatives[201](index=201&type=chunk) [Results of Operations (2024 vs. 2023)](index=47&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Results%20of%20Operations) In 2024, net revenues decreased by **4.4%** to **$487.9 million**, while gross profit increased to **$181.1 million (37.1% margin)**, and net loss narrowed to **$97.9 million**, driven by operational efficiencies and reduced expenses Consolidated Results of Operations (2024 vs. 2023) | Metric | 2024 (in millions) | 2023 (in millions) | Change % | | :--- | :--- | :--- | :--- | | Revenues, net | $487.9 | $510.5 | -4.4% | | Gross profit | $181.1 | $171.8 | +5.4% | | Gross Margin % | 37.1% | 33.7% | +3.4 pts | | Operating loss | $(92.2) | $(113.7) | -18.9% | | Net loss attributable to Purple Inc. | $(97.9) | $(120.8) | -19.0% | - DTC net revenues decreased by **$13.0 million (4.4%)**, and wholesale net revenues decreased by **$9.6 million (4.5%)** in 2024 compared to 2023[220](index=220&type=chunk) - Marketing and sales expense decreased by **$11.1 million (6.1%)** in 2024, primarily due to a **$7.2 million reduction** in advertising spend[222](index=222&type=chunk) - General and administrative expense decreased by **$15.3 million (18.2%)**, mainly due to **$11.3 million** of non-recurring legal and professional costs incurred in 2023[223](index=223&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Liquidity%20and%20Capital%20Resources) As of December 31, 2024, cash and cash equivalents were **$29.0 million**; management concluded sufficient liquidity for at least one year, supported by recent financing and cost-saving initiatives despite a **$97.9 million** net loss Key Liquidity Metrics (as of Dec 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $29.0 million | $26.9 million | | Working capital | $25.4 million | $30.8 million | - The company concluded it has sufficient liquidity for at least one year from the report's issuance date, supported by recent financing and cost-saving measures[234](index=234&type=chunk)[236](index=236&type=chunk) - In March 2025, the company received an additional **$19.0 million** in term loan proceeds to bolster its liquidity position[234](index=234&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk from its **$70.7 million variable-rate debt**, where a **100 basis point increase** would raise annual interest expense by approximately **$0.7 million** - The company is exposed to interest rate risk from its **$70.7 million variable-rate debt** as of December 31, 2024[244](index=244&type=chunk) - A **100 basis point increase** in interest rates would result in an approximate **$0.7 million increase** in annual interest expense[244](index=244&type=chunk) [Financial Statements and Supplementary Data](index=56&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for the fiscal year ended December 31, 2024, including the auditor's report, balance sheets, statements of operations, equity, cash flows, and notes - This section includes the full set of audited consolidated financial statements and related notes for the fiscal years ended **December 31, 2024, 2023, and 2022**[246](index=246&type=chunk)[247](index=247&type=chunk) - The independent auditor, **BDO USA, P.C.**, issued an opinion that the financial statements present fairly the company's financial position and results of operations[292](index=292&type=chunk) - The auditor's report identified the estimation of **accrued warranty liabilities** as a critical audit matter due to subjective judgment in determining future claim rates and costs[298](index=298&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=56&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting and financial disclosure - None [Controls and Procedures](index=56&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of December 31, 2024, having remediated a previously reported material weakness related to wholesale contracts and warranty obligations - Management concluded that the company's disclosure controls and procedures were effective as of **December 31, 2024**[251](index=251&type=chunk) - A previously reported material weakness concerning wholesale customer contracts and warranty liabilities was remediated as of **June 30, 2024**[256](index=256&type=chunk)[257](index=257&type=chunk) - There were no material changes in internal control over financial reporting during the **fourth quarter of 2024**[258](index=258&type=chunk) [Other Information](index=58&type=section&id=Item%209B.%20Other%20Information) This section details post-fiscal year-end events, including special incentive equity grants, amended bonus payments with accelerated vesting upon change of control, and the departure of the Chief Marketing Officer - On **March 12, 2025**, the Board approved special incentive bonus equity grants of restricted stock units to senior leadership[261](index=261&type=chunk) - On **March 12, 2025**, special recognition bonus payments for senior leadership and the CEO were amended to accelerate vesting upon a change in control[263](index=263&type=chunk)[265](index=265&type=chunk) - Chief Marketing Officer **Keira Krausz** departed the company on **March 11, 2025**[266](index=266&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=59&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company's operations - Not applicable Part III [Directors, Executive Officers and Corporate Governance](index=60&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information for this item, except executive officers detailed in Part I, is incorporated by reference from the company's definitive proxy statement - Information required by this item is incorporated by reference from the company's definitive proxy statement[270](index=270&type=chunk) [Executive Compensation](index=60&type=section&id=Item%2011.%20Executive%20Compensation) Information required for this item is incorporated by reference from the company's definitive proxy statement - Information required by this item is incorporated by reference from the company's definitive proxy statement[271](index=271&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=60&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information required for this item is incorporated by reference from the company's definitive proxy statement - Information required by this item is incorporated by reference from the company's definitive proxy statement[272](index=272&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=60&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required for this item is incorporated by reference from the company's definitive proxy statement - Information required by this item is incorporated by reference from the company's definitive proxy statement[273](index=273&type=chunk) [Principal Accountant Fees and Services](index=60&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information required for this item is incorporated by reference from the company's definitive proxy statement - Information required by this item is incorporated by reference from the company's definitive proxy statement[274](index=274&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=61&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all documents filed as part of the Form 10-K, including consolidated financial statements and a detailed index of various exhibits - This item provides an index of all financial statements, schedules, and exhibits filed with the **Form 10-K**[277](index=277&type=chunk)[279](index=279&type=chunk) [Form 10-K Summary](index=65&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item indicates that a summary of the Form 10-K is provided, though its content is not detailed in the table of contents - This item is listed in the Table of Contents, but no content is provided under this heading in the document body[287](index=287&type=chunk)

Company Performance - Purple Innovation reported a quarterly loss of $0.07 per share, better than the Zacks Consensus Estimate of a loss of $0.08, and an improvement from a loss of $0.15 per share a year ago, representing an earnings surprise of 12.50% [1] - The company posted revenues of $128.98 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.18%, but down from $145.94 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 9.6% since the beginning of the year, compared to a decline of 4.8% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is -$0.10 on revenues of $115.5 million, and for the current fiscal year, it is -$0.28 on revenues of $491.85 million [7] Industry Outlook - The Consumer Products - Staples industry, to which Purple Innovation belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Purple Innovation's stock performance [5]

Revenue Performance - Fourth quarter 2024 net revenue decreased by 11.6% to $129.0 million, down from $145.9 million in Q4 2023[4] - Full year 2024 net revenue was $487.9 million, a decline of 4.4% compared to $510.5 million in 2023[8] - Revenues for the three months ended December 31, 2024, were $128.975 million, a decrease of 11.6% compared to $145.936 million for the same period in 2023[27] - For the three months ended December 31, 2024, adjusted revenues, net were $128,975 thousand, a decrease of 11.5% compared to $145,936 thousand for the same period in 2023[36] Profitability Metrics - Gross profit for Q4 2024 increased to $55.3 million, with a GAAP gross margin of 42.9%, an improvement of 970 basis points year-over-year[5] - Gross profit for the year ended December 31, 2024, was $181.132 million, an increase of 5.8% from $171.825 million in 2023[27] - Adjusted gross profit for the year ended December 31, 2024, was $196,574 thousand, representing an increase of 0.5% from $195,506 thousand in 2023, with an adjusted gross profit margin of 40.3%[36] EBITDA and Operating Loss - Adjusted EBITDA for Q4 2024 was $2.9 million, a significant improvement compared to $(9.8) million in the prior year[7] - Full year 2024 adjusted EBITDA improved to $(20.8) million, compared to $(54.7) million in 2023[11] - Adjusted EBITDA for the three months ended December 31, 2024, was $2.871 million, compared to $(9.791) million for the same period in 2023[34] - Operating loss for the three months ended December 31, 2024, was $(7.694) million, an improvement from $(16.196) million in the same period of 2023[27] Cash and Cash Flow - Cash and cash equivalents increased to $29.0 million as of December 31, 2024, up from $26.9 million a year earlier[12] - Cash flows from operating activities for the three months ended December 31, 2024, generated $6.761 million, compared to $1.146 million in the same period of 2023[29] - The company reported a net cash increase of $5.612 million for the three months ended December 31, 2024[29] Operating Expenses - Operating expenses for Q4 2024 were $63.0 million, down 2.6% from $64.7 million in Q4 2023[6] - Total operating expenses for the year ended December 31, 2024, were $273.315 million, a decrease of 4.3% from $285.536 million in 2023[27] - Operating expenses for the year ended December 31, 2024, were $273,315 thousand, down 4.3% from $285,536 thousand in 2023[38] Net Loss and Adjusted Net Loss - Net loss attributable to Purple Innovation, Inc. for the year ended December 31, 2024, was $(97.897) million, compared to $(120.757) million in 2023, reflecting a reduction of 18.9%[27] - Adjusted net loss for the year ended December 31, 2024, was $61,682 thousand, compared to an adjusted net loss of $72,227 thousand in 2023, reflecting a 14.5% improvement[39] - The net loss attributable to Purple Innovation Inc. for the year ended December 31, 2024, was $98,098 thousand, a decrease from $121,215 thousand in 2023[39] - Adjusted net loss per diluted share for the year ended December 31, 2024, was $0.57, compared to $0.69 for the same period in 2023[45] Strategic Initiatives - The company expects full year 2025 revenue to be in the range of $465 to $485 million and adjusted EBITDA to be flat to positive $10 million[14] - The company plans to launch the Rejuvenate 2.0 product in the second quarter of 2025, aiming to enhance profitability[3] - The company has formed a special committee to evaluate strategic alternatives, including potential mergers or sales[16] Other Financial Metrics - The weighted average common shares outstanding for the year ended December 31, 2024, were 107,139 million, an increase from 103,602 million in 2023[27] - The company incurred $2.651 million in paid-in-kind interest for the three months ended December 31, 2024[29] - The effective tax rate applied to adjusted net income before income taxes was estimated at 25.9% for the year ended December 31, 2024[44] - The company incurred restructuring related charges of $20,915 thousand in operating expenses for the year ended December 31, 2024[38] - Adjusted cost of revenues for the year ended December 31, 2024, was $291,303 thousand, down from $329,894 thousand in 2023[36] - The company reported a total cost of revenues of $306,745 thousand for the year ended December 31, 2024, compared to $338,716 thousand in 2023[36]

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]

Core Insights - Purple Innovation, Inc. returned to positive Adjusted EBITDA and cash flow in Q4 2024, marking a significant operational turnaround after eight quarters of losses [2][6] - The company generated a GAAP gross margin of 42.9% in Q4 2024, an increase of 970 basis points year-over-year, and an adjusted gross margin of 44.9%, up over 810 basis points [4][8] - The company secured an additional $19.0 million in term loan financing to support ongoing investments in innovation and advertising [12][13] Financial Performance - Q4 2024 net revenue decreased by 11.6% to $129.0 million from $145.9 million in Q4 2023, attributed to industry softness and the cycling of new mattress line launches [3] - Gross profit for Q4 2024 rose to $55.3 million, compared to $48.5 million in the prior year [4] - Operating expenses for Q4 2024 were $63.0 million, down 2.6% from $64.7 million in Q4 2023, reflecting disciplined cost control [5] - The net loss for Q4 2024 was $(8.5) million, an improvement from $(18.3) million in the prior year [5] Full Year Results - For the full year 2024, net revenue was $487.9 million, a decline of 4.4% compared to $510.5 million in 2023 [7] - Full-year gross profit increased to $181.1 million from $171.8 million in the previous year, with a GAAP gross margin of 37.1% [8] - The full-year net loss attributable to Purple Innovation, Inc. was $(97.9) million, an improvement from $(120.8) million in 2023 [9] Balance Sheet and Liquidity - As of December 31, 2024, cash and cash equivalents were $29.0 million, up from $26.9 million a year earlier, driven by improved EBITDA [11] - Inventories decreased by 15.0% to $56.9 million compared to $66.9 million at the end of 2023 [11] Strategic Outlook - For 2025, the company expects full-year revenue to range between $465 million and $485 million, with adjusted EBITDA projected to be flat to positive $10 million [14] - The company plans to launch new products, including the Rejuvenate 2.0, in the second quarter of 2025 [2] Strategic Alternatives - The Board of Directors has formed a special committee to evaluate strategic alternatives aimed at maximizing shareholder value, which may include a sale or merger [15]

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]