Purple(US:PRPL)2025-11-04 21:01Financial Performance - Total revenues for Q3 2025 were $118.766 million, a slight increase from $118.598 million in Q3 2024, while year-to-date revenues decreased to $328.037 million from $358.902 million[13]. - Gross profit for Q3 2025 was $50.851 million, compared to $35.193 million in Q3 2024, indicating a significant improvement in profitability[13]. - Operating loss for Q3 2025 was $12.126 million, an improvement from a loss of $46.813 million in Q3 2024[13]. - Net loss attributable to Purple Innovation, Inc. for Q3 2025 was $11.720 million, compared to a net loss of $39.228 million in Q3 2024[13]. - For the nine months ended September 30, 2025, the company reported a net loss of $48.3 million, an improvement from a net loss of $89.6 million in the same period of 2024, representing a 46% reduction in losses[18]. - The Company reported a pretax loss of $48.1 million for the nine months ended September 30, 2025, compared to a pretax loss of $89.4 million for the same period in 2024[146]. Cash and Liquidity - Cash and cash equivalents increased to $32.358 million as of September 30, 2025, up from $29.011 million at the end of 2024[11]. - The company reported a net increase in cash and cash equivalents of $3.3 million for the nine months ended September 30, 2025, compared to a decrease of $3.5 million in the same period of 2024[18]. - Cash flows from operating activities resulted in a net cash used of $28.0 million for the nine months ended September 30, 2025, compared to $24.6 million for the same period in 2024[18]. - The company expects to have sufficient liquidity to fund its operations for at least one year from the date of the report issuance[30]. Assets and Liabilities - Total current assets rose to $136.406 million as of September 30, 2025, compared to $126.368 million at the end of 2024[11]. - Total liabilities increased to $329.028 million as of September 30, 2025, from $287.636 million at the end of 2024[11]. - The accumulated deficit grew to $(622.068) million as of September 30, 2025, compared to $(573.866) million at the end of 2024[11]. Operating Expenses and Cost Management - Operating expenses for Q3 2025 were $62.977 million, down from $82.006 million in Q3 2024, reflecting cost management efforts[13]. - The company has taken additional cost-saving initiatives to maintain liquidity and support its operations and strategies during the first nine months of 2025[29]. - The company recognized $5.3 million in costs related to the Restructuring Plan during the three months ended September 30, 2025[189]. Debt and Financing - Total debt as of September 30, 2025, was $102,889,000, an increase of 85.5% from $55,394,000 as of December 31, 2024[70]. - The Company entered into an amended credit agreement on January 23, 2024, which included a term loan of $61.0 million and provided net proceeds of approximately $27.0 million[73]. - The 2025 Amendment increased the initial principal amount of the Related Party Loan by $19.0 million, bringing the total to $80.0 million[79]. - The Second 2025 Amendment increased the initial principal amount of the senior secured term loan facility by $20.0 million, raising the total to $100.0 million[87]. Inventory and Revenue Streams - DTC revenue for the three months ended September 30, 2025, was $45.275 million, a decrease from $50.211 million in the same period of 2024, while wholesale revenue was $51.541 million, up from $47.775 million[58]. - The Company reported inventory levels of $65.770 million as of September 30, 2025, an increase from $56.863 million at the end of 2024[60]. - The expansion with Mattress Firm is progressing well, with Purple products represented in approximately 9,200 slots, aiming for a minimum of 12,000 slots by 2026, expected to generate $20 million in incremental revenue this year and $70 million next year[187]. Legal and Regulatory Matters - The Company is involved in various legal proceedings, including a class action lawsuit regarding employment-related claims, which has resulted in a settlement agreement expected to be approved by the California Superior Court[124]. - The Company has engaged in related party transactions, particularly with Coliseum Capital Management, LLC, which has significant control over certain securities[128]. Stock and Warrants - The Company issued 20.0 million warrants with a fair value of $19.6 million upon the initial credit agreement[74]. - The Company issued a total of 40,787 thousand warrants as of September 30, 2025, compared to 20,000 thousand warrants at December 31, 2024[141]. - The exercise price for all warrant tranches is $1.50, with expiration dates ranging from January 23, 2034, to March 12, 2035[141]. Tax Matters - The effective tax rate for the nine months ended September 30, 2025, was (0.31%), compared to (0.20%) for the same period in 2024, primarily due to a full valuation allowance against deferred tax assets[146]. - The Company had unrecognized tax benefits of $1.1 million as of September 30, 2025[149].