LEHI, Utah – Mattress maker Purple Innovation has launched a review of “strategic alternatives” following what it calls “inbound expressions of interest.”
The announcement was made just ahead of the company’s year-end and fourth quarter results.
The company’s board of directors said it will consider opportunities to “maximize shareholder value,” including sale, merger or other “strategic or financial transaction.” The board has established a committee of three independent directors – Gary DiCamillo, Scott Peterson and Claudia Hollingsworth –to evaluate its options. No timetable has been set for concluding the evaluation, and the board has not made a decision related to possible alternatives.
“Purple’s board is committed to maximizing shareholder value and assessing all credible pathways available to the company to achieve this objective,” DiCamillo said. “Following the company’s recent receipt of expressions of interest – reflecting our attractive position as a leading independent premium mattress brand – we believe it is in the best interests of all Purple stakeholders to initiate a formal review of strategic alternatives.
“We embark on this process from a position of strength, having delivered positive adjusted EBITDA and positive cash flow performance in the fourth quarter of 2024, while meaningfully enhancing our financial position through the expansion of our existing credit facility.”
For the fourth quarter, Purple saw net sales slide 11.6% to $129 million, compared with $145.9 million in the same quarter last year. In the quarter, Purple recorded a net loss of $8.5 million, an improvement from the loss reported in the fourth quarter of last year of $18.3 million.
Adjusted EBITDA for the fourth quarter was $2.9 million, a significant improvement compared with $(9.8) million last year, demonstrating the benefits of higher ticket sizes from the company’s premium sleep strategy and restructuring initiatives.
For the full year, the company’s net sales dropped 4.4% to $487.9 million, compared with $510.5 million. Purple reported a net loss of $97.9 million, an improvement from a loss of $120.8 million in the prior year.
CEO Rob DeMartini highlighted that that company had returned to positive EDITDA for the first time in eight quarters and generated positive cash flow.
“Looking forward, we are confident the durability we structured into the business through recent cost saving initiatives and the support of the additional borrowings under our term loan will enable the continued execution of our Path to Premium strategy,” he said. “We look forward to bringing new products to market from our robust innovation pipeline, including our Rejuvenate 2.0 launch in the second quarter, which we believe will build on our strong foundation and drive improved profitability.”
Looking ahead, the company expects full-year revenue to be in the range of $465 million to $485 million and for the first quarter revenue to be in the range of $102 million to $107 million.
In addition, the company said it had borrowed an additional$19 million under its existing term loan taking its total principal commitment to $80 million.
“We are grateful to our lenders for their continued confidence in Purple and our strategy, as demonstrated by this increased financial commitment,” DeMartini said. “The additional capital will support Purple’s liquidity position as we continue to invest in innovation and advertising and execute on our Path to Premium strategy.”
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