Utah, US – Mattress-maker Purple has begun a review of strategic alternatives for the business, as it announced that its adjusted EBITDA had returned to positive territory in Q4 2024. The review comes after the company received external expressions of interest in the business, it said. No timetable has been set.
The board will consider a broad range of options. These will include the sale or merger of the business, or an alternative strategic or financial transaction. It has formed a special committee of independent directors to carry out the review, chaired by Gary DiCamillo, and also including Scott Peterson and Claudia Hollingsworth.
“Purple’s board is committed to maximising 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.”
The announcement was made alongside the company’s 2024 financial results. Full-year revenue of $488m represented a 4.4% drop on the $510m reported the previous year, with similar declines in both its direct-to-consumer and wholesale channels. This, it said, was primarily down to increased industry softness, and cycling the launch of its new mattress lines in 2023.
Gross profit was up to $181m, a 5.2% increase from 2023’s $172m. Adjusted EBITDA improved to a $20.8m loss from the $54.7m loss made in 2023.
In the fourth quarter, net revenue was down 11.6%, falling from $146m in the 2023 quarter to $129m in last year’s quarter. Quarterly gross profit was up by 14.0%, from $48.5m to $55.3m.
“Purple achieved a significant milestone in the fourth quarter, returning to positive adjusted EBITDA for the first time in eight quarters and generating positive cash flow,” said CEO Rob DeMartini. “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.”
The company anticipates full-year revenues in 2025 will be in the range $465m and $485m. Adjusted EBITDA is expected to be in the range of flat to a positive $10m. “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,” DeMartini said.
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