Shares of Purple Innovation rose in after-hours trading on Tuesday after the mattress company announced the completion of a debt refinancing deal, providing it with increased financial flexibility.
Positive Movement in Stock Price
Following the news, Purple Innovation's stock saw a significant increase of 9.7% to 90 cents in late trading, offsetting the previous 4.2% decline during the regular session. Over the past year, the stock has experienced a notable decline of over 85%.
New Debt Facilities
Purple Innovation, based in Lehi, Utah, revealed that Coliseum Capital Management and No Street Capital have taken over as its primary debt facilities providers, replacing its previous lenders. These loans will be consolidated into a new term loan of $61 million, resulting in a more streamlined financial structure.
Boost in Cash and Liquidity
As a result of the refinancing transaction, Purple Innovation expects to see an increase in cash and cash equivalents, totaling approximately $48 million. Prior to the transaction, the company's net liquidity stood at around $26 million.
Warrants Issued
In conjunction with the new loan agreement, Purple Innovation has issued warrants to the lenders. These warrants grant the lenders the ability to purchase 20 million Class A shares at a price of $1.50 each, subject to certain adjustments.
Positive Projections and Outlook
Purple Innovation CEO Rob DeMartini stated that the company anticipates fourth-quarter net revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to fall within its guidance range. Despite challenging industry conditions, Purple Innovation also expects its revenue to continue to rise throughout 2024.
More Articles
All Rights Reserved © 2024
Post a comment