Aterian Reports Third Quarter 2024 Results

Third Quarter Net Loss Improved by 71.7% Year Over Year

Achieved Adjusted EBITDA Profit for the Second Consecutive Quarter, Marking a $4.9 Million Improvement Year-Over-Year

SUMMIT, N.J., Nov. 11, 2024 (GLOBE NEWSWIRE) -- Aterian, Inc. (Nasdaq: ATER) ("Aterian" or the "Company") today announced results for the third quarter ended September 30, 2024.

Third Quarter Highlights

   -- Third quarter 2024 net revenue declined 34.0% to $26.2 million, compared 
      to $39.7 million in the third  quarter of 2023, primarily reflecting a 
      reduced product portfolio as a result  of our previously announced SKU 
      rationalization efforts. 
 
   -- Third quarter 2024 gross margin improved to 60.3%, compared to 49.4% in 
      the third quarter of 2023, primarily reflecting the positive impact of 
      our SKU rationalization efforts and less liquidation of high-cost 
      inventory compared to the prior period. 
 
   -- Third quarter 2024 contribution margin improved to 17.0% from 3.0% in the 
      third quarter of 2023, primarily reflecting the positive impact of our 
      SKU rationalization efforts and less liquidation of high-cost inventory 
      compared to the prior period. 
 
   -- Third quarter 2024 operating loss of ($1.7) million improved compared to 
      an operating loss of ($6.5) million in the third quarter of 2023, 
      reflecting an improvement of 73.4%. Third quarter 2024 operating loss 
      includes ($1.8) million of non-cash stock compensation while third 
      quarter 2023 operating loss includes ($1.2) million of non-cash stock 
      compensation, and restructuring costs of ($0.4) million. 
 
   -- Third quarter 2024 net loss of ($1.8) million improved from a ($6.3) 
      million loss in the third quarter of 2023, reflecting an improvement of 
      71.7%. Third quarter 2024 net loss includes ($1.8) million of non-cash 
      stock compensation and a gain on fair value of warrant liability of $0.2 
      million while third quarter 2023 net loss includes ($1.2) million of 
      non-cash stock compensation, restructuring costs of ($0.4) million, and a 
      gain on fair value of warrant liability of $0.6 million. 
 
   -- Third quarter 2024 adjusted EBITDA improved to $0.5 million from a loss 
      of ($4.4) million in the third quarter of 2023, reflecting an improvement 
      of 111.0%. 
 
   -- Total cash balance at September 30, 2024 was $16.1 million. 

Fourth Quarter Outlook

For the fourth quarter of 2024, Aterian Management believes that net revenue will be between $22.5 million and $25.5 million and that adjusted EBITDA will be approximately break-even.

Non-GAAP Financial Measures

For more information on our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please see the "Non-GAAP Financial Measures" section below. The most directly comparable GAAP financial measure for EBITDA and adjusted EBITDA is net loss and we expect to report a net loss for the three months ending September 30, 2024 and December 31, 2024, due primarily to our operating losses, which includes stock-based compensation expense, change in fair value of warrant liability, and interest expense. We are unable to reconcile the forward-looking statements of EBITDA and adjusted EBITDA in this press release to their nearest GAAP measures because the nearest GAAP financial measures are not accessible on a forward-looking basis and reconciling information is not available without unreasonable effort.

Webcast and Conference Call Information

Aterian will host a live conference call to discuss financial results today, November 11, 2024, at 5:00 p.m. Eastern Time, which will be accessible by telephone and the internet. To access the call, participants from within the U.S. should dial (888) 596-4144 and participants from outside the U.S. should dial (646) 968-2525 and ask to be joined into the Aterian, Inc. call or use conference ID 4711775. Participants may also access the call through a live webcast at https://ir.aterian.io. The archived online replay will be available for a limited time after the call in the Investors Relations section of the Aterian website.

About Aterian, Inc.

Aterian, Inc. (Nasdaq: ATER) is a technology-enabled consumer products company that builds and acquires leading e-commerce brands with top selling consumer products, in multiple categories, including home and kitchen appliances, health and wellness and air quality devices. The Company sells across the world's largest online marketplaces with a focus on Amazon and Walmart in the U.S. and on its own direct to consumer websites. Our primary brands include Squatty Potty, hOmeLabs, Mueller Living, Pursteam, Healing Solutions and Photo Paper Direct.

Forward Looking Statements

All statements other than statements of historical facts included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements including, in particular, the statements regarding our projected fourth quarter net revenue and adjusted EBITDA, and the current global environment and inflation. These forward-looking statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties and other factors, all of which are difficult to predict and many of which are beyond our control and could cause actual results to differ materially and adversely from those described in the forward-looking statements. These risks include, but are not limited to, those related to our ability to continue as a going concern, our ability to meet financial covenants with our lenders, our ability to maintain and to grow market share in existing and new product categories; our ability to continue to profitably sell the SKUs we operate; our ability to maintain Amazon's Prime badge on our seller accounts or reinstate the Prime badge in the event of any removal of such badge by Amazon; our ability to create operating leverage and efficiency when integrating companies that we acquire, including through the use of our team's expertise, the economies of scale of our supply chain and automation driven by our platform; those related to our ability to grow internationally and through the launch of products under our brands and the acquisition of additional brands; those related to consumer demand, our cash flows, financial condition, forecasting and revenue growth rate; our supply chain including sourcing, manufacturing, warehousing and fulfillment; our ability to manage expenses, working capital and capital expenditures efficiently; our business model and our technology platform; our ability to disrupt the consumer products industry; our ability to generate profitability and stockholder value; international tariffs and trade measures; inventory management, product liability claims, recalls or other safety and regulatory concerns; reliance on third party online marketplaces; seasonal and quarterly variations in our revenue; acquisitions of other companies and technologies and our ability to integrate such companies and technologies with our business; our ability to continue to access debt and equity capital (including on terms advantageous to the Company) and the extent of our leverage; and other factors discussed in the "Risk Factors" section of our most recent periodic reports filed with the Securities and Exchange Commission ("SEC"), all of which you may obtain for free on the SEC's website at www.sec.gov.

Although we believe that the expectations reflected in our forward-looking statements are reasonable, we do not know whether our expectations will prove correct. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, even if subsequently made available by us on our website or otherwise. We do not undertake any obligation to update, amend or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

aterian.io

 
 
                              ATERIAN, INC. 
                        Consolidated Balance Sheets 
              (in thousands, except share and per share data) 
 
                                          December 31,     September 30, 
                                              2023              2024 
                                         --------------  ----------------- 
                ASSETS 
--------------------------------------- 
Current assets: 
Cash                                       $    20,023     $     16,071 
Accounts receivable, net                         4,225            3,259 
Inventory                                       20,390           16,561 
Prepaid and other current assets                 4,998            4,968 
                                         -------------   -------------- 
Total current assets                            49,636           40,859 
Property and equipment, net                        775              749 
Intangible assets, net                          11,320           10,148 
Other non-current assets                           138              383 
                                         -------------   -------------- 
Total assets                               $    61,869     $     52,139 
                                         ---  --------   ---  --------- 
 LIABILITIES AND STOCKHOLDERS' EQUITY 
--------------------------------------- 
Current Liabilities: 
Credit facility                            $    11,098     $      6,738 
Accounts payable                                 4,190            5,621 
Seller notes                                     1,049              467 
Accrued and other current liabilities            9,110            8,438 
                                         -------------   -------------- 
Total current liabilities                       25,447           21,264 

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