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.
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ATERIAN, INC.
Consolidated Balance Sheets
(in thousands, except share and per share data)
December 31,
2023
September 30,
2024
ASSETS Current assets: Cash$20,023 $16,071 Accounts receivable, net4,225 3,259 Inventory20,390 16,561 Prepaid and other current assets4,998 4,968 Total current assets49,636 40,859 Property and equipment, net775 749 Intangible assets, net11,320 10,148 Other non-current assets138 383 Total assets$61,869 $52,139 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Credit facility$11,098 $6,738 Accounts payable4,190 5,621 Seller notes1,049 467 Accrued and other current liabilities9,110 8,438 Total current liabilities25,447 21,264 Other liabilities391 249 Total liabilities25,838 21,513 Commitments and contingencies Stockholders' equity: Common stock, $0.0001 par value, 500,000,000 shares authorized and 7,508,246 and 8,743,687 shares outstanding at December 31, 2023 and September 30, 2024, respectively (*)9 9 Additional paid-in capital736,675 741,483 Accumulated deficit(699,815) (710,379)Accumulated other comprehensive loss(838) (487)Total stockholders' equity36,031 30,626 Total liabilities and stockholders' equity$61,869 $52,139 (*) The number of shares and per share amounts have been retroactively restated to reflect the one for twelve (1 for 12) reverse stock split, which was effective on March 22, 2024.
ATERIAN, INC.
Consolidated Statements of Operations
(in thousands, except share and per share data) Three Months Ended
September 30,
Nine Months Ended
September 30,
2023 2024 2023 2024 Net revenue$39,668 $26,239 $109,811 $74,438 Cost of goods sold20,085 10,411 56,236 28,550 Gross profit19,583 15,828 53,575 45,888 Operating expenses: Sales and distribution20,921 13,912 61,704 42,288 Research and development852 - 3,808 - General and administrative4,326 3,646 16,566 13,812 Impairment loss on intangibles- - 39,445 - Total operating expenses26,099 17,558 121,523 56,100 Operating loss(6,516) (1,730) (67,948) (10,212)Interest expense, net359 189 1,076 741 Change in fair value of warrant liabilities(567) (161) (2,410) (730)Other expense, net(128) 225 101 275 Loss before income taxes(6,180) (1,983) (66,715) (10,498)Provision for income taxes90 (210) 142 66 Net loss$(6,270) $(1,773) $(66,857) $(10,564)Net loss per share, basic and diluted$(0.95) $(0.25) $(10.30) $(1.51)Weighted-average number of shares outstanding, basic and diluted (*)6,600,485 7,166,612 6,493,852 6,977,262 (*) The number of shares and per share amounts have been retroactively restated to reflect the one for twelve (1 for 12) reverse stock split, which was effective on March 22, 2024.
ATERIAN, INC.
Consolidated Statements of Cash Flows
(in thousands)
Nine Months Ended September 30,
2023
2024
OPERATING ACTIVITIES: Net loss$(66,857) $(10,564)Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization3,416 1,279 Provision for sales returns(215) 86 Amortization of deferred financing cost and debt discounts321 160 Stock-based compensation6,771 6,394 Change in deferred tax expense- (5)Change in inventory provisions213 (1,653)Change in fair value of warrant liabilities(2,410) (730)Impairment loss on intangibles39,445 - Allowance for credit losses59 - Changes in assets and liabilities: Accounts receivable1,186 966 Inventory11,960 5,482 Prepaid and other current assets1,942 486 Accounts payable, accrued and other liabilities(4,289) 273 Cash (used in) provided by operating activities(8,458) 2,174 INVESTING ACTIVITIES: Purchase of fixed assets(80) (42)Purchase of Step and Go assets(125 Read The Rest at :
