Aterian, Inc. (Nasdaq: ATER) (“Aterian” or the “Company”) today
announced updates to its previously announced net revenue and
adjusted EBITDA ranges for the first quarter of 2023 ended March
31, 2023. The net revenue and adjusted EBITDA information is based
on preliminary data, which has not been subjected to normal quarter
end closing and review procedures. The Company expects to report
its finalized first quarter 2023 results in early May 2023.
The Company expects its first quarter net
revenue to be in the range of $34.0 million to $35.0 million and
adjusted EBITDA loss to be in the range of $(3.9) million to $(4.5)
million, an improvement compared to the $(4.8) million and $(5.8)
million range previously announced on March 9, 2023.
“Our first quarter revenue is inline with our
previously announced guidance range, but our adjusted EBITDA is
better than our expectations,” commented Yaniv Sarig, CEO of
Aterian. "We continued to execute on liquidating our high cost
inventory and expect our efforts to be completed in the second
quarter as planned. Coupled with continuing reductions in our
supply chain costs, we believe we remain on track to achieve
adjusted EBITDA profitability in the second half of 2023.”
The most directly comparable GAAP financial
measure for Adjusted EBITDA is net loss and we expect to report a
net loss for the three months ending March 31, 2023 and the second
half of 2023, due primarily to interest expense and stock-based
compensation expense.
About Aterian, Inc.Aterian,
Inc. (Nasdaq: ATER) is a leading technology-enabled consumer
product platform that builds, acquires, and partners with
best-in-class e-commerce brands by harnessing proprietary software
and an agile supply chain to create top selling consumer products.
The Company’s cloud-based platform, Artificial Intelligence
Marketplace Ecommerce Engine (AIMEE™), leverages machine learning,
natural language processing and data analytics to streamline the
management of products at scale across the world's largest online
marketplaces with a focus on Amazon, Shopify and Walmart. Aterian
has thousands of SKUs across its many owned and operated brands and
sells products in multiple categories, including home and kitchen
appliances, health and wellness, beauty and consumer
electronics.
Non-GAAP Financial MeasureThe
non-GAAP financial measure referenced herein is a supplement to the
corresponding financial measure prepared in accordance with U.S.
GAAP. The non-GAAP financial measure referenced excludes the items
described below. Management believes that adjustments for these
items assist investors in making comparisons of period-to-period
operating results. Furthermore, management also believes that these
items are not indicative of the Company’s on-going core operating
performance. The non-GAAP financial measure has certain limitations
in that it does not reflect all of the costs associated with the
operations of the Company’s business as determined in accordance
with GAAP.
Therefore, investors should consider the
non-GAAP financial measure in addition to, and not as a substitute
for, or as superior to, measures of financial performance prepared
in accordance with GAAP. The non-GAAP financial measure referenced
by the Company may be different from the non-GAAP financial
measures used by other companies.
The Company has referenced Adjusted EBITDA, a
non-GAAP measure, to assist investors in understanding the
Company’s core net operating results on an on-going basis. This
non-GAAP financial measure may also assist investors in making
comparisons of the Company’s core operating results with those of
other companies.
As used herein, EBITDA represents net loss plus
depreciation and amortization, interest expense, net and income tax
expense. As used herein, Adjusted EBITDA represents EBITDA plus
stock-based compensation expense and other expense, net. EBITDA and
Adjusted EBITDA do not represent, and should not be considered as,
alternatives to loss from operations or net loss, as determined
under GAAP.
We reference EBITDA and Adjusted EBITDA because
we believe each of these measures provides an additional metric to
evaluate our operations and, when considered with both our GAAP
results and the reconciliation to net loss, provides useful
supplemental information for investors. We use EBITDA and Adjusted
EBITDA, together with financial measures prepared in accordance
with GAAP, such as sales and gross margins, to assess our
historical and prospective operating performance, to provide
meaningful comparisons of operating performance across periods, to
enhance our understanding of our operating performance and to
compare our performance to that of our peers and competitors.
We believe EBITDA and Adjusted EBITDA are useful
to investors in assessing the operating performance of our business
without the effect of non-cash items. EBITDA and Adjusted EBITDA
should not be considered in isolation or as alternatives to net
loss, loss from operations or any other measure of financial
performance calculated and prescribed in accordance with GAAP.
Neither EBITDA nor Adjusted EBITDA should be considered a measure
of discretionary cash available to us to invest in the growth of
our business. Our EBITDA and Adjusted EBITDA may not be comparable
to similar titled measures in other organizations because other
organizations may not calculate EBITDA or Adjusted EBITDA in the
same manner as we do. Reference to Adjusted EBITDA should not be
construed as an inference that our future results will be
unaffected by the expenses that are excluded from such terms or by
unusual or non-recurring items.
We recognize that both EBITDA and Adjusted
EBITDA have limitations as analytical financial measures. For
example, neither EBITDA nor Adjusted EBITDA reflects:
- our capital expenditures or future
requirements for capital expenditures or merger and
acquisitions;
- the interest expense or the cash
requirements necessary to service interest expense or principal
payments, associated with indebtedness;
- depreciation and amortization,
which are non-cash charges, although the assets being depreciated
and amortized will likely have to be replaced in the future, or any
cash requirements for the replacement of assets; or
- changes in cash requirements for
our working capital needs.
- Additionally, Adjusted EBITDA
excludes non-cash expenses for stock-based compensation, which is
and will remain a key element of our overall long-term incentive
compensation package.
The most directly comparable financial measure
presented in accordance with GAAP to EBITDA and Adjusted EBITDA is
net loss.
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.
The preliminary financial information presented
in this press release is based on the Company’s current
expectations and may be adjusted as a result of, among other
things, the completion of customary quarter-end close review
procedures and financial review.
Forward Looking StatementsAll
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 expected net revenue and adjusted EBITDA
range for the first quarter of 2023; our target of achieving
adjusted EBITDA profitability in the second half of 2023; supply
chain costs; and our ability to manage our inventory, including
through liquidation of inventory. 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
global shipping disruptions; our ability to continue as a going
concern; our ability to meet financial covenants with our lenders;
our ability to create operating leverage and efficiency when
integrating companies that we acquire or have acquired, including
through the use of our team’s expertise, the economies of scale of
our supply chain and automation driven by our platform; our ability
to grow internationally and through the launch of products under
our brands and the acquisition of additional brands; the impact of
COVID-19, the war in the Ukraine, the rising tensions between China
and Taiwan and other macroeconomic factors, including their impact
on 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; the
impact of intangible assets such as goodwill, and other
impairments; disruptions to the Company's information technology
systems, including but not limited to potential or actual security
breaches of systems protecting consumer and employee information or
other types of cybercrimes or cybersecurity attacks; our ability to
disrupt the consumer products industry; our ability to maintain and
grow market share in existing and new product categories; 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 and expenses; acquisitions of
other companies and technologies and our ability to successfully
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.
Investor Contact:
Ilya Grozovsky
Vice President of Investor Relations & Corp. Development
Aterian, Inc.
ilya@aterian.io
917-905-1699
Aterian.io
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