First Quarter Net Loss Improved by 80.0% Year Over Year and Adjusted EBITDA Loss Improved by 38.4% Affirms Second Half 2024 Adjusted EBITDA Profitability Target NEW YORK, May 07, 2024 (GLOBE NEWSWIRE) -- Aterian, Inc. (NASDAQ:ATER) ("Aterian" or the "Company") today announced results for the first quarter ended March 31, 2024.  First Quarter Highlights First quarter 2024 net revenue declined 42.0% to $20.2 million, compared to $34.9 million in the first  quarter of 2023. First quarter 2024 gross margin improved to 65.1%, compared to 54.8% in the first 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. First quarter 2024 contribution margin improved to 14.1% from 5.9% in the first 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. First quarter 2024 operating loss of ($5.3) million improved compared to a loss of ($25.0) million in the first quarter of 2023, an improvement of 78.9%. First quarter 2024 operating loss includes ($1.7) million of non-cash stock compensation, and restructuring costs of ($0.6) million, while first quarter 2023 operating loss includes a non-cash loss of ($16.7) million from the impairment on intangibles, and ($2.3) million of non-cash stock compensation. First quarter 2024 net loss of ($5.2) million improved from a ($25.8) million loss in the first quarter of 2023, an improvement of 80.0%. First quarter 2024 adjusted EBITDA loss of ($2.6) million improved from a ($4.3) million loss in the first quarter of 2023, an improvement of 38.4%. Total cash balance at March 31, 2024 was $17.5 million. Second Quarter and Second Half 2024 OutlookFor the second quarter 2024, taking into account the current global environment and inflation, we believe that net revenue will be between $20.0 million and $23.0 million and that adjusted EBITDA loss will be between ($1.0) million to ($2.0) million.    For the second half of 2024, taking into account the current global environment and inflation, we believe that the  Company will be profitable on an Adjusted EBITDA basis. 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 June 30, 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, May 7, 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 (800) 715-9871  and participants from outside the U.S. should dial (646) 307-1963 and ask to be joined into the Aterian, Inc. call or use conference ID 2677840. 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. 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 second quarter net revenue and adjusted EBITDA, our guidance to achieve adjusted EBITDA profitability in the second half of 2024 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, INC. Consolidated Balance Sheets(in thousands, except share and per share data)     December 31,2023   March 31,2024 ASSETS         Current assets:         Cash   $ 20,023     $ 17,545   Accounts receivable, net     4,225       2,382   Inventory     20,390       18,520   Prepaid and other current assets     4,998       5,138   Total current assets     49,636       43,585   Property and equipment, net     775       748   Other intangibles, net     11,320       10,955   Other non-current assets     138       386   Total assets   $ 61,869     $ 55,674   LIABILITIES AND STOCKHOLDERS' EQUITY         Current Liabilities:         Credit facility   $ 11,098     $ 9,396   Accounts payable     4,190       4,058   Seller notes     1,049       903   Accrued and other current liabilities     9,110       7,989   Total current liabilities     25,447       22,346   Other liabilities     391       378   Total liabilities     25,838       22,724   Commitments and contingencies         Stockholders' equity:         Common stock, $0.0001 par value, 500,000,000 shares authorized and 7,508,246 and 7,656,044 shares outstanding at December 31, 2023 and March 31, 2024, respectively (*)     9       9   Additional paid-in capital     736,675       738,805   Accumulated deficit     (699,815 )     (704,977 ) Accumulated other comprehensive loss     (838 )     (887 ) Total stockholders' equity     36,031       32,950   Total liabilities and stockholders' equity   $ 61,869     $ 55,674   (*) 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 March 31,       2023       2024   Net revenue   $                       34,879     $                  20,214   Cost of good sold       15,782         7,046   Gross profit       19,097         13,168   Operating expenses:         Sales and distribution       20,226         13,214   Research and development       1,247         —   General and administrative       5,959         5,232   Impairment loss on intangibles       16,660         —   Total operating expenses       44,092         18,446   Operating loss       (24,995 )       (5,278 ) Interest expense, net