Page 1

ATERIAN Aterian Reports Third Quarter 2021 Results November 8 , 2021 Quarterly Net Revenue Grew 16 % Year - Over - Year to $ 68.1 Million With Positive Adjusted EBITDA Quarterly Direct Revenue ( excluding Wholesale and PPE ) Grew 37 % Year - Over - Year Company Optimizing its Supply Chain and Secures Competitive Shipping Rates NEW YORK , Nov. 08 , 2021 ( GLOBE NEWSWIRE ) -- Aterian , Inc. ( Nasdaq : ATER ) ( " Aterian " or the " Company " ) today announced results for the third quarter ended September 30 , 2021 . Third Quarter 2021 Highlights • Net revenue grew 16 % year over year to $ 68.1 million , compared to $ 58.8 million in the third quarter of 2020 . • Gross margin improved to 50.2 % compared to 47.8 % in the third quarter of 2020 . • Contribution margin declined to 12.1 % from 19.1 % in the third quarter of 2020 mainly as a result of cost increases due to supply chain disruptions . ● Operating income declined to a loss of $ 7.5 million , compared to operating income of $ 0.1 million in the third quarter of 2020 . • Operating expenses were $ 41.7 million which is an increase from $ 28.0 million in the third quarter of 2020. Operating expenses for the third quarter of 2021 include a $ 4.2 million benefit from the change in fair - value of earn out liabilities . • Fixed operating expenses increased as a percentage of net revenue to 11.3 % compared to 10.5 % in the third quarter of 2020 when excluding non - cash stock - based compensation and amortization of intangibles of $ 11.4 million in the third quarter of 2021 and $ 4.9 million in the third quarter of 2020 and $ 4.2 million benefit from the change in fair - value of potential future performance based earnouts from acquisitions in 2021 . • Net loss of $ ( 110.6 ) million , which includes a $ ( 107.0 ) million loss from extinguishment of debt , a $ 8.1 million gain from the change in fair value of warrants , and a $ ( 1.4 ) million gain associated with a derivative liability from our term loan , increased from a net loss of $ ( 0.8 ) million in the third quarter of 2020 . Adjusted EBITDA of $ 0.7 million decreased compared to $ 5.1 million in the third quarter of 2020 . • No new products launched in the third quarter compared to 8 in the third quarter of 2020 . • Total cash balance at September 30 , 2021 decreased by $ 24.4 million from June 30 , 2021 to $ 37.5 million . ● Yaniv Sarig , Co - Founder and Chief Executive Officer , commented , " This quarter was an all - hands effort to stabilize our business , strengthen our balance sheet and prepare Aterian to pursue our growth trajectory as we approach 2022. In July of this year , the price of shipping containers from China to the United States skyrocketed to over $ 20,000 . This left us in a challenging situation and we were forced to raise prices to offset our costs at the expense of our sales volume and margins . We acted quickly to protect the company and reached an agreement with our lender to reduce our debt while also focusing on negotiations with our logistics partners to secure better shipping rates . Our team put in a tremendous effort to re - engineer our entire 2022 manufacturing and shipping plan . Our logistics team has successfully secured new competitive shipping rates with various partners including Amazon , Flexport and XPO , who have proven to be great partners through these disruptions . Although the risks related to the COVID - 19 pandemic and its impact on global supply chains have not subsided , we believe that the work we have done is setting us up to accelerate growth again in 2022 organically and through an expected resumption of our M & A strategy . " 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 and Reconciliations " section below . Webcast and Conference Call Information Aterian will host a live conference call to discuss financial results today , November 8 , 2021 , at 5:00 p.m. Eastern Time . To access the call , participants from within the U.S. should dial ( 877 ) 295-1077 and participants from outside the U.S. should dial ( 470 ) 495-9485 and provide the conference ID : 7237999. Participants may also access the call through a live webcast at https://ir.aterian.io/investor-relations . Please visit the website at least 15 minutes prior to the start of the call to register and download any necessary software . The archived online replay will be available for a limited time after the call in the Investor Relations section of the Aterian website . About Aterian , Inc. Aterian , Inc. ( Nasdaq : ATER ) , is a leading technology - enabled consumer products 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 ™ M ) , leverages machine learning , natural language processing and data analytics to streamline the management of products at scale across the world's largest online marketplaces , including Amazon , Shopify and Walmart . Aterian has thousands of SKUs across 14 owned and operated brands and sells products in multiple categories , including home and kitchen appliances , health and wellness , beauty and consumer electronics .