Summary

  • Aterian is a leading consumer product platform.
  • The company operates through online retail channels such as Amazon and Walmart.
  • Aterian's fourteen brands are hOmeLabs; Vremi, Squatty Potty; Xtava; RIF6; Aussie Health; Holonix; Truweo; Mueller; Pursteam; Pohl and Schmitt; Spiralizer; Healing Solutions; and Photo Paper Direct.

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Aterian, Inc. (Nasdaq:ATER) and its subsidiaries is a technology-enabled consumer products platform that uses “data science” to design, develop, market and sell products. The company operate through online retail channels such as Amazon.com and Walmart.

Recent developments

Aterian Announces Closing of Acquisition of Health and Wellness Brand1

Oct 4, 2022; Aterian, Inc. Aterian today announced the closing of the previously announced acquisition of the assets of a brand in the health and wellness category. The Company believes that the acquisition will be accretive, expanding and securing market share in an existing portfolio brand’s category. The specific terms of the acquisition were not disclosed.

Popular Science Teams up with hOmeLabs on New Co-Branded Product Initiative2

Aug 18, 2022; Popular Science and hOmeLabs announce the launch of their newly co-branded air purifier. This is the first co-branded product from the partnership between Recurrent and Aterian, which was announced in December 2021.

The hOmeLabs Purely Awesome Air Purifier removes 99.97% of airborne particles, including dust, pet dander, smoke, cooking odors, and more. It features a Powerful 3-Stage Filtration system that utilizes a pre-filter, HEPA, and activated carbon filter. At just 12.8 inches in height and 7.8 inches in diameter, this powerful purifier is portable enough to take anywhere and blend into any room. Additionally, Aterian has committed to offsetting 100% of the carbon emissions resulting from the manufacturing and sales of the co-branded air purifier. This will be done via a carbon offset program devoted to reforestation.

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Financial Highlights

Second Quarter 2022 Results

Aug 8, 2022; Aterian, Inc. announced results for the second quarter ended June 30, 2022.3

Second Quarter 2022 Highlights

  • Second quarter 2022 net revenue declined 14.5% to $58.3 million, compared to $68.2 million in the second quarter of 2021.
  • Second quarter 2022 gross margin improved to 53.8%, compared to 48.0% in the second quarter of 2021.
  • Second quarter 2022 contribution margin improved to 9.7% from 8.3% in the second quarter of 2021, primarily due to product mix.
  • Second quarter 2022 operating loss of $(10.1) million increased, compared to a gain of $4.5 million in the second quarter of 2021. Second quarter 2022 operating loss includes a gain of $1.7 million from the change in fair value of earn-out liabilities and $6.0 million of non-cash stock compensation while second quarter 2021 operating income included $23.3 million of benefit from the change in fair value of earn-out liabilities and $4.9 million of non-cash stock compensation.
  • Second quarter 2022 net loss of $(16.3) million improved from $(36.3) million in the second quarter of 2021. Second quarter 2022 net loss includes $6.0 million in net charges from the changes in fair value of warrants, $6.0 million of non-cash stock compensation and a gain of $1.7 million from the net change in fair value of earn-out liabilities while second quarter 2021 included a $23.3 million benefit from the change in fair value of earn-out liabilities, a $(29.8) million loss from extinguishment of debt, a $(4.4) million loss from the change in fair value of warrants, $(4.9) million of non-cash stock compensation, and a $(1.9) million charge associated with a derivative liability from its term loan.
  • Second quarter 2022 adjusted EBITDA of $(3.7) million was flat as compared to $(3.7) million in the second quarter of 2021.
  • As planned, no new products were launched in the second quarter of 2022 compared with 19 in the second quarter of 2021.
  • Total cash balance at June 30, 2022 was $34.8 million.

2021 Annual Results

Net revenue increased $62.1 million, or 33.4%, during the year-ended December 31, 2021, to $247.8 million, compared to $185.7 million for the year-ended December 31, 2020. The increase in net revenue was primarily attributable to an increase in direct net revenue of $71.6 million, or a 43.6% increase. Direct net revenue consists of both organic net revenue and net revenue from its mergers and acquisitions (“M&A”). For the year-ended December 31, 2021, organic revenue was $118.4 million and revenue from its M&A businesses was $120.9 million. For the year-ended December 31, 2020, organic revenue was $147.9 million and revenue from its M&A businesses was $16.3 million. The company's organic revenue decreased by $29.5 million, or 19.9%, during the year-ended December 31, 2021, as compared to the year-ended December 31, 2020. This decrease was primarily driven by reduced sales volume, which the company attribute to both reduced demand due to the reopening of brick & mortar retail, and increased sale prices due to global supply chain disruptions and inventory shorts due to delayed receipt of goods. Included in its organic net revenue for the year-ended December 31, 2021, is approximately $15.7 million of revenue for products launched in 2021. Included in its organic net revenue for the year-ended December 31, 2020, is approximately $23.6 million of revenue for products launched in 2020.4

Heating, cooling and air quality accounted for $73.7 million in net revenue for the year-ended December 31, 2021, compared to $78.4 million for the year ended December 31, 2020. This decrease was primarily driven by reduced sales volume, which the company attribute to both reduced e-commerce demand due to the reopening of brick & mortar retail, and increased sale prices due to global supply chain disruptions and inventory shorts due to delayed receipt of goods.

Kitchen appliances accounted for $43.2 million in net revenue for the year-ended December 31, 2021, compared to $29.7 million in net revenue for the corresponding period in 2020, an increase of $13.5 million from new products launched and growth in its existing products during the year-ended December 31, 2021, including M&A businesses. Cookware, kitchen tools and gadgets accounted for approximately $22.9 million in net revenue for the year-ended December 31, 2021, compared to $14.9 million in net revenue for the corresponding period in 2020, an increase of $8.1 million from new products launched and growth in its existing products during the year-ended December 31, 2021, including M&A businesses. Net revenue from housewares increased approximately $30.7 million from growth in its existing products and new products obtained through M&A businesses. The company started selling essential oils and related accessories in 2021 via M&A, which generated $27.4 million in net revenue for the year-ended December 31, 2021.

Cost of goods sold increased by $24.9 million from $100.9 million for the year-ended December 20, 2020, to $125.9 million for the year-ended December 21, 2021. The increase in the cost of goods sold was primarily attributable to an increase of $42.9 million from its M&A businesses, offset by a $10.5 million decrease in the cost of goods sold from its organic business and $7.5 million from PPE.

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Company Overview

Aterian, Inc. 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 14 owned and operated brands and sells products in multiple categories, including home and kitchen appliances, health and wellness, beauty and consumer electronics.

AIMEE Platform

AIMEE, its proprietary technology, is a cloud-based modular platform incorporating a multi-tenant architecture. The company's platform is highly configurable and designed to provide flexibility in implementing critical business processes. AIMEE connects to multiple e-commerce platforms and other internet based sources through application program interfaces (“APIs”) in order to ingest data.

Brands

The company's fourteen brands are hOmeLabs; Vremi, Squatty Potty; Xtava; RIF6; Aussie Health; Holonix; Truweo; Mueller; Pursteam; Pohl and Schmitt; Spiralizer; Healing Solutions; and Photo Paper Direct. By leveraging its proprietary software technology platform, known as AIMEE, Aterian is able to identify new product and market opportunities, and to launch, market and sell products in the rapidly growing global e-commerce market. AIMEE combines large quantities of data, data science and other automation algorithms, at scale, to allow rapid opportunity identification and automated online sales and marketing of consumer products.5

BrandCategoryWebsite
Squatty PottyHealth & Wellnesssquattypotty.com
hOmeLabsHome Applianceshomelabs.com
SpiralizerKitchen Appliancesspiralizer.us
MuellerHome Appliancesmueller.com
RIF6Consumer Electronicsrif6.com
TruweoHealth & Wellnesstruweo.com
Aussie Health CoHealth & Wellnessaussiehealthco.com
Vremi®Home & Kitchen Appliancesvremi.com
Healing SolutionsEssential Oilshealingsolutions.com
PurSteamHome Appliancespursteam.us
XtavaBeauty Productsxtava.com
Pohl+SchmittHome & Kitchen Appliancespohlschmitt.com
Photo Paper DirectPrinting Suppliesphotopaperdirect.com

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Company History

Aterian was incorporated in Delaware under the name Mohawk Group Holdings, Inc. in March 2018 and the company changed its name to Aterian, Inc. in April 2021. Aterian has a single direct operating subsidiary, Aterian Group, Inc., a Delaware corporation, which was incorporated in Delaware in April 2014 as Mohawk Group, Inc. As of December 31, 2021, Aterian has multiple operating subsidiaries located in the U.S., Canada, Ireland, the Philippines and China and conduct various aspects of its business in a number of other geographic locations including Israel, Poland, France and Ukraine.

References

  1. ^ https://ir.aterian.io/news-releases/news-release-details/aterian-announces-closing-acquisition-health-and-wellness-brand
  2. ^ https://ir.aterian.io/news-releases/news-release-details/popular-science-teams-homelabs-new-co-branded-product-initiative
  3. ^ https://ir.aterian.io/news-releases/news-release-details/aterian-reports-second-quarter-2022-results
  4. ^ https://fintel.io/doc/sec-aterian-inc-1757715-10k-2022-march-16-19067-4582
  5. ^ https://www.aterian.io/brands
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Created by Asif Farooqui on 2022/10/06 10:23
     
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