ATER - Earnings call transcript Q4 2023

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Operator

I would like to welcome you to the Aterian, Inc. Q4 earnings report. [Operator Instructions]. I would now like to turn the call over to Ilya Grozovsky, Vice President, Investor Relations and Corporate Development.

You may begin your conference.

Ilya Grozovsky

Thank you. us discuss joining XXXX Fourth for Results. Earnings you today Aterian's to quarter Thank are and Joe co-CEOs. call today's On Risico Arturo our Rodriguez, A website release Relations press copy on of Investor the is section aterian.io. at available Aterian's of today's

regarding on Before Reform that remarks we that Act forward-looking within of on everyone the of based contain the the our may XXXX get expectations, meaning developments management want including expectations. differ current targets without call and mentioned. plans Private remind predictions, I statements started, may to and the those could Securities and financial are Litigation These or anticipated objectives, include, limitation, results materially events business from performance, estimates, future actual

of to statements cause substantial the These also among our SEC. We These materially some differ our risks and you involve discussed of uncertainties, and with that statements. those others, by actual such uncertainties, are implied could in to expressed be risks or results forward-looking and these XXXX, control from outside XX-K which upcoming encourage may available these of Form XXXX, March the on our for X, on including on report report website filed our XX-K our is aterian.io. annual XX, report November review discussion our Form at risks, XX-Q a and on when filed portion quarterly it annual Form and of on filings filings investor

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definitions website of to definition measures of metrics included the release, other note measures available portion our most Please our may these aterian.io. earnings is these comparable and which from our are in at GAAP companies. by these differ presented investor non-GAAP similarly titled Reconciliation measures of of that indicators the on

provide net margin, adjusted be of unable the are GAAP non-GAAP this most comparable a income basis efforts that predicted. reconciliation the on financial and/or a margin GAAP cannot to because measure to impact directly EBITDA control company's are financial We without unreasonable not within items forward-looking reasonably measure

will over Joe. With turn that, call to the I

Joseph A. Risico

on Aterian quarter Today, including and Thank to you, And touch the today. XXXX on foster positioning in also XXXX I Aterian are for half discuss going the and us actions growth Ilya, our and our year, adjusted on we thank joining remain growth EBITDA we beyond XXXX. in beyond substantial I'm achieving you, taking for focused fourth of as to everyone, financial XXXX second results. will both profitability for

our Arty results provide for will we'll more and the quarter fourth cover QX. in then outlook for depth our financial

of paper essential oils through brands, solutions. ], and marketing Potty an primer brand a for brands, PPD and appliances Aterian. primarily [ and [indiscernible] [ healing Direct its categories: home owns and through to selling Aterian Paper our For operates you ] Inn wellness, including Photo the Squatty brand, first of products and joining hOmeLabs, following and brand, Mueller quick or own accessories today, transfer through those health the our umbrella consumer in time and on kitchen our

and co-CEO I stabilize reposition shareholders. Arty a together and are deliver the and simplify set our We derive be to and about we have with last for in been quite him. bit team, excited with most we our role We success the sell the Aterian, role marketplace. Aterian. was our and value growth, can on the for a I accomplished and taking the to it's pleasure for partnership, we with strong U.S., sharing of XXXX And company from amazon.com focus, believe have mission change we July. primarily out a a year a to revenues and we products the of Arty

a align as Some things business. internal our our balance the far SKUs. that include refocusing sheet of we Further core operations efficient agile through a accomplished the and thus accounts better and only of core to strengthening of amendment our reducing significant have the vendor XX streamlining and further away focused with and from our number of by more credit initiatives don't costs newly to consumer noncore serve further model, from software fulfillment eliminating products company third-party people seller of developed accounts the aspects optimization Aterian products approximately our performance facility a noncore of SKUs. business, marketing eliminating lender, to number our our our X, restructuring Shifting with of

of progress made in across results Outwithstanding and Aterian and far, we respect thus growing in are actions number highly of look a this With these to a forward We particular, to challenging stabilize have quarter, baseline. pressure results, the to fourth the with that pricing from are with trend the thus the categories competitive discretionary operating we we pleased environment. business. pleased far spending our and our

for which completion liquidation we program, fourth results positioned has of XXXX reflect in previously quarter us our well the and announced success Our SKU believe also beyond.

in to And ending, each these efforts of work the seeing of we and SKUs. on of continued categories, this front across while our that optimize is results and are core also We from never this efforts marketing QX year. progress we made early performance

lesser continue strategy to EBITDA given and order operate, for top growth. done far extent, to we work position we've only this in drive profitability, a top line XXXX, stabilize Aterian how also and focus we to our the not profitable but simplify In adjusted will

will will largely also to and that existing number a portfolio, of meaningful we and existing XXXX, be growth existing new inorganic launching categories. development, segment variations existing provide that expansion With portfolio a new of products on products believe we on focused product new are to our value focused in our be consumers. products We in will in respect omnichannel refreshing and

announced, For products, example, have oils continue front. to we chemical-free promising to expand and needs offering we results throughout brands. as consumer We address seen intend portfolio this our expanded rest our to this oils essential early for previously of the healthier

the are [ addition, we a under also expansion with for categories product. working brand. Squatty towards product and Toilette In its hard Potty further brand our on expanding the flagship view ]

believe will our primarily through our drive profitable strategy, expansion that new focus We existing for to on marketplaces continue portfolio. we can revenues omnichannel to product

near on disclosed, results SKUs, with have to intend invest most of material. launched to in the be our for will Latin number alongside evolve sale We platform term, that TikTok of we products to launching the not previously that on Mercado America. For Libre and leading example, as platform. one of marketplace, in our a to Mexico-based marketplaces in in date to been be Also continue their

we products Amazon near to other shopping. number as We And Canada exploring be everywhere further, the in actively are will of a consumers position also to endeavor term. our are expanding marketplaces we

in categories. Forth a new up have focus. as remains the an ], strategy, for Aterian gee-butter in small investment opportunity the brands to inorganic brand United heart in recently completed drive well We in as We new of States. significant M&A high-growth open our help investment [ leading believe area value Regarding

brands. believe continue can valuable a earlier to to in intend explore We We Aterian be stage investing partner.

it pass the NASDAQ the with Arty, minimum a along Aterian's few I bid on to Before compliance words rule. $X

on NASDAQ April say the deadline and addressed most affecting through a other expect is gain And that we our to set reverse out the issues can underlying operating under over are split. last or free excited -- compliance, by providing to we ratio that the years. We specifics I that have given we April timing, XX we compliance stocks significant performance while believe split have these today, the prior not regain to reverse what are been

And with Thank it to Arty. pass that, you. I'll on

Arturo Rodriguez

Thanks, It's Good too. partner you, to Joe. great everyone. evening, with

our We simplifying Aterian. focusing, stabilizing path and continue on progress to of make

on see inventory ago. normalized almost considering great to it stronger. we missions, these a at results continues certain levels, get With the continue balance year a sheet just We from to as were especially levels our accomplishment

long Although facility EBITDA With company fixed moves, cost on of our increased profitability. go our have to are our extension our aligning we and our strengthened go-forward to focused as QX and anticipated, a recent such results and path adjusted better towards still credit balance more scale some our our than our of sheet. has way size flexibility further

right we We strength we grow path to half confident profitability, more these continue second balance the sheet XXXX deliver adjusted and results. a to on have are deliver EBITDA to that

Now moving the overall. results QX to

pricing noncore EBITDA challenging our fixed adjusted pressures our losses saw of SKUs, As Coupled strategy we consumer portfolio. are spending with and our discretionary to savings, competitive starting primarily of coupled previously revenue believe expected, our discontinuing see due decline to we we across action cost narrowing. with our sales

of to in on broke details $XX.X quarter net press moving quarter to revenue by net XXXX as $X.X million the follows: the revenue. Now the declined million our follows: year inventory fourth fourth as in from quarter. million down XX.X% year inventory net launch $XX.X broke normalization. million sustained, million quarter by liquidated liquidating down revenue ago sustain, $XX.X $X.X in The $XX.X $X.X $XX.X in and million in million launch and million million in revenue $XX.X Net $XX.X ago phase of phase defined normalization. as million release,

as primarily has result competitive net reduced Our our discretionary a which efforts, and poorly spending SKU decrease pressures. million consumer of SKUs, is discontinued $XX.X revenue rationalization performing coupled with sustained of pricing

A through launched million fourth thoughtful late inventory of we are launches Our $X.X revenue conclusion. and of liquidation XXXX. decreased timing in high-cost its the net product liquidating be were to continuing as efforts variations by the new our on has reached quarter, essentially the

the ago lower for prior increase to quarter, of The fourth an and Overall year mix XX.X% by XXXX. the XX.X% product gross increased inventory the QX cost XX.X% in period. compared improvement to margin was driven in from higher quarter liquidation from

our decrease X%. QX CM of contribution compared to defined XXXX release as in overall negative XX.X% XXXX was a year's and improved prior negative compared third Our which earnings a X.X%, to margin, of quarter

margin by liquidation The our product of our competitive revenue declined margin certain level moving decrease higher saw period business. higher to X.X% QX prior to core margin contribution in year-over-year competitive inventory. pricing increase pressures product on pricing of pressures the driven the QX by was mix contribution was X.X% mix the driven offset cost and product XXXX sustained compared in inventory contribution of XXXX. completion of by The and cost year-over-year and in versus slightly

for quarter. to an year is expenses distribution Looking The XX.X% XX.X% due our increase percentage the margin in to and in mix as predominantly sales net variable revenue compared deeper contribution our a as and and ago of sales into fulfillment distribution expenses QX increased in XXXX, to costs. increase product

million a in improvement $X.X of CM the fourth losses the XX.X%, year quarter, from ago Our $XX.X the million quarter of improvement of compared in by approximately primarily operating driven to reduction fixed improved costs. loss an and the of

XXXX loss of expense, intangible of quarter for barter includes a of loss noncash Our $X.X million. fourth million operating impairment compensation noncash million and $X.X a reserve credits on of $X.X stock

includes on impairment $X.X of compensation While quarter XXXX noncash $X.X our credits a barter for a fourth of loss goodwill $X.X of expense, stock million loss million and million. reserve of operating noncash

approximately Our the in and of improved driven of the improvement $X.X costs. reduction the by loss of quarter, CM million in net improvement year the XX%, for loss ago of a quarter from million fixed an $XX.X primarily

of of loss XXXX on million loss our $X.X XXXX and net loss million, barter $X.X noncash noncash million. impairment fourth million and of expenses, for loss million liability quarter and credit $X.X of quarter $X.X noncash and of gain stock million a of million, fair compensation of stock intangible barter reserve while includes a $X.X noncash fourth Our impairment value warrant of includes reserve $X.X net of in credit a compensation expenses, goodwill $X.X

$X.X million CM million quarter improved of XX.X% costs. in our as reduction a earnings of release, and loss XXXX, Our in the of from driven of by the in $XX.X improvement adjusted fixed defined the EBITDA fourth loss by primarily

in inventory tariff net $XX million approximately our balance cash compared higher at XXXX balance December cooler. should driven build million of to The on through XX, the specifically the XXXX, season by the avoid cash XX, is in decrease inventory period XXXX. end primarily September Moving XXXX. our to our with had the of QX This beverage remain up loss and expected sheet. of we of $XX decision as At to impacts, for advance in

ago XX, $XX.X level quarter. December third of down our million, year At quarter XXXX from $XX.X million million from and $XX.X inventory the was the the of at down at in end

current been our quarters inventory we happy many report $XX are believe the of high have We inventory million behind levels that us. at is cost we working on that almost now appropriate normalization to the for that is and

mentioned, advance million we $X tariff in our mitigate additional purchased an As to beverage inventory of includes coolers risks.

the year quarter facility in almost of access Our now XXXX XX% December current $XX.X allowing has at by our credit can the for prior facility the the period. third credit XX million We XXXX. was balance sufficient $XX.X million, fourth end down million rightsized needed. of extended years Aterian of at million flexibility quarter recently and XX commitments, the be increased XXXX $XX.X to from million, to to growth when from of and in down which X end comparable

flexibility on of extended with further continue cash path financial as peak credit XXXX. the company sheet covenant hand from the existing $XX balance profitability further minimum focuses and on believe our forecast, coupled down our EBITDA current a facility, We adjusted availability, cash adjusted growth. strengthened our half million as to on the and/or of million today, Also, profitability has eventual based in credit the providing second our towards our $X.X on EBITDA extension of facility liquidity reduces we

revenue range, the As and of challenges believe this million million. an we XXXX, QX year's and the our quarter in primarily our the middle a be decrease net SKU in environment, the $XX primarily from Using would consumer continued QX seasonality strategic XXXX, QX, our we rationalization be SKUs from from XX% look approximately considering $XX decrease between XX% rationalization. from that at last and driven sequential certain reduction competitive of from SKU our and pressures, a will strategic

QX lower seasonal is than drive reminder, that lowest our will a As first our quarter and quarter split years. slightly expect previous we

As our we revenue in decrease on we best have continue to brands as products. is focus business previously expected on our discussed, net and go-forward our

continues adjusted XXXX. focus be profitability getting primary today to in the to Our of half EBITDA second

of to we range and from million. be quarter XX% $X.X adjusted expect improvement million this our adjusted initiatives. XXXX. The loss XX% to represents of compared approximately EBITDA the turning continue some of work with and EBITDA XXXX, be to range of And results of a on XXXX target QX laser-focused sequential to QX For half a in in middle guide, we're Again, our XXXX. QX we our of of $X.X improvement can an profitability see of starting you second QX realize the all hard the to

also covenants our above We based have believe, additional without we goal forecast, on raising cash sufficient our to achieve our equity.

believe decide year raise decide so We as is this or over we our brand. financing, capital through if do As corporate if to part opportunistically if strategy the X, weeks. in to of previously will be pursue expect for to housekeeping items the SX few additional good do refile coming us predominantly our to stated, coming We M&A do we we M&A. shelf a acquire allow it and governance. growth any We expect to

after we XX-K. we file expect as shortly annually, our to SA the do Finally,

to we questions. to and strong with turning our we our look sheet, with as products, and EBITDA towards turn our it quarter With open call path to we forward I'll focus, are to believe cornerstone shareholder back on the that, stabilized, to simplify the continue our confidence In adjusted and operator balance the profitability closing, value. ultimately maximize and

Operator

Global Instructions] [Operator line from Your comes with first of Partners. Kinstlinger the Alliance Brian question

Brian Kinstlinger

or based there's consumers, year-over-year guidance. making be just last But about not the on sustained it inflationary worse at X I a pressure first the environment supplier quarter in the Great. high any wanted appears at consistent yourself, trends. that's to level for has I'm getting least pricing. sure demand revenue been quarters. the easier start to decline on the The X

down I you're the know you sustain, in help talked please? revenue seeing what and about terms seasonality. of step But understand us significant first in this quarter in

Joseph A. Risico

you maybe I'll and Arty, come this on back touch end. the on a in bit,

around... Just

Arturo Rodriguez

well. doing you're hope I Brian, Yes.

we've previously listen, hard, cut of well north So We've been yes, right? I SKUs. working mean, X,XXX very we've said

and you're we're most to this products -- of down fact some focus decrease really most our profitable seeing is So the that best business and to the trying brands. profitable

revenue we do expect So this decrease.

out. pressures There very to. consumers we're we're the seems goal our where still But to being adjusted The the definitely kind tracking there, to volatile. cut environmental is SKUs we've happy of getting out profitability. most right, amount especially EBITDA isn't roughly overall, or is spend important to $XX.X QX to that fact us, sort is of guide the be the considering being Again, middle of still of $XX in million million surprising

don't little in the other you may impacts think things a trend we'll quarter-to-quarter it an but the in bit especially we we're a that's lower, stabilize rationalize years, that business think of seen doing continue previous number mentioned that overall, effect and of seasonality SKUs. to we shrink I I sense have that think overall the be in you've see where the may as the that to our

Joseph A. Risico

some great, add Arty. some again, so for some just extent, to excited that, and -- going believe we've -- we've some this SKUs are share, I done lost which there. forward, I about we're share would Brian. work time, that's that last talked in of we to some regain the and we're about, I the Yes,

sustained there. some have loss We

a -- is of think some it that. little I So

think, And sales compete, just to for us say then I that on overall, I win it in products. pretty is our would demand and is for the challenge And think right, resilient. looks general, to I

the can make do good feeling we we're still to work we about that. So about it, pretty sure -- we're doing

Brian Kinstlinger

any there benefit you'll quarter? Whereas quarter? in SKU in more, I'll first and no you're revenues, from that in revenue do in first the of X rid fourth quarter, have was some back the the That's step there move is on -- both, queue. getting and and then that question. Was fourth them And the I'll the

And rate gets quarterly you few to the run announced believe cost ago, is, new question second that cutting EBITDA weeks you adjusted the with a profit? the revenue what's an

Joseph A. Risico

want to go that? you Arty, for

Arturo Rodriguez

Yes. the hear first part. that Brian, I second question? could to that got of part you part. I just want first repeat

Brian Kinstlinger

Yes.

of you the the of current quarter? from you're Or Sorry, rid curious, there That's there you is in the in discontinued, revenue were I'm getting that quarter, question. there was SKUs mentioning impact. in first some quarter? first has -- an that December the the was SKUs be won't March the

Arturo Rodriguez

Yes.

can you you to that something see our but there. liquidation, number that sort liquidation sure, seen it's When for the disclose, we like of in So that some table could of not the -- press it's necessarily you not -- plan in and we be numbers the release. look won't stainless at provided you've

that's on So drop part the [indiscernible]. down the of of top

Brian Kinstlinger

Yes, yes.

So there's you're mean you're that there's from getting [indiscernible] SKUs these sustaining? I in nothing sustaining? revenue no

Arturo Rodriguez

very little. Very, little. Very

Now think think the revenue as what run second talk is listen, we going ready I about in that disclosure. to -- to think part, to do I of kind be? rate the don't we're full

I QX the guided $XX mid range be of I'm again, think we've -- speaking in number the roughly the million. to to

way some I and two, cost. look fixed the reducing is cutting number EBITDA really our is the positive adjusted we focus, think at SKUs aspects, in the which first about our

second year, CM, look which do XX%-plus type healthy. towards will will those think brands at like a where we shake key the our will and be products the be when products that I you think half to back of out

savings the of initiatives we at continue in those the were of simplify to top of look is in to get you announced and XXXX, when profitability as savings what's mentioned that that on million top and earlier stabilize. we to of other us announced I February think think some Joe on $X that combinations kind going I just

like end our we're of through because primary EBITDA, the adjusted is that think kind back of working still focus I year.

think theory, think I give out ready that today. number I in we're to So actually don't

sight line that we've especially QX, feel I of with do of have in goal, we far. getting think initiatives later we'll so that kind those when get into line the we of be to year that in more of sight we achieved in but

Operator

question ROTH line next the MKM. Koranda from Matt with comes Your of

Michael Zabran

starting Maybe Matt. for Zabran products. Mike on new with just

and talked essential expanding recently about cooler You oils. adding products beverage

margin the balancing with guess, working purchasing sensitive, maintaining XXXX, given consumer new quarters? deal relatively Given a how towards environment we're still about price-sensitive consumer we is in a to adhering thinking coming product I introductions in . profile and higher these market are the share just

Joseph A. Risico

one, Yes. and Arty, It's in. I'll maybe chime -- fair can you question. grab this

right? a [ But you things right? sure, All are ] portfolio, ticked challenge, For the best. of about our when the off somewhat think challenge, we we terms it's think in get

products sort to of of product. of some towards of think the historically, are sort number products the of gone our the geared better/best version those kind we've market. way I A were of

variations. sort right, we're -- you're And are to so not more of up some That at on aimed of on same doing usually right, the good for to the product, right, the the always, Amazon, but usually, variations getting consumer the things those that but value the price extent through show listing.

And broader so now market think addressing listing about if consumers. of now, that it's a you

market hopefully, that you're if to more did you're And means listing, ranking, a you're share, prominent placement. conversion well, getting so more to more be prominent getting going which you have job right, you're your getting on

to crazy But us market. And for come right? so not think there going it's to launches, product number to where with areas of a we're are new appropriate we go

address so when that does there? question? And And you -- your stop

Michael Zabran

change where to Yes. any on just why in call. in factored new in profitability, lower doing Is there's right confident about I profitability second guess It certain a the or to Are the which lot set? in the push speak in prioritize any talked provide pickup know if guide data could promo for profitability -- now. of I on we counts market expansion me. categories? profitability to product environment? Maybe macro earlier we're in No, more and a bar the environment that is business that's just out? the on the color the is last clear. in one right parts the target potentially like things I we great. half, moving we're guess what factoring looks this

Joseph A. Risico

one? want do take that to Arty, you

Arturo Rodriguez

Yes.

we question. remarks. situated that our we -- to profitability. said our Listen, do think We right? simpling of confident on well should on very minutes the continue right a feel now, EBITDA good it What prepared that we're focus very business, that I adjusted to make just and unlock earnings, ago progress goal and second it's on stabilizing feel half

SKU and the on the out house, in still of he of around prepared specifically Joe our brands. remarks. think a I through that there's The side really listen, his said mitigate great Where that and but lot to there, doing core our we're we're highlighted pressures thing of we're that a that lot things. nice actions focus putting initiatives about energy SKU and is rationalization our SKUs all trying

one doing that company a when we was with SKUs more was across when lot to products perhaps in and brands. of past, dealing the there's So it XX the single every X,XXX and give today the brands was remaining tension it

well is macro So do currently of we north are revenue, to may and environment us There's which almost to again, XX% about. on-street omnichannel days. I way think, risk the And bit think that very type That that Joe a is years Amazon, do of that is talked happen. of we're ever still think that certainly, expansion, of on very very I concentrated little to where set protective the because things that listen, of we reaction gives But feel we ago, few up probably we are that any have the there. very our some important is and allows as that thing more these us said, a on mitigate be I said, one protections. world some does we're I us feel focused lot

that is the the of doing in over you order I year think may that hopefully the next year second half will initiatives from the through into of impact see type help of some any certainly mitigate there. diversify team to

Michael Zabran

that want that. call, down that new guide? out expansion any nail called factored the appreciate the in on, there is I we is I clear. That's just into market to

Joseph A. Risico

No.

Michael Zabran

Okay.

in ]? just icing top successful those would efforts that towards [ on be So

Joseph A. Risico

you fair, I should mean that. where think new -- behind don't when Arty that line is a I results, a particularly be that just on I important. think for bit you up -- Yes. to I example, about marketplace phenomenon maybe and And a exactly thinking expansion and we automatically you're little materializes in I know. marketplace being we're be like think But to right, mind keep TikTok, we're into for market, have a

We overnight. products do extremely reports that of of see well, lots seemingly

I it's think a little world, the of complicated. the more rest

it's So marketplace the to be company. mentioned. going are going important other for we're pillars as will we the be be to these then growth of it in And longer-term There ones. think I Right?

Operator

from comes with question next Fong Instructions [Operator Marvin BTIG.

Marvin Fong

you probably Congratulations on of works think the progress. was I Thrasio the a more while. at guys but small or -- ask all acquisition. us I bankruptcy announce questions, I'll the has which But been obvious did guess maybe of one lot all in the for a

future? the that sort cash for sort also, hard foreseeable way any that deals you of should might and in for for that the -- we fourth be stock of view sale? in and structure change might a for template both assets as any the So you And how good use

Joseph A. Risico

I'll this, you in. jump take Arty, can Yes. and

saw is right? we to. lenders. Thrasio And way They lenders, money the it's tons which been the not They there largely have duress. think the couple at point, the our a have they've the yes, aggregators, aggregators they're this the about of significant -- then asset's the in of bankruptcy tons largely, portfolios So loaned very it's we knowledge. really are and all and works under of The largely aggregator to space right,

their And so what the in seeing pushing largely portfolio you're lenders together companies. space is the

I wave reorganize. next Thrasio, think, they're which the of sort that's looking try versus, So to to

trying are the by portfolio is next find the this. all the they that amounts debt. to will way of them lenders out that of together, But move. of that's most the have Obviously, think the hope I consolidate significant companies consolidating a portfolio,

point, obviously we're nothing so that not term, is to aggregators, that for from it's for And with the that, do beyond from looking look opportunities not point. what we right, it, opportunity, think there in aggregators, that this term, assets an really was at -- that, kind this to if we but of be Having buy fourth at hard looking at way about us right? those to those means something and said size Marvin. We're medium likely not

Marvin Fong

fair. you from guess, the broader early guess -- much yes, tariffs may we avoid That's way, inventory I tariffs. China. a electing in just some products see a to bringing And mean I higher goes Okay. topic, from the I mentioned on And certain there's cooler

the about diversify remind of So can countries. just past, base your us you other efforts read supplier talked kind to strategy, you your I kind in think of into

Is the some outside Have general -- where stand in you that you if, Or moved do case? right? have do how adjusted production China? we do And fact, there? of still strategy

Arturo Rodriguez

earlier something the are in in or especially kind improvement which Trump, [indiscernible] I I guess, kind in numbers, about [ inventory belief [indiscernible]. ], North bottles I rationalization subsided since political SKU is think, completion, rationalization, XXXX very some or large year, see of XX% by about is even over produced the through Listen, especially of we've to campaign, seen former with I of as President our announced think Right that guess now, assembled China as closer we like part the coming of, that. XX% America, or with an our XX% of last kind completion.

So we that. improved on have

it's but we of if for of to and opportunities did which beverage were look many lot a just flexibility have is coolers implemented, away not outside and that difficult board. China, electronics, we do the from the tariffs some inventory with be categories, it that, it's really it's to of across Aterian, buying to there to that move right, to we said, that, difficult. electronic, That continue And see our remaining

it So hit us our equally. and competitors would

The think what public interest down. kind to inflation Everyone against come opt of to the And the reduce think Feds it -- rates within still though, we got -- to -- election, have like paper other I we far it's now. through it's other I trying side these side, aware the in that time like too, that. of desire always continue seems think front do some very to is the is everyone's it's page and do days. right

So be large because do during were I think think tariffs they're for [ from inflation as currently antics trying an as probably campaign of as we're to widespread I I there if going the think administration do ] perspective. the in enacted, as what not are to seeing it's or promised do what current that

Operator

There no over further the will questions I Ilya this time. at to turn now are Grozovsky for call remarks. closing back

Ilya Grozovsky

their which part questions the loyalty program, to up earnings management Perks our all the reminder, and a and as thank ask sign wanted questions. on As their for participants our aterian.io/perks. participation ability their call. investors have shareholder of Participants to the program in for shareholder I Perks can

few a have the of popular picked most I questions they submitted. that

first The to any question, Aterian shares? plans buy does company back have

Joseph A. Risico

this get one. I'll

we're again, Perks of are folks retail the behalf Aterian us just said, us. myself, the Ilya on in as that on follow So grateful support that folks for and

to Aterian talked deployed have call investing by to about the So hand, to future, in Cash we've want foreseeable we the going best near-term answer today. that we the into the be is is we pursue no. on -- on strategies think

Ilya Grozovsky

Great.

Next can on the an provide efforts question TikTok update on its specifically? company is,

Joseph A. Risico

Yes.

got, are, I if the the date time most we -- not to there, to our products results results. platform our recipe our dial discussed believe, platform. that, on earlier, we've that as products of not were material of we formula Having again, a all what And into in So into I results. to to said sort leaning investing, are our spending do translates just that best of

buying, is reminder, the content and the to it where discovery making Amazon, seeing platform searching for a mind Again, coming are then decision are TikTok in specifically. you're with and just buy People a product a right? versus to right, platform, people

We'll TikTok. a it. curve. So to talk We're learning There's working there. continue on about adjustment hard there's an

I the we so again, question, today. where and And that's are appreciate

Ilya Grozovsky

This concludes the call. Q&A portion of the

of terms Conference In XX Aterian We speaking future be management ends look the this XX to March Niguel, calendar, you Annual ROTH in Laguna participating the California. upcoming forward in with our XXth to on and calls, call. on will

now may disconnect. You

Aterian (ATER) 12 Mar 242023 Q4 Earnings call transcript