Market Newsdesk

Pre-Tax Income of $23.1 million

First Quarter Gross Loss Ratio Improved to 33.6% from 40.6%

Greenleaf Sells Two Properties for a Gain of $8.9 Million

TAMPA, Fla., May 09, 2023 (GLOBE NEWSWIRE) — HCI Group, Inc. (NYSE:HCI), a holding company with operations in homeowners insurance, information technology services, real estate, and reinsurance, reported net income of $17.8 million, or $1.54 diluted earnings per share in the first quarter of 2023, compared with net income of $2.8 million, or $0.09 diluted earnings per share, in the first quarter of 2022.

Adjusted net income (a non-GAAP measure which excludes net unrealized gains or losses on equity securities) for the first quarter of 2023 was $17.4 million, or $1.50 diluted earnings per share, compared with adjusted net income of $5.5 million, or $0.34 diluted earnings per share, in the first quarter of 2022. This press release includes an explanation of adjusted net income as well as a reconciliation to net income and earnings per share calculated in accordance with generally accepted accounting principles (known as “GAAP”).

Management Commentary

“We are starting to see the benefits of the company’s underwriting and rate actions as well as the bold leadership provided by the Florida Legislature in 2022,” said HCI Group Chairman and Chief Executive Officer Paresh Patel.

First Quarter 2023 Commentary

Consolidated gross premiums earned in the first quarter of 2023 increased to $180.1 million from $178.9 million in the first quarter of 2022. The increase was primarily due to higher average premium per policy offset by a decline in the number of policies in force.

Premiums ceded for reinsurance increased to $70.5 million from $53.2 million in the first quarter of 2022. Ceded premiums represented 39.2% and 29.7% of gross premiums earned in the first quarters of 2023 and 2022, respectively.

Net investment income increased to $17.7 million from $2.9 million in the first quarter of 2022. The increase included a gain of $8.9 million from the sale of two real estate investment properties at Greenleaf. Also included in investment income was interest income of $7.7 million, which increased from $0.6 million in the first quarter of 2022 reflecting higher yields on fixed maturity securities, cash, and cash equivalents.

Losses and loss adjustment expenses decreased to $60.6 million from $72.7 million in the same period of 2022. Losses and loss adjustment expenses as a percent of gross premiums earned declined to 33.6% from 40.6% in the first quarter of 2022. The decrease was driven by lower claims and litigation frequency in Florida.

Policy acquisition and other underwriting expenses decreased to $22.7 million from $29.4 million in the same quarter of 2022 and declined from 16.4% of gross premiums earned to 12.6%, reflecting a higher mix of renewal policies and lower commissions.

General and administrative personnel expenses decreased to $13.5 million from $14.0 million for the first quarter of 2022.

Conference Call

HCI Group will hold a conference call later today, May 9, 2023, to discuss these financial results. Chairman and Chief Executive Officer Paresh Patel, Chief Operating Officer Karin Coleman and Chief Financial Officer Mark Harmsworth will host the call starting at 4:45 p.m. Eastern time.

A replay of the call will be available after 8:00 p.m. Eastern time on the same day as the call and via the Investor Information section of the HCI Group website at www.hcigroup.com.

Listen-only toll-free number: (888) 506-0062
Listen-only international number: (973) 528-0011
Entry Code: 826822

Please call the conference telephone number 10 minutes before the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at (949) 574-3860.

A replay of the call will be available by telephone after 8:00 p.m. Eastern time on the same day as the call and via the Investor Information section of the HCI Group website at www.hcigroup.com through May 9, 2024.

Toll-free replay number: (877) 481-4010
International replay number: (919) 882-2331
Replay ID: 48147

About HCI Group, Inc.

HCI Group, Inc. owns subsidiaries engaged in diverse, yet complementary business activities, including homeowners insurance, information technology services, insurance management, real estate, and reinsurance. HCI’s leading insurance operation, TypTap Insurance Company, is a technology-driven homeowners insurance company. TypTap’s operations are powered in large part by insurance-related information technology developed by HCI’s software subsidiary, Exzeo USA, Inc. HCI’s largest subsidiary, Homeowners Choice Property & Casualty Insurance Company, Inc., provides homeowners insurance primarily in Florida. HCI’s real estate subsidiary, Greenleaf Capital, LLC, owns and operates multiple properties in Florida, including office buildings, retail centers and marinas.

The company’s common shares trade on the New York Stock Exchange under the ticker symbol “HCI” and are included in the Russell 2000 and S&P SmallCap 600 Index. HCI Group, Inc. regularly publishes financial and other information in the Investor Information section of the company’s website. For more information about HCI Group and its subsidiaries, visit www.hcigroup.com.

Forward-Looking Statements

This news release may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “estimate,” “expect,” “intend,” “plan,” “confident,” “prospects” and “project” and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions, but rather are subject to various risks and uncertainties. For example, the estimation of reserves for losses and loss adjustment expenses is an inherently imprecise process involving many assumptions and considerable management judgment. Some of these risks and uncertainties are identified in the company’s filings with the Securities and Exchange Commission. Should any risks or uncertainties develop into actual events, these developments could have material adverse effects on the company’s business, financial condition and results of operations. HCI Group, Inc. disclaims all obligations to update any forward-looking statements.

Company Contact:

Simon Rosenberg
Investor Relations
HCI Group, Inc.
Tel (813) 405-5261
[email protected]

Investor Relations Contact:

Matt Glover
Gateway Group, Inc.
Tel (949) 574-3860
[email protected]

HCI GROUP, INC. AND SUBSIDIARIES

(Amounts in thousands, except per share amounts)

A summary of the numerator and denominator of basic and diluted earnings per common share calculated in accordance with GAAP is presented below.

Non-GAAP Financial Measures

Adjusted net income is a Non-GAAP financial measure that removes from net income of HCI’s portion of the effect of unrealized gains or losses on equity securities required to be included in results of operations in accordance with Accounting Standards Codification 321. HCI Group believes net income without the effect of volatility in equity prices more accurately depicts operating results. This financial measurement is not recognized in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and should not be viewed as an alternative to GAAP measures of performance. A reconciliation of GAAP Net income to Non-GAAP Adjusted net income and GAAP diluted earnings per share to Non-GAAP Adjusted diluted earnings per share is provided below.

Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income

HCI GROUP, INC. AND SUBSIDIARIES

(Amounts in thousands, except per share amounts)

A summary of the numerator and denominator of the basic and diluted earnings per common share calculated with the Non-GAAP financial measure Adjusted net income is presented below.

Reconciliation of GAAP Diluted EPS to Non-GAAP Adjusted Diluted EPS

CAMBRIDGE, Mass., May 09, 2023 (GLOBE NEWSWIRE) — Generation Bio Co. (Nasdaq:GBIO), a biotechnology company innovating genetic medicines for people living with rare and prevalent diseases, announced that Matt Norkunas, M.D., chief financial officer, will present at the JMP Securities Life Sciences on Tuesday, May 16, 2023 at 1:00 p.m. EST in New York.

A live webcast of the presentation will be available on the investor section of the company’s website at investors.generationbio.com. A replay will be available there for 30 days following the event.

About Generation Bio

Generation Bio is innovating genetic medicines to provide durable, redosable treatments for people living with rare and prevalent diseases. The company’s non-viral genetic medicine platform incorporates a novel DNA construct called closed-ended DNA, or ceDNA; a unique cell-targeted lipid nanoparticle delivery system, or ctLNP; and a highly scalable capsid-free manufacturing process that uses proprietary cell-free rapid enzymatic synthesis, or RES, to produce ceDNA. This approach is designed to enable multi-year durability from a single dose, to deliver large genetic payloads, including multiple genes, to specific tissues and cell types, and to allow titration and redosing to adjust or extend expression levels in each patient. RES has the potential to expand Generation Bio’s manufacturing scale to hundreds of millions of doses to support its mission to extend the reach of genetic medicine to more people, living with more diseases, around the world. 
For more information, please visit www.generationbio.com. 

Investors and Media Contact

Maren Killackey
Generation Bio
[email protected]
857-371-4638

Tel Aviv, Israel / Vancouver, Canada, May 09, 2023 (GLOBE NEWSWIRE) — Clearmind Medicine Inc. (NASDAQ: CMND) (CSE: CMND), (FSE: CWY) (“Clearmind” or “the company”), a biotech company focused on discovery and development of novel psychedelic-derived therapeutics to solve major under-treated health problems, today announced that it has retained Crescendo Communications, LLC for strategic investor relations and capital markets communications services (the “Agreement”).

In addition, the company announces the issuance of an aggregate of 90,146 shares and 2,241 warrants pursuant to previously announced agreements.

Of these shares 45,329 were issued to consultants and 44,817 were issued to providers of investor services.

About 
Clearmind
 Medicine Inc.

Clearmind is a psychedelic pharmaceutical biotech company focused on the discovery and development of novel psychedelic-derived therapeutics to solve widespread and underserved health problems, including alcohol use disorder. Its primary objective is to research and develop psychedelic-based compounds and attempt to commercialize them as regulated medicines, foods or supplements.

The company’s intellectual portfolio currently consists of fourteen patent families. The company intends to seek additional patents for its compounds whenever warranted and will remain opportunistic regarding the acquisition of additional intellectual property to build its portfolio.

Shares of Clearmind are listed for trading on Nasdaq and the Canadian Securities Exchange under the symbol “CMND” and the Frankfurt Stock Exchange under the symbol “CWY.”

For further information visit: https://www.clearmindmedicine.com or contact:

Investor Relations

[email protected]

Telephone: (604) 260-1566

General Inquiries

[email protected]

www.Clearmindmedicine.com

FORWARD-LOOKING STATEMENTS:

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act and other securities laws. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements. For example, the Company is using forward-looking statements when it discusses the services to be performed by IMP and the benefit to the company therefrom, the timing of clinical trials, and the market size for AUD treatment and expected growth. Forward-looking statements are not historical facts, and are based upon management’s current expectations, beliefs and projections, many of which, by their nature, are inherently uncertain. Such expectations, beliefs and projections are expressed in good faith. However, there can be no assurance that management’s expectations, beliefs and projections will be achieved, and actual results may differ materially from what is expressed in or indicated by the forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements. For a more detailed description of the risks and uncertainties affecting the Company, reference is made to the Company’s reports filed from time to time with the Securities and Exchange Commission (“SEC”), including, but not limited to, the risks detailed in the Company’s annual report on Form 20-F filed with the SEC on February 6, 2023. Forward-looking statements speak only as of the date the statements are made. The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events or circumstances, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws. If the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect thereto or with respect to other forward-looking statements. References and links to websites have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release. Clearmind is not responsible for the contents of third-party websites.

Gross premiums written increased

27.8%
;


Net


income


of


$5.9 million


(


$0.17


per diluted ordinary share

)

;



Fully diluted book value per share


increased


1.1%


to


$14.75
  

GRAND CAYMAN, Cayman Islands, May 09, 2023 (GLOBE NEWSWIRE) — Greenlight Capital Re, Ltd. (NASDAQ: GLRE) (“Greenlight Re” or the “Company”) today reported its financial results for the first quarter ended March 31, 2023.

First Quarter
2023 Highlights
(all comparisons are to first quarter 2022 unless noted otherwise):

• Gross premiums written increased 27.8% to $186.5 million;
• Net premiums earned increased 13.3% to $142.6 million;
• Underwriting income of $0.4 million compared to an underwriting loss of $7.7 million;
• Net income of $5.9 million, or $0.17 per diluted ordinary share compared to a net loss of $5.7 million, or $(0.17) per diluted ordinary share;
• Combined ratio of 99.8%, compared to a combined ratio of 106.2%;
• Total investment income of $5.2 million, compared to total investment income of $7.7 million; and
• Fully diluted book value per share increased $0.16, or 1.1%, to $14.75, compared to $14.59 on December 31, 2022.

Simon Burton, Chief Executive Officer of Greenlight Re, stated, “During the first quarter we executed our strategy of expanding our portfolio into exceptional market conditions, with an increase in net written premium of 25%. Although our combined ratio improved more than 6% compared to last year, adverse prior year development prevented the impacts of the favorable market from flowing through this quarter. We expect the impact of our underwriting strategy and rate increases to flow through as improved combined ratios as 2023 progresses.”

David Einhorn, Chairman of the Board of Directors, said, “The first quarter was a challenging investment environment, as many investments that performed well in 2022, reversed in early 2023. The Solasglas investment portfolio had a (1.1)% return during the quarter. We repositioned the portfolio from bearish to neutral in response to the banking bailouts and likely shift in Fed policy from fighting inflation to financial stability.”

First Quarter 2023
Results

Gross premiums written in the first quarter of 2023 were $186.5 million, compared to $145.9 million in the first quarter of 2022. The $40.6 million increase, or 27.8%, relates primarily to new opportunities and improved pricing on property and general liability business, as well as several new specialty contracts bound during the quarter.

The Company recognized net underwriting income of $0.4 million in the first quarter of 2023. By comparison, the equivalent period in 2022 reported an underwriting loss of $7.7 million. The combined ratio for the first quarter of 2023 was 99.8%, an improvement of 6.4 percentage points over the equivalent period in 2022. The improved underwriting performance was net of $12.0 million, (8.4 percentage points), of adverse loss development on prior years’ contracts. The current period loss ratio included 6.2 million, or 4.3 percentage points, of losses related to the Turkey earthquake, the New Zealand Cyclone Gabrielle and U.S. convective storms that occurred during the first quarter of 2023. The convective storm losses stemmed from a single homeowners program written in 2022. The program was subsequently restructured at January 1, 2023 at significantly improved terms.

The following table summarizes the components of our combined ratio.

The Company’s total investment income during the first quarter of 2023 was $5.2 million. The Company’s investment in the Solasglas fund, managed by DME Advisors, returned (1.1)%, representing a loss of $3.1 million. The Company reported $8.4 million of other investment income, primarily from interest earned on its restricted cash and cash equivalents.

The Company reported other non-underwriting income of $7.1 million during the first quarter of 2023, due primarily to foreign exchange gains driven by the strengthening of the pound sterling and investment income on the funds withheld by the Lloyd’s syndicates.

The net income of $5.9 million contributed to the 1.1% increase in fully diluted book value per share which increased to $14.75 per share at March 31, 2023.

Greenlight Capital Re, Ltd. First Quarter 2023 Earnings Call

Greenlight Re will host a live conference call to discuss its financial results on Wednesday, May 10, 2023, at 9:00 a.m. Eastern Time. Dial-in details:        

The conference call can also be accessed via webcast at:

https://event.webcasts.com/starthere.jsp?ei=1606202&tp_key=8adc1f9f25

A telephone replay will be available following the call through May 15, 2023.  The replay of the call may be accessed by dialing 1-877-660-6853 (U.S. toll free) or 1-201-612-7415 (international), access code 13735400. An audio file of the call will also be available on the Company’s website, www.greenlightre.com.

Non-GAAP Financial Measures

In presenting the Company’s results, management has included financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (GAAP). Such measures, including basic book value per share, fully diluted book value per share, and net underwriting income (loss), are referred to as non-GAAP measures. These non-GAAP measures may be defined or calculated differently by other companies. Management believes these measures allow for a more thorough understanding of the underlying business. These measures are used to monitor our results and should not be viewed as a substitute for those determined in accordance with GAAP. Reconciliations of such measures to the most comparable GAAP figures are included in the attached financial information in accordance with Regulation G.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the U.S. Federal securities laws. These statements involve risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements made on the Company’s behalf. These risks and uncertainties include the impact of general economic conditions and conditions affecting the insurance and reinsurance industry, the adequacy of our reserves, our ability to assess underwriting risk, trends in rates for property and casualty insurance and reinsurance, competition, investment market fluctuations, trends in insured and paid losses, catastrophes, regulatory and legal uncertainties and other factors described in our most recent Form 10-K filed with the Securities and Exchange Commission (“SEC”), as those factors may be updated from time to time in our periodic and other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as provided by law.

About Greenlight Capital Re, Ltd.

Greenlight Re (www.greenlightre.com) provides multiline property and casualty insurance and reinsurance through its licensed and regulated reinsurance entities in the Cayman Islands and Ireland, and its Lloyd’s platform, Greenlight Innovation Syndicate 3456. The Company complements its underwriting activities with a non-traditional investment approach designed to achieve higher rates of return over the long term than reinsurance companies that exclusively employ more traditional investment strategies. In 2018, the Company launched its Greenlight Re Innovations unit, which supports technology innovators in the (re)insurance space by providing investment capital, risk capacity, and access to a broad insurance network.

Investor Relations Contact

Karin Daly
Vice President, The Equity Group Inc.
(212) 836-9623
[email protected]

GREENLIGHT CAPITAL RE, LTD.

CONDENSED CONSOLIDATED
BALANCE SHEETS

UNAUDITED

(expressed in thousands of U.S. dollars, except per share and share amounts)

GREENLIGHT CAPITAL RE, LTD.

CONDENSED CONSOLIDATED
RESULTS OF OPERATIONS

(UNAUDITED)

(expressed in thousands of U.S. dollars, except percentages and per share amounts)

The following tables present the Company’s net premiums earned and underwriting ratios by line of business: 

GREENLIGHT CAPITAL RE, LTD.

KEY FINANCIAL MEASURES AND NON-GAAP MEASURES

Management uses certain key financial measures, some of which are not prescribed under U.S. GAAP rules and standards (“non-GAAP financial measures”), to evaluate our financial performance, financial position, and the change in shareholder value. Generally, a non-GAAP financial measure, as defined in SEC Regulation G, is a numerical measure of a company’s historical or future financial performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented under U.S. GAAP. We believe that these measures, which may be calculated or defined differently by other companies, provide consistent and comparable metrics of our business performance to help shareholders understand performance trends and facilitate a more thorough understanding of the Company’s business. Non-GAAP financial measures should not be viewed as substitutes for those determined under U.S. GAAP.

The non-GAAP financial measures used in this report are:

• Basic book value per share and fully diluted book value per share; and
• Net underwriting income (loss)

These non-GAAP financial measures are described below.

Basic Book Value Per Share and Fully Diluted Book Value Per Share

We believe that long-term growth in fully diluted book value per share is the most relevant measure of our financial performance because it provides management and investors a yardstick to monitor the shareholder value generated. Fully diluted book value per share may also help our investors, shareholders, and other interested parties form a basis of comparison with other companies within the property and casualty reinsurance industry. Basic book value per share and fully diluted book value per share should not be viewed as substitutes for the comparable U.S. GAAP measures.

We calculate basic book value per share as (a) ending shareholders’ equity, divided by (b) aggregate of Class A and Class B ordinary shares issued and outstanding, including all unvested service-based restricted shares, and the earned portion of performance-based restricted shares granted after December 31, 2021. We exclude shares potentially issuable in connection with convertible notes if the conversion price exceeds the share price.

Fully diluted book value per share represents basic book value per share combined with any dilutive impact of in-the-money stock options, unvested service-based RSUs, and the earned portion of unvested performance-based RSUs granted. Fully diluted book value per share also includes the dilutive effect, if any, of ordinary shares expected to be issued upon settlement of the convertible notes.

Our primary financial goal is to increase fully diluted book value per share over the long term. We use fully diluted book value per share as a financial measure in our annual incentive compensation.

The following table presents a reconciliation of the non-GAAP financial measures basic and fully diluted book value per share to the most comparable U.S. GAAP measure:

⁽¹⁾
_{For periods prior to January 1, 2022, all unvested restricted shares are included in the “basic” and “fully diluted” denominators. Restricted shares with performance-based vesting conditions granted after December 31, 2021, are included in the “basic” and “fully diluted” denominators to the extent that the Company has recognized the corresponding share-based compensation expense. At March 31, 2023, the aggregate number of unearned restricted shares with performance conditions not included in the “basic” and “fully diluted” denominators was 1,014,317 (December 31, 2022: 709,638, September 30, 2022: 732,310, June 30, 2022: 754,076, March 31, 2022: 774,742).}

Net Underwriting Income (Loss)

One way that we evaluate the Company’s underwriting performance is by measuring net underwriting income (loss). We do not use premiums written as a measure of performance. Net underwriting income (loss) is a performance measure used by management to evaluate the fundamentals underlying the Company’s underwriting operations. We believe that the use of net underwriting income (loss) enables investors and other users of the Company’s financial information to analyze our performance in a manner similar to how management analyzes performance. Management also believes this measure follows industry practice and allows the users of financial information to compare the Company’s performance with that of our industry peer group.

Net underwriting income (loss) is considered a non-GAAP financial measure because it excludes items used to calculate net income before taxes under U.S. GAAP. We calculate net underwriting income (loss) as net premiums earned, plus other income relating to reinsurance and deposit-accounted contracts, less deposit interest expense, less net loss and loss adjustment expenses, acquisition costs, and underwriting expenses. The measure excludes, on a recurring basis: (1) investment income (loss); (2) other income (expense) not related to underwriting, including foreign exchange gains or losses, Lloyd’s interest income and expense, and adjustments to the allowance for expected credit losses; (3) corporate general and administrative expenses; and (4) interest expense. We exclude total investment income or loss, foreign exchange gains or losses, Lloyd’s interest income or expense and expected credit losses as we believe these items are influenced by market conditions and other factors unrelated to underwriting decisions. Additionally, we exclude corporate and interest expenses because these costs are generally fixed and not incremental to or directly related to our underwriting operations. We believe all of these amounts are largely independent of our underwriting process, and including them could hinder the analysis of trends in our underwriting operations. Net underwriting income (loss) should not be viewed as a substitute for U.S. GAAP net income before income taxes.

The reconciliations of net underwriting income (loss) to income (loss) before income taxes (the most directly comparable U.S. GAAP financial measure) on a consolidated basis are shown below:

SAN RAMON, Calif., May 09, 2023 (GLOBE NEWSWIRE) — CooperCompanies (NYSE: COO) today released its 2022 Environmental, Social, and Governance (ESG) Report. It highlights the company’s progress on social and environmental issues most important to its businesses and stakeholders, including employees, shareholders, customers, and global communities.

In 2022, CooperCompanies manufactured a record number of products while reducing greenhouse gas (GHG) emissions by more than 7%. A big contributor to this success was the start of the operation of a combined heat and power (CHP) facility in Puerto Rico. The company expects the CHP system to help significantly reduce its carbon footprint in the coming years.

“At CooperCompanies, we are committed to working diligently to positively impact the world around us,” said Al White, President and CEO of CooperCompanies. “In 2022, we continued making great progress and we’re proud of the success we’ve had, and the direction in which we’re moving. Conducting business in a socially and environmentally responsible manner is important to our long-term business success, and to the future of our planet.”

The 2022 ESG Report includes expanded and updated ESG performance data and provides stories across the company’s ESG pillars: People, Planet, and Partnerships. The report is aligned with the Sustainability Accounting Standards Board (SASB) Standards, a leading framework that identifies important ESG issues most relevant to investors.

Read more in the Cooper 2022 ESG Report: https://coopercos.com/esg/.

About CooperCompanies

CooperCompanies (“Cooper”) is a global medical device company publicly traded on the NYSE (NYSE: COO). Cooper operates through two business units, CooperVision and CooperSurgical. CooperVision brings a refreshing perspective on vision care with a commitment to developing a wide range of high-quality products for contact lens wearers and providing focused practitioner support. CooperSurgical is committed to advancing the health of women, babies and families with its diversified portfolio of products and services focusing on medical devices and fertility & genomics. Headquartered in San Ramon, CA, Cooper has a workforce of more than 14,000 with products sold in over 100 countries. For more information, please visit www.coopercos.com.

Forward Looking Statements

This press release contains “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Statements relating to guidance, plans, prospects, goals, strategies, future actions, events or performance and other statements of which are other than statements of historical fact, including all statements regarding planned ESG programs and goals, the anticipated impact of ESG activities, and product and technology plans, are forward-looking. To identify these statements, look for words like “believes,” “outlook,” “probable,” “expects,” “may,” “will,” “should,” “could,” “seeks,” “intends,” “plans,” “estimates,” or “anticipates” and similar words or phrases. Forward-looking statements necessarily depend on assumptions, data, or methods that may be incorrect or imprecise and are subject to risks and uncertainties. Among the factors that could cause our actual results and future actions to differ materially from those described in forward-looking statements are: adverse changes in the global or regional general business, political, and economic conditions including the impact of continuing uncertainty and instability of certain countries, man-made or natural disasters and pandemic conditions, that could adversely affect our global markets, and the potential adverse economic impact and related uncertainty caused by these items; the impact of Russia’s invasion of Ukraine and the global response to this invasion on the global economy, European economy, financial markets, energy markets, currency rates, and our ability to supply product to, or through, affected countries; compliance costs and potential liability in connection with U.S., and foreign laws and healthcare regulations pertaining to privacy and security of personal information; a major disruption in the operations of our manufacturing, accounting, and financial reporting, research, and development, distribution facilities or raw material supply chain; disruptions in supplies of raw materials, particularly components used to manufacture our silicone hydrogel lenses; new U.S. and foreign government laws and regulations, and changes in existing laws, regulations, and enforcement guidance, which affect areas of our operations including, but not limited to, those affecting the healthcare industry; new competitors, product innovations or technologies; reduced sales, loss of customers, and costs and expenses related to product recalls and warning letters; failure to receive, or delays in receiving, regulatory approvals or certifications for products; risks related to ESG issues, including those related to climate change and sustainability; and other events described in our Securities and Exchange Commission filings, including the “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in the our Annual Report on Form 10-K for the fiscal year ended October 31, 2022. As such, Risk Factors may be updated in annual and quarterly filings. We caution investors that forward-looking statements reflect our analysis only on their stated date. We disclaim any intent to update them except as required by law.

Contact:
Kim Duncan
Vice President, Investor Relations and Risk Management
925-460-3663
[email protected]

SAN FRANCISCO, May 09, 2023 (GLOBE NEWSWIRE) — Allbirds, Inc. (NASDAQ: BIRD), a global lifestyle brand that innovates with naturally derived materials to make better footwear and apparel products in a better way, today reported financial results for the first quarter ended March 31, 2023.

Q1 2023 Overview

• Net revenue decreased 13.4% to $54.4 million compared to 2022 and increased 9.5% compared to 2021
• Net loss of $35.2 million, or $0.23 per basic and diluted share
• Adjusted EBITDA¹ loss of $21.7 million
• Announced M0.0NSHOT, a project to create the world’s first net zero carbon shoe
• Significant improvement in Q1 cash usage, down 50.6% compared to Q1 2022
• In April 2023, extended and upsized undrawn revolver with JP Morgan

“Our teams are executing well against our strategic transformation plan designed to reignite growth, improve capital efficiency and drive profitability,” said Joey Zwillinger, Co-Founder and CEO. “The dedication and hard work of our flock resulted in a quarter that demonstrated good progress on our strategic initiatives while exceeding our expectations.”

“Our mission to create better things in a better way, guided by our Super Natural Comfort northstar, remains at the forefront of everything we do at Allbirds as we advance our vision to build a 100-year brand.”

First
Quarter Operating Results

Net revenue decreased 13.4% to $54.4 million compared to the first quarter of 2022 and increased 9.5% compared to the first quarter of 2021. This decrease is primarily attributable to a decrease in average selling price, driven by promotional activity and a higher mix of third party sales, and an estimated $1.2 million negative impact from foreign exchange (FX).

Gross profit totaled $21.8 million compared to $32.6 million in the first quarter of 2022, and gross margin declined to 40.1% compared to 51.9% in the first quarter of 2022. The decrease in gross margin is primarily due to the decrease in average selling price, driven by an increase in promotional activity and a higher mix of third party sales, write-downs related to prior generation products, and costs relating to our manufacturing transitions.

Selling, general, and administrative expense (SG&A) was $42.8 million, or 78.7% of net revenue, compared to $38.8 million, or 61.7% of net revenue in the first quarter of 2022, which represented a year over year increase of 10.3%. The increase is primarily attributable to an increase in stock-based compensation and operational expenses for 20 additional stores opened since the first quarter of 2022, including depreciation expense, and rent and utility expense.

Marketing expense totaled $11.5 million, or 21.1% of net revenue, compared to $13.8 million, or 22.0% of net revenue in the first quarter of 2022, due to a reduction in marketing spend compared to the same period in 2022, driven by decreased digital advertising spend.

Restructuring expense totaled $3.2 million, or 6.0% of net revenue, compared to $0.0 million in the first quarter of 2022, as a result of executing the strategic transformation plan announced in March 2023.

Net loss was $35.2 million compared to $21.9 million in the first quarter of 2022, and net loss margin was 64.7% compared to 34.9% in the first quarter of 2022.

Adjusted EBITDA¹ was a loss of $21.7 million, compared to a loss of $12.2 million in the first quarter of 2022, and adjusted EBITDA margin¹ declined to (39.8)% compared to (19.5)% in the first quarter of 2022.

Strategic Transformation Designed to Drive Sustained and Profitable Growth

Allbirds is executing its strategic transformation plan designed to reignite growth in the coming years, as well as improve capital efficiency, and drive profitability. The plan, announced in March 2023, focuses on four key areas:

• Reignite product and brand
  • Executing a highly-focused brand strategy that reconnects with core consumers.
• Optimize U.S. stores and slow pace of openings.
  • Driving traffic and conversion to our U.S. fleet and selectively expanding our third party wholesale channel.
• Evaluate transition of international go-to-market strategy
  • Evaluating potential distributor partners in certain international markets to grow internationally in a cost- and capital-efficient manner.
• Improve cost savings and capital efficiency
  • Building upon and further accelerating 2022 cost and cash optimization initiatives to accelerate cost of revenue savings and SG&A savings, and improve cash optimization.

Balance Sheet Highlights

Allbirds ended the quarter with $143.3 million of cash and cash equivalents, reflecting a 50.6% improvement in cash usage compared to the first quarter of 2022.

In April 2023, we amended our credit agreement to extend and upsize our undrawn revolver, which extended the maturity through 2026, increased the committed amount to $50 million, and increased the uncommitted incremental borrowing capacity to $50 million.

Inventories totaled $109.5 million, a decrease of 6.3% compared to $116.8 million at the end of 2022, and a decrease of 7.5% compared to $118.5 million at the end of the first quarter of 2022. The decrease from the end of 2022 is attributable to less on hand inventory.

Q2 2023
Financial Gui
dance
Targets

Allbirds is providing the following financial guidance targets for the 2nd quarter of 2023:

• Net revenue of $64 million to $69 million, a decrease of 18% to 12% versus the 2nd quarter of fiscal 2022.
• Adjusted EBITDA² loss of $20 million to $23 million.

The Company will provide additional commentary on 2023 business trends during its earnings call.

_______________
¹ For a reconciliation of each non-GAAP financial measure to its most directly comparable GAAP financial measure, please refer to the reconciliation tables in the section titled “Non-GAAP Financial Measures below.
² A reconciliation of these non-GAAP financial measures to corresponding GAAP financial measures is not available on a forward-looking basis without unreasonable effort as we are currently unable to predict with a reasonable degree of certainty certain expense items that are excluded in calculating adjusted EBITDA, although it is important to note that these factors could be material to our results computed in accordance with GAAP. We have provided a reconciliation of GAAP to non-GAAP financial measures in the section titled “Reconciliation of GAAP to Non-GAAP Financial Measures” for our first quarter 2023 and 2022 results included in this press release.

Conference Call Information

Allbirds will host a conference call to discuss the results, followed by Q&A, at 5:00 p.m. Eastern Time today, May 9, 2023. A live webcast and replay of the conference call will be available on the investor relations section of the Allbirds website at https://ir.allbirds.com where supplemental material dated May 9, 2023 will also be posted prior to the conference call. Information on the Company’s website is not, and will not be deemed to be, a part of this press release or incorporated into any other filings the Company may make with the Securities and Exchange Commission. A replay of the webcast will also be archived on the Allbirds website for 12 months.

About Allbirds, Inc.

Dreamed up in New Zealand, Allbirds launched in San Francisco in 2016 with the ethos of using natural materials to create the world’s most comfortable shoes. With carbon reduction as its north star, Allbirds is paving the way for a more sustainable approach to business through product innovation, industry collaboration (like open sourcing its carbon footprint calculator) and being the first footwear brand to carbon label all of its products. Allbirds serves customers in 35+ countries across 55+ retail stores. www.allbirds.com

Forward-Looking Statements

This press release and related conference call contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management’s beliefs and assumptions and on information currently available to management. All statements other than statements of historical facts, including statements regarding our strategic transformation plan and related efforts, financial outlook and guidance targets, estimated and/or targeted cost savings, medium-term financial targets, market position, future results of operations, financial condition, business strategy and plans, reducing the carbon footprint of our products, and objectives of management for future operations are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “designed,” “objective,” “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including, but not limited to: our strategic transformation plans, simplification initiatives or our long-term growth strategy; fluctuations in our operating results; economic uncertainty in our key markets; impairment of long-lived assets; the strength of our brand; our net losses since inception; the competitive marketplace; our reliance on technical and materials innovation; our use of sustainable high-quality materials and environmentally friendly manufacturing processes and supply chain practices; our ability to attract new customers and increase sales to existing customers; the impact of climate change and government and investor focus on sustainability issues; our ability to anticipate product trends and consumer preferences; and our ability to forecast consumer demand. Moreover, we operate in a very competitive and rapidly changing environment in which new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual results or performance to differ materially from those contained in any forward-looking statements we may make.

Further information on these risks and other factors that could cause our financial results, performance, and achievements to differ materially from any results, performance, or achievements anticipated, expressed, or implied by these forward-looking statements is included in the filings we make with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2022, and future reports we may file with the SEC from time to time. The forward-looking statements contained in this press release and related conference call relate only to events as of the date stated or, if no date is stated, as of the date of this press release and related conference call. We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in or expressed by, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.

Use of Non-GAAP Financial Measures

This press release and accompanying financial tables include references to adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures. We believe that these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, and not in isolation or as substitutes for analysis of our results of operations under GAAP, are useful to investors as they are widely used measures of performance, and the adjustments we make to these non-GAAP financial measures provide investors further insight into our profitability and additional perspectives in comparing our performance to other companies and in comparing our performance over time on a consistent basis. These non-GAAP financial measures should not be considered as alternatives to net loss or net loss margin as calculated and presented in accordance with GAAP.

Adjusted EBITDA is defined as net loss before stock-based compensation expense (including common stock warrant expense), depreciation and amortization expense, impairment expense, restructuring expense, other income or expense, interest income or expense, and income tax provision or benefit.

Adjusted EBITDA margin is defined as adjusted EBITDA divided by net revenue.

Other companies, including companies in our industry, may calculate these adjusted financial measures differently, which reduces their usefulness as comparative measures. Because of these limitations, we consider, and investors should consider, these adjusted financial measures together with other operating and financial performance measures presented in accordance with GAAP.

Investor
Relations
:

Katina Metzidakis
[email protected]

Media Contact:

[email protected]

Allbirds, Inc.

Condensed
Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share, per share amounts, and percentages)

Allbirds, Inc.

Condensed
Consolidated Balance Sheets

(
i
n thousands, except share amounts)

Allbirds, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

Allbirds, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except share, per share amounts, and percentages)

(unaudited)

The following tables present a reconciliation of adjusted EBITDA to its most comparable GAAP measure, net loss, and presentation of net loss margin and adjusted EBITDA margin for the periods indicated:

Allbirds, Inc.

Net Revenue and Store Count by Primary Geographical Market

(in thousands, except for store count)

(unaudited)

_______________
¹ In the third quarter of 2022, we opened two new international stores and had three store leases expire, resulting in a net reduction of one lease.

• Results in significant maturity runway to continue to execute on growth strategy, operational enhancements, and strategic initiatives
• Represents ~ 60% of Aggregate Principal Amount of Current TLB Debt Outstanding
• Expectation that the Transaction will be Consummated in mid-June 2023 with additional participation by other TLB Lenders
  

ANDOVER, Mass., May 09, 2023 (GLOBE NEWSWIRE) — Casa Systems, Inc. (NASDAQ: CASA) (“Casa” or “the Company”), a leading provider of cloud-native software and physical broadband technology solutions for access, cable, and cloud, today announced it entered into a Transaction Support Agreement (the “TSA”) with an ad hoc committee of lenders (the “Consenting Lenders”) representing approximately 60% of the approximately $223 million in aggregate principal amount of the Company’s Term Loan B Senior Secured debt now outstanding (the “2023 TLB Debt”).

The TSA provides for, among other things, the extension of the current maturity of the 2023 TLB Debt held by the Consenting Lenders (approximately $133.9 million), with maturity scheduled for December 2027, allowing the Company to execute on its previously announced growth strategy, implement operational efficiencies, and execute on strategic initiatives. The Consenting Lenders agreed, subject to certain terms and conditions set forth in the TSA, to exchange approximately $133.9 million of their existing 2023 TLB Debt for a newly issued super-priority term loan B (the “2027 TLB Debt”). The TSA also provides that other holders of the existing 2023 TLB Debt that did not initially sign the TSA may execute a joinder to the TSA under certain conditions. Any such other holder that executes a joinder will be required, subject to the same terms and conditions, to exchange its 2023 TLB Debt for such 2027 TLB Debt.

Simultaneously with the closing of the transactions contemplated by the TSA, the Company intends to pay down the 2027 TLB Debt principal held by the Consenting Lenders by $40 million using available cash on hand. The transactions contemplated by the TSA are subject to closing conditions and achieving certain participation thresholds as set forth therein. Additionally, please see the Company’s Current Report on Form 8-K that was filed today with the Securities and Exchange Commission with respect to the TSA and the 2027 TLB Debt, including for additional information regarding the economics, covenants, and conditions applicable thereto.

“We are grateful for the support we received from our 2023 TLB Debt holders,” said Edward Durkin, Casa Systems’ Chief Financial Officer and Interim Chief Executive Officer. “We believe the Consenting Lenders’ support for the TSA demonstrates the financial community’s confidence in our operating plans and the resiliency of our business. Our market leading product portfolios for access, cable, and cloud are as robust as ever, with consistently strong customer demand across all market segments. After the closing of the refinancing described in the TSA, we will have significantly extended the maturity date of our 2023 TLB Debt which we believe will allow us the time and flexibility to continue with our efforts to significantly enhance stockholder value, by executing on our previously announced cash-and-capital efficient growth plans and our plans to further de-lever.”

The consummation of the transactions contemplated by the TSA will be conditioned on the satisfaction or waiver of certain conditions precedent, including finalizing all definitive documents and completion of satisfactory due diligence by the Consenting Lenders. The transactions contemplated by the TSA may not be completed as contemplated, or at all. If the Company is unable to complete this transaction or any other alternative transactions, on favorable terms or at all, due to market conditions or otherwise, its financial condition could be materially adversely affected. This communication is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, any security and does not constitute an offer, solicitation, or sale of any security in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Sidley Austin LLP is serving as legal counsel to the Company in connection with the transactions contemplated by the TSA. JPMorgan Chase Bank, N.A. is serving as lead arranger for such transactions and is represented by Simpson Thacher & Bartlett LLP.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact contained in this press release, including statements regarding the potential future consummation of the transactions contemplated by the TSA, business strategy, and plans and objectives for future operations, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “are optimistic,” “plan,” “potential,” “predict,” “project,” “target,” “should,” “will,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs as of the date of this press release. A number of important risk factors could cause actual results to differ materially from the results described, implied or projected in these forward-looking statements. These factors include, without limitation: (1) our ability to satisfy the conditions described in the TSA and to consummate the transactions contemplated thereby; (2) our ability to fulfill our customers’ orders due to supply chain delays, access to key commodities or technologies or events that impact our manufacturers or their suppliers, including the lingering effects of the COVID-19 pandemic; (3) any failure by us to successfully anticipate technological shifts, market needs and opportunities, and develop new products and product enhancements that meet those technological shifts, needs and opportunities; (4) the concentration of a substantial portion of our revenue in certain customers; (5) fluctuations in our revenue due to timing of large orders and seasonality; (6) the length and lack of predictability of our sales cycle; (7) any difficulties we may face in expanding our platform into the wireless market; (8) any failure to maintain the synergies we have realized from our acquisition of NetComm; (9) increases or decreases in our expenses caused by fluctuations in foreign currency exchange rates and interest rates; (10) our ability to effectively transition our chief executive officer role and (11) other factors discussed in the “Risk Factors” section of our public reports filed with the Securities and Exchange Commission (the “SEC”), including our most recent Quarterly Report on Form 10-Q and our most recent Annual Report on Form 10-K, which are on file with the SEC and available in the investor relations section of our website at http://investors.casa-systems.com and on the SEC’s website at www.sec.gov. In addition, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements that we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this press release are inherently uncertain and may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Accordingly, you should not rely upon forward-looking statements as predictions of future events. We disclaim any obligation to update publicly or revise any forward-looking statements for any reason after the date of this press release. Any reference to our website address in this press release is intended to be an inactive textual reference only and not an active hyperlink.

About Casa Systems, Inc.

Casa Systems, Inc. (Nasdaq: CASA) delivers the core-to-customer building blocks to speed 5G transformation with future-proof solutions and cutting-edge bandwidth for all access types. In today’s increasingly personalized world, Casa Systems creates disruptive architectures built specifically to meet the needs of service provider networks. Our suite of open, cloud-native network solutions unlocks new ways for service providers to build networks without boundaries and maximize revenue-generating capabilities. Commercially deployed in more than 70 countries, Casa Systems serves over 475 Tier 1 and regional communications service providers worldwide. For more information, visit http://www.casa-systems.com.

CONTACT INFORMATION:

IR Contacts

Dennis Daly
Casa Systems
978-688-6706 ext. 6310
[email protected]

or

Mike Cummings or Jackie Marcus
Alpha IR Group
617-466-9257
[email protected]

Source: Casa Systems

Reports First Quarter 2023 Net Revenue of $34.9 Million

Announces Headcount Reduction Geared to Achieve Adjusted EBITDA Profitability Target

NEW YORK, May 09, 2023 (GLOBE NEWSWIRE) — Aterian, Inc. (Nasdaq: ATER) (“Aterian” or the “Company”) today announced results for the first quarter ended March 31, 2023. 

First Quarter Highlights

• First quarter 2023 net revenue declined 16.3% to $34.9 million, compared to $41.7 million in the first quarter of 2022.
• First quarter 2023 gross margin declined to 54.8%, compared to 56.6% in the first quarter of 2022, primarily reflecting the impact of our strategy of liquidating high-cost inventory.
• First quarter 2023 contribution margin declined to 5.9% from 9.2% in the first quarter of 2022, primarily reflecting the impact of our strategy of liquidating high-cost inventory.
• First quarter 2023 operating loss improved to $(25.0) million compared to a loss of $(36.3) million in the first quarter of 2022. First quarter 2023 operating loss includes ($2.3) million of non-cash stock compensation and a non-cash loss on impairment of intangibles of ($16.7) million, while first quarter 2022 operating loss included a gain of $2.8 million from the net change in fair value and settlement of earn-out liabilities, ($29.0) million of impairment loss on goodwill, and ($2.9) million of non-cash stock compensation.
• First quarter 2023 net loss of $(25.8) million decreased from $(42.8) million loss in the first quarter of 2022. First quarter 2023 net loss includes ($2.3) million of non-cash stock compensation, a non-cash loss on impairment of intangibles of ($16.7) million, and a gain on fair value of warrant liability of $0.4 million, while first quarter 2022 net loss included a gain of $2.8 million from the net change in fair value and settlement of earn-out liabilities, ($29.0) million of impairment loss on goodwill, and ($2.9) million of non-cash stock compensation, a gain on extinguishment of debt of $2.0 million and ($7.7) million in net charges from the changes in fair-value of warrants and initial issuance of equity.
• First quarter 2023 adjusted EBITDA loss improved to $(4.3) million from $(4.5) million in the first quarter of 2022.
• Total cash balance at March 31, 2023 was $33.9 million.

“Despite weakness in consumer demand, we are continuing to execute on our goal of becoming adjusted EBITDA profitable in the second half of this year,” commented Yaniv Sarig, Co-Founder and Chief Executive Officer of Aterian. “To that end today we announced a headcount reduction that will save an annualized $6 million toward our target of adjusted EBITDA profitability. It is a difficult decision but one that will put Aterian on a better footing with a solid balance sheet. This cost savings coupled with our portfolio’s market share position will allow us to build forward with emphasis and focus on both growth and profitability.”

Headcount Reduction

The Company plans to reduce expenses by implementing a reduction in its current workforce leading to approximately $6.0 million of annualized savings. This headcount reduction will impact approximately 70 employees and 30 contractors, primarily in the Philippines. The reduction in headcount is part of the Company’s strategy to increase efficiency and to drive focus as part of its second half 2023 adjusted EBITDA profitability goal. The Company expects to substantially complete the reduction in headcount by the end of the second quarter of 2023. The Company expects to recognize restructuring charges in connection with the headcount reduction plan, primarily from severance, of between $1.0 million to $1.3 million. The Company expects the charges will be recognized primarily in the second quarter of 2023, with the majority of such charges anticipated to be paid by the end of the third quarter of 2023.

As part of this headcount reduction, our Chief Supply Chain Officer, Michal Chaouat-Fix, will be transitioning away from the Company. Arturo Rodriguez, our Chief Financial Officer, will also assume the additional responsibilities of supply chain and operations as our Interim Chief Operating Officer. In addition, Tim Stanton, our Chief E-Commerce Officer, will transition away from the Company, Phil Lepper, our Senior Vice President of Revenue will assume Tim’s responsibilities.

Second Quarter 2023 & Second Half of 2023 Outlook

For the second quarter of 2023, taking into account the current global environment and inflation, we believe that net revenue will be between $37 million and $44 million. For the second quarter of 2023, the Company expects an Adjusted EBITDA loss of between $(5.2) million to $(6.2) million including the restructuring charges from our headcount reductions.

As a result of the headcount reduction, the Company is reconfirming its prior guidance of expecting to be Adjusted EBITDA profitable in the second half of 2023.

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 March 31, 2023 and the second half of 2023, due primarily to interest expense and stock-based compensation 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 9, 2023, 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 (833) 636-1351 and participants from outside the U.S. should dial (412) 902-4267 and ask to be joined into the Aterian, Inc. call. 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 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™), 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 numerous owned and operated brands and sells products in multiple categories, including home and kitchen appliances, health and wellness, beauty and consumer electronics.

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 goal to achieve adjusted EBITDA profitability in the second half of 2023, our portfolio’s market share position and the Company’s strategy of increasing efficiency and driving focus. 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 the 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, 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 the impact of COVID-19, including its 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; our ability to disrupt the consumer products industry; 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 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.

Investor Contact:

Ilya Grozovsky
Director of Investor Relations & Corp. Development
Aterian, Inc.
[email protected]
917-905-1699 
aterian.io

Non-GAAP Financial Measures

We believe that our financial statements and the other financial data included in this Quarterly Report have been prepared in a manner that complies, in all material respects, with generally accepted accounting principles in the U.S. (“GAAP”). However, for the reasons discussed below, we have presented certain non-GAAP measures herein.

We have presented the following non-GAAP measures to assist investors in understanding our core net operating results on an on-going basis: (i) Contribution Margin; (ii) Contribution margin as a percentage of net revenue; (iii) EBITDA (iv) Adjusted EBITDA; and (v) Adjusted EBITDA as a percentage of net revenue. These non-GAAP financial measures may also assist investors in making comparisons of our core operating results with those of other companies.

As used herein, Contribution margin represents gross profit less e-commerce platform commissions, online advertising, selling and logistics expenses (included in sales and distribution expenses). As used herein, Contribution margin as a percentage of net revenue represents Contribution margin divided by net revenue. As used herein, EBITDA represents net loss plus depreciation and amortization, interest expense, net and provision for income taxes. As used herein, Adjusted EBITDA represents EBITDA plus stock-based compensation expense, changes in fair-market value of earn-outs, profit and loss impacts from the issuance of common stock and/or warrants, changes in fair-market value of warrant liability, litigation settlements, impairment on goodwill and intangibles, gain from extinguishment of debt and other expenses, net. As used herein, Adjusted EBITDA as a percentage of net revenue represents Adjusted EBITDA divided by net revenue. Contribution margin, 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 present Contribution margin and Contribution margin as a percentage of net revenue, as 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 gross profit, provides useful supplemental information for investors. Specifically, Contribution margin and Contribution margin as a Non-GAAP Financial Measure percentage of net revenue are two of our key metrics in running our business. All product decisions made by us, from the approval of launching a new product and to the liquidation of a product at the end of its life cycle, are measured primarily from Contribution margin and/or Contribution margin as a percentage of net revenue. Further, we believe these measures provide improved transparency to our stockholders to determine the performance of our products prior to fixed costs as opposed to referencing gross profit alone.

In the reconciliation to calculate contribution margin, we add e-commerce platform commissions, online advertising, selling and logistics expenses (“sales and distribution variable expense”) to gross profit to inform users of our financial statements of what our product profitability is at each period prior to fixed costs (such as sales and distribution expenses such as salaries as well as research and development expenses and general administrative expenses). By excluding these fixed costs, we believe this allows users of our financial statements to understand our products performance and allows them to measure our products performance over time.

We present EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue 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, provide useful supplemental information for investors. We use these measures 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, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue are useful to investors in assessing the operating performance of our business without the effect of non-cash items.

Contribution margin, Contribution margin as a percentage of net revenue, EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue 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, Adjusted EBITDA or Adjusted EBITDA as a percentage of net revenue should be considered a measure of discretionary cash available to us to invest in the growth of our business. Our Contribution margin, Contribution margin as a percentage of net revenue, EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue may not be comparable to similar titled measures in other organizations because other organizations may not calculate Contribution margin, Contribution margin as a percentage of net revenue, EBITDA, Adjusted EBITDA or Adjusted EBITDA as a percentage of net revenue in the same manner as we do. Our presentation of Contribution margin and 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 EBITDA, Adjusted EBITDA and Adjusted EBITDA as a percentage of net revenue, have limitations as analytical financial measures. For example, neither EBITDA nor Adjusted EBITDA reflects:

• our capital expenditures or future requirements for capital expenditures or mergers 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;
• changes in cash requirements for our working capital needs; or
• changes in fair value of contingent earn-out liabilities, warrant liabilities, and amortization of inventory step-up from acquisitions (included in cost of goods sold).

Additionally, Adjusted EBITDA excludes non-cash expense for stock-based compensation, which is and is expected to remain a key element of our overall long-term incentive compensation package.

We also recognize that Contribution margin and Contribution margin as a percentage of net revenue have limitations as analytical financial measures. For example, Contribution margin does not reflect:

• general and administrative expense necessary to operate our business;
• research and development expenses necessary for the development, operation and support of our software platform;
• the fixed costs portion of our sales and distribution expenses including stock-based compensation expense; or
• changes in fair value of contingent earn-out liabilities, warrant liabilities, and amortization of inventory step-up from acquisitions (included in cost of goods sold).

Contribution Margin

The following table provides a reconciliation of Contribution margin to gross profit and Contribution margin as a percentage of net revenue to gross profit as a percentage of net revenue, which are the most directly comparable financial measures presented in accordance with GAAP:

Adjusted EBITDA

The following table provides a reconciliation of EBITDA and Adjusted EBITDA to net loss, which is the most directly comparable financial measure presented in accordance with GAAP:

Each of our products typically goes through the Launch phase and depending on its level of success is moved to one of the other phases as further described below:

i. Launch phase: During this phase, we leverage our technology to target opportunities identified using AIMEE (Artificial Intelligence Marketplace e-Commerce Engine) and other sources. This phase also includes revenue from new product variations and relaunches. During this period of time, due to the combination of discounts and investment in marketing, our net margin for a product could be as low as approximately negative 35%. Net margin is calculated by taking net revenue less the cost of goods sold, less fulfillment, online advertising and selling expenses. These primarily reflect the estimated variable costs related to the sale of a product.

ii. Sustain phase: Our goal is for every product we launch to enter the sustain phase and become profitable, with a target of positive 15% net margin for most products, within approximately three months of launch on average. Net margin primarily reflects a combination of manual and automated adjustments in price and marketing spend.

iii. Liquidate phase: If a product does not enter the sustain phase or if the customer satisfaction of the product (i.e., ratings) is not satisfactory, then it will go to the liquidate phase and we will sell through the remaining inventory. Products can also be liquidated as part of inventory normalization especially when steep discounts are required.

The following tables break out our first quarter of 2022 and 2023 results of operations by our product phases (in thousands):