Aterian (ATER) 11 Nov 242024 Q3 Earnings call transcript

Thank you for standing by. My name is Bella, and I will be your conference operator today. At this time, I would like to welcome everyone to the Aterian, Inc. Q3 Earnings Report. [Operator Instructions]

to Investor call Relations like Grozovsky, to now President Vice Corporate would turn over the Ilya I Development. Please go ahead.

Thank discuss Aterian's us today XXXX joining Results. you Earnings third for quarter to

CEO; call Josh of Arturo press available of Relations is the release today's Aterian's On Rodriguez, website, today's Feldman, CFO. aterian.io. A are our copy Investor section on our

Private report for Form Act statements is XX, risks, preconditions, these discussion also our Form everyone this expectations, call events on the XXXX to Investors report performance, including on and we uncertainties, be started, from and within including substantial meaning on expectations. among March some uncertainties, involve mentioned. control Before and you filings website available outside discussed differ may our the future remarks current get business or of actual and Reform others, I risks filings a those without These anticipated with the filed want aterian.io. Securities those of based results our are could XX-K actual XX-Q our may the risks on and XXXX contain targets financial are of or could limitation, to which estimates, developments annual materially these forward-looking at Litigation quarterly of our of it and remind We objectives, statements plans on forward-looking in management and may from differ on by statements. These when include to regarding encourage SEC. These of expressed our materially portion implied such the results review cause

and made of new information on obligation undue statements. these place or These except revise today statements not any only are undertake forward-looking required as law. for update to should by no them reliance as we You

and evaluating including margin, of useful our which measures that financial and we contain in will adjusted non-GAAP comparability assist supplemental earnings, consistency to with the most in results. generate on measures, are our of release, call provide This these at period-to-period are past and aterian.io. these of indicators core believe website also Reconciliation included Investors and EBITDA our facilitate comparisons the performance ability operating available is portion comparable certain to which adjusted measures of EBITDA our definitions our GAAP non-GAAP earnings measures

measures note these may titled differ companies. similarly presented Please by metrics our definition that from other of

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you, and Ilya, for thank joining Thank us you, today. everyone,

honor all like At themselves protecting our to and gratitude veterans to a Day, members deepest our Veterans and we moment the take today's have active dedicated to freedom. service to would express who

Aterian Now to over the business.

continues Our to focus, in Aterian results. stabilize simplify to XXXX mission show and

Today, I'm us progress being its company. quarter our discussion actions to, financial will provide then introduction and three, QX third profitable happy as going QX and CFO, our report in our are of to for another the provide an beyond results results; expectations four, for QX. Aterian for and continues quarter the brief successful our overview Aterian that We financial on consumer listeners; to Josh, outlook successful will brief journey two, our a growth for Aterian XXXX. one, cover led a on to a depth new to discuss goods to

own launched organically categories, brands, from For primarily Amazon.com. consumer today, our is marketing the e-commerce brands and and revenues and our we products on operating products most those today, derive amazing time, in have of X of owns joining either XXXX, brands. purchased our multiple selling or you across sell U.S., we marketplaces. focus Since us the Aterian first on its primarily for We and operates

are: its photos mop wrinkles humidifiers experience. on and our and essential to quality hOmeLabs, your photo its has who focuses home. the clean which power leader They Amazon. your fulfillment love their currently arts consumers in and poop their Amazon. innovative kitchen one, Mueller a the paper own clothes from another Solutions, home original Healing people continues the refrigeration, on Living, the Squatty selling stool all on your and of on daily which steam with DIY reduce finally, Paper our provides a consumers natural brand iron which products And Amazon, best-selling Pursteam, for leverages in Two, essential better. oil the transfer great printing craft Direct, do-it-yourself steam provides focuses collection and of or steam or oil making best-selling on T-shirts, irons. Potty, and around leader brands joint on Photo own toilet to world help top with and category. dehumidification easier to the Squatty products

positioned to foundational over consistently is deliver time consumers. and to With high-quality well X Aterian these brands, grow affordable products

and implemented driven Pursteam net We EBITDA the XXXX. our net products on by humidifiers our hOmeLabs the from a the revenue end of our of in impact QX steam guidance of previously and XXXX performance. to was with landing guidance. delivered combination revenue of cost-cutting QX range This adjusted the period during middle EBITDA goals, performance the on of of exercises higher and Now and QX adjusted our delivering

our XXX% even period path we to delivered right an profitable EBITDA last the again, continues further to in improvement When the on on cement lower less than Aterian strategy. a year the of year, Once an ago we QX which just is second performance quarter, over is our This adjusted revenue. for a was put a little adjusted EBITDA same row. compared

company. to and profitable of EBITDA to continues moves Aterian XXXX Aterian positive consistent stabilize simplify plan a to Our and adjusted deliver closer focus results

net to our specifically turning revenue performance. Now

performance. were that were landed seasonal sales of as third dehumidifier previously always for we product by our which stockouts during mentioned course, of and quarter earnings Our call the plays expectations QX hampered slightly short in weather,

performance still dehumidifiers. with are during summer our QX overall which is pleased we QX season very However, on and the

During dehumidifier, the buy which released Amazon. to This against noncompressor part our quality new maintaining well strategy and points to on cheaper budgets compressor-based performance. quarter, products different was consumers very our of families competitive variation give competed we to all of while of within third models X-pint our each based our offer options price product

of particular from saw in We during performance irons. also Pursteam strong our QX steam mops and brand, steam

sales their the use teams see to as and an marketing marketing strategy. successes and revenue We continue more approach outsiding in

of core to amount we focus further a our and see marketing seller efficiencies improvements on great our footprint reduced listing as into efforts focus SKUs. we continue continued as our We account

are other we on Amazon better-than-expected driving rankings conversion Further, initiatives, which traffic listing outside various seeing to product metrics. via benefits and results marketing our

shift found when very our decision to nimbleness software and last our off, as marketplace our is outages. service pleased be paying to mile to best-in-class continue dealing and unpredictable with with platform changing especially We continue rules to we that third-party new believe weather

year. chain team quarter. chain proud improve platform the continue the very past team to supply made I'm has to each the Furthermore, and Our master of over new also performance our decision supply continues our

of facets a multi-supplier chain to failure. We supply have our many approach single able to across been leverage sources of reduce

costs. is also container shipping For $X.X our timely Amazon Global multi-supplier performance existing but from secure us higher of than to containers, allowing pricing We to million Logistics, of approach, including shipping allows approximately additional find spot believe us containers, impact example, rates. QX with better incurred COGS

QX look quarters. as Now our net we still at largest QX are revenue in QX periods and XXXX, focused

estimated adjusted allows However, QX EBITDA or us to our net be very essentially close revenue profitability breakeven. to

our year-to-date in of primarily with fixed are continued combination XXXX, gross our XXXX. QX for and expected our percentage expect the with line second EBITDA savings, results to profitability cost we very believe well original goal half For realization adjusted to overall remain positioned of of we the we margin achieve in

and confident deliver continue which I'm delivering results lot team never work easy a our and However, effort, is very will of on. to requires

consumers to consumer value-driven very We inflationary the continue with as and with spending, a be wise their as current environment. continue space see especially to area the

do deal consumers also but As expect will important. be we buying we the to be pricing expect holiday period, and we enter will shopping be robust,

believe will well very QX considering offer which be consumers variations competitive, product we are multiple our positioned Although very we points. price

compared these by $X.X goal the approximately QX We a to with as impact expect we see to and Even higher The year, we we that second on million. half profitability. is to our pricing first higher QX bit into continue are margin are EBITDA tracking adjusted half of to last confident XXXX. continue higher challenges, container dragging price overall contribution projection a costs pricing to of container

growth. EBITDA Growth to move Looking time, to will goals our drive we believe will be at us Aterian profitability. XXXX, from in of stabilization more which a XXXX, one robust adjusted allow will over primary

growth said, launches previously and one, X which we also be best-in-class key pillars: organic listings in we them levels; omnichannel product including will equally two, to existing of improvements As bring our expansion, be believe important. still coming to will

expansion, of have best-in-class software into channels. would reason and investment or these products new and to some well now significant have on ability not brands third-party other With omnichannel on we products customization our model, sell no channels. brands our In best-selling why Amazon. without the the see We we expand

partnering Though with small, Mercado this So Libre will Mercado other far, across open we and is are a opportunities time. the LatAm pleased play results. up longer-term with over Libre

new continue purchase brands are it. new and and The this Mexico where somewhat learn people we in consumers believe channel, in, channel directly great ours to for is will we particular products and a import a program Mercado can love is Libre Libre, believe Plus products. Mercado and for and in where our is Target us like we U.S.

We products Friday. continue with Black and to live hOmeLabs, core to of Pursteam across be and expect a Mueller set Living to prior track well

Moving to launches. product organic

launching DNA great a have We in products. organically

Though this was in product, of XXXX, continuing continue launching period So towards like relaunching strengthening to new will about time, dehumidifier and muscles we muscles. is researched a X the on right months. build variation, to we've and the flexing focus but a not a those did we products quick pint sourced launches which in in we're new X very all Not XXXX. happen way, been

be have This Amazon better been pricing launch models, a we steam mop for higher-end most expect to will it Pursteam our out in scrubber, new This which both midrange new we'll and shopping. advanced a in our product along a are that Amazon. and marketplace product XXXX which time is product for XXXX other QX with yet. part mop round on currently is working strategy, One budget a consumers giving steam steam on holiday model on of that mop is our

plan We on and handful XXXX. a QX update road XXXX working communicate to are of in a launch our broader product provide great we results to map, XXXX We March. products new when expect we in

Finally, for M&A we still believe growth can Aterian. an on impact have

We see in the continue to market. many opportunities

needs accretive strategic improving in We M&A as driver as to expansion for our has do play our in and will a into believe or for portfolio many Regardless, omnichannel just closely we believe if on we product long-term growth. not such the position primary and related future pile proven we strategic However, be it reasons others. organic brand the expanding by M&A, unsuccessful be model category of a Aterian's today, improving categories. be believe will

and compared expect leverage XXXX improvements to of of year a when further be revenue as year ultimately, to operating of growth XXXX. today, our we a on And also

our strategies growth when journey to goods expect our our We in of and to QX March. on results being deliver consumer expand company a more we more profitable discuss

execute on profitability them, just simplify we deliver to drive in order long-term we on Aterian set on of closing, allow late key to initiatives account shareholder course, previous third-party and stabilize Back adjust on to challenged a marketplace profitability, it cost allowed focus, difficult today's marketing EBITDA of of towards to and our thinking, and structure and portfolio, have initiatives and decision believe Outside in us a our delivered in SKU making with we year in to the upgrading be drive in best-in-class more line tactics rationalized simplification towards ago, about In we XXXX, new announced a Amazon strategies. value. mission the of us our all fixed nimble many which rationalization. ideology to efficient, shifting the us to tools more

And our quarter adjusted second today, announced profitability. we consecutive EBITDA of

Aterian adjusted focus, simplify overall to deliver a and continues of stabilize plan EBITDA company. closer believe XXXX Aterian results, growing is Our profitable moving positive we being and to it and

a and I want do. continued shareholders work support. we on recognize to exciting lot patience congratulate excitement hard team have again to dedication, their still But and of and our and their continued work for our and hard

driving shareholder and do and profitable value. ultimately We growth have maximizing very high can Aterian become, and what expectations on beliefs

evening and your Thank you support. time for this unwavering

Now prepared will his pass for Josh I it remarks. to

Thanks, Arty. Good everyone. evening,

report ongoing proud stabilize We profitability results. second to initiatives that are positive and we're to efforts have to our the These to have business consecutive us pleased led quarter. report metrics for and focus, produced EBITDA adjusted simplify improve our key

This our would SKU seasonal softness at performance. revenue declined quarter $XX.X $XX.X let's take Net as dehumidifier look appliance impact XXXX well decline the of for overall have XX%. Now was rationalization, primarily from by Adjusting as of revenue stock-outs a declined driven third closer XX% net ago weather quarter. year for in the and the third million in million quarter our products. only approximately to kitchen patterns

the whole, approximately last still season Looking as the SKU for compared at the XX% rationalization same to adjusted however, period dehumidifier by sales increased year. summer a

QX $X.X during $X.X in XXXX. launch was XXXX Our million compared to revenue million QX

X As and have third planned, product variations in new X we category product the quarter. launched

quarter compared to was driven was liquidation period. variations increased QX The expect from year to in to less predominantly the We positive inventory XX.X% third improvement ago SKU essentially our the and XX.X% mix efforts, high-cost the quarter. Overall, impact in with by the launching rationalization flat margin product and gross year-over-year of quarter for prior XXXX. of continue fourth the

in rationalization to release QX prior to margin in driven The positive compared less the higher our slightly XXXX. SKU of overall improved margin, our Our XX%, by XX.X% to of contribution liquidation as X% year-over-year in was the efforts increase impact defined contribution which and inventory decreased XXXX QX the earnings compared year's cost period. prior to was compared

sales XX.X% our variable for our primarily net This contribution a expenses last into percentage distribution to a margin XXXX, quarter. year-ago as percentage decrease revenue in as mix as product and compared due XX.X% revenue. deeper mile the distribution of reduction in as sales to of and to in QX decreased a expenses is and a of cost Looking revenue percentage

$X.X of reduction improvement the of quarter, primarily in in due loss by of fixed third our from million an loss initiatives. cost-cutting operating costs XXXX a the approximately the million the CM Our to XX.X%, year-ago improved in driven quarter of of $X.X improvement and

XXXX and expense noncash stock XXXX Our includes operating our included third third operating million million. quarter $X.X noncash loss compensation loss while $X.X of $X.X of costs million of quarter expense restructuring stock compensation

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

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

decrease level million quarter XX, XX, we Moving of At at the remaining third the down million had on $XX.X of $XX.X XX, the in in The of XXXX on XXXX. XXXX. million of is year XXXX, working quarter XXXX million our and payments down June At $XX.X $XX.X went million balance down end. negative quarter the million period. The September credit at impacts from the the year end predominantly also driven $X.X $XX.X million, $X.X credit inventory cash balance of by facility prior was of to in our QX September The $XX.X from end cash reduction is end with from cash in the second from facility compared XXXX second ago million as capital. approximately of the sheet. of of $X.X from the on as quarter facility to our credit million balance of at is

SKUs in is compared rationalization at XXXX, the by driven will prior year, for million, expected Using an by QX look in rationalization. revenue the we of a $XX.X SKU million. would of considering last SKU this from strategic $XX.X be X% rationalization, year's XX% SKU middle the As primarily believe year. decrease million decline between be our to revenue our QX strategic to reduction we only that approximately Adjusting revenue from the last $XX.X net and range,

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

Our primary adjusted continues profitability. focus consistent today EBITDA to be

expect to XXXX. we and XXXX, EBITDA in adjusted million a from QX For EBITDA the Achieving approximately be loss represent breakeven breakeven. EBITDA QX will XXX% adjusted improvement $X.X adjusted

have EBITDA on continue raising that additional of consistent cash firm forecast also we above based covenants our our We without adjusted to to believe our profitability equity. achieve sufficient goal

for it second additional our accretive efforts, profitability. stated, M&A. In and financing, proud resulting very predominantly EBITDA closing, As team's of adjusted previously consecutive we our will of be pursue if in material I'm quarter

confident company. our that and are stabilization, focus, corner maximize with of our profitability We we and I revenue have EBITDA long-term and towards principles continue optimism simplification forward our journey ultimate to turned shareholder with growth, a strong balance the sheet gain we as products, adjusted aim a value. as look

to With it up back that, I'll turn the questions. operator for call to the open

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

It's business Great. to see great stabilizing. the

Target active away. comments, your X to I live in of is ahead think on you said Friday, So Black be weeks prepared you which only expect and

SKUs confident get obstacles you? the What there? how live period? be expect are the still holiday how do to are many listed So to you And during

we're grab today. things it's I we're some Brian, much. that one. of clear, really, don't testing here. think live very there's I'll Obstacles, Arty as mean, actually I

but I front us be marketing us. a based. So friction There Amazon some don't real than bit marketing to tools, are expect that I do that think there's tools are very little for little campaigns of and obstacles the in different

me the this this be will at there. bit moving SKUs, there's at hopefully, least X of SKUs, little target real my gut right? But a goal. I don't from of point, a any But number hitting -- certainly, from see preventing point, Things us us tells that. happen. the see friction But I really don't at As for still anything

your list next it? Is have product, cost Great. the timeline SKUs of of And additional over cautionary lot Target there you the more What's to you the the how see Walmart? factor XX only gives reason not on, to months what's top of handful a the do SKUs? limiting that then not XX to and to a majority caution say, a And sellers?

I'll grab that, Josh.

that So Listen, start in and a do. thing see it everything we make consumers learns how that to product are believe Target sure good of it important team I Target Brian. though, you our And market do lot to it's bit are on focus example listings expanding than to different. a want do time, There's each larger a consumers more and just benefit to that Target and rather to just start on channels, can I Prime. is opposed us Plus the very focused a card our an question, over I smaller because portfolio bit these on on is The as Plus close different. Plus credit the a to

easily the to know oils so experience these our concept, momentum do, one products, SKUs can certainly, of if as necessarily do hOmeLabs But probably a SKUs. we are expand cautiously. little I single of number marquee is approach gain go put marquee time. we we same traction SKU we But handful we the will time, to gain on to Pursteam And and don't our every that selling right think we gain to that to our I channels, a think portfolio. over product on need best as with But our of we certainly, start best learning definitely the broader we a have of want other succeeding, a and SKUs taking success. best at bit so yes, maybe

doesn't getting Why half And products, bit And one think sound you then year, handful products? lot. of year, of are a which not like first I you most Great. little mentioned your new a were a launches you next aggressive mentioned on of more new there that like variations the was wasn't. the

because consumer So are you sheet to seems positioned be investment? for waiting your for balance the stronger

Thank you on for Brian. balance sheet, the the comment

and great job I think done Josh a the team have sheet. strengthening balance

Come a way. long

has, It has. Yes. it

good success deserves that's to products I too Listen, in the let's researched stronger see a again, think, a there. think what widgets the lot where from many opposed for building say building stick I launch or way the team a going far to foundation long-term sticks. long-term category as as as a on quality and I'm possible, credit right success back but in less as hey, not in the properly is go many building like, history, this walls focused to

right that's approach. don't the I think

cautious after. I what make think rather and in the aspects. we're And tremendous we to not very, very we're very thoughtful a I'd over to we're missing because we being being sure amount are smaller launch, going are ordering, making some of start going slower where missteps categories in mark

So I do Aterian. more for approach believe lot sound is a that

familiar debate the a would of some think that I think history be little will with ambitious at some because conservative, aspects, too we're would people say time. you're lot I Somewhat a that the -- I in probably of

aggressive. as and with in gain the slower incremental wouldn't a So and I as at momentum thoughtful see not add, more be little more we'll of aimed to a more of what wall because we say bit some really But spaghetti profitability gain revenue want just to start bunch here. bullet we we to we get on opposed think the are looking I that's very ratified that aspects, a good we sticks. think a throwing

Your the Craig Fuhrman Capital next Hallum from of with question Alex Group. comes line

quarter another on positive of being here. Congratulations EBITDA

year? talk that pivoting about year? to these down next for half growth core brands, outlook think start you growth you really Which Now the the have drive as your potential do brands have you of portfolio you most next you to for a to dozen product can

our all Alex, it's happy Arty. I'm Josh, I'll that brands. grab with one. very Listen,

or year, rationalization to we X. like over XX brands I work did last from XX think the the went and down we the

to because there's In amount mentioned I we think of still X grow think And purposely of a as still into. the great great there's season all dehumidification, with perhaps grow. a to continues had between stuck continue perform we thought potential had air air our hOmeLabs these of It prepared them in well. very particular, I So to a for remarks. perhaps hOmeLabs opportunity purification environmental conditioning, but tremendous opportunities ton in space to we

Pursteam, on our coming we're I scrubber, there's steam rounding And most I the as opportunities mop irons that still out In steam steam more mentioned, our mop think advanced yet. you'll the months. see in

I go hour the just the I and all here. I don't So which brands better to don't that's weigh and the think grow. I spend one X And -- the want has I time or single think into about of everything can here worse. to potential our is we examples. can whole talking But do next products ideas

they opportunities their think and have impact I unique all their to consumer. unique the

world. work And a and right I now. got of certainly, things opportunity they lot wouldn't to of a them best the do, we've show of so in the happy and which sense has the with where very got are lot they But to I'm rank

to have think equally all I an they have opportunity grow.

good launch to about brands think that see new umbrella? you your that new you really products next that products And product on as you That's there as growth you're really launching existing likely particular Okay. under of to a then way that categories year. you focused mentioned more hear. any meaningful might as development Are want get to brands that any or you new

is the answer think yes. I

launch think tremendous existing channels, I as you there's of Amazon say, grow across omni. to still brands, products on especially as other amount we and our opportunity the

being this be great details We're brands hate versus in channels to and what little map, opportunities really lot -- confident we Amazon. feel we But say and out I make sure that to I XXXX. going Alex, bit we'll probably after because stuff there working what in time what a really, in to like that on again, certain in need XXXX. we put for about we'll more I think want categories certain we're is delivered there's stronger products a road give more

that be But categories new there'll to we used I categories in play can see we potentially revise. old that perhaps and some do that some

I think us people us but new that so to a seen be relaunches. not in of going before, going have it's categories And also combination into be

So I going XXXX both discuss do those I will we to both do map topics, QX. kind the it in -- when more of road think, be think sub in they're of evident

the of question Fong comes from next line of Your Marvin BTIG.

congrats on execution get lifting at guys and Yes. My all point. the heavy this you to

Just fourth quarter. almost could XXXX, the know and maybe about several near the We're through for questions maybe you more just kind think halfway term guidance already of November, on I or still a a Black and be been happening sales lot do we Friday to have period shorter of done a happening here, already holiday have but shopping holiday some for while.

the we how developing should consumer what what sort shopping like you've need in to far how of been of the So and realize has yet? else terms I much looking the terms for for, just the sort still of be guys kind seen would love in on season of of of so your you of season take rest just

words. Thanksgiving kind of before it's I for compact. And so a Thanksgiving holiday. thanks at is so November, the mean extra to Yes, gives the week sometimes usually, end right? an XX, little the you Marvin, you right like get

in was of mean, Prime we that that which a so So is far is kind successful. Day, activity saw being little October, talk listen, different little we robust bit certainly, But the so announce We'll earlier it a when QX. past. Amazon did than sales an pretty compact. about I

I there's think your point, been to a lot sales. more

The is consumers. good deals this going road they We I any But however usually, on, XX, very out If point. not helpful been think X see purchasing confident see or there don't has always they'll turkey early. before price slowdown turkey for sensitivity uncommon, we're Josh start bumps is at we're put what this the tracking guidance that quantify towards. in it, the still that people right?

pretty we Cyber Friday Black Monday. for we but feel So are though, excited happy and

price So good team experience as and of lot core to this or a sacrificing got SKUs. year right? necessarily much consumers a organization margins, to deals how excited focused for at more without great of kind We performs opportunities our see our the on I'm great tremendously impacting product a

looking But so forward far, to working to I am So expectations. our it. and everything is working

the rates couple of Got container this rates reported and view called think trade there's upcoming think shipping I new Considering, come you decelerate just have for it. quarter. kind a kind I quarter this then I that under the And quarter, Great. will down and post-election, of think administration. a for out

rate to a So kind the least last should half actually pressures considering headwind? comparison of tailwind lagging those be it a of the we in maybe become impact isolated just won't And of kind at sort could quarters a especially of back of the XXXX, or against container think year? is sort about

a question, Marvin. No, Yes. Yes. it's good

I will for think when of costs prepared we normal. remarks, XXXX, sorry, keep -- first to in consumer back we costs kind to think think mind the in continue we for and say be again, XXXX, of actually were higher, our container right, -- container half

was the cost that the would in of and time other a Southern probably strikes due this U.S. to April-ish May some kind lot rise obviously, in some mostly XXXX of say so say, that issues then think I issues uncertainty kind geopolitical I dock I the happened, weather-related of China would -- the in happened, some frame with container and that of And in of probably in

They be predict. yes, as you in a they though off lot that containers little certainly, they you to now, XXXX. came And comparison. the probably they'll down we the hard we those even lot are with higher eventually comparison. do stay come of and But new especially right be half of still probably you're come right. a they'll -- down of There's that when then that periods than the a And changes second we great bit, been sometimes to would would of it's the think administration. still changes hope So happen, benefit because down, will expected think

it. impacts So we'll see how that

expect kind I run that comes I X,XXX it's thing nimble leverage benefited think normalized XXXX. But through going continue that, it, higher containers. much think, and to beginning that off the us, be possible when as container it X,XXX we'll call is to of, to price still has the we that approach of than our to to still that multi-supplier as and be main them

cost Got your get think an Could in cost efficiencies, color cost are some of pipeline. structure on it. of more savings love good sort to mentioned then And maybe give what's still last that. the would I a have us you I idea question, realized you fully some you guys right? once fixed

Josh. it's Marvin,

first of So we this did year. restructuring our in the quarter

renewal. have that XXXX, So also -- a on restructuring. as summertime, now. we'll a switched and premiums insurance in And we had lower the year auditors We've announced, in we annual the obviously, and up of previously our a next renewals impact get come we full reduction we in also auditor cost got

So put do all rate expect if we to you that cost together, year. our of decrease fixed run next

the next Alliance comes line of Global of from Brian Kinstlinger question Your Partners.

to Josh, I'm a ask on Great. overhead. going to question that. follow-up

down anything significantly in there much quarter, lower that third there your the even else the the than cutting? is full be of March quarter to cost this at and nonrecurring? contemplated was may Is look June G&A effect the Or quarter. you If

some We third did came in quarter. refunds that the have insurance in,

first In exactly and G&A not the quarter, think fees. we I higher equal quarter-to-quarter. accounting our audit have is

higher results. our little is our say run would I probably rate actual So a bit than QX

then cash. of million my you've other helpful. got And That's $XX question, Great.

to cash capital thinking returns. You're using flow basically modest looking and your about the is to at breakeven the How their Board queue. excess generating management improve

you really a looking you're priorities understand are. of with And this high what it relationships us to is thinking maybe it Is Is priority? some it Is if technology? are your M&A. products and these Just platforms? buy? mentioned You help brands M&A,

add can Josh. that, to you mean I

would M&A, But as for Brian, strategic. going to it think create XXX again, enough something or a efficiencies comes We is or do costs. XX on of brands that is us operating our M&A I our running leverage XX portfolio, your aggregators right, help XX or your brand very believe just portfolio. or these to brand portfolio, be strengthen or some like our good marketing to don't product either tried brands model, it's to

it's we a over we us a strategic if that time. long-term a So value do we're think or adding because to brand product has M&A,

-- at saying cash other you we're is the we're side, to if think to our our listen going next look balance, year, I mission grow.

of for And that, new as as some we so cash need our especially capital of as we inventory of build think that marketing about working I some and we you up think think products.

So to it want grow that less launches. to the the I really comments, have to expansion inventory, how ABL. now of much think M&A. earlier model. ABL, your over benefit a think We third-party going if coming going right? so a really it we're the drags don't I you're be certainly, of omnichannel buy is if we find in deployed to because the leverage look we're it in those for right? Don't is think something, But need of ton to where friction we get you impact at you and There's that that And that the we to that's of as that deploy of cash growing, is it's areas, through kind do it months. product where sort cash, the

what are these of multiple looking then achieve? EBITDA days? Maybe you And like kind hope to valuations that

somewhere in thing think seen if at still at range. unrealistic But up than We've multiple. over right there's all little X place. with X X that or a stuff a expectations. the interesting bit they're seen sellers think think a lower showed some still X X the lot little I some -- I have of we've still I the But to I time. someone still -- between

think that's deal. I good a

Grozovsky, remarks. call Corporate [Operator over for now back the closing Development Relations Mr. President Vice will to Investor Instructions] I turn

Thank you.

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Next product lines and part rationalization? that question is, have discontinued SKU of you categories are you product interested as reentering in your

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call. of portion Q&A the concludes the This

XXth calendar, management our York This participating forward disconnect. look the you calls. be the XX, will to terms and Select of may XXXX. upcoming New in call, Conference Craig-Hallum future Alpha November you Annual speaking with in We now on In City on Aterian ends

call. Ladies gentlemen, today's that all Thank and you joining. for concludes

disconnect. now may You