 Net Revenue Grew 97 to 59.8 Million Company Maintains Fiscal 2020 Net Revenue Outlook Now Expects Positive Adjusted EBITDA for Full Year 2020NEW YORK, July 30, 2020 GLOBE NEWSWIRE -- Mohawk Group Holdings, Inc. NASDAQ: MWK Mohawk or the Company today announced results for the second quarter ended June 30, 2020. Second Quarter 2020 Highlights 8 new products launched in the second quarter compared to 7 in the second quarter of 2019. Net revenue grew 97 to 59.8 million, compared to 30.4 million in the second quarter of 2019. Gross margin improved to 46.2 versus 38.7 in the second quarter of 2019. Operating loss of 1.8 million decreased from 15.6 million in the second quarter of 2019. Contribution margin improved to 16.8 from 5.7 in the second quarter of 2019, reflecting both sale price increases as well as lower fulfillment costs. Excluding non-cash stock-based compensation of 5.2 million in the second quarter of 2020 and 11.9 million in the second quarter of 2019, respectively, fixed operating expenses for the second quarter decreased as a percentage of net revenue to 11.1 compared to the second quarter of 2019. Net loss of 2.9 million improved from a net loss of 16.9 million in the second quarter of 2019. Adjusted EBITDA improved to 3.4 million versus a loss of 3.7 million in the second quarter of 2019. Total cash balance at June 30, 2020 increased by 3.1 million to 17.2 million, while at the same time reducing debt by 5.9 million.Yaniv Sarig, Co-Founder and Chief Executive Officer, commented, I am proud to report Mohawks first quarter of Adjusted EBITDA profitability. Crossing over to Adjusted EBITDA profitability is an important milestone that demonstrates the power of our platform business model. Our strong second quarter results reflect our continued ability to leverage our tech enabled business model as well as the agile and innovative culture we have created. We are excited to continue to invest in our software platform to drive further efficiency through automation. The retail and consumer world is moving to online at a faster pace and we are well positioned to capitalize on this shift in the long term.Outlook For full year 2020, the Company continues to expect net revenue to be in the range of 170.0 million to 180.0 million driven primarily by continued growth of its existing product portfolio and the positive contribution from wholesale personal protective equipment PPE and new products launched in 2020. The Company continues to expect to generate positive Adjusted EBITDA on a quarterly basis for the remainder of 2020. In addition, the Company expects to achieve positive Adjusted EBITDA on a full year basis.The most directly comparable GAAP financial measure for Adjusted EBITDA is net loss and we expect to report a net loss for the three months ending September 30, 2020 and December 31, 2020, respectively, and for the twelve months ending December 31, 2020, due primarily to quarterly interest expense, net and stock-based compensation expense.Non-GAAP Financial MeasuresFor more information on our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please see the Non-GAAP Financial Measures and Reconciliations section below. Webcast and Conference Call InformationMohawk will host a live conference call to discuss financial results today, July 30, 2020, at 5:00 p.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial 877 295-1077 domestic or 470 495-9485 international at 5:00 p.m. ET and provide the Conference ID: 8684038. The conference call will also be available to interested parties through a live webcast Please visit the website at least 15 minutes prior to the start of the call to register and download any necessary software.About Mohawk Group Holdings, Inc. Mohawk Group Holdings, Inc. and subsidiaries Mohawk is a rapidly growing technology-enabled consumer products company that uses machine learning, natural language processing, and data analytics to design, develop, market and sell products. Mohawk predominantly operates through online retail channels such as Amazon and Walmart. Mohawk has six owned and operated brands: hOmeLabs, Vremi, Xtava, RIF6, Holonix Health, and Aussie Health Co. Mohawk sells products in multiple categories, including home and kitchen appliances, kitchenware, environmental appliances i.e., dehumidifiers and air conditioners, beauty related products and, to a lesser extent, consumer electronics. Mohawk was founded on the premise that if a company selling consumer packaged goods was founded today, it would apply artificial intelligence and machine learning, the synthesis of massive quantities of data and the use of social proof to validate high caliber product offerings as opposed to over-reliance on brand value and other traditional marketing tactics.Forward Looking StatementsAll 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 about our expected 2020 net revenue, the statements about our expected Adjusted EBITDA and net loss for the third and fourth quarters of 2020 and full year 2020, our ability to leverage our tech enabled business model, our ability to continue to invest in our software platform to drive efficiencies, our ability to capitalize on the shift to online consumer spending, and our ability to continue to maintain or grow our existing product portfolio, including our ability to maintain or grow sales of PPE.These forward-looking statements are based on managements current expectations and beliefs and are subject to uncertainties and 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 impact of COVID-19 including its impact on consumer demand, our cash flows, financial condition 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 grow market share in existing and new product categories, including PPE; 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 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 SECs website at 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. MOHAWK GROUP HOLDINGS, INC.MOHAWK GROUP HOLDINGS, INC. Condensed Consolidated Balance Sheets Unaudited in thousands, except share and per share data December 31, 2019 June 30, 2020 ASSETS CURRENT ASSETS: Cash 30,353 17,189 Accounts receivablenet 1,059 8,646 Inventory 36,212 27,346 Prepaid and other current assets 5,395 6,671 Total current assets 73,019 59,852 PROPERTY AND EQUIPMENTnet 175 141 GOODWILL AND OTHER INTANGIBLESnet 1,055 1,024 OTHER NON-CURRENT ASSETS 175 175 TOTAL ASSETS 74,424 61,192 LIABILITIES AND STOCKHOLDERS EQUITY CURRENT LIABILITIES: Credit facility 21,657 18,168 Accounts payable 21,064 15,045 Term loan 3,000 6,000 Accrued and other current liabilities 7,505 9,035 Total current liabilities 53,226 48,248 OTHER LIABILITIES 4 TERM LOANS 10,467 7,722 Total liabilities 63,697 55,970 COMMITMENTS AND CONTINGENCIES Note 9 STOCKHOLDERS EQUITY: Common stock, par value 0.0001 per share500,000,000 shares authorized and 17,736,649 shares outstanding at December 31, 2019; 500,000,000 shares authorized and 17,763,164 shares outstanding at June 30, 2020 2 2 Additional paid-in capital 140,477 152,948 Accumulated deficit 129,809 147,776 Accumulated other comprehensive income 57 48 Total stockholders equity 10,727 5,222 TOTAL LIABILITIES AND STOCKHOLDERS EQUITY 74,424 61,192 MOHAWK GROUP HOLDINGS, INC. 