Operational Highlights for the Third Quarter of Fiscal Year 2024 and Beyond
Bruce Ogilvie, President of Alliance Entertainment, commented, “During the third quarter of fiscal 2024, we continued to improve operations, technology and margins with a transition to automation at greater scale as one of the world’s largest physical media and entertainment providers. products. Our momentum continued with year-over-year innovations in gross profit, gross margin, positive adjusted EBITDA and encouraging developments within our brands.
“Operationally, during the quarter we installed Sure Sort® X at our Kentucky plant, a cost-effective sort generation formula from warehouse automation response provider OPEX. ®Using this new generation of Sure Sort X will result in an annual hard-working savings of only around $400,000, as well as a quick savings of $460,000 by avoiding upgrading the previous sorting generation that would like to be dismantled. With the arrival of Sure Sort X, this larger format sorter complements the five existing CD/DVD and vinyl record sorters. in Alliance, which gives our warehouse the ability to stop manually sorting larger products, especially toys, electronics, and accessories.
“We look forward to sharing more at our next investor and analyst excursion on May 16,” Mr. Ogilvie concluded.
“Adjusted EBITDA for the fiscal third quarter ended March 31, 2024 $2. 9 million, compared to a loss of $(2. 4) million for the same period in 2023, resulting in an improvement of $5. 3 million for the quarter. Adjusted EBITDA for the nine-month ended March 31, 2024 was $22. 2 million, compared to a loss of $(21. 0) million for the same period in 2023, an improvement of $43. 2 million. As a result, the availability of our $120 million line of credit has increased to $34 million.
“Net loss for the fiscal third quarter increased from $4. 4 million to $3. 4 million, compared to a net loss of $7. 8 million for the same time in 2023. Of the $3. 4 million net loss reported this quarter, $2. 1 million was due to the correction of an unseasonable non-cash adjustment. This adjustment is directly similar to the company’s popularity in a recent acquisition. Had this adjustment been identified in the designated valuation era, it would have resulted in an accumulation of the Company’s goodwill.
“Our set of stock and direct-to-consumer distribution (DTC) responses for the online retail industry accounted for 33% of gross sales for the 3 months ended March 31, 2024. Year-over-year, for the nine months ended March 31, DTC’s profit increased from 34. 4% to 39. 1% of gross profit, an increase of 4. 7%.
“Our Distribution Solutions department’s exclusive virtual video revenue for the fiscal third quarter increased to $4. 0 million from $2. 3 million for the same era in 2023, a 74% increase. The patented virtual gain for the nine-month era ended on March 31. 2024 construction increased to $17. 0 million, to $6. 4 million for the same time in 2023, a 165% cumulation.
“We have taken significant steps over the past year on our balance sheet, with more charge relief projects planned. Throughout 2023 and into 2024, our goal is largely to reduce stock and debt, with fiscal third-quarter stock expanding year-over-year from $163 million to $108 million and debt from $127 million to $87 million. We also anticipate significant cost savings from the planned closure of our plant in Minnesota no later than May 31, 2024. In addition, to help growth, we recently secured a new sum of $120 million. 3-year senior asset-based secured credit facility with White Oak Commercial Finance, the proceeds of which were used to refinance existing credit facility, fund current capital needs, and meet general corporate purposes. These steps have also allowed us to focus and put our procurement strategy into the future.
“Looking ahead, we will continue to grow and diversify by adding brands, product categories and retail partnerships to build a strong product portfolio. Through investment in new equipment, proprietary software and automation technologies, adding cube-based Sure Sort® X and AutoStore. Automated warehouse storage and retrieval system, we are now starting to show significant improvements in our warehouse efficiency. Given our expense relief, significant debt relief, and inventory relief through improved management, we can continue to improve EBITDA and inventory turnover in the future.
“Looking ahead, physical sales of music, vinyl and CDs continue to gain momentum as April 2024 sales for Record Store Day, Taylor Swift and K-Pop produced company-wide sales records within our Independent Music Store sales channel. There are still some wonderful music releases coming in 2024 and they are very exciting for the music industry,” Walker concluded.
Third Quarter Fiscal Year 2024 Financial Results
Jeff Walker added, “For the third quarter of fiscal 2024, we were encouraged by the continued improvement in gross profit and gross margin compared to the prior year period, as our charge relief and positive sales projects continue to deliver results. The innovations also led to a fourth consecutive quarter of positive adjusted EBITDA, expanding to $2. 9 million in the fiscal third quarter, compared to an adjusted EBITDA loss of $(2. 4) million in the prior year.
Capital Structure Overview
The Company’s notable non-unusual shares as of March 31, 2024 were 50,937,370 shares. The public was 2,210,672 shares as of March 31, 2024. La control owns 81% of the non-unusual notable shares.
For information, please refer to the company’s Quarterly Report on Form 10-Q filed with the SEC.
Bruce Ogilvie, Executive Chairman of Alliance Entertainment, and Jeff Walker, Chief Executive Officer and Chief Financial Officer, will host the conference call, followed by a Q&A session. The conference call will be accompanied by a presentation, which can be viewed via webcast or accessed through the investor relations segment of the Company’s website here.
For the call, use the following information:
Call the convention phone number 5-10 minutes before the start time. An operator will record your call and organization. If you have any difficulty connecting to the convention call, please contact MZ Group at 1-949-491-8235.
The convention call will be webcast live and can be replayed on https://viavid. webcasts. com/starthere. jsp?ei=1665551
Non-GAAP Financial Measures: We describe Adjusted EBITDA as net profit or loss adjusted to exclude: (i) source of income tax expense; (ii) other source of income (losses); (iii) interest rates; and (iv) depreciation commissions and (v) other infrequent and non-recurring expenses. Our approach to calculating Adjusted EBITDA would likely differ from that of other issuers and, therefore, this measure may not be comparable to measures used across other issuers. We use Adjusted EBITDA to benchmark our own operating performance and as an integral component of our plan-making process. We provide Adjusted EBITDA as a supplemental measure because we believe such a measure is useful to investors as a conservative indicator of operating performance. This metric is a monetary metric used by many investors to compare companies. This measure is not an identified measure of monetary functionality under US GAAP and is not worthy of consideration as a replacement for operating source of income (loss), net source of income (loss) from ongoing operations, or cash flows. cash flow from operating activities, as decided in accordance with GAAP. Please see the table below for a reconciliation, for the periods provided, of our GAAP net income (loss) to Adjusted EBITDA.
About Alianza Entertainment
Alliance Entertainment (NASDAQ: AENT) is a leading distributor of music, movies, toys, collectibles and electronics to customers. We will offer more than 325,000 exclusive SKUs in stock and add more than 57,300 exclusive compact discs, vinyl LPs, DVDs, and Blus. -Rays and video games. In addition to our extensive multimedia catalog, we will also offer a full range of accessories, toys, and similar collectibles. With over thirty-five years of distribution experience, Alliance Entertainment serves customers of all sizes, offering a physically powerful suite for resellers and stores around the world. Our effective fulfillment team and must-have sales team particularly reduce the costs relevant to multi-vendor relationship management, while helping omnichannel stores expand their product assortment and fulfillment goals. information, scale in www. aent. com.
Certain announcements included in this press release that are not past events are forward-looking announcements for purposes of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking announcements are sometimes accompanied by words like “believeArray” “possibly”, “will”, “estimate”, “continue”, “anticipate”, “intend”, “expect”, “deserve”, “would plan”, “is expected”, “potential”, “appear”, “seek”, “long-term”, “outlook” and similar expressions that expect or imply long-term events or trends or are not old matters. These forward-looking expressions include, but are not limited to. Announcements regarding estimates and forecasts of other monetary and functional measures and projections of market opportunities are based on various assumptions, whether known in this press release, as well as on the existing expectations of control of the Alliance and are not expectations genuine. These forward-looking announcements are provided for illustrative purposes only and are not intended to be relied upon and are not intended to be relied upon by any investor as a guarantee, assurance, expectation or certainty of fact or probability. It is difficult, if not impossible, to expect actual occasions and cases and will differ from the assumed ones. Many genuine occasions and cases are beyond the control of the Alliance. These forward-looking statements are subject to a number of threats and uncertainties, in addition to threats related to expected expansion rates and market opportunities; adjustments in applicable legislation or regulations; Alliance’s ability to execute its business model, adding market acceptance to its similar systems and services; Alliance’s dependence on a concentration of suppliers for its products and services; Alliance price increases, supply disruptions or shortages of products and materials; Alliance’s dependence on a concentration of consumers and its lack of ability to recruit new consumers or increase sales to Alliance’s existing consumers; accumulation of Alliance shares and threat of obsolescence; the Alliance’s significant amount of debt; our ability to refinance our existing debt; our ability to continue our business without access to liquidity resources; Alliance’s threats and inability to meet the contractual needs of its revolving credit facility, adding a constant rate policy ratio; threats that a default under the Revolving Credit Facility, coupled with Alliance’s recent failure to comply with covenant requirements, may also cause the Lender to claim default and that the total amount notable under the Revolving Credit Facility may also be paid without delay in full, which would have serious negative consequences for the Company; known or long-term threats similar to litigation and regulatory enforcement, adding diversion of time and attention and increased prices and demands on Alliance resources; Alliance’s business would be adversely affected by the accumulation of inflation, higher interest rates and other adverse economic, business and/or competitive factors; geopolitical threat and adjustments in applicable legislation or regulations; the threat that the COVID-19 pandemic and local, state and federal responses to combat the pandemic will likely have an adverse effect on our business operations, as well as our monetary condition and effects of operations; substantial and evolving regulations, and adverse adjustments or failure by Alliance to comply with such regulations; product liskill claims, which may also harm Alliance’s monetary position and liquidity if Alliance is unable to effectively protect or insure against such claims; leverage more capital to aid business expansion; and the Alliance’s inability to expand and maintain effective internal controls.
For investor inquiries, please contact: MZ GroupChris Tyson/Larry Holub(949) 491-8235AENT@mzgroup. us