Alliance Entertainment Holding Corporation · NASDAQ:AENT
Alliance Entertainment — Adara Acquisition — SPAC Merger (October 2022)
26 slides from Alliance Entertainment's SPAC merger presentation, Oct 18, 2022
Slide 1: Alliance Entertainment Investor Presentation
Alliance Entertainment Investor Presentation October 12 , 2022 Confidential
Slide 2: Legal Disclaimer
Legal Disclaimer This presentation (together with oral statements made in connection herewith, this “Presentation”) is for informational purposes only . This Presentation shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities, nor shall there be any sale of sec
Slide 3: Legal Disclaimer - Continued
Legal Disclaimer - Continued Additional risks related to Alliance’s business in particular include, but are not limited to the risk that the Proposed Business Combination disrupts current Alliance business plans and operations as a result of the announcement and consummation of the Proposed Business
Slide 4: Introduction and Transaction Highlights
Introduction Alliance Entertainment is that company • Alliance Entertainment is sizable today, generating annualized revenue of $1.4 billion and Adjusted EBITDA of $60 million as of June 30, 2022 fiscal year end • Leading direct - to - consumer and e - commerce provider to the entertainment industry
Slide 5: Alliance Entertainment company background
• Started Alliance Entertainment with less than $200,000 of capital and is now a worldwide distributor and retailer of physical exclusive and non - exclusive media of the biggest brands in the entertainment business without raising equity from outside investors • Alliance Entertainment has grown to
Slide 6: Overview
Overview Alliance is a $1.4 Billion leading Direct - to - Consumer (DTC) and eCommerce provider for the entertainment industry We are the gateway between brands and retailers 6
Slide 7: Expansion Plans
Expansion Plans Alliance expects to expand and diversify by adding brands and retail partnerships Alliance is the conduit for leading brands to reach Alliance’s current customer base, while helping Omni - Channel Retailers expand their product selection and fulfillment goals. Alliance is the retaile
Slide 8: Alliance Management Team
Alliance Management Team Bruce Ogilvie and Jeff Walker have distinguished themselves as innovators and expert consolidators, first in the physical media sector and now in the fulfillment and eCommerce distribution solutions space. As the sole owners of Alliance Entertainment, Bruce and Jeff are roll
Slide 9: Growth History
Growth History 2013 Music & Video Distribution • Super D acquires Alliance Entertainment becoming the largest music and video distributor • The first major step in consolidating the 3 main packaged media categories. Super D rebrands to Alliance Entertainment post acquisition 2016 Music & VMI • AN Co
Slide 10: Investment Thesis
10 Investment Thesis Alliance is one of the largest physical media and entertainment product distributors in the world and is a leader in fulfillment and eCommerce distribution solutions. Its existing product and service offering has positioned the Company to capitalize on shifts towards eCommerce a
Slide 11: Access to Capital Markets
Access to Capital Markets With a public listing, Alliance will have access to additional capital to finance future growth INCREASE MARKET SHARE Expanding its existing product and service offerings and executing its acquisition strategy will drive Alliance’s efforts toward increasing market share. EN
Slide 12: Financial Summary
FY19A FY20A FY21A FY22A Financial Summary REVENUE ($ in millions, Fiscal Year Ends 6/30) ADJUSTED EBITDA ($ in millions, Fiscal Year Ends 6/30) $747 $776 $1,324 $1,417 $25 $33 $69 $60 ADJUSTED EBITDA MARGIN 3.3% 4.2% 5.2% 4.2% GROWING REVENUES $1.417 BILLION & GROWING Alliance has grown revenues by
Slide 13: Pro Forma Ownership, Sources and Uses
77.87% 3.28% 18.85% Exisiting Alliance Shareholders Adara Sponsors SPAC in Trust 3 Pro Forma Ownership • $479.75 million pre - money valuation • $108.15 million in cash on balance sheet after closing SOURCES SPAC in Trust $116,150,000 Seller Rollover Equity $475,000,000 Total Sources $591,150,000 US
Slide 14: Service, Technology, Selection
SERVICE Product and eCommerce distribution and inventory solutions TECHNOLOGY State - of - the art systems and facilities SELECTION One of the largest physical media and entertainment product distributors Alliance provides traditional retailers with world class eCommerce abilities, leveling the play
Slide 15: Omni-Channel expansion solutions for retailers
MERCHANDISING SERVICES & IN - STORE OPERATIONS INVENTORY & PRODUCT PLACEMENT OMNI - CHANNEL STRATEGY SUPPORT AUTOMATED DTC PROCESS INVENTORY & CATEGORY MANAGEMENT SYSTEMS Alliance provides efficient, Omni - Channel expansion solutions for retailers eCommerce & DTC Vendor Managed Inventory Alliance p
Slide 16: Vast portfolio of entertainment products
Alliance consolidates and distributes a vast portfolio of entertainment products, while its proprietary database powers retailers’ online music and gaming offerings Gaming Products DVD & Blu - Ray CD Consumer Products Currently over 485,000 SKUs in stock Selection Vinyl Retro Arcades 16
Slide 17: Sales by Configuration
Sales by Configuration 17 (In Thousands) Sales by Configuration June 30, 2022 June 30, 2021 June 30, 2020 Gaming $557,658 39.3% $497,817 37.6% $108,735 14.0% Vinyl $329,202 23.2% $288,326 21.8% $158,633 20.5% DVD/Blu - ray/UltraHD $264,990 18.7% $288,372 21.8% $279,337 36.0% CD $151,583 10.7% $148,2
Slide 18: AutoStore Automated Storage & Retrieval System
AutoStore Automated Storage & Retrieval System In 2022, Alliance initiated installation of an AutoStore Automated Storage & Retrieval System (ASRS) for its Shepherdsville warehouse. This system will dramatically improve Alliance’s warehouse operations, allowing the Company to achieve increased level
Slide 19: Strategically Located Operations
Shakopee, MN 220K Sqft Facility Shepherdsville, KY 873K Sqft Facility Distribution Center • Shepherdsville, KY • Shakopee, MN • Dallas, TX • Los Angeles, CA • Charlotte, NC Offices • Bentonville, AR • Itasca, IL • Irvine, CA • Sacramento, CA • EI Segundo, CA • Minneapolis, MN • Shepherdsville, KY •
Slide 20: Forecast income statement
Forecast Fiscal Year 06 - 30 - 2023 06 - 30 - 2022 06 - 30 - 2021 06 - 30 - 2020 06 - 30 - 2019 Revenue $1,420,100 $1,417,377 $1,323,567 $775,596 $746,529 YoY Revenue Growth % 7.1% 70.7% 3.9% Cost of Goods Sold 1,230,600 1,234,995 1,140,885 656,485 637,970 Gross Profit $189,500 $182,382 $182,682 $11
Slide 21: Balance Sheet
Forecast 06 - 30 - 2023 Audited As of 06 - 30 - 2022 Audited As of 06 - 30 - 2021 ASSETS Cash and Equivalents. 1,400 1,469 4,028 Accounts Receivable - Trade 98,600 98,699 111,332 Inventory 184,400 249,439 141,661 Other Current Assets 15,600 9,373 8,763 Net PP&E & Operating Lease Right - OF - Use Ass
Slide 22: ESG Initiatives
ENVIRONMENTAL INITIATIVES Alliance has introduced eco - friendly CDF packaging, implemented paperless pick, pack and ship processes, and plans to reduce emissions with its new AutoStore ASRS system. DIVERSITY & INCLUSION EFFORTS Creating and sustaining a diverse and inclusive working environment is
Slide 23: Summary
Summary Alliance is one of the largest physical media companies in the Entertainment industry and is a leader in fulfillment and eCommerce distribution for the largest Omni - Channel retailers. MANAGEMENT EXPERIENCE Management has a proven track record of acquiring and integrating companies, signifi
Slide 24: Compelling Business Strategy (Adara Acquisition Corp.)
Compelling Business Strategy Adara Acquisition Corp. (NYSE: ADRA), was formed to seek a target in the high - growth middle market. The management team, chosen from diverse backgrounds, have one common trait: A Reputation for identifying and closing acquisitions of top high - growth business, and hel
Slide 25: Reconciliation of Adjusted EBITDA to GAAP Net Income
Exhibit 1 Reconciliation of Adjusted EBITDA to GAAP Net Income Forecast Fiscal Year 06 - 30 - 2023 06 - 30 - 2022 06 - 30 - 2021 06 - 30 - 2020 06 - 30 - 2019 Operating Earnings Before Depreciation & Amortization $58,100 $60,012 $68,548 $33,227 $24,509 Net Income/(Loss) Per GAAP $33,600 $28,619 $34,
Slide 26: Cash flow statement
Forecast June 30, 2023 Year Ended June 30, 2022 Year Ended June 30, 2021 Year Ended June 30, 2020 Year Ended June 30, 2019 Cash Flows from Operating Activities Net Income (Loss) $33,600 $28,619 $34,178 $5,361 $(5,894) Adjustments to Reconcile Net Income Cash provided by (Used In) Operating Activitie