Alliance Entertainment Holding Corporation · NASDAQ:AENT
Alliance Entertainment — Q3 2024 Earnings Presentation
31 slides from Alliance Entertainment's earnings presentation, May 9, 2024
Slide 1: Alliance Entertainment Third Quarter 2024 Financial Results Conference Call
Alliance Entertainment We bring entertainment to you! Third Quarter 2024 Financial Results Conference Call NASDAQ: AENT May 9, 2024
Slide 2: 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 securities in any sta
Slide 3: Legal Disclaimer - Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to financial measures prepared in accordance with United States generally accepted accounting principles (“GAAP”). some of the financial information and data contained in this Presentation, such as Adjusted EBITDA, EBITDA-CapEx and EV/EBITDA, has not been prep
Slide 4: Alliance Senior Management
Alliance Senior Management Presenters: BRUCE OGILVIE Executive Chairman Bruce has spent his entire career in the entertainment distribution industry starting with the founding of Abbey Road Distributors in 1980. Over the next 14 years, Bruce led Abbey Road’s growth to over $94 million in sales and s
Slide 5: We Bring Entertainment to You!
WE BRING ENTERTAINMENT TO YOU! Alliance Entertainment stocks the world’s largest selection of music, movies, video games, gaming hardware, arcades, collectibles, toys and consumer electronics • Trusted omni channel supplier to Walmart, Amazon, Best Buy, Costco, Target, Kohl’s, BJ’s, Meijer, Barnes &
Slide 6: Direct-to-Consumer (DTC) & eCommerce
Direct-to-Consumer (DTC) & eCommerce Alliance is a leading Direct-to-Consumer (DTC) and eCommerce provider for the entertainment industry We are the gateway between brands and retailers 600+ Vendors 200+ Online Customers & Ships to Over 35,000 Storefronts 325K SKU’s in Stock 6
Slide 7: Sales by Configuration
Sales by Configuration $600,000 $550,000 $500,000 $450,000 Gaming $400,000 Vinyl In Thousands $350,000 DVD/Blu-ray/UltraHD $300,000 CD $250,000 Collectibles, Toys & Consumer Products $200,000 Freight $150,000 Exclusive Distribution Fees $100,000 Digital Delivery $50,000 $- Nine Months Ended Fiscal Y
Slide 8: Exclusive Distribution in Excess of $200M Annually
Exclusive Distribution in Excess of $200M Annually Our exclusive distribution is a big focus and huge growth opportunity for Alliance Entertainment. Studios and labels which have moved to Distribution Solutions, AMPED, and Mill Creek divisions see increases in sales because of the industry’s largest
Slide 9: Acquisition History
Acquisition History 2013 2018 2020 2023 Music & Video Distribution Gaming Gaming Public Listing • Super D acquires Alliance • Mecca Acquisition • COKeM Acquisition • Alliance consummates merger Entertainment becoming the largest • Walmart, Best Buy, Target, GameStop, with Adara Acquisition Corp. to
Slide 10: Alliance provides traditional retailers with world class eCommerce abilities
Alliance provides traditional retailers with world class eCommerce abilities, leveling the playing field Alliance has specialized in providing superior: SERVICE SELECTION TECHNOLOGY Product and eCommerce One of the largest physical State-of-the art distribution and media and entertainment systems an
Slide 11: Service
Service Alliance provides efficient, Omni-Channel expansion solutions for retailers eCommerce & DTC Vendor Managed Inventory Alliance provides a full, enterprise-level infrastructure Alliance is a leader in vendor managed inventory and drop ships orders directly to consumers on behalf of solutions p
Slide 12: Selection
Selection Alliance consolidates and distributes a vast portfolio of entertainment products, while its proprietary database powers retailers’ online music and gaming offerings Gaming Products Retro Vinyl Arcades Currently over 325,000 SKUs in stock Consumer DVD & Products Blu-Ray CD 12
Slide 13: Technology
Technology Alliance is investing in enhancements to its automated handling equipment capable of reducing shipping times, streamlining order processing, and improving overall warehouse management. AutoStore Automated Storage & Retrieval System Alliance completed installing an AutoStore Automated Stor
Slide 14: Strategically Located Operations
Strategically Located Operations Through its highly skilled workforce and tech enabled facilities, Alliance has established a strong fulfillment and distribution infrastructure that allows Alliance to achieve industry leading speed and accuracy metrics. Distribution Center • Shepherdsville, KY • Sha
Slide 15: Key Fiscal Third Quarter 2024 Highlights
Key Fiscal Third Quarter 2024 Highlights • Net revenues for the fiscal third quarter ended March 31, 2024 were $211.2 million, compared to $227.7 million in the same period of 2023, a decrease of 7.3%, due mainly to macroeconomic headwinds caused by high interest rates and consumer discretion prompt
Slide 16: Financial Summary
REVENUE Financial ($ in millions, Fiscal Year Ended 6/30) Summary $1,324 $1,417 $1,158 REVENUES $863 $776 $1.15 BILLION FY 2023 Alliance has grown revenues by expanding its customer base and product offering, and through several successful acquisitions. MATURE REVENUE BASE FY20 FY21 FY22 FY23 Nine M
Slide 17: Income Statement
Income Statement Three Months Ended 03-31-2024 03-31-2023 ($ in 000’s) Revenue $211,209 $227,728 Cost of Goods Sold 183,196 200,402 Gross Profit $28,013 $27,326 Gross Profit % 13.3% 12.0% Operating Expenses: Distribution and Fulfilment Expense 11,125 14,923 Selling, General and Administrative 14,072
Slide 18: Reconciliation of Adjusted EBITDA to GAAP Net Income
Reconciliation of Adjusted EBITDA to GAAP Net Income Three Months Ended 03-31-2024 03-31-2023 ($ in 000’s) Net Income (Loss) $(3,377) $(7,750) Add back: Interest Expense 3,052 3,207 Income Tax Expense (Benefit) (457) (2,864) Depreciation and Amortization 1,402 1,679 EBITDA 601 (5,728) Adjustments IC
Slide 19: Income Statement
Income Statement Gross Profit 101,969 73,693 11.8% 8.08% 19
Slide 20: Income Statement
Income Statement 1 Nine Months Ended Fiscal Year 03-31-2024 06-30-2023 06-30-2022 06-30-2021 06-30-2020 ($ in 000’s) Revenue $863,549 $1,158,722 $1,417,377 $1,323,567 $775,596 YoY Revenue Growth % -18.3% 7.1% 70.7% 3.9% Cost of Goods Sold 761,580 1,054,788 1,234,995 1,140,885 656,485 Gross Profit $1
Slide 21: Quarterly Gross Profit, Net Income & Adj. EBITDA
Quarterly Gross Profit, Net Income & Adj. EBITDA ($ in 000’s) $80,000 $70,000 $60,000 $50,000 $40,000 Gross Profit $30,000 Net Income/(Loss) per GAAP $20,000 Adjusted EBITDA $10,000 $0 ($10,000) ($20,000) Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23
Slide 22: Balance Sheet
Balance Sheet UnAudited UnAudited Audited Audited Audited Audited 03-31-2024 As of 03-31-2023 As of 06-30-2023 As of 06-30-2022 As of 06-30-2021 As of 06-30-2020 ($ in 000’s) ASSETS Cash and Equivalents. 1,642 1,034 865 1,469 4,028 1,334 Accounts Receivable 87,517 79,445 98,699 111,332 70,881 104,93
Slide 23: Capitalization Table
Capitalization Table1 Alliance Entertainment Management owns 81% of outstanding common shares 2 Class A Common Shares 50,937,370 Warrants (WAEP: $11.46) 9,919,993 1. Does not include up to 60 million shares of contingent common stock which automatically convert into shares of Class A common in three
Slide 24: Alliance Leadership Team
Alliance Leadership Team Senior Management: Board of Directors: Tom Donaldson Director, Compensation, Audit, and Nominating and BRUCE OGILVIE Executive Chairman Corporate Governance Committees Bruce has spent his entire career in the entertainment distribution industry starting with the founding of
Slide 25: Alliance Strategic Priorities
Alliance Strategic Priorities EXECUTE ACQUISITION STRATEGY Alliance has a proven track record of successfully acquiring and integrating competitors and complementary businesses. Executive Chairman Bruce Ogilvie and Chief Executive Officer Jeff Walker have acquired over a dozen companies in the last
Slide 26: Investment Highlights
Investment Highlights Alliance Entertainment is the leading global entertainment wholesaler, direct-to-consumer distributor and e- commerce provider for the entertainment industry • Proven Management Experience and Equity Ownership. With over 30 years of operations and experience, Alliance managemen
Slide 27: Investor Relations
Investor Relations Alliance Entertainment Chris Tyson Executive Vice President 8201 Peters Road, Ste 1000 MZ North America Plantation, FL 33324 Direct: 949-491-8235 AENT@mzgroup.us www.mzgroup.us 27
Slide 28: Appendix
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Slide 29: Exhibit 1 Reconciliation of Adjusted EBITDA to GAAP Net Income
Exhibit 1 Reconciliation of Adjusted EBITDA to GAAP Net Income Nine Months Ended Fiscal Year ($ in 000’s) 03-31-2024 06-30-2023 06-30-2022 06-30-2021 06-30-2020 Operating Earnings Before Depreciation, Amortization & Arcade $20,360 $(17,964) $60,012 $68,548 $33,227 Adjustment (Adjusted EBITDA) Net In
Slide 30: Exhibit 2 Consolidated Statement of Cash Flows
Exhibit 2 Consolidated Statement of Cash Flows Nine Months Ended Year Ended Year Ended Year Ended Year Ended 03-31-2024 06-30-2023 6-30-2022 6-30-2021 6-30-2020 ($ in 000’s) Cash Flows from Operating Activities Net Income (Loss) $2,075 $(32,944) $28,496 $34,178 $5,361 Adjustments to Reconcile Net In
Slide 31: Exhibit 3 Updates
Exhibit 3 Updates Alliance Entertainment Announces Largest Sales Month for Independent Retail Division Coinciding with 2024 Record Store Day Event Alliance Entertainment to Attend Music Biz 2024 in Nashville Alliance Entertainment to Host Investor and Analyst Tours at its Warehouse in Shepherdsville
Alliance Entertainment Holding — Q3 2024 Earnings Presentation on 6ix