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: 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
Legal Disclaimer 2 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 s
Slide 3: Legal Disclaimer - Continued
Legal Disclaimer - Continued 3 Non - GAAP Financial Measures In addition to financial measures prepared in accordance with United States generally accepted accounting principles (“GAAP”) , s ome of the financial information and data contained in this Presentation, such as Adjusted EBITDA, EBITDA - C
Slide 4: Bruce Ogilvie, Executive Chairman
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 successfully sold the business in 1994
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 5 • 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 6 600+ Vendors 200+ Online Customers & Ships to Over 35,000 Storefronts 325K SKU’s in Stock
Slide 7: Sales by Configuration
Sales by Configuration 7 (In Thousands) Sales by Configuration Nine Months Ended 03 - 31 - 2024 Fiscal Year Ended 06 - 30 - 2023 Fiscal Year Ended 06 - 30 - 2022 Fiscal Year Ended 06 - 30 - 2021 Fiscal Year Ended 06 - 30 - 2020 Gaming $287,064 33.2% $391,308 33.8% $557,658 39.3% $497,817 37.6% $108,
Slide 8: Distribution Solutions division
Distribution Solutions (DS) is a division of Alliance that has over 62 significant video studios that by Exclusive contract rely on Distribution Solutions to manufacture, supply, and market video products. • DS has direct sales accounts with Amazon, Walmart, Target, Best Buy, and many other signific
Slide 9: Acquisition History
Acquisition 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 •
Slide 10: 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 11: 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 12: 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 325,000 SKUs in stock Selection Vinyl Retro Arcades 12
Slide 13: AutoStore Automated Storage & Retrieval System
AutoStore Automated Storage & Retrieval System Alliance completed installing an AutoStore Automated Storage & Retrieval System for its Shepherdsville warehouse as of January 2023 . This system has improved Alliance’s warehouse operations, allowing the Company to achieve increased levels of speed, re
Slide 14: Strategically Located Operations
Shakopee, MN 220K Sqft Facility Shepherdsville, KY 873K Sqft Facility Distribution Center • Shepherdsville, KY • Shakopee, MN • Dallas, TX • Los Angeles, CA Offices • Bentonville, AR • Itasca, IL • Irvine, CA • Sacramento, CA • Shakopee , MN • Shepherdsville, KY • Plantation, FL Strategically Locate
Slide 15: Key Fiscal Third Quarter 2024 Highlights
15 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 pro
Slide 16: Financial Summary
2 $(17) REVENUE ($ in millions, Fiscal Year Ended 6/30) ADJUSTED EBITDA ($ in millions, Fiscal Year Ended 6/30) $776 $1,324 $1,417 $33 $69 $60 ADJUSTED EBITDA MARGIN 4.2% 5.2% 4.2% Financial Summary REVENUES $1.15 BILLION FY 2023 Alliance has grown revenues by expanding its customer base and product
Slide 17: Income Statement
Three Months Ended 03 - 31 - 2024 03 - 31 - 2023 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 14,783 Net Income (Lo
Slide 18: Reconciliation of Adjusted EBITDA to GAAP Net Income
Three Months Ended 03 - 31 - 2024 03 - 31 - 2023 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 - DISC — — Stock - based Compensation Expense — — Mergers
Slide 19: Income Statement
19 Income Statement Gross Profit 101,969 73,693 11.8% 8.08%
Slide 20: Income Statement: Nine Months and Fiscal Years
Nine Months Ended Fiscal Year 03 - 31 - 2024 06 - 30 - 2023 06 - 30 - 2022 06 - 30 - 2021 06 - 30 - 2020 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 $101,970 $103
Slide 21: Quarterly Gross Profit, Net Income & Adj. EBITDA
21 Quarterly Gross Profit, Net Income & Adj. EBITDA 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 Q1'24 Q2'24 Q3’24 Gross Profit $23,225 $37,469 $26,221 $32,196 $28,409 $67,919 $41,512 $44,843 $40,720 $73,038 $40,138 $28,487 $25,468 $20,897 $27,326 $
Slide 22: Balance Sheet
($ in 000’s) Balance Sheet 22 UnAudited 03 - 31 - 2024 UnAudited As of 03 - 31 - 2023 Audited As of 06 - 30 - 2023 Audited As of 06 - 30 - 2022 Audited As of 06 - 30 - 2021 Audited As of 06 - 30 - 2020 ASSETS Cash and Equivalents. 1,642 1,034 865 1,469 4,028 1,334 Accounts Receivable 87,517 79,445 1
Slide 23: Capitalization Table
Capitalization Table 1 Alliance Entertainment Management owns 81% of outstanding common shares 23 50,937,370 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 equal tranches when the price of the Class
Slide 24: Bruce Ogilvie, Executive Chairman
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 successfully sold the business in 1994
Slide 25: Alliance Strategic Priorities
Alliance Strategic Priorities INCREASE MARKET SHARE Expanding its existing product and service offerings and executing its acquisition strategy will drive Alliance’s efforts toward increasing market share. ENHANCE DTC RELATIONSHIPS & CAPABILITIES Alliance’s DTC services are in greater demand as cons
Slide 26: Investment Highlights
Investment Highlights 26 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 m
Slide 27: Investor Relations Contact
27 Alliance Entertainment 8201 Peters Road, Ste 1000 Plantation, FL 33324 Investor Relations Chris Tyson Executive Vice President MZ North America Direct: 949 - 491 - 8235 AENT@mzgroup.us www.mzgroup.us
Slide 28: Appendix
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Slide 29: Adjusted EBITDA Reconciliation
Nine Months Ended Fiscal Year 03 - 31 - 2024 06 - 30 - 2023 06 - 30 - 2022 06 - 30 - 2021 06 - 30 - 2020 Operating Earnings Before Depreciation, Amortization & Arcade Adjustment (Adjusted EBITDA) $20,360 $(17,964) $60,012 $68,548 $33,227 Net Income/(Loss) Per GAAP $2,074 $(35,404) $28,619 $34,178 $5
Slide 30: Cash Flow Statement
Nine Months Ended 03 - 31 - 2024 Year Ended 06 - 30 - 2023 Year Ended 6 - 30 - 2022 Year Ended 6 - 30 - 2021 Year Ended 6 - 30 - 2020 Cash Flows from Operating Activities Net Income (Loss) $2,074 $(32,944) $28,496 $34,178 $5,361 Adjustments to Reconcile Net Income Net Cash provided by (Used In) Oper
Slide 31: Exhibit Updates
Exhibit 3 Updates Alliance Entertainment Announces Largest Sales Month for Independent Retail Division Coinciding with 2024 Record Store Day Ev ent Alliance Entertainment to Attend Music Biz 2024 in Nashville Alliance Entertainment to Host Investor and Analyst Tours at its Warehouse in Shepherdsvill
Alliance Entertainment Holding — Q3 2024 Earnings Presentation on 6ix