Core Insights - Alliance Entertainment Holding Corporation is set to ship approximately 650,000 units for Record Store Day 2025, marking an 8.3% increase from 2024 [1] - The event will take place on April 12, 2025, with shipments already initiated from the company's advanced distribution center in Shepherdsville, KY [2] - The company emphasizes its role in the growth of independent record stores and the increasing popularity of vinyl records among younger consumers [3][5] Company Performance - Alliance Entertainment is a leading distributor in the entertainment and pop culture collectibles sector, boasting over 325,000 unique in-stock SKUs, including more than 57,300 exclusive titles [9] - The company utilizes advanced technology, such as proprietary vinyl sortation machines and AutoStore technology, to ensure efficient and accurate deliveries [2] - AMPED Distribution, a subsidiary of Alliance, will release 67 unique Record Store Day titles with over 100,000 units available for the event [6] Industry Trends - Vinyl record sales in the U.S. reached 24.3 million units in the first half of 2024, reflecting a 10.7% year-over-year increase, with total sales value rising by 17% to $739.9 million [3] - The resurgence of vinyl is not only a nostalgic trend but is also becoming mainstream, appealing to a younger demographic [4] - Record Store Day continues to attract new generations of music lovers, with independent stores hosting various events to celebrate the occasion [7]

Core Viewpoint - Alliance Entertainment Holding Corporation has been selected as the winning bidder to acquire substantially all assets of Diamond Comic Distributors, Inc., which is currently undergoing a court-supervised bankruptcy process. This acquisition is expected to enhance Alliance's position in the collectibles market and unlock cross-selling synergies across various retail channels [1][2][8]. Group 1: Acquisition Details - The acquisition includes Diamond Comic Distributors (U.S.), Alliance Game Distributors, Diamond Select Toys & Collectibles, and Collectible Grading Authority, which collectively represent a 42-year-old enterprise recognized as a leader in comic books, tabletop games, and collectibles [1][2]. - The acquired assets are projected to generate over $200 million in revenue and over $10 million in EBITDA in FY2026 [1]. Group 2: Strategic Importance - The acquisition is viewed as a transformative opportunity to expand leadership in gaming and physical collectibles, deepening reach into fan-driven categories [2]. - Alliance Entertainment will gain access to a highly engaged community of retailers and fans, supporting over 5,000 retail storefronts, including independent comic and game stores, specialty retailers, and mass-market chains [2][3]. Group 3: Market Position and Product Offering - Alliance Game Distributors is a category leader in the tabletop games sector, offering over 15,000 unique SKUs to more than 3,000 independent hobby retailers across North America [3]. - Diamond Comic Distributors serves as the distribution backbone for comic books and collectibles, fulfilling orders for over 2,500 comic shops and thousands of additional retailers [4]. - Collectible Grading Authority has authenticated and graded over 500,000 collectibles for dealers and collectors in more than 50 countries, adding a high-value service layer to Alliance's offerings [5]. Group 4: Financial Strategy - Alliance Entertainment plans to finance the acquisition through an amendment to its existing $120 million Revolving Credit Facility, which is expected to increase to $160 million [8].

Financial Data and Key Metrics Changes - The company generated $393.7 million in net revenue for Q2 fiscal year 2025, a decrease from $425.6 million in the prior year period [31] - Net income for Q2 fiscal year 2025 was $7.1 million, down from $8.9 million in Q2 fiscal year 2024, impacted by a $2.5 million noncash charge [32] - Adjusted EBITDA for the quarter was $16.1 million, compared to $17.9 million in the prior year period [33] - For the first half of fiscal year 2025, net revenue totaled $622.7 million, down from $652.3 million in the first half of fiscal year 2024 [34] - The company reduced its revolver balance from $101 million to $70 million year-over-year, improving liquidity availability from $19 million to $50 million [35][38] Business Line Data and Key Metrics Changes - Vinyl sales grew 12% year-over-year to $109 million, while physical movie sales surged 23% to $86 million [31] - Physical movie sales increased 19% year-over-year to $139 million for the first half of fiscal year 2025, while vinyl sales grew 10% to $180 million [34] Market Data and Key Metrics Changes - The physical media market has returned to a historical growth trajectory in the high single digits following a surge during the pandemic [14] - The CD market has seen a revival, with CDs outselling digital albums by a 3:1 margin in the first six months of the year [15] Company Strategy and Development Direction - The company aims to expand market share, improve margins, and drive EBITDA growth while focusing on profitability and cash flow generation [40] - Strategic acquisitions have been central to the company's growth, allowing entry into new markets and diversification of offerings [19][24] - The company is committed to enhancing its product selection and operational scale through disciplined acquisition strategies [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on new opportunities and deliver long-term value for shareholders [42] - The company sees significant opportunities as family-owned competitors age out and large studios look to sell or license physical media rights [43] - Management is excited about the potential of the new partnership with Paramount and the Handmade by Robots acquisition, which are expected to drive future growth [49][56] Other Important Information - The company has implemented advanced automation systems to improve efficiency and reduce costs, including the AutoStore system [26][28] - The company has a strong balance sheet with total liabilities at $306.2 million and stockholders' equity improving to $95.6 million [39] Q&A Session Summary Question: Can you elaborate on the expected financial and operational impact of your distribution deal with Paramount? - The partnership with Paramount allows the company to license all of Paramount's catalog and new releases on DVD, which is expected to significantly impact financial profitability [48] Question: How do you see the Handmade by Robots brand fitting into your broader collectible strategy? - The brand fits well into the company's collectible strategy, allowing for higher-margin products and cross-promotion with existing entertainment catalog [56][58] Question: Can you give us a sense of the metrics you were looking for when making an acquisition? - The company looks for acquisitions that are accretive to overall enterprise value and bring good profitability, with a focus on integration post-acquisition [60][63] Question: How do you plan to further optimize the direct-to-consumer sales channel? - The company plans to leverage its extensive SKU inventory and ensure products are available on multiple websites to drive consumer engagement [64][66] Question: How sustainable are the recent cost reductions and are there further automation initiatives in the pipeline? - The company expects to continue seeing operational benefits from its warehouse operations and has ongoing projects to improve efficiencies [70][72] Question: What trends are you seeing in consumer demand for physical media? - There is a robust consumer demand for collectibles, including vinyl and physical movies, which the company plans to capitalize on [74][78]

Financial Performance - Net revenues for Q2 FY 2025 were $393.7 million, down from $425.6 million in the same period of 2023, representing a decrease of approximately 7.1%[14] - Gross profit for Q2 FY 2025 was $42.3 million, compared to $47.7 million in Q2 FY 2024, resulting in a gross profit margin of 10.7%, down from 11.2%[14] - Net income for Q2 FY 2025 was $7.1 million, compared to $8.9 million in Q2 FY 2024, impacted by a $2.5 million non-cash expense related to warrant liabilities[14] - Adjusted EBITDA for Q2 FY 2025 was $16.1 million, down from $17.9 million in the same period of 2023[14] - Net revenues for the three months ended December 31, 2024, were $393,672, a decrease of 7.5% compared to $425,586 for the same period in 2023[22] - Operating income for the six months ended December 31, 2024, increased to $16,917, up 18.5% from $14,280 in the same period of 2023[22] - Net income for the six months ended December 31, 2024, was $7,468, representing a 37% increase from $5,452 in the same period of 2023[26] - Adjusted EBITDA for the six months ended December 31, 2024, was $19,483, slightly up from $19,228 in the same period of 2023[28] Sales Performance - Higher-margin Consumer Direct Fulfillment (CDF) sales accounted for 42% of gross sales revenue, reflecting a strategic focus on direct-to-consumer channels[3] - Vinyl record sales increased by 12% year-over-year, rising from $97 million to $109 million, driven by higher consumer demand[3] - Physical movie sales surged 23% year-over-year, from $70 million to $86 million, fueled by premium 4K UHD and collectible editions[3] Cost Management - Total operating expenses were reduced by 13% year-over-year, with distribution and fulfillment costs declining 18% due to automation initiatives[3] - Interest expense for the six months ended December 31, 2024, was $5,666, down from $6,468 in the same period of 2023, a reduction of 12.4%[28] Asset and Liability Management - Total current assets increased to $253,524 as of December 31, 2024, compared to $196,213 as of June 30, 2024, reflecting a growth of 29.2%[24] - Total liabilities rose to $306,173 as of December 31, 2024, compared to $253,183 as of June 30, 2024, indicating an increase of 20.9%[24] - Trade receivables increased to $147,038 as of December 31, 2024, compared to $92,357 as of June 30, 2024, reflecting a significant increase of 59.4%[24] Cash Flow - Cash at the end of the period was $2,490, up from $2,655 at the end of the previous period, showing a decrease of 6.2%[26] - The company reported a net cash provided by operating activities of $13,618 for the six months ended December 31, 2024, compared to $26,106 in the same period of 2023, a decrease of 47.9%[26] Strategic Initiatives - The acquisition of Handmade by Robots enhances the company's presence in the licensed collectibles market, adding iconic franchises to its portfolio[3] - An exclusive home entertainment license agreement with Paramount Pictures positions the company as the exclusive distributor of Paramount's physical media in the U.S. and Canada[3]

Strategic investments and partnerships set stage for strong second half outlook Reduced revolver debt by 31%, strengthening balance sheet and liquidity position Higher-margin Direct to Consumer sales reach 42% of gross revenue PLANTATION, Fla., Feb. 13, 2025 (GLOBE NEWSWIRE) -- Alliance Entertainment Holding Corporation (Nasdaq: AENT), a global distributor and wholesaler specializing in music, movies, video games, electronics, arcades, and collectibles, reported its financial and operational results for th ...

PLANTATION, Fla., Feb. 12, 2025 (GLOBE NEWSWIRE) -- Alliance Entertainment Holding Corporation (NASDAQ:AENT) is thrilled to announce the launch of its latest line of Handmade by Robots™ collectible figures, which debuted in select Walmart stores nationwide and on Walmart.com on February 7. This exciting new collection represents a unique fusion of craftsmanship and pop culture, catering to the growing demand for collectible products that resonate with consumers and collectors alike. These figures are not ju ...

PLANTATION, Fla., Jan. 30, 2025 (GLOBE NEWSWIRE) -- Alliance Entertainment Holding Corporation (Nasdaq: AENT), a global distributor and wholesaler specializing in music, movies, video games, electronics, arcades, toys, and collectibles, will hold a conference call on Thursday, February 13, at 4:30 p.m. Eastern Time to discuss its results for the second quarter ended December 31, 2024. A press release detailing these results will be issued prior to the call. Alliance Entertainment Executive Chairman Bruce Og ...

PLANTATION, Fla., Dec. 18, 2024 (GLOBE NEWSWIRE) -- Alliance Entertainment Holding Corporation (NASDAQ:AENT), a global distributor and wholesaler specializing in music, movies, video games, electronics, arcades, toys, and collectibles, is proud to announce the acquisition of Handmade by Robots, a highly sought-after line of collectible vinyl figures. This acquisition bolsters Alliance Entertainment's growing collectibles division and reflects the company's ongoing commitment to offering unique and innovativ ...

According to several indicators—including a robust labor market and tamed inflation figures—the U.S. economy heads into 2025 with strong tailwinds. Many of the securities that have been primary beneficiaries of this economic well-being are large-cap (or even mega-cap) titans in the tech industry. Companies like NVIDIA Corp. NASDAQ: NVDA have shares that have doubled or even tripled in price in the year leading to December 11, 2024. For many investors, these major players may be prohibitively expensive. Thei ...

Core Insights - Alliance Entertainment Holding Corporation is hosting a webinar on December 10, 2024, to discuss its leadership in the physical media distribution market [1][2] - The company is recognized as the largest player in its field, with a strong position due to its extensive reach and relationships with major content producers and retailers [2][3] - Alliance's business model is characterized as capital-light and low-cost, which positions it well for future growth [3] Company Overview - Alliance Entertainment specializes in the distribution of music, movies, video games, electronics, toys, and collectibles, offering over 325,000 unique in-stock SKUs [7] - The company has over 35 years of distribution experience and serves a diverse range of customers, providing essential services to resellers and retailers worldwide [7] - Alliance's operational efficiency helps reduce costs associated with managing multiple vendor relationships, aiding omni-channel retailers in expanding their product offerings [7]