Alliance Entertainment (AENT) - 2024 Q4 - Annual Results

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]