Delivered $1.9M in net income, a $5.3M year-over-year improvement, showcasing strong execution and margin gains
Reduced revolver debt by 25% year-over-year, strengthening balance sheet and liquidity position
Direct to Consumer sales reach 35% of gross revenue
PLANTATION, Fla., May 15, 2025 (GLOBE NEWSWIRE) -- Alliance Entertainment Holding Corporation (Nasdaq: AENT), a premier distributor and fulfillment partner of entertainment and pop culture collectibles, reported its financial and operational results for the third quarter and nine months ended March 31, 2025.
Third Quarter FY 2025 Highlights
- Exclusive home entertainment license agreement with Paramount Pictures became effective January 1, 2025, establishing Alliance as the exclusive licensee of Paramount's physical media-including DVD, Blu-ray, 4K, and UHD-across the U.S. and Canada, enhancing its leadership in premium home entertainment content.
- Expanded retail distribution of Handmade by Robots following the December 2024 acquisition, leveraging Alliance's retail network to launch exclusive licensed collectibles. Significant new releases coming in the second half of 2025, leveraging iconic franchises such as DC Comics, Harry Potter, Jurassic World, Peanuts, Disney, Sonic the Hedgehog, Hello Kitty, SpongeBob SquarePants, and Star Trek.
- Physical movie sales surged 39% year-over-year, increasing from $42 million to $58 million, driven by new exclusive content partnerships and strong demand for premium 4K and collectible SteelBook editions-an upward trend expected to continue as retailers prioritize curated, high-value offerings across their in-store and online channels to enhance customer engagement and loyalty.
- Vinyl record sales increased by 11% year-over-year, rising from $78 million to $86 million, supported by strong pre-Record Store Day demand and fueled by sustained consumer enthusiasm for the collectible, tangible, and artistic appeal of vinyl-an upward trend we expect to continue as fans seek exclusive and limited-edition releases.
- Higher-margin Consumer Direct Fulfillment (CDF) sales accounted for 35% of gross sales revenue, up from 33% in Q3 of FY24.
- Inventory levels improved to $93.2 million, down 13% from $108.0 million at March 31, 2024, supporting improved inventory turnover and working capital efficiency.
- Working capital totaled $46.3 million, down from $57.3 million at March 31, 2024, reflecting more efficient management of inventory and supplier payables, while maintaining financial flexibility to fund operations and growth initiatives.
- Reduced total operating expenses by 11.4% year-over-year, with distribution and fulfillment costs declining by 10.2% due to automation initiatives and the consolidation of warehouse operations.
- Interest expense declined 20.2% year-over-year, reflecting a lower revolving credit balance and improved financial efficiency.
"This quarter's results reflect the strength of our operating model and our commitment to creating long-term value for our shareholders," commented Bruce Ogilvie, Chairman of Alliance Entertainment. "By leveraging our leadership position in entertainment media and collectibles, we continue to deliver exclusive content and unique products that resonate with fans and collectors worldwide.
"The launch of our Paramount distribution partnership and the expanded retail rollout of Handmade by Robots represent two important milestones that build on our strategy to scale high-margin, high-demand categories through our trusted retail relationships. At the same time, our focus on operational discipline, inventory optimization, and supplier partnerships has strengthened our balance sheet and enhanced our financial flexibility.
"As the entertainment and collectibles markets continue to evolve, Alliance is uniquely positioned to lead, grow, and capture new opportunities that extend our leadership and deliver sustainable profitability over the long term," concluded Ogilvie.
Jeff Walker, Chief Executive Officer of Alliance Entertainment, added, "We are pleased to report another strong quarter, highlighted by both top-line growth and improved profitability. Revenue reached $213 million, supported by double-digit increases in vinyl and physical movie sales-two of our highest-performing product categories.
"Operationally, we remain laser-focused on driving margin expansion and cost efficiency. Our automation investments and warehouse consolidation efforts have meaningfully reduced distribution and fulfillment costs, while our disciplined inventory management has improved working capital efficiency.
"We are also seeing strong momentum in our higher-margin Consumer Direct Fulfillment (CDF) channel, which accounted for 35% of gross revenue this quarter, up from 33% in the prior year period. This model allows our retail partners to offer a dramatically broader online assortment without holding physical inventory, while enabling Alliance to ship directly to consumers with faster delivery and high fulfillment accuracy-enhancing both customer satisfaction and our profitability.
"We delivered $4.9 million in Adjusted EBITDA for the quarter, up 66% year-over-year, and achieved $1.9 million in net income, reflecting our commitment to profitable growth. As we look ahead to the remainder of fiscal 2025 and beyond, we are confident in our ability to capitalize on emerging trends in physical media, direct-to-consumer fulfillment, and collectibles-positioning Alliance to deliver sustained growth and enhanced value for our shareholders," concluded Walker.
Third Quarter FY 2025 Financial Results
- Net revenues for the fiscal third quarter ended March 31, 2025, were $213.0 million, up 1% compared to $211.2 million in the same period of 2024.
- Gross profit for the fiscal third quarter ended March 31, 2025, was $29.1 million, up 3.7% compared to $28.0 million in the same period of 2024.
- Gross profit margin for the fiscal third quarter ended March 31, 2025, was 13.6%, up from 13.2% in the same period of 2024.
- Net income for the fiscal third quarter ended March 31, 2025, was $1.9 million, or $0.04 per diluted share, compared to a net loss of $3.4 million, or ($0.07) per diluted share for the same period of 2024.
- Adjusted EBITDA for the fiscal third quarter ended March 31, 2025, was $4.9 million, up 66% compared to Adjusted EBITDA of $2.9 million for the same period of 2024.
Nine-Months FY 2025 Financial Results
- Net revenues for the nine months ended March 31, 2025, were $835.7 million, compared to $863.5 million in the same period of 2024.
- Gross profit for the nine months ended March 31, 2025, was $96.9 million, compared to $102.0 million in the same period of 2024.
- Gross profit margin for the nine months ended March 31, 2025, was 11.6%, compared to 11.8% in the same period of 2024.
- Net income for the nine months ended March 31, 2025, was $9.3 million, or $0.18 per diluted share, up 349% compared to net income of $2.1 million, or $0.04 per diluted share, for the same period of 2024.
- Adjusted EBITDA for the nine months ended March 31, 2025, was $24.4 million, up 9.9% compared to Adjusted EBITDA of $22.2 million for the same period of 2024.
Conference Call
Alliance Entertainment Chief Executive Officer and Chief Financial Officer Jeff Walker and Chief Accounting Officer Amanda Gnecco will host the conference call, which will be followed by a question-and-answer session. A presentation will accompany the call and can be viewed during the webcast or accessed via the investor relations section of the Company's website here.
To access the call, please use the following information:
| Date: | Thursday, May 15, 2025 |
| Time: | 4:30 p.m. Eastern Time, 1:30 p.m. Pacific Time |
| Toll-free dial-in number: | 1-877-407-0784 |
| International dial-in number: | 1-201-689-8560 |
| Conference ID: | 13753860 |
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact RedChip Companies at 1-407-644-4256.
The conference call will be broadcast live and available for replay at https://viavid.webcasts.com/starthere.jsp?ei=1719544&tp_key=061cf336f8 and via the investor relations section of the Company's website here.
A telephone replay of the call will be available approximately three hours after the call concludes and can be accessed through July 15, 2025, using the following information:
| Toll-free replay number: | 1-844-512-2921 |
| International replay number: | 1-412-317-6671 |
| Replay ID: | 13753860 |
About Alliance Entertainment
Alliance Entertainment (NASDAQ: AENT) is a premier distributor and fulfillment partner for the entertainment and pop culture collectibles industry. With more than 325,000 unique in-stock SKUs - including over 57,300 exclusive titles across compact discs, vinyl LPs, DVDs, Blu-rays, and video games - Alliance offers the largest selection of physical media in the market. Our vast catalog also includes licensed merchandise, toys, retro gaming products, and collectibles, serving over 35,000 retail locations and powering e-commerce fulfillment for leading retailers. Leveraging decades of operational expertise, exclusive licensing partnerships, and a capital-light, scalable infrastructure, Alliance is a trusted partner to the world's top entertainment brands and retailers. Our omnichannel platform connects collectors and fans to the products, franchises, and experiences they love - across formats and generations. For more information, visit www.aent.com.
Forward Looking Statements
Certain statements included in this Press Release that are not historical facts are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," "should," "would," "plan," "predict," "potential," "seem," "seek," "future," "outlook," and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding estimates and forecasts of other financial and performance metrics and projections of market opportunity. These statements are based on various assumptions, whether identified in this Press Release, and on the current expectations of Alliance's management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as and must not be relied on by an investor as, a guarantee, an assurance, a prediction, or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Alliance. These forward-looking statements are subject to a number of risks and uncertainties, including risks relating to the anticipated growth rates and market opportunities; changes in applicable laws or regulations; the ability of Alliance to execute its business model, including market acceptance of its systems and related services; Alliance's reliance on a concentration of suppliers for its products and services; increases in Alliance's costs, disruption of supply, or shortage of products and materials; Alliance's dependence on a concentration of customers, and failure to add new customers or expand sales to Alliance's existing customers; increased Alliance inventory and risk of obsolescence; Alliance's significant amount of indebtedness; our ability to refinance our existing indebtedness; our ability to continue as a going concern absent access to sources of liquidity; risks and failure by Alliance to meet the covenant requirements of its revolving credit facility, including a fixed charge coverage ratio; risks that a breach of the revolving credit facility, including Alliance's recent breach of the covenant requirements, could result in the lender declaring a default and that the full outstanding amount under the revolving credit facility could be immediately due in full, which would have severe adverse consequences for the Company; known or future litigation and regulatory enforcement risks, including the diversion of time and attention and the additional costs and demands on Alliance's resources; Alliance's business being adversely affected by increased inflation, higher interest rates and other adverse economic, business, and/or competitive factors; geopolitical risk and changes in applicable laws or regulations; risk that the COVID-19 pandemic, and local, state, and federal responses to addressing the pandemic may have an adverse effect on our business operations, as well as our financial condition and results of operations; substantial regulations, which are evolving, and unfavorable changes or failure by Alliance to comply with these regulations; product liability claims, which could harm Alliance's financial condition and liquidity if Alliance is not able to successfully defend or insure against such claims; availability of additional capital to support business growth; and the inability of Alliance to develop and maintain effective internal controls.
For investor inquiries, please contact:
Dave Gentry
RedChip Companies, Inc.
1-407-644-4256
AENT@redchip.com
| ALLIANCE ENTERTAINMENT HOLDING CORP. UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| ($ in thousands except share and per share amounts) | March 31, 2025 | March 31, 2024 | March 31, 2025 | March 31, 2024 | ||||||||||||
| Net Revenues | $ | 213,045 | $ | 211,209 | $ | 835,707 | $ | 863,549 | ||||||||
| Cost of Revenues (excluding depreciation and amortization) | 183,984 | 183,196 | 738,821 | 761,580 | ||||||||||||
| Operating Expenses | ||||||||||||||||
| Distribution and Fulfillment Expense | 9,989 | 11,125 | 31,425 | 37,983 | ||||||||||||
| Selling, General and Administrative Expense | 14,187 | 13,948 | 41,092 | 43,667 | ||||||||||||
| Depreciation and Amortization | 1,352 | 1,402 | 3,865 | 4,455 | ||||||||||||
| Transaction Costs | - | 2,086 | - | 2,086 | ||||||||||||
| Restructuring Cost | 4 | 179 | 73 | 226 | ||||||||||||
| Gain on Disposal of Fixed Assets | - | (51 | ) | (15 | ) | (51 | ) | |||||||||
| Total Operating Expenses | 25,532 | 28,689 | 76,440 | 88,366 | ||||||||||||
| Operating Income (Loss) | 3,529 | (676 | ) | 20,446 | 13,603 | |||||||||||
| Other Expenses | ||||||||||||||||
| Interest Expense, Net | 2,435 | 3,052 | 8,101 | 9,520 | ||||||||||||
| Change in Fair Value of Warrants | (1,676 | ) | 124 | 910 | (41 | ) | ||||||||||
| Total Other Expenses | 759 | 3,176 | 9,011 | 9,479 | ||||||||||||
| Income (Loss) Before Income Tax Expense (Benefit) | 2,770 | (3,852 | ) | 11,435 | 4,124 | |||||||||||
| Income Tax Expense (Benefit) | 919 | (475 | ) | 2,116 | 2,049 | |||||||||||
| Net Income (Loss) | 1,851 | (3,377 | ) | 9,319 | 2,075 | |||||||||||
| Net Income (Loss) per Share - Basic and Diluted | 0.04 | (0.07 | ) | $ | 0.18 | $ | 0.04 | |||||||||
| Weighted Average Common Shares Outstanding - Basic | 50,957,370 | 50,933,020 | 50,957,370 | 50,788,811 | ||||||||||||
| Weighted Average Common Shares Outstanding - Diluted | 50,965,970 | 50,933,020 | 50,965,970 | 50,788,811 | ||||||||||||
| ALLIANCE ENTERTAINMENT HOLDING CORP. UNAUDITED CONSOLIDATED BALANCE SHEETS | ||||||||
| ($ in thousands) | March 31, 2025 | June 30, 2024 | ||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | 2,030 | $ | 1,129 | ||||
| Trade Receivables, Net of Allowance for Credit Losses of $760 and $648, respectively | 94,860 | 92,357 | ||||||
| Inventory, Net | 93,188 | 97,429 | ||||||
| Other Current Assets | 11,369 | 5,298 | ||||||
| Total Current Assets | 201,447 | 196,213 | ||||||
| Property and Equipment, Net | 11,838 | 12,942 | ||||||
| Operating Lease Right-of-Use Assets, Net | 19,967 | 22,124 | ||||||
| Goodwill | 89,116 | 89,116 | ||||||
| Intangibles, Net | 19,353 | 13,381 | ||||||
| Other Long-Term Assets | 175 | 503 | ||||||
| Deferred Tax Asset, Net | 7,500 | 6,533 | ||||||
| Total Assets | $ | 349,396 | $ | 340,812 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable | $ | 139,589 | $ | 133,221 | ||||
| Accrued Expenses | 8,901 | 9,371 | ||||||
| Current Portion of Operating Lease Obligations | 3,144 | 1,979 | ||||||
| Current Portion of Finance Lease Obligations | 3,003 | 2,838 | ||||||
| Contingent Liability | 511 | 511 | ||||||
| Total Current Liabilities | 155,148 | 147,920 | ||||||
| Revolving Credit Facility, Net | 65,164 | 69,587 | ||||||
| Finance Lease Obligation, Non- Current | 2,735 | 5,016 | ||||||
| Operating Lease Obligations, Non-Current | 18,244 | 20,413 | ||||||
| Shareholder Loan (subordinated), Non-Current | 10,000 | 10,000 | ||||||
| Warrant Liability | 703 | 247 | ||||||
| Total Liabilities | 251,994 | 253,183 | ||||||
| Commitments and Contingencies (Note 12) | ||||||||
| Stockholders' Equity | ||||||||
| Preferred Stock: Par Value $0.0001 per share, Authorized 1,000,000 shares, Issued and Outstanding 0 shares as of March 31, 2025, and June 30, 2024 | - | - | ||||||
| Common Stock: Par Value $0.0001 per share, Authorized 550,000,000 shares at March 31, 2025, and at June 30, 2024; Issued and Outstanding 50,957,370 Shares as of March 31, 2025, and June 30, 2024 | 5 | 5 | ||||||
| Paid In Capital | 48,512 | 48,058 | ||||||
| Accumulated Other Comprehensive Loss | (79 | ) | (79 | ) | ||||
| Retained Earnings | 48,964 | 39,645 | ||||||
| Total Stockholders' Equity | 97,402 | 87,629 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 349,396 | $ | 340,812 | ||||
| ALLIANCE ENTERTAINMENT HOLDING CORP. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| Nine Months Ended | Nine Months Ended | |||||||
| ($ in thousands) | March 31, 2025 | March 31, 2024 | ||||||
| Cash Flows from Operating Activities: | ||||||||
| Net Income | $ | 9,319 | $ | 2,075 | ||||
| Adjustments to Reconcile Net Income to | ||||||||
| Net Cash Provided by (Used in) Operating Activities: | ||||||||
| Depreciation of Property and Equipment | 1,280 | 1,455 | ||||||
| Amortization of Intangible Assets | 2,585 | 3,000 | ||||||
| Amortization of Deferred Financing Costs (Included in Interest) | 1,053 | 511 | ||||||
| Allowance for Credit Losses | 780 | 457 | ||||||
| Change in Fair Value of Warrants | 910 | (41 | ) | |||||
| Deferred Income Taxes | (967 | ) | - | |||||
| Operating Lease Right-of-Use Assets | 2,157 | 2,651 | ||||||
| Gain on Disposal of Fixed Assets | (15 | ) | (51 | ) | ||||
| Changes in Assets and Liabilities, Net of Acquisitions | ||||||||
| Trade Receivables | (3,283 | ) | 16,966 | |||||
| Inventory | 4,994 | 38,871 | ||||||
| Income Taxes Payable\Receivable | 1,558 | 1,764 | ||||||
| Other Assets | (6,027 | ) | 3,021 | |||||
| Operating Lease Obligations | (1,004 | ) | (2,959 | ) | ||||
| Accounts Payable | 6,368 | (19,101 | ) | |||||
| Accrued Expenses | (3,627 | ) | (2,504 | ) | ||||
| Net Cash Provided by Operating Activities | 16,081 | 46,115 | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Capital Expenditures | (52 | ) | (186 | ) | ||||
| Cash inflow from Asset Disposal | 15 | 43 | ||||||
| Cash Paid for Business Asset Purchase | (7,551 | ) | - | |||||
| Net Cash Used in Investing Activities | (7,588 | ) | (143 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Payments on Revolving Credit Facility | (778,620 | ) | (872,760 | ) | ||||
| Borrowings on Revolving Credit Facility | 773,144 | 820,517 | ||||||
| Proceeds from Shareholder Note (Subordinated), Current | - | 46,000 | ||||||
| Payments on Shareholder Note (Subordinated), Current | - | (36,000 | ) | |||||
| Issuance of common stock, net of transaction costs | - | 3,516 | ||||||
| Deferred Financing Costs | - | (4,211 | ) | |||||
| Payments on Financing Leases | (2,116 | ) | (2,257 | ) | ||||
| Net Cash Used in Financing Activities | (7,592 | ) | (45,195 | ) | ||||
| Net Increase in Cash | 901 | 777 | ||||||
| Cash, Beginning of the Period | 1,129 | 865 | ||||||
| Cash, End of the Period | $ | 2,030 | $ | 1,642 | ||||
| Supplemental disclosure for Cash Flow Information | ||||||||
| Cash Paid for Interest | $ | 8,089 | $ | 9,520 | ||||
| Cash Paid for Income Taxes | $ | 1,675 | $ | 366 | ||||
| Supplemental Disclosure for Non-Cash Investing and Financing Activities | ||||||||
| Stock-based compensation conversion to stock | - | 1,386 | ||||||
| Conversion of Warrants from liability to Equity | 454 | - | ||||||
Non-GAAP Financial Measures: For the three months ended March 31, 2025, we had non-GAAP Adjusted EBITDA of approximately $4.9 million compared with Adjusted EBITDA of approximately $2.9 million in the prior year period, or a year-over-year improvement of $2.0 million. For the nine months ended March 31, 2025, we had non-GAAP Adjusted EBITDA of approximately $24.4 million compared to Adjusted EBITDA of approximately $22.2 million for the prior year period, or a year-over-year improvement of $2.2 million. We define Adjusted EBITDA as net gain or loss adjusted to exclude: (i) income tax expense; (ii) other income (loss); (iii) interest expense; (iv) depreciation and amortization expense; and (v) other non- recurring expenses. Our method of calculating Adjusted EBITDA may differ from other companies and accordingly, this measure may not be comparable to measures used by other companies. We use Adjusted EBITDA to evaluate our own operating performance and as an integral part of our planning process. We present Adjusted EBITDA as a supplemental measure because we believe such a measure is useful to investors as a reasonable indicator of operating performance. We believe this measure is a financial metric used by many investors to compare companies. This measure is not a recognized measure of financial performance under GAAP in the United States and should not be considered as a substitute for operating earnings (losses), net earnings (loss) from continuing operations or cash flows from operating activities, as determined in accordance with GAAP. See the table below for a reconciliation, for the periods presented, of our GAAP net income (loss) to Adjusted EBITDA.
| Three Months Ended | Three Months Ended | |||||||
| ($ in thousands) | March 31, 2025 | March 31, 2024 | ||||||
| Net Income(Loss) | $ | 1,851 | $ | (3,377 | ) | |||
| Add back: | ||||||||
| Interest Expense | 2,435 | 3,052 | ||||||
| Income Tax Expense | 919 | (475 | ) | |||||
| Depreciation and Amortization | 1,352 | 1,402 | ||||||
| EBITDA | $ | 6,557 | $ | 602 | ||||
| Adjustments | ||||||||
| Transaction Costs | - | 2,086 | ||||||
| Change In Fair Value of Warrants | (1,676 | ) | 124 | |||||
| Gain on Disposal of PPE | - | (51 | ) | |||||
| Restructuring Cost | 4 | 179 | ||||||
| Adjusted EBITDA | $ | 4,885 | $ | 2,940 | ||||
| Nine Months Ended | Nine Months Ended | |||||||
| ($ in thousands) | March 31, 2025 | March 31, 2024 | ||||||
| Net Income | $ | 9,319 | $ | 2,075 | ||||
| Add back: | ||||||||
| Interest Expense | 8,101 | 9,520 | ||||||
| Income Tax Expense | 2,116 | 2,049 | ||||||
| Depreciation and Amortization | 3,865 | 4,455 | ||||||
| EBITDA | $ | 23,401 | $ | 18,099 | ||||
| Adjustments | ||||||||
| Stock-based Compensation Expense | - | 1,386 | ||||||
| Transaction Costs | 2,086 | |||||||
| Restructuring Cost | 73 | 226 | ||||||
| Change In Fair Value of Warrants | 910 | (41 | ) | |||||
| Merger-related Contingent Losses | - | 461 | ||||||
| Gain on Disposal of Property and Equipment | (15 | ) | (51 | ) | ||||
| Adjusted EBITDA | $ | 24,369 | $ | 22,166 | ||||
