Alliance Entertainment We bring entertainment to you! First Quarter Fiscal 2025 Financial Results Conference Call November 12, 2024 NASDAQ: AENT 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 states or jurisdictions in which such offer, solicita ...

Financial Data and Key Metrics Changes - The company generated $229 million in net revenue for Q1 2025, an increase from $226.8 million in Q1 2024 [29] - Total cost of revenue was $203 million in Q1 2025, compared to $201 million in the same quarter last year, resulting in a gross margin of 11.2%, slightly below the 11.6% achieved in Q1 2024 [30] - Net income for the quarter was $400,000, a significant turnaround from a net loss of $3.5 million in the same period last year, leading to earnings per share improving from a negative $0.07 to a profit of $0.01 [31] - Adjusted EBITDA for the quarter was $3.4 million, marking the sixth consecutive quarter of positive adjusted EBITDA [32] - Inventory levels dropped to $138 million and debt reduced to $85 million as of September 30, 2024, improving financial flexibility [34] Business Line Data and Key Metrics Changes - The Distribution Solutions division generated $134 million in revenue in fiscal 2024, partnering with over 60 movie studios [15] - The AMPED division is a leader in exclusive physical music content distribution, with significant relationships with over 90 music labels [16] - The Mill Creek division specializes in exclusive video content licensing for major studios, enhancing the ability to offer unique video content [18] - Revenue from the exclusive relationship with Arcade1Up increased to $12.6 million in Q1 2025, up over 20% from $10.2 million in Q1 2024 [19] Market Data and Key Metrics Changes - The physical media market is normalizing back to historical growth levels in the high single digits after a surge during the pandemic [13] - The CD market has seen a revival, with CDs outselling digital albums at a 3 to 1 margin in the first half of the year [13] Company Strategy and Development Direction - The company aims to expand market share, improve margins, and drive EBITDA growth through licensing opportunities in video and collectibles [35][36] - Mergers and acquisitions remain central to the growth strategy, focusing on diversifying product categories and strengthening relationships with retail partners [37] - The company is investing in automation and technological innovation to enhance operational efficiencies, with significant cost savings already realized [36][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to leverage its capital-light model and integration capabilities to capture opportunities in the market [38] - The company anticipates significant opportunities as family-owned competitors age out and large studios look to sell or license physical media rights [38] Other Important Information - The company has a long history of strategic acquisitions, having successfully integrated over a dozen companies to expand its market presence [11][20] - The implementation of AutoStore technology has transformed operations, allowing for increased processing capacity and reduced distribution costs [26][27] Q&A Session Summary Question: How does the company balance inventory optimization with ensuring adequate stock for anticipated demand? - The company utilizes sophisticated purchasing systems and experienced buyers to manage inventory, focusing on both evergreen sellers and new releases to meet customer demand [40][41][42] Question: What measures are being considered to drive margin expansion in the coming quarters? - The company is seeing improvements in margins and plans to enhance margins through licensing models and obtaining additional rebates from suppliers [43][44] Question: Can you discuss the criteria for potential acquisitions and any specific targets? - The company is active in acquisition conversations, focusing on both consolidation opportunities within existing categories and new licensed entertainment product categories [45][46][47]

Revenue Growth and Sales Performance - Net revenues increased from $227 million to $229 million, a 1% year-over-year growth for the three months ended September 30, 2024[116] - Vinyl record sales grew by $3.2 million (4.8%) to $70.5 million, driven by a 4.9% increase in average selling price[117] - Physical movie sales (DVDs, Blu-Ray, Ultra HD) increased by $6.1 million (13.2%) to $52.9 million, with an 18.6% rise in average selling price[117] - Gaming product revenue rose by $4.5 million (8.6%) to $57.1 million, attributed to higher sales of hardware and retro arcades[119] - Consumer products revenue declined by $3.4 million (-31.6%) to $7.3 million due to a decrease in average selling price per unit[118] - Direct-to-consumer (DTC) business contributed approximately 34% of gross revenue for Q3 2024, up from 30% in the same period last year[116] Cost and Margin Analysis - Cost of revenues increased by $2 million (1%) to $203 million, while gross margin decreased from 11.6% to 11.2%[120] - Total operating expenses decreased by $5 million (-17.9%) to $23 million, with distribution and fulfillment expenses dropping by $2.7 million (-23%)[121] - The company closed its Shakopee, MN warehouse in May 2024, reducing operating costs and improving efficiency[121] Financial Performance and Liquidity - Interest expense decreased by $0.3 million (-10%) to $2.8 million for the three months ending September 30, 2024, driven by a reduction in the average revolver balance from $124 million to $81 million (-35%)[122] - Non-GAAP Adjusted EBITDA increased to $3.4 million for the three months ending September 30, 2024, compared to $1.3 million in the same period of the prior year[123] - The company's revolver balance decreased from $126 million on September 30, 2023, to $88 million (-$38 million or -28%) on September 30, 2024, due to improved cash conversion from accounts receivable and inventory[128] - Net cash provided by financing activities was $14.7 million for the three months ending September 30, 2024, compared to $3.1 million in the same period prior year, primarily due to increased borrowing for inventory[132] - The company's liquidity ratio improved to 1.34 from 0.87 last year, reflecting a stronger ability to meet short-term obligations[129] - Inventory decreased by $41 million for the three months ending September 30, 2024, compared to a $13 million increase in the same period prior year, driven by lower inventory on-hand to support sales[131] Credit Facilities and Financial Stability - The company entered into a $120 million senior secured asset-based credit facility with White Oak Commercial Finance, LLC, replacing the prior credit facility with Bank of America[125] - The company concluded it has sufficient cash to fund operations for at least twelve months, supported by the new credit facility, strategic initiatives, and financial performance[126] Internal Controls and Remediation - Material weaknesses in internal control over financial reporting were identified, primarily related to entity-level controls, IT general controls, and financial close processes[136][137][138] - Remediation efforts for material weaknesses are ongoing, with significant actions expected to be finalized by the fiscal year ending June 30, 2025[139][140][141] Legal Proceedings and Risks - Alliance is involved in legal proceedings, claims, and government investigations, which could result in monetary damage awards, fines, penalties, or injunctive orders, potentially affecting the company's business and financial condition[145][146] - A class action lawsuit filed on March 31, 2023, alleges breaches of fiduciary duties related to the Business Combination, with potential losses currently unestimable[147] - COKeM faces a lawsuit seeking damages of at least $20,913,200 plus 9% interest for alleged contributory trademark infringement and related claims[148] - A class action complaint filed on August 8, 2024, alleges violations of the Video Privacy Protection Act (VPPA) by disclosing user data to Facebook, with financial impact currently unestimable[149] Inventory and Operations - Alliance Entertainment maintains in-stock inventory of over 325,000 SKU products and serves more than 70 countries worldwide[101]

Operational efficiencies drove improved profitabilityStrengthened balance sheet including 33% reduction in revolver debtHigher-margin Direct to Consumer sales increased to 34% of gross revenue PLANTATION, Fla., Nov. 12, 2024 (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 the first quarter ended September 30, ...

PLANTATION, Fla., Oct. 01, 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 pleased to invite investors to a webinar on October 15, 2024, at 4:15 p.m. ET. The exclusive event, hosted by RedChip Companies, will feature Alliance Entertainment’s Chairman, Bruce Ogilvie, and Chief Executive Officer, Jeff Walker, who will share insight into Alliance’s ...

Exhibit 99.1 Alliance Entertainment Reports Fourth Quarter and Fiscal Year 2024 Results Operational ef iciencies and margin improvements drive profitability turnaround Higher-margin DTC sales increased to 36% of gross revenue in FY24 Strengthened balance sheet with 45% reduction in revolver debt and added new $120M credit facility PLANTATION, Fla., September 19, 2024 (GLOBE NEWSWIRE) — Alliance Entertainment Holding Corporation (Nasdaq: AENT), a global distributor and wholesaler specializing in music, movie ...

Alliance Entertainment Holding Corporation (NASDAQ:AENT) Q4 2024 Results Conference Call September 19, 2024 4:30 PM ET Company Participants Bruce Ogilvie - Executive Chairman Jeff Walker - Chief Executive Officer, Chief Financial Officer Operator Greetings, and welcome to the Alliance Entertainment Fourth Quarter and Fiscal Year 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, t ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-40014 ALLIANCE ENTERTAINMENT HOLDING CORPORATION (Exact name of Registrant as specified in its Charter) | --- | --- | |------------------ ...

Operational efficiencies and margin improvements drive profitability turnaround Higher-margin DTC sales increased to 36% of gross revenue in FY24 Strengthened balance sheet with 45% reduction in revolver debt and added new $120M credit facility PLANTATION, Fla., Sept. 19, 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, reported its financial and op ...

PLANTATION, Fla., July 30, 2024 (GLOBE NEWSWIRE) -- Alliance Entertainment Holding Corporation (NASDAQ:AENT) ("Alliance Entertainment", "Company"), a global distributor and wholesaler specializing in music, movies, video games, electronics, arcades, and collectibles, announced today an exclusive distribution agreement executed with Arcade1Up for retail and website fulfillment of the complete line of arcade and gaming products in North America. Arcade1Up licenses and manufactures home arcade consoles with ov ...