Alliance Entertainment (AENT) Registration Filing summary

Company overview and business model

• Operates as a leading global wholesaler and distributor of physical media, entertainment products, hardware, and accessories, serving over 4,000 customers and 35,000 ship-to locations in more than 70 countries worldwide.

• Employs a multi-channel strategy, acting as a vital link between major entertainment manufacturers and top-tier retail partners, including Walmart, Amazon, Best Buy, and others.

• Owns a diverse portfolio of e-commerce brands and provides state-of-the-art warehousing, distribution technologies, and vendor-managed inventory solutions.

• Product mix includes vinyl records, video games, CDs, DVDs, Blu-Rays, toys, and collectibles, with over 325,000 SKUs in stock.

• Has a history of growth through ten accretive acquisitions and continues to pursue both organic and M&A-driven expansion.

Financial performance and metrics

• For the nine months ended March 31, 2024, net revenues were $863.5M, net income was $2.1M, and Adjusted EBITDA was $22.2M.

• For the year ended June 30, 2023, revenues were $1.16B, net loss was $(35.4)M, and Adjusted EBITDA was $(17.6)M.

• Gross margin improved to 11.8% for the nine months ended March 31, 2024, up from 8.1% in the prior year period.

• Operating expenses decreased 18% year-over-year for the nine months ended March 31, 2024, reflecting cost controls and workforce reductions.

• As of March 31, 2024, cash was $1.6M, with $77.3M outstanding under a $120M revolving credit facility and $10M in shareholder loans.

Use of proceeds and capital allocation

• Net proceeds from the offering (estimated at $8.6M) will be used for working capital and general corporate purposes, with potential for acquisitions or investments in complementary businesses.

• Management retains broad discretion over the use of proceeds, which may be allocated to capital preservation investments pending deployment.