NEW YORK, Aug. 12, 2020 /PRNewswire/ -- ALJ Regional
Holdings, Inc. (NASDAQ: ALJJ) ("ALJ") announced results
today for its third quarter ended June
30, 2020.
ALJ is a holding company, whose wholly owned subsidiaries are
Faneuil, Inc. ("Faneuil"), Floors-N-More, LLC, d/b/a Carpets
N' More ("Carpets"), and Phoenix Color Corp.
("Phoenix"). Faneuil
is a leading provider of call center services, back office
operations, staffing services, and toll collection services to
commercial and governmental clients across the United States. Carpets is one of the
largest floor covering retailers in Las
Vegas, Nevada, and a provider of multiple products for the
commercial, retail, and home builder markets including all types of
flooring, countertops, and cabinets. Phoenix is a leading manufacturer of book
components, educational materials, and related products producing
value-added components, heavily illustrated books, and specialty
commercial products using a broad spectrum of materials and
decorative technologies.
Investment Highlights – Three and Nine Months Ended
June 30, 2020
Consolidated Results for ALJ
- ALJ recognized net revenue of $95.4
million for the three months ended June 30, 2020, an increase of $11.1 million, or 13.2%, compared to $84.2 million for the three months ended
June 30, 2019. The increase was
driven by implementation activities and start of production for new
contracts at Faneuil, offset by lower component sales primarily
related to education at Phoenix
and lower volumes at Carpets. ALJ recognized consolidated net
revenue of $96.0 million for the
three months ended March 31,
2020.
- ALJ recognized a net loss of $2.7
million and loss per share of $0.06 (diluted) for the three months ended
June 30, 2020, compared to a net loss
of $7.2 million and loss per share of
$0.19 (diluted) for the three months
ended June 30, 2019. Most of the
improvement was due to a $3.4 million
decrease in the provision for income taxes and increased margin
from Faneuil implementation activities, offset by lower volumes at
Phoenix and Carpets. ALJ
recognized a net loss of $61.8
million and loss per share of $1.47 (diluted) for the three months ended
March 31, 2020, which included a
$59.0 million non-cash, non-recurring
impairment of goodwill (as described below).
- ALJ recognized adjusted EBITDA of $7.2
million for the three months ended June 30, 2020, an increase of $2.0 million, or 38.5%, compared to a
$5.2 million for the three months
ended June 30, 2019. The increase was
a result of implementation activities and start of production for
new contracts at Faneuil, offset by lower components sales
primarily related to education at Phoenix, and lower volumes from builders and
fewer upgrades to higher margin products by builder customers at
Carpets. ALJ recognized adjusted EBITDA of $4.7 million for the three months ended
March 31, 2020.
- ALJ recognized net revenue of $281.8
million for the nine months ended June 30, 2020, an increase of $15.8 million, or 6.0%, compared to $266.0 million for the nine months ended
June 30, 2019. The increase was
driven by implementation activities and the start of production for
new contracts at Faneuil, offset by lower component sales related
to education at Phoenix and lower
volumes at Carpets.
- ALJ recognized a net loss of $68.7
million and loss per share of $1.63 (diluted) for the nine months ended
June 30, 2020, compared to a net loss
of $6.1 million and loss per share of
$0.16 (diluted) for the nine months
ended June 30, 2019. Net loss for the
nine months ended June 30, 2020
reflects a $59.0 million non-cash and
non-recurring impairment of goodwill. Excluding such impairment of
goodwill, ALJ recognized a net loss of $9.7
million and loss per share of $0.23 (diluted) for the nine months ended
June 30, 2020. Most of the decrease
was due to lower margin from Faneuil revenue as a result of
inefficiencies related to the start of new contracts and
operational challenges related to the expansion of certain ongoing
contracts, and lower volumes at both Phoenix and Carpets, offset by a $5.2 million swing to a $1.0 million benefit from income taxes from a
$4.2 million provision for income
taxes.
- ALJ recognized adjusted EBITDA of $15.2
million for the nine months ended June 30, 2020, a decrease of $7.3 million, or 32.4%, compared to $22.5 million for the nine months ended
June 30, 2019. The decrease was a
result of operational inefficiencies from the startup of new
contracts, increased medical claims, increased reserves for
workers' compensation claims, and higher rent expense for new call
centers, offset by implementation activities at Faneuil, lower
component sales primarily related to education at Phoenix and lower volumes from builders and
fewer upgrades to higher margin products by builder customers at
Carpets.
- ALJ estimates net revenue for the three months ending
September 30, 2020 to be in the range
of $100.0 million to $107.0 million, compared to $89.0 million for the three months ended
September 30, 2019.
Jess Ravich, Chief Executive
Officer of ALJ, said, "Our quarterly results continue to improve at
Faneuil, which benefited from the recent addition of state
unemployment contracts and the finalization of certain contract
implementations which had a positive effect on the quarter.
We continue our focus on transforming Faneuil's operations by
shedding unprofitable contracts and increasing prices on existing
contracts in order to generate EBITDA margins that are consistently
in the high single digits. Results from Phoenix continued to be below prior year, but
we are encouraged by the pickup in business activity at our
production facilities as of mid-June. Due in large part to
our improving financial performance, we ended the quarter with over
$22.0 million in liquidity, which is
nearly double our liquidity a year ago. This increased liquidity
allows us to continue our growth as we enter our seasonal ramp up
at Faneuil. We are proud of our over 6,500 employees for their hard
work and dedication during this worldwide pandemic."
|
|
Three Months Ended
June 30,
|
|
|
|
|
|
Amounts in
thousands, except per share amounts
|
|
2020
|
|
|
2019
|
|
|
$ Change
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
Net
revenue
|
|
$
|
95,354
|
|
|
$
|
84,225
|
|
|
$
|
11,129
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
|
75,084
|
|
|
|
68,857
|
|
|
|
6,227
|
|
Selling, general, and
administrative expense
|
|
|
20,408
|
|
|
|
16,210
|
|
|
|
4,198
|
|
(Gain) loss on
disposal of assets and other gain, net
|
|
|
(297)
|
|
|
|
2
|
|
|
|
(299)
|
|
Total operating
expenses
|
|
|
95,195
|
|
|
|
85,069
|
|
|
|
10,126
|
|
Operating income
(loss)
|
|
|
159
|
|
|
|
(844)
|
|
|
|
1,003
|
|
Other (expense)
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(2,568)
|
|
|
|
(2,701)
|
|
|
|
133
|
|
Total other
expense, net
|
|
|
(2,568)
|
|
|
|
(2,701)
|
|
|
|
133
|
|
Loss before income
taxes
|
|
|
(2,409)
|
|
|
|
(3,545)
|
|
|
|
1,136
|
|
Provision for income
taxes
|
|
|
(250)
|
|
|
|
(3,662)
|
|
|
|
3,412
|
|
Net
loss
|
|
$
|
(2,659)
|
|
|
$
|
(7,207)
|
|
|
$
|
4,548
|
|
Loss per share of
common stock–basic and diluted
|
|
$
|
(0.06)
|
|
|
$
|
(0.19)
|
|
|
|
|
|
Weighted average
shares of common stock outstanding–
basic
and diluted
|
|
|
42,173
|
|
|
|
38,026
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
June 30,
|
|
|
|
|
|
Amounts in
thousands, except per share amounts
|
|
2020
|
|
|
2019
|
|
|
$ Change
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
Net
revenue
|
|
$
|
281,845
|
|
|
$
|
266,005
|
|
|
$
|
15,840
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
|
229,573
|
|
|
|
212,160
|
|
|
|
17,413
|
|
Selling, general, and
administrative expense
|
|
|
55,485
|
|
|
|
47,946
|
|
|
|
7,539
|
|
Impairment of
goodwill
|
|
|
59,047
|
|
|
|
—
|
|
|
|
59,047
|
|
Gain on disposal of
assets and other gain, net
|
|
|
(295)
|
|
|
|
(221)
|
|
|
|
(74)
|
|
Total operating
expenses
|
|
|
343,810
|
|
|
|
259,885
|
|
|
|
83,925
|
|
Operating (loss)
income
|
|
|
(61,965)
|
|
|
|
6,120
|
|
|
|
(68,085)
|
|
Other (expense)
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(7,976)
|
|
|
|
(8,041)
|
|
|
|
65
|
|
Interest from legal
settlement
|
|
|
200
|
|
|
|
—
|
|
|
|
200
|
|
Total other
expense, net
|
|
|
(7,776)
|
|
|
|
(8,041)
|
|
|
|
265
|
|
Loss before income
taxes
|
|
|
(69,741)
|
|
|
|
(1,921)
|
|
|
|
(67,820)
|
|
Benefit from
(provision for) income taxes
|
|
|
1,007
|
|
|
|
(4,152)
|
|
|
|
5,159
|
|
Net
loss
|
|
$
|
(68,734)
|
|
|
$
|
(6,073)
|
|
|
$
|
(62,661)
|
|
Loss per share of
common stock–basic and diluted
|
|
$
|
(1.63)
|
|
|
$
|
(0.16)
|
|
|
|
|
|
Weighted average
shares of common stock outstanding–
basic
and diluted
|
|
|
42,173
|
|
|
|
38,034
|
|
|
|
|
|
Results for Faneuil
Anna Van Buren, CEO of Faneuil,
stated, "Third quarter revenue improved by 37.4% over the prior
year due in part to several new contracts supporting unemployment
claimants in multiple states. Adjusted EBITDA results also
improved significantly with the additional growth throughout the
quarter. The majority of our staff have successfully
transitioned to a work-from-home environment and, by the end of the
quarter, all clients affected by the pandemic had resumed
operations."
Faneuil recognized net revenue of $61.5
million for the three months ended June 30, 2020 compared to $44.8 million for the three months ended
June 30, 2019. Net revenue
increased $16.8 million, or 37.4%,
due to a $23.6 million increase in
new customer contracts, offset by a $3.6
million reduction driven by the completion of customer
contracts and a $3.2 million net
decrease in existing customers mostly due to lower call
volumes. Faneuil recognized net revenue of $58.8 million for the three months ended
March 31, 2020.
Faneuil segment adjusted EBITDA was $4.3
million for the three months ended June 30, 2020 compared to $0.5 million for the three months ended
June 30, 2019. Segment adjusted
EBITDA increased $3.7 million, or
723.0%, driven by the ramp up of new state unemployment contracts,
and the completion of certain deliverables related to the
implementation of new contracts. Faneuil segment adjusted EBITDA
was $1.4 million for the three months
ended March 31, 2020.
Faneuil recognized net revenue of $178.9
million for the nine months ended June 30, 2020 compared to $146.6 million for the nine months ended
June 30, 2019. Net revenue
increased $32.4 million, or 22.1%,
due to a $43.1 million increase in
new customer contracts, offset by a $6.7
million net decrease in existing customers mostly due to
lower call volumes and a $4.0 million
reduction driven by the completion of customer contracts.
Faneuil segment adjusted EBITDA was $7.3
million for the nine months ended June 30, 2020 compared to $8.3 million for the nine months ended
June 30, 2019. Segment adjusted
EBITDA decreased $1.0 million, or
11.7%, driven by operational inefficiencies from the start of new
contracts, increased medical claims, increased reserves for
workers' compensation claims, and higher rent expense for new call
centers.
Faneuil estimates its net revenue for the three months ending
September 30, 2020 to be in the range
of $63.0 million to $67.0 million, compared to $50.2 million for the three months ended
September 30, 2019.
Faneuil's contract backlog expected to be realized within the
next twelve months as of June 30,
2020 was $250.6 million,
compared to $202.3 million as of
June 30, 2019 and $225.6 million as of March
31, 2020. Faneuil's total contract backlog as of
June 30, 2020 was $642.0 million as compared to $495.0 million as of June
30, 2019 and $607.2 million as
of March 31, 2020.
Results for Carpets
Steve Chesin, CEO of Carpets
stated, "Our results continue to be impacted by lower volumes,
unfavorable customer mix, and lower than anticipated upgrades from
customers due to increased pricing for housing in the Southern Nevada market versus prior year.
Revenues compared to the prior quarter ended March 31, 2020 declined by $1.3 million and adjusted EBITDA remained steady
due to a constant focus on cost containment. The pandemic and
how and when it will end throughout the state, country and the
world has added uncertainty to the Southern Nevada marketplace. Carpets continues
to expand its customer base to other areas to lessen the impact of
a slowdown in the new home construction division."
Carpets recognized net revenue of $9.3
million for the three months ended June 30, 2020 compared to $12.8 million for the three months ended
June 30, 2019. Net revenue
decreased $3.5 million, or 27.3%,
which was primarily attributable to lower volumes from floorings,
cabinets, and granite. The decrease in volumes from large
builders was somewhat offset by the increased volumes from
commercial customers as a result of Carpets' efforts to attract and
service multi-family construction projects. Carpets recognized net
revenue of $10.5 million for the
three months ended March 31,
2020.
Carpets recognized segment adjusted EBITDA of less than
$0.1 million for the three months
ended June 30, 2020 compared
$0.5 million for the three months
ended June 30, 2019. Segment adjusted
EBITDA decreased $0.4 million, or
92.5%, due to lower overall volumes. Carpets recognized
segment adjusted EBITDA of $0.1
million for the three months ended March 31, 2020.
Carpets recognized net revenue of $29.6
million for the nine months ended June 30, 2020 compared to $37.2 million for the nine months ended
June 30, 2019. Net revenue
decreased $7.6 million, or 20.5%,
which was primarily attributable to lower volumes from floorings,
cabinets, and granite.
Carpets segment adjusted EBITDA for the nine months ended
June 30, 2020 was less than
$0.1 million compared to segment
adjusted EBITDA of $0.9 million for
the nine months ended June 30,
2019. Segment adjusted EBITDA decreased $0.9 million, or 98.6%, due to lower
volumes.
Carpets estimates its net revenue for the three months ending
September 30, 2020 to be in the range
of $9.0 million to $10.0 million, compared to $11.8 million for the three months ended
September 30, 2019.
Carpets total backlog, which is expected to be fully realized
within the next 12 months, as of June 30,
2020 was $8.0 million compared
to $11.0 million as of June 30, 2019 and $8.3
million as of March 31,
2020.
Results for Phoenix
Marc Reisch, CEO of Phoenix, stated, "The $2.1 million decrease in our fiscal third quarter
revenues, versus prior year, was due to lower component sales,
offset in part by higher sales of children's books and labels. The
decrease of $1.1 million of segment
adjusted EBITDA for the quarter, versus prior year, was due to the
lower total revenues. The decrease in component revenues was
primarily due to the ongoing industry-wide slowdown for education
book components that is expected to continue into the fourth fiscal
quarter. Trade book component sales were soft in April and May, but
improved in the month of June, and have further strengthened thus
far in the fourth quarter. Third quarter revenues benefitted
from a strategic supply agreement, signed in the second quarter,
that significantly increased annual sales with a major customer.
Year over year quarterly sales increases are expected from that
customer for the next three quarters."
Phoenix recognized net revenue
of $24.6 million for the three months
ended June 30, 2020 compared to
$26.7 million for the three months
ended June 30, 2019. Net revenue
decreased $2.1 million, or 8.0%, due
to lower component sales primarily related to education.
Phoenix recognized net revenue of
$26.7 million for the three months
ended March 31, 2020.
Phoenix recognized segment
adjusted EBITDA of $3.8 million for
the three months ended June 30, 2020
compared to $4.9 million for the
three months ended June 30, 2019.
Segment adjusted EBITDA decreased by $1.1
million, or 22.9%, as a result of decreased component sales
primarily related to education. Phoenix recognized segment adjusted EBITDA of
$4.2 million for the three months
ended March 31, 2020.
Phoenix recognized net revenue
of $73.3 million for the nine months
ended June 30, 2020 compared to
$82.2 million for the nine months
ended June 30, 2019. Net revenue
decreased $8.9 million, or 10.8%, due
to several large orders during the nine months ended June 30, 2019 that did not reoccur during the
nine months ended June 30, 2020 and
lower component sales primarily related to education.
Phoenix recognized segment
adjusted EBITDA of $10.8 million for
the nine months ended June 30, 2020
compared to $15.4 million for the
nine months ended June 30, 2019.
Segment adjusted EBITDA decreased by $4.7
million, or 30.2%, as a result of the decrease in components
sales primarily related to education and a higher bad debt
allowance. Although production labor decreased in response to the
decreased volumes, the decrease in production labor did not keep
pace with the decreased volumes.
Phoenix estimates its net
revenue for the three months ending September 30, 2020 to be in the range of
$28.0 million to $30.0 million, compared to $27.0 million for the three months ended
September 30, 2019.
Phoenix's contract backlog
expected to be realized within the next twelve months as of
June 30, 2020 was $64.4 million, compared to $71.4 million as of June
30, 2019 and $70.7 million as
of March 31, 2020. Phoenix's total contract backlog as of
June 30, 2020 was $302.8 million as compared to $187.3 million as of June
30, 2019 and $313.6 million as
of March 31, 2020.
Non-GAAP Financial Measures
In our earnings releases, prepared remarks, conference calls,
presentations, and webcasts, we may present certain adjusted
financial measures that are not calculated according to generally
accepted accounting principles in the
United States ("GAAP"). These non-GAAP financial measures
are designed to complement the GAAP financial information presented
in this release because management believes they present
information regarding ALJ that is useful to investors. The non-GAAP
financial measures presented should not be considered in isolation
from, or as a substitute for, the comparable GAAP financial
measure.
We present adjusted EBITDA because we believe it is frequently
used by analysts, investors, and other interested parties in the
evaluation of our company. ALJ defines segment adjusted
EBITDA as segment net income (loss) before depreciation and
amortization expense, interest expense, litigation loss, recovery
of litigation loss, restructuring and cost reduction initiatives,
loan amendment expenses, fair value of warrants issued in
connection with loan amendments, stock-based compensation,
acquisition-related expenses, (loss) gain on disposal of assets and
other gain, net, provision for income taxes, and other
non-recurring items. Adjusted EBITDA measures are not
calculated in the same manner by all companies and, accordingly,
may not be an appropriate measure for comparison. Below are
reconciliations of our net loss, the most directly comparable GAAP
measure, to consolidated adjusted EBITDA:
|
|
Three Months Ended
June 30,
|
|
|
|
|
|
Amounts in
thousands
|
|
2020
|
|
|
2019
|
|
|
$ Change
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
Net
loss
|
|
$
|
(2,659)
|
|
|
$
|
(7,207)
|
|
|
$
|
4,548
|
|
Depreciation and
amortization expense
|
|
|
4,937
|
|
|
|
5,598
|
|
|
|
(661)
|
|
Interest
expense
|
|
|
2,568
|
|
|
|
2,701
|
|
|
|
(133)
|
|
Restructuring and cost
reduction initiatives
|
|
|
1,005
|
|
|
|
139
|
|
|
|
866
|
|
Change in fair value
of contingent and deferred
consideration
|
|
|
900
|
|
|
|
—
|
|
|
|
900
|
|
Bank fees accreted to
term loan
|
|
|
300
|
|
|
|
—
|
|
|
|
300
|
|
Provision for income
taxes
|
|
|
250
|
|
|
|
3,662
|
|
|
|
(3,412)
|
|
Acquisition-related
expense
|
|
|
—
|
|
|
|
85
|
|
|
|
(85)
|
|
Stock-based
compensation
|
|
|
89
|
|
|
|
185
|
|
|
|
(96)
|
|
Loan amendment
expense
|
|
61
|
|
|
|
—
|
|
|
|
61
|
|
(Gain) loss on
disposal of assets and other gain,
net
|
|
|
(297)
|
|
|
|
2
|
|
|
|
(299)
|
|
Consolidated
Adjusted EBITDA
|
|
$
|
7,154
|
|
|
$
|
5,165
|
|
|
$
|
1,989
|
|
|
|
|
|
Nine Months Ended
June 30,
|
|
|
|
|
|
Amounts in
thousands
|
|
2020
|
|
|
2019
|
|
|
$ Change
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
Net
loss
|
|
$
|
(68,734)
|
|
|
$
|
(6,073)
|
|
|
$
|
(62,661)
|
|
Impairment of
goodwill
|
|
|
59,047
|
|
|
|
—
|
|
|
|
59,047
|
|
Depreciation and
amortization expense
|
|
|
15,097
|
|
|
|
14,881
|
|
|
|
216
|
|
Interest
expense
|
|
|
7,976
|
|
|
|
8,041
|
|
|
|
(65)
|
|
Restructuring and cost
reduction initiatives
|
|
|
1,795
|
|
|
|
742
|
|
|
|
1,053
|
|
Change in fair value
of contingent and deferred
consideration
|
|
|
900
|
|
|
|
—
|
|
|
|
900
|
|
Fair value of warrants
issued in connection with
loan amendments
|
|
|
716
|
|
|
|
—
|
|
|
|
716
|
|
Loan amendment
expense
|
|
|
475
|
|
|
|
337
|
|
|
|
138
|
|
Stock-based
compensation
|
|
|
312
|
|
|
|
556
|
|
|
|
(244)
|
|
Bank fees accreted to
term loan
|
|
|
300
|
|
|
|
—
|
|
|
|
300
|
|
Acquisition-related
expense
|
|
|
99
|
|
|
|
97
|
|
|
|
2
|
|
Gain on disposal of
assets and other gain,
net
|
|
|
(295)
|
|
|
|
(221)
|
|
|
|
(74)
|
|
Interest from legal
settlement
|
|
|
(200)
|
|
|
|
—
|
|
|
|
(200)
|
|
(Benefit from)
provision for income taxes
|
|
|
(1,007)
|
|
|
|
4,152
|
|
|
|
(5,159)
|
|
Recovery of litigation
loss
|
|
|
(1,256)
|
|
|
|
—
|
|
|
|
(1,256)
|
|
Consolidated
Adjusted EBITDA
|
|
$
|
15,225
|
|
|
$
|
22,512
|
|
|
$
|
(7,287)
|
|
Supplemental Consolidated Financial Information - Segment Net
Revenue, Segment Adjusted EBITDA, and Debt
|
|
Three Months Ended
June 30,
|
|
|
|
|
|
|
|
|
|
Amounts in
thousands
|
|
2020
|
|
|
2019
|
|
|
$ Change
|
|
|
% Change
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Segment Net
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Faneuil
|
|
$
|
61,523
|
|
|
$
|
44,773
|
|
|
$
|
16,750
|
|
|
|
37.4
|
%
|
Carpets
|
|
|
9,277
|
|
|
|
12,763
|
|
|
|
(3,486)
|
|
|
|
(27.3)
|
%
|
Phoenix
|
|
|
24,554
|
|
|
|
26,689
|
|
|
|
(2,135)
|
|
|
|
(8.0)
|
%
|
Total Segment Net
Revenue
|
|
$
|
95,354
|
|
|
$
|
84,225
|
|
|
$
|
11,129
|
|
|
|
13.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
|
|
|
|
|
|
Amounts in
thousands
|
|
2020
|
|
|
2019
|
|
|
$ Change
|
|
|
% Change
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Faneuil
|
|
$
|
4,263
|
|
|
$
|
518
|
|
|
$
|
3,745
|
|
|
|
723.0
|
%
|
Carpets
|
|
|
36
|
|
|
|
478
|
|
|
|
(442)
|
|
|
|
(92.5)
|
%
|
Phoenix
|
|
|
3,761
|
|
|
|
4,881
|
|
|
|
(1,120)
|
|
|
|
(22.9)
|
%
|
Corporate
|
|
|
(906)
|
|
|
|
(712)
|
|
|
|
(194)
|
|
|
|
(27.2)
|
%
|
Total Segment
Adjusted EBITDA
|
|
$
|
7,154
|
|
|
$
|
5,165
|
|
|
$
|
1,989
|
|
|
|
38.5
|
%
|
|
|
|
|
Nine Months Ended
June 30,
|
|
|
|
|
|
|
|
|
|
Amounts in
thousands
|
|
2020
|
|
|
2019
|
|
|
$ Change
|
|
|
% Change
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Segment Net
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Faneuil
|
|
$
|
178,915
|
|
|
$
|
146,565
|
|
|
$
|
32,350
|
|
|
|
22.1
|
%
|
Carpets
|
|
|
29,599
|
|
|
|
37,213
|
|
|
|
(7,614)
|
|
|
|
(20.5)
|
%
|
Phoenix
Color
|
|
|
73,331
|
|
|
|
82,227
|
|
|
|
(8,896)
|
|
|
|
(10.8)
|
%
|
Total Segment Net
Revenue
|
|
$
|
281,845
|
|
|
$
|
266,005
|
|
|
$
|
15,840
|
|
|
|
6.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
June 30,
|
|
|
|
|
|
|
|
|
|
Amounts in
thousands
|
|
2020
|
|
|
2019
|
|
|
$ Change
|
|
|
% Change
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Faneuil
|
|
$
|
7,288
|
|
|
$
|
8,257
|
|
|
$
|
(969)
|
|
|
|
(11.7)
|
%
|
Carpets
|
|
|
13
|
|
|
|
910
|
|
|
|
(897)
|
|
|
|
(98.6)
|
%
|
Phoenix
Color
|
|
|
10,779
|
|
|
|
15,437
|
|
|
|
(4,658)
|
|
|
|
(30.2)
|
%
|
Corporate
|
|
|
(2,855)
|
|
|
|
(2,092)
|
|
|
|
(763)
|
|
|
|
(36.5)
|
%
|
Total Segment
Adjusted EBITDA
|
|
$
|
15,225
|
|
|
$
|
22,512
|
|
|
$
|
(7,287)
|
|
|
|
(32.4)
|
%
|
As of June 30, 2020 and
September 30, 2019, consolidated
total debt and consolidated net debt were comprised of the
following (exclusive of deferred financing costs):
|
|
June 30,
|
|
|
September 30,
|
|
Amounts in
thousands
|
|
2020
|
|
|
2019
|
|
|
|
(unaudited)
|
|
|
|
|
|
Term loan
payable
|
|
$
|
80,179
|
|
|
$
|
81,082
|
|
Line of
credit
|
|
|
15,791
|
|
|
|
9,823
|
|
Equipment financing
agreements
|
|
|
4,093
|
|
|
|
3,101
|
|
Capital
leases
|
|
|
6,111
|
|
|
|
5,158
|
|
Total
debt
|
|
|
106,174
|
|
|
|
99,164
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
7,393
|
|
|
|
4,529
|
|
Net
debt
|
|
$
|
98,781
|
|
|
$
|
94,635
|
|
As of June 30, 2020, ALJ was in
compliance with all debt covenants.
|
|
Financial Covenants Compliance
|
|
|
June 30,
2020
|
|
|
(actual)
|
|
|
(required)
|
Leverage
Ratio
|
|
4.68
|
|
|
< 7.45
|
Fixed Charges
Ratio
|
|
0.98
|
|
|
> 0.63
|
Investor Conference Call Details
ALJ will host an investor conference call on August 20, 2020 at 4:30 PM
Eastern Standard Time. Participants should dial in 10
minutes prior to the start time by using the following dial-in
information and Conference ID/Passcode:
Participant Toll-Free
Dial-In Number:
|
(877) 870
4263
|
Participant
International Dial-In Number:
|
(412) 317
0790
|
Conference
ID/Passcode:
|
ALJ Regional
Holdings, Inc.
|
Participants can also access ALJ's investor conference call
using the following webcast URL:
https://www.webcaster4.com/Webcast/Page/2172/35696. A playback of
the investor conference call will be available within 24 hours
using the same webcast URL.
About ALJ Regional Holdings, Inc.
ALJ Regional Holdings, Inc. is the parent company of (i)
Faneuil, Inc., a leading provider of call center services, back
office operations, staffing services, and toll collection services
to commercial and governmental clients across the United States, (ii) Floors-N-More, LLC,
d/b/a Carpets N' More, one of the largest floor covering retailers
in Las Vegas, Nevada, and a
provider of multiple products for the commercial, retail, and home
builder markets including all types of flooring, countertops, and
cabinets, and (iii) Phoenix Color Corp., a leading manufacturer of
book components, educational materials, and related products
producing value-added components, heavily illustrated books, and
specialty commercial products using a broad spectrum of materials
and decorative technologies.
Forward-Looking Statements
ALJ's third quarter ended June 30,
2020 earnings release and related communications contain
forward-looking statements within the meaning of federal securities
laws. Such statements include information regarding our
expectations, impact of COVID-19, goals or intentions regarding the
future, including but not limited to statements about our financial
projections and business growth, our plans to reduce capital
expenditures and deleverage our balance sheet, our ability to
achieve target adjusted EBITDA margins on customer contracts, the
impact of new customer contracts for Faneuil, the impact of new
Faneuil contracts on Faneuil's financial results and other
statements including the words "will," "anticipate," and "expect"
and similar expressions. You should not place undue reliance
on these statements, as they involve certain risks and
uncertainties, and actual results or performance may differ
materially from those discussed in any such statement. Factors that
could cause actual results to differ materially are discussed in
our annual report on Form 10-K and quarterly reports on Form 10-Q
filed with the Securities and Exchange Commission and available
through EDGAR on the SEC's website at www.sec.gov.
All forward-looking statements in this release are made as of
the date hereof and we assume no obligation to update any
forward-looking statement.
View original
content:http://www.prnewswire.com/news-releases/alj-regional-holdings-inc-announces-earnings-for-the-third-quarter-ended-june-30-2020-301110994.html
SOURCE ALJ Regional Holdings, Inc.