The following is a summary of the Alliance Entertainment Holding Corporation (AENT) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Alliance Entertainment reported a 7.3% decrease in Q3 2024 net revenues, totalling $211 million.

• Gross profit rose by 2.5% to $28 million in the same quarter, with gross profit margin improving from 12% to 13.3%.

• Net loss significantly decreased from $7.8 million in Q3 2023 to $3.4 million in Q3 2024.

• Adjusted EBITDA for Q3 2024 improved by $5.3 million, resulting in $2.9 million, a significant change from the $2.4 million loss in the same period of 2023.

• There was a notable decrease in Inventory and debt year-over-year.

Business Progress:

• Alliance is focusing its efforts on automating facilities and upgrading proprietary software to boost e-commerce distribution.

• The firm is evaluating four potential acquisitions and expecting growth in e-commerce.

• A new sorting technology, Sure Sort X, has been installed in their warehouse.

• A three-year, $120 million credit facility with White Oak Commercial Finance has been secured.

• Two major properties were shut down to reduce warehouse costs significantly in the 2025 fiscal year.

• Alliance Entertainment experienced decreased net revenues, due to lower liquidation product sales; however, more profitable sales have increased the profit margin.

• Partnership with major retailers for supply and direct-to-consumer fulfillment has been extended.

• The company is focusing on the increasing vinyl and K-pop music markets, live commerce, and digital video sales for future growth.

• A consolidation project aimed at retiring a legacy computer system is set to provide substantial cost savings in fiscal 2025.

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