Market Overview

ALJ Regional Holdings, Inc. Announces Earnings For The Second Quarter Ended March 31, 2019

Share:

NEW YORK, May 13, 2019 /PRNewswire/ -- ALJ Regional Holdings, Inc. (NASDAQ:ALJJ) ("ALJ") announced results today for its second quarter ended March 31, 2019. 

ALJ is a holding company, whose primary assets are its subsidiaries 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 Six Months Ended March 31, 2019

Consolidated Results for ALJ

  • ALJ recognized consolidated net revenue of $88.0 million for the three months ended March 31, 2019, a decrease of $7.1 million, or 7.5%, compared to $95.1 million for the three months ended March 31, 2018. The decrease was primarily driven by lower sales volumes in cabinets, flooring, and countertops at Carpets, offset somewhat by Component sales at Phoenix. ALJ recognized consolidated net revenue of $93.8 million for the three months ended December 31, 2018.
  • ALJ recognized net income of $0.4 million and income per share of $0.01 (diluted) for the three months ended March 31, 2019, compared to net loss of $0.3 million and loss per share of $0.01 (diluted) for the three months ended March 31, 2018. Decreased net revenue was offset by reduced selling, general and administrative expenses that reflect the completion of combining manufacturing facilities at Phoenix and process improvements and cost reductions at Carpets. ALJ recognized net income of $0.7 million and income per share of $0.02 (diluted) for the three months ended December 31, 2018.
  • ALJ recognized adjusted EBITDA of $8.7 million for the three months ended March 31, 2019, an increase of $1.1 million, or 15.1%, compared to $7.6 million for the three months ended March 31, 2018. The increase was driven by process improvements and cost reductions at Carpets, and higher sales and lower operational expenses at Phoenix. ALJ recognized adjusted EBITDA of $8.6 million for the three months ended December 31, 2018.
  • ALJ recognized consolidated net revenue of $181.8 million for the six months ended March 31, 2019, a decrease of $8.3 million, or 4.4%, compared to $190.1 million for the six months ended March 31, 2018. The decrease was driven by lower sales volumes in cabinets, flooring, and countertops at Carpets, offset somewhat by new customer contracts at Faneuil.
  • ALJ recognized net income of $1.1 million and income per share of $0.03 (diluted) for the six months ended March 31, 2019, compared to net loss of $5.7 million and loss per share of $0.15 (diluted) for the six months ended March 31, 2018. Decreased net revenue was offset by reduced selling, general and administrative expenses that reflect the completion of combining manufacturing facilities at Phoenix, new customer contracts and lower legal expenses at Faneuil, and process improvements and cost reductions at Carpets, and decreased provision for income taxes to reflect a one-time, non-cash deferred income tax expense of $4.1 million as a result of the Tax Cuts and Jobs Act of 2017 recorded during the six months ended March 31, 2018. Excluding such deferred income tax expense, ALJ recognized net loss of $1.6 million and loss per share of $0.04 (diluted) for the six months ended March 31, 2018.
  • ALJ recognized adjusted EBITDA of $17.3 million for the six months ended March 31, 2019, an increase of $3.2 million, or 22.3%, compared to $14.2 million for the six months ended March 31, 2018. The increase was driven by process improvements and cost reductions at Carpets, and new customer contracts and lower legal expenses at Faneuil.
  • ALJ estimates consolidated net revenue for the three months ending June 30, 2019 to be in the range of $81.0 million to $89.9 million, compared to $89.7 million for the three months ended June 30, 2018.

Jess Ravich, Executive Chairman of ALJ, said, "Second quarter adjusted EBITDA was above prior year mainly due to increased volume at Phoenix for Components.  ALJ continues to invest in and support its core business segments, Phoenix and Faneuil, for long-term growth.  In this regard, Faneuil is in the final stages of completing its three call center buildout program.  Faneuil expects new customer contract ramp ups to occur during the last six months of calendar 2019.  Total backlog for Faneuil as of March 31, 2019 was $403.4 million compared to $254.4 million at March 31, 2018, which is indicative of Faneuil's large new contracts.  Adjusted EBITDA margin improved to 9.5% for the six months ended March 31, 2019 compared 7.5% for the six months ended March 31, 2018.  Adjusted EBITDA margin improved to 10.0% for the trailing 12 months ended March 31, 2019 compared 8.4% for the trailing 12 months ended March 31, 2018."



Three Months Ended
March 31,










Amounts in thousands, except per share amounts


2019



2018



$ Change



% Change




(unaudited)



(unaudited)










Net revenue


$

87,996



$

95,105



$

(7,109)




(7.5%)


Costs and expenses:

















Cost of revenue



67,739




74,239




(6,500)




(8.8%)


Selling, general and administrative expense



17,007




18,822




(1,815)




(9.6%)


Disposal of assets and other gain






(25)




25




NM


Total operating expenses



84,746




93,036




(8,290)

View Comments and Join the Discussion!
 
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com