ALJ Regional Holdings, Inc. Announces Earnings For The First Quarter Ended December 31, 2015 And Filing Of Registration Statement On Form 10

Feb 16, 2016, 07:30 ET from ALJ Regional Holdings, Inc.

NEW YORK, Feb. 16, 2016 /PRNewswire/ -- ALJ Regional Holdings, Inc. (Pink Sheets: ALJJ) ("ALJ") announced results today for our first quarter ended December 31, 2015 and the filing of a registration statement on Form 10 with the U.S. Securities and Exchange Commission (the "SEC") in anticipation of listing ALJ common stock on a national securities exchange.

Results for First Quarter Ended December 31, 2015

ALJ acquired Faneuil, Inc. ("Faneuil") in October 2013, Floors-N-More, LLC, dba Carpets N' More ("Carpets") in April 2014 and Phoenix Color Corp. ("Phoenix") in August 2015. Faneuil is a leading provider of call center services, back office operations, staffing services, and toll collection services to government and regulated commercial 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, cabinets, window coverings and garage/closet organizers, with five retail locations, as well as a stone and solid surface fabrication facility. 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.

Our financial statements reflect the full operations of Faneuil from October 18, 2013, Carpets from April 1, 2014 and Phoenix from August 9, 2015.

Investment Highlights

Results for ALJ for First Quarter

  • ALJ recognized consolidated revenue of $64.8 million for the three months ended December 31, 2015 compared to $49.9 million for the three months ended December 31, 2014 and $58.2 million for the three months ended September 30, 2015.
  • ALJ recognized adjusted EBITDA of $5.8 million for the three months ended December 31, 2015 compared to $4.9 million for the three months ended December 31, 2014 and $6.3 million for the three months ended September 30, 2015.
  • ALJ posted net income of $0.3 million and earnings per share (EPS) of $0.01 (diluted) for the three months ended December 31, 2015 compared to net income of $2.9 million and EPS of $0.08 (diluted) for the three months ended December 31, 2014 and net income of $6.4 million and EPS of $0.18 (diluted) for the three months ended September 30, 2015.

Results for Faneuil for First Quarter

  • Faneuil recognized revenue of $33.8 million for the three months ended December 31, 2015 compared to $40.7 million for the three months ended December 31, 2014 and $30.3 million for the three months ended September 30, 2015.
  • Faneuil recognized adjusted EBITDA of $2.8 million for the three months ended December 31, 2015 compared to $5.4 million for the three months ended December 31, 2014 and $2.5 million for the three months ended September 30, 2015.
  • Faneuil estimates its revenue for the three months ending March 31, 2016 to be in the range of $29.3 million to $32.5 million, compared to $42.4 million for the three months ending March 31, 2015.

Results for Carpets for First Quarter

  • Carpets recognized revenue of $11.7 million for the three months ended December 31, 2015 compared to $9.1 million for the three months ended December 31, 2014 and $12.1 million for the three months ended September 30, 2015.
  • Carpets recognized adjusted EBITDA of ($0.1) million for the three months ended December 31, 2015 compared to ($0.1) million for the three months ended December 31, 2014 and $0.2 million for the three months ended September 30, 2015.
  • Carpets estimates its revenue for the three months ending March 31, 2016 to be in the range of $10.2 million to $11.3 million, compared to $10.8 million for the three months ending March 31, 2015.

Results for Phoenix for First Quarter

  • Phoenix recognized revenue of $19.3 million for the three months ended December 31, 2015 compared to $15.8 million for the 52 days ended September 30, 2015.  Phoenix was acquired on August 9, 2015 and therefore no comparable numbers for prior periods are presented.
  • Phoenix recognized adjusted EBITDA of $4.2 million for the three months ended December 31, 2015 compared to $4.7 million for the 52 days ended September 30, 2015.  Phoenix was acquired on August 9, 2015 and therefore no comparable numbers for prior periods are presented.
  • Phoenix estimates its revenue for the three months ending March 31, 2016 to be in the range of $19.4 million to $21.5 million.

ALJ Regional Holdings, Inc.

(in thousands, except share and per share)

Three Months ended December 31,

2015

2014

Net revenue

$

64,797

$

49,864

Net income

$

324

$

2,883

Net income per share (Basic)

$

0.01

$

0.09

Net income per share (Diluted)

$

0.01

$

0.08

Shares outstanding (Basic)

35,003,212

31,278,660

Shares outstanding (Diluted)

36,172,821

34,190,071

Jess Ravich, Executive Chairman of ALJ, said, "On February 2, 2015, we filed a Form 10 Registration Statement with the U.S. Securities and Exchange Commission, so that we can uplist our stock to a national securities exchange. We felt that this was a good time to make the investment to uplist our stock, as it will provide better access to our stock.  In connection with this transaction, we incurred one-time costs of $0.7 million, of which $0.4 million were related to this quarter."

"Faneuil's revenues and (adjusted) EBITDA increased over the prior quarter, as our health care contracts ramped up," said Anna Van Buren, CEO of Faneuil. She further stated, "During the first two quarters of our fiscal year, we are experiencing an increase in health care revenues, as we assist in getting the public access to medical coverage."

Regarding Carpets, Steve Chesin, CEO of Carpets, noted, "Our revenues within the Carpets segment continue to be strong.  The investment in our infrastructure, in the Cabinet and Granite divisions, have proven to be effective in increasing our contract wins, resulting in higher revenues."  He went on to say, "Our focus for the next two quarters will be to reduce overhead expenses and drive operating margins higher."

"We are pleased with our first five months results since joining ALJ.  Phoenix continues to effectively manage its costs to deliver consistent year over year EBITDA performance," said Marc Reisch, Executive Chairman of Phoenix Color.

Form 10 Registration Statement and Audited Financial Statements for 2015 and Annual Report

On February 2, 2016, we filed a Form 10 Registration Statement ("Form 10") with the SEC to register ALJ common stock under the Securities Exchange Act of 1934 ("Exchange Act").  Our common stock must be registered under the Exchange Act in order for our stock to be listed on a national securities exchange. Once the SEC approves our Form 10, we intend to pursue a listing on either NASDAQ or the New York Stock Exchange. The Form 10 contains important information about our business, risk factors affecting our business and our financial information, including audited financial statements for the fiscal year ended September 30, 2015 and 2014, and management's discussion and analysis of our financial results.  A copy of the Form 10 is available on the SEC's EDGAR database.

Non-GAAP Financial Measures

In this release, we 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 we believe are 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 define adjusted EBITDA as net income before interest income and expense, income taxes, non-cash stock based compensation, depreciation and amortization. We present adjusted EBITDA because we believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of our company.  Adjusted EBITDA measures are not calculated in the same manner by all companies and, accordingly, may not be an appropriate measure for comparison.  A reconciliation of our adjusted EBITDA to operating income, the most directly comparable GAAP measure, can be obtained by subtracting depreciation and amortization and non-cash stock based compensation from ALJ adjusted EBITDA.  A reconciliation of Faneuil's, Carpets' and Phoenix's adjusted EBITDA to operating income, the most directly comparable GAAP measure, can be obtained by subtracting depreciation and amortization and non-cash stock based compensation from consolidated operating income.  Following is a reconciliation of consolidated operating income to consolidated adjusted EBITDA (in thousands):

Three Months ended December 31,

2015

2014

Consolidated operating income

$2,569

$3,440

Adjustments:

    Depreciation and amortization expense

3,130

1,430

    Stock-based compensation expense

98

36

Consolidated adjusted EBITDA

$5,797

$4,906

About ALJ Regional Holdings, Inc.

ALJ Regional Holdings, Inc. is the parent company of Faneuil, Inc., a leading provider of outsourcing and co-sourced services to both commercial and government entities in the healthcare, utility, toll and transportation industries; Floors-N-More, LLC, dba Carpets N' More, one of the largest floor covering retailers in Las Vegas and a provider of multiple finishing products for commercial, retail and home builder markets including all types of flooring, countertops, cabinets, window coverings and garage/closet organizers, with five retail locations; and 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.

This press release contains forward-looking statements. Such statements include information regarding our expectations, goals or intentions regarding the future, including but not limited to statements about our financial projections, business growth, Exchange Act registration, the timing, feasibility and business impact of the listing of ALJ common stock on a national securities exchange, and other statements including the words "believe," "anticipate," "intend," "expect," "will" 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 Form 10 filed with the U.S. 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.

 

SOURCE ALJ Regional Holdings, Inc.