Alliance Distributors Holding Inc. Reports Fourth Quarter and Year End Financial Results

NEW YORK, Aug. 22, 2011 /PRNewswire/ -- Alliance Distributors Holding Inc. (Pink Sheets: ADTR), a distributor of interactive video games and gaming products, today announced its financial results for the three-month period and fiscal year ended June 30, 2011.

Net sales for the three months ended June 30, 2011 were $10.4 million, essentially flat with the comparable 2010 period.  Net income for the three months ended June 30, 2011 decreased to $8,000, compared to $62,000 for the comparable period in 2010.

For the fiscal year ended June 30, 2011, net sales decreased 19% to $57 million, compared to $70.5 million for the twelve-month period ended June 30, 2010. Net income decreased to $285,000 for the fiscal year ended June 30, 2011, compared to $740,000 for the twelve-month period ended June 30, 2010.

Jay Gelman, Chairman and Chief Executive Officer, said, "We continue to see a challenging landscape in the video game market. Lower hardware sales and a muted and disappointing release schedule of front line software titles persist in our industry. Our operating results also continue to be impacted by the costs of our Metaversal Studios game development subsidiary."

About Alliance Distributors Holding Inc.

Alliance Distributors Holding Inc. (www.alliancedistributors.com), which does business as Alliance Distributors, is a full-service wholesale videogame distributor, specializing in gaming products and accessories for all key manufacturers and 3rd party publishers. Alliance Distributors offers support on: PS3, PSP, PS2, X-Box 360, Wii, DS and GBA SP, peripherals and software titles. Alliance develops downloadable and social content video games through Metaversal Studios (www.metaversalstudios.com), which it wholly-owns.

Safe Harbor

Certain statements contained in this press release contain forward-looking statements including without limitation, statements concerning our operations, economic performance, and financial condition.  The words "estimate," "believe," "expect," "should" and "anticipate" and other similar expressions generally identify forward-looking statements, which speak only as of their dates.

Investors are cautioned that all forward-looking statements, which are based largely on our current expectations, involve risks and uncertainty. Actual results, events and circumstances (including future performance, results and trends) could differ materially from those set forth in such statements due to various factors, risks and uncertainties, including without limitation, risks associated with technological change, competitive factors and general economic conditions, including the related impact on discretionary consumer spending, changes in marketing and distribution strategies by manufacturers, continued shortages of new platform systems, timely development and release of video game products we produce, potential cost overruns in our development of video games, ability to protect our intellectual property rights, potential claims that we have infringed the intellectual property rights of others, market acceptance of games we develop, ability to realize anticipated benefits of acquisitions, potential undiscovered liabilities of companies that we acquire, changes in our business or growth strategy, the emergence of new or growing competitors, various other competitive and technological factors. There can be no assurance that the results referred to in the forward-looking statements contained in this release will occur. The Company has no duty and undertakes no obligation to update any forward-looking information, whether as a result of new information, future developments or otherwise.

ALLIANCE DISTRIBUTORS HOLDING INC. AND SUBSIDIARY

CONSOLIDATED INCOME STATEMENTS

THREE AND TWELVE MONTHS ENDED JUNE 30, 2011 AND 2010

(In thousands, except per share amounts)







Three Months


Twelve Months


2011

2010


2011

2010


Unaudited

Unaudited


Derived

from

Unaudited





audited

financial






statements








NET SALES

$10,410

$10,362


$  57,004

$  70,471







COST OF SALES

8,781

8,555


49,464

61,168







GROSS PROFIT

1,629

1,807


7,540

9,303







OPERATING COSTS AND EXPENSES

1,474

1,618


6,544

7,681







INCOME FROM OPERATIONS

155

189


996

1,662







Interest expense

147

108


532

431







INCOME BEFORE PROVISION FOR






 INCOME TAXES

8

81


464

1,191







Provision for income taxes

-

19


179

451







NET INCOME

$    8

$   62


$    285

$     740







Net income per share – basic and diluted

$      -

$      -


$   0.01

$   0.01







Weighted average common shares outstanding –






   Basic and Diluted

46,746

52,883


51,353

52,883



Certain 2010 amounts have been reclassified to conform to the 2011 presentation.  This reclassification includes a decrease to cost of sales and a corresponding increase in operating costs and expenses related to software development costs.



ALLIANCE DISTRIBUTORS HOLDING INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

JUNE 30, 2011 AND 2010

(in thousands)





JUNE 30,


2011

2010


Derived from audited


Financial statements




ASSETS






CURRENT ASSETS:



   Cash and equivalents

$    988

$    906

   Accounts receivable-net

3,457

3,909

   Inventory

6,581

5,849

   Advances to suppliers

153

257

   Prepaid expenses and other current assets

145

236

   Deferred income taxes

268

277




           Total current assets

11,592

11,434




PROPERTY AND EQUIPMENT – NET

153

318




DEFERRED INCOME TAXES

230

185




OTHER ASSETS

81

98




TOTAL

$12,056

$12,035




LIABILITIES AND STOCKHOLDERS' EQUITY






CURRENT LIABILITIES:



   Notes payable – bank

$ 5,589

$ 5,131

   Accounts payable

2,012

2,289

   Accrued expenses and other current liabilities

240

353




           Total current liabilities

7,841

7,773




LONG-TERM OBLIGATIONS

-

28




STOCKHOLDERS' EQUITY

4,215

4,234




TOTAL

$12,056

$12,035




COMMON SHARES OUTSTANDING

44,157

52,883




ALLIANCE DISTRIBUTORS HOLDING INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

TWELVE MONTHS ENDED JUNE 30, 2011 AND 2010

(in thousands)






2011

2010


Derived from

Unaudited


audited financial



statements


OPERATING ACTIVITIES:



   Net income

$    285

$    740

   Adjustments to reconcile net income to net cash provided by



       operating activities:



       Depreciation and amortization

223

236

       Provision for doubtful accounts

15

140

       Stock option compensation  expense

31

48

       Deferred income taxes

(36)

171

       Other

10

19

       Changes in operating assets and liabilities-net

(472)

(1,370)




           Net cash provided by (used in) operating activities

56

(16)




INVESTING ACTIVITIES:



   Purchase of property and equipment

(44)

(123)

   Acquisition of assets of Metaversal Studios, Inc.

-

(25)

   Note receivable in connection with acquisition

-

(30)




           Net cash used in investing activities

(44)

(178)




FINANCING ACTIVITIES:



   Proceeds from note payable, net of repayments – bank

458

323

   Purchase and retirement of common stock

(335)

-

   Payment of deferred financing costs

(38)

(38)

   Payment of long-term obligations

(15)

(15)




           Net cash provided by financing activities

70

270




INCREASE IN CASH AND EQUIVALENTS

82

76




CASH AND EQUIVALENTS, BEGINNING OF PERIOD

906

830




CASH AND EQUIVALENTS, END OF PERIOD

$   988

$   906







SOURCE Alliance Distributors Holding Inc.



RELATED LINKS
www.alliancedistributors.com

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