Alliance Distributors Holding Inc. Reports Fourth Quarter and Full Year 2009 Financial Results
NEW YORK, March 11 /PRNewswire-FirstCall/ -- Alliance Distributors Holding Inc. (Pink Sheets: ADTR.PK), a distributor of interactive video games and gaming products, today announced its financial results for the fourth quarter and full year ended December 31, 2009.
Net sales for the quarter decreased 8% to $24.6 million from $26.8 million in the fourth quarter of 2008. Net income was $328,000 in the fourth quarter of 2009, compared to $532,000 in the fourth quarter of 2008. Earnings in the fourth quarter of 2008 included a tax benefit of $110,000 resulting principally from the utilization of net operating loss carry forwards and realization of deferred tax assets. On a pre-tax basis, income before provision for income taxes increased to $535,000 in the fourth quarter of 2009 from $422,000 in the comparable 2008 period.
For the year ended December 31, 2009, net sales decreased 25% to $69.1 million, compared to $92.3 million for the same period in 2008. Net income was $657,000 for the year ended December 31, 2009, compared to $1,036,000 for the year ended December 31, 2008. Earnings in 2008 included a tax benefit of $84,000 resulting principally from the utilization of net operating loss carry forwards and realization of deferred tax assets. On a pre-tax basis, income before provision for income taxes increased 13% to nearly $1.1 million in 2009 compared to $952,000 in 2008.
Jay Gelman, Chairman and Chief Executive Officer, said, "We are pleased with our performance in spite of trying times in the overall economy coupled with significant challenges within the video game industry. Even with a 25% year over year decrease in revenue, we earned nearly $1.1 million for the year on a pre-tax basis, a 13% increase over 2008. Our commitment to bringing value offerings to our customers while continuing to forge better relationships with our suppliers allowed us to increase our gross profit as a percent of sales in 2009 by 38% over 2008. This strategy was especially significant in the fourth quarter where we were able to narrow our year over year revenue shortfall and outperform the industry during these months."
Gelman continued, "Additionally the October 2009 acquisition of Metaversal was an important strategic step to take for the future. Although we do not anticipate revenue impact from Metaversal during the next few quarters, we see digital downloadable content becoming more and more meaningful as the consumers slowly begins to shift their dollars into these purchases."
Timing of Conference Call with Q&A
Alliance Distributors will conduct an earnings conference call, including a question and answer period, at 3:00 PM ET today.
The call-in number for the conference call is:
888-631-5930 (confirmation code: 1464443)
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
(In thousands, except per share amounts)
Three Months ended Year ended
December 31, December 31,
(unaudited) (audited)
------------------ ---------------
2009 2008 2009 2008
---- ---- ---- ----
NET SALES $24,601 $26,804 $69,077 $92,311
COST OF GOODS SOLD 21,635 23,935 60,034 83,582
------ ------ ------ ------
GROSS PROFIT 2,966 2,869 9,043 8,729
OPERATING COSTS AND EXPENSES 2,317 2,299 7,513 7,197
----- ----- ----- -----
INCOME FROM OPERATIONS 649 570 1,530 1,532
Interest expense 114 148 453 580
--- --- --- ---
INCOME BEFORE PROVISION FOR
(BENEFIT FROM) INCOME TAXES 535 422 1,077 952
Provision for (benefit from)
income taxes 207 (110) 420 (84)
--- ---- --- ---
NET INCOME $328 $532 $657 $1,036
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Net income per share:
Basic and diluted $- $- $0.01 $0.02
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Weighted average common shares
outstanding:
Basic 52,883 53,075 52,883 52,965
====== ====== ====== ======
Diluted 52,883 53,282 52,883 53,449
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ALLIANCE DISTRIBUTORS HOLDING INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2009 and 2008
(audited; in thousands)
2009 2008
ASSETS
CURRENT ASSETS:
Cash and equivalents $1,002 $924
Accounts receivable-net 7,007 5,334
Inventory 6,154 7,262
Due from vendors 366 342
Prepaid expenses and other current assets 221 215
Deferred income taxes 260 263
--- ---
Total current assets 15,010 14,340
PROPERTY AND EQUIPMENT – NET 352 501
DEFERRED INCOME TAXES 181 178
OTHER ASSETS 119 88
--- ---
TOTAL $15,662 $15,107
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable – bank $5,577 $6,806
Accounts payable 5,364 4,630
Accrued expenses and other current liabilities 761 425
--- ---
Total current liabilities 11,702 11,861
DEFERRED LEASE OBLIGATIONS 37 50
LONG TERM OBLIGATIONS 5 -
STOCKHOLDERS' EQUITY 3,918 3,196
----- -----
TOTAL $15,662 $15,107
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COMMON SHARES OUTSTANDING 52,883 52,883
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ALLIANCE DISTRIBUTORS HOLDING INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2009 AND 2008
(audited, in thousands)
2009 2008
---- ----
OPERATING ACTIVITIES:
Net income $657 $1,036
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 220 204
Provision for doubtful accounts 190 115
Equity compensation expense 65 98
Deferred income taxes - (223)
Other 29 56
Changes in operating assets and liabilities-net 304 (552)
--- ----
Net cash provided by operating activities 1,465 734
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INVESTING ACTIVITIES:
Purchase of property and equipment (60) (99)
Acquisition of assets of Metaversal Studios (25) -
Note Receivable in connection with acquisition (30) -
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Net cash used in investing activities (115) (99)
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FINANCING ACTIVITIES:
Repayments of note payable, net of proceeds – bank (1,229) -
Proceeds from note payable, net of repayments – bank - 19
Payment of deferred financing costs (38) (45)
Payment of long-term obligations (5) (5)
--- ---
Net cash used in financing activities (1,272) (31)
------ ---
INCREASE IN CASH AND EQUIVALENTS 78 604
--- ---
CASH AND EQUIVALENTS, BEGINNING OF YEAR 924 320
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CASH AND EQUIVALENTS, END OF YEAR $1,002 $924
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SOURCE Alliance Distributors Holding Inc.
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