ALJ Regional Holdings, Inc. (NASDAQ:ALJJ) Q4 2019 Earnings Conference Call - Final Transcript

Jan 16, 2020 • 04:30 pm ET

Previous

ALJ Regional Holdings, Inc. (NASDAQ:ALJJ) Q4 2019 Earnings Conference Call - Final Transcript

Share
Close

Loading Event

Loading Transcript

Presentation
Operator
Operator

Good afternoon, and welcome to the ALJ Regional Holdings, Incorporated Fiscal Fourth Quarter and Full Year 2019 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Brian Hartman, Chief Financial Officer. Please go ahead.

Executive
Brian Hartman

Welcome, and thank you for participating in today's teleconference and for being investors in ALJ Regional Holdings. My name is Brian Hartman and I am the CFO for ALJ. With me is Jess Ravich, our CEO and Chairman.

Before we begin, I ask everyone listening to this investor conference call to review the risk factors presented in our latest Form 10-K that was filed with the SEC on December 23, 2019. With respect to forward-looking statements, it is important to note that today's investor call as well as our earnings release and related communications contain forward-looking statements within the meaning of Federal Securities Laws. Such statements include information regarding our expectations, goals, our intentions regarding the future including but not limited to statements about our financial projections, business growth, the impact of acquisition, cost-cutting measures, integration measures and other statements including words, will and expect, 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 can cause actual results to differ materially are discussed in our Form 10-K filed with the Securities and Exchange Commission. We assume no obligation to update any forward-looking statements made during this investor call. We will provide a financial update for the fiscal quarter and full-year ended September 30, 2019 and then we will provide the high-level guidance for fiscal 2020.

ALJ recognized revenue of $89 million for the three months ended September 30, 2019, a decrease of $1.1 million or 1.2% compared to $90.1 million for the three months ended September 30, 2018. The decrease was primarily driven by planned lower sales volume at Carpets and lower volumes in components and packaging at Phoenix, offset somewhat by new contracts at Faneuil.

ALJ recognized a net loss of $9.9 million and loss per share of $0.24 for the three months ended September 30, 2019, compared to net income of $1.2 million and diluted earnings per share of $0.03 for the three months ended September 30, 2018. The majority of the loss was due to a non-cash deferred tax expense of $5.9 million and a non-cash write-off of intangible assets of $0.7 million related to one of Faneuil's contracts. In addition, Faneuil had three contracts that generated significant losses in the quarter and Phoenix had lower overall volumes and unfavorable product mix impacting profitability.

ALJ recognized adjusted EBITDA of $5.2 million for the three months ended September 30, 2019, a decrease of $4.2 million or 44.5% compared to $9.3 million for the three months ended September 30, 2018. The decrease was driven by contracts that generated losses at Faneuil, the wind down of existing