ALJ Regional Holdings, Inc.

For the fiscal fourth quarter ended September 30, 2021, consolidated revenue was $111.7 million, up $13.9 million or 14.2% year over year. Net income from continuing operations was $1.1 million, or $0.03 per diluted share, versus $1.2 million, or $0.03 per diluted share, a year ago. Adjusted EBITDA from continuing operations was $10.6 million, up $1.8 million or 19.9% year over year. For fiscal 2021, revenue was $440.9 million, up $90.8 million or 25.9%; net loss from continuing operations was $3.6 million, or $0.08 per share, versus a $64.2 million loss in fiscal 2020; and adjusted EBITDA was $33.7 million, up $9.6 million or 40%. Total debt at September 30, 2021 was $106.7 million, cash on hand was $2.3 million, and borrowing capacity on the line of credit was $23.5 million. Management did not give specific fiscal 2022 financial guidance, saying it is working on the reforecast.

CEO Jess Ravich’s strategic message centered on portfolio simplification and monetizing a large asset through the Faneuil transaction. The sale should let ALJ pay down debt and focus the remaining business on the verticals and subsidiary that stay inside Faneuil. The tone was pragmatic and transitional rather than expansive, with management emphasizing that more detailed 2022 expectations are still being developed.

CFO Brian Hartman highlighted the year-over-year improvement in both revenue and adjusted EBITDA, driven by higher volume in transportation, a state unemployment contract, and exiting a loss-generating healthcare contract at Faneuil. He also laid out the balance sheet, including $106.7 million of total debt, $2.3 million of cash, and $23.5 million of revolver capacity, while noting compliance with all debt covenants. On capital allocation, he said transaction proceeds will first repay $93.1 million of term debt and the revolver balance, with remaining net proceeds used for working capital and operations; cash taxes on the deal are estimated at $4 million to $7 million.

There was no substantive analyst Q&A in the transcript; the call ended after management opened the line for questions. As a result, the main unresolved investor question on this call was the fiscal 2022 outlook, which management said it was still reforecasting and not ready to detail. The transaction’s closing timing, regulatory approvals, and how much of the NOLs can be used to offset taxes were the key forward-looking items discussed.