ALJ Regional Holdings Inc. (fka ALJJ)

[freddie me]

RE in Newark in general isnt worth much

[Phaedrus77]

EVOL (cash shell) and RFL (busted biotech which also owns real estate) are other current NCAVs (in RFL’s case, the real estate is an added bonus).

[Phaedrus77]

The pro-formas are a bit wonky. Total equity only increased $236 million even though the subs were sold for $275 (including $15 in escrow).

The $236 increase in equity takes into account taxes ($11 million on the pro-forma IS) and transaction costs.

It’s unclear if the transaction costs include the bonuses to Ravich and the Phoenix CEO. it’s also unclear if the pro-forma includes the escrow amount.

If the pro-forma includes the bonuses and excludes the escrow, there’s the potential for another $40 million ($15 escrow + $25 earnout) to show up.

My guess is that the pro-forma excludes both the escrow and the bonuses though.

You also need to include the loss for Q1 since the pro-forma is as of 9/30.

Finally, the pro-forma shows all the debt being paid off, but $6 of it is a convertible note held, in part, by Ravich. I think he’d convert that to equity (conversion price is $0.54/share), so I think you need to add $6 to assets and use 54 million shares o/s.

We’ll have to wait for Q3 financials to see the final actual result. I could be way off here.

[Enterprising Investor]

[From the Department of Corrections]

Ben Graham would call this a “net-net”.

Current assets: $204,071
Total liabilities: $73,847
Net Current Assets: $130,224
NCAVPS: $3.07

Based on reported shares outstanding in the pro forma.

[Phaedrus77]

Your analysis is off a bit. Pro-forma, it has $137 of cash. Shares o/s are about 54.

https://www.sec.gov/Archives/edgar/data/1438731/000156459022013209/aljj-ex991_59.htm

[spec machine]

ALJJ closes deal on sale of Phoenix Color -

Phoenix sale - about $136M
Faneuil sale (certain parts) - $142M

$278M added to ALJJ cash, less ALL outstanding LT debt (just under $100M), leaves ALJJ with
$178M cash
remaining verticals of Faneuil including utilities, non-health benefits, and Vistio - together these generated $170M in revenue for 2021

So, with 42M OS, that's over $4 in CASH per share on the books - current SP is $2.60

https://aljregionalholdings.com/2022/04/13/alj-regional-holdings-inc-completes-sale-of-phoenix-color-corp/

https://aljregionalholdings.com/2022/04/04/alj-regional-holdings-inc-completes-sale-of-tolling-and-transportation-and-health-benefit-exchange-verticals-of-faneuil-inc/

spec

[Phaedrus77]

Sale closed on Friday.

[spec machine]

We ought to be getting an announcement on the closing of the Faneuil deal

2nd fiscal quarter is wrapping up now

spec

[Enterprising Investor]

Mission Accomplished

Jess Ravich, Chief Executive Officer of ALJ, said, "[...] On December 2021, we announced the sale of contracts in Faneuil's transportation and health benefit exchange verticals for $140 million, subject to certain adjustments. We anticipate recognizing a significant gain on sale from this transaction and expect closing to occur during the fiscal second quarter of 2022. Phoenix results for the quarter were above prior year as trade and education book components performed well. On February 4, 2022, we announced the sale of Phoenix for approximately $135 million, subject to certain adjustments and expect the transaction to close in the fiscal third quarter of 2022. We anticipate recognizing a significant gain on sale from this transaction and expect to use all of our remaining federal net operating loss carryforwards."

[Enterprising Investor]

ALJ Regional Holdings, Inc Announces Earnings for the First Quarter Ended December 31, 2021 (2/11/22)

NEW YORK, Feb. 11, 2022 /PRNewswire/ -- ALJ Regional Holdings, Inc. (NASDAQ: ALJJ) ("ALJ") announced results today for its first quarter ended December 31, 2021.

ALJ is a holding company, whose wholly owned subsidiaries during the first quarter included Faneuil, Inc. ("Faneuil"), and Phoenix Color Corp. ("Phoenix"). Faneuil is a leading provider of call center services, back-office operations, staffing services, and toll collection services to governmental and commercial clients across the United States. 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.

ALJ completed the sale of Floors-N-More, LLC, d/b/a Carpets N' More ("Carpets") in February 2021. As such, Carpets' results of operations are excluded from continuing operations presented below and are presented as discontinued operations.

Investment Highlights – Three Months Ended December 31, 2021

Consolidated Results for ALJ

ALJ recognized consolidated net revenue of $103.1 million for the three months ended December 31, 2021, a decrease of $8.1 million, or 7.2%, compared to $111.1 million for the three months ended December 31, 2020. The decrease was driven by decreased revenue at Faneuil driven by completion of customer contracts and a net decline in existing customer volumes offset by increases at Phoenix. ALJ recognized consolidated net revenue of $111.7 million for the three months ended September 30, 2021.
ALJ recognized a loss from continuing operations of $9.4 million and loss per share from continuing operations of ($0.22) (diluted) for the three months ended December 31, 2021, compared to a net loss from continuing operations of $1.9 million and loss per share from continuing operations of ($0.04) (diluted) for the three months ended December 31, 2020, respectively. The increase in the net loss is due to the decreased revenue at Faneuil offset slightly by increases at Phoenix. ALJ recognized net income from continuing operations of $1.1 million and income per share from continuing operations of $0.03 (diluted) for the three months ended September 30, 2021.

ALJ recognized adjusted EBITDA from continuing operations of $1.9 million for the three months ended December 31, 2021, a decrease of $4.6 million, or 71.0%, compared to $6.4 million for the three months ended December 31, 2020. The decrease was driven by lower volumes at Faneuil due to completion of customer contracts and a net decline in existing customers at Faneuil offset slightly by increases at Phoenix. ALJ recognized adjusted EBITDA from continuing operations of $10.6 million for the three months ended September 30, 2021.

Jess Ravich, Chief Executive Officer of ALJ, said, "Faneuil results were impacted by the runoff of profitable state unemployment contracts versus prior year and constraints in the labor market. In December 2021, we announced the sale of contracts in Faneuil's transportation and health benefit exchange verticals for $140 million, subject to certain adjustments. We anticipate recognizing a significant gain on sale from this transaction and expect closing to occur during the fiscal second quarter of 2022. Phoenix results for the quarter were above prior year as trade and education book components performed well. On February 4, 2022, we announced the sale of Phoenix for approximately $135 million, subject to certain adjustments and expect the transaction to close in the fiscal third quarter of 2022. We anticipate recognizing a significant gain on sale from this transaction and expect to use all of our remaining federal net operating loss carryforwards."

Results for Faneuil

Anna Van Buren, CEO of Faneuil stated, "Both revenue and EBITDA were down in the first quarter compared to last year due to the ramp down of unemployment contracts, higher than anticipated employee medical claims and increased labor market pressures during our open enrollment season. During the quarter Faneuil also had increased expenses related to a large new client implementation."

Faneuil recognized net revenue of $74.8 million for the three months ended December 31, 2021 compared to $86.0 million for the three months ended December 31, 2020. Net revenue decreased $11.2 million, or 13.0%, mainly attributable to a $10.6 million reduction driven by completion of customer contracts and a $0.6 million net decrease in existing volumes. Faneuil recognized net revenue of $82.1 million for the three months ended September 30, 2021.

Faneuil segment adjusted EBITDA loss was $1.8 million for the three months ended December 31, 2021 compared to segmented adjusted EBITDA of $3.6 million for the three months ended December 31, 2020. Segment adjusted EBITDA decreased $5.5 million, or 149.9%, driven by the wind-down of certain contracts, increased medical insurance claims under Faneuil's self-insurance medical plan, and the usage of more costly subcontract labor to supplement the call center workforce. Faneuil recognized segment adjusted EBITDA of $7.0 million from the three months ended September 30, 2021.

Faneuil estimates its net revenue for the three months ending March 31, 2022 to be in the range of $68.0 million to $73.0 million, compared to $84.4 million for the three months ended March 31, 2021.

Faneuil contract backlog expected to be realized within the next twelve months as of December 31, 2021 was $206.2 million, compared to $241.2 million as of December 31, 2020 and $196.4 million as of September 30, 2021. Faneuil's total contract backlog as of December 31, 2021 was $459.4 million as compared to $673.7 million as of December 31, 2020 and $450.8 million as of September 30, 2021. The decrease in total Faneuil backlog from December 31, 2021 compared to December 31, 2020 was primarily the result of negotiating an early termination of a large unprofitable contract, and services provided in the normal course of business for long-term contracts outstanding on December 31, 2020. A recent large long-term transportation award is not yet reflected in the December 31, 2021 backlog as the contract was not signed at December 31, 2021.

Results for Phoenix

Marc Reisch, CEO of Phoenix, stated, "The $3.1 million, or 12.5% increase in our fiscal first quarter revenues, versus prior year, was due to higher component sales primarily related to education. The increase of $1.1 million, or 26.5% of segment adjusted EBITDA for the quarter, versus prior year, was due to the higher component revenues."

Phoenix recognized net revenue of $28.3 million for the three months ended December 31, 2021 compared to $25.2 million for the three months ended December 31, 2020. Net revenue increased $3.1 million, or 12.5% primarily attributable to higher sales of book components. Phoenix recognized net revenue of $29.6 million for the three months ended September 30, 2021.

Phoenix recognized segment adjusted EBITDA of $5.1 million for the three months ended December 31, 2021 compared to $4.0 million for the three months ended December 31, 2020. Segment adjusted EBITDA increased by $1.1 million, or 26.5%, driven by higher sales volumes from book components. Phoenix recognized segment adjusted EBITDA of $5.6 million for the three months ended September 30, 2021.

Phoenix estimates its net revenue for the three months ending March 31, 2022 to be in the range of $28.0 million to $30.0 million, compared to $30.2 million for the three months ended March 31, 2021.

Phoenix contract backlog expected to be realized within the next twelve months as of December 31, 2021 was $72.7 million, compared to $69.8 million as of December 31, 2020 and $69.8 million as of September 30, 2021. Phoenix's total contract backlog as of December 31, 2021 was $259.5 million as compared to $315.4 million as of December 31, 2020 and $274.7 million as of September 30, 2021. The decrease in Phoenix backlog on December 31, 2021 compared to December 31, 2020 was primarily driven by product delivery in the normal course of business.

Non-GAAP Financial Measures

In our earnings releases, prepared remarks, conference calls, presentations, and webcasts, we may 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 is 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 present adjusted EBITDA because we believe it is frequently used by analysts, investors, and other interested parties in the evaluation of our company. ALJ defines segment adjusted EBITDA as segment net income (loss) before depreciation and amortization expense, interest expense, litigation loss, recovery of litigation loss, restructuring and cost reduction initiatives, loan amendment expenses, fair value of warrants issued in connection with loan amendments, stock-based compensation, acquisition-related expenses, gain on disposal of assets, net, income taxes, loss on debt extinguishment, and other non-recurring items. Adjusted EBITDA measures are not calculated in the same manner by all companies and, accordingly, may not be an appropriate measure for comparison.

About ALJ Regional Holdings, Inc.

ALJ Regional Holdings, Inc. is the parent company of (i) Faneuil, Inc., a leading provider of call center services, back office operations, staffing services, and toll collection services to commercial and governmental clients across the United States, and (ii) 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.

https://www.prnewswire.com/news-releases/alj-regional-holdings-inc-announces-earnings-for-the-first-quarter-ended-december-31-2021-301480703.html

[Enterprising Investor]

William Montgomery beneficially owns 3,941,150 shares (12/31/21)

Represents 8.7 percent.

https://www.sec.gov/Archives/edgar/data/1438731/000092189522000392/sc13ga100322001aljj_02072022.htm

[spec machine]

A headline ran yesterday about a firm that had announced an investigation on the Phoenix sale

Didn't take me 2 seconds to see who it was and what their business model is

So I'm surprised that ALJJ took a pretty solid hit

I wouldn't mind seeing a countersuit, might check PACER on that later today

spec

[spec machine]

ALJJ $2.69 with a strong pre-earnings volume

lit up

spec

[spec machine]

ALJJ pulling strong at $2.50

chart fantastic, blue sky breakout

Ravich and family own half, will it be a repeat of the KES deal and subsequent dutch auction??

What happens with the remaining Faneuil verticals will probably be a tell of what's to come but I suspect he'll still sell off the 1/3 of Faneuil to a competitor and roll the cash into new opportunities

I hope they just lay it out as best they can in the next filing after they close each deal

spec

[Enterprising Investor]

[From the Department of Corrections]

At September 30, 2021, the Company has NOL carryforwards for federal income tax purposes of approximately $135.1 million that begin expiring in 2022. In addition, the use of this NOL in future years may be restricted under Section 382 of the IRC if there is a change of ownership.

ALJJ's fiscal year ends in September.

CFO Brian Hartman made the following comments on the Q4 earnings call.

As of September 30, 2021 we had approximately $135.1 million of net operating loss carry forwards available. As of June 30, 2022, approximately $109.1 million or 80% of these net operating loss carry forwards are set to expire. We anticipate a material gain on sale from Faneuil's transaction and that we will use a significant portion of our existing net operating loss carryforwards to offset federal taxes. We estimate that cash state taxes will approximate $4 million to $7 million for this transaction. Net proceeds after debt repayments, state cash taxes paid and transaction related expenses will be used to fund working capital and ongoing business operations.

[Enterprising Investor]

Sold my original position years ago, too.

Always kept ALJJ on my watch list. Several months ago, I started taking another look, sensing that it might be time to begin the asset pruning process.

I purchased shares quickly once the first sale was announced. The math required only a tiny portion of the back of an envelope.

[Phaedrus77]

Thanks. I remember buying into this when he did a tender offer after selling the steel company, IIRC. I quit following it a few years ago though.

[Enterprising Investor]

If everything goes as planned…

ALJJ would be the first NOL shell that I have owned that actually utilized ever last cent of TDAs.

The profit opportunity is too small to attract most professional investors.

[Phaedrus77]

So this thing should have ~$4 cash per share after everything closes, plus the remaining portion of Fanueil and the corporate overhead costs?

Seems like a steal at $2. I've been buying, but it makes me wonder if I'm missing something.

[spec machine]

No doubt that's the reason for the expedite clause in the sale agreement for Phoenix

Ravich could sell the remaining verticals in the call-center biz for ten bucks and this would still be a steal at $3-4

Can't wait to see what ALJJ gets into next

printing was boring

flooring was boring

Both the printing and the call center flips made big money

Keep your eye on Ravich and what he does, it's the jockey, not the horse on this one

He bought a bunch of ALJJ with his own cash at much higher prices

long cycle time though, years ...

like planting acorns and selling the lumber

spec

[Enterprising Investor]

ALJJ has approximately $135.1 million of net operating loss carry forwards available.

Approximately $109.1 million or 80% of these net operating loss carry forwards are set to expire on 6/30/22.

[Enterprising Investor]

Should be selling for the PV of cash at 6/30/22.

I plan to pick up any sub-$2.00 shares.

[Enterprising Investor]

Only 219,000 shares were short per the last January report, down from 411,800.

[spec machine]

ALJJ - about 65% of the free trading shares cross the tape in the first 2 hrs

machine trading, of course

many of the same shares traded over and over

up 24%

shorts on fire yet?

spec

[spec machine]

ALJJ - selling Phoenix Color for $135M
- selling 2/3 of Faneuil for $140M

ALJJ @ $2.20 in AH trading = market cap of about $95M with 42.2M OS

NOTE- ALJJ has struggled to make any profit recently due mostly to the highly leveraged position and the cost of their debt

CEO Jess Ravich has an excellent track record of purchasing undervalued or cash-starved businesses and revving them up for a resale, "flipping" for large profits (and being a successful fund manager)

Long timers will remember the KES (Kentucky Electric Steel) flip for a 4-5 bagger tender offer

I sold out half and retained half in ALJJ which became a holding company with no operations for a short while, then the sequence of acquisitions Faneuil, Phoenix Color, and Carpets and more

Carpets and More was a dud

Faneuil sale is a windfall and put the stock way undervalued at $2

Phoenix Color sale is gravy on top

$275M in sale windfall, NOL's to reduce a big portion of the tax liability (anxious to hear mgmt narrative on that)

Should be a lively day

$270M on closing, pays off entire $100M of debt, $170M before tax remains or about $4/share pre-tax

spec

[Enterprising Investor]

Lakeside Book Company and ALJ Regional Holdings, Inc. Enter Into Definitive Agreement for Acquisition of Phoenix Color (2/04/22)

WARRENVILLE, Ill. and NEW YORK, Feb. 4, 2022 /PRNewswire/ -- Lakeside Book Company ("Lakeside") and ALJ Regional Holdings, Inc. (NASDAQ: ALJJ) ("ALJ") jointly announced today that they have entered into a definitive agreement for Lakeside's acquisition of all of the issued and outstanding shares of common stock of ALJ's wholly-owned subsidiary Phoenix Color Corp. ("Phoenix"). Headquartered in Hagerstown, Maryland, Phoenix is a specialty printer of book components, children's books, and other print-related products with printing facilities in Indiana and Maryland.

The transaction is expected to close during the second calendar quarter of 2022, subject to customary closing conditions and regulatory and stockholder approvals.

"We know Phoenix well as a recognized leader in book components. Adding their team's capabilities to Lakeside's service offerings will enable our publishing customers to conveniently manage book and cover printing in one place," said Dave McCree, Lakeside's Chief Executive Officer. "We are always looking for ways to make the printing supply chain more efficient for publishers and this transaction would be a significant step in that direction."

"The combination of Phoenix's component production capabilities and Lakeside's book manufacturing services would provide customers the benefits of streamlined order processing, scheduling and speed of delivery. Lakeside has been a key Phoenix customer for a number of years, and we are confident Lakeside will be a good home for the exceptional Phoenix team," said Marc Reisch, Chairman and Chief Executive Officer of Phoenix.

"Phoenix has been a terrific member of the ALJ family of companies. While we are sad to lose the Phoenix team, we are excited that we have found a synergistic home for the business that will enable it to enhance its services to its customers," added Jess Ravich, Chief Executive Officer of ALJ.

About Lakeside

In 1864, R.R. Donnelley started as a partner at a small printing company in Chicago. In the years that followed, he grew the company into one of the largest and most trusted printing service providers in the world. As the decades passed, the company continuously expanded its services, and in 2016, LSC Communications was spun out to offer specialized solutions to publishers, brands, retailers, and merchandisers. In 2020, Atlas Holdings acquired LSC Communications and in 2021, rebranded its Book division the Lakeside Book Company. The company mission states: "We are committed to crafting books and services that are meaningful. We take pride in the challenge of fulfilling our customers' visions."

About ALJ

ALJ Regional Holdings, Inc. is the parent company of (i) Faneuil, Inc., a leading provider of call center services, back office operations, staffing services, and toll collection services to commercial and governmental clients across the United States, and (ii) 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.

About Phoenix

Phoenix has been a premier supplier for publishing companies for over forty years. The company's extensive print and finishing capabilities positions Phoenix to meet its customers' most demanding design and scheduling requirements.

https://www.prnewswire.com/news-releases/lakeside-book-company-and-alj-regional-holdings-inc-enter-into-definitive-agreement-for-the-acquisition-of-phoenix-color-301475656.html

[Enterprising Investor]

Asset Purchase Agreement

On December 21, 2021, ALJ Regional Holdings, Inc., a Delaware corporation (the “Company” or “ALJ”) entered into an asset purchase agreement (the “Asset Purchase Agreement”) with TTEC Government Solutions, LLC, a Colorado limited liability company (“Purchaser” or “TTEC”), TTEC Holdings, Inc., a Delaware corporation, and Faneuil, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Faneuil”). Purchaser has agreed, subject to the terms and conditions set forth in the Asset Purchase Agreement, to acquire the assets of Faneuil’s tolling and transportation vertical and health benefit exchange vertical (the “Asset Sale”) for a purchase price to be paid at closing of $140.0 million, less an indemnification escrow amount of approximately $15.0 million. Faneuil is also eligible to receive additional earn-out payments based upon the performance of certain customer agreements in an aggregate amount of up to $25.0 million.

In addition, Faneuil agreed to grant TTEC a call right to purchase, in one or a series of separate transactions, the assets of any of its utilities, non-health benefit exchange healthcare, commercial and other verticals (the “Other Verticals”). Such call right will be exercisable for a three-year period commencing on the closing date (the “Option Period”). Faneuil also granted TTEC a call right to purchase its wholly owned subsidiary Realtime Digital Innovations, Inc., d/b/a Vistio (“Vistio”). The Vistio call right is exercisable commencing during the calendar year 2024 and continuing for the remainder of the Option Period. The exercise prices for the Other Verticals and Vistio call rights will be determined based on the sales of the applicable Other Vertical or Vistio at the time of exercise. The consummation of a call right transaction, if any, is subject to customary Company and Faneuil corporate approvals, including board and stockholder consent.

In addition to the above rights, Faneuil agreed that it will not entertain any third party acquisition proposals for any of the Other Verticals or Vistio in the first year of the Option Period, and granted TTEC a right of first offer in the event a third party acquisition proposal is received for any of the Other Verticals or Vistio during the remainder of the Option Period.

The completion of the Asset Sale is subject to certain customary closing conditions, including, among others, (a) the receipt of certain requisite consents, including requisite consents to effect the transfer of customer contracts representing not less than ninety-five percent (95%) of trailing twelve (12)-month revenue, (b) the expiration of the waiting period applicable to the Asset Sale under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (c) the accuracy of the parties’ respective representations and warranties in the Asset Purchase Agreement, subject to specified materiality qualifications, (d) compliance by the parties with their respective covenants in the Asset Purchase Agreement in all material respects, and (e) the absence of a Material Adverse Effect (as defined in the Asset Purchase Agreement). Consummation of the Asset Sale is not subject to a financing condition. The Asset Purchase Agreement also contains representations, warranties, covenants and indemnities that are customary for transactions of this type. ALJ, TTEC and Faneuil may terminate the Asset Purchase Agreement under certain specified circumstances, including, among others, if the Asset Sale is not consummated by April 30, 2022.

The foregoing description of the Asset Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Asset Purchase Agreement, a copy of which is filed as Exhibit 2.1 hereto and incorporated herein by reference.

The Asset Purchase Agreement and the above description have been included to provide investors and security holders with information regarding the terms of the Asset Purchase Agreement. They are not intended to provide any other factual information about ALJ, TTEC, Faneuil or their respective subsidiaries or affiliates or stockholders. The representations, warranties and covenants set forth in the Asset Purchase Agreement have been made only for the purposes of the Asset Purchase Agreement and solely for the benefit of the parties thereto and may be subject to limitations agreed upon by such parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between such parties instead of establishing these matters as facts. In addition, such representations and warranties were made only as of the dates specified in the Asset Purchase Agreement and information regarding the subject matter thereof may change after the date of the Asset Purchase Agreement. Accordingly, investors should read the representations and warranties in the Asset Purchase Agreement not in isolation but only in conjunction with the other information about ALJ, Faneuil or TTEC that the respective companies include in reports, statements and other filings they make with the SEC.

https://www.sec.gov/ix?doc=/Archives/edgar/data/1438731/000156459021061138/aljj-8k_20211221.htm

[Enterprising Investor]

ALJJ paid $53 million for Faneuil in October 2013.

The price breaks out into $25 million in cash, 3 million shares of ALJJ stock and a $25 million note.

Harland Clarke acquired Faneuil $70 million in March 2012.

[Enterprising Investor]

ALJ REGIONAL HOLDINGS, INC ENTERS INTO DEFINITIVE AGREEMENT TO SELL TOLLING AND TRANSPORTATION AND HEALTH BENEFIT EXCHANGE VERTICALS OF FANEUIL, INC (12/22/21)

NEW YORK, Dec. 22, 2021 /PRNewswire/ -- ALJ Regional Holdings, Inc. (NASDAQ: ALJJ) ("ALJ") announced today that it has entered into a definitive agreement to sell the tolling and transportation and health benefit exchange verticals of its wholly owned subsidiary, Faneuil, Inc. ("Faneuil"), to TTEC Holdings, Inc. (NASDAQ: TTEC) ("TTEC"), one of the largest global customer experience ("CX") technology and services innovators for end-to-end digital CX solutions. Consideration to be paid by TTEC is $140 million, less an indemnification escrow amount of approximately $15 million dollars. Faneuil is also eligible to receive additional earn-out payments in an aggregate amount of up to $25 million.

Other Faneuil verticals, including its utilities, non-health benefit exchange, commercial and other verticals, as well as Vistio, a wholly owned subsidiary of Faneuil, which incorporates software tools and methodologies to improve and optimize the contact center agent experience, will remain at Faneuil and Faneuil will continue to operate as a wholly owned subsidiary of ALJ.

The transaction is expected to close during the first calendar quarter of 2022, subject to customary closing conditions and regulatory approvals, including clearance under the Hart-Scott-Rodino Act by the Federal Trade Commission.

"This exciting partnership offers us the ability to provide our core clients many opportunities to leverage broader industry capabilities including scalability and security of our IT technology, workforce management, and the ability to leverage near and off–shore recruiting resources," said Anna Van Buren, President and CEO of Faneuil. "This acquisition stands as a testament to the strength of the Faneuil business and brings together two management teams with extensive CX expertise to better serve our customers. We look forward to working with the TTEC team to complete the transaction and ensure that we continue to deliver the highest quality service to our customers. Both Faneuil and TTEC anticipate a seamless transition for customers and employees, and a quick enhancement to our existing customers in the new year."

"We are very pleased with this partnership with TTEC as it creates synergies for both Faneuil's transitioning and existing customer base and will facilitate additional growth opportunities for Faneuil," added Jess Ravich, Chief Executive Officer of ALJ.

About Faneuil

For more than 25 years, Faneuil (www.faneuil.com) has specialized in designing, implementing managing and operating multichannel customer care, back–office business processing, and Solution as a Service (SaaS) offerings for government and commercial clients operating in complex, highly regulated environments nationwide. Headquartered in Hampton, Virginia, Faneuil delivers broad support to several diverse industries, including health and human services, transportation and tolling, utilities, state and municipal governments, and commercial/retail services. With an unrelenting focus on creating consistently positive customer experiences, Faneuil's customer care professionals are intent on building the brands and reputations of its client partners every day.

About ALJ

ALJ Regional Holdings, Inc. is the parent company of (i) Faneuil, Inc., a leading provider of call center services, back office operations, staffing services, and toll collection services to commercial and governmental clients across the United States, and (ii) 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.

https://www.prnewswire.com/news-releases/alj-regional-holdings-inc-enters-into-definitive-agreement-to-sell-tolling-and-transportation-and-health-benefit-exchange-verticals-of-faneuil-inc-301449446.html

[Enterprising Investor]

TTEC Announces Agreement to Acquire Public Sector Citizen Experience Platform (12/22/21)

Accelerates growth strategy with tech-enabled citizen engagement solutions, ~$19 billion total addressable market

ENGLEWOOD, Colo., Dec. 22, 2021 /PRNewswire/ -- TTEC Holdings, Inc. (NASDAQ: TTEC), one of the largest global customer experience (CX) technology and services innovators for end-to-end digital CX solutions, announces the signing of an agreement to acquire certain citizen experience and smart city assets of Faneuil, Inc. a wholly owned subsidiary of ALJ Regional Holdings, Inc. (NASDAQ: ALJJ).

"Citizen experience for the public sector is a core component of TTEC's vision, and this transaction will accelerate our growth in this rapidly expanding market," said Ken Tuchman, chairman and CEO, TTEC. "The acquisition of this platform amplifies TTEC's decades of leadership in delivering citizen experience solutions." Tuchman continued, "Visionary public sector leaders understand that innovative citizen engagement must be frictionless, automated, and personalized going forward."

Tuchman concluded, "Upon closing, the combined public sector assets position us to accelerate our strategy of partnering with governments around the world to deliver equitable, secure, digital and engaging citizen experiences at scale, particularly in the areas of infrastructure, transportation, and healthcare."

At a time when governments around the globe are deploying incremental investments in digital citizen experience and smart government programs, TTEC's global scale and market-leading digital CX solutions, combined with Faneuil's deep state and local government expertise, positions the company as the public sector's premier CX provider. The combination of TTEC Engage, TTEC Digital, and the Faneuil assets will better enable TTEC to address fast-growing public sector opportunities related to mobility, fleet management, congestion management, health and wellness, healthcare exchanges, labor and social benefits delivery, and emergent infrastructure citizen response systems.

"TTEC's scale, engagement, culture and expansive CX capabilities spanning innovative digital solutions, global delivery footprint, access to industry best practices, and flexible work environments will immediately benefit our clients," said Anna Van Buren, CEO, Faneuil, Inc. who, along with a portion of her management team, will be joining TTEC to run the acquired platform and will also continue to provide services to Faneuil pursuant to service agreements entered into at closing. "I could not be more excited about the combination of our respective public sector platforms. In addition to the power of our combined capability, TTEC's brand, mission, vision, culture, and intense focus on customer, citizen and employee experience make this the perfect home for our clients and employees."

The transaction is expected to close during the first quarter of 2022, subject to customary closing conditions and consent, including the competition clearance by the Federal Trade Commission.

About TTEC

TTEC Holdings, Inc. (NASDAQ: TTEC) is one of the largest, global CX (customer experience) technology and services innovators for end-to-end, digital CX solutions. The company delivers leading CX technology and operational CX orchestration at scale through its proprietary cloud-based CXaaS (Customer Experience as a Service) platform. Serving iconic and disruptive brands, TTEC's outcome-based solutions span the entire enterprise, touch every virtual interaction channel, and improve each step of the customer journey. Leveraging next gen digital and cognitive technology, the company's Digital business designs, builds, and operates omnichannel contact center technology, conversational messaging, CRM, automation (AI / ML and RPA), and analytics solutions. The company's Engage business delivers digital customer engagement, customer acquisition & growth, content moderation, fraud mitigation, and data annotation solutions. Founded in 1982, the Company's singular obsession with CX excellence has earned it leading client NPS scores across the globe. The company's nearly 62,300 employees operate on six continents and bring technology and humanity together to deliver happy customers and differentiated business results. To learn more visit us at www.ttec.com.

https://www.prnewswire.com/news-releases/ttec-announces-agreement-to-acquire-public-sector-citizen-experience-platform-301449513.html

[Enterprising Investor]

Floors-N-More, LLC, dba, Carpets N' More led to value destruction.

On January 23, 2021, ALJ Regional Holdings, Inc. (the “Company”) entered into a Purchase and Sale Agreement (the “PSA”), by and among the Company, Superior Interior Finishes, LLC, a Nevada limited liability company (the “Purchaser”) and Floors-N-Moore, LLC, dba Carpets N’ More (“Carpets”), a wholly owned subsidiary of the Company, pursuant to which the Company will sell 100% of the membership interests of Carpets to the Purchaser for an aggregate purchase price of $500,000 (the “Purchase Price”) in cash (the “Transaction”). The Company decided to enter into the Transaction because its Carpets business segment had been deemed a non-core holding and underperformed over the past several years.

ALJJ paid $5.47 million for just under 88 percent in 2014.

[Enterprising Investor]

ALJ Regional Holdings, Inc. Announces Earnings For The Fourth Quarter Ended September 30, 2021 (12/20/21)

NEW YORK, NY, Dec. 20, 2021 /PRNewswire/ -- ALJ Regional Holdings, Inc. (NASDAQ: ALJJ) ("ALJ") announced results today for its fourth quarter and year ended September 30, 2021.

ALJ is a holding company, whose wholly owned subsidiaries during the fourth quarter included Faneuil, Inc. ("Faneuil"), and Phoenix Color Corp. ("Phoenix"). Faneuil is a leading provider of call center services, back-office operations, staffing services, and toll collection services to governmental and commercial clients across the United States. 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.

ALJ completed the sale of Floors-N-More, LLC, d/b/a Carpets N' More ("Carpets") in February 2021. As such, Carpets' results of operations are excluded from continuing operations presented below and are presented as discontinued operations.

Investment Highlights – Three and Twelve Months Ended September 30, 2021

Consolidated Results for ALJ

ALJ recognized consolidated net revenue of $111.7 million for the three months ended September 30, 2021, an increase of $13.9 million, or 14.2%, compared to $97.8 million for the three months ended September 30, 2020. The increase was driven by the higher production in healthcare and transportation verticals as well as one state unemployment contract at Faneuil. ALJ recognized consolidated net revenue of $103.5 million for the three months ended June 30, 2021.

ALJ recognized net income from continuing operations of $1.1 million and income per share from continuing operations of $0.03 (diluted) for the three months ended September 30, 2021, compared to net income from continuing operations of $1.2 million and income per share from continuing operations of $0.03 (diluted) for the three months ended September 30, 2020, respectively. The decrease in net income is due to a smaller benefit from income taxes in the current quarter versus prior year. ALJ recognized a net loss from continuing operations of $3.5 million and loss per share from continuing operations of $0.08 (diluted) for the three months ended June 30, 2021.

ALJ recognized adjusted EBITDA from continuing operations of $10.6 million for the three months ended September 30, 2021, an increase of $1.8 million, or 19.9%, compared to $8.8 million for the three months ended September 30, 2020. The increase was driven by higher volumes in the transportation vertical, one state unemployment contract, and exit from a loss generating healthcare contract at Faneuil. ALJ recognized adjusted EBITDA from continuing operations of $7.8 million for the three months ended June 30, 2021.

ALJ recognized consolidated net revenue of $440.9 million for fiscal 2021, an increase of $90.8 million, or 25.9%, compared to $350.1 million for fiscal 2020. The increase was driven by the start of production for new contracts and increased volume for existing contracts at Faneuil and higher component sales primarily related to trade sales at Phoenix.
ALJ recognized a net loss from continuing operations of $3.6 million and loss per share from continuing operations of $0.08 (diluted) for fiscal 2021, compared to net loss from continuing operations of $64.2 million and loss per share from continuing operations of $1.52 (diluted) for fiscal 2020. Net loss from continuing operations for fiscal 2020 reflected a $56.5 million non-cash and non-recurring impairment of goodwill. Excluding such impairment of goodwill, ALJ recognized a net loss from continuing operations of $7.7 million and loss per share from continuing operations of $0.18 (diluted) for fiscal 2020. The improvement in net loss is due to higher business activity at Faneuil and Phoenix.

ALJ recognized adjusted EBITDA from continuing operations of $33.7 million for fiscal 2021, an increase of $9.6 million, or 40.0%, compared to $24.0 million for fiscal 2020. The increase was driven by the start of new contracts and operational improvements at existing contracts for Faneuil and higher component sales primarily related to trade sales at Phoenix.

ALJ estimates lower consolidated net revenue for the three months ending December 31, 2021 in the range of $100.0 million to $105.5 million, as we have exited from unprofitable contracts at Faneuil, compared to $111.1 million for the three months ended December 31, 2020.

Jess Ravich, Chief Executive Officer of ALJ, said, "Results for the quarter were above prior year as Faneuil continued to benefit from state unemployment related contracts, conclusion of certain unprofitable legacy contracts, and operational efficiencies. Phoenix continued to provide strong overall results with volumes increasing for education components and books."

[Tables deleted]

Results for Faneuil

Anna Van Buren, CEO of Faneuil, stated, "Faneuil continued a strong performance in the fourth quarter, ending the fiscal year with year over year revenue growth of 31.7% and adjusted EBITDA improvement of 72.7%. The largest contributor to adjusted EBITDA in the last quarter was a short term unemployment contract that concluded in September."

Faneuil recognized net revenue of $82.1 million for the three months ended September 30, 2021 compared to $68.1 million for the three months ended September 30, 2020. Net revenue increased $14.0 million, or 20.5%, mainly attributable to a $14.1 million and $6.5 million increase in revenues from new and existing customers, respectively, partially offset by a $6.4 million reduction driven by the completion of customer contracts. Faneuil recognized net revenue of $72.8 million for the three months ended June 30, 2021.

Faneuil segment adjusted EBITDA was $7.0 million for the three months ended September 30, 2021 compared to $3.9 million for the three months ended September 30, 2020. Segment adjusted EBITDA increased $3.1 million, or 78.1%, driven by higher volumes in the transportation vertical, one state unemployment contract, and exit from a loss generating healthcare contract. Faneuil recognized segment adjusted EBITDA of $3.7 million from the three months ended June 30, 2021.

Faneuil recognized net revenue of $325.2 million for fiscal 2021 compared to $247.0 million for fiscal 2020. Net revenue increased $78.2 million, or 31.7%, due to a $77.8 million and $17.9 million increase in revenues from new and existing customers, respectively, partially offset by a $17.5 million reduction driven by the completion of customer contracts.

Faneuil segment adjusted EBITDA was $19.3 million for fiscal 2021 compared to $11.2 million for fiscal 2020. Segment adjusted EBITDA increased $8.1 million, or 72.7%, driven by the start of new contracts, operational improvements at existing contracts, reduced costs for medical and workers compensation claims, offset somewhat by losses incurred for one healthcare contract that ended in October 2021.

Faneuil estimates its net revenue for the three months ending December 31, 2021 to be in the range of $75.0 million to $79.0 million, compared to $86.0 million for the three months ended December 31, 2020.

Faneuil contract backlog expected to be realized within the next twelve months as of September 30, 2021 was $196.4 million, compared to $245.6 million as of September 30, 2020 and $215.6 million as of June 30, 2021. Faneuil's total contract backlog as of September 30, 2021 was $450.8 million as compared to $613.9 million as of September 30, 2020 and $506.3 million as of June 30, 2021. The decrease in total Faneuil backlog from September 30, 2021 compared to September 30, 2020 was primarily the result of negotiating an early termination of a large unprofitable contract, and services provided in the normal course of business for long-term contracts outstanding on September 30, 2021. A recent large long-term transportation award is not yet reflected in the September 30, 2021 backlog as the contract was not signed at September 30, 2021.

Results for Phoenix

Marc Reisch, CEO of Phoenix, stated, "Fourth quarter revenues were flat versus prior year. Higher book sales were offset by lower planned beauty packaging sales. Fourth quarter segment adjusted EBITDA for the quarter, versus prior year, was down $0.4 million primarily due to higher executive performance-based compensation expense. Excluding this increased expense, segment adjusted EBITDA increased by $0.3 million. The $12.6 million, or 12.2% increase in our full year revenues, versus prior year, was due to higher trade and education component sales, as well as higher sales from a strategic supply agreement. Higher book sales were offset by lower planned beauty packaging sales. The full year increase of $3.6 million, or 21.6%, of segment adjusted EBITDA, versus prior year, was due primarily to the higher component sales significantly offset by higher executive performance-based compensation expense. Excluding this increased expense, full year segment adjusted EBITDA increased by $5.8 million or 34.9%"

Phoenix recognized net revenue of $29.6 million for the three months ended September 30, 2021 compared to $29.7 million for the three months ended September 30, 2020, flat versus prior year. Phoenix recognized net revenue of $30.7 million for the three months ended June 30, 2021.

Phoenix recognized segment adjusted EBITDA of $5.6 million for the three months ended September 30, 2021 compared to $5.9 million for the three months ended September 30, 2020. Segment adjusted EBITDA decreased by $0.4 million, or 6.5%, primarily due to higher bonus expense. Phoenix recognized segment adjusted EBITDA of $5.5 million for the three months ended June 30, 2021.

Phoenix recognized net revenue of $115.6 million for fiscal 2021 compared to $103.0 million for fiscal 2020. Net revenue increased $12.6 million, or 12.2%, due to higher trade component and book sales.

Phoenix recognized segment adjusted EBITDA of $20.3 million for fiscal 2021 compared to $16.7 million for fiscal 2020. Segment adjusted EBITDA increased by $3.6 million, or 21.6%, as a result of higher component sales primarily related to trade sales.

Phoenix estimates its net revenue for the three months ending December 31, 2021 to be in the range of $25.0 million to $26.5 million, compared to $25.2 million for the three months ended December 31, 2020.

Phoenix contract backlog expected to be realized within the next twelve months as of September 30, 2021 was $69.8 million, compared to $65.0 million as of September 30, 2020 and $71.3 million as of June 30, 2021. Phoenix's total contract backlog as of September 30, 2021 was $274.7 million as compared to $324.7 million as of September 30, 2020 and $294.2 million as of June 30, 2021.The decrease in Phoenix backlog on September 30, 2021 compared to September 30, 2020 was primarily driven by product delivery in the normal course of business for purchase orders outstanding on September 30, 2020.

Non-GAAP Financial Measures

In our earnings releases, prepared remarks, conference calls, presentations, and webcasts, we may 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 is 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 present adjusted EBITDA because we believe it is frequently used by analysts, investors, and other interested parties in the evaluation of our company. ALJ defines segment adjusted EBITDA as segment net income (loss) before depreciation and amortization expense, interest expense, litigation loss, recovery of litigation loss, restructuring and cost reduction initiatives, loan amendment expenses, fair value of warrants issued in connection with loan amendments, stock-based compensation, acquisition-related expenses, gain on disposal of assets, net, income taxes, loss on debt extinguishment, and other non-recurring items. Adjusted EBITDA measures are not calculated in the same manner by all companies and, accordingly, may not be an appropriate measure for comparison. Below are reconciliations of our net income (loss), the most directly comparable GAAP measure, to consolidated adjusted EBITDA:

Investor Conference Call Details

ALJ will host an investor conference call on January 20, 2022 at 4:30 PM Eastern Standard Time. Participants should dial in 10 minutes prior to the start time by using the following dial-in information and Conference ID/Passcode:

Participant Toll-Free Dial-In Number: [phone]

Participant International Dial-In Number: [phone]

Conference ID/Passcode: ALJ Regional Holdings, Inc.

Participants can also access ALJ's investor conference call using the following webcast URL: https://www.webcaster4.com/Webcast/Page/2172/43907. A playback of the investor conference call will be available within 24 hours using the same webcast URL.

About ALJ Regional Holdings, Inc.

ALJ Regional Holdings, Inc. is the parent company of (i) Faneuil, Inc., a leading provider of call center services, back office operations, staffing services, and toll collection services to commercial and governmental clients across the United States, and (ii) 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.

https://www.prnewswire.com/news-releases/alj-regional-holdings-inc-announces-earnings-for-the-fourth-quarter-ended-september-30-2021-301448369.html

[spec machine]

ALJ gets hit with a cyberattack

Ramsomware encrypted files related to Faneuil

spec

[spec machine]

ALJ restructures debt

Huge volume spike today, 1.7 M and closed up 10% at $1.85

Long a bunch of shares and it’s good to see the uptrend get a boost

https://ih.advfn.com/stock-market/NASDAQ/alj-regional-ALJJ/stock-news/85474480/alj-regional-holdings-inc-replaces-its-existing

spec

[spec machine]

$ALJJ is LIT UP! over 100% in early trading on HUGE volume - it popped over $4 for a few

currently $2.24 up 68%

spec

[spec machine]

ALJJ up big after hours

posted a loss but appears to be headed to profitability

selling off a non-core sub that was underperforming, should close this quarter

major contracts starting up, costs associated with transition and covid account for a portion of the losses

A bid debt load, otherwise not too shabby on fundamentals

spec

[spec machine]

$ALJJ up 52% in after hours, LOL

I was bummed at the downturn on the earnings (loss) because it did show some very positive changes and was very optimistic going forward

I guess I wasn't alone after all

spec

[spec machine]

Earnings on 02/12 BMO

SP improving going into earnings, good sign

They have a P&S to unload Carpets as a turn key with all associated debts and liabilities

https://www.sec.gov/Archives/edgar/data/1438731/000156459021002076/aljj-8k_20210123.htm

Closing within 30 days of the P&S (by Feb 22nd), price $500K

This should be a big boost going forward due to the continued underperformance of Carpets

Faneuil is the main value and should shine in the earnings release due to recently started or modified contracts for higher margins

spec

[spec machine]

$ALJJ at $1.30 - This is just the beginning of a long uptrend

Long term hold, Faneuil has some great contracts and is adding more

Margins expanding and deleveraging

spec

[spec machine]

New public programs targeting

Rural Healthcare initiatives

Telehealth

Covid19 support operations

All dovetail into Faneuil current government funded call center operations

Expect some big contract announcements in the next couple months

I predict - ALJJ over $3 by mid summer, over $5 by EOY 2021

spec

[spec machine]

Broadening their market share opportunities

http://faneuil.com/news/faneuil-announces-launch-of-vistio/

expecting a rebranding/renaming of Faneuil sometime soon

spec

[beebread]

Interesting chart!

[spec machine]

Those $1.10 shares are going to shine today!

ah trading spiked to $1.80, premarket currently $1.40

Earnings out, solid revenue increase, turn to profits confirmed, forward guidance good!

spec

[spec machine]

ALJJ buying again at $1.10

spec

[spec machine]

there's a fairly decent write-up on SA and it's going to get a pop from the <$1 closing price today

even better is the audio replay of the LD-Micro conference presentation

https://www.webcaster4.com/Webcast/Page/2019/36836

very worthwhile to listen to it in its entirety as it explains the business model and strategy in Jess Ravich's own words

you'll need to register (free) to access

my 12 month target is >$3 depending on the additional guidance and narrative in the upcoming filing

spec

[spec machine]

$1.29 after hours on news, sweet!

I loaded ALJJ on the dip, there's more to come!

spec

[spec machine]

trading at ~.86 there is big upside here

way undervalued IMO, but the bigger plan requires patience

longer term value play of 5X or more

spec

[RiskyRewards]

I’m heavy long for swing here, undervalued

[spec machine]

Up 30% on strong volume again today

Still undervalued at P/S ~.5

spec

[spec machine]

ALJJ sharply higher on big volume

Looking good for the earnings report

spec