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STCN Nasdaq· Steel Connect Inc
Earnings report Q4 2023

Steel Connect Reports Decrease in Net Revenue for the Latest Quarter

Segments of revenue

In the latest quarter, Steel Connect reported a net revenue of $41.34 million. The revenue was generated from various geographic locations, with the United States contributing $15.20 million, Mainland China contributing $14.38 million, the Netherlands contributing $5.30 million, the Czech Republic contributing $2.63 million, Singapore contributing $1.46 million, and other locations contributing $2.37 million.

Strengths

Despite a decrease in net revenue compared to the same quarter last year, Steel Connect demonstrated resilience in its Supply Chain segment. The decrease in net revenue of approximately $10.0 million was primarily driven by lower revenue in the Supply Chain segment. However, the company's gross profit percentage remained stable at 27.8%, indicating efficient cost management.

Challenges

Steel Connect faced challenges in its net revenue performance, with a decrease of 19.5% compared to the same quarter last year. This decline was primarily attributed to lower revenue in the Supply Chain segment. The company's operating income also decreased from $3.88 million to $1.81 million, reflecting the impact of reduced revenue.

Noteworthy

It is worth noting that Steel Connect has significant related party transactions with SPHG Holdings and its affiliates, including Steel Holdings, Handy & Harman Ltd., and Steel Partners Ltd. These entities beneficially own approximately 85.9% of Steel Connect's outstanding capital stock. This relationship may have implications for the company's financial performance and decision-making.

Summary

Steel Connect faced a decline in net revenue for the latest quarter, primarily driven by lower revenue in the Supply Chain segment. However, the company demonstrated strength in maintaining a stable gross profit percentage and efficient cost management. The significant related party transactions with SPHG Holdings and its affiliates may impact the company's financial performance and strategic decisions moving forward.

Source documents

Form 10-Q  filed on Dec 14, 2023
99 pages scanned

Reference data

Company financials Q4 revenue 0
Analyst estimates Q4 EPS missed by 0.00%
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