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.
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.
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.
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.
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.