Stock Watch List: Steel Connect, Inc. (NASDAQ: STCN)

On Monday, Steel Connect, Inc. (NASDAQ: STCN) negotiated 3,685 shares against it an average volume of 41,962 shares. The stock concluded the recent trade at $1.8500 with upbeat/downbeat trend move of -0.54%. The company has total market value of 112.171M billion. The daily trading range was observed between a day’s low price of $1.7907 to a day’s high price of $1.8500.

Steel Connect, Inc. (STCN), recently reported financial results for its second quarter of fiscal year 2019 ended January 31, 2019.

Second Quarter Financial Results Summary

Net Revenue
The Company stated net revenue of $206.2M for the second quarter ended January 31, 2019, as contrast to $153.7M for the same quarter in the previous year, an raise of $52.5M or 34.1%. The year-over-year improvement was driven primarily by the raise in revenue associated with the acquisition of IWCO Direct in December 2017.

Revenue in the Direct Marketing section for the second quarter ended January 31, 2019was $118.4M, an raise of $58.9M contrast to $59.5M for the period ended January 31, 2018. The Company’s Supply Chain business stated total revenue of $87.8M for the three months ended January 31, 2019 contrast to $94.2M for the same period in the previous year. Within the Supply Chain business, net revenue in the Americas region raised by $2.9M when comparing the fiscal second quarter periods, driven primarily by clients in the computing markets, offset partially by a decrease in revenue from clients in the consumer electronics market. Within the Asia region, net revenue raised by $8.3M primarily Because of higher revenues from programs in the computing and consumer electronics markets, offset partially by lower revenue from other clients in the consumer electronics industries. Within the Europe region, net revenue declined by $17.4M, primarily Because of a client loss in the consumer electronics industry. Note, the loss of this client did not have a important negative effect on income from operations. Net revenue for e-Business remained consistent for the comparable three-month periods.

Operating Expenses
Total operating expenses for the second quarter ended January 31, 2019 were $35.4M, as contrast to $21.5M in the same period in the previous year, an raise of $13.9M. The year-over-year raise was primarily related to a $12.7M gain on the sale of property in the second quarter of fiscal 2018, as contrast to $0.1M in the comparable fiscal 2019 period, as well as a $3.7M raise in amortization of intangible assets related to the acquisition of IWCO Direct. Selling, general and administrative (“SG&A”) expenses for the second quarter ended January 31, 2019 were $27.7M, as contrast to $30.1M for the second quarter ended January 31, 2018, a year-over-year improvement of $2.4M or 8.0%.

Net Income (Loss)
The Company stated a net loss attributable to ordinary stockholders of $(12.3)M for the second quarter ended January 31, 2019, as contrast to net income attributable to ordinary stockholders of $59.5M in the same period in the previous year. The year-over-year variance was primarily related to an income tax benefit of $73.5M recorded in the second quarter ended January 31, 2018, as contrast to an income tax expense of $1.4M during the three months ended January 31, 2019. The income tax benefit in the previous year quarter of $79.9M is related to a reduction of the Company’s valuation allowance associated with the IWCO Direct acquisition, partially offset by income tax expense in certain jurisdictions where the Company operates, using the enacted tax rates in those jurisdictions.

Liquidity
As of January 31, 2019, the Company held cash and cash equivalents of $92.9M, as contrast to cash and cash equivalents of $92.1M as of July 31, 2018. As of January 31, 2019, the Company’s long-term debt, not including its current portion, stood at $380.2M as contrast to $383.1M as of July 31, 2018.

Additionally, as of January 31, 2019, the Company did not have an outstanding balance under its PNC Bank Credit Facility or its Revolving Facility. As of January 31, 2019, the Company had a readily accessible borrowing capacity under its PNC Bank Credit Facility of $4.6M and $25.0M under its Revolving Facility, and the principal amount outstanding on its Term Loan was $386.0M. The Term Loan was secured in conjunction with the acquisition of IWCO Direct in December 2017.

The stock price switched up -3.29% 20-Days Simple Moving Average dropped -6.55% from 50-Days Simple Moving Average and fell -3.51% from 200 Days Simple Moving Average. Beta factor, which measures the riskiness of the security, was registered at 0.15.

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