Steel Connect Inc - STCN STOCK NEWS

Steel Connect reported net revenue of $51.5 million for Q3 FY2022, up from $49.4 million a year earlier. However, a net loss from continuing operations increased to $9.7 million vs. $9.3 million in the prior year. Notably, net income attributable to stockholders was $29.7 million, compared to a loss of $28.1 million year-over-year. The company’s adjusted EBITDA improved to $0.9 million, yet free cash flow remained negative at $(2.9 million). The balance sheet showed $10.5 million in total debt while net cash used in operations was $2.5 million.

Steel Partners (NYSE: SPLP) has signed a definitive merger agreement to acquire Steel Connect, Inc. (NASDAQ: STCN) for $1.35 per share in cash, plus a contingent value right (CVR) linked to potential future proceeds from the sale of Steel Connect’s ModusLink subsidiary. This transaction, approved by both companies’ boards, is expected to close in the second half of 2022, pending stockholder approval. The merger includes a 'go-shop' period until July 12, 2022, allowing Steel Connect to solicit alternative offers. Advisors for the deal include Houlihan Lokey and Imperial Capital.

Steel Partners Holdings (NYSE: SPLP) has signed a merger agreement to acquire Steel Connect (NASDAQ: STCN) for $1.35 per share in cash and a contingent value right (CVR). The CVR allows shareholders to receive part of the net proceeds from a future sale of Steel Connect’s ModusLink subsidiary if it exceeds $80 million. The merger is backed by both companies' Boards and is subject to Steel Connect's stockholder approval and customary conditions, expected to close in the second half of 2022. A 'go-shop' period for alternative proposals ends on July 12, 2022.

Steel Connect (NASDAQ: STCN) reported second quarter fiscal 2022 results with net revenue of $120.6 million, down from $156.0 million a year prior. The company faced a significant net loss of $23.0 million, compared to a loss of $2.2 million in the same period last year. Adjusted EBITDA fell to $1.0 million from $21.2 million.

After disposing of IWCO Direct, which had $361 million in debt, the company now has a stronger balance sheet. Net cash used in operations reached $12.7 million.

Steel Connect, Inc. (NASDAQ: STCN) has completed the sale of its subsidiary, IWCO Direct Holdings, Inc., to a Cerberus Capital Management-led investor group. This decision comes after IWCO's operations were severely impacted by the COVID-19 pandemic, leading to a decline in customer mailing activities. Steel Connect's board deemed the sale necessary as refinancing IWCO's substantial debt of approximately $361 million was not feasible. Following the transaction, Steel Connect will have no net debt, and ModusLink Corporation, its other operating unit, remains unaffected.

Steel Connect, Inc. (NASDAQ: STCN) reported Q1 2021 results with net revenue of $125.4 million, a decline of 26.2% from $169.9 million last year. The net loss worsened to $19.5 million, compared to a $3.6 million loss in the previous year. Adjusted EBITDA dropped 83.2% to $3.8 million. Revenue declines were attributed to reduced volumes in both the Direct Marketing (down 23.3%) and Supply Chain (down 30.9%) segments, impacted by client exits and semiconductor shortages. The company's cash and equivalents totaled $81.3 million, with total debt at $372.1 million.

Steel Connect, Inc. (NASDAQ: STCN) reported fourth-quarter revenue of $136.0 million, down 17.5% from $164.9 million a year prior. The net loss widened to $11.0 million from $0.4 million in the previous year. For the fiscal year, revenue totaled $613.8 million, a 21.6% decline from $782.8 million. Adjusted EBITDA fell to $67.3 million from $86.9 million year-over-year. The company faces challenges in direct marketing and supply chain segments due to client exits and material shortages, while efforts to implement a Competitive Improvement Plan are underway.

IWCO Direct, a leader in data-driven direct marketing, announced a historic investment of approximately $50 million to enhance its technology and digital marketing capabilities. This investment aims to position the company as a premier strategic partner for performance marketers by optimizing its production platform and enhancing data analytics services. CEO John Ashe stated the funding will enable quicker, more efficient marketing solutions that integrate direct mail and digital channels, ultimately delivering greater value to clients.

Steel Connect reported Q3 2021 net revenue of $151.8 million, a 14.4% decrease year-over-year, driven by a decline in the Supply Chain segment, while Direct Marketing showed a slight increase. The company incurred a net loss of $27.6 million, influenced by a $25.7 million goodwill impairment charge. Adjusted EBITDA remained relatively stable at $16.5 million. Amid ongoing evaluations of a purchase proposal from Steel Partners, the Board approved a Competitive Improvement Plan for IWCO Direct, aiming for $50 million investment over 24 months to enhance services and reduce costs.