Steel Connect Reports Financial Results for Third Quarter & Nine Months of Fiscal 2019.

WALTHAM, Mass: Steel Connect, Inc. (the "Company") (NASDAQ: STCN), today announced financial results for its third quarter of fiscal year 2019 ended April 30, 2019. For a full discussion of the results, please see the Company's Form 10-Q filed with the Securities and Exchange Commission ("SEC"), which can be accessed through its Investor Relations website.

Executive Commentary

Warren Lichtenstein, Executive Chairman and Interim Chief Executive Officer of Steel Connect stated, "Our fiscal third quarter results show continued improvements in our business. Further, through the first nine months of the fiscal year, we have delivered growth, improved gross margin performance and have lowered SG&A expenses as a percentage of net revenue from 16.1% to 13.3%, while delivering a $16.0 million year-over-year improvement in operating income. We remain focused on driving efficiencies at both ModusLink and IWCO Direct, leveraging the Steel Business System and SteelGrow, and believe additional savings and synergies will be realized over time. We continue to drive positive changes to enhance our foundation, support our customers and deliver increased shareholder value."

Third Quarter Financial Results Summary

Net Revenue

The Company reported net revenue of $194.0 million for the third quarter ended April 30, 2019, as compared to $193.9 million for the same quarter in the prior year, an increase of $0.1 million.

Revenue in the Direct Marketing segment for the third quarter ended April 30, 2019 was $116.0 million compared to $120.6 million for the prior period ended April 30, 2018. The year-over-year decline was primarily related to lower volumes partially offset by an increase in the average price per package mailed. The Company's Supply Chain business reported total revenue of $78.0 million for the three months ended April 30, 2019 compared to $73.3 million for the same period in the prior year. Within the Supply Chain business, when comparing the fiscal third quarter periods, net revenue in the Americas region increased by $4.1 million or 31.4%; net revenue within the Asia region increased by $7.5 million or 23.5%; net revenue within the Europe region declined by $6.2 million or 27.0%; and net revenue for e-Business decreased by $0.7 million or 12.4%.

Gross Margin

Gross margin for the third quarter ended April 30, 2019 was 19.0%, as compared to 20.1% for the same period in the prior year, a decline of 110 basis points. The year-over-year decline was...

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