Resolute Quadruples Management Fees as Tax Charge Swings Earnings
Second-quarter consolidated net sales reached $473.2 million following the Husky transaction.
Resolute Holdings Management (RHLD), an asset-management company overseeing operating businesses, quadrupled second-quarter management fees from a year earlier as its Husky agreement contributed for a second full quarter.
Management fees rose to $13.6 million from $12.9 million sequentially and $3.4 million a year earlier. The increase extended a shift that began when the Husky management agreement took effect in January, following $4.0 million of fees in the fourth quarter of 2024.
Standalone income from operations increased to $9.2 million from $8.6 million in the first quarter and swung from a $0.4 million loss a year earlier. Operating expenses edged up to $4.4 million from $4.3 million sequentially, leaving expense growth well behind the rise in fees.
Fee-Related Earnings declined to $5.6 million from $5.9 million in the first quarter, while Fee-Related Earnings per diluted share held at $0.69. The per-share measure had climbed from a loss of $0.04 in the fourth quarter of 2024 and stood at $0.08 a year earlier.
GAAP diluted results swung to a loss of $1.53 a share from earnings of $7.19 a share in the first quarter and a loss of $0.07 a share a year earlier. Resolute recorded a $20.7 million standalone income-tax expense after receiving a $53.0 million tax benefit in the preceding quarter.
The expanded consolidated business produced net sales nearly four times the prior-year level, while profitability narrowed. Gross profit rose to $165.0 million from $68.8 million, though gross margin fell to about 34.9% from 57.5% as cost of sales increased. Income from operations declined to $35.2 million from $40.6 million as selling, general and administrative expense rose to $129.8 million, compressing the operating margin to about 7.4% from 33.9%.
Resolute repurchased $50.0 million of common shares during the quarter and through July, up from $38.0 million in the first quarter, and shares outstanding had fallen about 8.3% since its spin-off. The acquisition-led expansion also weighed on cash: operating cash flow shifted to a $23.2 million use in the first half from $67.4 million provided a year earlier, while acquisition spending reached $665.2 million.