Third Quarter 2023 Results
- Revenue was $492.3 million, an increase of 15.6% as compared to
the same period in the prior year
- Net income was $27.9 million, a decrease of 23.4% as compared
to the same period in the prior year
- Net income attributable to common unitholders was $25.6
million, or $1.14 per diluted common unit
- Adjusted EBITDA* decreased to $44.5 million from $60.2 million
for the same period in the prior year; Adjusted EBITDA margin* was
9.0%
- Net cash used in operating activities was $66.2 million
- Adjusted free cash flow* totaled $85.5 million
- Total debt at quarter-end was $187.2 million; net debt,* which
includes, among other items, pension and preferred unit
liabilities, and long-term investments was $29.5 million
YTD 2023 Results
- Revenue was $1,438.6 million, an increase of 13.0% as compared
to the same period in the prior year
- Net income was $111.3 million, a decrease of 16.4% as compared
to the same period in the prior year
- Net income attributable to common unitholders was $109.6
million, or $4.68 per diluted common unit
- Adjusted EBITDA* decreased to $181.2 million from $183.8
million for the same period in the prior year; Adjusted EBITDA
margin* was 12.6%
- Net cash used in operating activities was $11.7 million
- Adjusted free cash flow* was $148.4 million
Steel Partners Holdings L.P. (NYSE: SPLP) (the “Company”), a
diversified global holding company, today announced operating
results for the third quarter ended September 30, 2023. The
financial results of Steel Connect, Inc. ("Steel Connect" or
"STCN") have been included in the Company's consolidated financial
statements since the exchange transaction on May 1, 2023.
Q3 2023
Q3 2022
($ in thousands)
YTD 2023
YTD 2022
$492,254
$425,673
Revenue
$1,438,550
$1,272,826
27,887
36,428
Net income
111,305
133,082
25,572
36,317
Net income attributable to common
unitholders
109,568
132,960
44,464
60,167
Adjusted EBITDA*
181,201
183,785
9.0%
14.1%
Adjusted EBITDA margin*
12.6%
14.4%
13,116
11,718
Purchases of property, plant and
equipment
36,667
30,188
85,536
48,011
Adjusted free cash flow*
148,393
116,012
*See reconciliations to the nearest GAAP
measure included in the financial tables. See "Note Regarding Use
of Non-GAAP Financial Measurements" below for the definition of
these non-GAAP measures.
"Steel Partners continues to deliver strong results driven by
increased revenue in our Financial Services segment and favorable
impact from the newly acquired Supply Chain segment," said
Executive Chairman Warren Lichtenstein. "We have seen erosion of
both income and EBITDA year over year, and our management team is
focused on reducing costs and expenses. We continue to
strategically deploy our capital, and we are thrilled to bring
online our brand new, state-of-the-art plant for Lucas Milhaupt in
Cudahy, Wisconsin, which is part of our Diversified Industrial
segment."
Results of Operations
Comparison of the Three and Nine Months Ended September 30,
2023 and 2022 (unaudited)
(Dollar amounts in table and commentary in
thousands, unless otherwise indicated)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Revenue
$
492,254
$
425,673
$
1,438,550
$
1,272,826
Cost of goods sold
283,285
273,657
833,977
830,640
Selling, general and administrative
expenses
124,934
93,634
376,252
280,599
Asset impairment charges
—
2,449
329
2,884
Interest expense
4,115
5,110
15,934
14,452
Realized and unrealized (gains) losses on
securities, net
(8,665
)
(3,641
)
(6,151
)
22,570
Gain from sale of business
—
(295
)
—
(85,480
)
All other expense, net*
58,539
9,736
96,667
16,056
Total costs and expenses
462,208
380,650
1,317,008
1,081,721
Income from operations before income
taxes and equity method investments
30,046
45,023
121,542
191,105
Income tax (benefit) provision
(981
)
9,211
(1,707
)
56,256
Loss (income) of associated companies, net
of taxes
3,140
(616
)
11,944
1,767
Net income
$
27,887
$
36,428
$
111,305
$
133,082
* includes finance interest, provision for
loan losses, and other expense from the consolidated statements of
operations
Revenue
Revenue for the three months ended September 30, 2023 increased
$66,581, or 15.6%, as compared to the same period last year, as a
result of higher revenue from Financial Services and favorable
impact from the recently added Supply Chain segment, partially
offset by lower sales from the Diversified Industrial segment and
lower revenue from the Energy segment.
Revenue for the nine months ended September 30, 2023 increased
$165,724, or 13.0%, as compared to the same period last year, as a
result of higher revenue from both Financial Services and Energy
segments, as well as favorable impact of the recently added Supply
Chain segment, partially offset by lower sales from the Diversified
Industrial segment including the impact from the divestiture of the
SLPE business in April 2022.
Cost of Goods Sold
Cost of goods sold for the three months ended September 30, 2023
increased $9,628, or 3.5%, as compared to the same period last
year, resulting from the recently added Supply Chain segment,
partially offset by lower sales from the Diversified Industrial
segment, primarily from its Building Materials business unit and
lower revenue volume from the Energy segment.
Cost of goods sold for the nine months ended September 30, 2023
increased $3,337, or 0.4%, as compared to the same period last
year, resulting from the recently added Supply Chain segment and
higher revenue from the Energy segment, partially offset by lower
sales discussed above from the Diversified Industrial segment.
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A") for
the three months ended September 30, 2023 increased $31,300, or
33.4%, as compared to the same period last year. The increase was
primarily due to higher expenses from the Financial Services
segment of $17,800 and Diversified Industrial segment of $4,800,
and impact of the recently added Supply Chain segment of $7,100,.
The increase for the Financial Services segment was primarily due
to higher credit performance fees due to higher credit risk
transfer ("CRT") balances and higher personnel expenses related to
incremental headcount. The higher expenses from the Diversified
Industrial segment was primarily driven by higher personnel
costs.
SG&A for the nine months ended September 30, 2023 increased
$95,653, or 34.1%, as compared to the same period last year. The
increase was primarily driven by higher SG&A expenses from the
Financial Services segment of $68,800 as discussed above and
Diversified Industrial segment of approximately $18,700, primarily
due to higher personnel costs for the nine months ended September
30, 2023, despite the impact of the divestiture of SLPE business of
$5,000, as well as the recently added Supply Chain segment of
$15,900 as mentioned above, partially offset by lower Corporate
SG&A expenses of $8,400 due primarily to lower legal fees as
compared to the last year period.
Asset Impairment Charges
An impairment charge of $329 was recognized during the nine
months ended September 30, 2023, related to a piece of unused
equipment in the Building Materials business unit from the
Diversified Industrial segment. The Company recorded asset
impairment charges of $2,449 and $2,884 for the three and nine
months ended September 30, 2022, respectively, primarily related to
the implementation costs of an ERP project associated with the
Kasco business unit from the Diversified Industrial segment.
Interest Expense
Interest expense decreased $995, or 19.5% and increased $1,482
or 10.3% for the three and nine months ended September 30, 2023,
respectively, as compared to the same periods last year. The
decrease for the three month period was primarily driven by lower
average debt level, partially offset by higher average interest
rates. The increase for the nine month period was primarily due to
higher average interest rates, partially offset by lower average
debt level.
Realized and Unrealized (Gains) Losses on Securities,
Net
The Company recognized gains of $8,665 for the three months
ended September 30, 2023, as compared to gains of $3,641 in the
same period of 2022. The Company recorded gains of $6,151 for the
nine months ended September 30, 2023, as compared to losses of
$22,570 in the same period of 2022. These gains and losses were due
to unrealized gains and losses related to the mark-to-market
adjustments on the Company's portfolio of securities.
All Other Expense, Net
All other expense, net totaled $58,539 for the three months
ended September 30, 2023, as compared to $9,736 in the same period
of 2022 and $96,667 for the nine months ended September 30, 2023,
as compared to $16,056 in the same period of 2022. The incremental
all other expense, net for the three and nine months ended
September 30, 2023 was primarily due to higher provisions for
credit losses of $30,376 and $36,221 and finance interest expense
of $17,601 and $46,888 related to the Financial Service segment, as
compared to the same periods of 2022, respectively.
Income Tax (Benefit) Provision
The Company recorded an income tax benefit of $981 for the three
months ended September 30, 2023 and an income tax provision of
$9,211 for the same period in 2022. The Company recorded an income
tax benefit of $1,707 for the nine months ended September 30, 2023
and an income tax provision of $56,256 for the same period in 2022.
The Company's effective tax rate was (1.4)% and 29.4% for the nine
months ended September 30, 2023 and 2022, respectively. The lower
effective tax rate for the nine months ended September 30, 2023 is
primarily due to the change in U.S. income tax expense related to
unrealized gains and losses on investments and the deferred tax
movements resulting from the addition of Steel Connect. As a
limited partnership, the Company is generally not responsible for
federal and state income taxes, and its profits and losses are
passed directly to its limited partners for inclusion in their
respective income tax returns. Provisions have been made for
federal, state, local or foreign income taxes on the results of
operations generated by our consolidated subsidiaries that are
taxable entities. Significant differences between the statutory
rate and the effective tax rate include partnership losses for
which no tax benefit is recognized, tax expense related to
unrealized gains and losses on investment, state taxes, changes in
deferred tax valuation allowances, deferred tax movements resulting
from the addition of Steel Connect in an exchange transaction and
other permanent differences.
Loss (income) of Associated Companies, Net of Taxes
The Company recorded losses from associated companies, net of
taxes, of $3,140 and $11,944 for the three and nine months ended
September 30, 2023, respectively, as compared to income from
associated companies, net of taxes, of $616 and loss from
associated companies, net of taxes, of $1,767 for the three and
nine months ended September 30, 2022, respectively. The
fluctuations for these periods were primarily due to the changes in
fair value of the Company's investment in Steel Connect. The net of
tax loss for the three month ended September 30, 2023 was related
to the Company's PCS-Mosaic investment based on the most recent
valuation analysis.
Purchases of Property, Plant and Equipment (Capital
Expenditures)
Capital expenditures for the three and nine months ended
September 30, 2023 totaled $13,116, or 2.7% of revenue and $36,667,
or 2.5% of revenue, respectively as compared to $11,718, or 2.8% of
revenue and $30,188, or 2.4% of revenue, respectively, in the same
periods of 2022.
Common Units Repurchase Program
During the three months ended September 30, 2023, the Company
repurchased 111,118 common units for $4,891. From the inception of
the Repurchase Program the Company has purchased 7,800,608 common
units for an aggregate price of approximately $164,086. As of
September 30, 2023, there were approximately 969,632 common units
that may yet be purchased under the Repurchase Program.
Additional Non-GAAP Financial Measures
Adjusted EBITDA was $44,464 for the three months ended September
30, 2023, as compared to $60,167 for the same period of 2022 and
$181,201 for the nine months ended September 30, 2023, as compared
to $183,785 for the same period of 2022. Adjusted EBITDA decreased
by $15,703 and $2,584 for the three and nine months ended September
30, 2023, respectively. The decrease for the three month period was
primarily due to 1) higher credit loss provisions and finance
interest, as well as higher personnel costs, partially offset by
higher revenue impact at the Financial Services segment; 2) lower
profit at both Diversified Industrial and Energy segments driven by
lower sales; 3) favorable impact from the newly acquired Supply
Chain segment; and 4) lower SG&A costs from Corporate as
compared to the same period of 2022. The decrease for the nine
month period was primarily due to lower profit from the Diversified
Industrial segment driven by lower sales, largely offset by 1)
lower SG&A costs from Corporate; 2) favorable impact from the
newly acquired Supply Chain segment; 3) higher revenue at the
Financial Services segment that was partially offset by higher
finance interest and credit loss provisions, as well as higher
personnel costs; and 4) strong revenue at the Energy segment
primarily resulting from higher volume and favorable pricing, as
compared to the same period of 2022. For the three and nine months
ended September 30, 2023, adjusted free cash flow were $85,536 and
$148,393, as compared to $48,011 and $116,012, respectively for the
same periods in 2022.
Liquidity and Capital Resources
As of September 30, 2023, the Company had approximately $403,500
in availability under its senior credit agreement, as well as
$356,299 in cash and cash equivalents, excluding WebBank cash, and
approximately $39,373 in long-term investments.
As of September 30, 2023, total debt was $187,184, an increase
of approximately $6,860, as compared to December 31, 2022. As of
September 30, 2023, net debt totaled $29,456, a decrease of
approximately $18,175, primarily driven by the change of long term
investments for the 2023 period. Total leverage (as defined in the
Company's senior credit agreement) was approximately 1.4x as of
both September 30, 2023 and December 31, 2022.
Quarterly Cash Distribution on Series A Preferred
Units
On November 9, 2023, the Company's board of directors declared a
regular quarterly cash distribution of $0.375 per unit, payable
December 15, 2023, to unitholders of record as of December 1, 2023,
on its 6% Series A Preferred Units, no par value ("Series A
Preferred").
Any future determination to declare distributions on its units
of Series A Preferred, and any determination to pay such
distributions in cash or in kind, or a combination thereof, will
remain at the discretion of Steel Partners' board of directors and
will be dependent upon a number of factors, including the Company's
results of operations, cash flows, financial position, and capital
requirements, among others.
About Steel Partners Holdings L.P.
Steel Partners Holdings L.P. (www.steelpartners.com) is a
diversified global holding company that owns and operates
businesses and has significant interests in various companies,
including diversified industrial products, energy, defense, supply
chain management and logistics, banking and youth sports. At Steel
Partners, our culture and core values of Teamwork, Respect,
Integrity, and Commitment guide our Kids First purpose, which is to
forge a path of success for the next generation by instilling
values, building character, and teaching life lessons through
sports.
(Financial Tables Follow)
Consolidated Balance Sheets
(unaudited)
(in thousands, except common
units)
September 30, 2023
December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
562,149
$
234,448
Trade and other receivables - net of
allowance for doubtful accounts of $2,325 and $2,414,
respectively
234,080
183,861
Loans receivable, including loans held for
sale of $776,060 and $602,675, respectively, net
1,443,166
1,131,745
Inventories, net
214,846
214,084
Prepaid expenses and other current
assets
43,618
41,090
Total current assets
2,497,859
1,805,228
Long-term loans receivable, net
475,159
423,248
Goodwill
148,629
125,813
Other intangible assets, net
118,346
94,783
Other non-current assets
348,678
195,859
Property, plant and equipment, net
249,269
238,510
Operating lease right-of-use assets
73,916
42,711
Long-term investments
39,373
309,697
Total Assets
$
3,951,229
$
3,235,849
LIABILITIES AND CAPITAL
Current liabilities:
Accounts payable
$
131,886
$
109,572
Accrued liabilities
137,979
112,744
Deposits
1,722,254
1,360,477
Short-term debt
195
685
Current portion of long-term debt
67
67
Other current liabilities
95,435
65,598
Total current liabilities
2,087,816
1,649,143
Long-term deposits
377,232
208,004
Long-term debt
186,922
179,572
Other borrowings
20,309
41,682
Preferred unit liability
154,250
152,247
Accrued pension liabilities
83,694
84,948
Deferred tax liabilities
5,973
41,055
Long-term operating lease liabilities
60,185
35,512
Other non-current liabilities
39,876
42,226
Total Liabilities
3,016,257
2,434,389
Commitments and Contingencies
Capital:
Partners' capital common units: 21,304,915
and 21,605,093 issued and outstanding (after deducting 18,359,295
and 17,904,679 units held in treasury, at cost of $328,985 and
$309,257), respectively
1,038,447
952,094
Accumulated other comprehensive loss
(152,911
)
(151,874
)
Total Partners' Capital
885,536
800,220
Noncontrolling interests in consolidated
entities
49,436
1,240
Total Capital
934,972
801,460
Total Liabilities and Capital
$
3,951,229
$
3,235,849
Consolidated Statements of Operations
(unaudited)
(in thousands, except common units and
per common unit data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Revenue:
Diversified Industrial net sales
$
299,098
$
312,200
$
918,570
$
986,113
Energy net revenue
46,742
51,409
145,220
136,750
Financial Services revenue
106,405
62,064
304,570
149,963
Supply Chain revenue
40,009
—
70,190
—
Total revenue
492,254
425,673
1,438,550
1,272,826
Costs and expenses:
Cost of goods sold
283,285
273,657
833,977
830,640
Selling, general and administrative
expenses
124,934
93,634
376,252
280,599
Asset impairment charges
—
2,449
329
2,884
Finance interest expense
22,371
4,770
54,494
7,606
Provision for credit losses
36,969
6,593
47,979
11,758
Gain from sale of business
—
(295
)
—
(85,480
)
Interest expense
4,115
5,110
15,934
14,452
Realized and unrealized (gains) losses on
securities, net
(8,665
)
(3,641
)
(6,151
)
22,570
Other income, net
(801
)
(1,627
)
(5,806
)
(3,308
)
Total costs and expenses
462,208
380,650
1,317,008
1,081,721
Income from operations before income
taxes and equity method investments
30,046
45,023
121,542
191,105
Income tax (benefit) provision
(981
)
9,211
(1,707
)
56,256
Loss (income) of associated companies, net
of taxes
3,140
(616
)
11,944
1,767
Net income
27,887
36,428
111,305
133,082
Net (income) loss attributable to
noncontrolling interests in consolidated entities
(2,315
)
(111
)
(1,737
)
(122
)
Net income attributable to common
unitholders
$
25,572
$
36,317
$
109,568
$
132,960
Net income per common unit -
basic
Net income attributable to common
unitholders
$
1.20
$
1.57
$
5.10
$
5.85
Net income per common unit -
diluted
Net income attributable to common
unitholders
$
1.14
$
1.45
$
4.68
$
5.26
Weighted-average number of common units
outstanding - basic
21,298,871
23,147,644
21,495,689
22,737,902
Weighted-average number of common units
outstanding - diluted
25,081,210
27,245,770
25,360,324
27,038,551
Supplemental Balance Sheet Data
(September 30, 2023 unaudited)
(in thousands, except common and
preferred units)
September 30,
December 31,
2023
2022
Cash and cash equivalents
$
562,149
$
234,448
WebBank cash and cash equivalents
205,850
174,257
Cash and cash equivalents, excluding
WebBank
$
356,299
$
60,191
Common units outstanding
21,304,915
21,605,093
Preferred units outstanding
6,422,128
6,422,128
Supplemental Non-GAAP Disclosures
(unaudited)
Adjusted EBITDA Reconciliation:
(in thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Net income
$
27,887
$
36,428
$
111,305
$
133,082
Income tax (benefit) provision
(981
)
9,211
(1,707
)
56,256
Income before income taxes
26,906
45,639
109,598
189,338
Add (Deduct):
Loss (income) of associated companies, net
of taxes
3,140
(616
)
11,944
1,767
Realized and unrealized (gains) losses on
securities, net
(8,665
)
(3,641
)
(6,151
)
22,570
Interest expense
4,115
5,110
15,934
14,452
Depreciation
10,255
9,118
29,222
28,636
Amortization
4,438
3,583
12,211
11,576
Asset impairment charge
—
2,449
329
2,884
Non-cash pension expense (income)
2,979
(1,799
)
8,948
(5,405
)
Non-cash equity-based compensation
599
369
1,007
842
Gain from sale of business
—
(295
)
—
(85,480
)
Other items, net
697
250
(1,841
)
2,605
Adjusted EBITDA
$
44,464
$
60,167
$
181,201
$
183,785
Total revenue
$
492,254
$
425,673
$
1,438,550
$
1,272,826
Adjusted EBITDA margin
9.0
%
14.1
%
12.6
%
14.4
%
Net Debt Reconciliation:
(in thousands)
September 30,
December 31,
2023
2022
Total debt
$
187,184
$
180,324
Accrued pension liabilities
83,694
84,948
Preferred unit liability
154,250
152,247
Cash and cash equivalents, excluding
WebBank
(356,299
)
(60,191
)
Long-term investments
(39,373
)
(309,697
)
Net debt
$
29,456
$
47,631
Adjusted Free Cash Flow
Reconciliation:
(in thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Net cash used in operating activities
$
66,186
$
42,337
$
11,675
$
(58,524
)
Purchases of property, plant and
equipment
(13,116
)
(11,718
)
(36,667
)
(30,188
)
Net increase in loans held for sale
32,466
17,392
173,385
204,724
Adjusted free cash flow
$
85,536
$
48,011
$
148,393
$
116,012
Segment Results (unaudited)
(in thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Revenue:
Diversified Industrial
$
299,098
$
312,200
$
918,570
$
986,113
Energy
46,742
51,409
145,220
136,750
Financial Services
106,405
62,064
304,570
149,963
Supply Chain
$
40,009
$
—
$
70,190
$
—
Total revenue
$
492,254
$
425,673
$
1,438,550
$
1,272,826
Income (loss) before interest expense
and income taxes:
Diversified Industrial
$
14,756
$
27,500
$
61,015
$
183,534
Energy
5,968
6,383
15,239
14,012
Financial Services
(2,588
)
17,135
48,246
44,771
Supply Chain
4,011
—
5,846
—
Corporate and other
8,874
(269
)
(4,814
)
(38,527
)
Income before interest expense and
income taxes:
31,021
50,749
125,532
203,790
Interest expense
4,115
5,110
15,934
14,452
Income tax (benefit) provision
(981
)
9,211
(1,707
)
56,256
Net income
$
27,887
$
36,428
$
111,305
$
133,082
(Income) loss of associated companies,
net of taxes:
Corporate and other
$
3,140
$
(616
)
$
11,944
$
1,767
Total
$
3,140
$
(616
)
$
11,944
$
1,767
Segment depreciation and
amortization:
Diversified Industrial
$
10,257
$
9,875
$
30,333
$
31,628
Energy
2,740
2,536
7,732
7,700
Financial Services
205
131
630
392
Supply Chain
1,324
—
2,234
—
Corporate and other
167
159
504
492
Total depreciation and amortization
$
14,693
$
12,701
$
41,433
$
40,212
Segment Adjusted EBITDA:
Diversified Industrial
$
33,581
$
37,504
$
100,370
$
129,481
Energy
7,971
8,873
22,517
21,538
Financial Services
(4,412
)
17,101
47,573
44,300
Supply Chain
5,935
—
8,806
—
Corporate and other
1,389
(3,311
)
1,935
(11,534
)
Total Adjusted EBITDA
$
44,464
$
60,167
$
181,201
$
183,785
Note Regarding Use of Non-GAAP Financial Measurements
The financial data contained in this press release includes
certain non-GAAP financial measurements as defined by the SEC,
including "Adjusted EBITDA," "Adjusted EBITDA Margin," "Net Debt"
and "Adjusted Free Cash Flow." The Company is presenting these
non-GAAP financial measurements because it believes that these
measures provide useful information to investors about the
Company's business and its financial condition. The Company defines
Adjusted EBITDA as net income or loss from continuing operations
before the effects of income or loss from investments in associated
companies and other investments held at fair value, interest
expense, taxes, depreciation and amortization, non-cash pension
expense or income, and realized and unrealized gains or losses on
securities, and excludes certain non-recurring and non-cash items.
The Company defines Adjusted EBITDA margin as Adjusted EBITDA as a
percentage of revenue. The Company defines Net Debt as the sum of
total debt, accrued pension liabilities and preferred unit
liability, less the sum of cash and cash equivalents (excluding
those used in WebBank's banking operations), and long-term
investments. The Company defines Adjusted Free Cash Flow as net
cash provided by or used in operating activities of continuing
operations less the sum of purchases of property, plant and
equipment, and net increases or decreases in loans held for sale.
The Company believes these measures are useful to investors because
they are measures used by the Company's Board of Directors and
management to evaluate its ongoing business, including in internal
management reporting, budgeting and forecasting processes, in
comparing operating results across the business, as internal
profitability measures, as components in assessing liquidity and
evaluating the ability and the desirability of making capital
expenditures and significant acquisitions, and as elements in
determining executive compensation.
However, the measures are not measures of financial performance
under generally accepted accounting principles in the U.S. ("U.S.
GAAP"), and the items excluded from these measures are significant
components in understanding and assessing financial performance.
Therefore, these non-GAAP financial measurements should not be
considered substitutes for net income or loss, total debt, or cash
flows from operating, investing or financing activities. Because
Adjusted EBITDA is calculated before recurring cash charges,
including realized losses on investments, interest expense, and
taxes, and is not adjusted for capital expenditures or other
recurring cash requirements of the business, it should not be
considered as a measure of discretionary cash available to invest
in the growth of the business. There are a number of material
limitations to the use of Adjusted EBITDA as an analytical tool,
including the following:
- Adjusted EBITDA does not reflect the Company's tax provision or
the cash requirements to pay its taxes;
- Adjusted EBITDA does not reflect income or loss from the
Company's investments in associated companies and other investments
held at fair value;
- Adjusted EBITDA does not reflect the Company's interest
expense;
- Although depreciation and amortization are non-cash expenses in
the period recorded, the assets being depreciated and amortized may
have to be replaced in the future, and Adjusted EBITDA does not
reflect the cash requirements for such replacement;
- Adjusted EBITDA does not reflect the Company's net realized and
unrealized gains and losses on its investments;
- Adjusted EBITDA does not include non-cash charges for pension
expense and equity-based compensation;
- Adjusted EBITDA does not include amounts related to
noncontrolling interests in consolidated entities;
- Adjusted EBITDA does not include certain other non-recurring
and non-cash items; and
- Adjusted EBITDA does not include the Company's discontinued
operations.
In addition, Net Debt assumes the Company's cash and cash
equivalents (excluding those used in WebBank's banking operations),
marketable securities and long-term investments are immediately
convertible in cash and can be used to reduce outstanding debt
without restriction at their recorded fair value, while Adjusted
Free Cash Flow excludes net increases or decreases in loans held
for sale, which can vary significantly from period-to-period since
these loans are typically sold after origination and thus represent
a significant component in WebBank's operating cash flow
requirements.
The Company compensates for these limitations by relying
primarily on its U.S. GAAP financial measures and using these
measures only as supplemental information. The Company believes
that consideration of Adjusted EBITDA, Adjusted EBITDA Margin, Net
Debt and Adjusted Free Cash Flow, together with a careful review of
its U.S. GAAP financial measures, is a well-informed method of
analyzing SPLP. Because Adjusted EBITDA, Adjusted EBITDA Margin,
Net Debt and Adjusted Free Cash Flow are not measurements
determined in accordance with U.S. GAAP and are susceptible to
varying calculations, Adjusted EBITDA, Adjusted EBITDA Margin, Net
Debt and Adjusted Free Cash Flow, as presented, may not be
comparable to other similarly titled measures of other
companies.
Forward-Looking Statements
This press release contains certain "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, that reflect SPLP's current expectations and projections
about its future results, performance, prospects and opportunities.
SPLP identifies these forward-looking statements by using words
such as "expect," "anticipate," "intend," "plan," "believe,"
"seek," "estimate," and similar expressions. These forward-looking
statements are only predictions based upon the Company's current
expectations and projections about future events, and are based on
information currently available to the Company and are subject to
risks, uncertainties, and other factors that could cause its actual
results, performance, prospects, or opportunities in 2023 and
beyond to differ materially from those expressed in, or implied by,
these forward-looking statements. These factors include, without
limitation: disruptions to the Company’s business as a result of
economic downturns; the negative impact of inflation, raw material
price increases and supply chain disruptions; the significant
volatility of crude oil and commodity prices, including from the
ongoing Russia-Ukraine war or the disruptions caused by the ongoing
conflict between Israel and Hamas; the effects of rising interest
rates; the Company’s subsidiaries’ sponsor defined pension plans,
which could subject the Company to future cash flow requirements;
the ability to comply with legal and regulatory requirements,
including environmental, health and safety laws and regulations,
banking regulations and other extensive requirements to which the
Company and its businesses are subject; risks associated with the
Company’s wholly-owned subsidiary, WebBank, as a result of its
Federal Deposit Insurance Corporation ("FDIC") status,
highly-regulated lending programs, and capital requirements; the
ability to meet obligations under the Company's senior credit
facility through future cash flows or financings; the risk of
recent events affecting the financial services industry, including
the closures or other failures of several large banks; the risk of
management diversion, increased costs and expenses, and impact on
profitability in connection with the Company's business strategy to
make acquisitions, including in connection with the Company’s
recent majority investment in the Supply Chain segment; the impact
of losses in the Company's investment portfolio; the Company’s
ability to protect its intellectual property rights and obtain or
retain licenses to use others' intellectual property on which the
Company relies; the Company’s exposure to risks inherent to
conducting business outside of the U.S.; the impact of any changes
in U.S. trade policies; the adverse impact of litigation or
compliance failures on the Company's profitability; a significant
disruption in, or breach in security of, the Company’s technology
systems or protection of personal data; the loss of any significant
customer contracts; the Company’s ability to maintain effective
internal control over financial reporting; the rights of
unitholders with respect to voting and maintaining actions against
the Company or its affiliates; potential conflicts of interest
arising from certain interlocking relationships amount us and
affiliates of the Company’s Executive Chairman; the Company’s
dependence on the Manager and impact of the management fee on the
Company’s total partners’ capital; the impact to the development of
an active market for the Company’s units due to transfer
restrictions and other factors; the Company’s tax treatment and its
subsidiaries’ ability to fully utilize their tax benefits; the
potential negative impact on our operations of changes in tax
rates, laws or regulations, including U.S. government tax reform;
the loss of essential employees; and other risks detailed from time
to time in filings we make with the SEC. These statements involve
significant risks and uncertainties, and no assurance can be given
that the actual results will be consistent with these
forward-looking statements. Investors should read carefully the
factors described in the "Risk Factors" section of the Company's
filings with the SEC, including the Company's Form 10-K for the
year ended December 31, 2022 and subsequent quarterly reports on
Form 10-Q and annual reports on Form 10-K, for information
regarding risk factors that could affect the Company's results. Any
forward-looking statement made in this press release speaks only as
of the date hereof, and investors should not rely upon
forward-looking statements as predictions of future events. Except
as otherwise required by law, the Company undertakes no obligation
to publicly update or revise any forward-looking statements,
whether as a result of new information, future events, changed
circumstances, or any other reason.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231108309626/en/
Investor Relations Contact
Jennifer Golembeske 212-520-2300
jgolembeske@steelpartners.com
Steel Partners (NYSE:SPLP)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
Steel Partners (NYSE:SPLP)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024