Steel Partners Holdings Earnings 2020-06-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

splp-20200630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number: 001-35493

STEEL PARTNERS HOLDINGS L.P.

(Exact Name of Registrant as Specified in its Charter)


Delaware			13-3727655
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

590 Madison Avenue, 32^nd Floor
New York, New York			10022
(Address of Principal Executive Offices)			(Zip Code)

(212) 520-2300

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbols	Name of Each Exchange on which Registered
Common Units, $0 par	SPLP	New York Stock Exchange
6.0% Series A Preferred Units	SPLP-PRA	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐			Accelerated filer ☑
Non-accelerated filer ☐			Smaller reporting company ☑

			Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

The number of common units outstanding as of August 6, 2020 was 24,948,713.

STEEL PARTNERS HOLDINGS L.P.

TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION			Page
Item 1.	Financial Statements (unaudited)

	Consolidated Balance Sheets as of June 30 , 2020 and December 31, 2019	2

	Consolidated Statements of Operations for the three and si x months ended June 30 , 2020 and 2019	3

	Consolidated Statements of Comprehensive (Loss) Income for the three and six months ended June 30, 2020 and 2019	4

	Consolidated Statements of Changes in Capital for the three and six months ended June 30, 2020 and 2019	5

	Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019	7

	Notes to Consolidated Financial Statements	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	35

Item 4.	Controls and Procedures	45

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	45

Item 1A.	Risk Factors	46

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46

Item 6.	Exhibits	47

SIGNATURES			48

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

STEEL PARTNERS HOLDINGS L.P.

Consolidated Balance Sheets

(unaudited)

(in thousands, except common units)


	June 30, 2020		December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	107,083	$	139,467

Marketable securities	155		220
Trade and other receivables - net of allowance for doubtful accounts of $3,232 and $2,512, respectively	163,486		175,043
Receivables from related parties	2,875		2,221
Loans receivable, including loans held for sale of $71,378 and $225,013, respectively, net	321,987		546,908
Inventories, net	143,923		151,641
Prepaid expenses and other current assets	32,172		33,689
Assets of discontinued operations	—		41,012
Total current assets	771,681		1,090,201
Long-term loans receivable, net	2,250,656		196,145
Goodwill	151,931		149,626
Other intangible assets, net	148,643		158,593
Deferred tax assets	94,552		88,645
Other non-current assets	45,000		70,616
Property, plant and equipment, net	238,109		250,225
Operating lease right-of-use assets	31,756		34,324
Long-term investments	214,719		275,836
Assets of discontinued operations	—		18,143
Total Assets	$	3,947,047	$	2,332,354
LIABILITIES AND CAPITAL
Current liabilities:
Accounts payable	$	107,936	$	85,817
Accrued liabilities	72,739		114,941

Deposits	362,286		615,495
Payables to related parties	687		481
Short-term debt	357		1,800
Current portion of long-term debt	14,035		14,208
Current portion of preferred unit liability	—		39,782
Other current liabilities	88,806		42,041
Liabilities of discontinued operations	—		21,256
Total current liabilities	646,846		935,821
Long-term deposits	95,717		139,222
Long-term debt	350,653		322,081
Other borrowings	2,032,236		—
Preferred unit liability	145,544		144,247
Accrued pension liabilities	183,230		183,228
Deferred tax liabilities	—		2,497
Long-term operating lease liabilities	24,649		26,458
Other non-current liabilities	38,883		14,556
Liabilities of discontinued operations	—		87,825
Total Liabilities	3,517,758		1,855,935
Commitments and Contingencies
Capital:
Partners' capital common units: 24,929,253 and 25,023,128 issued and outstanding (after deducting 12,647,864 and 12,647,864 units held in treasury, at cost of $198,781 and $198,781), respectively	600,578		664,035
Accumulated other comprehensive loss	(175,504)		(191,422)
Total Partners' Capital	425,074		472,613
Noncontrolling interests in consolidated entities	4,215		3,806
Total Capital	429,289		476,419
Total Liabilities and Capital	$	3,947,047	$	2,332,354

See accompanying Notes to Consolidated Financial Statements

STEEL PARTNERS HOLDINGS L.P.

Consolidated Statements of Operations

(unaudited)

(in thousands, except common units and per common unit data)


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Revenue:
Diversified industrial net sales	$	252,172	$	300,049	$	514,472	$	580,970
Energy net revenue	14,302		43,532		52,904		82,518
Financial services revenue	28,963		42,134		75,961		78,040
Total revenue	295,437		385,715		643,337		741,528
Costs and expenses:
Cost of goods sold	195,199		252,548		416,278		491,015
Selling, general and administrative expenses	74,936		97,430		151,600		179,753

Asset impairment charges	—		190		617		190
Finance interest expense	3,475		4,201		6,909		8,125
Provision for loan losses	14,253		12,715		40,390		21,185
Interest expense	7,722		10,272		16,037		20,477

Realized and unrealized losses (gains) on securities, net	8,482		(36,377)		26,484		(38,486)
Other (income) expense, net	(2,000)		(1,132)		(2,967)		18
Total costs and expenses	302,067		339,847		655,348		682,277
(Loss) income from continuing operations before income taxes and equity method investments	(6,630)		45,868		(12,011)		59,251
Income tax (benefit) provision	(1,320)		14,798		(4,749)		17,800
(Income) loss of associated companies, net of taxes	(4,893)		7,118		29,614		(2,263)
Net (loss) income from continuing operations	(417)		23,952		(36,876)		43,714
Discontinued operations (see Note 3)
Loss from discontinued operations, net of taxes	(280)		(2,918)		(2,581)		(7,058)
Net loss on deconsolidation of discontinued operations	(980)		—		(23,827)		—
Loss from discontinued operations, net of taxes	(1,260)		(2,918)		(26,408)		(7,058)
Net (loss) income	(1,677)		21,034		(63,284)		36,656
Net (income) loss attributable to noncontrolling interests in consolidated entities (continuing operations)	(191)		29		(321)		85
Net (loss) income attributable to common unitholders	$	(1,868)	$	21,063	$	(63,605)	$	36,741
Net (loss) income per common unit - basic
Net (loss) income from continuing operations	$	(0.02)	$	0.96	$	(1.49)	$	1.75
Net loss from discontinued operations	(0.05)		(0.12)		(1.06)		(0.28)
Net (loss) income attributable to common unitholders	$	(0.07)	$	0.84	$	(2.55)	$	1.47
Net (loss) income per common unit - diluted
Net (loss) income from continuing operations	$	(0.02)	$	0.69	$	(1.49)	$	1.27
Net loss from discontinued operations	(0.05)		(0.08)		(1.06)		(0.18)
Net (loss) income attributable to common unitholders	$	(0.07)	$	0.61	$	(2.55)	$	1.09
Weighted-average number of common units outstanding - basic	24,958,026		24,982,728		24,989,440		24,915,446
Weighted-average number of common units outstanding - diluted	24,958,026		39,138,599		24,989,440		39,158,510

See accompanying Notes to Consolidated Financial Statements

STEEL PARTNERS HOLDINGS L.P.

Consolidated Statements of Comprehensive (Loss) Income

(unaudited)

(in thousands)


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Net (loss) income	$	(1,677)	$	21,034	$	(63,284)	$	36,656
Other comprehensive income (loss), net of taxes:


Gross unrealized (losses) gains on derivative financial instruments	—		(425)		—		93
Currency translation adjustments	1,373		(1,797)		(1,563)		(494)

Other comprehensive income (loss)	1,373		(2,222)		(1,563)		(401)
Comprehensive (loss) income	(304)		18,812		(64,847)		36,255
Comprehensive (income) loss attributable to noncontrolling interests	(191)		29		(321)		85
Comprehensive (loss) income attributable to common unitholders	$	(495)	$	18,841	$	(65,168)	$	36,340

See accompanying Notes to Consolidated Financial Statements

STEEL PARTNERS HOLDINGS L.P.

Consolidated Statements of Changes in Capital

(unaudited)

(in thousands, except common units and treasury units)


	Steel Partners Holdings L.P. Common Unitholders
	Common	Treasury Units					Partners'		Accumulated Other Comprehensive		Total Partners'		Noncontrolling Interests in Consolidated		Total
	Units	Units	Dollars		Capital		Loss		Capital		Entities		Capital
Balance as of December 31, 2019	37,670,992	(12,647,864)	$	(198,781)	$	664,035	$	(191,422)	$	472,613	$	3,806	$	476,419
Net (loss) income	—	—	—		(61,737)		—		(61,737)		130		(61,607)

Currency translation adjustments	—	—	—		—		(2,936)		(2,936)		—		(2,936)
Equity compensation - restricted units	(9,854)	—	—		104		—		104		—		104
Deconsolidation of API (see Note 3)	—	—	—		—		17,481		17,481		—		17,481
Other, net	—	—	—		(2)		—		(2)		60		58
Balance as of March 31, 2020	37,661,138	(12,647,864)	(198,781)		602,400		(176,877)		425,523		3,996		429,519
Net (loss) income	—	—	—		(1,868)		—		(1,868)		191		(1,677)

Currency translation adjustments	—	—	—		—		1,373		1,373		—		1,373
Equity compensation - restricted units	(84,021)	—	—		49		—		49		—		49

Other, net	—	—	—		(3)		—		(3)		28		25
Balance as of June 30, 2020	37,577,117	(12,647,864)	$	(198,781)	$	600,578	$	(175,504)	$	425,074	$	4,215	$	429,289

STEEL PARTNERS HOLDINGS L.P.

Consolidated Statements of Changes in Capital

(unaudited)

(in thousands, except common units and treasury units)

Steel Partners Holdings L.P. Common Unitholders

Common

Treasury Units

Partners'

Accumulated Other Comprehensive

Total Partners'

Noncontrolling Interests in Consolidated

Total

Units

Dollars

Capital

Loss

Capital

Entities

Price	1.00	EPS	-33,977,000
Shares	-0	P/E	-0
MCap	-0	P/FCF	-0
Net Debt	302	EBIT	97
TEV	302	TEV/EBIT	3
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-06-30	Filed 2020-08-10
10-Q	2020-03-31	Filed 2020-05-07
10-K	2019-12-31	Filed 2020-02-28
10-Q	2019-09-30	Filed 2019-11-12
10-Q	2019-06-30	Filed 2019-08-08
10-Q	2019-03-31	Filed 2019-05-02
10-K	2018-12-31	Filed 2019-03-01
10-Q	2018-09-30	Filed 2018-11-01
10-Q	2018-06-30	Filed 2018-08-07
10-Q	2018-03-31	Filed 2018-05-04
10-K	2017-12-31	Filed 2018-03-09
10-Q	2017-09-30	Filed 2017-11-07
10-Q	2017-06-30	Filed 2017-08-08
10-Q	2017-03-31	Filed 2017-05-09
10-K	2016-12-31	Filed 2017-03-14
10-Q	2016-09-30	Filed 2016-11-07
10-Q	2016-06-30	Filed 2016-08-04
10-Q	2016-03-31	Filed 2016-05-05
10-K	2015-12-31	Filed 2016-03-11
10-Q	2015-09-30	Filed 2015-11-05
10-Q	2015-06-30	Filed 2015-08-06
10-Q	2015-03-31	Filed 2015-05-11
10-K	2014-12-31	Filed 2015-03-16
10-Q	2014-09-30	Filed 2014-11-06
10-Q	2014-06-30	Filed 2014-08-07
10-Q	2014-03-31	Filed 2014-05-09
10-K	2013-12-31	Filed 2014-03-12
10-Q	2013-09-30	Filed 2013-11-07
10-Q	2013-06-30	Filed 2013-08-08
10-Q	2013-03-31	Filed 2013-05-10
10-K	2012-12-31	Filed 2013-03-21
10-Q	2012-09-30	Filed 2012-11-14
10-Q	2012-06-30	Filed 2012-08-14
10-Q	2012-03-31	Filed 2012-05-15
10-K	2011-12-31	Filed 2012-03-26

8-K	2020-08-19	Other Events, Exhibits
8-K	2020-08-07	Earnings, Regulation FD, Exhibits
8-K	2020-07-08	Exhibits
8-K	2020-06-30	Exhibits
8-K	2020-05-18
8-K	2020-05-18
8-K	2020-05-07
8-K	2020-04-30
8-K	2020-04-15
8-K	2020-03-25
8-K	2020-03-18
8-K	2020-03-10
8-K	2020-02-28
8-K	2020-02-20
8-K	2020-02-14
8-K	2020-01-31
8-K	2020-01-15
8-K	2019-12-23
8-K	2019-11-14
8-K	2019-11-12
8-K	2019-08-15
8-K	2019-08-08
8-K	2019-05-17
8-K	2019-05-17
8-K	2019-05-02
8-K	2019-04-08
8-K	2019-03-11
8-K	2019-02-28
8-K	2019-02-15
8-K	2019-01-31
8-K	2018-11-15
8-K	2018-11-01
8-K	2018-08-15
8-K	2018-08-07
8-K	2018-08-03
8-K	2018-07-25
8-K	2018-06-27
8-K	2018-05-24
8-K	2018-05-16
8-K	2018-05-07
8-K	2018-04-27
8-K	2018-04-13
8-K	2018-03-15
8-K	2018-03-12
8-K	2018-03-09
8-K	2018-03-05
8-K	2018-02-15
8-K	2017-12-15

EX-10.1	exhibit1016302010q.htm
EX-31.1	ex311splp6302010-q.htm
EX-31.2	ex312splp6302010q.htm
EX-32.1	ex321splp6302010q.htm
EX-32.2	ex322splp6302010q.htm

SPLP 10Q Quarterly Report

Steel Partners Holdings Earnings 2020-06-30