Steel Partners Holdings Earnings 2020-09-30

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

splp-20200930

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 September 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, 32nd 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 November 2, 2020 was 25,207,175.

STEEL PARTNERS HOLDINGS L.P.

TABLE OF CONTENTS


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

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

	Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019	3

	Consolidated Statements of Comprehensive In come (Loss) for the three and nine months ended September 30, 2020 and 2019	4

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

	Consolidated Statements of Cash Flows for the nine months ended September 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	36

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46

Item 4.	Controls and Procedures	46

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	46

Item 1A.	Risk Factors	46

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47

Item 6.	Exhibits	48

SIGNATURES		49

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

STEEL PARTNERS HOLDINGS L.P.

Consolidated Balance Sheets

(in thousands, except common units)


	(Unaudited)
	September 30, 2020		December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	141,265	$	139,467

Marketable securities	137		220
Trade and other receivables - net of allowance for doubtful accounts of $3,433 and $2,512, respectively	175,822		175,043
Receivables from related parties	3,457		2,221
Loans receivable, including loans held for sale of $80,169 and $225,013, respectively, net	299,943		546,908
Inventories, net	149,558		151,641
Prepaid expenses and other current assets	39,634		33,689
Assets of discontinued operations	—		41,012
Total current assets	809,816		1,090,201
Long-term loans receivable, net	2,289,835		196,145
Goodwill	151,940		149,626
Other intangible assets, net	143,674		158,593
Deferred tax assets	83,380		88,645
Other non-current assets	37,995		70,616
Property, plant and equipment, net	231,946		250,225
Operating lease right-of-use assets	29,744		34,324
Long-term investments	219,156		275,836
Assets of discontinued operations	—		18,143
Total Assets	$	3,997,486	$	2,332,354
LIABILITIES AND CAPITAL
Current liabilities:
Accounts payable	$	117,042	$	85,817
Accrued liabilities	72,261		114,941

Deposits	268,637		615,495
Payables to related parties	1,814		481
Short-term debt	70		1,800
Current portion of long-term debt	13,953		14,208
Current portion of preferred unit liability	—		39,782
Other current liabilities	91,789		42,041
Liabilities of discontinued operations	—		21,256
Total current liabilities	565,566		935,821
Long-term deposits	120,221		139,222
Long-term debt	288,676		322,081
Other borrowings	2,159,721		—
Preferred unit liability	146,218		144,247
Accrued pension liabilities	184,396		183,228
Deferred tax liabilities	1,753		2,497
Long-term operating lease liabilities	22,804		26,458
Other non-current liabilities	38,541		14,556
Liabilities of discontinued operations	—		87,825
Total Liabilities	3,527,896		1,855,935
Commitments and Contingencies
Capital:
Partners' capital common units: 25,189,613 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	639,186		664,035
Accumulated other comprehensive loss	(174,125)		(191,422)
Total Partners' Capital	465,061		472,613
Noncontrolling interests in consolidated entities	4,529		3,806
Total Capital	469,590		476,419
Total Liabilities and Capital	$	3,997,486	$	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 September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Revenue:
Diversified industrial net sales	$	274,094	$	281,120	$	788,566	$	862,090
Energy net revenue	22,378		44,147		75,282		126,665
Financial services revenue	33,535		45,813		109,496		123,853
Total revenue	330,007		371,080		973,344		1,112,608
Costs and expenses:
Cost of goods sold	216,322		236,474		632,600		727,489
Selling, general and administrative expenses	67,418		76,265		219,018		256,018
Goodwill impairment charges	—		24,219		—		24,219
Asset impairment charges	—		659		617		849
Finance interest expense	2,537		4,568		9,446		12,693
(Benefit from) provision for loan losses	(9,684)		11,230		30,706		32,415
Interest expense	6,988		9,622		23,025		30,099

Realized and unrealized (gains) losses on securities, net	(969)		(30,234)		25,515		(68,720)
Other income, net	(1,577)		(1,001)		(4,544)		(983)
Total costs and expenses	281,035		331,802		936,383		1,014,079
Income from continuing operations before income taxes and equity method investments	48,972		39,278		36,961		98,529
Income tax provision	14,783		13,705		10,034		31,505
(Income) loss of associated companies, net of taxes	(3,194)		1,855		26,420		(408)
Net income from continuing operations	37,383		23,718		507		67,432
Discontinued operations (see Note 3)
Loss from discontinued operations, net of taxes	(21)		(26,482)		(2,602)		(33,540)
Net income (loss) on deconsolidation of discontinued operations	1,161		—		(22,666)		—
Income (loss) from discontinued operations, net of taxes	1,140		(26,482)		(25,268)		(33,540)
Net income (loss)	38,523		(2,764)		(24,761)		33,892
Net income attributable to noncontrolling interests in consolidated entities (continuing operations)	(248)		(114)		(569)		(29)
Net income (loss) attributable to common unitholders	$	38,275	$	(2,878)	$	(25,330)	$	33,863
Net income (loss) per common unit - basic
Net income from continuing operations	$	1.49	$	0.94	$	—	$	2.70
Net income (loss) from discontinued operations	0.05		(1.06)		(1.02)		(1.34)
Net income (loss) attributable to common unitholders	$	1.54	$	(0.12)	$	(1.02)	$	1.36
Net income (loss) per common unit - diluted
Net income from continuing operations	$	0.77	$	0.94	$	—	$	1.93
Net income (loss) from discontinued operations	0.02		(1.06)		(1.02)		(0.85)
Net income (loss) attributable to common unitholders	$	0.79	$	(0.12)	$	(1.02)	$	1.08
Weighted-average number of common units outstanding - basic	24,874,281		25,011,142		24,844,114		24,947,814
Weighted-average number of common units outstanding - diluted	52,067,382		25,011,142		24,844,114		39,604,813

See accompanying Notes to Consolidated Financial Statements

STEEL PARTNERS HOLDINGS L.P.

Consolidated Statements of Comprehensive Income (Loss)

(unaudited)

(in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net income (loss)	$	38,523	$	(2,764)	$	(24,761)	$	33,892
Other comprehensive income (loss), net of taxes:


Gross unrealized gains on derivative financial instruments	—		71		—		164
Currency translation adjustments	1,379		(2,401)		(184)		(2,895)

Other comprehensive income (loss)	1,379		(2,330)		(184)		(2,731)
Comprehensive income (loss)	39,902		(5,094)		(24,945)		31,161
Comprehensive income attributable to noncontrolling interests	(248)		(114)		(569)		(29)
Comprehensive income (loss) attributable to common unitholders	$	39,654	$	(5,208)	$	(25,514)	$	31,132

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
Net income	—	—	—		38,275		—		38,275		248		38,523
Currency translation adjustments	—	—	—		—		1,379		1,379		—		1,379
Equity compensation - restricted units	260,360	—	—		334		—		334		—		334
Other, net	—	—	—		(1)		—		(1)		66		65
Balance as of September 30, 2020	37,837,477	(12,647,864)	$	(198,781)	$	639,186	$	(174,125)	$	465,061	$	4,529	$	469,590

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, 2018	37,436,531	(12,142,528)	$	(192,060)	$	666,031	$	(177,244)	$	488,787	$	3,721	$	492,508
Net income (loss)	—	—	—		15,678		—		15,678		(56)		15,622
Unrealized gains on derivative financial instruments	—	—	—		—		518		518		—		518
Currency translation adjustments	—	—	—		—		1,303		1,303		—		1,303
Equity compensation - restricted units	170,000	—	—		164		—		164		—		164
Purchases of SPLP common units	—	(505,336)	(6,721)		(6,721)		—		(6,721)		—		(6,721)
Balance as of March 31, 2019	37,606,531	(12,647,864)	(198,781)		675,152		(175,423)		499,729		3,665		503,394
Net income (loss)	—	—	—		21,063		—		21,063		(29)		21,034
Unrealized losses on derivative financial instruments	—	—	—		—		(425)		(425)		—		(425)
Currency translation adjustments	—	—	—		—		(1,797)		(1,797)		—		(1,797)
Equity compensation - restricted units	52,475	—	—		227		—		227		—		227
Other, net	—	—	—		(22)		—		(22)		—		(22)
Balance as of June 30, 2019	37,659,006	(12,647,864)	(198,781)		696,420		(177,645)		518,775		3,636		522,411
Net (loss) income	—	—	—		(2,878)		—		(2,878)		114		(2,764)
Unrealized gains on derivative financial instruments	—	—	—		—		71		71		—		71
Currency translation adjustments	—	—	—		—		(2,401)		(2,401)		—		(2,401)

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	2020-09-30	Filed 2020-11-03
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	2020-11-19	Other Events, Exhibits
8-K	2020-11-17	Other Events, Exhibits
8-K	2020-11-03	Earnings, Exhibits
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-31.1	ex311splp09302010-q.htm
EX-31.2	ex312splp09302010q.htm
EX-32.1	ex321splp09302010q.htm
EX-32.2	ex322splp09302010q.htm

SPLP 10Q Quarterly Report

Steel Partners Holdings Earnings 2020-09-30