Fourth Quarter 2023 Results
- Revenue totaled $466.9 million
- Net income was $42.7 million
- Net income attributable to common unitholders was $41.3 million, or $1.75 per diluted common unit
- Adjusted EBITDA* totaled $59.4 million; Adjusted EBITDA margin* was 12.7%
- Net cash provided by operating activities was $9.5 million
- Adjusted free cash flow* totaled $87.6 million
- Total debt was $191.4 million; net cash,* which also includes our pension and preferred unit liabilities, less cash and investments, totaled $56.4 million
Full Year 2023 Results
- Revenue totaled $1.9 billion
- Net income was $154.0 million
- Net income attributable to common unitholders was $150.8 million, or $6.43 per diluted common unit
- Adjusted EBITDA* totaled to $240.6 million; Adjusted EBITDA margin* was 12.6%
- Net cash provided by operating activities was $21.2 million
- Adjusted free cash flow* totaled $236.0 million
NEW YORK–(BUSINESS WIRE)–Steel Partners Holdings L.P. (NYSE: SPLP), a diversified global holding company, today announced operating results for the fourth quarter and year ended December 31, 2023. The financial results of Steel Connect, Inc. (“Steel Connect” or “STCN”) have been included in the Company’s consolidated financial statements since the exchange transaction on May 1, 2023.
|
Unaudited |
|
|
|
|
|
|
||
|
Q4 2023 |
|
Q4 2022 |
|
($ in thousands) |
|
FY 2023 |
|
FY 2022 |
|
$466,907 |
|
$422,615 |
|
Revenue |
|
$1,905,457 |
|
$1,695,441 |
|
42,697 |
|
73,083 |
|
Net income |
|
154,002 |
|
206,165 |
|
41,261 |
|
73,012 |
|
Net income attributable to common unitholders |
|
150,829 |
|
205,972 |
|
59,358 |
|
44,649 |
|
Adjusted EBITDA* |
|
240,559 |
|
228,434 |
|
12.7% |
|
10.6% |
|
Adjusted EBITDA margin* |
|
12.6% |
|
13.5% |
|
14,784 |
|
17,353 |
|
Purchases of property, plant and equipment |
|
51,451 |
|
47,541 |
|
87,587 |
|
30,260 |
|
Adjusted free cash flow* |
|
235,980 |
|
146,272 |
|
* 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. |
||||||||
Results of Operations
|
Comparisons of the Three Months and Years Ended December 31, 2023 and 2022 |
||||||||||||||||
|
|
Unaudited |
|
|
|
|
|||||||||||
|
(Dollar amounts in table in thousands, unless otherwise indicated) |
Three Months Ended December 31, |
|
Year Ended December 31, |
|||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||||
|
Revenue |
$ |
466,907 |
|
|
$ |
422,615 |
|
|
$ |
1,905,457 |
|
|
$ |
1,695,441 |
|
|
|
Cost of goods sold |
|
269,040 |
|
|
|
266,296 |
|
|
|
1,103,017 |
|
|
|
1,096,936 |
|
|
|
Selling, general and administrative expenses |
|
128,708 |
|
|
|
102,778 |
|
|
|
504,960 |
|
|
|
383,377 |
|
|
|
Asset impairment charges |
|
536 |
|
|
|
278 |
|
|
|
865 |
|
|
|
3,162 |
|
|
|
Interest expense |
|
2,466 |
|
|
|
6,197 |
|
|
|
18,400 |
|
|
|
20,649 |
|
|
|
Realized and unrealized gains on securities, net |
|
(923 |
) |
|
|
(57,361 |
) |
|
|
(7,074 |
) |
|
|
(34,791 |
) |
|
|
Gains from sales of businesses |
|
(58 |
) |
|
|
(203 |
) |
|
|
(58 |
) |
|
|
(85,683 |
) |
|
|
All other expenses, net * |
|
27,474 |
|
|
|
20,237 |
|
|
|
124,141 |
|
|
|
36,293 |
|
|
|
Total costs and expenses |
|
427,243 |
|
|
|
338,222 |
|
|
|
1,744,251 |
|
|
|
1,419,943 |
|
|
|
Income before income taxes and equity method investments |
|
39,664 |
|
|
|
84,393 |
|
|
|
161,206 |
|
|
|
275,498 |
|
|
|
Income tax provision (benefit) |
|
33 |
|
|
|
17,688 |
|
|
|
(1,674 |
) |
|
|
73,944 |
|
|
|
(Income) loss of associated companies, net of taxes |
|
(3,066 |
) |
|
|
(6,378 |
) |
|
|
8,878 |
|
|
|
(4,611 |
) |
|
|
Net income |
|
42,697 |
|
|
|
73,083 |
|
|
|
154,002 |
|
|
|
206,165 |
|
|
|
Net income attributable to noncontrolling interests in consolidated entities |
|
(1,436 |
) |
|
|
(71 |
) |
|
|
(3,173 |
) |
|
|
(193 |
) |
|
|
Net income attributable to common unitholders |
$ |
41,261 |
|
|
$ |
73,012 |
|
|
$ |
150,829 |
|
|
$ |
205,972 |
|
|
|
* includes finance interest, provision (benefit) for credit losses, and other expenses (income) from the consolidated statements of operations |
||||||||||||||||
Revenue
Revenue for the three months ended December 31, 2023 increased $44.3 million , or 10.5%, as compared to the same period last year. The increase was driven primarily by favorable impact of the recently added Supply Chain segment and higher revenue for the Financial Services segment, partially offset by lower sales from the Diversified Industrial segment and lower revenue from the Energy segment.
Revenue in the year ended December 31, 2023 increased $210.0 million, or 12.4%, as compared to 2022, as a result of higher revenue from the Financial Services segment and favorable impact of the recently added Supply Chain segment, partially offset by lower sales from the Diversified Industrial segment and lower revenue from the Energy segment.
Cost of Goods Sold
Cost of goods sold for the three months ended December 31, 2023 increased $2.7 million, or 1.0%, as compared to the same period last year. The increase was primarily due to the recently added Supply Chain segment, partially offset by lower revenue for the Diversified Industrial and Energy segments, discussed above.
Cost of goods sold in the year ended December 31, 2023 increased $6.1 million, or 0.6%, as compared to 2022, resulting from the recently added Supply Chain segment, partially offset by lower revenue for the Diversified Industrial and Energy segments discussed above.
Selling, General and Administrative Expenses
Selling, general and administrative expenses (“SG&A”) for the three months ended December 31, 2023 increased $25.9 million, or 25.2%, as compared to the same period last year. The SG&A increase was primarily driven by: (1) $18.1 million increase in the Financial Services segment primarily due to higher credit performance fees due to higher credit risk transfer (“CRT”) balances and higher personnel expenses related to incremental headcount and (2) $9.3 million for the recently added Supply Chain segment. The increases were partially offset by $3.7 million lower Corporate SG&A expenses primarily due to lower legal expenses as compared to the last year period.
SG&A in 2023 increased $121.6 million, or 31.7%, as compared to 2022. The SG&A increase was primarily driven by: (1) $86.8 million increase in the Financial Services segment primarily due to higher credit performance fees due to higher CRT balances and higher personnel expenses related to incremental headcount, (2) $25.2 million increase for the Supply Chain segment, and (3) $24.1 million increase for the Diversified Industrial segment primarily due to net pension expense, despite the impact of the divestiture of the SLPE business of $5.0 million. These increases were partially offset by lower Corporate SG&A expenses of $15.4 million due primarily to lower legal fees as compared to the last year period.
Asset Impairment Charges
The Company recorded asset impairment charges of $0.5 million and $0.3 million for the three months ended December 31, 2023 and 2022, respectively. These charges were primarily related to idle machinery and equipment from the Diversified Industrial segment.
The Company recorded asset impairment charges of $0.9 million and $3.2 million for the twelve months ended December 31, 2023 and 2022, respectively. The 2023 charges were primarily driven by idle machinery and equipment associated with the Building Materials and Electrical Products business units within the Diversified Industrial segment. The 2022 charges were primarily related to the implementation costs of an ERP project associated with the Kasco business within the Diversified Industrial segment.
Interest Expense
Interest expense for the three months ended December 31, 2023 and 2022 was $2.5 million and $6.2 million, respectively. Interest expense for the years ended December 31, 2023 and 2022 was $18.4 million and $20.6 million, respectively. The lower interest expense for the three months and the year ended December 31, 2023 was primarily due to lower average debt levels, partially offset by higher average interest rates.
Realized and Unrealized Gains on Securities, Net
The Company recorded gains of $0.9 million for the three months ended December 31, 2023, as compared to $57.4 million in 2022, and gains of $7.1 million and $34.8 million for the years ended December 31, 2023 and 2022, respectively. The changes in realized and unrealized gains on securities, net over the respective periods are primarily due to mark-to-market adjustments on the Company’s portfolio of securities.
All Other Expenses, Net
All other expense, net totaled $27.5 million for the three months ended December 31, 2023, as compared to $20.2 million for the year ended December 31, 2022. The incremental all other expense, net for the three months ended December 31, 2023 was primarily due to higher finance interest expense of $16.6 million, partially offset by lower provisions for credit losses of $7.6 million related to the Financial Service segment, as compared to 2022.
All other expense, net totaled $124.1 million for the year ended December 31, 2023, as compared to $36.3 million for the year ended December 31, 2022. The incremental all other expense, net for the years ended December 31, 2023 was primarily due to higher finance interest expense of $63.5 million and higher provisions for credit losses of $28.6 million related to the Financial Service segment, as compared to 2022.
Income Taxes
The Company recorded income tax provisions of $0.03 million and $17.7 million for the three months ended December 31, 2023 and 2022, respectively. The lower effective tax rate for the three months ended December 31, 2023, is primarily due to a decrease in U.S. tax expense related to unrealized gains on investment from related parties which are eliminated for financial statement purposes, as well as the partial release of valuation allowances on the Company’s deferred tax assets.
For the year ended December 31, 2023, a tax benefit of $1.7 million was recorded, as compared to a tax provision of $73.9 million in 2022. The Company’s effective tax rate for the year ended December 31, 2023 was a benefit of 1.0% as compared to a provision of 26.8% for the year ended December 31, 2022. The lower effective tax rate for the year ended December 31, 2023, was primarily due to certain tax-deferred transactions associated with internal restructurings undertaken by the Company and the partial release of valuation allowances on the Company’s deferred tax assets, partially offset by increased state and foreign income taxes associated with the Company’s operations.
As a limited partnership, we are generally not responsible for federal and state income taxes, and our profits and losses are passed directly to our limited partners for inclusion in their respective income tax returns. The Company’s tax provision represents the income tax expense or benefit of its consolidated corporate subsidiaries.
(Income) Loss of Associated Companies, Net of Taxes
The Company recorded income from associated companies, net of taxes of $3.1 million for the three months ended December 31, 2023, as compared to $6.4 million for the same period of 2022. The Company recorded loss from associated companies, net of taxes, of $8.9 million in 2023 as compared to income, net of taxes of $4.6 million in 2022.
Net Income
Net income for the three months ended December 31, 2023 was $42.7 million, as compared to $73.1 million for the same period in 2022. The decrease in net income was primarily due to lower realized and unrealized gains on securities, net, partially offset by higher income from the Financial Service segment resulting from higher revenue and favorable impact of added Supply Chain segment, as well as lower income tax expense. See above explanations for further details.
Net income for the year ended December 31, 2023 was $154.0 million, as compared to $206.2 million for the year ended December 31, 2022. The decrease in net income for the year ended December 31, 2023 was primarily due to a pre-tax gain of $85.7 million in 2022, primarily related to the divestiture of the SLPE business from the Diversified Industrial segment and lower realized and unrealized gains on securities, net, partially offset by higher income from the Financial Services segment resulting from higher revenue and favorable impact of the recently added Supply Chain segment, as well as lower income tax expense. See above explanations for further details.
Purchases of Property, Plant and Equipment (Capital Expenditures)
Capital expenditures for the three months ended December 31, 2023 totaled $14.8 million, or 3.2% of revenue, as compared to $17.4 million, or 4.1% of revenue, in the three months ended December 31, 2022. For the year ended December 31, 2023, capital expenditures were $51.5 million, or 2.7% of revenue, as compared to $47.5 million, or 2.8% of revenue, for the year ended December 31, 2022.
Additional Non-GAAP Financial Measures
Adjusted EBITDA for the three months ended December 31, 2023 was $59.4 million, as compared to $44.6 million for the same period in 2022. Adjusted EBITDA margin increased to 12.7% in the quarter from 10.6% in the three months ended December 31, 2022, primarily due to the higher revenue impact of the Financial Services segment, favorable impact from the newly acquired Supply Chain segment, and lower SG&A costs from Corporate as compared to the same period of 2022. Adjusted free cash flow was $87.6 million for the three months ended December 31, 2023, as compared to $30.3 million for the same period in 2022.
For the year ended December 31, 2023, Adjusted EBITDA and Adjusted EBITDA margin were $240.6 million and 12.6%, respectively, as compared to $228.4 million and 13.5% in 2022. Adjusted EBITDA increased by $12.1 million primarily due to increases in the Financial Service segment due to higher revenue, favorable impact from the newly acquired Supply Chain segment, and lower SG&A costs from Corporate, partially offset by lower revenue from the Diversified Industrial segment. Adjusted free cash flow was $236.0 million, as compared to $146.3 million for the same period in 2022.
Liquidity and Capital Resources
As of December 31, 2023, the Company had $399.3 million in available liquidity under its senior credit agreement, as well as $407.6 million in cash and cash equivalents, excluding WebBank cash, and $41.2 million in long-term investments.
As of December 31, 2023, total debt was $191.4 million, an increase of $11.0 million, as compared to December 31, 2022. As of December 31, 2023, net cash totaled $56.4 million, an increase of $104.0 million, as compared to December 31, 2022. Net cash position in 2023 was primarily due to higher cash balance of $347.5 million and $38.8 million lower accrued pension liabilities, partially offset by $268.5 million of lower investment balances and $11.0 million increase of total debt due to additional borrowing of debt, as compared to the net debt position in 2022. Total leverage (as defined in the Company’s senior credit agreement) was approximately 1.5x as of December 31, 2023 versus 1.4x as of December 31, 2022.
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 |
||||||||
|
|
December 31, 2023 |
|
December 31, 2022 |
|||||
|
ASSETS |
|
|
|
|||||
|
Current assets: |
|
|
|
|||||
|
Cash and cash equivalents |
$ |
577,928 |
|
|
$ |
234,448 |
|
|
|
Trade and other receivables – net of allowance for doubtful accounts of $2,481 and $2,414, respectively |
|
216,429 |
|
|
|
183,861 |
|
|
|
Receivables from related parties |
|
234 |
|
|
|
961 |
|
|
|
Loans receivable, including loans held for sale of $868,884 and $602,675, respectively, net |
|
1,582,536 |
|
|
|
1,131,745 |
|
|
|
Inventories, net |
|
202,294 |
|
|
|
214,084 |
|
|
|
Prepaid expenses and other current assets |
|
47,935 |
|
|
|
40,129 |
|
|
|
Total current assets |
|
2,627,356 |
|
|
|
1,805,228 |
|
|
|
Long-term loans receivable, net |
|
386,072 |
|
|
|
423,248 |
|
|
|
Goodwill |
|
148,838 |
|
|
|
125,813 |
|
|
|
Other intangible assets, net |
|
114,177 |
|
|
|
94,783 |
|
|
|
Other non-current assets |
|
342,046 |
|
|
|
195,859 |
|
|
|
Property, plant and equipment, net |
|
253,980 |
|
|
|
238,510 |
|
|
|
Operating lease right-of-use assets |
|
76,746 |
|
|
|
42,711 |
|
|
|
Long-term investments |
|
41,225 |
|
|
|
309,697 |
|
|
|
Total Assets |
$ |
3,990,440 |
|
|
$ |
3,235,849 |
|
|
|
LIABILITIES AND CAPITAL |
|
|
|
|||||
|
Current liabilities: |
|
|
|
|||||
|
Accounts payable |
$ |
131,922 |
|
|
$ |
109,572 |
|
|
|
Accrued liabilities |
|
117,943 |
|
|
|
112,744 |
|
|
|
Deposits |
|
1,711,585 |
|
|
|
1,360,477 |
|
|
|
Payables to related parties |
|
2,529 |
|
|
|
2,881 |
|
|
|
Short-term debt |
|
— |
|
|
|
685 |
|
|
|
Current portion of long-term debt |
|
67 |
|
|
|
67 |
|
|
|
Other current liabilities |
|
101,086 |
|
|
|
62,717 |
|
|
|
Total current liabilities |
|
2,065,132 |
|
|
|
1,649,143 |
|
|
|
Long-term deposits |
|
370,107 |
|
|
|
208,004 |
|
|
|
Long-term debt |
|
191,304 |
|
|
|
179,572 |
|
|
|
Other borrowings |
|
15,065 |
|
|
|
41,682 |
|
|
|
Preferred unit liability |
|
154,925 |
|
|
|
152,247 |
|
|
|
Accrued pension liabilities |
|
46,195 |
|
|
|
84,948 |
|
|
|
Deferred tax liabilities |
|
18,353 |
|
|
|
41,055 |
|
|
|
Long-term operating lease liabilities |
|
61,790 |
|
|
|
35,512 |
|
|
|
Other non-current liabilities |
|
62,161 |
|
|
|
42,226 |
|
|
|
Total Liabilities |
|
2,985,032 |
|
|
|
2,434,389 |
|
|
|
Commitments and Contingencies |
|
|
|
|||||
|
Capital: |
|
|
|
|||||
|
Partners’ capital common units: 21,296,067 and 21,605,093 issued and outstanding (after deducting 18,367,307 and 17,904,679 units held in treasury, at cost of $329,297 and $309,257, respectively |
|
1,079,853 |
|
|
|
952,094 |
|
|
|
Accumulated other comprehensive loss |
|
(121,223 |
) |
|
|
(151,874 |
) |
|
|
Total Partners’ Capital |
|
958,630 |
|
|
|
800,220 |
|
|
|
Noncontrolling interests in consolidated entities |
|
46,778 |
|
|
|
1,240 |
|
|
|
Total Capital |
|
1,005,408 |
|
|
|
801,460 |
|
|
|
Total Liabilities and Capital |
$ |
3,990,440 |
|
|
$ |
3,235,849 |
|
|
|
Consolidated Statements of Operations |
||||||||||||||||
|
|
Unaudited |
|
|
|
|
|||||||||||
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||
|
Revenue: |
|
|
|
|
|
|
|
|||||||||
|
Diversified Industrial net sales |
$ |
275,394 |
|
|
$ |
299,553 |
|
|
$ |
1,193,964 |
|
|
$ |
1,285,666 |
|
|
|
Energy net revenue |
|
34,218 |
|
|
|
45,061 |
|
|
|
179,438 |
|
|
|
181,811 |
|
|
|
Financial Services revenue |
|
112,341 |
|
|
|
78,001 |
|
|
|
416,911 |
|
|
|
227,964 |
|
|
|
Supply Chain revenue |
|
44,954 |
|
|
|
— |
|
|
|
115,144 |
|
|
|
— |
|
|
|
Total revenue |
|
466,907 |
|
|
|
422,615 |
|
|
|
1,905,457 |
|
|
|
1,695,441 |
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|||||||||
|
Cost of goods sold |
|
269,040 |
|
|
|
266,296 |
|
|
|
1,103,017 |
|
|
|
1,096,936 |
|
|
|
Selling, general and administrative expenses |
|
128,708 |
|
|
|
102,778 |
|
|
|
504,960 |
|
|
|
383,377 |
|
|
|
Asset impairment charges |
|
536 |
|
|
|
278 |
|
|
|
865 |
|
|
|
3,162 |
|
|
|
Finance interest expense |
|
25,938 |
|
|
|
9,301 |
|
|
|
80,432 |
|
|
|
16,907 |
|
|
|
Provision for credit losses |
|
3,845 |
|
|
|
11,419 |
|
|
|
51,824 |
|
|
|
23,177 |
|
|
|
Interest expense |
|
2,466 |
|
|
|
6,197 |
|
|
|
18,400 |
|
|
|
20,649 |
|
|
|
Gains from sales of businesses |
|
(58 |
) |
|
|
(203 |
) |
|
|
(58 |
) |
|
|
(85,683 |
) |
|
|
Realized and unrealized gains on securities, net |
|
(923 |
) |
|
|
(57,361 |
) |
|
|
(7,074 |
) |
|
|
(34,791 |
) |
|
|
Other income, net |
|
(2,309 |
) |
|
|
(483 |
) |
|
|
(8,115 |
) |
|
|
(3,791 |
) |
|
|
Total costs and expenses |
|
427,243 |
|
|
|
338,222 |
|
|
|
1,744,251 |
|
|
|
1,419,943 |
|
|
|
Income from operations before income taxes and equity method investments |
|
39,664 |
|
|
|
84,393 |
|
|
|
161,206 |
|
|
|
275,498 |
|
|
|
Income tax provision (benefit) |
|
33 |
|
|
|
17,688 |
|
|
|
(1,674 |
) |
|
|
73,944 |
|
|
|
(Income) loss of associated companies, net of taxes |
|
(3,066 |
) |
|
|
(6,378 |
) |
|
|
8,878 |
|
|
|
(4,611 |
) |
|
|
Net income |
|
42,697 |
|
|
|
73,083 |
|
|
|
154,002 |
|
|
|
206,165 |
|
|
|
Net income attributable to noncontrolling interests in consolidated entities |
|
(1,436 |
) |
|
|
(71 |
) |
|
|
(3,173 |
) |
|
|
(193 |
) |
|
|
Net income attributable to common unitholders |
$ |
41,261 |
|
|
$ |
73,012 |
|
|
$ |
150,829 |
|
|
$ |
205,972 |
|
|
|
Net income per common unit – basic |
|
|
|
|
|
|
|
|||||||||
|
Net income attributable to common unitholders |
$ |
1.94 |
|
|
$ |
3.17 |
|
|
$ |
7.04 |
|
|
$ |
9.03 |
|
|
|
Net income per common unit – diluted |
|
|
|
|
|
|
|
|||||||||
|
Net income attributable to common unitholders |
$ |
1.75 |
|
|
$ |
2.82 |
|
|
$ |
6.43 |
|
|
$ |
8.12 |
|
|
|
Weighted-average number of common units outstanding – basic |
|
21,250,547 |
|
|
|
23,038,179 |
|
|
|
21,433,900 |
|
|
|
22,813,588 |
|
|
|
Weighted-average number of common units outstanding – diluted |
|
25,348,229 |
|
|
|
27,020,358 |
|
|
|
25,356,796 |
|
|
|
26,869,440 |
|
|
|
Consolidated Statements of Cash Flows |
||||||||
|
(in thousands) |
Year Ended December 31, |
|||||||
|
|
2023 |
|
2022 |
|||||
|
Cash flows from operating activities: |
|
|
|
|||||
|
Net income |
$ |
154,002 |
|
|
$ |
206,165 |
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|||||
|
Provision for credit losses |
|
51,824 |
|
|
|
23,177 |
|
|
|
Loss (income) of associated companies, net of taxes |
|
8,878 |
|
|
|
(4,611 |
) |
|
|
Realized and unrealized gains on securities, net |
|
(7,074 |
) |
|
|
(34,791 |
) |
|
|
Gains from sale of businesses |
|
(58 |
) |
|
|
(85,683 |
) |
|
|
Gain on sale of property, plant and equipment |
|
— |
|
|
|
(940 |
) |
|
|
Derivative gains on economic interests in loans |
|
(4,713 |
) |
|
|
(5,294 |
) |
|
|
Non-cash pension expense (income) |
|
11,806 |
|
|
|
(7,042 |
) |
|
|
Deferred income taxes |
|
(30,069 |
) |
|
|
48,546 |
|
|
|
Depreciation and amortization |
|
56,565 |
|
|
|
53,755 |
|
|
|
Non-cash lease expense |
|
18,377 |
|
|
|
10,461 |
|
|
|
Equity-based compensation |
|
1,617 |
|
|
|
1,280 |
|
|
|
Asset impairment charges |
|
865 |
|
|
|
3,162 |
|
|
|
Other |
|
4,166 |
|
|
|
2,843 |
|
|
|
Net change in operating assets and liabilities: |
|
|
|
|||||
|
Trade and other receivables |
|
4,802 |
|
|
|
(710 |
) |
|
|
Inventories |
|
19,247 |
|
|
|
(41,086 |
) |
|
|
Prepaid expenses and other assets |
|
(7,718 |
) |
|
|
(10,431 |
) |
|
|
Accounts payable, accrued and other liabilities |
|
4,914 |
|
|
|
35,012 |
|
|
|
Net increase in loans held for sale |
|
(266,209 |
) |
|
|
(404,043 |
) |
|
|
Net cash provided by (used in) operating activities |
|
21,222 |
|
|
|
(210,230 |
) |
|
|
Cash flows from investing activities: |
|
|
|
|||||
|
Purchases of investments |
|
(208,836 |
) |
|
|
(310,798 |
) |
|
|
Proceeds from maturities of investments |
|
45,731 |
|
|
|
156,050 |
|
|
|
Proceeds from sales of investments |
|
213,319 |
|
|
|
19,828 |
|
|
|
Principal repayment on Steel Connect Convertible Note |
|
1,000 |
|
|
|
— |
|
|
|
Loan originations, net of collections |
|
(208,571 |
) |
|
|
(90,030 |
) |
|
|
Purchases of property, plant and equipment |
|
(51,451 |
) |
|
|
(47,541 |
) |
|
|
Proceeds from sale of property, plant and equipment |
|
1,846 |
|
|
|
1,241 |
|
|
|
Proceeds from sale of businesses |
|
— |
|
|
|
142,426 |
|
|
|
Acquisitions, net of cash acquired |
|
— |
|
|
|
(47,280 |
) |
|
|
Increase in cash upon consolidation of Steel Connect |
|
65,896 |
|
|
|
— |
|
|
|
Other |
|
(1,136 |
) |
|
|
(454 |
) |
|
|
Net cash used in investing activities |
|
(142,202 |
) |
|
|
(176,558 |
) |
|
|
Cash flows from financing activities: |
|
|
|
|||||
|
Net revolver borrowings (repayments) |
|
11,115 |
|
|
|
(90,616 |
) |
|
|
Repayments of term loans |
|
(67 |
) |
|
|
(82 |
) |
|
|
Purchases of the Company’s common units |
|
(20,040 |
) |
|
|
(44,973 |
) |
|
|
Net decrease in other borrowings |
|
(26,486 |
) |
|
|
(291,117 |
) |
|
|
Distribution to preferred unitholders |
|
(9,633 |
) |
|
|
(9,633 |
) |
|
|
Purchase of subsidiary shares from noncontrolling interests |
|
(2,934 |
) |
|
|
(8,606 |
) |
|
|
Tax withholding related to vesting of restricted units |
|
(605 |
) |
|
|
(1,394 |
) |
|
|
Net increase in deposits |
|
513,211 |
|
|
|
743,593 |
|
|
|
Net cash provided by financing activities |
|
464,561 |
|
|
|
297,172 |
|
|
|
Net change for the period |
|
343,581 |
|
|
|
(89,616 |
) |
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
(101 |
) |
|
|
(1,299 |
) |
|
|
Cash and cash equivalents at beginning of period |
|
234,448 |
|
|
|
325,363 |
|
|
|
Cash and cash equivalents at end of period |
$ |
577,928 |
|
|
$ |
234,448 |
|
|
|
Supplemental Balance Sheet Data |
||||||
|
(in thousands, except common and preferred units) |
December 31, |
|
December 31, |
|||
|
|
2023 |
|
2022 |
|||
|
Cash and cash equivalents |
$ |
577,928 |
|
$ |
234,448 |
|
|
WebBank cash and cash equivalents |
|
170,286 |
|
|
174,257 |
|
|
Cash and cash equivalents, excluding WebBank |
$ |
407,642 |
|
$ |
60,191 |
|
|
Common units outstanding |
|
21,296,067 |
|
|
21,605,093 |
|
|
Preferred units outstanding |
|
6,422,128 |
|
|
6,422,128 |
|
|
Supplemental Non-GAAP Disclosures |
||||||||||||||||
|
Adjusted EBITDA Reconciliation: |
|
|
|
|
|
|
|
|||||||||
|
|
Unaudited |
|
|
|
|
|||||||||||
|
(in thousands) |
Three Months Ended December 31, |
|
Year Ended December 31, |
|||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||
|
Net income from continuing operations |
$ |
42,697 |
|
|
$ |
73,083 |
|
|
$ |
154,002 |
|
|
$ |
206,165 |
|
|
|
Income tax provision (benefit) |
|
33 |
|
|
|
17,688 |
|
|
|
(1,674 |
) |
|
|
73,944 |
|
|
|
Income from continuing operations before income taxes |
|
42,730 |
|
|
|
90,771 |
|
|
|
152,328 |
|
|
|
280,109 |
|
|
|
Add (Deduct): |
|
|
|
|
|
|
|
|||||||||
|
(Income) loss of associated companies, net of taxes |
|
(3,066 |
) |
|
|
(6,378 |
) |
|
|
8,878 |
|
|
|
(4,611 |
) |
|
|
Realized and unrealized gains on securities, net |
|
(923 |
) |
|
|
(57,361 |
) |
|
|
(7,074 |
) |
|
|
(34,791 |
) |
|
|
Interest expense |
|
2,466 |
|
|
|
6,197 |
|
|
|
18,400 |
|
|
|
20,649 |
|
|
|
Depreciation |
|
10,756 |
|
|
|
9,758 |
|
|
|
39,978 |
|
|
|
38,394 |
|
|
|
Amortization |
|
4,376 |
|
|
|
3,785 |
|
|
|
16,587 |
|
|
|
15,361 |
|
|
|
Non-cash asset impairment charges |
|
536 |
|
|
|
278 |
|
|
|
865 |
|
|
|
3,162 |
|
|
|
Non-cash pension expense |
|
2,858 |
|
|
|
(1,637 |
) |
|
|
11,806 |
|
|
|
(7,042 |
) |
|
|
Non-cash equity-based compensation |
|
610 |
|
|
|
438 |
|
|
|
1,617 |
|
|
|
1,280 |
|
|
|
Gains from sales of businesses |
|
(58 |
) |
|
|
(203 |
) |
|
|
(58 |
) |
|
|
(85,683 |
) |
|
|
Other items, net |
|
(927 |
) |
|
|
(999 |
) |
|
|
(2,768 |
) |
|
|
1,606 |
|
|
|
Adjusted EBITDA |
$ |
59,358 |
|
|
$ |
44,649 |
|
|
$ |
240,559 |
|
|
$ |
228,434 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Total revenue |
$ |
466,907 |
|
|
$ |
422,615 |
|
|
$ |
1,905,457 |
|
|
$ |
1,695,441 |
|
|
|
Adjusted EBITDA margin |
|
12.7 |
% |
|
|
10.6 |
% |
|
|
12.6 |
% |
|
|
13.5 |
% |
|
Contacts
Investor Relations
Jennifer Golembeske
212-520-2300
[email protected]
