Steel Partners (SPLP) Earnings & Revenues Rise Y/Y in Q2

Core Viewpoint - Steel Partners Holdings L.P. (SPLP) demonstrated strong financial performance in Q2 2024, with significant growth in earnings and revenues, despite challenges in the Energy segment [1][2]. Financial Metrics - Earnings per share for Q2 2024 reached $4.85, a 99% increase from $2.44 in the same quarter last year [3]. - Total revenues for the quarter were $533.2 million, reflecting a 6.4% rise from $501 million in Q2 2023 [3]. - Net income surged 113.2% year over year to $124.9 million, with net income attributable to common unitholders at $116.3 million, up from $59.2 million [8]. Segmental Results - Diversified Industrial: Revenues increased by 6.2% to $334.5 million, with adjusted EBITDA rising to $42.2 million from $34.9 million [4]. - Energy: Revenues declined by 26.5% to $37 million, with adjusted EBITDA decreasing to $5.4 million from $7.2 million due to lower rig hours [5]. - Financial Services: Revenues grew by 9.7% to $115.6 million, with adjusted EBITDA increasing to $28.9 million from $25.8 million [6]. - Supply Chain: Revenues surged by 52.7% to $46.1 million, with adjusted EBITDA rising to $6.1 million from $2.9 million [7]. Profitability - Adjusted EBITDA for the quarter increased to $83.8 million from $73.6 million in the same period last year, driven by improved performance in Diversified Industrial and Financial Services segments [10]. - A notable factor in the net income increase was a $71.5 million non-cash adjustment related to deferred tax assets, which significantly impacted the income tax benefit [9]. Cost Management - Cost of goods sold rose by 4.8% to $303.2 million, attributed to higher net sales in the Diversified Industrial segment and Supply Chain consolidation [11]. - Selling, general, and administrative expenses increased by 2.4% to $139.7 million, primarily due to higher expenses in the Financial Services segment [12]. Cash and Debt Position - As of June 30, 2024, Steel Partners had cash and cash equivalents of $428.8 million, with total debt reduced to $78.6 million from $191.3 million at the end of December 2023 [13]. - Interest expenses declined by 71.1% year over year to $1.7 million, reflecting lower average debt outstanding [13]. Other Developments - The company repurchased 43,557 common units for $1.6 million and 76,146 preferred units for $1.8 million, aligning with its strategy to return capital to unitholders [13].