SEC Filing | Steel Partners Holdings L.P.

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splp-20240930

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, 2024


☐			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, no par value	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 1, 2024 was 19,185,453.

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, 2024 and December 31, 2023	2

	Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023	3

	Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023	4

	Consolidated Statements of Changes in Capital for the three and nine months ended September 30, 2024 and 2023	5

	Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023	7

	Notes to Consolidated Financial Statements	8

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

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44

Item 4.	Controls and Procedures	44

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	45

Item 1A.	Risk Factors	45

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45

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)



	September 30, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	388,124	$	577,928


Trade and other receivables - net of allowance for doubtful accounts of $1,348 and $2,481, respectively	240,473		216,429

Loans receivable, including loans held for sale of $653,219 and $868,884, respectively, net	1,430,323		1,582,536
Inventories, net	210,714		202,294
Prepaid expenses and other current assets	48,311		48,169

Total current assets	2,317,945		2,627,356
Long-term loans receivable, net	236,603		386,072
Goodwill	145,958		148,838
Other intangible assets, net	101,555		114,177
Deferred tax assets	81,397		581
Other non-current assets	328,423		341,465
Property, plant and equipment, net	278,882		253,980
Operating lease right-of-use assets	64,983		76,746
Long-term investments	78,329		41,225
Total Assets	$	3,634,075	$	3,990,440
LIABILITIES AND CAPITAL
Current liabilities:
Accounts payable	$	154,643	$	131,922
Accrued liabilities	98,868		117,943

Deposits	1,475,481		1,711,585




Other current liabilities	91,589		103,682

Total current liabilities	1,820,581		2,065,132
Long-term deposits	258,780		370,107
Long-term debt	120,104		191,304
Other borrowings	2,068		15,065
Preferred unit liability	155,065		154,925
Accrued pension liabilities	43,198		46,195
Deferred tax liabilities	35,073		18,353
Long-term operating lease liabilities	52,094		61,790
Other non-current liabilities	63,439		62,161
Total Liabilities	2,550,402		2,985,032
Commitments and Contingencies
Capital:
Partners' capital common units: 19,183,332 and 21,296,067 issued and outstanding (after deducting 20,626,267 and 18,367,307 units held in treasury, at cost of $434,367 and $329,297), respectively	1,164,004		1,079,853
Accumulated other comprehensive loss	(121,147)		(121,223)
Total Partners' Capital	1,042,857		958,630
Noncontrolling interests in consolidated entities	40,816		46,778
Total Capital	1,083,673		1,005,408
Total Liabilities and Capital	$	3,634,075	$	3,990,440

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,
	2024		2023		2024		2023
Revenue:
Diversified Industrial net sales	$	318,642	$	299,098	$	945,576	$	918,570
Energy net revenue	40,266		46,742		109,182		145,220
Financial Services revenue	113,027		106,405		338,575		304,570
Supply Chain revenue	48,488		40,009		136,595		70,190
Total revenue	520,423		492,254		1,529,928		1,438,550
Costs and expenses:
Cost of goods sold	295,577		283,285		872,929		833,977
Selling, general and administrative expenses	137,310		124,934		412,301		376,252

Asset impairment charge	530		—		530		329
Finance interest expense	22,648		22,371		69,697		54,494
Provision for credit losses	7,085		36,969		10,159		47,979
Interest expense	1,993		4,115		5,074		15,934


Realized and unrealized losses (gains) on securities, net	2,060		(8,665)		(2,994)		(6,151)
Other expense (income), net	123		(801)		(2,489)		(5,806)
Total costs and expenses	467,326		462,208		1,365,207		1,317,008
Income from operations before income taxes and equity method investments	53,097		30,046		164,721		121,542
Income tax provision (benefit)	16,224		(981)		(31,906)		(1,707)
Loss of associated companies, net of taxes	—		3,140		7		11,944





Net income	36,873		27,887		196,620		111,305
Net income attributable to noncontrolling interests in consolidated entities	(457)		(2,315)		(9,635)		(1,737)
Net income attributable to common unitholders	$	36,416	$	25,572	$	186,985	$	109,568
Net income per common unit - basic


Net income attributable to common unitholders	$	1.83	$	1.20	$	9.19	$	5.10
Net income per common unit - diluted


Net income attributable to common unitholders	$	1.65	$	1.14	$	8.02	$	4.68
Weighted-average number of common units outstanding - basic	19,929,713		21,298,871		20,338,033		21,495,689
Weighted-average number of common units outstanding - diluted	23,985,875		25,081,210		24,470,418		25,360,324

See accompanying Notes to Consolidated Financial Statements

STEEL PARTNERS HOLDINGS L.P.

Consolidated Statements of Comprehensive Income

(Unaudited)

(in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net income	$	36,873	$	27,887	$	196,620	$	111,305
Other comprehensive income (loss), net of taxes:



Currency translation adjustments	2,234		(1,991)		520		(1,073)
Changes in pension liabilities and other post-retirement benefit obligations	(444)		36		(444)		36
Other comprehensive income (loss)	1,790		(1,955)		76		(1,037)
Comprehensive income	38,663		25,932		196,696		110,268
Comprehensive (income) loss attributable to noncontrolling interests	(457)		(2,315)		(9,635)		(1,737)
Comprehensive income attributable to common unitholders	$	38,206	$	23,617	$	187,061	$	108,531

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, 2023	39,663,374	(18,367,307)	$	(329,297)	$	1,079,853	$	(121,223)	$	958,630	$	46,778	$	1,005,408
Net income	—	—	—		34,231		—		34,231		570		34,801
Currency translation adjustments	—	—	—		—		(1,110)		(1,110)		—		(1,110)
Equity compensation - restricted units	2,995	—	—		381		—		381		—		381
Tax withholding related to vesting of restricted units	(609)	—	—		(587)		—		(587)		—		(587)
Share-based long term incentive plan unit awards	27,538	—	—		1,604		—		1,604		—		1,604
Purchases of SPLP common units	—	(933,787)	(39,487)		(39,487)		—		(39,487)		—		(39,487)
Adjustment to interest in consolidated subsidiaries	—	—	—		—		—		—		155		155
Other, net	—	—	—		34		—		34		11		45
Balance as of March 31, 2024	39,693,298	(19,301,094)	(368,784)		1,076,029		(122,333)		953,696		47,514		1,001,210
Net income	—	—	—		116,338		—		116,338		8,608		124,946

Currency translation adjustments	—	—	—		—		(604)		(604)		—		(604)
Equity compensation - restricted units	125,577	—	—		522		—		522		—		522
Tax withholding related to vesting of restricted units	(1,515)	—	—		(55)		—		(55)		—		(55)
Purchases of SPLP common units	—	(43,557)	(1,646)		(1,646)		—		(1,646)		—		(1,646)
Adjustment to interest in consolidated subsidiaries	—	—	—		—		—		—		(10,697)		(10,697)
Other, net	—	—	—		10		—		10		46		56
Balance as of June 30, 2024	39,817,360	(19,344,651)	(370,430)		1,191,198		(122,937)		1,068,261		45,471		1,113,732
Net income	—	—	—		36,416		—		36,416		457		36,873
Currency translation adjustments	—	—	—		—		2,234		2,234		—		2,234
Changes in pension liabilities and post-retirement benefit obligations	—	—	—		—		(444)		(444)		—		(444)
Equity compensation - restricted units	2,793	—	—		765		—		765		—		765
Tax withholding related to vesting of restricted units	(10,554)	—	—		(417)		—		(417)		—		(417)
Purchases of SPLP common units	—	(1,281,616)	(63,937)		(63,937)		—		(63,937)		—		(63,937)
Adjustment to interest in consolidated subsidiaries	—	—	—		—		—		—		(5,112)		(5,112)

Other, net	—	—	—		(21)		—		(21)		—		(21)
Balance as of September 30, 2024	39,809,599	(20,626,267)	$	(434,367)	$	1,164,004	$	(121,147)	$	1,042,857	$	40,816	$	1,083,673


	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, 2022	39,509,772	(17,904,679)	$	(309,257)	$	952,094	$	(151,874)	$	800,220	$	1,240	$	801,460
Cumulative effect of change in accounting principle for current expected credit losses, net of tax	—	—	—		(3,862)		—		(3,862)		—		(3,862)
Net income (loss)	—	—	—		24,846		—		24,846		(43)		24,803

Currency translation adjustments	—	—	—		—		1,093		1,093		—		1,093
Equity compensation - restricted units	146,414	—	—		(11)		—		(11)		—		(11)
Tax withholding related to vesting of restricted units	(8,972)	—	—		(333)		—		(333)		—		(333)
Purchases of SPLP common units	—	(75,504)	(3,248)		(3,248)		—		(3,248)		—		(3,248)
Other, net	—	—	—		(61)		—		(61)		—		(61)
Balance as of March 31, 2023	39,647,214	(17,980,183)	(312,505)		969,425		(150,781)		818,644		1,197		819,841
Net income	—	—	—		59,150		—		59,150		(535)		58,615

Currency translation adjustments	—	—	—		—		(175)		(175)		—		(175)
Equity compensation - restricted units	17,174	—	—		419		—		419		—		419
Tax withholding related to the vesting of restricted units	(2,462)	—	—		(100)		—		(100)		—		(100)
Purchases of SPLP common units	—	(267,994)	(11,588)		(11,588)		—		(11,588)		—		(11,588)
Noncontrolling interests assumed upon consolidation of Steel Connect (Note 3)	—	—	—		—		—		—		48,900		48,900
Other, net	—	—	—		(30)		—		(30)		—		(30)
Balance as of June 30, 2023	39,661,926	(18,248,177)	(324,093)		1,017,276		$	(150,956)	866,320		49,562		915,882
Net income	—	—	—		25,572		—		25,572		2,315		27,887
Currency translation adjustments	—	—	—		—		(1,991)		(1,991)		—		(1,991)
Changes in pension liabilities and post-retirement benefit obligations	—	—	—		—		36		36		—		36
Equity compensation - restricted units	2,284	—	—		599		—		599		—		599

Purchases of SPLP common units	—	(111,118)	(4,891)		(4,891)		—		(4,891)		—		(4,891)
Adjustment to interest in consolidated subsidiaries	—	—	—		(110)		—		(110)		(2,440)		(2,550)
Other, net	—	—	(1)		1		—		1		(1)		—
Balance as of September 30, 2023	39,664,210	(18,359,295)	$	(328,985)	$	1,038,447	$	(152,911)	$	885,536	$	49,436	$	934,972

See accompanying Notes to Consolidated Financial Statements

STEEL PARTNERS HOLDINGS L.P.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)


	Nine Months Ended September 30,
	2024		2023
Cash flows from operating activities:
Net income	$	196,620	$	111,305


Adjustments to reconcile net income from operations to net cash (used in) provided by operating activities:
Provision for credit losses	10,159		47,979
Loss of associated companies, net of taxes	7		11,944
Realized and unrealized gains on securities, net	(2,994)		(6,151)



Derivative gains on economic interests in loans	(4,187)		(3,762)
Non-cash pension expense	4,199		8,948
Deferred income taxes	(65,224)		(30,390)
Depreciation and amortization	43,839		41,433
Non-cash lease expense	17,342		12,710
Equity-based compensation	1,668		1,007

Asset impairment charges	530		329

Other	1,317		2,193
Net change in operating assets and liabilities:
Trade and other receivables	(24,479)		(12,999)
Inventories	(8,243)		6,241
Prepaid expenses and other assets	2,544		(1,038)
Accounts payable, accrued and other liabilities	(20,590)		(4,689)
Net decrease (increase) in loans held for sale	215,665		(173,385)

Net cash provided by operating activities	$	368,173	$	11,675


Cash flows from investing activities:
Purchases of investments	(50,706)		(204,611)
Proceeds from sales of investments	13,788		207,893
Proceeds from maturities of investments	16,832		41,058
Principal repayment on Steel Connect Convertible Note	—		1,000
Loan originations, net of collections	76,790		(242,667)
Purchases of property, plant and equipment	(55,712)		(36,667)

Proceeds from sale of property, plant and equipment	1,501		490



Increase in cash upon consolidation of Steel Connect	—		65,896


Other	(181)		(1,084)
Net cash provided by (used in) investing activities	$	2,312	$	(168,692)


Cash flows from financing activities:
Net revolver (repayments) borrowings	(71,149)		6,910
Repayments of term loans	(51)		(51)




Purchases of the Company's common units	(105,070)		(19,727)
Purchases of the Company's preferred units	(1,830)		—
Net decrease in other borrowings	(10,528)		(21,277)


Distribution to preferred unitholders	(7,139)		(7,225)

Purchase of subsidiary shares from noncontrolling interests	(16,181)		(2,784)
Tax withholding related to vesting of restricted units	(1,059)		(433)

Net (decrease) increase in deposits	(347,430)		531,006

Net cash (used in) provided by financing activities	$	(560,437)	$	486,419


Net change for the period	(189,952)		329,402
Effect of exchange rate changes on cash and cash equivalents	148		(1,701)
Cash, cash equivalents and restricted cash at beginning of period	577,928		234,448
Cash, cash equivalents and restricted cash at end of period	$	388,124	$	562,149

See accompanying Notes to Consolidated Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

All amounts used in the Notes to Consolidated Financial Statements are in thousands, except common and preferred units, per common and preferred unit, share and per share data, and price per ounce.

1. NATURE OF THE BUSINESS AND BASIS OF PRESENTATION

Nature of the Business

Steel Partners Holdings L.P. ("we," "our," "SPLP," or "Company") is a diversified global holding company that engages in multiple businesses through consolidated subsidiaries and other interests. It 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. SPLP operates through the following segments: Diversified Industrial, Energy, Financial Services and Supply Chain, which are managed separately and offer different products and services. For additional details related to the Company's reportable segments, see Note 17 - "Segment Information." Steel Partners Holdings GP Inc. ("SPH GP"), a Delaware corporation, is the general partner of SPLP and is wholly-owned by SPLP. The Company is managed by SP General Services LLC ("Manager"), pursuant to the terms of an amended and restated management agreement (the "Management Agreement") discussed in further detail in Note 16 - "Related Party Transactions."

Basis of Presentation

The accompanying unaudited consolidated financial statements as of September 30, 2024 and for the three and nine month periods ended September 30, 2024 and 2023, which have been prepared by the Company in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") for interim periods, include the accounts of the Company and its consolidated subsidiaries. The financial results of Steel Connect, Inc. ("Steel Connect" or "STCN") have been included in the Company's consolidated financial statements since May 1, 2023 (see Note 3 - "Acquisitions and Divestitures"). In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation have been reflected herein. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the operating results for the full year. The accompanying unaudited consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 ("Annual Report" or "Form 10-K"), from which the consolidated balance sheet as of December 31, 2023 has been derived.

The Company's fiscal quarter ends on the last day of the calendar quarter; however, for certain subsidiaries of the Company, the fiscal quarter periods end on the Saturday that is closest to the last day of the calendar quarter, except for the last quarterly period of the fiscal year. The Company and all its subsidiaries close their books for fiscal years on December 31 except for Steel Connect, which closes its books for its fiscal years on July 31. For ease of presentation, the quarterly financial statements included herein are described as ending on the last day of the calendar quarter.

Certain financial information that is normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"), but is not required for interim reporting purposes, has been condensed or omitted. Management must make estimates and assumptions that affect the consolidated financial statements and the related footnote disclosures. While management uses its best judgment, actual results may differ from those estimates. Certain reclassifications have been made to the prior period financial statements and notes to conform to the current period presentation.

Adoption of New Accounting Standards

In June 2022, the FASB issued Accounting Standards Update ("ASU") 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The new standard clarifies that a contractual restriction on the sale of an equity security should not be considered in measuring the fair value of the security. The new standard also requires certain disclosures related to equity securities with contractual sale restrictions. The Company adopted ASU 2022-03 on January 1, 2024. The adoption did not have any impact on the Company's consolidated financial statements and disclosures.

Accounting Standards Not Yet Effective

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to enhance the transparency, decision usefulness and effectiveness of income tax disclosures. The

new guidance requires disaggregated information about the effective tax rate reconciliation and additional information on taxes paid that meet a quantitative threshold. The new guidance is effective for annual reporting periods beginning after December 15, 2024, with early adoption and retrospective application permitted. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statement disclosures; however, adoption will not impact its consolidated balance sheets or income statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, allowing financial statement users to better understand the components of a segment's profit or loss to assess potential future cash flows for each reportable segment and the entity as a whole. The new guidance requires a public entity to disclose significant expenses and other segment items that are regularly reported to the chief operating decision maker ("CODM") and the nature of segment expense information used to manage operations. Additionally, it requires a public entity to disclose the title and position of the CODM. The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. The new guidance is effective for annual reporting periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statement disclosures; however, adoption will not impact its consolidated balance sheets or income statements.

In August 2023, the FASB issued ASU 2023-05, Business Combinations-Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement ("ASU 2023-05"). ASU 2023-05 applies to the formation of a "joint venture" or a "corporate joint venture" and requires a joint venture to initially measure all contributions received upon its formation at fair value. The new guidance is applicable to joint venture entities with a formation date on or after January 1, 2025, on a prospective basis. Early adoption is permitted. The Company is currently evaluating this guidance to determine the impact of this accounting standard; however, adoption is not expected to have a material impact on its consolidated balance sheets or income statements.

2. REVENUES

Disaggregation of Revenues

Revenues are disaggregated at the Company's segment level since the segment categories depict how the nature, amount, timing and uncertainty of revenues and cash flows are affected by economic factors. For additional details related to the Company's reportable segments, see Note 17 - "Segment Information."

The following table presents the Company's revenues disaggregated by geography for the three and nine months ended September 30, 2024 and 2023. The Company's revenues are primarily derived domestically. Foreign revenues are based on the country in which the legal subsidiary generating the revenue is domiciled. Revenue from any single foreign country was not material to the Company's consolidated financial statements.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
United States	$	464,471	$	443,981	$	1,368,289	$	1,327,713
Foreign	55,952		48,273		161,639		110,837
Total revenue	$	520,423	$	492,254	$	1,529,928	$	1,438,550

Contract Balances

Differences in the timing of revenue recognition, billings and cash collections result in billed trade receivables, unbilled receivables (contract assets) and deferred revenues (contract liabilities) on the consolidated balance sheets.

Contract Assets

Unbilled receivables arise when the timing of billings to customers differs from the timing of revenue recognition, such as when the Company recognizes revenue over time before a customer can be billed. Contract assets are classified as Prepaid expenses and other current assets on the consolidated balance sheets. As of September 30, 2024 and December 31, 2023, the contract asset balance was $6,374 and $5,317, respectively.

Contract Liabilities

The Company records deferred revenues when cash payments are received or due in advance of the Company's performance, including amounts that are refundable, which are recorded as contract liabilities. Contract liabilities are classified as Other current liabilities on the consolidated balance sheets, based on the timing of when the Company expects to recognize revenue.


	Contract Liabilities
Balance at December 31, 2023	$	7,388
Deferral of revenue	14,805
Recognition of unearned revenue	(16,120)
Balance at September 30, 2024	$	6,073

Balance at December 31, 2022	$	4,380
Deferral of revenue	17,416
Recognition of unearned revenue	(15,578)
Balance at September 30, 2023	$	6,218

3. ACQUISITIONS AND DIVESTITURES

STCN Transfer and Exchange Agreement

On April 30, 2023, the Company and Steel Connect, executed a series of agreements, in which the Company and certain of its affiliates (the "Steel Partners Group") transferred an aggregate of 3,597,744 shares of common stock, par value $0.10 per share, of Aerojet Rocketdyne Holdings, Inc. ("Aerojet") held by the Steel Partners Group to Steel Connect in exchange for 3,500,000 shares of newly created Series E Convertible Preferred Stock of Steel Connect (the "Series E Convertible Preferred Stock" and such transfer and related transactions, the "Exchange Transaction"). The Series E Convertible Preferred Stock is convertible into an aggregate of 184.9 million shares (19.8 million shares post June 21, 2023 reverse/forward stock split) of Steel Connect common stock, par value $0.01 per share (the “common stock” or “Common Stock”), and will vote together with the Steel Connect common stock and participate in any dividends paid on the Steel Connect common stock, in each case on an as-converted basis. Upon conversion of the Series E Convertible Preferred Stock, when combined with STCN common stock, STCN convertible debt, if converted, and STCN Series C preferred shares, also if converted, owned by the Company, would result in the Steel Partners Group holding approximately 84.0% of the outstanding equity interests of Steel Connect as of the Exchange Transaction closing date. The Exchange Transaction closed on May 1, 2023, the date that the consideration was exchanged between the Company and Steel Connect and as of that date Steel Connect became a consolidated subsidiary for financial reporting purposes. Steel Connect is not consolidated for Federal income tax purposes because the ownership in Steel Connect is dispersed between different federal tax consolidation groups. Steel Connect's assets and liabilities have been included in the Company's consolidated balance sheet, with a related noncontrolling interest of 16.0% of STCN's common stock as of the Exchange Transaction closing date. Prior to May 1, 2023, the Company held a 49.6% ownership interest in Steel Connect and accounted for its investment in Steel Connect in accordance with the equity method of accounting. The Company remeasured the previously held equity method investment to its fair value based upon a valuation of Steel Connect, as of the date of the Exchange Transaction.

The Exchange Transaction was accounted for in accordance with Accounting Standards Codification ("ASC") Topic 805, Business Combinations, and, accordingly, Steel Connect’s results of operations have been consolidated in our financial statements since the date of the Exchange Transaction. The Company recorded a preliminary allocation of the Exchange Transaction to assets acquired and liabilities assumed based on their estimated fair values as of May 1, 2023. The purchase price and purchase price allocation of the Exchange Transaction were finalized as of December 31, 2023, with no significant changes to preliminary amounts.

The following table summarizes the total Exchange Transaction consideration:


(in thousands)	May 1, 2023
Fair value of Aerojet common stock	$	202,733

Fair value of previously held interests in Steel Connect:
Steel Connect common stock	19,010
Steel Connect Series C Preferred Stock	35,000
Steel Connect Convertible Note	13,006

Noncontrolling interest ("NCI") at fair value	44,800

Less cash acquired	(65,896)

Total estimated consideration, less cash acquired	$	248,653

The Company remeasured the fair value of STCN common stock using the quoted market price available on the date immediately prior to when the Exchange Transaction was executed, which was the closing market price as of Friday, April 28, 2023, as that represented the information known and knowable at the time of the Exchange Transaction. The Company notes that the change in the calculation resulted in other adjustments which reallocated the components of total estimated consideration between the fair value of previously held STCN common stock and NCI, with no change to the overall consideration transferred. The other adjustments were recorded as of December 31, 2023 and did not result in any other changes to assets or liabilities recognized by the Company.

The Company's fair value estimates of the assets acquired and the liabilities assumed in the Exchange Transaction, as well as final fair value allocations reflecting adjustments made during the measurement period to date, are as follows:


(in thousands)	Initial Estimate		Other Adjustments		Final Allocation

Trade and other receivables	$	36,900	$	—	$	36,900
Inventories, net	6,900		—		6,900
Prepaid expenses and other current assets	5,000		—		5,000
Identifiable intangible assets	36,000		(500)		35,500
Other non-current assets	3,900		—		3,900
Property, plant and equipment, net	3,400		—		3,400
Operating lease right-of-use assets	29,250		—		29,250
Investments	202,733		—		202,733
Total assets acquired	324,083		(500)		323,583

Accounts payable	26,300		—		26,300
Accrued liabilities	29,100		(3,082)		26,018
Other current liabilities	15,230		—		15,230
Long-term operating lease liabilities	21,300		—		21,300
Other non-current liabilities	5,500		300		5,800
Total liabilities assumed	97,430		(2,782)		94,648

Goodwill	22,000		(2,282)		19,718
Net assets acquired at fair value	$	248,653	$	(3,082)	$	248,653

The excess of the Exchange Transaction consideration over the fair value of net identifiable assets acquired and liabilities assumed was recorded as goodwill, which was primarily attributed to expected synergies and the assembled workforce of Steel Connect and will not be deductible for income tax purposes. The fair values assigned to the net identifiable assets and liabilities assumed were based on management’s estimates and assumptions.

Identifiable intangible assets were recognized at their estimated acquisition date fair values. The fair value of the trade name asset was determined using the relief-from-royalty method and the fair value of the customer relationships asset was determined using the excess earnings method. These income-based approaches included assumptions such as the amount and

timing of projected cash flows, growth rates, customer attrition rates, discount rates, and the assessment of the asset’s life cycle. The estimated fair value and estimated remaining useful lives of identifiable intangible assets as of the Exchange Transaction closing date were as follows:


(in thousands)	Useful Life (Years)	Amount
Customer relationships	7	$	25,000
Trade name	Indefinite	10,500
Estimated fair value of identifiable intangible assets		$	35,500

The operating results of Steel Connect have been included in our consolidated financial statements since the date of the Exchange Transaction.

4. LOANS RECEIVABLE, INCLUDING LOANS HELD FOR SALE

Major classifications of Loans receivable, including loans held for sale, held by WebBank as of September 30, 2024 and December 31, 2023 are as follows:


	Total								Current				Non-current
	September 30, 2024		%		December 31, 2023		%		September 30, 2024		December 31, 2023		September 30, 2024		December 31, 2023
Loans held for sale	$	653,219			$	868,884			$	653,219	$	868,884	$	—	$	—

Commercial real estate loans	$	3,588	—	%	$	2,078	—	%	$	—	$	—	$	3,588	$	2,078
Commercial and industrial	932,488		90	%	980,722		87	%	724,592		646,890		207,896		333,832
Consumer loans	102,267		10	%	142,410		13	%	74,257		92,248		28,010		50,162
Total loans	1,038,343		100	%	1,125,210		100	%	798,849		739,138		239,494		386,072
Less:

Allowance for credit losses	(24,636)				(25,486)				(21,745)		(25,486)		(2,891)		—
Total loans receivable, net	$	1,013,707			$	1,099,724			777,104		713,652		236,603		386,072
Loans receivable, including loans held for sale (a)									$	1,430,323	$	1,582,536	$	236,603	$	386,072

(a) The amortized cost of loans receivable, including loans held for sale, is considered to be representative of fair value because the rates of interest are not significantly different from market interest rates for instruments with similar maturities. The fair value of loans receivable, including loans held for sale, was $1,665,594 and $1,967,021 as of September 30, 2024 and December 31, 2023, respectively.

Loans with an amortized cost of approximately $246,346 and $381,256 were pledged as collateral for potential borrowings as of September 30, 2024 and December 31, 2023, respectively. WebBank serviced $1,699 and $1,744 in loans for others as of September 30, 2024 and December 31, 2023, respectively.

WebBank sold loans classified as loans held for sale of $20,355,843 and $13,811,235 during the nine months ended September 30, 2024 and 2023, respectively. The sold loans were derecognized from the consolidated balance sheets. Loans classified as loans held for sale primarily consist of consumer and small business loans. Amounts added to loans held for sale during the same periods were $20,332,799 and $14,104,112, respectively.

WebBank's allowance for credit losses ("ACL") increased $3,815, or 18.3%, during the three months ended September 30, 2024 and decreased $850, or 3.3% during the nine months ended September 30, 2024. The increase in ACL was primarily due to underperformance of collateral on one of WebBank’s asset-based lending loans and reduced collateral on commercial premium finance loans, partially offset by a reduction in loan balances.

Changes in the ACL are summarized as follows:


	Commercial Real Estate Loans		Commercial & Industrial		Consumer Loans		Total




December 31, 2023	$	75	$	14,744	$	10,667	$	25,486

Charge-offs	—		(2,644)		(2,100)		(4,744)
Recoveries	—		399		164		563
Provision (benefit)	63		946		(194)		815
March 31, 2024	$	138	$	13,445	$	8,537	$	22,120
Charge-offs	—		(2,051)		(1,285)		(3,336)
Recoveries	—		391		66		457
Provision	18		716		846		1,580
June 30, 2024	$	156	$	12,501	$	8,164	$	20,821
Charge-offs	—		(2,106)		(1,305)		(3,411)
Recoveries	—		315		79		394
Provision	32		5,742		1,058		6,832
September 30, 2024	$	188	$	16,452	$	7,996	$	24,636


	Commercial Real Estate Loans		Commercial & Industrial		Consumer Loans		Total
December 31, 2022	$	28	$	18,493	$	11,169	$	29,690
Impact of adopting current expected credit loss accounting guidance	1		1,144		3,597		4,742
Charge-offs	—		(3,493)		(2,539)		(6,032)
Recoveries	5		328		154		487
Provision	7		5,156		2,643		7,806
March 31, 2023	$	41	$	21,628	$	15,024	$	36,693
Charge-offs	—		(3,826)		(2,462)		(6,288)
Recoveries	54		366		82		502
(Benefit) Provision	(47)		4,815		(1,564)		3,204
June 30, 2023	$	48	$	22,983	$	11,080	$	34,111
Charge-offs	—		(4,569)		(1,864)		(6,433)
Recoveries	—		305		88		393
Provision	1		35,191		1,777		36,969
September 30, 2023	$	49	$	53,910	$	11,081	$	65,040

The ACL and outstanding loan balances are summarized as follows:


September 30, 2024	Commercial Real Estate Loans		Commercial & Industrial		Consumer Loans		Total
Allowance for credit losses:
Individually evaluated for impairment	$	—	$	4,562	$	—	$	4,562
Collectively evaluated for impairment	188		11,890		7,996		20,074
Total	$	188	$	16,452	$	7,996	$	24,636
Outstanding loan balances:
Individually evaluated for impairment	$	—	$	27,890	$	—	$	27,890
Collectively evaluated for impairment	3,588		904,598		102,267		1,010,453
Total	$	3,588	$	932,488	$	102,267	$	1,038,343


December 31, 2023	Commercial Real Estate Loans		Commercial & Industrial		Consumer Loans		Total
Allowance for loan losses:
Individually evaluated for impairment	$	8	$	1,000	$	—	$	1,008
Collectively evaluated for impairment	67		13,744		10,667		24,478
Total	$	75	$	14,744	$	10,667	$	25,486
Outstanding loan balances:
Individually evaluated for impairment	$	8	$	3,095	$	—	$	3,103
Collectively evaluated for impairment	2,070		977,627		142,410		1,122,107
Total	$	2,078	$	980,722	$	142,410	$	1,125,210

Nonaccrual and Past Due Loans

Commercial and industrial loans past due 90 days or more and still accruing interest were $5,800 and $10,270 at September 30, 2024 and December 31, 2023, respectively. Consumer loans past due 90 days or more and still accruing interest were $870 and $4,790 at September 30, 2024 and December 31, 2023, respectively. The Company had $25,312 and $814 nonaccrual loans at September 30, 2024 and December 31, 2023, respectively.

Past due loans (accruing and nonaccruing) are summarized as follows:


September 30, 2024	Current		30-89 Days Past Due		90+ Days Past Due		Total Past Due		Total Loans		Recorded Investment In Accruing Loans 90+ Days Past Due		Nonaccrual Loans That Are Current (a)
Commercial real estate loans	$	3,588	$	—	$	—	$	—	$	3,588	$	—	$	—
Commercial and industrial	912,578		14,110		5,800		19,910		932,488		5,800		25,312
Consumer loans	98,857		2,540		870		3,410		102,267		870		—
Total loans	$	1,015,023	$	16,650	$	6,670	$	23,320	$	1,038,343	$	6,670	$	25,312


December 31, 2023	Current		30-89 Days Past Due		90+ Days Past Due		Total Past Due		Total Loans		Recorded Investment In Accruing Loans 90+ Days Past Due		Nonaccrual Loans That Are Current (a)
Commercial real estate loans	$	2,078	$	—	$	—	$	—	$	2,078	$	—	$	—
Commercial and industrial	959,852		10,600		10,270		20,870		980,722		10,270		814
Consumer loans	132,570		5,050		4,790		9,840		142,410		4,790		—
Total loans	$	1,094,500	$	15,650	$	15,060	$	30,710	$	1,125,210	$	15,060	$	814

(a) Represents nonaccrual loans that are not past due more than 30 days; however, full payment of principal and interest is still not expected.

Credit Quality Indicators

In addition to the past due and nonaccrual criteria, loans are analyzed using a loan grading system. Generally, internal grades are assigned to commercial loans based on the performance of the loans, financial/statistical models and loan officer judgment. For consumer loans and some commercial and industrial loans, the primary credit quality indicator is payment status. Reviews and grading of loans with unpaid principal balances of $100 or more are performed once per year. Grades follow definitions of Pass, Special Mention, Substandard and Doubtful, which are consistent with published definitions of regulatory risk classifications. The definitions of Pass, Special Mention, Substandard and Doubtful are summarized as follows:

•Pass: An asset in this category is a higher quality asset and does not fit any of the other categories described below. The likelihood of loss is considered remote.

•Special Mention: An asset in this category has a specific weakness or problem but does not currently present a significant risk of loss or default as to any material term of the loan or financing agreement.

•Substandard: An asset in this category has a developing or minor weakness or weaknesses that could result in loss or default if deficiencies are not corrected or adverse conditions arise.

•Doubtful: An asset in this category has an existing weakness or weaknesses that have developed into a serious risk of significant loss or default with regard to a material term of the financing agreement.

Outstanding loan balances (accruing and nonaccruing) categorized by these credit quality indicators are summarized as follows:


September 30, 2024	Non - Graded		Pass		Special Mention		Sub- standard		Doubtful		Total Loans


Commercial real estate loans	$	—	$	3,588	$	—	$	—	$	—	$	3,588
Commercial and industrial	700,030		204,568		—		27,890		—		932,488
Consumer loans	102,267		—		—		—		—		102,267
Total loans	$	802,297	$	208,156	$	—	$	27,890	$	—	$	1,038,343


December 31, 2023	Non - Graded		Pass		Special Mention		Sub- standard		Doubtful		Total Loans


Commercial real estate loans	$	—	$	2,070	$	—	$	8	$	—	$	2,078
Commercial and industrial	675,952		301,675		—		3,095		—		980,722
Consumer loans	142,410		—		—		—		—		142,410
Total loans	$	818,362	$	303,745	$	—	$	3,103	$	—	$	1,125,210

The following table represents the amortized cost basis loan balances by year of origination and credit quality indicator:


	As of September 30, 2024												Revolving loans amortized cost basis
	Amortized Cost Basis by Origination Year
	2024		2023		2022		2021		2020		Prior				Total
Commercial Real Estate Loans
Risk Rating:
Pass	$	1,607	$	1,106	$	582	$	97	$	59	$	137	$	—	$	3,588




Total Commercial Real Estate Loans	$	1,607	$	1,106	$	582	$	97	$	59	$	137	$	—	$	3,588



Commercial & Industrial
Risk Rating:
Pass	$	—	$	77,859	$	81,522	$	44,961	$	226	$	—	$	—	$	204,568
Non - graded	501,358		28,536		901		1,972		4,427		7		162,829		700,030

Sub-standard	666		226		24,562		—		—		2,436		—		27,890

Total Commercial & Industrial	$	502,024	$	106,621	$	106,985	$	46,933	$	4,653	$	2,443	$	162,829	$	932,488

Current period gross charge-offs	$	172	$	4,549	$	1,698	$	100	$	238	$	44	$	—	$	6,801

Consumer Loans
Risk Rating:
Non - graded	$	33,677	$	42,513	$	14,551	$	1,068	$	160	$	183	$	10,115	$	102,267
Total Consumer Loans	$	33,677	$	42,513	$	14,551	$	1,068	$	160	$	183	$	10,115	$	102,267
Current period gross charge-offs	$	49	$	3,107	$	1,297	$	118	$	29	$	90	$	—	$	4,690


	As of December 31, 2023												Revolving loans amortized cost basis
	Amortized Cost Basis by Origination Year
	2023		2022		2021		2020		2019		Prior				Total
Commercial Real Estate Loans
Risk Rating:
Pass	$	1,116	$	591	$	126	$	61	$	42	$	134	$	—	$	2,070


Sub-standard	—		—		—		—		—		8		—		8

Total Commercial Real Estate Loans	$	1,116	$	591	$	126	$	61	$	42	$	142	$	—	$	2,078



Commercial & Industrial
Risk Rating:
Pass	$	135,468	$	114,821	$	51,181	$	205	$	—	$	—	$	—	$	301,675
Non - graded	508,163		11,717		414		1,901		278		62		153,417		675,952

Sub-standard	560		27		—		—		—		2,508		—		3,095

Total Commercial & Industrial	$	644,191	$	126,565	$	51,595	$	2,106	$	278	$	2,570	$	153,417	$	980,722



Consumer Loans
Risk Rating:

Non - graded	$	74,242	$	25,733	$	2,475	$	594	$	1,056	$	51	$	38,259	$	142,410



Total Consumer Loans	$	74,242	$	25,733	$	2,475	$	594	$	1,056	$	51	$	38,259	$	142,410

Impaired Loans

Loans are considered impaired when, based on current information and events, it is probable that WebBank will be unable to collect all amounts due in accordance with the contractual terms of the loan agreement, including scheduled interest payments. When loans are impaired, WebBank estimates the amount of the balance that is impaired and allocates additional reserves to the loan based on the estimated present value of the loan’s future cash flows discounted at the loan’s effective interest rate, the observable market price of the loan, or the fair value of the loan’s underlying collateral less the cost to sell. When the impairment is based on the fair value of the loan's underlying collateral, the portion of the balance that is impaired is generally charged off.

During the three and nine months ended September 30, 2024 and 2023, WebBank did not issue new loans under the Small Business Administration's ("SBA") Paycheck Protection Program ("PPP") authorized under the Coronavirus Aid, Relief, and Economic Security ("CARES") Act. The existing loans were funded by the PPP Liquidity Facility, have terms of between two and five years, and their repayment is guaranteed by the SBA. Payments by borrowers on the loans can begin up to 16 months after the note date, and interest will continue to accrue during the 16-month deferment at 1%. Loans can be forgiven in whole or in part (up to full principal and any accrued interest) if certain criteria are met. Loan processing fees paid to WebBank from the SBA are accounted for as loan origination fees. Net deferred fees are recognized over the life of the loan as yield adjustments on the loans. If a loan is paid off or forgiven by the SBA prior to its maturity date, the remaining unamortized deferred fees will be recognized in interest income at that time. The PPP loans are included in Commercial and industrial loans in the table above. As of September 30, 2024, the total PPP loans and associated liabilities were $5,466 and $4,437, respectively, with $3,475 and $1,991 recorded to Loans receivable, net and Long-term loans receivable, net, respectively, and $2,369 and $2,068 included in Other current liabilities and Other borrowings, respectively, in the Company's consolidated balance sheet as of September 30, 2024. As of December 31, 2023, the total PPP loans and associated liabilities were $16,660 and $15,065, respectively, and included in Long-term loans receivable, net, and Other borrowings, respectively, in the consolidated balance sheet as of December 31, 2023. Upon borrower forgiveness, the SBA pays WebBank for the principal and accrued interest owed on the loan. WebBank has received forgiveness payments from the SBA and received payments from borrowers of $11,195 during the nine months ended September 30, 2024.

5. INVENTORIES, NET

A summary of Inventories, net is as follows:


	September 30, 2024		December 31, 2023
Finished products	$	55,808	$	62,798
In-process	36,211		34,376
Raw materials	67,074		68,895
Fine and fabricated precious metal in various stages of completion	52,015		36,393
	211,108		202,462
LIFO reserve	(394)		(168)
Total	$	210,714	$	202,294

Fine and Fabricated Precious Metal Inventory

In order to produce certain of its products, the Company purchases, maintains and utilizes precious metal inventory. The Company records certain precious metal inventory at the lower of last-in-first-out ("LIFO") cost or market value, with any adjustments recorded through Cost of goods sold. Remaining precious metal inventory is accounted for primarily at fair value.

The Company obtains certain precious metals under a fee consignment agreement. As of September 30, 2024 and December 31, 2023, the Company had approximately $39,692 and $30,242, respectively, of precious metals, principally silver, under consignment, which are recorded at fair value in Inventories, net with a corresponding liability for the same amount recorded in Accounts payable on the Company's consolidated balance sheets. Fees charged under the consignment agreement are recorded in Interest expense in the Company's consolidated statements of operations.


	September 30, 2024		December 31, 2023
Supplemental inventory information:
Precious metals stated at LIFO cost	$	3,919	$	2,113
Precious metals stated under non-LIFO cost methods, primarily at fair value	$	47,702	$	34,112
Market price per ounce:
Silver	$	31.63	$	23.93
Gold	$	2,653.47	$	2,069.11
Platinum	$	1,013.51	$	998.58
Palladium	$	1,025.82	$	1,108.32

6. GOODWILL AND OTHER INTANGIBLE ASSETS, NET

A summary of the change in the carrying amount of goodwill by reportable segment is as follows:


	Diversified Industrial		Energy		Financial Services		Supply Chain		Corporate and Other		Total
Balance as of December 31, 2023
Gross goodwill	$	155,423	$	67,143	$	9,474	$	22,785	$	81	$	254,906
Accumulated impairments	(41,278)		(64,790)		—		—		—		(106,068)
Net goodwill	114,145		2,353		9,474		22,785		81		148,838



Currency translation adjustments	202		—		—		—		—		202
Other adjustments	—		—		—		(3,082)		—		(3,082)

Balance as of September 30, 2024
Gross goodwill	155,625		67,143		9,474		19,703		81		252,026
Accumulated impairments	(41,278)		(64,790)		—		—		—		(106,068)
Net goodwill	$	114,347	$	2,353	$	9,474	$	19,703	$	81	$	145,958

As of September 30, 2024 and December 31, 2023, the Electrical Products reporting unit, which is included within the Diversified Industrial segment, had goodwill of $46,882 and $46,682, respectively. As of December 1, 2023 the Electrical Products reporting unit's fair value exceeded its net book value by 11%. As of September 30, 2024, the Company did not identify indicators of impairment for the Electrical Products reporting unit. The fair value of the Electrical Products reporting unit can be significantly impacted by the reporting unit's performance, the amount and timing of expected future cash flows, decreased customer demand for Electrical Products' services, management's ability to execute its business strategies, and general market conditions, such as economic downturns, and changes in interest rates, including discount rates. Future cash flow estimates are, by their nature, subjective, and actual results may differ materially from the Company's estimates. Based on our assessment of these circumstances, we have determined that goodwill at our Electrical Products reporting unit is at risk for future impairment if the Company's ongoing cash flow projections are not met or if market factors utilized in the impairment test deteriorate, including an unfavorable change in the terminal growth rate or the weighted-average cost of capital, the Company may have to record impairment charges in future periods.

A summary of Other intangible assets, net is as follows:


	September 30, 2024						December 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	$	217,320	$	155,080	$	62,240	$	216,968	$	144,686	$	72,282
Trademarks, trade names and brand names	57,167		24,698		32,469		57,160		23,431		33,729
Developed technology, patents and patent applications	33,290		26,444		6,846		33,102		25,086		8,016
Other	16,664		16,664		—		16,662		16,512		150
Total	$	324,441	$	222,886	$	101,555	$	323,892	$	209,715	$	114,177

Trademarks with indefinite lives as of September 30, 2024 and December 31, 2023 were $22,216 and $22,210, respectively. Amortization expense related to intangible assets was $4,267 and $4,438 for the three months ended September 30, 2024 and 2023, respectively, and $12,839 and $12,211 for the nine months ended September 30, 2024 and 2023, respectively.

Based on gross carrying amounts at September 30, 2024, the Company's estimate of amortization expense for identifiable intangible assets for the years ending December 31, 2024 through 2028 is presented in the table below.


	Year Ending December 31,
	2024		2025		2026		2027		2028
Estimated amortization expense	$	17,192	$	15,705	$	13,687	$	13,007	$	12,213

7. INVESTMENTS

The following table summarizes the Company's long-term investments as of September 30, 2024 and December 31, 2023.


	Ownership %				Long-Term Investments Balance

	September 30, 2024		December 31, 2023		September 30, 2024		December 31, 2023
DMC Global, Inc. (a)	9.8	%	—	%	25,610		$	—






PCS-Mosaic (b)	58.3	%	58.3	%	19,058		19,067
Other long-term investments (c)					33,661		22,158


Total					$	78,329	$	41,225

a)Gross unrealized losses for DMC Global, Inc. totaled $1,081 for the nine months ended September 30, 2024.

b)Represents the Company's investment in PCS-Mosaic, which is accounted for under the equity method of accounting.

c)The balance consists of multiple common stock investments of public and non-public companies and available for sale securities.

The Loss of associated companies, net of taxes, for the three and nine months ended September 30, 2024 and 2023, respectively, are as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
STCN convertible notes	$	—	$	—	$	—	$	389




STCN common stock	—		—		—		8,415

PCS-Mosaic	—		3,140		7		3,140


Loss of associated companies, net of taxes	$	—	$	3,140	$	7	$	11,944

The amounts of unrealized (gains) losses for the three and nine months ended September 30, 2024 and 2023 that relate to equity securities still held as of September 30, 2024 and 2023, respectively, are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net losses (gains) recognized during the period on equity securities	$	2,060	$	(8,665)	$	(2,994)	$	(6,151)
Less: Net (gains) losses recognized during the period on equity securities sold during the period	—		(10,394)		(4,222)		(6,690)
Unrealized losses (gains) recognized during the period on equity securities still held at the end of the period	$	2,060	$	1,729	$	1,228	$	539

Equity Method Investments

As of September 30, 2024, the Company's investments in associated companies includes PCS-Mosaic, which is accounted for under the equity method of accounting. PCS-Mosaic is a private investment fund primarily invested in specialized software development and training services. PCS-Mosaic is carried at cost, plus or minus the Company’s share of net earnings or losses of the investment. Associated companies are included in the Corporate and Other segment.

Beginning May 1, 2023, STCN was consolidated by the Company. Refer to Note 3 - "Acquisitions and Divestitures" for further details of the exchange transactions between the Company and STCN.

Other Investments

WebBank has held-to-maturity ("HTM") debt securities which are carried at amortized cost and included in Other non-current assets on the Company's consolidated balance sheets. The amount and contractual maturities of HTM debt securities are noted in the tables below. Actual maturities may differ from expected or contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. The securities are collateralized by unsecured consumer loans.


	September 30, 2024
	Amortized Cost		Gross Unrealized Gains		Estimated Fair Value		Carrying Value
Collateralized securities	$	307,297	$	3,548	$	310,845	$	307,297

Contractual maturities within:
Less than five years							301,077
Five years to ten years							314
After ten years							5,906
Total							$	307,297

	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Estimated Fair Value		Carrying Value
Collateralized securities	$	322,268	$	2,199	$	324,467	$	322,268

Contractual maturities within:
Less than five years							318,644
Five years to ten years							—
After ten years							3,624
Total							$	322,268

WebBank regularly evaluates each HTM debt security whose value has declined below amortized cost to assess whether the decline in fair value is other-than-temporary. If there is an other-than-temporary impairment in the fair value of any individual security classified as HTM, WebBank writes down the security to fair value with a corresponding credit loss portion charged to earnings, and the corresponding non-credit portion charged to accumulated other comprehensive income. The ACL for HTM debt securities of $3,131 and $2,199 at September 30, 2024 and December 31, 2023, respectively, is included in the net amortized cost balance of the securities. For the nine months ended September 30, 2024, WebBank recorded a provision for credit losses on HTM debt securities of $932.

8. DEBT

The current portion of long-term debt is included in Other current liabilities on the Company's consolidated balance sheets. The components of debt and a reconciliation to the carrying amount of long-term debt is presented in the table below:


	September 30, 2024		December 31, 2023



Long-term debt:
Credit Agreement	$	119,300	$	190,449

Other debt - domestic	871		922




Subtotal	120,171		191,371
Less: portion due within one year	67		67
Long-term debt	120,104		191,304
Total debt	$	120,171	$	191,371

Long-term debt as of September 30, 2024 matures in each of the next five years as follows:


	Total		2024		2025		2026		2027		2028		Thereafter
Long-term debt	$	120,171	$	17	$	67	$	119,367	$	720	$	—	$	—

As of September 30, 2024, the Company's senior credit agreement, as amended and restated ("Credit Agreement") covers substantially all of the Company's subsidiaries, with the exception of WebBank and Steel Connect, and provides for a senior secured revolving credit facility in an aggregate principal amount not to exceed $600,000 (the "Revolving Credit Loans"), which includes a $50,000 subfacility for swing line loans, a $50,000 subfacility for standby letters of credit and a foreign currency sublimit (available in euros and pounds sterling) equal to the lesser of $75,000 and the total amount of the Revolving

Credit Commitment. The Credit Agreement permits, under certain circumstances, to increase the aggregate principal amount of revolving credit commitments under the Credit Agreement by $300,000 plus additional amounts so long as the Leverage Ratio (as defined in the Credit Agreement) would not exceed 3.50:1. Borrowings bear interest, at annual rates of either Base Rate, SOFR Rate or Term RFR (each as defined in the Credit Agreement), at the borrowers’ option, plus an applicable margin, as set forth in the Credit Agreement. As of September 30, 2024, the Credit Agreement also provides for a commitment fee of 0.150% to be paid on unused borrowings.

The Credit Agreement contains financial covenants, including: (i) a Leverage Ratio not to exceed 4.25 to 1.00 for quarterly periods as of the end of each fiscal quarter; provided, however, that notwithstanding the foregoing, following a Material Acquisition (as defined in the Credit Agreement), Borrowers shall not permit the Leverage Ratio, calculated as of the end of each of the four (4) fiscal quarters immediately following such Material Acquisition (which, for the avoidance of doubt, shall commence with the fiscal quarter in which such Material Acquisition is consummated), to exceed 4.50 to 1.00 and (ii) an Interest Coverage Ratio, calculated as of the end of each fiscal quarter, not less than 3.00 to 1.00. The Credit Agreement also contains standard representations, warranties and covenants for a transaction of this nature, including, among other things, covenants relating to: (i) financial reporting and notification; (ii) payment of obligations; (iii) compliance with law; (iv) maintenance of insurance; and (v) maintenance of properties. As of September 30, 2024, the Company was in compliance with all financial and nonfinancial covenants under the Credit Agreement. The Company believes it will remain in compliance with the Credit Agreements covenants for the next twelve months. The Credit Agreement will expire on December 29, 2026.

The weighted average interest rate on the Credit Agreement was 6.18% at September 30, 2024. As of September 30, 2024, letters of credit totaling $10,631 had been issued under the Credit Agreement. The primary use of the Company's letters of credit are to support the performance and financial obligations related to certain environmental matters, insurance programs and real estate leases. The Credit Agreement permits the Company to borrow for the dividends on its preferred units, pension contributions, investments, acquisitions and other general corporate expenses. Based on financial results as of September 30, 2024, the Company's total availability under the Credit Agreement, which is based upon Consolidated Adjusted EBITDA (as defined in the Credit Agreement) and certain covenants as described in the Credit Agreement, was approximately $470,000 as of September 30, 2024.

Steel Connect Revolving Credit Facility

Steel Connect's wholly-owned subsidiary, ModusLink Corporation ("ModusLink"), has a revolving credit agreement (the "Umpqua Revolver") with Umpqua Bank which provides for a maximum credit commitment of $12,500 and a sub-limit of $5,000 for letters of credit and expires on March 31, 2026. As of September 30, 2024, ModusLink was in compliance with the Umpqua Revolver's covenants and believes it will remain in compliance with the Umpqua Revolver’s covenants for the next twelve months. As of September 30, 2024, ModusLink had available borrowing capacity of $11,890 and there was $610 outstanding for letters of credit.

On May 1, 2024, ModusLink entered into a Second Amendment to Credit Agreement (the "Second Amendment"), amending the Umpqua Revolver. Among other things, the Second Amendment extended the maturity date with respect to revolving loans from March 31, 2025 to March 31, 2026, removed certain adjustments in the definition of "Adjusted EBITDA" as set forth in the Umpqua Revolver, increased the minimum Adjusted Tangible Net Worth and removed certain caps and conditions on ModusLink's ability to pay dividends.

9. FINANCIAL INSTRUMENTS

WebBank - Economic Interests in Loans

WebBank's derivative financial instruments represent on-going economic interests in loans made after they are sold. These derivatives are carried at fair value on a gross basis in Other non-current assets on the Company's consolidated balance sheets and are classified within Level 3 in the fair value hierarchy (see Note 14 - "Fair Value Measurements"). As of September 30, 2024, outstanding derivatives mature within three to five years. Gains and losses resulting from changes in the fair value of derivative instruments are accounted for in the Company's consolidated statements of operations in Financial Services revenue. Fair value represents the estimated amounts that WebBank would receive or pay to terminate the contracts at the reporting date based on a discounted cash flow model for the same or similar instruments. WebBank does not enter into derivative contracts for speculative or trading purposes.

Precious Metal and Commodity Inventories

As of September 30, 2024, the Company had the following outstanding forward contracts with settlement dates through October 2024. There were no futures contracts outstanding as of September 30, 2024.


Commodity	Amount (in whole units)	Notional Value
Silver	129,363 ounces	$	4,042
Gold	1 ounce	$	6
Palladium	1,261 ounces	$	1,374
Platinum	46 ounces	$	46
Copper	207,000 pounds	$	906
Tin	27 metric tons	$	839

Fair Value Hedges. Certain forward contracts are accounted for as fair value hedges under ASC 815 for the Company's precious metal inventory carried at fair value. These contracts hedge 31,500 ounces (in whole units) of silver and a majority of the Company's pounds of copper. The fair values of these derivatives are recognized as derivative assets and liabilities on the Company's consolidated balance sheets. The net changes in fair value of the derivative assets and liabilities, and the changes in the fair value of the underlying hedged inventory, are recognized in the Company's consolidated statements of operations, and such amounts principally offset each other due to the effectiveness of the hedges.

Economic Hedges. The remaining outstanding forward contracts for silver, and all the contracts for gold, palladium, platinum and tin, are accounted for as economic hedges. As these derivatives are not designated as accounting hedges under ASC 815, they are accounted for as derivatives with no hedge designation. The derivatives are marked to market with gains and losses recorded in earnings in the Company's consolidated statements of operations. The economic hedges are associated primarily with the Company's precious metal inventory valued using the LIFO method.

The forward contracts were made with a counterparty rated Aa2 by Moody's. Accordingly, management evaluated counterparty risk and believes that there is minimal credit risk of default. The Company estimates the fair value of its derivative contracts based on the counterparty's statement. The Company maintains collateral on account with the third-party broker which varies in amount depending on the value of open contracts and the current market price.

The fair value and carrying amount of derivative instruments on the Company's consolidated balance sheets are as follows:



	Fair Value of Derivative Assets (Liabilities)
	September 30, 2024			December 31, 2023
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as ASC 815 hedges

Commodity contracts	Other liabilities	$	(58)	Other liabilities	$	(25)
Derivatives not designated as ASC 815 hedges

Commodity contracts	Prepaid expenses and other current assets	$	5	Prepaid expenses and other current assets	$	75
Economic interests in loans	Other non-current assets	$	5,207	Other non-current assets	$	4,903

The effects of fair value hedge accounting on the consolidated statements of operations for the three and nine months ended September 30, 2024 was losses of $106 and $495, respectively, and for the three and nine months ended September 30, 2023 was gains of $46 and $213, respectively. The effects of derivatives not designated as ASC 815 hedging instruments on the consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023 are as follows:


Derivatives Not Designated as Hedging Instruments:	Location of Gain (Loss) Recognized in Income	Amount of Gain (Loss) Recognized in Income
		Three Months Ended September 30,				Nine Months Ended September 30,
		2024		2023		2024		2023

Commodity contracts	Other (expense) income, net	$	(419)	$	33	$	(1,008)	$	790
Economic interests in loans	Financial Services revenue	1,606		1,415		4,187		3,763


Total		$	1,187	$	1,448	$	3,179	$	4,553

Financial Instruments with Off-Balance Sheet Risk

WebBank is a party to financial instruments with off-balance sheet risk. In the normal course of business, these financial instruments include commitments to extend credit in the form of loans as part of WebBank's lending arrangements. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized on the Company's consolidated balance sheets. The contractual amounts of those instruments reflect the extent of involvement WebBank has in particular classes of financial instruments.

As of September 30, 2024 and December 31, 2023, WebBank's undisbursed loan commitments totaled $299,689 and $340,621, respectively. Commitments to extend credit are agreements to lend to a borrower who meets the lending criteria through one of WebBank's lending agreements, provided there is no violation of any condition established in the contract with the counterparty to the lending arrangement.

Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since certain of the commitments are expected to expire without the credit being extended, the total commitment amounts do not necessarily represent future cash requirements. WebBank evaluates each prospective borrower's credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by WebBank upon extension of credit, is based on management's credit evaluation of the borrower and WebBank's counterparty.

WebBank's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. WebBank uses the same credit policy in making commitments and conditional obligations as it does for on balance sheet instruments.

10. PENSION AND OTHER POST-RETIREMENT BENEFITS

The Company maintains several qualified and non-qualified pension plans and other post-retirement benefit plans. The following table presents the components of pension expense for the Company's significant pension plans. The Company's other pension and post-retirement benefit plans are not significant individually or in the aggregate.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023

Interest cost	$	4,199	$	4,538	$	12,598	$	13,614
Expected return on plan assets	(5,010)		(4,467)		(15,030)		(13,401)
Amortization of actuarial loss	2,185		2,882		6,555		8,647
Total net pension expense	$	1,374	$	2,953	$	4,123	$	8,860

Net pension expense is included in Selling, general and administrative expenses in the consolidated statements of operations. During the nine months ended September 30, 2024, the Company contributed $7,226 to its pension plans. Required future pension contributions are estimated based upon assumptions such as discount rates on future obligations, assumed rates of return on plan assets and legislative changes. Actual future pension costs and required funding obligations will be affected by changes in the factors and assumptions described in the previous sentence, including the impact of declines in pension plan assets and interest rates, as well as other changes such as any plan termination or other acceleration events. The Company currently estimates it will contribute $2,983 to its pension plans during the remainder of 2024.

11. CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE LOSS

As of September 30, 2024, the Company had 19,183,332 Class A units (regular common units) outstanding.

Common Unit Repurchase Program

The Board of Directors of SPH GP, the general partner of SPLP, (the "Board of SPH GP") has approved the repurchase of up to an aggregate of 9,520,240 of the Company's common units (the "Repurchase Program"), which is inclusive of 750,000 common units approved in March 2024. The Repurchase Program, which was announced on December 7, 2016, supersedes and cancels, to the extent any amounts remain available, all previously approved repurchase programs. Any purchases made under the Repurchase Program will be made from time to time on the open market or in negotiated transactions off the market, in compliance with applicable laws and regulations. The timing, manner, price and amount of any repurchase will depend on economic and market conditions, share price, trading volume, applicable legal requirements and other factors. In connection with the Repurchase Program, the Company may enter into a stock purchase plan. The Repurchase Program has no termination date. The Company repurchased, under the Repurchase Program, 13,813 and 991,157 common units for an aggregate purchase price of $547 and $41,680 during the three and nine months ended September 30, 2024, respectively. From the inception of the Repurchase Program the Company has purchased 8,799,777 common units for an aggregate price of approximately $206,078. As of September 30, 2024, there remained 720,463 common units that may yet be purchased under the Repurchase Program.

On September 1, 2024, the Company entered into a purchase agreement with Hale Partnership Fund, L.P. and related parties (the "Hale Entities") pursuant to which the Company purchased an aggregate of 1,267,803 Common Units from the Hale Entities for an aggregate purchase price of $63,390. This agreement was approved by the Company’s Board of Directors outside of the Repurchase Program.

Incentive Award Plan

The Company's 2018 Incentive Award Plan (the "2018 Plan") provides equity-based compensation through the grant of options to purchase the Company's limited partnership units, unit appreciation rights, restricted units, phantom units, substitute awards, performance awards, other unit-based awards, and, as appropriate, any tandem distribution equivalent rights granted with respect to an award (collectively, "LP Units"). On May 18, 2020, the Company's unitholders approved the Amended and Restated 2018 Incentive Award Plan, which increased the number of LP Units issuable under the 2018 Plan by 500,000 to a total of 1,000,000 LP Units. On June 9, 2021, the Company's unitholders approved the Second Amended and Restated 2018 Incentive Award Plan ("Second A&R 2018 Plan"), which increased the number of LP Units issuable under the 2018 Plan by 1,000,000 to a total of 2,000,000 LP Units. The Company granted 153,266 restricted LP Units under the Second A&R 2018 Plan during the nine months ended September 30, 2024. Of the restricted LP Units granted during the nine months ended September 30, 2024, 27,538 restricted LP Units were granted during the three months ending March 31, 2024, which vested immediately on the date of the grant, and 125,728 restricted LP Units were granted during the three months ended June 30, 2024, which will vest in approximately 2.5 years.

Preferred Units

The Company's 6.0% Series A preferred units, no par value (the "SPLP Preferred Units") entitle the holders to a cumulative quarterly cash or in-kind (or a combination thereof) distribution. The Company declared cash distributions of approximately $2,380 and $2,408 to preferred unitholders for the three months ended September 30, 2024, and 2023, respectively, and approximately $7,139 and $7,225 for the nine months ended September 30, 2024, and 2023, respectively. The SPLP Preferred Units have a term of nine years, ending February 2026, and are redeemable at any time at the Company's option at a $25 liquidation value per unit, plus any accrued and unpaid distributions (payable in cash or SPLP common units, or a combination of both, at the Company's discretion). If redeemed in common units, the number of common units to be issued will be equal to the liquidation value per unit divided by the volume weighted-average price of the common units for 60 days prior to the redemption. On February 2, 2024, the Board of SPH GP approved the repurchase of up to 400,000 of the SPLP Preferred Units. For the nine months ended September 30, 2024, the Company repurchased 76,146 SPLP Preferred Units for $1,830. The Company did not repurchase any SPLP Preferred Units during the three months ended September 30, 2024.

The SPLP Preferred Units have no voting rights, except that holders have certain voting rights in limited circumstances relating to the election of directors following the failure to pay six quarterly distributions. The SPLP Preferred Units are recorded as non-current liabilities, including accrued interest expense, on the Company's consolidated balance sheets as of September 30, 2024 and December 31, 2023 because they have an unconditional obligation to be redeemed for cash or by issuing a variable number of SPLP common units for a monetary value that is fixed and known at inception. Because the SPLP Preferred Units are classified as liabilities, distributions thereon are recorded as a component of Interest expense in the Company's consolidated statements of operations. As of September 30, 2024 and December 31, 2023, there were 6,345,982 and 6,422,128 SPLP Preferred Units outstanding, respectively.

On November 6, 2024, the Board of SPH GP declared a regular quarterly cash distribution of $0.375 per unit, payable December 15, 2024, to unitholders of record as of December 1, 2024, on its SPLP Preferred Units.

Accumulated Other Comprehensive Loss

Changes, net of tax, where applicable, in AOCI are as follows:


	Unrealized loss on available-for-sale debt securities		Cumulative translation adjustments		Change in net pension and other benefit obligations		Total
Balance at December 31, 2023	$	(92)	$	(14,993)	$	(106,138)	$	(121,223)
Net other comprehensive loss attributable to common unitholders	—		(1,110)		—		(1,110)
Balance at March 31, 2024	(92)		(16,103)		(106,138)		(122,333)
Net other comprehensive loss attributable to common unitholders	—		(604)		—		(604)
Balance as of June 30, 2024	(92)		(16,707)		(106,138)		(122,937)
Net other comprehensive income attributable to common unitholders	—		2,234		(444)		1,790
Balance at September 30, 2023	$	(92)	$	(14,473)	$	(106,582)	$	(121,147)


	Unrealized loss on available-for-sale securities		Cumulative translation adjustments		Change in net pension and other benefit obligations		Total
Balance at December 31, 2022	$	(92)	$	(17,113)	$	(134,669)	$	(151,874)
Net other comprehensive income attributable to common unitholders	—		1,093		—		1,093
Balance at March 31, 2023	(92)		(16,020)		(134,669)		(150,781)
Net other comprehensive loss attributable to common unitholders	—		(175)		—		(175)
Balance at June 30, 2023	$	(92)	$	(16,195)	$	(134,669)	$	(150,956)
Net other comprehensive loss attributable to common unitholders	—		(1,991)		36		(1,955)
Balance at September 30, 2023	$	(92)	$	(18,186)	$	(134,633)	$	(152,911)

Incentive Unit Awards

In 2012, SPLP issued to the Manager partnership profits interests in the form of Incentive Units which entitle the holder generally to share in 15% of the increase in the equity value of the Company, based on the volume weighted average price of the Company’s common units for the 20 trading days prior to the year-end measurement date. In 2015, the Manager assigned its rights to Incentive Units to a related party, SPH SPV-I LLC ("SPH SPV-I") pursuant to an Incentive Unit Agreement. Vesting in Incentive Units is measured annually on the last day of the Company’s fiscal year and is based upon exceeding a baseline equity value per common unit which is currently $41.82 and was determined when the most recent award vested on December 31, 2022. The number of outstanding Incentive Units is equal to 100% of the common units outstanding, including common units held by non-wholly-owned subsidiaries. The measurement date equity value per common unit is determined by calculating the volume weighted average price of the Company’s common units for 20 trading days prior to a measurement date. If an Incentive Unit award vests as of an annual measurement date they will be issued as Class C units.

Upon vesting in Incentive Units, the baseline equity value will be recalculated as the new baseline equity value to be assessed at the next annual measurement date. If the baseline equity value is not exceeded as of an annual measurement date, then no portion of annual Incentive Units will be classified as Class C common units for that year and the baseline equity value per common unit will be the same amount as determined upon the prior vesting. The Class C units have the same rights as the LP Units, including, without limitation, with respect to partnership distributions and allocations of income, gain, loss and deduction, in all respects, except that liquidating distributions made by the Company to such holder may not exceed the amount of its capital account allocable to such Class C units and such Class C units may not be sold in the public market, until they have converted into LP Units. At such time that the amount of the capital account allocable to a Class C unit is equal to the amount of the capital account allocable to an LP Unit, such Class C unit shall convert automatically into an LP Unit.

If September 30, 2024 was the annual measurement date, no Incentive Units would vest or be issued as Class C common units based upon the volume weighted-average price of the Company's common units for 20 trading days prior to September 30, 2024. Pursuant to the terms to the Incentive Unit Agreement, vesting of the Incentive Units only occurs based on the value of the Company’s common units at the annual measurement date on December 31, and therefore, more, fewer or no Incentive Units may vest for 2024.

12. INCOME TAXES

The Company's tax provision represents the income tax expense or benefit of its consolidated subsidiaries that are taxable entities. The income tax provision fluctuates based on, among other factors, where income is earned and the level of income relative to tax attributes. The Company recorded an income tax provision of $16,224 for the three months ended September 30, 2024 and an income tax benefit of $981 for the same period in 2023. The Company recorded income tax benefits of $31,906 and $1,707 for the nine months ended September 30, 2024 and 2023, respectively. Provisions have been made for federal, state, local, and 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 the effect of the release of valuation allowances with respect to deferred tax assets, partnership losses for which no tax benefit is recognized, tax expense related to unrealized gains and losses on investment, the effect of tax credits and incentives, and other permanent differences. The Company's consolidated subsidiaries have recorded deferred tax valuation allowances to the extent that they believe it is more likely than not that the benefits of certain deferred tax assets will not be realized in future periods.

The income tax benefits recorded for the nine months ended September 30, 2024, include the impact of the release of Steel Connect's valuation allowance on its deferred tax assets which resulted in a one-time non-cash income tax benefit of $73,536. During the three months ended June 30, 2024, Steel Connect reassessed the need for a valuation allowance against its deferred tax assets. After considering historical and projected future taxable income and existing taxable temporary differences, Steel Connect determined that it is more likely than not that the deferred tax assets will be realized. As a result, Steel Connect released substantially all of its valuation allowance on the NOLs carried forward after July 31, 2024 (Steel Connect's fiscal year-end), other than the valuation allowance relating to an estimated $912 of state NOLs that Steel Connect anticipates will expire unutilized.

Each year, the Company files many tax returns given the number of national, state and local tax jurisdictions in which the Company operates. These tax returns are subject to examination by the tax authorities. As a result, there is an uncertainty in income taxes recognized in the financial statements in accordance with accounting for income taxes and accounting for uncertainty in income taxes. The ultimate resolution of such uncertainties is not expected to have a material impact on the Company's results of operations.

13. NET INCOME PER COMMON UNIT

The following data was used in computing net income per common unit shown in the Company's consolidated statements of operations:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net income	$	36,873	$	27,887	$	196,620	$	111,305
Net income attributable to noncontrolling interests in consolidated entities	(457)		(2,315)		(9,635)		(1,737)


Net income attributable to common unitholders	36,416		25,572		186,985		109,568
Effect of dilutive securities:
Interest expense from SPLP Preferred Units (a)	3,044		3,083		9,183		9,228
Net income attributable to common unitholders – assuming dilution	$	39,460	$	28,655	$	196,168	$	118,796
Net income per common unit – basic


Net income attributable to common unitholders	$	1.83	$	1.20	$	9.19	$	5.10
Net income per common unit – diluted


Net income attributable to common unitholders	$	1.65	$	1.14	$	8.02	$	4.68
Denominator for net income per common unit – basic	19,929,713		21,298,871		20,338,033		21,495,689
Effect of dilutive securities:
Incentive Units	—		154,078		—		153,063
Unvested restricted common units	54,640		24,341		47,812		19,340
SPLP Preferred Units	4,001,522		3,603,920		4,084,573		3,692,232
Denominator for net income per common unit – diluted	23,985,875		25,081,210		24,470,418		25,360,324

(a) Assumes the SPLP Preferred Units were redeemed in common units as described in Note 11 - "Capital and Accumulated Other Comprehensive Loss."

14. FAIR VALUE MEASUREMENTS

Financial assets and liabilities measured at fair value on a recurring basis in the Company's consolidated financial statements as of September 30, 2024 and December 31, 2023 are summarized by type of inputs applicable to the fair value measurements as follows:


September 30, 2024	Level 1		Level 2		Level 3		Total
Assets:
Long-term investments (a)	$	48,861	$	5,568	$	4,842	$	59,271
Precious metal and commodity inventories recorded at fair value	49,355		—		—		49,355
Economic interests in loans (b)	—		—		5,207		5,207




Warrants (c)	—		—		1,436		1,436
Total	$	98,216	$	5,568	$	11,485	$	115,269

Liabilities:

Commodity contracts on precious metal and commodity inventories	$	—	$	53	$	—	$	53
Other precious metal liabilities	$	41,022	$	—	$	—	$	41,022


Total	$	41,022	$	53	$	—	$	41,075


December 31, 2023	Level 1		Level 2		Level 3		Total
Assets:
Long-term investments (a)	$	15,965	$	447	$	5,746	$	22,158

Precious metal and commodity inventories recorded at fair value	35,361		—		—		35,361
Economic interests in loans (b)	—		—		4,903		4,903

Commodity contracts on precious metal and commodity inventories	—		75		—		75
Warrants (c)	—		—		1,436		1,436

Total	$	51,326	$	522	$	12,085	$	63,933

Liabilities:

Commodity contracts on precious metal and commodity inventories	$	—	$	25	$	—	$	25
Other precious metal liabilities	30,958		—		—		30,958


Total	$	30,958	$	25	$	—	$	30,983

(a) For additional details of the long-term investments, see Note 7 – "Investments." The investment in PCS-Mosaic of $19,058 and $19,067 as of September 30, 2024 and December 31, 2023, respectively, is not included in the fair value leveling tables as it is valued at cost.

(b) For additional details of the economic interests in loans, see Note 9 – "Financial Instruments".

During the three and nine months ended September 30, 2024, $5,075 of assets, were transferred from Level 1 to Level 2, due to being delisted from the London Stock Exchange. There were no level changes during the three and nine months ending September 30, 2023.

Level 1 inputs are quoted prices in active markets for identical assets or liabilities as of the measurement date ("Level 1").

Level 2 inputs may include quoted prices in active markets for similar assets or liabilities, quoted prices in a market that is not active for identical assets or liabilities, or other inputs that can be corroborated by observable market data ("Level 2").

Level 3 inputs are unobservable for the asset or liability when there is little, if any, market activity for the asset or liability. Level 3 inputs are based on the best information available and may include data developed by the Company ("Level 3").

The fair value of the Company's financial instruments, such as cash and cash equivalents, trade and other receivables and accounts payable, approximates carrying value due to the short-term maturities of these assets and liabilities. Carrying cost approximates fair value for long-term debt, which has variable interest rates.

The precious metal and commodity inventories associated with the Company's fair value hedges (see Note 9 - "Financial Instruments") are reported at fair value. Fair values of these inventories are based on quoted market prices on commodity exchanges and are considered Level 1 measurements. The derivative instruments that the Company purchases in connection with its precious metal and commodity inventories, specifically commodity futures and forward contracts, are also

valued at fair value. The futures contracts are Level 1 measurements since they are traded on a commodity exchange. The forward contracts are entered into with a counterparty and are considered Level 2 measurements.

Following is a summary of changes in financial assets measured using Level 3 inputs:


	Long Term Investments (a)		Economic Interests in Loans (b)		Warrants (b)		Total
Balance as of December 31, 2023	$	5,746	$	4,903	$	1,436	$	12,085
Purchases	373		—		—		373
Sales, cash collections, and eliminations	(49)		(3,883)		—		(3,932)
Realized gains	—		4,187		—		4,187

Unrealized losses	(1,228)		—		—		(1,228)
Balance as of September 30, 2024	$	4,842	$	5,207	$	1,436	$	11,485

Balance as of December 31, 2022	$	52,336	$	5,728	$	3,564	$	61,628
Purchases	589		—		—		589
Sales, cash collections, and eliminations	(49,521)		(4,393)		—		(53,914)
Realized gains	(5)		3,763		—		3,758
Unrealized gains	106		—		—		106

Balance as of September 30, 2023	$	3,505	$	5,098	$	3,564	$	12,167

(a) Unrealized gains and losses are recorded in Loss of associated companies, net of taxes in the Company's consolidated statements of operations.

(b) Realized and unrealized gains and losses are recorded in Realized and unrealized losses (gains) on securities, net or Financial Services revenue in the Company's consolidated statements of operations.

Long-Term Investments - Valuation Techniques

The Company estimated the value of its investment in the STCN Note as of March 31, 2023 using a Binomial Lattice Model. Key inputs in the valuation included the trading price and volatility of STCN's common stock, the risk-free rate of return, as well as the dividend rate, conversion price, and maturity date. The fair value of the Company’s investment in STCN preferred stock as of March 31, 2023 was its par value because the Company has the right to redeem and the issuer has the right to convert the instrument at the redemption value. The Company's investments in the STCN Note and STCN preferred stock were remeasured as of the date of the Exchange Transaction. The Company's investment in Steel Connect as of March 31, 2023 was eliminated as the Company's ownership of Steel Connect increased to 84.0% on May 1, 2023, as discussed in Note 3 - "Acquisitions and Divestitures".

Marketable Securities and Other - Valuation Techniques

The Company determines the fair value of certain corporate securities and corporate obligations by incorporating and reviewing prices provided by third-party pricing services based on the specific features of the underlying securities.

The Company uses the net asset value included in quarterly statements it receives in arrears from a venture capital fund to determine the fair value of such fund and determines the fair value of certain corporate securities and corporate obligations by incorporating and reviewing prices provided by third-party pricing services based on the specific features of the underlying securities. The fair value of the derivatives held by WebBank (see Note 9 - "Financial Instruments") represent the estimated amounts that WebBank would receive or pay to terminate the contracts at the reporting date and is based on discounted cash flow analyses that consider credit, performance and prepayment. Unobservable inputs used in the discounted cash flow analyses are: a constant prepayment rate of 8.82% to 35.95%, a constant default rate of 1.72% to 21.50% and a discount rate of 1.82% to 25.41%.

Assets Measured at Fair Value on a Nonrecurring Basis

The Company's non-financial assets and liabilities measured at fair value on a non-recurring basis, include goodwill and other intangible assets, any assets and liabilities acquired in a business combination, or its long-lived assets written down to fair value. To measure fair value for such assets and liabilities, the Company uses techniques including an income approach, a market approach and/or appraisals (Level 3 inputs). The income approach is based on a discounted cash flow analysis ("DCF") and calculates the fair value by estimating the after-tax cash flows attributable to an asset or liability and then discounting the after-tax cash flows to a present value using a risk-adjusted discount rate. Assumptions used in the DCF require the exercise of significant judgment, including judgment about appropriate discount rates and terminal values, growth rates and the amount and timing of expected future cash flows. The discount rates, which are intended to reflect the risks inherent in future cash flow

projections, used in the DCF are based on estimates of the weighted-average cost of capital of a market participant. Such estimates are derived from analysis of peer companies and consider the industry weighted-average return on debt and equity from a market participant perspective. A market approach values a business by considering the prices at which shares of capital stock, or related underlying assets, of reasonably comparable companies are trading in the public market or the transaction price at which similar companies have been acquired. If comparable companies are not available, the market approach is not used.

15. COMMITMENTS AND CONTINGENCIES

Environmental and Litigation Matters

The Company and certain of the Company's subsidiaries are defendants in certain legal proceedings and environmental investigations and have been designated as potentially responsible parties ("PRPs") by federal and state agencies with respect to certain sites with which they may have had direct or indirect involvement. Most of such legal proceedings and environmental investigations involve unspecified amounts of potential damage claims or awards, are in an initial procedural phase, involve significant uncertainty as to the outcome or involve significant factual issues that need to be resolved, such that it is not possible for the Company to estimate a range of possible loss. For matters that have progressed sufficiently through the investigative process such that the Company is able to reasonably estimate a range of possible loss, an estimated range of possible loss, in excess of the accrued liability (if any) for such matters, is provided. Any estimated range of possible loss is or will be based on currently available information and involves elements of judgment and significant uncertainties and may not represent the Company's maximum possible loss exposure. The circumstances of such legal proceedings and environmental investigations will change from time to time, and actual results may vary significantly from the current estimate. For current proceedings not specifically reported below, management does not anticipate that the liabilities, if any, arising from such legal proceedings and environmental investigations would have a material effect on the financial position, liquidity or results of operations of the Company.

The legal proceedings and environmental investigations are in various stages of administrative or judicial proceedings and include demands for recovery of past governmental costs, and for future investigations and remedial actions. In some cases, the dollar amounts of the claims have not been specified and, with respect to a number of the PRP claims, have been asserted against a number of other entities for the same cost recovery or other relief as was asserted against certain of the Company's subsidiaries. The Company accrues liabilities associated with environmental and litigation matters on an undiscounted basis, when they become probable and reasonably estimable. As of September 30, 2024, on a consolidated basis, the Company recorded liabilities of $2,581 and $25,390 in Accrued liabilities and Other non-current liabilities, respectively, on the consolidated balance sheet. As of December 31, 2023, on a consolidated basis, the Company recorded liabilities of $13,107 and $25,388 in Accrued Liabilities and Other non-current liabilities, respectively, on the consolidated balance sheet, which represent the current estimate of environmental remediation liabilities as well as reserves related to the litigation matters discussed below. Expenses relating to these costs, and any recoveries, are included in Selling, general and administrative expenses in the Company's consolidated statements of operations. Estimates of the Company's liability for remediation of a particular site and the method and ultimate cost of remediation require a number of assumptions that are inherently difficult to make, and the ultimate outcome may be materially different from current estimates.

Environmental Matters

Certain subsidiaries of the Company have existing and contingent liabilities relating to environmental matters, including costs of remediation, capital expenditures, and potential fines and penalties relating to possible violations of federal and state environmental laws. Such existing and contingent liabilities are continually being readjusted based upon the emergence of new findings, techniques and alternative remediation methods.

Included among these liabilities, certain of the Company's subsidiaries have been identified as PRPs under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") or similar state statutes at sites and are parties to administrative consent orders in connection with certain properties. Those subsidiaries may be subject to joint and several liabilities imposed by CERCLA on PRPs. Due to the technical and regulatory complexity of remedial activities and the difficulties attendant in identifying PRPs and allocating or determining liability among them, the subsidiaries are unable to reasonably estimate the ultimate cost of compliance with such laws at some of the sites at which the Company's subsidiaries are PRP's.

Based upon information currently available, the Company's subsidiaries do not expect that their respective environmental costs, including the incurrence of additional fines and penalties, if any, will have a material adverse effect on them or that the resolution of these environmental matters will have a material adverse effect on the financial position, results of

operations or cash flows of such subsidiaries or the Company, but there can be no such assurances. The Company anticipates that the subsidiaries will pay any such amounts out of their respective working capital, although there is no assurance that they will have sufficient funds to pay them. In the event that a subsidiary is unable to fund its liabilities, claims could be made against its respective parent companies for payment of such liabilities.

The sites where certain of the Company's subsidiaries have environmental liabilities include the following:

The Company has been working with the Connecticut Department of Energy and Environmental Protection ("CTDEEP") with respect to its obligations under a 1989 consent order that applies to a former manufacturing facility located in Fairfield, Connecticut. A preliminary ecological risk assessment of the wetlands portion was submitted in 2016 to the CTDEEP for their review and approval. The CTDEEP required an additional assessment of the wetlands and Company officials continue to meet with CTDEEP representatives to agree on a workplan for the additional assessment. Additional investigation of the wetlands is expected in 2024 and 2025 and remediation will likely start in 2027, pending approval of a mutually acceptable wetlands work plan. A work plan to investigate the upland portion of the parcel was prepared by the Company and approved by the CTDEEP in March 2018 and implemented from 2019 through 2023. Additional upland investigatory work will be required to fully define the areas requiring remediation and is also dependent upon CTDEEP requirements and approval. Based on currently known information, the Company reasonably estimates that it may incur aggregate losses over a period of multiple years of between $10,500 and $17,500. The Company has a reserve of $14,458 recorded for future remediation costs, which is our best estimate within this range of potential losses. Due to the uncertainties, there can be no assurance that the final resolution of this matter will not be material to the financial position, results of operations or cash flows of the Company.

In 1986, a subsidiary of the Company entered into an administrative consent order ("ACO") with the New Jersey Department of Environmental Protection ("NJDEP") to investigate and remediate property in Montvale, New Jersey that it purchased in 1984. The ACO required investigation and remediation activities to be performed with regard to soil and groundwater contamination. The Company has been actively investigating and remediating the soil and groundwater since that time and has completed the implementation of the groundwater treatment system in operation at the property. Pursuant to a settlement agreement with the former owner/operator of the site, the responsibility for site investigation and remediation costs and other related costs are contractually allocated 75% to the former owner/operator and 25% jointly to the Company, all after having the first $1,000 paid by the former owner/operator. Additionally, the Company had been reimbursed indirectly through insurance coverage for a portion of the costs for which it is responsible. There is no assurance that the former owner/operator or guarantors will continue to timely reimburse the Company for expenditures and/or will be financially capable of fulfilling their obligations under the settlement agreement and the guaranties. There is no assurance that there will be any additional insurance reimbursement. A reserve of approximately $812 has been established for the Company's expected 25% share of anticipated costs at this site, which is based upon the recent selection of a final remedy, on-going operations and maintenance, additional investigations and monitored natural attenuation testing over the next 30 years. Also, a reserve and related receivable of approximately $2,437 has been established for the former owner/operator's expected share of anticipated costs at this site. On December 18, 2019, the State of New Jersey ("State") filed a complaint against the Company and other non-affiliated corporations related to former operations at this location. The State sought unspecified damages, including reimbursement for all cleanup and removal costs and other damages that the State claims it has incurred, including the lost value of, and reasonable assessment costs for, any natural resource injured as a result of the alleged discharge of hazardous substances and pollutants, as well as attorneys' fees and costs. On July 1, 2020, the Company answered and asserted crossclaims for indemnification and contribution against another defendant, Cycle Chem, Inc. Cycle Chem also asserted crossclaims against the Company. As a result of a confidential mediation, the parties negotiated a settlement amount of $10,500, of which the Company would pay $2,625, its 25% share, and of which other non-affiliated corporations would pay the remaining $7,875, their 75% share. The State also agreed to a separate settlement amount of $3,500 with Cycle Chem for which they were 100% responsible. The Court approved the settlement and on June 27, 2024, the Company and the other defendants paid their portion of the settlement to the State.

The Company's subsidiary, SL Industries, Inc. ("SLI"), may incur environmental costs in the future as a result of the past activities of its former subsidiary, SL Surface Technologies, Inc. ("SurfTech"), in Pennsauken, New Jersey ("Pennsauken Site") and in Camden, New Jersey and at its former subsidiary, SGL Printed Circuits in Wayne, New Jersey. At the Pennsauken Site, SLI entered into a consent decree with both the U.S. Department of Justice and the U.S. Environmental Protection Agency ("EPA") in 2013 and has since completed the remediation required by the consent decree and has paid the EPA a fixed sum for its past oversight costs. Separate from the consent decree, in December 2012, the NJDEP made a settlement demand of $1,800 for past and future cleanup and removal costs and natural resource damages ("NRD"). To avoid the time and expense of litigating the matter, SLI offered to pay approximately $300 to fully resolve the claim presented by the State. SLI's settlement offer was rejected. On December 6, 2018, the State filed a complaint against SLI related to the Pennsauken Site. The State is seeking treble damages and attorneys' fees, NRD for loss of use of groundwater, as well as a request that SLI pay all cleanup and

removal costs that the State has incurred and will incur at the Pennsauken Site. On August 21, 2019, SLI submitted a $1,070 settlement offer, which was not accepted. The parties have substantially completed the fact and expert discovery, including the exchange of competing expert reports. The Company has a reserve of $2,582, which is the amount of SLI's last settlement offer. SLI intends to assert all legal and procedural defenses available to it. Accordingly, there can be no assurance that the resolution of this matter will not be material to the financial position, results of operations or cash flows of the Company.

SLI reported soil contamination and groundwater contamination in 2003 from the SurfTech site located in Camden, New Jersey. Substantial investigation and remediation work has been completed under the direction of the licensed site remediation professional for the site. Additional investigations related to PFAS compounds have been initiated and have delayed remediation actions. Remediation actions, including soil excavation and groundwater bioremediation, are expected to start in the first half of 2025 pending completion of the PFAS investigations. Post-remediation groundwater monitoring will be conducted following completion of soil excavation. A reserve of $2,837 has been established for anticipated costs at this site, but there can be no assurance that there will not be potential additional costs associated with the site, which cannot be reasonably estimated at this time. Accordingly, there can be no assurance that the resolution of this matter will not be material to the financial position, results of operations or cash flows of the Company.

SLI is currently participating in environmental assessment and cleanup at a commercial facility located in Wayne, New Jersey. Contaminated soil and groundwater have undergone remediation with the NJDEP and LSRP oversight, but contaminants of concern in groundwater and surface water, which extend off-site, remain above applicable NJDEP remediation standards. A reserve of approximately $1,106 has been established for anticipated costs, but there can be no assurance that there will not be potential additional costs associated with the site which cannot be reasonably estimated at this time. Accordingly, there can be no assurance that the resolution of this matter will not be material to the financial position, results of operations or cash flows of SLI, HNH or the Company.

Litigation Matters

Reith v. Lichtenstein, et al. On April 13, 2018, a purported shareholder of STCN, Donald Reith, filed a verified complaint, Reith v. Lichtenstein, et al., 2018-0277 (Del. Ch.) (the "Reith litigation") in the Delaware Court of Chancery. The plaintiff sought to assert class action and derivative claims against the Company and several of its affiliated companies, together with certain members of STCN's board of directors, as well as other named defendants (collectively, the "defendants") in connection with the acquisition of $35,000 of STCN's Series C Preferred Stock by an affiliate of the Company and equity grants made to three individual defendants. The complaint includes claims for breach of fiduciary duty against all the individual defendants as STCN directors; claims for aiding and abetting breach of fiduciary duty against the Company; a claim for breach of fiduciary duty as controlling stockholder against the Company; and a derivative claim for unjust enrichment against the Company and the three individuals who received equity grants. The complaint demands damages in an unspecified amount for STCN and its stockholders, together with rescission, disgorgement and other equitable relief. On August 13, 2021, the parties entered into a memorandum of understanding (the "MOU") in connection with the settlement of the Reith litigation. Pursuant to the MOU, the defendants agreed (subject to court approval) to cause their directors' and officers' liability insurance carriers to pay to STCN $2,750 in cash. The Company's insurance carrier agreed to pay $1,100 of the settlement, and STCN's insurance carrier agreed to pay the remaining $1,650. Following the parties' entry into a Stipulation and Agreement of Compromise, Settlement, and Release (the "Proposed Settlement Agreement") on February 18, 2022, on March 17, 2022, the Court of Chancery granted a scheduling order (the "Scheduling Order") in connection with the Proposed Settlement Agreement. Pursuant to the terms of the MOU, certain of the individual defendants who are also current and former employees of the Company—Warren Lichtenstein (Executive Chairman), Jack Howard (President), and William Fejes (former Chief Operating Officer)—entered into separate letter agreements (the "Surrender Agreements") with STCN whereby they each agreed to surrender to STCN an aggregate 3,300,000 shares which they had initially received in December 2017 in consideration for services to STCN. Pursuant to the MOU and the Surrender Agreements, on August 17, 2021, Mr. Lichtenstein surrendered 2,133,333 Steel Connect shares (1,833,333 vested shares and 300,000 unvested shares), and Mr. Howard surrendered 1,066,667 Steel Connect shares (916,667 vested shares and 150,000 unvested shares). Also pursuant to the MOU and the Surrender Agreements, Mr. Fejes surrendered 100,000 vested shares in December 2021. After the parties filed papers in support of court approval of the settlement and an objector filed papers in opposition to court approval of the settlement, and after hearings held on August 12 and August 18, 2022, and after the parties and insurers agreed to modify the proposed settlement to increase by $250 the cash to be paid by the insurers, the Court of Chancery declined to approve the settlement as described in the Proposed Settlement Agreement on September 23, 2022. After the Court of Chancery rejected the settlement, it was no longer probable the Company had a liability for the proposed settlement nor a receivable for the related insurance coverage and therefore both amounts were no longer accrued.

On April 8, 2024, STCN, the defendants and Mr. Reith entered into a new memorandum of understanding contemplating the settlement of the Reith litigation.

On October 18, 2024, STCN, the defendants and Mr. Reith entered into a Stipulation and Agreement of Compromise, Settlement and Release to resolve the Reith litigation (the "Second Proposed Settlement Agreement"). If the Second Proposed Settlement Agreement is approved by the Court, the defendants, among other things, shall cause their insurers to make a cash payment of $6,000 to STCN and, after deducting any Court-approved award of attorneys' fees and certain litigation expenses, STCN shall distribute the balance of the cash payment to the holders of STCN common stock pursuant to the allocation provisions set forth in the previously disclosed Stockholders Agreement dated April 30, 2023 by and among the Company, STCN, and other stockholders signatory thereto (the "Stockholders’ Agreement") as amended by the Second Proposed Settlement Agreement. The Second Proposed Settlement Agreement requires Court approval, and there can be no assurances that such approval will be granted.

Mohammad Ladjevardian v. Warren G. Lichtenstein, et al. On September 1, 2023, a purported stockholder of STCN, Mohammad Ladjevardian, filed a verified complaint in the Delaware Court of Chancery alleging a single direct claim for breach of fiduciary duty against members of STCN's Board of Directors, the Company, Steel Excel, Inc. ("Steel Excel"), and WebFinancial Corporation ("WebFinancial") in connection with the Exchange Transaction. The complaint alleged that although the challenged transaction was approved by the independent Strategic Planning Committee of STCN's Board of Directors, the committee failed to obtain a "control premium" or to consider the dilutive effect that the Series E Convertible Preferred Stock issuance had on the plaintiff's holdings. Remedies requested included rescission of the Series E Convertible Preferred Stock and a judicially imposed requirement that all future transactions involving the Company and its affiliates be subject to minority stockholder approval. On September 27, 2023, the entity defendants moved to dismiss the complaint. On October 5, 2023, the individual defendants moved to dismiss the complaint.

On April 18, 2024, in order to avoid the cost and uncertainty of litigation, Messrs. Lichtenstein and Howard, the Company, Steel Excel and WebFinancial, without admitting any wrongdoing, entered into a Settlement Agreement and Securities Purchase Agreements (the "SPAs") with the Estate of Mohammad Ladjevardian and certain parties related to Mohammad Ladjevardian (the "Ladjevardian Parties"). Pursuant to the SPAs, (a) Steel Excel purchased an aggregate of 701,246 shares of Common Stock of STCN held by the Ladjevardian Parties at a price of $9.83 per share, which represented the closing market price of the shares on April 17, 2024, and (b) made an aggregate cash settlement payment of $1,522 to the Ladjevardian Parties.

BNS Claims. A subsidiary of BNS Holdings Liquidating Trust ("BNS Sub") has been named as a defendant in multiple alleged asbestos-related toxic-tort claims filed over a period beginning in 1994 through September 30, 2024. In many cases these claims involved more than 100 defendants. There remained approximately 55 pending asbestos claims as of September 30, 2024. BNS Sub believes it has significant defenses to any liability for toxic-tort claims on the merits. None of these toxic-tort claims has gone to trial and, therefore, there can be no assurance that these defenses will prevail. BNS Sub has insurance policies covering asbestos-related claims for years beginning 1974 through 1988. BNS Sub annually receives retroactive billings or credits from its insurance carriers for any increase or decrease in claims accruals as claims are filed, settled or dismissed, or as estimates of the ultimate settlement costs for the then-existing claims are revised. As of both September 30, 2024 and December 31, 2023, BNS Sub has accrued $1,359 and $1,357 respectively, relating to the open and active claims against BNS Sub. This accrual includes the amount of unpaid retroactive billings submitted to the Company by the insurance carriers and also the Company's best estimate of the likely costs for BNS Sub to settle these claims outside the amounts funded by insurance. There can be no assurance that the number of future claims and the related costs of defense, settlements or judgments will be consistent with the experience to-date of existing claims and that BNS Sub will not need to significantly increase its estimated liability for the costs to settle these claims to an amount that could have a material effect on the consolidated financial statements.

In the ordinary course of our business, the Company is subject to other periodic lawsuits, investigations, claims and proceedings, including, but not limited to, contractual disputes, employment, environmental, health and safety matters, as well as claims associated with our historical acquisitions and divestitures. There is insurance coverage available for many of the foregoing actions. Although the Company cannot predict with certainty the ultimate resolution of lawsuits, investigations, claims and proceedings asserted against the Company, it does not believe any currently pending legal proceeding to which it is a party will have a material adverse effect on its business, prospects, financial condition, cash flows, results of operations or liquidity.

16. RELATED PARTY TRANSACTIONS

The receivables from related parties and payables to related parties are included in Prepaid expenses and other current assets and Other current liabilities, respectively, on the Company's consolidated balance sheets. The components of receivables from related parties and payables to related parties for the years ended September 30, 2024 and December 31, 2023 are presented below:


	September 30, 2024		December 31, 2023
Receivable from related parties:

Receivable from other related parties	$	306	$	234

Payables to related parties:
Accrued management fees	$	506	$	170
Payables to other related parties	1,789		2,359
Total	$	2,295	$	2,529

Management Agreement with SP General Services LLC

SPLP is managed by the Manager, pursuant to the terms of the Management Agreement, which receives a fee at an annual rate of 1.5% of total Partners' capital ("Management Fee"), payable on the first day of each quarter and subject to a quarterly adjustment. In addition, SPLP may issue to the Manager partnership profits interests in the form of incentive units, which will be classified as Class C common units of SPLP, upon exceeding a baseline equity value per common unit, which is determined as of the last day of each fiscal year (see Note 11 - "Capital and Accumulated Other Comprehensive Loss" for additional information on the incentive units).

The Management Agreement is automatically renewed each December 31 for successive one-year terms unless otherwise determined at least 60 days prior to each renewal date by a majority of the Company's independent directors. The Management Fee was $4,014 and $3,249 for the three months ended September 30, 2024 and 2023, respectively, and net of reimbursement for use of Company assets of $(4) and $0 for the three months ended September 30, 2024 and 2023, respectively. The Management Fee was $11,137 and $9,319 for the nine months ended September 30, 2024 and 2023, respectively, and net of reimbursement for use of Company assets of $20 and $0 for the nine months ended September 30, 2024 and 2023, respectively. The Management Fee is included in Selling, general and administrative expenses in the Company's consolidated statements of operations. Unpaid amounts for management fees included in Other current liabilities on the Company's consolidated balance sheet were $506 and $170 as of September 30, 2024 and December 31, 2023, respectively.

SPLP will bear (or reimburse the Manager with respect to) all its reasonable costs and expenses of the managed entities, the Manager, SPH GP or their affiliates, including but not limited to: travel, legal, tax, accounting, auditing, consulting, administrative, compliance, investor relations costs related to being a public entity rendered for SPLP or SPH GP, as well as expenses incurred by the Manager and SPH GP which are reasonably necessary for the performance by the Manager of its duties and functions under the Management Agreement and certain other expenses incurred by managers, officers, employees and agents of the Manager or its affiliates on behalf of SPLP. Reimbursable expenses incurred by the Manager in connection with its provision of services under the Management Agreement, the substantial majority of which was for business-related air travel, were approximately $535 and $1,203 for the three months ended September 30, 2024 and 2023, respectively, and $2,100 and $3,582 for the nine months ended September 30, 2024 and 2023, respectively. Unpaid amounts for reimbursable expenses were approximately $1,595 and $2,185 as of September 30, 2024 and December 31, 2023, respectively, and are included in Other current liabilities on the Company's consolidated balance sheets.

Corporate Services

The Company's subsidiary, Steel Services Ltd ("Steel Services"), through management services agreements with its subsidiaries and portfolio companies, provides services, which include assignment of C-Level management personnel, legal, tax, accounting, treasury, consulting, auditing, administrative, compliance, environmental health and safety, human resources, marketing, investor relations, operating group management and other similar services. In addition to its servicing agreements with SPLP and its consolidated subsidiaries, which are eliminated in consolidation, Steel Services has management services agreements with other companies considered to be related parties, including J. Howard Inc. and Steel Partners, Ltd. and affiliates. In total, Steel Services currently charges approximately $88 annually to these companies, such fees are payable to Steel Services quarterly. Upon closing of the Exchange Transaction on May 1, 2023, STCN became a consolidated subsidiary of the Company as described in Note 3 - "Acquisitions and Divestitures". Service fees charged to STCN after May 1, 2023 are

eliminated in consolidation. All amounts billed under these service agreements are classified as a reduction of Selling, general and administrative expenses.

Mutual Securities, Inc.

Pursuant to the Management Agreement, the Manager is responsible for selecting executing brokers. Securities transactions for SPLP are allocated to brokers on the basis of reliability, price and execution. The Manager has selected Mutual Securities, Inc. as an introducing broker and may direct a substantial portion of the managed entities' trades to such firm, among others. An officer of the Manager and SPH GP is affiliated with Mutual Securities, Inc. The commissions paid by SPLP to Mutual Securities, Inc. were not significant in any period.

Other

At September 30, 2024 and December 31, 2023, several related parties and consolidated subsidiaries had deposits totaling $27 and $110, respectively, at WebBank. Approximately $27 of these deposits, including interest which was not significant, have been eliminated in consolidation as of both September 30, 2024 and December 31, 2023.

17. SEGMENT INFORMATION

SPLP operates through the following segments: Diversified Industrial, Energy, Financial Services, and Supply Chain, which are managed separately and offer different products and services. The Diversified Industrial segment is comprised of manufacturers of engineered niche industrial products, including joining materials, tubing, building materials, performance materials, electrical products, cutting replacement products and services, and a packaging business. The Energy segment provides drilling and production services to the oil & gas industry and owns a youth sports business. The Financial Services segment consists primarily of the operations of WebBank, a Utah chartered industrial bank, which engages in a full range of banking activities. The Supply Chain segment is comprised of the operations of Steel Connect's wholly-owned subsidiary, ModusLink, which provides supply chain management and logistics services.

Corporate and Other consists of several consolidated subsidiaries, including Steel Services, equity method and other investments, and cash and cash equivalents. Its income or loss includes certain unallocated general corporate expenses.

Steel Services has management services agreements with its consolidated subsidiaries and other related companies as further discussed in Note 16 - "Related Party Transactions." Steel Services charged the Diversified Industrial, Energy, Financial Services, and Supply Chain segments approximately $13,699, $2,373, $540 and $630, respectively, for the three months ended September 30, 2024 and charged the Diversified Industrial, Energy, Financial Services and Supply Chain segments approximately $13,184, $2,344, $497 and $617, respectively, for the three months ended September 30, 2023. These service fees are reflected as expenses in the segment income (loss) below, but are eliminated in consolidation. Steel Services charged the Diversified Industrial, Energy, Financial Services, and Supply Chain segments approximately $41,097, $7,118, $1,620, and $1,891, respectively, for the nine months ended September 30, 2024 and charged the Diversified Industrial, Energy, Financial Services, and Supply Chain segments approximately $39,552, $7,033, $1,490, and $1,028, respectively, for the nine months ended September 30, 2023. These service fees are reflected as expenses in the segment income (loss) below, but are eliminated in consolidation.

Segment information is presented below:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenue:
Diversified Industrial	$	318,642	$	299,098	$	945,576	$	918,570
Energy	40,266		46,742		109,182		145,220
Financial Services	113,027		106,405		338,575		304,570
Supply Chain	48,488		40,009		136,595		70,190
Total revenue	$	520,423	$	492,254	$	1,529,928	$	1,438,550
Income (loss) before interest expense and income taxes:
Diversified Industrial	$	26,346	$	14,756	$	66,175	$	61,015
Energy	3,466		5,968		8,149		15,239
Financial Services	23,945		(2,588)		80,846		48,246
Supply Chain	2,637		4,011		8,870		5,846
Corporate and Other	(1,304)		8,874		5,748		(4,814)
Income before interest expense and income taxes	55,090		31,021		169,788		125,532
Interest expense	1,993		4,115		5,074		15,934
Income tax provision (benefit)	16,224		(981)		(31,906)		(1,707)
Net income	$	36,873	$	27,887	$	196,620	$	111,305
Loss of associated companies, net of taxes:


Corporate and Other	$	—	$	3,140	$	7	$	11,944
Total	$	—	$	3,140	$	7	$	11,944
Segment depreciation and amortization:
Diversified Industrial	$	10,604	$	10,257	$	31,743	$	30,333
Energy	2,161		2,740		6,482		7,732
Financial Services	233		205		620		630
Supply Chain	1,450		1,324		4,145		2,234
Corporate and Other	548		167		849		504
Total depreciation and amortization	$	14,996	$	14,693	$	43,839	$	41,433

18. REGULATORY MATTERS

WebBank is subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain actions by regulators that, if undertaken, could have a direct material effect on WebBank's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, WebBank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. WebBank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

As a result of Basel III becoming fully implemented as of January 1, 2019, WebBank's minimum requirements increased for both the quantity and quality of capital held by WebBank. The rules include a new common equity Tier 1 capital to risk-weighted assets ratio ("CET1 Ratio") of 4.5% and a capital conservation buffer of 2.5% of risk-weighted assets, which, as fully phased-in, effectively results in a minimum CET1 Ratio of 7.0%. Basel III raised the minimum ratio of Tier 1 capital to risk-weighted assets from 4.0% to 6.0% (which, with the capital conservation buffer, effectively results in a minimum Tier 1 capital ratio of 8.5% as fully phased-in) and effectively results in a minimum total capital to risk-weighted assets ratio of 10.5% (with the capital conservation buffer fully phased-in), and requires a minimum leverage ratio of 4.0%. Basel III also made changes to risk weights for certain assets and off-balance sheet exposures. WebBank expects that its capital ratios under Basel III will continue to exceed the well-capitalized minimum capital requirements and such amounts are disclosed in the table below:


					Amount of Capital Required
	Actual				For Capital Adequacy Purposes				Minimum Capital Adequacy With Capital Buffer				To Be Well Capitalized Under Prompt Corrective Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
As of September 30, 2024
Total Capital
(to risk-weighted assets)	$	381,256	18.80	%	$	162,499	8.00	%	$	213,280	10.50	%	$	203,123	10.00	%
Tier 1 Capital
(to risk-weighted assets)	$	355,854	17.50	%	$	121,874	6.00	%	$	172,655	8.50	%	$	162,499	8.00	%
Common Equity Tier 1 Capital
(to risk-weighted assets)	$	355,854	17.50	%	$	91,406	4.50	%	$	142,186	7.00	%	$	132,030	6.50	%
Tier 1 Capital
(to average assets)	$	355,854	16.30	%	$	87,397	4.00	%	n/a		n/a		$	109,247	5.00	%

As of December 31, 2023
Total Capital
(to risk-weighted assets)	$	359,747	15.40	%	$	186,523	8.00	%	$	244,811	10.50	%	$	233,154	10.00	%
Tier 1 Capital
(to risk-weighted assets)	$	334,833	14.40	%	$	139,892	6.00	%	$	198,180	8.50	%	$	186,523	8.00	%
Common Equity Tier 1 Capital
(to risk-weighted assets)	$	334,833	14.40	%	$	104,919	4.50	%	$	163,207	7.00	%	$	151,550	6.50	%
Tier 1 Capital
(to average assets)	$	334,833	13.20	%	$	101,663	4.00	%	n/a		n/a		$	127,078	5.00	%

The Federal Reserve, Office of the Comptroller of Currency and Federal Deposit Insurance Corporation issued an interim final rule that excludes loans pledged as collateral to the Federal Reserve's PPP Lending Facility from supplementary leverage ratio exposure and average total consolidated assets. Additionally, PPP loans will receive a zero percent risk weight under the risk-based capital rules of the federal banking agencies.

19. SUPPLEMENTAL CASH FLOW INFORMATION

A summary of supplemental cash flow information for the nine months ended September 30, 2024 and 2023 is presented in the following table:


	Nine Months Ended September 30,
	2024		2023
Cash paid during the period for:
Interest	$	96,174	$	59,125
Taxes	$	33,160	$	30,135

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

As used in this Quarterly Report on Form 10-Q (this "Form 10-Q"), unless the context otherwise requires, the terms "we," "our," "SPLP" and the "Company" refer to Steel Partners Holdings L.P.

The following discussion is intended to assist you in understanding our present business and the results of operations, together with our present financial condition. This section should be read in conjunction with our Consolidated Financial Statements and the accompanying Notes contained in this Form 10-Q, along with the Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the "2023 Annual Report"). All monetary amounts used in this discussion are in thousands.

Cautionary Statement Regarding Forward-Looking Statements

This Form 10-Q includes "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 (the "Exchange Act"), including, in particular, forward-looking statements under the headings "Item 1 - Financial Statements" and "Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations." These statements appear in a number of places in this report and include statements regarding the Company's intent, belief or current expectations with respect to, among other things, (i) its financing plans, (ii) trends affecting its financial condition or results of operations, (iii) the impact of legal claims and related contingencies, (iv) expectations and estimates regarding certain tax and accounting matters, including the impact on our financial statements, (v) WebBank, including its debt securities, credit risk and minimum capital requirements, (vi) cash flows from operations for the next twelve months, (vii) full-year capital expenditures, and (viii) the impact of competition. The words "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate" and similar expressions are intended to identify such forward-looking statements; however, this report also contains other forward-looking statements in addition to historical information.

Forward-looking statements are only predictions based upon the Company's current expectations and projections about future events. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by the statements. Factors that could cause actual results or conditions to differ from those anticipated by these and other forward-looking statements include: disruptions to the Company's business as a result of economic downturns; the negative impact of inflation 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 factors described in the "Risk Factors" in Part I, Item 1A of the Form 10-K that could affect the Company's results. Any forward-looking statement made in this Form 10-Q 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.

OVERVIEW

SPLP, together with its subsidiaries, 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. SPLP operates through the following segments: Diversified Industrial, Energy, Financial Services and Supply Chain. Each of our companies has its own management team with significant experience in their respective industries.

The Diversified Industrial segment is comprised of manufacturers of engineered niche industrial products, with leading market positions in many of the markets they serve. The businesses in this segment distribute products to customers through their sales personnel, outside sales representatives and distributors in North and South America, Europe, Australia, Asia and several

other international markets. Its manufacturing operations encompass joining materials, tubing, building materials, performance materials, electrical products, cutting replacement products and services, and metallized films.

The Energy segment provides drilling and production services to the oil & gas industry and owns a youth sports business. The operations of the sports business are not material to the Company. The profitability of the energy business is highly sensitive to changes in the price of crude oil. Any future decline in oil prices will negatively impact this business.

The Financial Services segment consists primarily of the operations of WebBank, of which we own 100% through our subsidiary WebFinancial Holding Corporation. WebBank is an FDIC-insured state chartered industrial bank headquartered in Utah. WebBank is subject to comprehensive regulation, examination and supervision of the FDIC and the State of Utah Department of Financial Institutions ("UDFI"). WebBank is not considered a "bank" for Bank Holding Company Act purposes and, as such, SPLP is not regulated as a bank holding company. WebBank engages in a full range of banking activities, including originating loans, issuing credit cards and taking deposits that are federally insured. WebBank originates and funds consumer and small business loans through lending programs with unaffiliated companies that market and service the programs ("Marketing Partners"), where the Marketing Partners subsequently purchase the loans (or interests in the loans) that are originated by WebBank. WebBank retains a portion of the loans it originates for its Marketing Partners. WebBank also has private-label financing programs that are branded for a specific retailer, manufacturer, dealer channel, proprietary network or bank card program. WebBank participates in syndicated commercial and industrial as well as asset-based credit facilities and asset-based securitizations through relationships with other financial institutions. Through its subsidiary, National Partners PFco, LLC ("National Partners"), WebBank provides commercial premium finance solutions for national insurance brokerages, independent insurance agencies and insureds in key markets throughout the U.S.

During the three months ended September 30, 2024, WebBank did not issue new loans under the Small Business Administration's ("SBA") Paycheck Protection Program ("PPP"), authorized under the Coronavirus Aid, Relief, and Economic Security ("CARES") Act. The existing loans were funded by the PPP Liquidity Facility and have terms of between two and five years with repayment guaranteed by the SBA. Payments by borrowers up to sixteen months after the note date, and interest will continue to accrue during the sixteen-month deferment at 1%. Loans can be forgiven in whole or in part (up to full principal and any accrued interest) if certain criteria are met. Loan processing fees paid to WebBank from the SBA are accounted for as loan origination fees. Net deferred fees are recognized over the life of the loan as yield adjustments on the loans. If a loan is paid off or forgiven by the SBA prior to its maturity date, the remaining unamortized deferred fees will be recognized in interest income at that time. As of September 30, 2024, the total PPP loans and associated liabilities are $5,466 and $4,437, respectively, and included in Long-term loans receivable, net and Other borrowings, respectively, in the consolidated balance sheet as of September 30, 2024. Upon borrower forgiveness, the SBA pays WebBank for the principal and accrued interest owed on the loan.

The Supply Chain segment consists primarily of the operations of Steel Connect, Inc.'s ("Steel Connect" or "STCN") wholly-owned subsidiary, ModusLink Corporation ("ModusLink" or "Supply Chain"), which serves the supply chain management market. ModusLink provides digital and physical supply chain solutions to many of the world's leading brands across a diverse range of industries, including consumer electronics, telecommunications, computing and storage, software and content, consumer packaged goods, health and personal care products, retail and luxury and connected devices. These solutions are delivered through a combination of industry expertise, innovative service solutions, and integrated operations, proven business processes, an expansive global footprint and world-class technology. With a global footprint spanning North America, Europe and the Asia Pacific region, ModusLink's solutions and services are designed to improve end-to-end supply chains in order to drive growth, lower costs, and improve profitability.

Corporate and Other consists of several consolidated subsidiaries, including our subsidiary, Steel Services Ltd ("Steel Services"), equity method and other investments, and cash and cash equivalents. Its income or loss includes certain unallocated general corporate expenses. Steel Services has management services agreements with our consolidated subsidiaries and other related companies. Steel Services provides assignment of C-Level management personnel, legal, tax, accounting, treasury, consulting, auditing, administrative, compliance, environmental health and safety, human resources, marketing, investor relations, operating group management and other similar services. For additional information on these service agreements, see Note 16 - "Related Party Transactions" to the SPLP consolidated financial statements found elsewhere in this Form 10-Q.

Significant Developments

Common Unit Repurchase Program

During the three months ended September 30, 2024, the Company repurchased 13,813 common units for an aggregate purchase price of $547 under the Repurchase Program. From the inception of the Repurchase Program the Company has purchased 8,799,777 common units for an aggregate price of approximately $206,078. As of September 30, 2024, there remained 720,463 common units that may yet be purchased under the Repurchase Program.

RESULTS OF OPERATIONS

Comparison of the Three and Nine Months Ended September 30, 2024 and 2023


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenue	$	520,423	$	492,254	$	1,529,928	$	1,438,550
Cost of goods sold	295,577		283,285		872,929		833,977
Selling, general and administrative expenses	137,310		124,934		412,301		376,252

Asset impairment charge	530		—		530		329
Interest expense	1,993		4,115		5,074		15,934
Realized and unrealized losses (gains) on securities, net	2,060		(8,665)		(2,994)		(6,151)

All other expense, net *	29,856		58,539		77,367		96,667
Total costs and expenses	467,326		462,208		1,365,207		1,317,008
Income from operations before income taxes and equity method investments	53,097		30,046		164,721		121,542
Income tax provision (benefit)	16,224		(981)		(31,906)		(1,707)
Loss of associated companies, net of taxes	—		3,140		7		11,944
Net income	$	36,873	$	27,887	$	196,620	$	111,305
* Includes Finance interest expense, Provision for credit losses, and Other expense (income), net from the Consolidated Statements of Operations

Revenue

Revenue for the three months ended September 30, 2024 increased $28,169, or 5.7%, as compared to the same period last year. This increase was due to $19,544 or 6.5%, higher net sales from the Diversified Industrial segment, $8,479, or 21.2% higher revenue from the Supply Chain segment, and $6,622, or 6.2% higher revenue from the Financial Services segment. These increases were partially offset by $6,476 or 13.9%, lower net revenue from the Energy segment.

Revenue for the nine months ended September 30, 2024 increased $91,378, or 6.4%, as compared to the same period last year, as a result of higher revenue of $34,005 or 11.2% from the Financial Services segment and higher net sales of $27,006, or 2.9% from the Diversified Industrial segments, as well as higher revenue of $66,405 or 94.6% from the Supply Chain segment, primarily driven by favorable impact of the consolidation, partially offset by lower net revenue of $36,038, or 24.8% from the Energy segment.

Cost of Goods Sold

Cost of goods sold for the three months ended September 30, 2024 increased $12,292, or 4.3%, as compared to the same period last year, resulting from higher net sales from the Diversified Industrial segment and higher revenue from the Supply Chain segment, partially offset by the impact of lower net revenue from the Energy segment.

Cost of goods sold for the nine months ended September 30, 2024 increased $38,952, or 4.7%, as compared to the same period last year, resulting from consolidation of the Supply Chain segment and higher net sales from the Diversified Industrial segment, partially offset by the impact of lower net revenue from the Energy segment.

Selling, General and Administrative Expenses

Selling, general and administrative expenses ("SG&A") for the three months ended September 30, 2024 increased $12,376, or 9.9%, as compared to the same period last year. The increase was primarily due to higher expenses from the Financial Services segment of $7,600 and Supply Chain segment of $4,900. 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 increase for the Supply Chain segment was primarily due to an increase in merger and acquisition related expenses compared to the prior period.

SG&A for the nine months ended September 30, 2024 increased $36,049, or 9.6%, as compared to the same period last year. The increase was primarily driven by higher SG&A expenses from the Financial Services segment of $22,600 as discussed above and Supply Chain segment of $16,400, primarily due to the consolidation impact.

Interest Expense

Interest expense decreased $2,122, or 51.6% and $10,860 or 68.2% for the three and nine months ended September 30, 2024, respectively, as compared to the same period last year. The decrease for the three and nine month periods was primarily due to significantly lower average debt outstanding.

Realized and Unrealized Losses (Gains) on Securities, Net

The Company recorded losses of $2,060 and gains of $2,994 for the three and nine months ended September 30, 2024, as compared to gains of $8,665 and $6,151 for the three and nine months ended September 30, 2023, respectively. 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 $29,856 for the three months ended September 30, 2024, as compared to $58,539 in the same period of 2023 and $77,367 for the nine months ended September 30, 2024, as compared to $96,667 in the same period of 2023. Lower all other expense, net for the three months ended September 30, 2024 was primarily due to $29,884 lower provisions for credit losses related to the Financial Services segment, as compared to the same period of 2023. Lower all other expense, net for the nine months ended September 30, 2024 was primarily due to $37,820 lower provisions for credit losses, partially offset by $15,203 higher finance interest expense related to the Financial Services segment, as compared to the same period of 2023.

Income Tax Provision (Benefit)

The Company recorded an income tax provision of $16,224 and an income tax benefit of $981 for the three months ended September 30, 2024 and 2023, respectively, and income tax benefits of $31,906 and $1,707 for the nine months ended September 30, 2024 and 2023, respectively. As a limited partnership, the Company is generally not directly subject to federal and state income taxes, and instead 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, and foreign income taxes on the results of operations generated by our consolidated subsidiaries that are taxable entities. The Company's effective tax rate was (19.4%) and (1.4%) for the nine months ended September 30, 2024 and 2023, respectively. The lower effective tax rate for the nine months ended September 30, 2024, is primarily due to a non-cash income tax benefit of $73,536 for the reduction in the valuation allowance against Steel Connect's deferred tax assets. Significant differences between the statutory rate and the effective tax rate include the effect of the release of valuation allowances with respect to deferred tax assets, partnership losses for which no tax benefit is recognized, tax expense related to unrealized gains and losses on investment, the effect of tax credits and incentives, and other permanent differences.

Loss of Associated Companies, Net of Taxes

The Company recorded a loss from associated companies, net of taxes, of $7 for the nine months ended September 30, 2024, as compared to losses from associated companies, net of taxes, of $3,140 and $11,944 for the three and nine months ended September 30, 2023, respectively.

For the details of each of these investments and the related mark-to-market adjustments, see Note 7 - "Investments" to the Company's consolidated financial statements found elsewhere in this Form 10-Q.

Segment Analysis


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenue:
Diversified Industrial	$	318,642	$	299,098	$	945,576	$	918,570
Energy	40,266		46,742		109,182		145,220
Financial Services	113,027		106,405		338,575		304,570
Supply Chain	48,488		40,009		136,595		70,190
Total revenue	$	520,423	$	492,254	$	1,529,928	$	1,438,550
Income (loss) from operations before interest expense and income taxes:
Diversified Industrial	$	26,346	$	14,756	$	66,175	$	61,015
Energy	3,466		5,968		8,149		15,239
Financial Services	23,945		(2,588)		80,846		48,246
Supply Chain	2,637		4,011		8,870		5,846
Corporate and other	(1,304)		8,874		5,748		(4,814)
Income from operations before interest expense and income taxes	55,090		31,021		169,788		125,532
Interest expense	1,993		4,115		5,074		15,934
Income tax provision (benefit)	16,224		(981)		(31,906)		(1,707)
Net income	$	36,873	$	27,887	$	196,620	$	111,305
Loss of associated companies, net of taxes:


Corporate and other	$	—	$	3,140	$	7	$	11,944
Total	$	—	$	3,140	$	7	$	11,944
Segment depreciation and amortization:
Diversified Industrial	$	10,604	$	10,257	$	31,743	$	30,333
Energy	2,161		2,740		6,482		7,732
Financial Services	233		205		620		630
Supply Chain	1,450		1,324		4,145		2,234
Corporate and other	548		167		849		504
Total depreciation and amortization	$	14,996	$	14,693	$	43,839	$	41,433

Diversified Industrial

Net sales for the three months ended September 30, 2024 increased $19,544, or 6.5%, as compared to the same period of 2023, primarily driven by higher sales for the Joining Materials business unit, Electrical Products business unit, and Building Materials business unit. The increase of $9,100 for the Joining Materials business unit was primarily driven by higher precious metal prices and sales volume. The increase of $5,200 for the Electrical Products business unit was primarily driven by strong demand from both industrial and aerospace & defense sectors. The increase of $4,000 for the Building Materials business unit was primarily driven by higher sales volume from its roofing products, partially offset by lower sales volume from its FastenMaster products.

Net sales for the nine months ended September 30, 2024 increased $27,006, or 2.9%, as compared to the same period of 2023, primarily driven by higher sales for the Building Materials business unit, Joining Materials business unit, and Electrical Products business unit. The increase of $12,500 for the Building Materials business unit was primarily driven by higher sales volume from its roofing products. The increase of $11,100 for the Joining Materials business unit was primarily driven by higher precious metal prices. The increase of $8,400 for the Electrical Products business unit was primarily driven by strong demand from both industrial and aerospace & defense sectors.

Segment operating income for the three months ended September 30, 2024 increased $11,590, as compared to the same period of 2023. Higher operating income for the 2024 period was primarily driven by higher sales volume as discussed above and improved profit margin from the Electrical Products business unit.

Segment operating income for the nine months ended September 30, 2024 increased $5,160, as compared to the same period of 2023. Higher operating income for the 2024 period was primarily driven by higher net sales as mentioned above and improved profit margin from both the Building Materials business unit and Electrical Products business unit.

Energy

Net revenue for the three months ended September 30, 2024 decreased $6,476, or 13.9%, as compared to the same period of 2023. The decrease in net revenue was primarily due to lower rig hours.

Net revenue for the nine months ended September 30, 2024 decreased $36,038, or 24.8%, as compared to the same period of 2023. The decrease in net revenue was primarily due to lower rig hours.

Segment operating income for the three months ended September 30, 2024 decreased $2,502, as compared to the same period of 2023 primarily driven by lower net revenue mentioned above during the 2024 period.

Segment operating income for the nine months ended September 30, 2024 decreased $7,090, as compared to the same period of 2023 primarily driven by lower net revenue mentioned above during the 2024 period.

Financial Services

Revenue for the three months ended September 30, 2024 increased $6,622, or 6.2%, as compared to the same period of 2023. The increase was primarily due to an increase in interest income and fees from higher credit risk transfer, held for sale volume, and higher interest from held to maturity investments, as compared to the same period of 2023.

Revenue for the nine months ended September 30, 2024 increased $34,005, or 11.2%, as compared to the same period of 2023. The increase was primarily due to an increase in interest income and fees from higher asset based lending, credit risk transfer, held for sale volume, and higher interest rates, as compared to the same period of 2023.

Segment operating income for the three months ended September 30, 2024 was $23,945, as compared to an operating loss of $2,588 for the same period of 2023. Strong operating results was due primarily to higher revenue mentioned above and lower provisions for credit losses of $29,884, partially offset by higher SG&A expenses of $7,600 for the three months ended September 30, 2024 as compared to the same period last year. The lower provision for loan losses was driven by lower retentions of held to maturity loans and increased reserves in 2023 primarily resulting from the deterioration in value of the collateral supporting one of WebBank’s asset-based lending loans. The higher SG&A expenses was driven by higher credit performance fees due to higher CRT balances as well as higher personnel expense related an increase in employees.

Segment operating income for the nine months ended September 30, 2024 increased $32,600, or 67.6%, as compared to the same period of 2023. The increase was due primarily to higher revenue mentioned above and lower provisions for credit losses of $37,820, partially offset by higher SG&A expenses of $22,600 and finance interest expense of $15,203 for the nine months ended September 30, 2024 as compared to the same period last year. The lower provision for loan losses was driven by lower retentions of held to maturity loans and increased reserves in 2023 primarily resulting from the deterioration in value of the collateral supporting one of WebBank’s asset-based lending loans. The lower provision for credit losses was driven by lower retentions of held for sale loans. The higher SG&A expenses was driven by higher credit performance fees due to higher CRT balances as well as higher personnel expense related an increase in employees. The higher finance interest expense was due primarily to an increase in higher interest rates.

Supply Chain

The Company added the Supply Chain segment on May 1, 2023 with revenue of $48,488 and $136,595 for the three and nine months ended September 30, 2024, respectively, as compared to $40,009 and $70,190 for the three and nine months ended September 30, 2023. The increase of $8,479, or 21.2% for the three month period in 2024 was primarily due to higher sales volume, as compared to the same period of 2023.

Operating income was $2,637 and $8,870 for the three and nine months ended September 30, 2024, respectively, as compared to $4,011 and $5,846 for the three and nine months ended September 30, 2023. Lower operating income for the three month period in 2024 was primarily due to higher SG&A costs, partially offset by favorable impact of higher sales volume, as compared to the same period of 2023.

Corporate and Other

Operating loss was $1,304 and operating income was $5,748 for the three and nine months ended September 30, 2024, respectively, as compared to operating income of $8,874 and operating loss of $4,814 for the three and nine months ended September 30, 2023, respectively. The fluctuations were primarily due to changes in investment results from long-term investments.

DISCUSSION OF CONSOLIDATED CASH FLOWS

The following table provides a summary of the Company's consolidated cash flows from operations for the nine months ended September 30, 2024 and 2023:


	Nine Months Ended September 30,
	2024		2023
Net cash provided by operating activities	$	368,173	$	11,675
Net cash provided by (used in) investing activities	2,312		(168,692)
Net cash (used in) provided by financing activities	(560,437)		486,419
Net change for the period	$	(189,952)	$	329,402

Cash Flows from Operating Activities

During the nine months ended September 30, 2024, the Company generated $368,173 of cash from operating activities, which was primarily due to a net decrease in loans held for sale of $215,665 and net income of $196,620, partially offset by a deferred income tax benefit of $65,224. During the nine months ended September 30, 2023, the Company generated $11,675 of cash, which was primarily due to operating income of $111,305 and adjustments to operating income, including a provision for credit losses of $47,979 and depreciation and amortization of $41,433, partially offset by changes in operating assets and liabilities of $185,870 .

Cash Flows from Investing Activities

During the nine months ended September 30, 2024, the Company generated $2,312 of cash from investing activities, which was primarily due to loan originations, net of collections, of $76,790, proceeds from maturities of investments of $16,832 and proceeds from sales of investments of $13,788, partially offset by capital expenditures of $55,712 and purchases of investments of $50,706. During the nine months ended September 30, 2023, the Company used $168,692 of cash, which was primarily due to loan originations, net of collections, of $242,667, and partially offset by an increase in cash on consolidation of Steel Connect as of the Exchange Transaction closing date.

Cash Flows from Financing Activities

During the nine months ended September 30, 2024, the Company used $560,437 of cash from financing activities, which was primarily due to a decrease in deposits of $347,430, common unit repurchases of $105,070, net revolver repayments of $71,149, the purchase of subsidiary shares from noncontrolling interests of $16,181, and a net decrease in other borrowings of $10,528. During the nine months ended September 30, 2023, the Company generated $486,419 of cash, which was primarily due to an increase in deposits of $531,006, partially offset by repayments of PPP borrowings of $21,277 and share repurchases of $19,727.

LIQUIDITY AND CAPITAL RESOURCES

SPLP (excluding its operating subsidiaries, the "Holding Company") is a diversified global holding company with assets that principally consist of the stock of its direct subsidiaries, equity method and other investments, and cash and cash equivalents. The Company works with its businesses to enhance their liquidity and operations and increase long-term value for its unitholders and stakeholders through working capital improvements, capital allocation policies, and operational and growth initiatives. Management plans to use the following strategies to continue to enhance liquidity: (1) continuing to implement improvements using the Steel Business System throughout all the Company's operations to increase sales and operating efficiencies; (2) supporting profitable sales growth both internally and potentially through acquisitions; and (3) evaluating from time to time and as appropriate, strategic alternatives with respect to its businesses and/or assets. The Company continues to examine all of its options and strategies, including acquisitions, divestitures and other corporate transactions, to increase cash flow and stakeholder value.

The Company's senior credit facility, as amended and restated, (the "Credit Agreement") consists of a senior secured revolving credit facility in an aggregate principal amount not to exceed $600,000 (the "Revolving Credit Loans"), which includes a $50,000 subfacility for swing line loans, a $50,000 subfacility for standby letters of credit and a currency sublimit (available in euros and pounds sterling) equal to the lesser of $75,000 and the total amount of the Revolving Credit Commitment. The Credit Agreement covers substantially all of the Company's subsidiaries, with the exception of WebBank and Steel Connect. Availability under the Credit Agreement is based upon earnings and certain covenants, including a maximum ratio limit on Total Leverage and a minimum ratio limit on Interest Coverage, each as defined in the Credit Agreement. The Credit Agreement is subject to certain mandatory prepayment provisions and restrictive and financial covenants, primarily the leverage ratios described above. The Company was in compliance with all financial and nonfinancial covenants as of September 30, 2024. The Company believes it will remain in compliance with the Credit Agreement's covenants for the next twelve months. If the Company does not meet its financial covenants, and if it is unable to secure necessary waivers or other amendments from its lenders on terms acceptable to management, its ability to access available lines of credit could be limited, its debt obligations could be accelerated and liquidity could be adversely affected. The Credit Agreement will expire on December 29, 2026, and all outstanding amounts will be due and payable.

The Holding Company and its operating subsidiaries believe that they have access to adequate resources to meet their needs for normal operating costs, capital expenditures, pension payments, debt obligations and working capital for their existing business, as well as to fund its taxes, legal and environmental matters, for at least the next twelve months. These resources include cash and cash equivalents, investments, cash provided by operating activities and unused lines of credit. The Holding Company and its operating businesses' ability to satisfy their debt service obligations, to fund planned capital expenditures and required pension payments, and to make acquisitions or repurchase units under its common unit repurchase program will depend upon their future operating performance, which will be affected by prevailing economic conditions in the markets in which they operate, as well as financial, business and other factors, some of which are beyond their control. As indicated above, there can be no assurances that the Holding Company and its operating businesses will continue to have access to their lines of credit if their financial performance does not satisfy the financial covenants set forth in their respective financing agreements, which could also result in the acceleration of their debt obligations by their respective lenders, adversely affecting liquidity.

As of September 30, 2024, the Company's working capital was $497,364, as compared to working capital of $562,224 as of December 31, 2023. The Company's total availability under the Credit Agreement was approximately $470,000 as of September 30, 2024. During the nine months ended September 30, 2024, capital expenditures were $55,712, as compared to $36,667 for the same period of 2023. The Company currently expects full-year capital expenditures in the range of $66,000 to $70,000 in 2024, as compared to $51,451 in 2023. The Company and its subsidiaries have ongoing commitments, which include funding of the minimum requirements of its subsidiaries' pension plans. During the nine months ended September 30, 2024, the Company contributed $7,226 to its pension plans. The Company currently estimates it will contribute $2,983 to its pension plans during the remainder of 2024. Required future pension contributions are estimated based upon assumptions such as discount rates on future obligations, assumed rates of return on plan assets and legislative changes. Actual future pension costs and required funding obligations will be affected by changes in the factors and assumptions described in the previous sentence, including the impact of declines in pension plan assets and interest rates, as well as other changes such as any plan termination or other acceleration events.

WebBank manages its liquidity to provide adequate funds to meet anticipated financial obligations, such as certificate of deposit maturities and to fund customer credit needs. WebBank had $127,111 and $170,286 in cash and cash equivalents, time deposits placed at other institutions and federal funds sold as of September 30, 2024 and December 31, 2023, respectively. WebBank had $115,000 and $50,000 in lines of credit from its correspondent banks as of September 30, 2024 and December 31, 2023, respectively. WebBank had $219,301 and $325,175 available from the Federal Reserve discount window as of September 30, 2024 and December 31, 2023, respectively. Therefore, WebBank had a total of $461,412 and $545,461 in cash, lines of credit and access to the Federal Reserve Bank discount window as of September 30, 2024 and December 31, 2023, respectively, which represents approximately 21.3% and 21.8%, respectively, of WebBank's total assets, excluding PPP loans.

Steel Connect's wholly-owned subsidiary, ModusLink, has a revolving credit agreement (the "Umpqua Revolver") with Umpqua Bank which provides for a maximum credit commitment of $12,500 and a sub-limit of $5,000 for letters of credit and expires on March 31, 2026. As of September 30, 2024, ModusLink was in compliance with the Umpqua Revolver's covenants, and believes it will remain in compliance with the Umpqua Revolver’s covenants for the next twelve months. As of September 30, 2024, ModusLink had available borrowing capacity of $11,890 and there was $610 outstanding for letters of credit.

revolving loans from March 31, 2025 to March 31, 2026, removed certain adjustments in the definition of "Adjusted EBITDA" as set forth in the Umpqua Revolver, increased the minimum Adjusted Tangible Net Worth and removed certain caps and conditions on ModusLink's ability to pay dividends.

OTHER

Critical Accounting Estimates

The Company's consolidated financial statements are prepared in conformity with U.S. GAAP, which require us to make estimates and assumptions that affect the amounts reported in the financial statements. The critical accounting policies and estimates that we believe are most critical to the portrayal of our financial condition and results of operations are reported in the "Critical Accounting Policies" section of Part II. Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the 2023 Annual Report.

The Company completed the annual impairment test of Steel Connect's goodwill and indefinite-lived intangible assets as of June 1, 2024. There were no goodwill impairment charges recorded as a result of this assessment.

There were no material changes to the critical accounting policies during the nine months ended September 30, 2024, as compared to those disclosed in the Company's 2023 Annual Report. In preparing the financial statements, the Company is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Consistent with the rules applicable to "Smaller Reporting Companies" we have omitted information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company conducted an evaluation under the supervision and with the participation of our management, including the Principal Executive Officer and the Principal Financial Officer, of the effectiveness of the Company's disclosure controls and procedures (as such terms are defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Disclosure controls and procedures are controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company, including its consolidated subsidiaries, in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its Principal Executive and Principal Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Based on that evaluation, the Company's management, including the Principal Executive Officer and the Principal Financial Officer, concluded that the Company's disclosure controls and procedures were effective as of September 30, 2024.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the three months ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company and its subsidiaries are parties to a variety of legal actions arising out of the normal course of business and otherwise. For further information regarding our legal proceedings, see the description of legal and environmental matters set forth in Note 15 - "Commitments and Contingencies" to the SPLP consolidated financial statements included in Part I of this Form 10-Q and incorporated herein by reference.

Item 1A. Risk Factors

There have been no material changes to the risk factors as disclosed in Part I, Item 1A, Risk Factors in our most recent Annual Report on Form 10-K. Investors are encouraged to review such risk factors in such Form 10-K prior to making an investment in the Company.

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

(a) Not applicable

(b) Not applicable

The Board of SPH GP, has approved the repurchase of up to an aggregate of 9,520,240 of the Company's common units ("Repurchase Program"), which is inclusive of 750,000 common units approved in March 2024. The Repurchase Program was announced on December 7, 2016 and supersedes and cancels, to the extent any amounts remain available, all previously approved repurchase programs, as discussed in further detail in Note 11 - "Capital and Accumulated Other Comprehensive Loss." Any purchases made under the Repurchase Program will be made from time to time on the open market or in negotiated transactions off the market, in compliance with applicable laws and regulations. The timing, manner, price and amount of any repurchase will depend on economic and market conditions, share price, trading volume, applicable legal requirements and other factors. In connection with the Repurchase Program, the Company may enter into a stock purchase plan. The Repurchase Program has no termination date. In the three months ended September 30, 2024, the Company repurchased, under the Repurchase Program, 13,813 common units for $547. Since inception of the Repurchase Program the Company has purchased 8,799,777 common units for an aggregate price of approximately $206,078. As of September 30, 2024, there were approximately 720,463 common units that may yet be purchased under the Repurchase Program.

The following table provides information about our repurchases of common units during the three months ended September 30, 2024. During that period, we did not act in concert with any affiliate or any other person to acquire any of our common stock and, accordingly, we do not believe that purchases by any such affiliate or other person (if any) are reportable in the following table.



Period	Total Number of Units Purchased	Average Price Paid per Unit		Total Number of Units Purchased as Part of Publicly Announced Plans or Programs	Approximate Number of Units that May Yet Be Purchased Under the Plans or Programs
July 1, 2024 through July 31, 2024	—	$	—	—	734,276
August 1, 2024 through August 31, 2024	—	$	—	—	734,276
September 1, 2024 through September 30, 2024	1,281,616	$	49.89	13,813	720,463
Total	1,281,616			13,813

Item 5. Other Information

Insider trading arrangements and policies

During the three months ended September 30, 2024, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits


Exhibit No.						Description




31.1+						Certification of Principal Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 and Rule 13a-14(a) of the Securities Exchange Act of 1934.

31.2+						Certification of Principal Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 and Rule 13a-14(a) of the Securities Exchange Act of 1934.

32.1*						Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) and Rule 13a-14(b) of the Securities Exchange Act of 1934 (furnished herewith).

32.2*						Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) and Rule 13a-14(b) of the Securities Exchange Act of 1934 (furnished herewith).

101.INS+						Inline XBRL Instance Document.

101.SCH+						Inline XBRL Taxonomy Extension Schema.

101.CAL+						Inline XBRL Taxonomy Extension Calculation Linkbase.

101.DEF+						Inline XBRL Taxonomy Extension Definition Linkbase.

101.LAB+						Inline XBRL Taxonomy Extension Label Linkbase.

101.PRE+						Inline XBRL Taxonomy Extension Presentation Linkbase.

104+						Cover Page Interactive Data File (formatted as Inline XBRL and included in Exhibit 101).

+ Filed herewith.

* Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Dated:	November 8, 2024	STEEL PARTNERS HOLDINGS L.P.

		By:	Steel Partners Holdings GP Inc.,
			Its General Partner


		By:	/s/ Ryan O'Herrin
			Ryan O'Herrin
			Chief Financial Officer and Authorized Signatory
			(Principal Financial Officer)

Document

EXHIBIT 31.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION

I, Warren G. Lichtenstein, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 of Steel Partners Holdings L.P.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date:

November 8, 2024

/s/ Warren G. Lichtenstein

Warren G. Lichtenstein
Executive Chairman
of Steel Partners Holdings GP Inc.

Document

EXHIBIT 31.2

PRINCIPAL FINANCIAL OFFICER CERTIFICATION

I, Ryan O'Herrin, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 of Steel Partners Holdings L.P.;

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date:

November 8, 2024

/s/ Ryan O'Herrin

Ryan O'Herrin
Chief Financial Officer
of Steel Partners Holdings GP Inc.

Document

EXHIBIT 32.1

Certification of the Principal Executive Officer

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Steel Partners Holdings L.P. (the “Partnership”) on Form 10-Q for the quarter ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Warren G. Lichtenstein, Executive Chairman of Steel Partners Holdings GP Inc., the general partner of the Partnership, certify, pursuant to 18 U.S.C. Section § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

Date:

November 8, 2024

/s/ Warren G. Lichtenstein

Warren G. Lichtenstein
Executive Chairman
of Steel Partners Holdings GP Inc.

* The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

Document

EXHIBIT 32.2

Certification of the Principal Financial Officer

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Steel Partners Holdings L.P. (the “Partnership”) on Form 10-Q for the quarter ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ryan O'Herrin, Chief Financial Officer of Steel Partners Holdings GP Inc., the general partner of the Partnership, certify, pursuant to 18 U.S.C. Section § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

Date:

November 8, 2024

/s/ Ryan O'Herrin

Ryan O'Herrin
Chief Financial Officer
of Steel Partners Holdings GP Inc.

* The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.