Steel Partners Holdings L.P. Reports Second Quarter Financial Results and Outlook
For the six months ended June 30, 2017, revenues increased to
Results for the quarter and six months ended June 30, 2017, and the
comparable periods in 2016, include certain significant
transaction-related and integration charges associated with the
Company's recently completed acquisitions, as well as other non-cash
income or loss from associated companies and other investments held at
fair value, net of taxes, which are allocated by segment. The six-month
period ended
"Operating results for the second quarter reflected solid performances
by our
Based on current information,
On
Financial Summary |
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(in thousands, except per common unit) |
Three Months Ended |
Six Months Ended |
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2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Revenue | $ | 358,391 | $ | 281,402 | $ | 681,710 | $ | 528,195 | ||||||||||||||
Costs and expenses | 332,325 | 266,975 | 658,198 | 502,251 | ||||||||||||||||||
Income before taxes, associated companies and other investments held at fair value | 26,066 | 14,427 | 23,512 | 25,944 | ||||||||||||||||||
Income tax provision | 10,416 | 6,288 | 17,262 | 10,023 | ||||||||||||||||||
(Income) loss of associated companies and other investments held at fair value, net of taxes | (68 | ) | (1,720 | ) | (6,370 | ) | 3,718 | |||||||||||||||
Net income | 15,718 | 9,859 | 12,620 | 12,203 | ||||||||||||||||||
Net income attributable to noncontrolling interests in consolidated entities | (4,465 | ) | (650 | ) | (5,449 | ) | (1,032 | ) | ||||||||||||||
Net income attributable to common unitholders | $ | 11,253 | $ | 9,209 | $ | 7,171 | $ | 11,171 | ||||||||||||||
Net income per common unit - basic | $ | 0.43 | $ | 0.35 | $ | 0.27 | $ | 0.42 | ||||||||||||||
Net income per common unit - diluted | $ | 0.41 | $ | 0.35 | $ | 0.27 | $ | 0.42 | ||||||||||||||
Segment Results |
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(in thousands) |
Three Months Ended |
Six Months Ended |
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2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenue: | ||||||||||||||||
Diversified industrial | $ | 303,816 | $ | 241,472 | $ | 584,030 | $ | 448,072 | ||||||||
Energy | 34,035 | 21,715 | 61,351 | 41,714 | ||||||||||||
Financial services | 20,540 | 18,215 | 36,329 | 38,409 | ||||||||||||
Total | $ | 358,391 | $ | 281,402 | $ | 681,710 | $ | 528,195 | ||||||||
Income (loss) before income taxes: | ||||||||||||||||
Diversified industrial | $ | 21,853 | $ | 12,444 | $ | 29,799 | $ | 24,853 | ||||||||
Energy | (1,505 | ) | 2 | (9,282 | ) | (3,022 | ) | |||||||||
Financial services | 10,844 | 11,239 | 18,467 | 24,107 | ||||||||||||
Corporate and other | (5,058 | ) | (7,538 | ) | (9,102 | ) | (23,712 | ) | ||||||||
Income before income taxes | 26,134 | 16,147 | 29,882 | 22,226 | ||||||||||||
Income tax provision | 10,416 | 6,288 | 17,262 | 10,023 | ||||||||||||
Net income | $ | 15,718 | $ | 9,859 | $ | 12,620 | $ | 12,203 | ||||||||
Income (loss) of associated companies and other investments held at fair value, net of taxes: | ||||||||||||||||
Diversified industrial | $ | — | $ | 5,969 | $ | — | $ | 8,078 | ||||||||
Energy | 1,471 | (220 | ) | 2,270 | 6,090 | |||||||||||
Corporate and other | (1,403 | ) | (4,029 | ) | 4,100 | (17,886 | ) | |||||||||
Total | $ | 68 | $ | 1,720 | $ | 6,370 | $ | (3,718 | ) | |||||||
Supplemental Non-GAAP Disclosures |
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(in thousands) |
Three Months Ended |
Six Months Ended |
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2017 | 2016 | 2017 | 2016 | |||||||||||||||||
Segment Income (U.S. GAAP): | ||||||||||||||||||||
Diversified industrial | $ | 21,853 | $ | 12,444 | $ | 29,799 | $ | 24,853 | ||||||||||||
Energy | (1,505 | ) | 2 | (9,282 | ) | (3,022 | ) | |||||||||||||
Financial services | 10,844 | 11,239 | 18,467 | 24,107 | ||||||||||||||||
Corporate and other | (5,058 | ) | (7,538 | ) | (9,102 | ) | (23,712 | ) | ||||||||||||
Income before income taxes | $ | 26,134 | $ | 16,147 | $ | 29,882 | $ | 22,226 | ||||||||||||
Segment Adjusted EBITDA: | ||||||||||||||||||||
Diversified industrial | $ | 39,886 | $ | 30,077 | $ | 67,084 | $ | 52,214 | ||||||||||||
Energy | 2,311 | (167 | ) | 675 | (2,815 | ) | ||||||||||||||
Financial services | 10,554 | 11,306 | 18,247 | 24,328 | ||||||||||||||||
Corporate and other | (2,306 | ) | (2,787 | ) | (5,302 | ) | (4,825 | ) | ||||||||||||
Adjusted EBITDA | $ | 50,445 | $ | 38,429 | $ | 80,704 | $ | 68,902 | ||||||||||||
Adjusted EBITDA Reconciliation: | ||||||||||||||||||||
Net income | $ | 15,718 | $ | 9,859 | $ | 12,620 | $ | 12,203 | ||||||||||||
Income tax provision | 10,416 | 6,288 | 17,262 | 10,023 | ||||||||||||||||
Income before income taxes | 26,134 | 16,147 | 29,882 | 22,226 | ||||||||||||||||
Add (Deduct): | ||||||||||||||||||||
(Income) loss of associated companies and other investments held at fair value, net of taxes | (68 | ) | (1,720 | ) | (6,370 | ) | 3,718 | |||||||||||||
Interest expense | 4,893 | 2,332 | 9,299 | 4,365 | ||||||||||||||||
Depreciation and amortization | 17,428 | 13,865 | 35,708 | 27,329 | ||||||||||||||||
Non-cash asset impairment charges | — | 7,858 | — | 9,328 | ||||||||||||||||
Non-cash pension expense | 1,615 | 997 | 3,187 | 1,973 | ||||||||||||||||
Non-cash stock-based compensation | 93 | 820 | 6,420 | 2,211 | ||||||||||||||||
Amortization of fair value adjustments to acquisition-date inventories | — | 984 | — | 984 | ||||||||||||||||
Realized and unrealized gains and losses on investments, net | (139 | ) | (2,106 | ) | 767 | (3,282 | ) | |||||||||||||
Other items, net | 489 | (748 | ) | 1,811 | 50 | |||||||||||||||
Adjusted EBITDA | $ | 50,445 | $ | 38,429 | $ | 80,704 | $ | 68,902 | ||||||||||||
Note Regarding Use of Non-GAAP Financial Measurements
The financial data contained in this press release includes certain
non-GAAP financial measurements as defined by the
However, Adjusted EBITDA is not a measure of financial performance under generally accepted accounting principles in the U.S. ("U.S. GAAP"), and the items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. Therefore, Adjusted EBITDA should not be considered a substitute for net income or loss, or cash flows from operating, investing or financing activities. Because Adjusted EBITDA is calculated before recurring cash charges, including realized losses investments, interest expense and taxes, and is not adjusted for capital expenditures or other recurring cash requirements of the business, it should not be considered as a measure of discretionary cash available to invest in the growth of the business. There are a number of material limitations to the use of Adjusted EBITDA as an analytical tool, including the following:
- Adjusted EBITDA does not reflect the Company's tax provision or the cash requirements to pay its taxes;
- Adjusted EBITDA does not reflect income or loss from the Company's investments in associated companies and other investments held at fair value;
- Adjusted EBITDA does not reflect the Company's interest expense;
- Although depreciation and amortization are non-cash expenses in the period recorded, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect the cash requirements for such replacement;
- Adjusted EBITDA does not reflect the Company's net realized and unrealized gains and losses on its investments;
- Adjusted EBITDA does not include non-cash charges for pension expense and stock-based compensation; and
- Adjusted EBITDA does not include certain other non-recurring and non-cash items.
The Company compensates for these limitations by relying primarily on its U.S. GAAP financial measures and by using Adjusted EBITDA only as supplemental information. The Company believes that consideration of Adjusted EBITDA, together with a careful review of its U.S. GAAP financial measures, is the most informed method of analyzing SPLP.
The Company reconciles Adjusted EBITDA to net income or loss, which does not include amounts reported under U.S. GAAP related to noncontrolling interests in consolidated entities, and that reconciliation is set forth above. Because Adjusted EBITDA is not a measurement determined in accordance with U.S. GAAP and is susceptible to varying calculations, Adjusted EBITDA, as presented, may not be comparable to other similarly titled measures of other companies. Revenues and expenses are measured in accordance with the policies and procedures described in the Company's Annual Report on Form 10-K for the year ended December 31, 2016.
About
Forward-Looking Statements
This press release contains certain "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, that
reflect SPLP's current expectations and projections about its future
results, performance, prospects and opportunities. SPLP has tried to
identify these forward-looking statements by using words such as "may,"
"should," "expect," "hope," "anticipate," "believe," "intend," "plan,"
"estimate" and similar expressions. These forward-looking statements are
based on information currently available to the Company and are subject
to a number of risks, uncertainties and other factors that could cause
its actual results, performance, prospects or opportunities in 2017 and
beyond to differ materially from those expressed in, or implied by,
these forward-looking statements. These factors include, without
limitation, SPLP's subsidiaries need for additional financing and the
terms and conditions of any financing that is consummated, their
customers' acceptance of its new and existing products, the risk that
the Company and its subsidiaries will not be able to compete
successfully, the possible volatility of the Company's unit price and
the potential fluctuation in its operating results. Although SPLP
believes that the expectations reflected in these forward-looking
statements are reasonable and achievable, such statements involve
significant risks and uncertainties, and no assurance can be given that
the actual results will be consistent with these forward-looking
statements. Investors should read carefully the factors described in the
"Risk Factors" section of the Company's filings with the
View source version on businesswire.com: http://www.businesswire.com/news/home/20170808006482/en/
Source:
Investors:
PondelWilkinson Inc.
Roger S. Pondel, 310-279-5965
rpondel@pondel.com