Steel Partners Holdings L.P.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 001-35493
STEEL PARTNERS HOLDINGS L.P.
(Exact name of registrant as specified in its charter)
Delaware
13-3727655
(State of incorporation)
(I.R.S. Employer Identification No.)
590 Madison Avenue, 32  Floor
New York, New York
10022
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (212) 520-2300
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
Securities registered pursuant to Section 12(g) of the Act:
Common Units, no par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes ☐   No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.   Yes ☐   No ☒
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 ☐
nd
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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 has filed a report on and attestation to its management's assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that
prepared or issued its audit report. ☒
Indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously
issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).   Yes ☐   No ☒
The aggregate market value of our common units held by non-affiliates of registrant as of June 30, 2024 totaled approximately $160.4 million
based on the then-closing unit price.
On March 3, 2025, there were 19,074,992 common units outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company's definitive proxy statement for the 2025 Annual Meeting of Limited Partners are incorporated by reference into Part III
of this annual report on Form 10-K.
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STEEL PARTNERS HOLDINGS L.P.
TABLE OF CONTENTS
PART I
Item 1.
Business
4
Item 1A.
Risk Factors
8
Item 1B.
Unresolved Staff Comments
29
Item 2.
Properties
30
Item 3.
Legal Proceedings
31
Item 4.
Mine Safety Disclosures
31
PART II
Item 5.
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
32
Item 6.
[Reserved]
33
Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations
33
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
47
Item 8.
Financial Statements and Supplementary Data
48
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
106
Item 9A.
Controls and Procedures
106
Item 9B.
Other Information
108
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
108
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
109
Item 11.
Executive Compensation
109
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
109
Item 13.
Certain Relationships and Related Transactions, and Director Independence
109
Item 14.
Principal Accountant Fees and Services
109
PART IV
Item 15.
Exhibits and Financial Statement Schedules
109
Item 16.
Form 10-K Summary
111
SIGNATURES
112
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As used in this annual report on Form 10-K (this "Report" or this "Form 10-K"), unless the context otherwise requires, the terms "we," "us," "our,"
"SPLP" and the "Company" refer to Steel Partners Holdings L.P., a Delaware limited partnership.
All dollar amounts used in this Report are in thousands, except for common and preferred unit and per common and preferred unit data, unless
otherwise indicated.
PART I
FORWARD-LOOKING STATEMENTS AND RISK FACTORS SUMMARY
This Report 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 ("Exchange Act"), including, in particular, forward-looking statements under the headings "Item 7 -
Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Item 8 - Financial Statements and Supplementary Data."
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 (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 held to maturity 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. Certain factors that might cause actual results to differ from our expectations include, but are not limited to:
Risks Related to Our Business
•
disruptions to our business as a result of economic downturns;
•
negative impact of inflation and supply chain disruptions;
•
significant volatility in prices of, and declines in demand for, crude oil;
•
fluctuations in commodity prices;
•
the negative impact of rising interest rates;
•
the potential need for cash funding requirements due to our subsidiaries’ sponsorship of defined benefit pension plans;
•
our ability to comply with environmental, health and safety laws and regulations;
•
increased costs and reduced demand for our services as a result of climate change legislation or regulations;
•
our ability to comply with banking and other extensive regulations to which our businesses are subject;
•
impacts to our liquidity or financial condition as a result of WebBank's legislative and regulatory requirements;
•
our ability to continue to comply with listing standards of the New York Stock Exchange;
•
our ability to meet our obligations under our senior credit facility through future cash flows as well as future financings, which may be impacted by
credit market volatility;
•
negative impacts to our business strategy to make acquisitions due to factors such as management diversion and increased costs and expenses;
•
divestitures and contingent liabilities from divested businesses could adversely affect our business and financial results;
•
losses sustained in our investment portfolio;
•
our ability to adequately obtain or protect our intellectual property and licenses, or defend against third-party infringement claims;
•
conducting business outside of the United States;
•
global trade issues and changes in and uncertainties with trade policies;
•
impacts to our profitability due to litigation or compliance failures;
•
a significant disruption in, or breach in security of, our technology systems;
•
increased liability, costs or limitations to our service offerings as a result of current and proposed laws and regulations regarding the protection of
personal data;
•
work stoppages and increased costs due to labor disputes or the unionization of our workforce and suppliers;
•
challenges to WebBank's status as lender of the loans it offers and the ability of assignees to collect interest;
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•
WebBank’s ability to satisfy its capital requirements, including any that may arise from the Federal Deposit Insurance Corporation ("FDIC");
•
WebBank's ability to maintain its lending programs through its relationships with marketing partners;
•
WebBank’s exposure to risks related to loans received under the Paycheck Protection Program (“PPP”), including litigation or the possibility that the
Small Business Administration ("SBA") may not fund some or all PPP loan guaranties;
•
credit and interest rate risks in connection with WebBank's lending activities;
•
our businesses have been, and may in the future be, adversely affected by conditions in the financial services industry;
•
changes in Steel Connect's relationship with significant clients, could have a material adverse impact on its business;
•
our subsidiaries’ ability to maintain its relationships and business with customers without long-term contracts;
•
our ability to maintain effective internal control over financial reporting;
•
adverse impacts of public health developments on our business, results of operations, financial condition and cash flows; and
•
loss of essential employees without timely replacement or substitution.
Risks Related to Our Structure
•
the limited recourse that our unitholders have with respect to maintaining actions against our General Partner, our Board, our officers and our Manager
(each as defined under Part I, Item 1, "Business");
•
limited voting rights of some unitholders under certain provisions of our Partnership Agreement (as defined under Part I, Item 1, "Business");
•
potential conflicts of interest arising from certain interlocking relationships between us and certain affiliates of Warren G. Lichtenstein, our Executive
Chairman, as well as from the business activities of members of our management team; and
•
potential conflicts of interest arising from involvement in other business activities.
Risks Related to Our Manager
•
our ability to successfully retain the services of Warren G. Lichtenstein, the Chairman and Chief Executive Officer, and Jack L. Howard, the President
of our Manager, in running our businesses;
•
uncertainty relating to the amount of the Management Fee (as defined in Part I, Item 1, “Business”) that will be paid or Class C partnership units that
will be issued over time with any certainty;
•
potential adverse impacts from the limited liability and indemnification of our Manager under our Management Agreement; and
•
limitations on our General Partners' fiduciary duties.
Risks Related to our Common and Preferred Units
•
declines in the prices of our common or preferred units;
•
our ability to maintain an active market for our common or preferred units as a result of transfer restrictions and other factors; and
•
the liquidation and distribution preferences of our preferred units.
Risks Related to Taxation
•
our common unitholders' U.S. federal, state and other income tax obligations with respect to their share of our taxable income, regardless of whether
they receive any cash distributions from us;
•
our unitholders' potential exposure to Internal Revenue Service (the "IRS") initiated tax adjustments for prior years on their personal tax returns;
•
negative impacts to our future results of operations as a result of U.S. government tax reform;
•
our inability to assure our tax treatment;
•
our structure involves complex provisions of U.S. federal income tax law for which no clear precedent or authority may be available;
•
adverse tax consequences that our tax-exempt investors may face from our owning common units;
•
our subsidiaries' ability to fully utilize their tax benefits, which could result in increased cash payments for taxes in future periods; and
•
other factors described in the "Risk Factors" in Part I, Item 1A of this Report.
Any forward-looking statement made in this Report 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
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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.
Item 1. Business
The Company
Steel Partners Holdings L.P. (together with its subsidiaries, referred to herein as "SPLP") is a Delaware limited partnership formed in 2008
and a diversified global holding company that owns and operates businesses and has significant interests in various companies, including diversified
industrial products, energy, banking, defense, supply chain management and logistics 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 industries. Corporate and Other consists of several consolidated subsidiaries, including, Steel Services Ltd. ("Steel Services"), which, through
management services agreements, provides services to us and some of our companies, which include assignment of C-Level management personnel, legal,
tax, accounting, treasury, consulting, auditing, administrative, compliance, environmental health and safety, human resources and other similar services. We
work with our businesses to increase corporate value over the long term for all stakeholders by implementing our unique strategy discussed in more detail
below.
SPLP is managed by SP General Services LLC (the "Manager"), pursuant to the terms of an amended and restated management agreement (the
"Management Agreement") discussed in further detail in Note 20 – "Related Party Transactions" to the Consolidated Financial Statements, included in Part
II, Item 8, "Financial Statements and Supplementary Data" of this Report. Our wholly-owned subsidiary, Steel Partners Holdings GP Inc. (the "General
Partner"), is our general partner. The General Partner has a board of directors (the "Board of Directors"). Out of the seven members of the Board of
Directors of the General Partner currently serving, two are appointed by our Manager, including Warren G. Lichtenstein, who is the Executive Chairman of
our Manager and serves as the Executive Chairman of the Board of Directors.
Products and Product Mix
Diversified Industrial Segment
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. Below is additional information related to the
businesses within the Diversified Industrial segment.
Joining Materials - The Joining Materials business primarily fabricates precious metals and related alloys into brazing alloys. Brazing alloys are
used to join similar and dissimilar metals, as well as specialty metals and some ceramics, with strong, hermetic joints. The Joining Materials business offers
these metal joining products in a wide variety of alloys, including gold, silver, palladium, copper, nickel, aluminum and tin. These brazing alloys are
fabricated into a variety of engineered forms and are used in many industries, including electrical, appliance, transportation, energy and general industrial,
where dissimilar material and metal joining applications are required. Joining Materials' operating income from precious metal products is principally
derived from the "value-add" of casting and fabricating processes and not from the direct purchase and resale of precious metals. The Joining Materials
business enters into commodity futures and forward contracts to mitigate the impact of price fluctuations on its owned precious and certain non-precious
metal inventories that are not subject to fixed price contracts.
Tubing - The Tubing business manufactures a wide variety of stainless and low carbon steel tubing products. The Tubing business manufactures
continuous seamless stainless steel tubing coils, serving primarily the petrochemical and oil and gas infrastructure markets. The Tubing business is also a
manufacturer of mechanical and fluid-carrying welded low carbon tubing used for diverse industries, including the automotive, heavy truck, heating,
cooling and oil and gas markets.
Building Materials - The Building Materials business manufactures and supplies products primarily to the commercial construction and building
industries. It manufactures fasteners, adhesives and fastening systems for the U.S. commercial low-slope roofing industry, which are sold to building and
roofing material wholesalers, roofing contractors and private label roofing system manufacturers, and a line of engineered specialty fasteners for the
building products industry for fastening applications in the remodeling and construction of homes, decking and landscaping.
Performance Materials - The Performance Materials business manufactures woven substrates of fiberglass, quartz, carbon and aramid materials
for specialty applications in a wide expanse of markets requiring highly engineered components. Its
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products are used in a wide range of advanced composite applications, such as commercial and military aerospace components, printed electronic circuit
boards, automotive and industrial components, and substrates for commercial and military armor applications.
Electrical Products - The Electrical Products business designs, manufactures and markets power electronics, motion control, power protection,
power quality electromagnetic equipment, and custom ball-screws, gears and gearboxes used in a variety of medical, commercial and military aerospace,
computer, datacom, industrial, specialty LED lighting, test and measurement, and telecom applications. Its products are generally incorporated into larger
systems to improve operating performance, safety, reliability and efficiency.
Kasco Blades and Route Repair Services ("Kasco") - The Kasco business provides meat-room blade products, repair services and distributed
products for the meat and deli departments of supermarkets, meat and fish processing plants, and for distributors of electrical saws and cutting equipment,
principally in North America and Europe. The Kasco business also provides cutting blades for bakeries, in addition to wood cutting blade products for the
saw mill industry, pallet manufacturing, and pallet recycling in North America.
Specialized Films - The Specialized Films (formerly known as "Metallized Films") business includes Dunmore Corporation in the U.S. and
Dunmore Europe GmbH in Germany (collectively, "Dunmore"), which manufacture and distribute coated, laminated and metallized films for engineered
applications in the imaging, aerospace, insulation and solar photo-voltaic markets and also provide products for custom and special applications.
Energy Segment
The Energy segment provides drilling and production services to the oil and gas industry and owns a youth sports business. Below is additional
information related to the consolidated businesses within the Energy segment.
Steel Energy - The Energy business provides completion, recompletion and production services to exploration and production companies in the oil
and gas business. The services provided include well completion and recompletion, well maintenance and workover, flow testing, down hole pumping, plug
and abandonment, well logging and perforating wireline services. The Energy segment primarily provides its services to customers' extraction and
production operations in North Dakota and Montana in the Bakken basin, Colorado and Wyoming in the Niobrara basin, Texas in the Permian basin and
New Mexico in the San Juan basin.
Steel Sports - Steel Sports is a social impact company committed to creating a new standard in youth sports and coaching while forging the next
generation of leaders. The organization strives to provide a first-class youth sports experience emphasizing positive experiences and instilling the core
values of Teamwork, Respect, Integrity and Commitment.
Financial Services Segment
Through our subsidiary WebFinancial Holding Corporation, we own 100% of WebBank, which 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's deposits are insured by the FDIC up to the maximum allowed by law. 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 also has private-label financing programs
that are branded for a specific retailer, manufacturer, dealer channel, proprietary network and bank card programs. 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. National Partners was acquired in April 2019.
Supply Chain Segment
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 is an end-to-end global supply
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chain solutions and e-commerce provider serving clients in markets such as consumer electronics, communications, computing, software and retail.
ModusLink designs and executes critical elements in its clients' global supply chains to improve speed to market, product customization, flexibility, cost,
quality and service. These benefits 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. ModusLink has an integrated network of strategically located
facilities in various countries, including numerous sites throughout North America, Europe and Asia.
Corporate and Other
Corporate and Other consists of several consolidated subsidiaries, including Steel Services, as well as 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 certain of our consolidated subsidiaries and other related companies. For additional information on these service agreements see Note 20 - "Related
Party Transactions" to the Consolidated Financial Statements, included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Report.
Sources and Availability of Raw Materials
The major commodities and raw materials used by the businesses within the Diversified Industrial segment are as follows:
The Joining Materials business uses precious metals such as silver, gold and palladium to produce certain of its products. These precious metals
are generally obtained under a consignment arrangement with a financial institution. In addition to precious metals, the raw materials used in the Joining
Materials, Tubing, Building Materials, Electrical Products and Kasco businesses consist principally of stainless, silicon and carbon steel, aluminum, copper,
tin, nickel alloys, a variety of high-performance alloys, permanent magnets, electronic and electrical components, chemicals and various plastic
compositions. The raw materials used in the operations of the Performance Materials business consist principally of fiberglass, quartz and aramid yarns.
The raw materials used in the Metallized Films business consist principally of polyester scrim fabric, PET film, organic solvents, aluminum, resins,
pigments and adhesives. Raw materials are generally purchased at open market prices from domestic and foreign suppliers. The Diversified Industrial
segment businesses have not experienced any significant problem in obtaining the necessary quantities of raw materials. Prices and availability, particularly
of raw materials purchased from foreign suppliers, are affected by world market conditions and government policies. The Company enters into commodity
futures and forward contracts to mitigate the impact of price fluctuations on its precious and certain non-precious metal inventories that are not subject to
fixed price contracts. The raw materials used by these businesses are generally readily available from more than one source.
The businesses in our Diversified Industrial segment also require significant amounts of electricity, oil and natural gas to operate their facilities,
and they are subject to price changes in these commodities. A shortage of electricity, oil or natural gas, or a government allocation of supplies resulting in a
general reduction in supplies, could increase costs of production and could cause some curtailment of production.
Intellectual Property
The Company's businesses depend in part on trademarks and patents that they own, or the licenses they hold to use others' brand names,
proprietary technology and manufacturing techniques. In addition to trademark and patent protection, these businesses rely on copyrights, trade secrets,
confidentiality procedures and contractual provisions to protect their intellectual property rights.
Employees
As of December 31, 2024, the Company employed approximately 5,200 employees worldwide.
Competition
There are many companies, larger and smaller, domestic and foreign, which manufacture products or provide services of the type offered by our
businesses. Some of these competitors have financial resources greater than our subsidiaries. Some of these competitors enjoy certain other competitive
advantages, including greater name recognition, technical, marketing and other resources, a larger installed base of customers and well-established
relationships with current and potential customers.
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Competition in the Diversified Industrial segment is based on quality, technology, performance, service, reputation, price, and in some industries,
new product introduction.
The Energy business operates in a highly competitive industry that is influenced by price, capacity, reputation and experience. In times of high
demand, capacity, reputation and experience are major competitive forces. In times of low demand, service providers will compete on price to attract
customers. In addition, the Energy business needs to maintain a safe work environment and a well-trained workforce to remain competitive. Energy
services are affected by seasonal factors, such as inclement weather, fewer daylight hours and holidays during the winter months. Heavy snow, ice, wind or
rain can make it difficult to operate and to move equipment between work sites, which can reduce its ability to provide services and generate revenues.
These seasonal factors affect competitors as well. Because they have conducted business together over several years, the members of our local operations
have established strong working relationships with certain of their clients. These strong client relationships provide a better understanding of region-
specific issues and enable us to better address customer needs.
The market for Steel Sports' baseball facility services and soccer camps and leagues is very fragmented, and its competitors are primarily small
local or regional operations.
The market for banking and related financial services is highly competitive. WebBank competes with other providers of financial services,
including a broad range of banks and other nontraditional lending and banking companies that offer financial services. Some of our competitors are larger
and may have more financial resources, while other competitors enjoy fewer regulatory constraints and may have lower cost structures. The financial
services industry has become more competitive as technology advances have lowered barriers to entry, enabling more companies, including nonbank
companies, to provide financial services.
The market for the supply chain management service offerings provided by ModusLink is highly competitive. As a provider with service offerings
covering a range of supply chain operations and activities across the globe, ModusLink competes with different companies depending on the type of
service it is providing or the geographic area in which an activity is taking place. ModusLink faces competition from Electronics Manufacturing
Services/Contract Manufacturers (EMS/CM), third party logistics (3PL) providers, Supply Chain Management (SCM) companies and regional specialty
companies. For certain digital commerce services, ModusLink's competition includes global outsource providers, software as a service (SaaS) providers,
technology providers and computer software providers offering content and document management solutions. As a provider of an outsourcing solution,
ModusLink's competition also includes current and prospective clients, who evaluate ModusLink's capabilities in light of their own capabilities and cost
structures.
Governmental Regulation
As a public company with many subsidiaries based in the United States and abroad, we are subject to many U.S. federal, state, local and foreign
laws and regulations. These requirements, which differ among jurisdictions, include, but are not limited to, those related to environmental protection and
management, labor, employment, worker health and safety, import and export, customs and tariffs, cybersecurity, intellectual property, privacy and
protection of user data. In addition, WebBank is subject to regulatory capital requirements administered by the FDIC and legal requirements in connection
with the consumer and business lending programs that it originates.
These laws and regulations are constantly evolving and may be interpreted, applied, created or amended in a manner that could harm our
businesses. Historically, the cost of compliance with these requirements have not had a material adverse effect on our financial position, results of
operations or cash flows. We believe that we are in compliance in all material respects with all such laws and regulations and that we have obtained all
material licenses and permits that are required for the operation of our businesses. For more information regarding regulatory risks, see the information in
Part I, Item 1A, "Risk Factors - Risks Related to our Business" and "Risks Related to Taxation," and Part II, Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Environmental Liabilities" of this Report.
Other Information
Our common units are listed on the New York Stock Exchange under the symbol "SPLP." Our business address is 590 Madison Avenue, 32
Floor, New York, New York 10022, and our telephone number is (212) 520-2300. Our website is www.steelpartners.com. We use our website as a channel
of distribution of company information. The information we post through this channel may be deemed material. Accordingly, investors should monitor this
channel, in addition to following our press releases, filings with the U.S. Securities and Exchange Commission (the "SEC"), and public conference calls
and webcasts. The information contained in, or that can be accessed through, the website is not part of this Report. Annual reports on Form 10-
nd
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K (including this Report), quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports, are available to you free of
charge through our website as soon as reasonably practicable after those materials have been electronically filed with, or furnished to, the SEC.
Item 1A. Risk Factors
Our businesses are subject to a number of risks. You should carefully consider the following risk factors, together with all of the other information
included or incorporated by reference in this Report, before you decide whether to purchase our common or preferred units. These factors are not intended
to represent a complete list of the general or specific risks that may affect us. It should be recognized that other risks may be significant, presently or in the
future, and the risks set forth below may affect us to a greater extent than indicated. If any of the following risks occur, our business, financial condition
and results of operations could be materially adversely affected. In such case, the trading price of our common and preferred units could decline, and you
may lose all or part of your investment.
Risks Related to Our Business
Economic downturns in various sectors could disrupt and materially harm our businesses.
Negative trends in the general economy, including rising interest rates and commodity prices, could cause a downturn in the markets for our
products and services. A significant portion of our revenues in the Diversified Industrial segment are received from customers in transportation, oil and gas
exploration and construction-related industries, which have experienced significant financial downturns in the past. These industries are cyclical, and
demand for their products tends to fluctuate due to changes in national and global economic conditions, availability of credit and other factors. In our
Energy segment, the level of oil and natural gas exploration and production activity in the United States is affected by the price of oil. Reduced discovery
rates of new oil and natural gas reserves, or a decrease in the development rate of reserves in our market areas, weakness in oil and natural gas prices, or
our customers’ perceptions that oil and natural gas prices will decrease in the future, could result in a reduction in the utilization of our equipment and
result in lower revenues or rates for the services of our Energy segment.
In addition, revenues in our Supply Chain segment are dependent on customer traffic and demand for supply chain management services. Our
customers' willingness to undertake activities in our business segments depends largely upon prevailing industry conditions that are influenced by many
factors over which we have no control. In our Supply Chain segment, our supply chain management services are tied to the demand of our customers'
goods. If demand for our customers' products declines, our customers may experience a decline in volumes, which may impact our financial results. As a
result, our business may begin to slow before overall market slowdowns, at the point of customer uncertainty, and may recover later than overall market
recoveries, as our customers may continue to feel uncertain about future market conditions. If uncertainty around macroeconomic conditions increase, such
as due to recessionary conditions, unexpected interest rate fluctuations or inflationary pressures, our future growth prospects, business and results of
operations could be materially adversely affected.
Our Financial Services segment could be impacted by tightening of the credit markets and other general economic declines that could result in a
decrease in lending and demand for consumer loans. We may also experience a slowdown in our other segments if some customers experience difficulty in
obtaining adequate financing due to tightness in the credit markets. In the short term, our customers, Marketing Partners, and other contractual
counterparties could react to negative market conditions, and may seek to renegotiate their contracts with us or to cancel their contracts with us even if
cancellation involves their paying a cancellation fee. Continued market deterioration could also jeopardize the ability to perform certain counterparty
obligations, including those of our insurers, customers, Marketing Partners and financial institutions. Although we assess the creditworthiness of our
counterparties, prolonged business decline or disruptions as a result of economic downturns or lower oil and gas prices could lead to changes in a
counterparty’s financial stability and liquidity and increase our exposure to credit risk, bad debts or non-performance by our suppliers. Our assets may also
be impaired or subject to write-down or write-off as a result of these conditions. There could also be adverse impacts to several of our businesses due to
overall negative economic conditions, changes in gross domestic product growth, financial and credit market fluctuations or the unavailability of credit, or
geopolitical challenges, including global security concerns and the ongoing conflicts between Russia and Ukraine and the Middle East. These adverse
effects would likely be exacerbated if global economic conditions worsen, resulting in wide-ranging, adverse and prolonged effects on general business
conditions, which could materially and adversely affect our operations, financial results and liquidity.
Inflation and supply chain disruptions have, and may continue to negatively impact our business and results of operations.
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Inflation could continue to increase our costs of labor and other costs related to our business, which could have an adverse impact on our business,
financial position, results of operations and cash flows. Current and future inflationary effects may be driven by, among other things, supply chain
disruptions, governmental stimulus or fiscal policies, and geopolitical instability, including the ongoing conflict between Ukraine and Russia or the Middle
East. We have generally been able to offset increases in these costs through various cost reduction initiatives, as well as adjusting our selling prices to pass
some of these higher costs to our customers. Our ability to raise or maintain our selling prices depends on market conditions and certain competitive
dynamics. Given the timing of our actions compared to the timing of these inflationary pressures, there may be periods during which we are unable to fully
recover the increases in our costs.
Significant volatility in prices of, and declines in customer demand for, crude oil due to factors beyond our control have materially and
adversely affected our diversified industrial and energy business segments, and any prolonged instability in the oil industry could negatively impact our
business, operations and financial condition.
Certain of our operating companies, particularly those in our Diversified Industrial and Energy segments, are highly dependent on customer
demand for, and the availability of, crude oil and natural gas. For example, our portfolio of quality energy segment companies provide a multitude of
oilfield services and oil and gas equipment rentals, operate numerous oil rigs and perform well servicing and workover services. The oil and gas industry
has historically experienced periodic downturns, which have been characterized by diminished demand for our products and services and downward
pressure on the prices that we are able to charge. Sustained market uncertainty can also result in lower demand and pricing for our products and services.
Customer demand is generally dependent on our customers’ views of future demand for oil and gas and future oil and gas prices, as well as our
customers’ ability to access capital. Since the first quarter of 2020, crude oil prices, as well as supply and demand for oil and natural gas, have fluctuated
significantly as a result of national and international economic and political conditions, such as the conflict between Ukraine and Russia. The market and
our businesses currently continue to experience demand loss, as well as volatility in oil prices, which have recently begun to decline due to an oil
oversupply. Additionally, oil prices are particularly sensitive to actual and perceived threats to global political stability, including conflicts in oil and gas
producing regions, and changes in production from OPEC+ member states. Demand for our services and products may be sensitive to the level of
exploration, development and production activity of, and the corresponding capital spending by, oil and natural gas companies. For instance, continuing
tensions and instability resulting from the Russian invasion of Ukraine, and conflicts in the Middle East, have increased and could continue to increase
volatility in global oil and gas prices, which may adversely affect the profitability of our Diversified Industrial and Energy segments. The Russian invasion
of Ukraine has caused, and could intensify, volatility in crude oil and natural gas, and the extent and duration of the military action, sanctions and resulting
market disruptions could be significant and could potentially have a substantial negative impact on the global economy and/or our business for an unknown
period of time. Any such volatility and disruptions may also magnify the impact of other risks described in this "Risk Factors" section.
In addition, the market prices and demand for oil and natural gas are impacted by governmental regulations and the level of oil and natural gas
production in the United States and non-OPEC+ countries, as well as the oil and gas industry’s view of future oil and gas prices, which generally determine
the level of capital spending for the exploration, development and production of crude oil and natural gas reserves. These and other changes in the oil and
natural gas industry have had, and are likely to continue to have for the foreseeable future, a significant adverse impact on our financial condition, results of
operations and cash flows. A significant industry downturn, sustained market uncertainty, or increased availability of economical alternative energy sources
could result in a reduction in demand for our products and services, which could adversely affect our business, financial condition, results of operations,
cash flows and prospects. Due to numerous uncertainties surrounding the resolutions by OPEC+ with respect to oil production discussions, we cannot
predict when oil prices, inventory and demand will improve or stabilize.
Our results of operations are affected by fluctuations in commodity prices.
The cost of raw materials is a key element in the cost of our products. In the normal course of business, our operations, particularly those of our
Diversified Industrial segment, require the purchase and use of commodities used as raw materials, such as precious metals, steel products and certain non-
ferrous metals. The availability of, and prices for, these raw materials expose our businesses to market risk and volatility as a result of, among other factors:
worldwide economic conditions; speculative actions; world supply and demand balances; inventory levels; availability of substitute metals; the U.S. dollar
exchange rate; production costs of U.S. and foreign competitors; and anticipated or perceived shortages. In particular, in recent years we have experienced
significant fluctuations in precious metal prices, including gold and silver, which has impacted our ability to find suitable sources for use in our
manufacturing and maintain adequate inventory levels. Increases in the costs of these commodities and the costs of energy, transportation and other
necessary services may adversely affect our profit margins if we are unable to
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pass along any higher costs in the form of price increases or otherwise achieve cost efficiencies such as in manufacturing and distribution. Price increases
have had and could continue to have an adverse effect on our results of operations and operating margins. Disruptions to the supply chain resulting from
shortages of raw materials and components have had and could continue to have an adverse effect on our ability to meet commitments to customers.
We seek multiple sources of supply for each of our major raw materials in order to avoid significant dependence on any one or a few suppliers.
However, the supply of such materials have been and are likely to continue to be disrupted by higher commodity prices, which increase our costs of
production and can result in tighter supplies. Moreover, to the extent customers delay or decrease purchases of our products as a result of raw material cost
increases or we are otherwise unable to pass cost increases on to our customers, our results of operations and financial condition could be materially
adversely effected. In addition, raw material price fluctuations impact the value of our commodity inventories, in particular, our precious metal inventory.
Adjustments to our inventory carrying values could have a negative impact on our profitability and cash flows. Additionally, commodity prices may also
fall rapidly from time to time. If commodity prices significantly decline for a sustained period of time, the net realizable value of our existing inventories
could be reduced or we could be required to take impairment charges on our inventories, which could adversely affect our results of operations.
Rising interest rates may negatively impact our investments and have an adverse effect on our business, financial condition, results of
operations and cash flows.
Changes in interest rates could have an adverse impact on our business by increasing the cost of borrowing, affecting our interest costs (including
with respect to our senior credit agreement, which is comprised primarily of variable rate options), and our ability to make new investments on favorable
terms or at all. The Federal Reserve Board significantly increased the federal funds rate in 2022 and 2023 and may in the future continue to increase rates.
Such rate increases have a corresponding impact to our costs of borrowing and may have an adverse impact on our ability to raise funds through the
offering of our securities or through the issuance of debt due to higher debt capital costs, diminished credit availability, and less favorable equity markets.
Any significant additional federal fund rate increases may have a material adverse effect on our business, results of operations, and financial condition.
More generally, interest rate fluctuations and changes in credit spreads on floating rate loans may have a negative impact on our investments and
investment opportunities and, accordingly, may have a material adverse effect on our rate of return on invested capital, our net investment income, our net
asset value and the market price of our securities. In addition, an increase in interest rates may make it difficult or impossible to make payments on
outstanding indebtedness. Any increase in interest rates could have a negative effect on our net interest costs and investments, which could negatively
impact our operating results, financial condition and cash flows.
Certain of the Company’s subsidiaries sponsor defined benefit pension plans, which could subject the Company to substantial cash funding
requirements in the future.
The Company's ongoing operating cash flow requirements include arranging for the funding of the minimum requirements of its subsidiaries’
defined benefit pension plans. The Company is generally jointly and severally liable for such subsidiaries’ underfunded pension liabilities. The
performance of the financial markets and interest rates (given the mix of investment assets in the plan), as well as healthcare trends and associated mortality
rates, impact our defined benefit pension plan expense and funding obligations. Significant changes in these factors, including adverse changes in discount
rates, investment losses on plan assets and increases in participant life expectancy, may increase our funding obligations and adversely impact our financial
condition. Required future 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 sentences, as well as other changes such as any plan termination or other acceleration events. For more information, see Part II,
Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" of this Report.
We are subject to risks associated with environmental, health and safety matters.
We (including our businesses) are subject to U.S. federal, state, local and foreign environmental, health and safety ("EHS") laws and regulations in
connection with our ongoing and former operations. These requirements include, but are not limited to regulations related to: the development,
manufacture, shipping and use of the products produced by our businesses; the handling, storage, transportation, discharge, recycling, treatment and
disposal of raw materials and/or hazardous materials, by-products or wastes used in such products or in production; and the operation of facilities and the
use of real property. Compliance with these and other EHS requirements may require us to engage in environmental remediation activities of property
currently or previously owned by us or our subsidiaries, retrofit existing facilities with additional pollution-control equipment, undertake new measures in
connection with the management of hazardous materials, by-products and wastes or to take other
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steps to ensure compliance with various legal and regulatory agencies and entities, all of which could require our subsidiaries to incur substantial costs.
Many of the customers in our Energy segment use hydraulic fracturing services, which is the process of creating or expanding cracks, or fractures,
in formations underground where water, sand and other additives are pumped under high pressure into the formation. Although our Energy segment is not a
provider of hydraulic fracturing services, many of its services complement the hydraulic fracturing process. Fracturing regulations vary widely because
they are regulated at the state level. States continue to evaluate fracturing activities and their impact on the environment. Legislation for broader federal
regulation of hydraulic fracturing operations and the reporting and public disclosure of chemicals used in the fracturing process could be enacted.
Additionally, the U.S. Environmental Protection Agency (the "EPA") has asserted federal regulatory authority over certain hydraulic fracturing activities
involving diesel fuel under the U.S. Safe Drinking Water Act. Our Energy segment’s customers’ operations could be adversely affected if additional
regulation or permitting requirements were to be required for hydraulic fracturing activities, which could have an adverse effect on our results of
operations.
Although our subsidiaries maintain environmental insurance coverage, this insurance may not be sufficient to cover the financial, legal, business
or reputational losses that may result from litigation, regulatory actions, proceedings or investigations as a result of non-compliance or violations of EHS
requirements, as well as any other EHS-related matters. A failure or inability by us or any of our subsidiaries to comply with existing or future EHS
regulations could therefore require us to incur substantial costs, including cleanup costs, fines or sanctions, and subject us to third-party claims for property
damage or personal injury. Any material violations of these laws can lead to significant remediation requirements and administrative oversight, substantial
liability, revocations of discharge permits, fines or penalties, and any new laws, regulations and enforcement policies could become more stringent and
significantly increase our compliance costs or limit our future business opportunities, negatively impacting our financial condition, business and results of
operations.
In addition to EHS legal and regulatory requirements, growing stakeholder engagement with respect to sustainability matters could cause our
subsidiaries to alter their manufacturing processes or business operations, which could require them to incur substantial expense. Any failure to comply
with stakeholder requests, in particular, the ability to meet customer requirements or sustainability targets, could adversely impact the demand of our
businesses' products and subject us and our subsidiaries to significant costs and liabilities and reputational risks, any of which could adversely affect our
business, financial condition and results of operations.
The risks associated with climate change, including our ability to comply with legislation or regulations restricting emissions of greenhouse
gases, could result in increased costs and reduced demand for our services in our Energy segment.
Increased public concern and governmental action may result in more international, U.S. federal, regional, state and local requirements to monitor,
limit, restrict and/or eliminate emissions of GHG. In addition, companies and their stakeholders, including shareholders and non-governmental
organizations, are seeking ways to reduce GHG emissions through private ordering. Any such regulation of GHG emissions, or climate impacts generally,
could adversely affect our Energy business's operations, as well as the operations of its customers, as a result of their links to the production and processing
of fossil fuels and GHG emissions. Although we are not a fossil fuel producer, our Energy segment directly services companies involved in the production
and processing of fossil fuels.
In the United States, no comprehensive climate change legislation has been implemented federally. However, the EPA has adopted rules that,
among other things, establish construction and operating permit reviews for GHG emissions from certain large stationary sources, require the monitoring
and reporting of GHG emissions from certain petroleum and natural gas system sources, implement standards directing the reduction of methane from
certain facilities in the oil and gas sector, and, together with the U.S. Department of Transportation, implement GHG emissions limits on vehicles
manufactured for domestic operations. Additionally, various states have adopted or are considering adopting legislation and regulation focused on GHG
cap-and-trade programs, carbon taxes, reporting and tracking programs and emissions limits. In addition, recently there has been more focus on climate-
related disclosures. For example, the SEC finalized rules in March 2024 that would require public companies to include extensive climate-related
disclosures in their SEC filings, however the SEC issued an order staying the rules due to a number of challenges. Although the SEC has stayed these rules,
state governments, such as California, have enacted laws that require climate-related disclosures, and if we were required to comply with such laws,
including the SEC disclosure requirements if re-instated, we would expect to incur substantial additional compliance costs. The Inflation Reduction Act of
2022 (the "IRA"), which was signed into law in August 2022, directs nearly $400 billion of federal spending to be used toward reducing carbon emissions
and funding clean energy over the next 10 years and is designed to encourage private investment in clean energy, transport and manufacturing. In addition,
fossil fuel producers face increasing litigation risks from local governments and financial risks from liquidity sources that have become more attentive to
sustainability, such as
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shareholders who may shift their investments into other sectors and institutional lenders who may decrease to funding fossil fuel companies.
These changes in the investing and financing markets, and cost increases or demand volatility in connection with the adoption and implementation
of new or more stringent GHG-related legislation or regulation on the oil and gas sector, could in turn reduce demand for our Energy business’s well
servicing, workover and other services. Additionally, measures taken with respect to GHG emissions, whether through governmental mandates or private
ordering, could increase costs in our Energy segment businesses in the form of taxes or emission allowances, facilities improvements, and energy costs,
which would increase our operating expenses through higher utility, transportation, and more expensive materials. Political, litigation and financial risks
could also result in the oil and gas customers of our Energy business restricting or cancelling production activities, incurring liability in connection with
climate-related changes or impairing their ability to continue operating economically, which could also decrease demand for that business's services.
We could incur significant costs, as a result of complying with or failing to comply with other extensive regulations, including banking
regulations, to which our businesses are subject.
We and our businesses are subject to extensive regulation by U.S. and non-U.S. governmental and self-regulatory entities at the federal, state and
local levels, including laws related to anti-corruption, privacy matters, banking, health and safety, import laws and export control and economic sanctions,
and the sale of products and services to government entities. In addition, the consumer and business lending programs offered by WebBank are subject to
extensive legal requirements at the federal and state levels, as described below.
As discussed above, our businesses must comply with substantial additional regulations. Failure to comply with these or any other regulations
could result in civil and criminal, monetary and non-monetary penalties, disruptions to our business, limitations on our ability to manufacture, import,
export and sell products and services, disbarment from selling to certain federal agencies, damage to our reputation and loss of customers and could cause
us to incur significant legal and investigatory fees. Compliance with these and other regulations may also require us to incur significant expenses. The
products and operations of our businesses are also often subject to the rules of industrial standards bodies such as the International Organization for
Standardization ("ISO"), and failure to comply with these rules could result in withdrawal of certifications needed to sell our products and services and
otherwise adversely impact our financial condition.
WebBank operates in a highly regulated environment, and its programs are subject to extensive federal and state regulation. Ongoing
legislative and regulatory actions may significantly affect our liquidity or financial condition.
The consumer lending, business lending, and deposit programs offered by WebBank are subject to extensive legal requirements at the federal and
state levels. Among the laws that may be applicable to some or all of the programs offered by WebBank are:
•
the Federal Truth in Lending Act and Regulation Z promulgated thereunder, which require certain disclosures to borrowers regarding the terms of
their loans and impose requirements and restrictions when extending consumer credit;
•
the Federal Truth in Savings Act and Regulation DD promulgated thereunder, which require certain disclosures to depositors regarding the terms
of their deposit accounts and imposes certain requirements on banks that provide deposit accounts for consumers;
•
the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), the Federal Trade Commission Act and state laws that
prohibit unfair, deceptive, or abusive acts or practices;
•
the Federal Equal Credit Opportunity Act and Regulation B promulgated thereunder, which prohibit discrimination in the extension of credit on
the basis of age, race, color, sex, religion, marital status, national origin, receipt of public assistance or the exercise of any right under the
Consumer Credit Protection Act;
•
the Fair Credit Reporting Act, which governs the use of credit reports and the reporting of information to credit bureaus, and imposes restrictions
on the marketing of credit products through prescreened solicitations based on credit report information;
•
the Electronic Fund Transfer Act and Regulation E promulgated thereunder, which require certain disclosures and imposes certain requirements on
banks that provide electronic transfers of funds for consumers;
•
the Service Members Civil Relief Act and the Military Lending Act, which impose rate limitations and other requirements in connection with the
credit obligations of active duty military personnel and certain of their dependents;
•
federal and state laws relating to privacy and the safeguarding of personally identifiable consumer information and data breach notification;
12

•
the Bank Secrecy Act, which relates to compliance with anti-money laundering, customer due diligence and record-keeping policies and
procedures; and
•
laws governing the permissibility of the interest rates and fees that are charged to borrowers.
The extent and complexity of this regulatory environment has increased WebBank’s regulatory compliance burden and therefore has increased its
regulatory risk. If WebBank or its programs do not comply with these laws, it may be subject to claims for damages, fines, penalties or other relief, and
may face regulatory scrutiny, including examination and enforcement action, and some violations could result in an underlying loan being found invalid or
unenforceable, or subject to payment defenses. Any of these violations could result in the imposition of liability on WebBank, although WebBank may have
indemnification rights for certain claims. In addition, there could be limitations on WebBank’s ongoing or future business.
As part of the bank regulatory process, the FDIC and the UDFI, periodically conduct examinations of WebBank, including compliance with laws
and regulations. The authority of the FDIC and the UDFI includes the ability to examine WebBank, and its Marketing Partners and the lending and deposit
programs with such Marketing Partners. The FDIC, the UDFI, and the Consumer Financial Protection Bureau ("CFPB"), among other federal and state
agencies, also may bring enforcement actions against WebBank and its Marketing Partners if they detect any violations of law. These enforcement actions
could result in monetary liability on WebBank, increased compliance obligations or limitations on its ongoing and future business.
Federal and state regulators, including the CFPB, the Federal Trade Commission ("FTC") and state attorneys-general, has, and may in the future,
bring investigations and enforcement actions against WebBank's Marketing Partners. These actions against Marketing Partners may increase WebBank's
own regulators' scrutiny of WebBank's business and could result in an increased risk of investigations or claims being brought against WebBank. The U.S.
Congress and state legislatures and federal and state regulatory authorities continually review banking laws, regulations and policies for possible changes.
The CFPB and the FDIC may revise or enact new regulatory requirements or revise or adopt new regulatory interpretations that could affect WebBank, its
Marketing Partners and programs. In January 2025, a new acting chairman took office at the FDIC, and he may adopt a different set of priorities than the
prior agency leadership, which could affect WebBank's business. The Trump administration may make other changes that could also affect WebBank.
Under the previous chairman, the FDIC adopted a final rule codifying its practices for supervising certain industrial banks and their parent companies.
Although the rule does not directly apply to us or to WebBank at this time, if not withdrawn by the new chairman, the potential impact that the rule may
have on our business, financial condition or results of operations in the future remains uncertain. The FDIC and other banking regulators also adopted a
final rule regarding the obligations of banks when contracting with third parties, which includes WebBank's relationships with its Marketing Partners. In
June 2023, Colorado enacted a law to opt out from interest rate preemption afforded state-chartered banks, such as WebBank, with respect to loans and
certain types of credit cards issued to Colorado consumers, pursuant to the Depository Institutions Deregulation and Monetary Control Act of 1980
("DIDMCA"). The law was expected to take effect July 1, 2024. Iowa and Puerto Rico previously opted out of the DIDMCA. In response to a federal
lawsuit brought by several industry trade groups challenging certain aspects of the Colorado law, on June 20, 2024 a federal court granted a preliminary
injunction that prevents Colorado from enforcing the law against out-of-state chartered banks that make loans and extend credit to Colorado residents and
that are members of the respective industry trade groups (including WebBank). That ruling is on appeal at the Tenth Circuit Court of Appeals. No assurance
can be given as to the outcome of this litigation or its impact. Other states and jurisdictions may enact similar laws seeking to opt out from interest rate
preemption afforded to state-chartered banks pursuant to DIDMCA. The consumer and business lending programs offered by WebBank rely on WebBank's
ability to charge the interest rates and fees permitted by WebBank's home state of Utah to consumers and businesses that are residents of other jurisdictions.
Colorado’s opt out from the DIDMCA and any opt outs by other states or jurisdictions, could negatively impact WebBank's ongoing or future business. We
cannot predict whether additional legislation or regulations will be enacted and, if enacted, the effect that it would have on our business, financial condition
or results of operations.
We cannot assure you that we will be able to continue to comply with listing standards of the New York Stock Exchange.
Our common units are listed on the New York Stock Exchange. For our common units to remain listed, we must meet the continued listing
standards of the New York Stock Exchange. Although we believe we are in compliance with the listing standards of the New York Stock Exchange, given
our limited trading activity and public float, there can be no assurance that we will remain in compliance with the continued listing standards of the New
York Stock Exchange and if we fail to comply, our securities could be delisted. In addition, even if we are successful in maintaining compliance with
applicable New York Stock Exchange listing requirements, our board of directors may decide that the costs of compliance and the demands of management
time and Company resources required to maintain our listing are greater than the benefits received by the Company and its unitholders from being a listed
company and that, accordingly, we should voluntarily delist from the New York Stock Exchange.
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If our common shares were delisted from New York Stock Exchange voluntarily or involuntarily, our common units may revert to trading on the OTC
Market or another over-the-counter platform following any delisting from the New York Stock Exchange. Any such delisting of our common units could
have an adverse effect on the market price of, and the efficiency of the trading market for, our common units, not only in terms of the number of units that
can be bought and sold at a given price, but also through delays in the timing of transactions and less coverage of us by securities analysts, if any.
Future cash flows from operations or through financings may not be sufficient to enable the Company to meet its obligations under its senior
credit facility, and this would likely have a material adverse effect on its businesses, financial condition and results of operations, and credit market
volatility may affect our ability to refinance our existing debt, borrow funds under our existing lines of credit or incur additional debt.
As of December 31, 2024, the Company had borrowing capacity of $470,000 available under its senior credit facility and $118,800 of outstanding
indebtedness under its senior credit facility. There can be no assurances that the Company or its subsidiaries will continue to have access to their lines of
credit if their financial performance does not satisfy the financial covenants set forth in the applicable financing agreements. If the Company or its
subsidiaries do not meet certain of its financial covenants, and if they are unable to secure necessary waivers or other amendments from the respective
lenders on terms acceptable to management, their ability to access available lines of credit could be limited, their debt obligations could be accelerated by
the respective lenders and liquidity could be adversely affected.
If the Company’s or its subsidiaries’ cash needs are significantly greater than anticipated or they do not materially meet their business plans, or
there are unanticipated downturns in the markets for the Company’s and its subsidiaries’ products and services, the Company or its subsidiaries may be
required to seek additional or alternative financing sources. Future disruption and volatility in credit market conditions could have a material adverse
impact on the Company’s ability or that of its subsidiaries to refinance debt when it comes due on terms similar to our current credit facilities, or to draw
upon existing lines of credit or incur additional debt if needed. There can be no assurance therefore that any such financing will be available or available on
acceptable terms. The inability to generate sufficient cash flows from operations or through financings could impair the Company’s or its subsidiaries’
liquidity and would likely have a material adverse effect on their businesses, financial condition and results of operations.
Our business strategy includes acquisitions, and acquisitions entail numerous risks, including the risk of management diversion and increased
costs and expenses, all of which could negatively affect the Company’s profitability.
Our business strategy includes, among other things, strategic acquisitions, as well as potential opportunistic acquisitions and strategic actions with
respect to our existing investments, such as restructurings, strategic partnerships and collaborations and activist activity. This overall acquisition and
investment strategy entails several risks, including the diversion of management’s attention from other business concerns, the incurrence of substantial legal
and other advisory fees (including, in the case of activist activity, proxy solicitation fees) and the potential need to finance such acquisitions with additional
equity and/or debt. Additionally, to the extent that we are already invested in the entities that are the subject of our acquisitions and other activities, our
actions may be temporarily disruptive to the value of the investments, which could adversely affect our financial condition.
In addition, once completed, acquisitions may entail further risks, including: unanticipated costs and liabilities of the acquired businesses,
including environmental liabilities, that could materially adversely affect our results of operations; increased regulatory compliance relating to the acquired
business; difficulties in assimilating acquired businesses, their personnel and their financial reporting systems, which would prevent the expected benefits
from the transaction from being realized within the anticipated timeframe; negative effects on existing business relationships with suppliers and customers;
and loss of key employees of the acquired businesses. In addition, any future acquisitions could result in the incurrence of additional debt and related
interest expense, contingent liabilities and amortization expense related to intangible assets, which could have a material adverse effect on our business,
financial condition, operating results and cash flows, or the issuance of additional equity, which could dilute our unitholders’ interests.
There can be no assurance that we will be able to negotiate any pending acquisition successfully, receive the required approvals for any acquisition
or otherwise conclude any acquisition successfully, or that any acquisition will achieve the anticipated synergies or other positive results. Overall, if our
acquisition strategy is not successful or if acquisitions are not well integrated into our existing operations, the Company’s profitability, business and
financial condition could be negatively affected.
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Divestitures and contingent liabilities from divested businesses could adversely affect our business and financial results.
We continually evaluate the performance and strategic fit of all of our businesses and may sell businesses or product lines. Divestitures involve
risks, including difficulties in the separation of operations, services, products and personnel, the diversion of management’s attention from other business
concerns, the disruption of our business, the potential loss of key employees and the retention of uncertain contingent liabilities, including environmental
liabilities, related to the divested business. When we decide to sell assets or a business, we may encounter difficulty in finding buyers or alternative exit
strategies on acceptable terms in a timely manner, which could delay the achievement of our strategic objectives. We may also dispose of a business at a
price or on terms that are less desirable than we had anticipated, which could result in significant asset impairment charges, including those related to
goodwill and other intangible assets, that could have a material adverse effect on our financial condition and results of operations. In addition, we may
experience greater dis-synergies than expected, the impact of the divestiture on our revenue growth may be larger than projected, and some divestitures
may be dilutive to earnings. There can be no assurance whether the strategic benefits and expected financial impact of any divestiture will be achieved. We
cannot assure you that we will be successful in managing these or any other significant risks that we encounter in divesting a business or product line, and
any divestiture we undertake could materially and adversely affect our business, financial condition, results of operations and cash flows.
We may sustain losses in our investment portfolio, which could have an adverse effect on our results of operations, financial condition and
liquidity.
A portion of our assets consists of equity securities which are adjusted to fair value each period, as well as other investments. An adverse change
in economic conditions or setbacks to such companies, their operations or business models may result in a decline in the value of these investments. Such
declines in value are principally recognized in net income or loss in accordance with U.S. GAAP. Any adverse changes in the financial markets and
declines in value of our investments may result in additional losses and could have an adverse effect on our results of operations, financial condition and
liquidity.
If our businesses are unable to adequately obtain or protect the intellectual property and licenses upon which they rely, or other third parties
claim that our businesses have infringed upon or otherwise violated their intellectual property, we could face material adverse effects to our financial
condition, businesses and results of operations.
The success of each of our businesses depends in part on the trademarks and patents that they own, or their licenses to use others', brand names,
proprietary technology and manufacturing techniques. In addition to trademark and patent protection, these businesses rely on copyrights, trade secrets,
confidentiality procedures and contractual provisions to protect their intellectual property rights. The steps they have taken to protect their intellectual
property rights may not prevent third parties, including our competitors, from using their intellectual property without their authorization or independently
developing substantially similar intellectual property. Infringement or misappropriation of our businesses’ intellectual property rights, such as the
unauthorized manufacture or sale of materials, could result in uncompensated lost market and revenue opportunities. Despite these steps to monitor and
detect unauthorized use of our businesses’ intellectual property by third parties, any such unauthorized use could reduce or eliminate any competitive
advantage our businesses have developed, cause them to lose sales or otherwise harm their business. The businesses' ability to enforce their intellectual
property rights is subject to litigation risks, as well as uncertainty as to the protection and enforceability of those rights in some countries. If the businesses
seek to enforce their intellectual property rights, it may be subject to claims that those rights are invalid or unenforceable, and others may seek
counterclaims against the businesses, which could have a negative impact on their business. If the businesses are unable to enforce and protect intellectual
property rights, or if they are circumvented, rendered obsolete or invalidated by the rapid pace of technological change, or stolen or misappropriated by
employees or third parties, it could have an adverse impact on their competitive position and business.
Third parties may also assert claims that the products, solutions and services of our businesses’ infringe upon the rights of others. Whether or not
meritorious, defense of these claims can be expensive and time-consuming to defend and resolve, and may divert the efforts and attention of management
and personnel. In addition, the laws of foreign countries may not effectively protect our businesses’ intellectual property rights. In such cases, the
unauthorized use of proprietary information and intellectual property may be made more difficult, time-consuming and costly and could subject our
businesses to significant liability for damages and invalidate their property rights. If our businesses face claims based on the theft or unauthorized use or
disclosure of third-party trade secrets and other confidential business information, defense against such claims could result in significant expenses and harm
our competitive position, all of which could have a significant adverse impact on our business and results of operations.
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We conduct business outside of the United States, which may expose us to additional risks not typically associated with companies that operate
solely in the United States.
We conduct business and have operations or own interests in securities of companies with operations outside the United States. These operations
have additional risks, including risks relating to currency exchange, changes in tariffs, less developed or efficient financial markets than in the United
States, absence of uniform accounting, auditing and financial reporting standards, differences in the legal and regulatory environment, different publicly
available information in respect of companies in non-U.S. markets, economic and political risks, public health crises and possible imposition of non-U.S.
taxes. There can be no assurance that adverse developments with respect to such risks will not adversely affect our assets that are held in certain countries
or the returns from these assets.
We also face several risks inherent in conducting business internationally, including compliance with international and U.S. laws and regulations
that apply to our international operations. These laws and regulations include data privacy requirements, labor relations laws, tax laws, anti-competition
regulations, import and trade restrictions, U.S. laws such as export control laws and the Foreign Corrupt Practices Act, and similar laws in other countries
which also prohibit corrupt payments to governmental officials or certain payments or remunerations to customers. Given the high level of complexity of
these laws, there is a risk that some provisions may be inadvertently breached. Also, we may be held liable for actions taken by our local partners.
Violations of these laws and regulations could result in fines and penalties, criminal sanctions against us, our officers or our employees, administrative
remedies and prohibitions on the conduct of our business. Any such violations could include prohibitions on our ability to offer our products and services in
one or more countries.
In addition, a significant portion of Steel Connect’s revenue historically has come from Mainland China, and Steel Connect’s business in turn
faces certain specific risks relating to operations in Mainland China and its complex and unpredictable political, economic and legal environment. The
interpretation and enforcement of many laws, regulations and rules in China involve significant uncertainties, including with respect to intellectual property
protection. The legal protections and remedies available in the event of any claims or disputes related to, among other things, confidential information or
intellectual property, may be limited and any litigation in Mainland China may be protracted and result in substantial costs and diversion of resources and
management attention. Moreover, Steel Connect’s ability to operate in Mainland China may be adversely affected by changes in U.S. and Chinese laws and
regulations, such as those related to, among other things, international trade, taxation, intellectual property, currency controls, network security, employee
benefits and other matters. Additionally, the U.S. administration has advocated greater restrictions on trade generally and significant increases on tariffs on
certain goods imported into the United States, particularly from Mainland China and has taken steps toward restricting trade in certain goods. China and
other countries have retaliated in response to new trade policies, treaties and tariffs implemented by the United States. If any of these events occur, Steel
Connect’s business, financial condition and results of operations could be materially and adversely affected.
Global trade issues and changes in and uncertainties with respect to trade policies, trade sanctions, tariffs and international trade disputes,
may significantly increase the costs or limit supplies of materials and products used in our operations.
We import raw materials and products used in our operations from jurisdictions outside of the United States. There is inherent risk, based on the
complex relationships among the United States and the countries in which we conduct our business, that political, diplomatic, and national security factors
can lead to global trade issues and changes in trade policies and export regulations. Trade restrictions, including withdrawal from or modification of
existing trade agreements, negotiation of new trade agreements, non-tariff trade barriers, local content requirements, and imposition of new or retaliatory
tariffs against certain countries or covering certain products, including developments in U.S.-China trade relations and sanctions against Russia, could limit
our ability to Import certain raw materials and products used in our operations. Policies impacting exchange rates and commodity prices or those limiting
the export or import of commodities could have a material adverse effect on the international flow of commodities, which may result in a corresponding
negative effect on our operations.
The United States has recently enacted and proposed to enact significant new tariffs. There continues to exist significant uncertainty about the
future relationship between the United States and other countries with respect to trade policies, treaties and tariffs. These trade conflicts and related
escalating governmental actions that result in additional tariffs, duties and/or trade restrictions could increase our operating costs, cause disruptions or
shortages in our supply chains and/or negatively impact the United States, regional or local economies, and, individually or in the aggregate, materially and
adversely affect our business and our consolidated financial results.
Litigation or compliance failures could adversely affect our profitability.
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The nature of our businesses and our investment strategies expose us to various litigation matters. We contest these matters vigorously and make
insurance claims where appropriate. However, litigation is inherently costly and unpredictable, making it difficult to accurately estimate the outcome of any
litigation. These lawsuits may include claims for compensatory damages, punitive and consequential damages and/or injunctive relief. The defense of these
lawsuits may divert our management’s attention, we may incur significant expenses in defending these lawsuits, and we may be required to pay damage
awards or settlements or become subject to equitable remedies that could adversely affect our operations and financial condition. Moreover, any insurance
or indemnification rights that we may have may be insufficient or unavailable to protect us against such losses or result in significantly higher premiums in
the future. In addition, developments in legal proceedings in any given period may require us to adjust the loss contingency estimates that we have recorded
in our consolidated financial statements, record estimates or reserves for liabilities or assets previously not susceptible of reasonable estimates or pay cash
settlements or judgments. Any of these developments could adversely affect our financial condition in any particular period. Although we make accruals as
we believe warranted, the amounts that we accrue could vary significantly from any amounts we actually pay due to the inherent uncertainties in the
estimation process. For more information, see Part I, Item 3, “Legal Proceedings”.
A significant disruption in, or breach in security of, our technology systems could adversely affect our business.
We rely on information and operational technology systems in the conduct of our business to process, transmit and store electronic information, to
manufacture our products and to manage or support a variety of critical business processes and activities. In some cases, we may rely upon third-party
providers of hosting, support and other services to meet our information technology requirements. Our information and operational technology systems are
subject to disruption, damage or failure from a variety of sources, including, without limitation, computer viruses, security breaches, cyber-attacks,
ransomware attacks, natural disasters and defects in design. We may also face increased cybersecurity risks associated with an extensive workforce now
working remotely, as remote working environments have become less secure and more susceptible to hacking attacks, including phishing and social
engineering attempts. Cybersecurity incidents in particular are evolving and include, but are not limited to, use of malicious software, attempts to gain
unauthorized access to data or control of automated production systems, and other security breaches that could lead to disruptions in systems, unauthorized
release of confidential or otherwise protected information and the corruption of data. We have implemented various measures to manage and mitigate risks
related to technology systems and network disruption. We maintain an information security program that includes cybersecurity awareness training for
employees, consistent infrastructure security practices across user account access, endpoint protection, email and perimeter security, as well as continuous
monitoring and logging of network activity and tracking for rapid incident response. We believe that these preventative actions provide us and our
businesses with adequate measures of protection against security breaches and work to reduce technology disruptions and cybersecurity risks. However,
given the unpredictability of the timing, nature and scope of technology security incidents and disruptions, our businesses have been, and could potentially
be, subject to production downtimes, operational delays, the compromising of confidential or otherwise protected information, destruction or corruption of
data, security breaches, theft, other manipulation or improper use of our systems and networks or financial losses from remedial actions, any of which
could have a material adverse effect on our competitive position, financial condition, reputation or results of operations. We have experienced, and could
experience in the future, actual or attempted cyber-attacks of our information technology systems or networks, yet none of these actual or attempted cyber-
attacks has had a material effect on our operations or financial condition. Further, any failure by our hosting and support partners or other third-party
service providers in the performance of their services could materially harm our business.
A breach of our information technology systems could also result in the misappropriation of intellectual property, business plans or trade secrets.
Any failure of our systems or those of our third-party service providers could result in unauthorized access or acquisition of such proprietary information,
and any actual or perceived security breach could cause significant damage to our reputation and adversely impact our relationships with our customers.
Additionally, while our security systems are designed to maintain the physical security of our facilities and information systems, accidental or willful
security breaches or other unauthorized access by third parties to our facilities or our information systems could lead to misappropriation of proprietary and
confidential information.
If any person, including any of our employees or those with whom we share such information, negligently disregards or intentionally breaches our
established controls with respect to our client, customer or employee data, or otherwise mismanages or misappropriates that data, we could be subject to
significant monetary damages, litigation, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions.
We take cybersecurity seriously and devote significant resources and tools to protect our systems, products and data, prevent unwanted intrusions
and disclosures and provide periodic training to our employees, in compliance with applicable U.S. federal and state laws and non-U.S. laws and
regulations addressing cybersecurity. However, these security and compliance
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efforts are costly to implement and may not be successful. As cyber threats are continually evolving, our controls and procedures may become inadequate
and we may be required to devote additional resources to modifying or enhancing our systems in the future. There can be no assurance that we will be able
to prevent, detect and adequately address or mitigate such cyber-attacks or security breaches. We may also be required to expend resources to remediate
cyber-related incidents or to enhance and strengthen our cybersecurity. Based on our cybersecurity program, we do not maintain dedicated cybersecurity
insurance. Any cybersecurity breach could have a material adverse effect on our operations and our reputation and could cause irreparable damage to us or
our systems, regardless of whether we or our third-party providers are able to adequately recover critical systems following a systems failure.
Current and proposed laws and regulations regarding the protection of personal data could result in increased risks of liability or increased
cost to us or could limit our service offerings.
Some of our businesses collect and store personal data and any security breaches of our systems could result in the misappropriation or
unauthorized disclosure of personal data belonging to us or to our employees, partners, customers or suppliers. The regulatory environment surrounding
information security and privacy is increasingly demanding. We are subject to numerous U.S. federal and state laws and non-U.S. laws and regulations
governing the privacy, security and protection of personal and confidential information of our customers and employees. In particular, the European Union
("E.U.") has adopted the General Data Protection Regulation, (the “GDPR”), which contains numerous requirements for processing personal data of, and
honoring the exercise of GDPR specific rights by, E.U.-based data subjects and provides for penalties up to the greater of €20,000 or 4% of worldwide
gross revenue for violation. We are subject to the GDPR with respect to our E.U. operations and employees. Privacy laws such as the GDPR and similar
laws and regulations are increasing in complexity and number, change frequently and sometimes conflict. In particular, as the E.U. member states reframe
their national legislation to harmonize with the GDPR, we will need to monitor compliance with each relevant E.U. member states’ laws and regulations,
including where permitted derogations from the GDPR are introduced. U.S. states, such as California, have adopted comprehensive data privacy laws.
Additional laws may be enacted at the state or at the U.S. federal level. The GDPR, any resultant changes in E.U. member states’ national laws and
regulations, and existing or new U.S. federal or state data privacy laws and regulations may increase our compliance obligations and may necessitate the
review and implementation of policies and processes relating to our collection, security and use of data.
This increase in compliance obligations could also lead to an increase in compliance costs which may have an adverse impact on our business,
financial condition and results of operations. Moreover, failure to comply with these data protection and privacy regulations and rules in various
jurisdictions, or to resolve any serious privacy or security complaints, could subject us to regulatory sanctions, criminal prosecution or civil liability.
Additionally, if we violate applicable laws, regulations or duties relating to the use, privacy or security of personal data, we could be subject to civil
liability or criminal prosecution, be forced to alter our business practices and suffer reputational harm.
Labor disputes, as well as the continued or further unionization of our, and our suppliers’, workforce could increase our costs and cause work
stoppages that may have an adverse effect on our business.
Some of our businesses are party to collective bargaining agreements with various labor unions in the United States and internationally. For more
information, see Part I, Item 1, "Business – Employees". We may be subject to, among other things, strikes, work stoppages or work slowdowns as a result
of disputes under these collective bargaining agreements and labor contracts or our potential inability to negotiate acceptable contracts with these unions. If
the unionized workers in the U.S. or internationally were to engage in a strike, work stoppage or other slowdown, if other employees were to become
unionized or if the terms and conditions in future labor agreements were renegotiated, our businesses could experience a significant disruption in their
operations, which could cause them to be unable to deliver products to customers on a timely basis. Such disruptions could also result in loss of business
and higher ongoing labor costs.
In addition, our Diversified Industrial segment may be impacted by work stoppages or slowdowns experienced by automakers, or their suppliers,
which could result in slowdowns or closures of assembly plants where our products are included in assembled vehicles. In the past, a labor strike by the
United Auto Workers ("UAW") resulted in temporary work stoppages or slowdowns at the U.S. locations of assembly plants and distribution facilities of
certain of the Diversified Industrial segment's customers. The strike impacted our operations, but to date has not had a material impact on our consolidated
results. The UAW reached a tentative labor agreement with each of the impacted auto makers. If the tentative agreements are not ratified, and a continued
or expanded strike ensues, it could materially adversely impact our automotive supply chain (causing delay or non-delivery of goods and services) and
could materially reduce the demand for our goods and services to our customers. If this occurs, it could have a material adverse effect on our business and
our results of operations.
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Additionally, we believe some of our direct and indirect suppliers have unionized workforces. Strikes, work stoppages or slowdowns experienced
by suppliers could result in slowdowns or closures of facilities where components of our products are manufactured or delivered. Any interruption in the
production or delivery of these components could reduce sales, increase costs and have a material adverse effect on us.
WebBank's status as lender of the loans it offers, and the ability of assignees to collect interest, may be challenged, and these challenges could
negatively impact WebBank’s ongoing and future business.
WebBank's business includes lending programs with Marketing Partners, where the Marketing Partners provide origination servicing for the loans
and subsequently purchase the loans (or interests in the loans) that are originated by WebBank. There have been litigation and regulatory actions which
have challenged lending arrangements where a bank has made a loan and then sold and assigned it to an entity that is engaged in assisting with the
origination and servicing of the loan. Some of these cases have alleged that the marketing and servicing entity should be viewed as the "true creditor" of the
loans originated through the lending program, and the bank should be disregarded. If this type of challenge is successful, state law interest rate limitations
and other requirements that apply to non-bank lenders would then be applicable, instead of the federal interest rate laws that govern bank lenders. Other
cases have relied on the claim that even if a bank originated a loan based on the federal interest rate laws, an assignee of a bank is not permitted to rely on
the federal law and is instead subject to state law limitations. In addition, several states have adopted laws that purport to identify which entity is the lender
of a loan. For example, in 2021, Maine adopted a law that, among other things, may deem an entity to be the lender of a loan if certain statutory criteria are
met, such as a non-bank entity holds the "predominant economic interest" in a loan. Certain of these challenges have been brought or threatened in
programs involving WebBank. In 2021, Congress enacted a joint resolution under the Congressional Review Act that was signed by the president that had
the effect of repealing a regulation adopted by the Office of the Comptroller of the Currency. That regulation had provided clarity on the question of when a
bank is the lender of a loan and, although not directly applicable to WebBank, may have provided support for the manner in which WebBank conducts its
lending business. Because of the repeal, these arguments will not be available in the event of a future challenge. Additional cases or regulatory actions, if
successfully brought against WebBank or its Marketing Partners or others, could negatively impact WebBank's ongoing and future business. WebBank
continues to structure its programs, and to exercise control over these programs, to address these risks, although there can be no assurance that additional
cases or regulatory actions will not be brought in the future. State regulators have also made claims that WebBank and its Marketing Partners are required
to obtain licenses under state laws, and those licenses may have the effect of restricting the business of the licensed entity.
WebBank is subject to capital requirements, and SPLP could be called upon by the FDIC to infuse additional capital into WebBank to the
extent that WebBank fails to satisfy its capital requirements.
WebBank is subject to capital requirements administered by various federal banking regulators in the U.S. and, accordingly, must meet specific
capital guidelines. The federal banking regulators have implemented the global regulatory capital requirements of Basel III and certain requirements
implemented by the Dodd-Frank Act. FDIC regulations implementing the Basel III Accord modified WebBank’s minimum capital requirements by
defining what constitutes capital for regulatory capital purposes and adding a 4.5% Common Equity Tier 1 ratio and increased the Tier 1 capital ratio
requirement from 4% to 6%. FDIC regulations also require WebBank to comply with a total capital ratio of 8% and a leverage ratio of 4%. Additionally,
WebBank is expected to maintain a Capital Conservation Buffer (composed solely of common equity Tier 1 capital) equal to 2.5% above the new
regulatory minimum capital requirements. The Capital Conservation Buffer is on top of the minimum risk-weighted capital ratios and had the effect of
increasing those ratios by 2.5% each. A failure of WebBank to maintain the aggregate minimum capital required by the Capital Conservation Buffer will
impair its ability to make certain distributions (including dividends and stock repurchases) and discretionary bonus payments to executive officers. A
failure of WebBank to maintain capital as required by the FDIC's minimum capital requirements would subject WebBank to the FDIC’s prompt corrective
action regime, which may further impair WebBank's ability to make payments or distributions and may require a capital restoration plan or other corrective
regulatory measures. As a result, our business, results of operations, financial condition and prospects could be adversely affected.
The Federal Reserve Board, the Office of the Comptroller of the Currency and the FDIC have continued to amend regulations implementing Basel
III in the United States in certain respects and are expected to make further amendments to these regulatory capital rules. On July 27, 2023, the Federal
Reserve Board, the Office of the Comptroller of the Currency and the FDIC issued a proposal that would significantly revise U.S. regulatory capital
requirements for large banking organizations. The proposal has not yet been finalized and further changes are expected. If adopted as proposed, it would
not directly modify the capital requirements applicable to WebBank. However, the Company cannot predict whether any changes adopted in the final rule
will have an impact on WebBank or whether there will be any additional amendments to the regulatory capital rules directly
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applicable to WebBank. The Company currently cannot predict the specific impact and long-term effects that Basel III and its implementation in the U.S.
will have on WebBank and the banking industry more generally.
Furthermore, the Dodd-Frank Act codified a longstanding policy that all companies that directly or indirectly control an FDIC-insured bank are
required to serve as a source of financial strength for such institution. As a result, SPLP could be called upon by the FDIC to infuse additional capital into
WebBank to the extent that WebBank fails to satisfy its capital requirements, including at times that SPLP might not otherwise be inclined to provide it and
even if doing so may adversely affect SPLP's ability to meet its other obligations, which include limitations on capital contributions to WebBank specified
in the Company's senior credit facility.
WebBank's lending programs depend on relationships with Marketing Partners.
WebBank offers its lending programs with Marketing Partners. For the years ended December  31, 2024 and 2023, the two highest grossing
contractual lending programs combined accounted for approximately 16.9% and 24.9%, respectively, of WebBank’s total net revenue. If its Marketing
Partners do not provide origination services or other services to WebBank, or provide those services in a faulty manner, that may negatively impact
WebBank’s ongoing and future business. Faulty services from service providers engaged by Marketing Partners may also may negatively impact
WebBank’s ongoing and future business. In addition, if the Marketing Partners or other third parties do not purchase the loans (or interests in loans) that are
originated by WebBank, then WebBank may need to retain those loans (or interests in loans), which may negatively impact its ongoing and future business.
Marketing Partners are also required to indemnify WebBank for certain liabilities that may arise from the lending programs. If Marketing Partners are
unable or unwilling to satisfy their indemnification obligations, then WebBank would face increased risk from liability for claims made in private litigation
or regulatory enforcement actions. Additionally, Marketing Partners may rely on outside sources of capital to meet their obligations. Market conditions and
other factors may affect the availability of capital for Marketing Partners. The availability of capital may affect the volume of loans that can be originated
through WebBank’s lending programs. In recent periods, the availability of capital has been more limited for several of WebBank’s Marketing Partners,
resulting in a decrease in loan volume and a negative impact on WebBank’s business.
WebBank is subject to risks of litigation from its borrowers or others regarding the processing of loans for the Paycheck Protection Program,
or PPP, and risks that the Small Business Administration may not fund some or all PPP loan guaranties.
The CARES Act included a $349,000,000 loan program administered through the Small Business Administration ("SBA") and is referred to as the
Paycheck Protection Program. The PPP had subsequently been expanded and extended under additional legislation. Under the PPP, small businesses and
other entities and individuals could apply for loans from existing SBA lenders and other approved regulated lenders. WebBank participated as a lender in
the PPP. Because of the short timeframe between the passing of the CARES Act and the opening of the PPP, there was some ambiguity in the laws, rules
and guidance regarding the operation of the PPP along with the continually evolving nature of the SBA rules, interpretations and guidelines concerning this
program, which exposes WebBank to risks relating to noncompliance with the PPP. Since the launch of the PPP, several banks have been subject to
litigation regarding the process and procedures that such banks used in processing applications for the PPP. As such, WebBank may be exposed to the risk
of litigation, from both borrowers and non-borrowers that approached WebBank regarding PPP loans, regarding its process and procedures used in
processing applications for the PPP. WebBank may also be subject to investigations or enforcement actions by state and federal authorities, including the
SBA. If any such litigation or government action is brought against WebBank and is not resolved in a manner favorable to WebBank, it may result in
significant financial liability or adversely affect its reputation. In addition, litigation and government actions can be costly, regardless of outcome. Any
financial liability, litigation costs or reputational damage caused by PPP-related litigation or government actions could have a material adverse impact on
WebBank’s business, financial condition and results of operations.
WebBank also has credit risk on PPP loans if a determination is made by the SBA that there is a deficiency in the manner in which the loan was
originated, underwritten, certified by the borrower, funded, or serviced by WebBank or its third-party servicers, such as an issue with the eligibility of a
borrower to receive a PPP loan, which may or may not be related to the ambiguity in the laws, rules and guidance regarding the operation of the PPP. In the
event of a loss resulting from a default on a PPP loan and a determination by the SBA that there was a deficiency in the manner in which the PPP loan was
originated, certified by the borrower, funded, or serviced by WebBank or its third-party services, the SBA may deny its liability under the guaranty, reduce
the amount of the guaranty, or, if it has already paid under the guaranty, seek recovery of any loss related to the deficiency from WebBank.
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We are subject to credit and interest rate risk in connection with our lending activities, and our financial condition and results of operations
may be negatively impacted by factors that adversely affect our borrowers.
WebBank originates various types of credit products, and our financial condition and results of operations are affected by the ability of borrowers
to repay their loans in a timely manner. Borrowers may be unable to repay their loans due to various factors, some of which are outside of their control.
Similarly, borrowers under our commercial loans and related financing products (typically, small-sized businesses) may be more susceptible to even mild or
moderate economic declines than larger commercial borrowers, which may subject WebBank to a higher risk of loan loss. Many borrowers have been
negatively impacted by recent events impacting financial, real estate, and securities markets, including geopolitical turmoil, rising interest rates, inflation,
adverse developments in the financial services industry, and other recent events that have caused market and economic volatility, and may continue to be
similarly or more severely affected in the future. The risk of non-payment by borrowers is assessed through our underwriting processes and other risk
management practices, which may not be able to fully identify, price and mitigate such risk. WebBank could also be impacted by tightening of the credit
markets and other general economic declines that could result in a decrease in lending and demand for consumer loans.
WebBank derives a portion of its income from the excess of interest collected over interest paid. The rates of interest WebBank earns on assets and
pays on liabilities generally are established contractually for a period of time. Market interest rates change over time. Accordingly, WebBank’s results of
operations, like those of most financial institutions, are impacted by changes in interest rates and the interest rate sensitivity of its assets and liabilities.
WebBank monitors and measures its exposure to changes in interest rates in order to comply with applicable government regulations and to limit the risk
that changing interest rates could have a negative impact on its results of operations. There can be no assurance, however, that, in the event of adverse
changes in interest rates, WebBank’s efforts to limit interest rate risk will be successful.
Our businesses have been, and may in the future be, adversely affected by conditions in the financial services industry.
Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional
counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of
these kinds or other similar events, have in the past and may in the future lead to erosion of customer confidence in the banking system, deposit volatility,
liquidity issues, and other adverse developments.
If other banks and financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the
banking system and financial markets, our ability to access our existing cash and cash equivalents may be threatened. In addition, if any of our customers,
suppliers, Marketing Partners or other parties with whom we conduct business are unable to access funds, such parties' ability to pay or perform their
obligations to us or to enter into new commercial arrangements requiring additional payments to us or additional funding could be adversely affected.
Moreover, sufficient external financing may not be available to us on a timely basis, on commercially reasonable terms to us, or at all. Any of these events
could adversely affect our business and financial condition.
Changes in Steel Connect’s relationships with significant clients, including the loss or reduction in business from one or more of them, could
have a material adverse impact on its business.
Steel Connect depends on a small number of clients for a substantial portion of its business. For its fiscal years ended July 31, 2024 and 2023,
Steel Connect's 10 largest clients accounted for approximately 81% and 83% of consolidated net revenue, respectively. Two customers accounted for
approximately 38% and 15% of Steel Connect's consolidated net revenue for the fiscal year ended July 31, 2024, and two customers accounted for 41% and
13% of Steel Connect’s consolidated net revenue for the fiscal year ended July 31, 2023. No other clients accounted for greater than 10% of Steel
Connect’s consolidated net revenue for its fiscal years ended July 31, 2024 and 2023.
In general, Steel Connect does not have any agreements which obligate any client to buy a material amount of services from it or designate it as an
exclusive service provider. Consequently, Steel Connect's net revenue is subject to demand variability by its clients. The level and timing of orders placed
by Steel Connect's clients vary for a variety of reasons, including seasonal buying by end-users, the introduction of new technologies and general economic
conditions. Changes in relationships with significant clients may require Steel Connect to evaluate its other long-lived assets for impairment, which may
require Steel Connect to record an impairment charge. Decreases in client demand or volumes or loss of business from one or more of these clients could
have a materially adverse impact on Steel Connect's business, financial condition or results from operations.
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In addition, a large portion of Steel Connect's revenue comes from clients in the technology and consumer products sectors, which is intensely
competitive and subject to rapid changes. A reduction or interruption in supply, including disruptions to Steel Connect's global supply chain or a significant
natural disaster (including as a result of climate change) or otherwise, a failure to appropriately cancel, reschedule, or adjust Steel Connect's requirements
based on Steel Connect's business needs, or a decrease in demand for Steel Connect's services could materially adversely affect Steel Connect’s business,
operating results, and financial condition and could materially damage customer relationships. There has been and may continue to be market shortages of
semiconductor and other electrical component supplies, which has affected, and could further affect, Steel Connect's clients in the computing and consumer
electrical markets and, consequently, their demand for Steel Connect's offerings. During periods of component shortages for Steel Connect's clients, it may
also encounter reduced client demand, and accordingly, Steel Connect's revenue and profitability could suffer until other component sources can be
developed.
Our subsidiaries do not have long-term contracts with all of their customers, and the loss of customers with which we do not have long-term
contracts could materially adversely affect our financial condition, business and results of operations.
Our businesses are based primarily upon individual orders, sales and service agreements with customers and not long-term contracts. As such,
these customers could cease buying products or using our services at any time, for any reason, and with little or no notice, and we will have no recourse in
the event a customer no longer wants to purchase products from us or use our services. If a significant number of our customers reduce or elect not to
purchase products or use our services, or we have to make price concessions in order to retain certain customers, it could materially adversely affect our
financial condition, business and results of operations. In the event of termination, our subsidiaries’ contracts sometimes provide for fees for winding down
the products or services, but these fees may not be sufficient for us to maintain the revenues associated with the canceled contract or to compensate for the
losses incurred in finding replacement sources of revenue.
Failure to maintain effective internal control over financial reporting could result in material misstatements in our financial statements, and a
failure to meet its reporting and financial obligations, each of which could adversely affect our results of operations and financial condition.
We have in the past, and may in the future, conclude that our internal controls and procedures over financial reporting were not effective. Several
years ago we identified material weaknesses in our internal control over financial reporting which were remediated as of December 31, 2022. However, the
use of such remediation measures may not be sufficient going forward, and any failure to maintain effective internal control could lead us to conclude that
we have one or more material weaknesses in the future. Failure to maintain effective internal control or further revisions of our prior financial statements,
among other things, could cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price
of our common and preferred units and limit our ability to raise capital, may cause us to fail to meet our reporting obligations and may require us to incur
additional costs to improve our internal control system. If we cannot provide reliable financial reports or prevent fraud and errors in our financial
statements, our reputation and operating results could also be materially adversely affected. In addition, we could become subject to investigations by the
stock exchange on which our securities are listed, the SEC and other regulatory authorities or private litigation, which could require additional financial and
management resources. For more information, including on our remediation plan, see Part II, Item 9A, "Controls and Procedures."
Epidemics, pandemics, outbreaks of disease and other adverse public health developments have, and may in the future have, an adverse effect
on our business, results of operations, financial condition and cash flows.
Epidemics, pandemics, outbreaks of novel diseases and other adverse public health developments in countries and states where we operate may
arise at any time. Such developments, including the COVID-19 pandemic, have had, and in the future may have, an adverse effect on our business, results
of operations, financial condition and cash flows. These effects include disruption in the global financial markets, reduced customer demand for our
businesses’ products, disruption in or closures of our manufacturing operations or those of our customers and suppliers, delays and disruption in the supply
chain, limited productivity and efficiency of our personnel, availability of qualified personnel and increased cybersecurity risks associated with remote
working environments, could increase our costs, limit our ability to meet customer demand or otherwise have a material adverse effect on our business,
results of operations, financial condition and cash flows. The extent to which our operating and financial results will be and may continue to be affected by
public health emergencies will depend on various factors beyond our control, such as the continued severity and duration of the public health emergencies,
including any sustained geographic resurgence; the emergence of new variants and strains of a contagious disease or virus; and the success of actions to
contain or
22

mitigate the effects of the public health emergency. A public health emergency, and volatile regional and global economic conditions stemming from a
public health emergency, may also magnify the impact of other risks described in this "Risk Factors" section.
Loss of essential employees could have a significant negative impact on our business.
Our success is largely dependent on the skills, experience and efforts of our management and other employees. The loss of the services of one or
more members of our senior management or of numerous employees with essential skills could have a negative effect on our business, financial condition
and results of operations.
In particular, we rely on an adequate supply of skilled employees at our businesses. Trained and experienced personnel in our businesses’
industries are in high demand. We cannot predict whether we will be able to attract, motivate and maintain an adequate skilled workforce necessary to
operate our existing and future businesses efficiently, or that labor expenses will not increase as a result of a shortage in the supply of skilled personnel and
inflationary pressures on wages thereby adversely impacting our financial performance. While our businesses generally operate with high employee
turnover, any material increases in employee turnover rates or any widespread employee dissatisfaction could also have a material adverse effect on our
business, financial condition and results of operations.
Risks Related to Our Structure
The unitholders have limited recourse to maintain actions against the General Partner, the Board of Directors, our officers and the Manager.
The Limited Partnership Agreement of SPLP, or the “Partnership Agreement,” contains broad indemnification and exculpation provisions that
limit the right of a unitholder to maintain an action against the General Partner, the Board of Directors, our officers and the Manager, or to recover losses or
costs incurred due to action or inaction by these parties which have a negative effect on the Company.
Our Partnership Agreement contains certain provisions that may limit the voting rights of some unitholders.
Our Partnership Agreement contains specific provisions that are intended to comply with regulatory limitations on the ownership of our securities
as a result of our ownership of WebBank. Under the Partnership Agreement, a person or group that acquires beneficial ownership of 10% or more of the
common units without the prior approval of the Board of Directors may lose voting rights with respect to all of its common units in excess of 9.9%.
There are certain interlocking relationships among us and certain affiliates of Warren G. Lichtenstein, our Executive Chairman, which may
present potential conflicts of interest.
Warren G. Lichtenstein, our Executive Chairman and a substantial unitholder, is the Chief Executive Officer of our Manager. As of December 31,
2024, Mr. Lichtenstein directly owned approximately 4.2% of our outstanding common units. In addition, affiliates of our Manager, including Mr.
Lichtenstein, beneficially own approximately 84.9% of our outstanding common units, although Mr. Lichtenstein disclaims beneficial ownership of any
common units not directly held by him. We have entered into transactions and/or agreements with these entities. There can be no assurance that such
entities will not have interests in conflict with our own, or that Mr. Lichtenstein will not have interests different than those of our unitholders.
Certain members of our management team may be involved in other business activities that may involve conflicts of interest, possibly diverting
their attention from the Company’s operations.
Certain individual members of our management team, including Warren G. Lichtenstein, our Executive Chairman, and Jack L. Howard, our
President, may from time to time be involved in the management of other businesses, including those owned or controlled by our Manager and its affiliates.
Accordingly, these individuals may focus a portion of their time and attention on managing these other businesses. Conflicts may arise in the future
between our interests and the interests of the other entities and business activities in which such individuals are involved.
Risks Related to Our Manager
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We depend on Warren G. Lichtenstein, the Chairman and Chief Executive Officer of the Manager, and Jack L. Howard, the President of the
Manager, in running our businesses. The loss of their services could have a material adverse effect on our business, results and financial condition.
Our success depends on the efforts, skills, reputation and business contacts of Warren G. Lichtenstein, the Chairman and Chief Executive Officer
of the Manager and Jack L. Howard, the President of the Manager. While the key members of the Manager have worked for the Manager and its affiliates
for many years, our Manager does not have any employment agreements with any of the key members of its management team, and their continued service
is not guaranteed. The loss of the services of Mr. Lichtenstein or Mr. Howard could have a material adverse effect on our asset values, revenues, net income
and cash flows and could harm our ability to maintain or grow our existing operations or pursue additional opportunities in the future.
We cannot determine the amount of the Management Fee that will be paid or Class C partnership units that will be issued over time with any
certainty.
The Manager is entitled to receive a fee (the "Management Fee") at an annual rate of 1.5% of total partners' capital. Our total partners' capital will
be impacted by the performance of our businesses and other businesses we may acquire in the future, as well as the issuance of additional common or
preferred units. Changes in our total partners’ capital and in the resulting Management Fee could be significant, resulting in a material adverse effect on our
results of operations. In addition, if our performance declines, assuming our total partners’ capital remains the same, the Management Fee will increase as a
percentage of our income. In addition, SPH SPV-I LLC, an affiliate of the Manager, holds incentive units which entitle the holder generally to share in 15%
of the increase in the equity value of the Company, as calculated for the twenty trading days prior to each year end. The incentive units’ share of such
appreciation is reflected by classifying a portion of the incentive units as Class C units of the Company. Any issuance of such Class C units will result in
dilution to existing limited partners' holdings in the Company. As of the annual measurement date on December 31, 2024, 76,323 incentive units vested.
The incentive units are expected to be issued in the first quarter of our fiscal year ending December 31, 2025 and subsequently automatically convert into
the same number of common units.
Our Manager’s liability is limited under the Management Agreement, and we have agreed to indemnify our Manager against certain
liabilities. Such indemnification may incentivize our Manager to take unnecessary risks with respect to actions for which it will be indemnified.
Under the Management Agreement, our Manager, its members, officers, employees, affiliates, agents and legal representatives are not liable for,
and we have agreed to indemnify such persons from, any loss or expense, including without limitations, any judgment, settlement, reasonable attorneys’
fees and other costs and expenses incurred in connection with the defense of any actual or threatened proceeding, other than losses resulting from willful
misconduct or gross negligence in the performance of such indemnified person’s obligations and duties. Such indemnification may incentivize our Manager
to take unnecessary risks with respect to actions for which it will be indemnified.
The Partnership Agreement limits the General Partner’s fiduciary duties to our unitholders.
The Partnership Agreement contains provisions that modify and reduce the fiduciary standards to which the General Partner otherwise would be
held by state fiduciary duty law. For example, our Partnership Agreement provides that when our General Partner is acting in its individual capacity, as
opposed to in its capacity as our General Partner, it may act without any fiduciary obligations to holders of our units, whatsoever. When our General
Partner, in its capacity as our general partner, is permitted or required to make a decision in its "sole discretion" or "discretion" or that it deems "necessary
or appropriate" or "necessary or advisable," then, except as otherwise provided in our Partnership Agreement, our General Partner will be entitled to
consider only such interests and factors as it desires and will have no duty or obligation (fiduciary or otherwise) to give any consideration to any interest of
or factors affecting us or any holder of our units and will not be subject to any different standards imposed by our Partnership Agreement, the Delaware
Limited Partnership Act, or under any other law, rule or regulation or in equity. These standards reduce the obligations to which our General Partner would
otherwise be held.
The above modifications of fiduciary duties are expressly permitted by Delaware law. Hence, we and holders of our units will only have recourse
and be able to seek remedies against our General Partner if our General Partner breaches its obligations pursuant to our limited Partnership Agreement.
Unless our General Partner breaches its obligations pursuant to our Partnership Agreement, we and holders of our units will not have any recourse against
our General Partner even if our General Partner were to act in a manner that was inconsistent with traditional fiduciary duties. Furthermore, even if there
has been a breach of the obligations set forth in our Partnership Agreement, our Partnership Agreement provides that our General Partner and its officers
and directors will not be liable to us or holders of our units for errors of judgment or for any acts or omissions
24

unless there has been a final and non-appealable judgment by a court of competent jurisdiction determining that our General Partner or its officers and
directors acted in bad faith or engaged in fraud or willful misconduct. These provisions restrict the remedies available to unitholders for actions that without
such limitations might constitute breaches of duty including fiduciary duties.
Risks Related to Our Common and Preferred Units
We may issue additional common or preferred units, or other series of units, in the future without the consent of unitholders and at a discount
to the market price of such units. In particular, sales of significant amounts of the common or preferred units may cause the respective prices of the
units to decline.
Under the terms of the Partnership Agreement, additional common or preferred units, or additional series of units, may be issued without the
consent of unitholders at a discount to the market price. In addition, other classes of securities may be issued with rights that are senior to or which
otherwise have preferential rights to the rights of the common and preferred units. Sales of significant amounts of the common or preferred units in the
public market or the perception that such sales of significant amounts may occur could adversely affect their respective market prices. Moreover, the
perceived risk of any potential dilution could cause common or preferred unitholders to attempt to sell their units and investors to “short” the common or
preferred units, a practice in which an investor sells units that he or she does not own at prevailing market prices, hoping to purchase units later at a lower
price to cover the sale. Any event that would cause the number of common or preferred units being offered for sale to increase would likely cause the
respective units’ market price to further decline. These sales might also make it more difficult for us to sell additional common or preferred units in the
future at a time and price that we deem appropriate.
Transfer restrictions contained in the Company’s Partnership Agreement and other factors could hinder the development of an active market
for our common or preferred units.
There can be no assurance as to the volume of our common or preferred units or the degree of price volatility for our common and preferred units
traded on the New York Stock Exchange. There are transfer restrictions contained in the Company's Partnership Agreement to help protect the tax benefits
of the net operating loss ("NOL") carryforwards of certain of the Company’s corporate subsidiaries and other portfolio companies, and such transfer
restrictions could hinder development of an active market for our common and preferred units. Unless renewed, the transfer restrictions will expire on June
1, 2025.
The preferred units give the holders thereof liquidation and distribution preferences over our common unitholders.
We currently have one series of preferred units outstanding. All of these units rank senior to the common units with respect to distribution rights
and rights upon liquidation. Subject to certain exceptions, as long as any preferred units remain outstanding, we may not declare any distribution on our
common units unless all accumulated and unpaid distributions have been declared and paid on the preferred units. In the event of our liquidation, winding-
up or dissolution, the holders of the preferred units would have the right to receive proceeds from any such transaction before the holders of the common
units. The payment of the liquidation preference could result in common unitholders not receiving any consideration if we were to liquidate, dissolve or
wind up, either voluntarily or involuntarily.
Risks Related to Taxation
All statutory references in this section are to the Internal Revenue Code of 1986, as amended, or the "Code."
Our common unitholders may be subject to U.S. federal, state and other income tax on their share of our taxable income, regardless of
whether they receive any cash distributions from us.
As long as the Company is treated for U.S. federal income tax purposes as a partnership and not as a publicly traded partnership taxable as a
corporation, our common unitholders will be subject to U.S. federal, state, local and possibly, in some cases, foreign income tax on their allocable share of
our taxable income, whether or not they receive cash distributions from us. Distributions to a unitholder will generally be taxable to the unitholder for U.S.
federal income tax purposes only to the extent the amount distributed exceeds the unitholder’s tax basis in the unit, in contrast with the treatment of a
shareholder in a corporation, who will generally report a distribution of earnings from the corporation as dividend income for U.S. federal income tax
purposes. In contrast, unitholders who receive a distribution of earnings from the Company will not report the distribution as dividend income but will
instead report the holder’s allocable share of the Company’s items of income, gain, loss, deduction, and credit for U.S. federal income tax purposes.
25

Any future determination to declare distributions on the Company’s common units will remain at the discretion of the Board of Directors of the
General Partner and is separately determined regardless of the allocation of taxable income. Accordingly, our common unitholders may be required to make
tax payments in connection with their ownership of common units that exceed their cash distributions in any given year. Common unitholders may not
receive cash distributions equal to their allocable share of our net taxable income or gain, or even the amount of their U.S. federal, state, and local income
tax liability that results from that income or gain. To the extent taxable income is allocated to unitholders in excess of the cash distributions made, the
excess amount would typically be applied to increase the tax basis of unitholders’ investment in the Company under applicable U.S. federal income tax
laws.
Items of income, gain, loss and deduction with respect to the units could be reallocated if the IRS does not accept the assumptions or
conventions used by the Company in allocating such items.
U.S. federal income tax rules applicable to partnerships are complex and often difficult to apply to publicly traded partnerships. The Company will
apply certain assumptions and conventions in an attempt to comply with applicable rules and to report items of income, gain, loss and deduction to
unitholders in a manner that reflects the unitholders’ beneficial interest in such tax items, but these assumptions and conventions may not be in compliance
with all aspects of the applicable tax requirements. It is possible that the U.S. Internal Revenue Service (the "IRS") will successfully assert that the
conventions and assumptions used by the Company do not satisfy the technical requirements of the Code or the Federal Tax Regulations codified under 26
C.F.R., referred to herein as the Treasury Regulations, and could require that items of income, gain, loss and deduction be adjusted or reallocated in a
manner that adversely affects one or more unitholders.
The Company and its current unitholders may be liable for adjustments to the Company's prior year tax returns as a result of centralized
partnership audit procedures.
For tax years beginning on or after January 1, 2018, the Company is subject to partnership audit rules enacted as part of the Bipartisan Budget Act
of 2015 (the "Centralized Partnership Audit Regime"). Under the Centralized Partnership Audit Regime, any IRS audit of the Company would be
conducted at the Company level, and if the IRS determines an adjustment is warranted, the default rule is that the Company would pay an "imputed
underpayment" including interest and penalties, if applicable, resulting from such adjustment. The Company may instead elect to make a "push-out"
election, in which case the partners for the year that is under audit would be required to take into account the adjustment on their own income tax returns
and the Company would not be liable for such adjustments. There can be no assurance that the Company will be eligible to make such an election or that
the Company will, in fact, make such an election for any given adjustment. If the Company is not able to or otherwise does not make such an election, then
our then-current unitholders, in the aggregate, could indirectly bear income tax liabilities in excess of the aggregate amount of taxes that would have been
due had the Company elected the alternate procedure, and then-current unitholders may bear taxes attributable to income allocable to other unitholders or
former unitholders, including taxes (as well as penalties and interest, if applicable) with respect to periods prior to such holder’s ownership of common
units. Amounts available for distribution to our unitholders may be reduced as a result of our obligation to pay taxes associated with an adjustment.
Changes in tax rates, laws or regulations, including U.S. government tax reform, could have a negative impact on our results of operations.
The Company and its subsidiaries are subject to taxation in the U.S. and foreign jurisdictions, and changes in various tax laws can and do occur.
For example, on December 22, 2017, the U.S. enacted tax reform that made substantial changes to the Code, including (i) a reduction in the U.S. corporate
income tax rate from 35% to 21% beginning in 2018, (ii) limitation of annual deductions for interest net expense to no more than 30% of our "adjusted
taxable income" plus 100% of our business interest income for the year and (iii) permitting a taxpayer to offset only 80% (rather than 100%) of its taxable
income with any U.S. NOLs generated for taxable years beginning after 2017. The U.S. Department of the Treasury has broad authority to issue regulations
and interpretative guidance that may significantly impact how we will apply the law and impact our results of operations in the period issued, and while
Treasury Regulations and other guidance have been issued to provide clarification, certain aspects of this law remain unclear. In addition, on August 16,
2022, the U.S. enacted the Inflation Reduction Act ("IRA"), which, among other provisions, imposes a 15% minimum tax on the adjusted financial
statement income of certain large corporations and a 1% excise tax on corporate stock repurchases by U.S. publicly traded corporations and certain U.S.
subsidiaries of non-U.S. publicly traded corporations. Although no material impact is expected, the full effect of these and other tax legislation on the
operations of the Company and its subsidiaries is uncertain and may impact the Company's financial results. Under various provisions of the Code and
relevant case law, the IRS has also become increasingly aggressive in deploying "soft doctrines" to challenge transactions as prioritizing form over
economic substance and being motivated by tax
26

considerations. The application of these doctrines is often uncertain and could produce adverse tax results with respect to transactions in which we engage.
Additionally, longstanding international tax norms that determine each country's jurisdiction to tax cross-border international trade are subject to
potential evolution. In connection with the Base Erosion and Profit Shifting Integrated Framework provided by Organization for Economic Cooperation
and Development (the "OECD"), in October 2021 over 135 jurisdictions agreed to align on a minimum corporate tax rate and an expansion of the taxing
rights of market countries, and therefore determination of multijurisdictional taxation rights and the rate of tax applicable to certain types of income may be
subject to potential change. There can be no assurance that future changes to the U.S. federal, state, local and foreign tax laws will not be proposed or
enacted that could materially or adversely impact our business or financial results. If and when any or all of these changes are put into effect, they could
result in tax increases where we do business both in and outside of the United States, and could have a material adverse effect on the results of our
operations.
Our tax treatment depends on our status as a partnership for U.S. federal income tax purposes and is not assured. If we are taxed as a
corporation for U.S. federal income tax purposes, it could adversely impact our results of operations.
A partnership generally is not a taxable entity under U.S. federal income tax law, and distributions by a partnership to a partner are generally not
taxable to the partnership or the partner unless the amount of money distributed to such partner exceeds the partner’s adjusted basis in its partnership
interest. Section 7704 generally provides that publicly traded partnerships are taxed as corporations. However, an exception, referred to as the "Qualifying
Income Exception," exists with respect to publicly traded partnerships of which 90% or more of the gross income of such partnership for every taxable year
consists of “qualifying income” as defined in the Code, and for whom registration is not required under the Investment Advisers Act. We intend to manage
our affairs so that we will meet the Qualifying Income Exception for our current taxable year and each succeeding tax year. Nonetheless, there can be no
assurance that the IRS will not disagree with the positions we take or that there will not be changes in our business or to U.S. federal income tax laws that
could cause us to be treated as a corporation for U.S. federal income tax purposes or otherwise subject us to U.S. federal income taxation as an entity.
If we were taxed as a corporation, among other things, (i) our net income would be taxed at corporate income tax rates, which is currently 21%,
and we would likely pay state income tax at varying rates, thereby substantially reducing our profitability, (ii) no income, gains, losses or deductions would
flow through to our unitholders and (iii) distributions to our common unitholders generally would constitute dividends for U.S. federal income tax purposes
to the extent paid from our current or accumulated earnings and profits (as determined under U.S. federal income tax principles) and would be taxable as
such. Because a tax would be imposed upon us as a corporation, our cash available for distribution to a unitholder would be substantially reduced.
Therefore, treatment of us as a corporation for U.S. federal income tax purposes would result in a material reduction in the anticipated cash flow and after-
tax return to a unitholder, likely causing a substantial reduction in the value of our units.
Our structure involves complex provisions of U.S. federal income tax law for which no clear precedent or authority may be available.
The U.S. federal income tax treatment of our common unitholders depends in some instances on determinations of fact and interpretations of
complex provisions of U.S. federal income tax law for which no clear precedent or authority may be available. The U.S. federal income tax rules are
constantly under review by persons involved in the legislative process, the Internal Revenue Service, and the U.S. Department of Treasury, frequently
resulting in revised interpretations of established concepts, statutory changes, revisions to regulations, and other modifications and interpretations. The
present U.S. federal income tax treatment of owning our common units reflected herein may be modified by administrative, legislative, or judicial
interpretation at any time, and any such action may affect investments and commitments previously made.
Our Partnership Agreement permits our General Partner to modify it from time to time, including the allocation of items of income, gain, loss and
deduction (including unrealized gain and unrealized loss to the extent allowable under U.S. federal income tax law), without the consent of our unitholders,
to address certain changes in U.S. federal income tax regulations, legislation or interpretation or to preserve the uniformity of our common units. In some
circumstances, such revisions could have a material adverse impact on some or all common unitholders. In addition, we formed a subsidiary partnership, to
which we contributed certain of our assets (the "Subsidiary Partnership"). To preserve the uniformity of common units, we (but not the Subsidiary
Partnership) made an election permitted under Section 754, and we will adopt the remedial allocation method under Section 704(c) with respect to items of
income, gain, loss and deduction attributable to assets contributed to us (which we will contribute to the Subsidiary Partnership), to account for any
difference between the tax basis and fair market value of such assets at the time of contribution, or attributable to the "book-up" or "book-down" of our
assets prior to their contribution to the
27

Subsidiary Partnership, or while they were held by the Subsidiary Partnership, to account for the difference between the tax basis and fair market value of
such assets at the time of a mark-to-market event. We intend generally to make allocations under Section 704(c) to our common unitholders in accordance
with their respective percentage interests. However, built-in gain or built-in loss in existence and allocable to the assets we contributed to the Subsidiary
Partnership, when recognized, will be allocated to our common unitholders as of the contribution date. We intend to prepare our tax returns on the basis that
buyers of common units from such unitholders will not inherit such unitholders' built-in gains or built-in losses as of that date as a result of the election
under Section 754. However, it is not clear whether this position will be upheld if challenged by the IRS. While we believe it represents the right result,
there is no law directly on point.
Tax-exempt entities and non-U.S. persons face unique tax issues from owning common units that may result in adverse tax consequences to
them.
A holder of common units that is a tax-exempt organization may be subject to U.S. federal income taxation to the extent that its allocable share of
our income consists of unrelated business taxable income ("UBTI"). A tax-exempt partner of a partnership may be treated as earning UBTI if the
partnership regularly engages in a trade or business that is unrelated to the exempt function of the tax-exempt partner, if the partnership derives income
from debt-financed property (as we may borrow money) or if the tax-exempt organization’s partnership interest itself is debt-financed. Further, with respect
to taxable years beginning after December 31, 2017, a tax-exempt entity with more than one unrelated trade or business (including by attribution from
investment in a partnership such as ours that is engaged in one or more unrelated trades or businesses) may be required to compute the UBTI of such tax-
exempt entity separately with respect to each such trade or business (including for purposes of determining any net operating loss deduction). As a result, it
may not be possible for tax-exempt entities to utilize losses from an investment in our partnership to offset unrelated business taxable income from another
unrelated trade or business or vice versa.
If we are engaged in a U.S. trade or business, distributions to non-U.S. persons generally will be reduced by withholding taxes at the highest
applicable effective tax rate, and non-U.S. persons generally will be required to file U.S. federal tax returns and pay tax on their share of our taxable
income. Gain recognized from a sale or other disposition of our common units by a non-U.S. person may be subject to federal income tax as income
effectively connected with a U.S. trade or business. Moreover, the transferee of our units (or the transferee's broker, if applicable) is generally required to
withhold 10% of the amount realized by the transferor unless the transferor certifies that it is not a non-U.S. person. Recent final Treasury Regulations
provide for the application of this withholding rule to open market transfers of interests in publicly traded partnerships beginning on January 1, 2023.
Under these regulations, the "amount realized" for purposes of this withholding is the gross proceeds paid or credited upon the transfer.
Our interests in certain of our businesses are held in intermediate holding companies treated as corporations for U.S. federal income tax
purposes; such corporations may be liable for significant taxes and may create other adverse tax consequences, which could potentially adversely affect
the value of our common units.
The Company holds its interest in certain of our businesses through intermediate holding companies treated as corporations for U.S. federal
income tax purposes. The intermediate holding companies are generally liable for U.S. federal income tax at regular rates on all of their taxable income as
well as applicable state, local, and other taxes. These taxes reduce the amount of distributions available to be made on our common units. In addition, these
taxes may be increased if the IRS or state tax authorities were to successfully reallocate deductions or income of the related entities conducting our
business, which would likewise reduce the amount of cash available for distributions to holders of our common units and adversely affect the value of an
investment in the Company.
Our subsidiaries may not be able to fully utilize their tax benefits, which could result in increased cash payments for taxes in future periods.
The past operations of certain of our subsidiaries and portfolio companies have generated significant net operating losses ("NOLs") and other tax
benefits. NOLs may be carried forward to offset federal and state taxable income in future years and reduce the amount of cash paid for income taxes
otherwise payable on such taxable income, subject to certain limitations and adjustments. If fully utilized, our subsidiaries’ NOLs and other carryforwards
could provide them with significant tax savings in future periods. Their ability to utilize these tax benefits in future years will depend upon their ability to
generate sufficient taxable income and to comply with the rules relating to the preservation and use of NOLs, as well as potential future changes in tax
laws. The potential benefit of the NOLs and other carryforwards may be limited or permanently lost as a result of the following:
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•
the inability to generate sufficient taxable income in future years to use such benefits before they expire as NOLs generated in tax years beginning
on or before December 31, 2017, have a limited carryforward period;
•
a change in control of our subsidiaries that would trigger limitations on the amount of taxable income in future years that may be offset by NOLs
and other carryforwards that existed prior to the change in control; or
•
examinations and audits by the IRS and other taxing authorities that could reduce the amount of NOLs and other credit carryforwards that are
available for future years.
Certain of our subsidiaries maintain valuation allowances against their NOLs and other carryforwards due to uncertainty regarding their ability to
generate sufficient taxable income in future periods to utilize such NOLs. Their inability to utilize the NOLs and other carryforwards could result in
increased cash payments for taxes in future periods.
Holders of our common units may be subject to state, local, and foreign taxes and return filing requirements as a result of owning such units.
In addition to U.S. federal income taxes, holders of our common units may be subject to other taxes, including state, local, and foreign taxes and
estate, inheritance, or intangible taxes that are imposed by the various jurisdictions in which we do business or own property now or in the future, even if
the holders of our common units do not reside in any of those jurisdictions. Holders of our common units may be required to file state and local income tax
returns and pay state and local income taxes in some or all of these jurisdictions in the U.S. and abroad. Further, holders of our common units may be
subject to penalties for failure to comply with those requirements. It is the responsibility of each unit holder to file all U.S. federal, state, local, and foreign
tax returns that may be required of such unit holder.
The Company may not be able to furnish to each unitholder specific tax information within 90 days after the close of each calendar year,
which means that holders of common units who are U.S. taxpayers should anticipate the need to file annually a request for an extension of the due
date for their income tax returns.
As a publicly traded partnership, our operating results, including distributions of income, dividends, gains, losses, or deductions, and adjustments
to carrying basis, will be reported on Schedule K-1 and distributed to each unitholder annually. It may require longer than 90 days after the end of our fiscal
year to obtain the requisite information from all lower-tier entities so that Schedule K-1s may be prepared for the unitholders. Consequently, holders of
common units who are U.S. taxpayers should anticipate the need to file annually with the IRS (and certain states) a request for an extension past the
applicable due date of their income tax return for the taxable year.
In addition, each unitholder generally is required to file U.S. federal and state tax returns consistently with the information provided by us for the
taxable year for all relevant tax purposes. In preparing this information, we will use various accounting and reporting conventions to determine each
unitholder’s share of income, gain, loss, deduction, and credit. The IRS or state tax authorities may successfully contend that certain of these reporting
conventions are impermissible, which could result in an adjustment to such holder’s income or loss and could result in an increase in overall tax due.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
The Audit Committee ("Audit Committee") of the Company’s Board of Directors (the "Board") is involved in the oversight of the Company's
enterprise risk management program, including risks of cybersecurity threats. In general, the Company seeks to address cybersecurity risks through a
comprehensive, cross-functional approach that is focused on ensuring each operating company is implementing effective and efficient controls,
technologies, and other processes to assess, identify, prevent and mitigate cybersecurity threats and effectively respond to cybersecurity incidents when
they occur.
Cybersecurity risk management and strategy
Each operating company assesses its own cybersecurity risk profile and designs and implements technical safeguards and other risk management
policies; however, as one of the critical elements of the Company's overall enterprise risk management approach, the Company's cybersecurity program to
which all operating companies are a part, includes:
29

•
Collaboration: Through ongoing communications with management and the Company's IT department, each operating company's IT department
monitors the prevention, detection, mitigation and remediation of cybersecurity threats and incidents applicable to the particular operating
company in real time, and reports such threats and incidents to the Corporate Cyber Security Incident Team.
•
Technical Safeguards: Although each operating company assesses and implements its appropriate technical safeguards for its business, generally
the Company deploys technical safeguards that are designed to protect the Company's information systems from cybersecurity threats such
safeguards are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence.
•
Incident Response and Recovery Planning: The Company has established and maintains comprehensive incident response and recovery plans
that address the Company's response to a cybersecurity incident. The Company has adopted a Cybersecurity Incident Policy and has established a
Corporate Cyber Security Incident Team to timely, consistently, and compliantly address cybersecurity threats that may occur despite the
Company's safeguards.
•
Outside Consultants: The Company engages various outside consultants, including forensic specialists, public relations and data breach
resolutions firms, outside attorneys and other third parties, to among other things, obtain information of a cybersecurity incident and isolate
compromised systems and electronic data from further exposure; and determine and execute mitigation and remediation options and plans.
•
Education and Awareness: The Company provides awareness training to its personnel regarding cybersecurity threats to help identify, avoid and
mitigate cybersecurity threats, and to communicate the Company's evolving information security policies, standards, processes and practices.
Cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected the Company or its financial
position, results of operations and/or cash flows.
Governance
As discussed above, the Board has delegated to the Audit Committee the responsibility for monitoring and overseeing the Company's overall
cybersecurity and other information technology risks, controls, strategies and procedures. The Audit Committee periodically evaluates the Company's (and
each operating company's) information security strategies to ensure its effectiveness. The Company's management reports to the Audit Committee as part
of every quarterly scheduled meeting of the Audit Committee (or more frequently, as needed) regarding technological risk exposure and cybersecurity risk
management strategy. In addition, the full Board may review and assess cybersecurity risks as part of its responsibilities for oversight of the Company’s
broad enterprise risk management program.
The Company's IT department, in coordination with the Company's legal department, General Counsel ("GC"), Chief Financial Officer ("CFO"),
Senior Vice President of Finance ("SVP Finance") and as needed each operating company's IT department (collectively, the "Data Breach Response
Team"), works collaboratively to promptly respond to any cybersecurity incidents in accordance with the Company's Cybersecurity Incident Policy. The
Company's response planning is reviewed annually and kept up to date with industry developments.
Management's Expertise
The Company's Senior Vice President, Information Technology, holds a Master's degree in business administration and industrial psychology. He
has served in various roles in information technology for over 27 years. Staying informed on developments in the cyber industry is crucial to the
Company's effective prevention, detection, mitigation and remediation of any cybersecurity incidents.
Item 2. Properties
At December 31, 2024, we operated in 90 locations consisting of manufacturing facilities, warehouses, offices, sales, service and laboratory spaces
throughout the United States and internationally. Of these, we owned 25 locations consisting of approximately 2.1 million square feet and leased space at
65 locations consisting of approximately 3.0 million square feet.
At December 31, 2024 we had major operations at the following locations:
•
Diversified Industrial - Camden, Delaware; Brewster, New York; Bristol, Pennsylvania; Addison and Glendale Heights, Illinois;
Evansville, Indiana; Agawam, Massachusetts; Rockford, Minnesota; St. Louis, Missouri; Charlotte and Statesville, North Carolina; Anderson,
South Carolina; Cudahy, Muskego and Pleasant Prairie, Wisconsin; Warwick, Rhode Island; Laval, Canada; Matamoros, Mexicali and Tecate,
Mexico; Welham Green and Blackwood, United Kingdom; Freiburg and Pansdorf, Germany; Riberac, France; and Suzhou, China.
30

•
Energy - The Energy business owns office space in Williston, North Dakota; Farmington, New Mexico; and Andrews, Texas; and leases
office space in Johnstown, Colorado and Midland, Texas. Steel Sports leases space in Yaphank, New York and Johnstown, Colorado for its
baseball service operations and office space in Virginia Beach, Virginia; and Somerville, NJ.
•
Financial Services - Salt Lake City, Utah; Summit, New Jersey; Denver, Colorado; and Miami, Florida.
•
Supply Chain - ModusLink leases space in Miami, Florida; Smyrna, Tennessee; Tlaquepaque, Zapopan and Apodaca, Mexico; Milperra,
Australia; Chongqing, Kunshan, Shanghai and Shenzhen, China; Penang, Malaysia; Singapore; Apeldoorn and Venray, Netherlands; Brno, Czech
Republic; Cork and Kildare, Ireland; and Phan Thong, Thailand.
•
Corporate – New York, New York; Hermosa Beach, California; and Miami, Florida.
Management believes all of our properties have been well maintained, are in good condition and are adequate and suitable for our business as
presently conducted.
Item 3. Legal Proceedings
In the ordinary course of our business, the Company is subject to periodic lawsuits, investigations, claims and proceedings, including, but not
limited to, contractual disputes, employment, environmental, health and safety matters, claims associated with our historical acquisitions and divestitures,
and other legal proceedings. For more information on material legal proceedings which are ongoing or recently resolved, see "Litigation Matters" in Note
19 - "Commitments and Contingencies" to the Consolidated Financial Statements, included in Part II, Item 8, Financial Statements and Supplementary
Data, of this Report. For an additional discussion of certain risks associated with legal proceedings, see also Part I, Item 1A, "Risk Factors" of this Report.
Item 4. Mine Safety Disclosures
Not applicable.
31

PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common units, no par value, are listed on the New York Stock Exchange under the symbol "SPLP."
Holders
As of December  31, 2024, there were approximately 96 unitholders of record, including Cede & Co., the nominee of the Depository Trust
Company. The number of record holders may not be representative of the number of beneficial owners of our common units, whose units are held in street
name by banks, brokers and other nominees.
Dividends
We do not pay any dividends on our common units and do not anticipate declaring or paying any cash dividends on our common units in the
foreseeable future. Payment of future dividends on our common units, if any, will be at the discretion of our Board of Directors, after taking into account
various factors, including our financial condition, operating results, any restrictions on payment of dividends under our credit facilities, current and
anticipated cash needs and plans for expansion.
Equity Performance Graph
Consistent with the rules applicable to "Smaller Reporting Companies," we have elected scaled disclosure reporting, and therefore have omitted
information required by this Item.
Recent Sales of Unregistered Securities
None.
Issuer Purchases of Equity Securities
The Board of Directors has approved the repurchase of up to an aggregate of 9,520,240 of the Company's common units (the "Repurchase
Program"). 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.
During the year ended December 31, 2024, the Company purchased 2,360,634 common units for an aggregate purchase price of $109,411. Under
the Repurchase Program, during the year ended December 31, 2024, the Company purchased 1,092,831 common units for an aggregate purchase price of
$46,021. From the inception of the Repurchase Program until December 31, 2024 the Company had purchased 8,901,451 common units for an aggregate
purchase price of approximately $210,418. As of December 31, 2024, there remained 618,789 units that may yet be purchased under the Repurchase
Program.
In addition to common units repurchased under the Repurchase Program, on September 1, 2024, the Company's Board of Directors approved the
Company entering into a purchase agreement with 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.
The following table provides information about our repurchases of common units during the quarter ended December  31, 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.
32

Period
Total number of units purchased
Average price paid per unit
Total number of units purchased
as part of publicly announced
plans or programs
Maximum number (or
approximate dollar value) of units
that may yet be purchased under
the plans or programs
October 1-31, 2024
— 
$
— 
— 
720,463 
November 1-30, 2024
98,764 
$
42.72 
98,764 
621,699 
December 1-31, 2024
2,910
$
41.52 
2,910 
618,789 
Total
101,674
101,674 
Item 6. [Reserved]
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated
financial statements and related notes thereto that are available elsewhere in this Report. The following is a discussion and analysis of SPLP's consolidated
results of operations for the years ended December  31, 2024 and 2023. In addition to historical consolidated financial information, the following
discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed
in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Report,
particularly in Part I, Item 1A, "Risk Factors". All monetary amounts used in this discussion are in thousands, except common and preferred units, per
common and preferred unit, and per share data.
Business Segments
SPLP operates through the following segments: Diversified Industrial, Energy, Financial Services and Supply Chain, which are managed
separately and offer different products and 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. For a more
complete description of the Company's segments, see Part I, Item 1, "Business - Products and Product Mix" found elsewhere in this Report.
Significant Developments
Following is a summary of significant developments that have impacted the Company in 2024 and early 2025. For additional discussion of these
matters, please see the Company's Consolidated Financial Statements, included in Part II, Item 8, Financial Statements and Supplementary Data, of this
Report.
Steel Connect Transfer and Exchange Agreement
On April 30, 2023, the Company and Steel Connect, Inc., 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"). As of the date of the
Exchange Transaction, 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 have resulted in the Steel Partners Group holding
approximately 84.0% of the outstanding equity interests of Steel Connect. The Exchange Transaction closed on May 1, 2023.
Steel Connect Short-Form Merger
On November 27, 2024, the Audit Committee of the Board of Directors of Steel Connect approved a short-form merger transaction (the "Short-
Form Merger") between Steel Connect and an indirect, wholly-owned subsidiary of SPLP, which at the effective time of the Short-Form Merger (the
"Effective Time"), together with its affiliates, owned greater than 90% of the outstanding common stock, par value $0.01 per share (the "Steel Connect
Common Stock") of Steel Connect, on an as-converted basis. Immediately prior to the Effective Time, all shares of Series C Preferred Stock of Steel
Connect and Series E Preferred Stock of Steel Connect held by SPLP or its affiliates were converted into shares of Steel Connect Common Stock.
33

On January 2, 2025, in compliance with Section 267 of the Delaware General Corporation Law, an indirect, wholly-owned subsidiary of SPLP
merged with and into Steel Connect, with Steel Connect surviving the Short-Form Merger and became an indirect wholly-owned subsidiary of SPLP. The
funds required to pay the aggregate cash consideration in the Short-Form Merger and related fees and expenses was approximately $31,200, which was
funded from amounts available under SPLP's existing senior credit agreement.
Steel Connect Delisting
In connection with the closing of the Short-Form Merger, Steel Connect notified the NASDAQ Capital Market ("Nasdaq") of its intent to remove
the Steel Connect Common Stock from listing on Nasdaq and requested that Nasdaq (i) suspend trading of the Steel Connect Common Stock on Nasdaq
prior to the opening of trading on January 3, 2025 and (ii) file a Notification of Removal from Listing and/or Registration on Form 25 with the SEC to
delist and deregister the Steel Connect Common Stock under Section 12(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
In addition, Steel Connect filed a certification on Form 15 with the SEC suspending Steel Connects reporting obligations under Sections 13 and
15(d) of the Exchange Act with respect to the Steel Connect Common Stock.
Income Taxes
During the year ended December 31, 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. Income taxes for the year ended December 31, 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 $73,380.
Common Unit Repurchases
During the year ended December 31, 2024, the Company purchased 1,092,831 common units for an aggregate purchase price of $46,021. From
the inception of the Repurchase Program until December 31, 2024 the Company had purchased 8,901,451 common units for an aggregate purchase price of
approximately $210,418. As of December 31, 2024, there remained 618,789 units that may yet be purchased under the Repurchase Program. From January
1, 2025 through March 3, 2025, the Company repurchased 1,999 common units for $82.
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. The
purchase of the common units pursuant to the purchase agreement were approved by the Company's Board of Directors outside of the Repurchase Program.
Preferred Unit Repurchase Program
On February 2, 2024, the board of directors of the general partner of the Company approved the repurchase of up to 400,000 of the Company's
6.0% Series A preferred units (the "Preferred Repurchase Program"). Any purchases made by the Company and/or its applicable subsidiaries under the
Preferred 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. The Preferred Repurchase Program has no termination date. During the year ended
December 31, 2024, the Company repurchased 80,881 preferred units for $1,945. On February 6, 2025, the board of directors of the general partner of the
Company approved the repurchase of an additional 1,000,000 of the Company's 6.0% Series A preferred units.
From January 1, 2025 through March 3, 2025, the Company repurchased 508,812 preferred units for $12,486.
RESULTS OF OPERATIONS
Comparison of the Years Ended December 31, 2024 and 2023
34

Year Ended December 31,
2024
2023
Revenue
$
2,027,848 
$
1,905,457 
Cost of goods sold
1,152,355 
1,103,017 
Selling, general and administrative expenses
547,125 
504,960 
Asset impairment charges
671 
865 
Interest expense
8,015 
18,400 
Gains from sales of businesses
— 
(58)
Realized and unrealized losses (gains) on securities, net
2,983 
(7,074)
All other expense, net *
93,117 
124,141 
Total costs and expenses
1,804,266 
1,744,251 
Income before income taxes and equity method investments
223,582 
161,206 
Income tax benefit
(53,255)
(1,674)
Loss of associated companies, net of taxes
5,615 
8,878 
Net income
271,222 
154,002 
Net income attributable to noncontrolling interests in consolidated entities
(9,660)
(3,173)
Net income attributable to common unitholders
$
261,562 
$
150,829 
* Includes Finance interest expense, Provision for credit losses, and Other income, net from the Consolidated Statements of Operations
Revenue
Revenue in the year ended December 31, 2024 increased $122,391, or 6.4%, as compared to 2023, as a result of higher net sales of $49,006, or
4.1%, from the Diversified Industrial segment and higher revenue of $37,314, or 9.0% from the Financial Services segment, as well as the favorable impact
from the full year operating results of the Supply Chain segment, partially offset by lower revenue of $34,419, or 19.2% from the Energy segment.
Cost of Goods Sold
Cost of goods sold in the year ended December 31, 2024 increased $49,338, or 4.5%, as compared to 2023, resulting from the full year operating
results 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") in 2024 increased $42,165, or 8.4%, as compared to 2023. The SG&A increase was
primarily driven by: (1) $29,300 increase for the Financial Services segment primarily due to higher credit performance fees due to higher credit risk
transfer balances and higher personnel expenses related to incremental headcount, and (2) $17,300 increase for the Supply Chain segment due to impact of
the full year operating results. These increases were partially offset by lower SG&A expenses of $3,300 from the Energy segment due to favorable
settlement of certain legal matters and, to a lesser extent, lower compensation expense, as compared to 2023.
Interest Expense
Interest expense for the years ended December 31, 2024 and 2023 was $8,015 and $18,400, respectively. The lower interest expense in 2024 was
primarily due to significant lower average debt levels, partially offset by higher average interest rates.
Realized and Unrealized Gains on Securities, Net
Realized and unrealized losses on securities, net for the year ended December 31, 2024 was $2,983, as compared to gains of $7,074 for the year
ended December 31, 2023. The changes in realized and unrealized losses and gains on securities, net over the respective periods are primarily due to mark-
to-market adjustments on the Company's portfolio of securities.
All Other Expense, Net
All other expense, net for the years ended December 31, 2024 and 2023 totaled $93,117 and $124,141 respectively. The decrease in all other
expense, net for the year ended December 31, 2024, was primarily due to lower provisions for credit losses
35

of $44,084, partially offset by higher finance interest expense of $8,568 related to the Financial Service segment, as compared to 2023.
Income Taxes
As a limited partnership, we are generally not responsible for federal and state income taxes, and our profits and losses are passed directly to our
limited partners for inclusion in their respective income tax returns. The Company's tax provision represents the income tax expense or benefit of its
consolidated corporate subsidiaries. For the year ended December 31, 2024, a tax benefit of $53,255 was recorded, as compared to a tax benefit of $1,674
in 2023. The Company's effective tax rate for the year ended December 31, 2024 was a benefit of 23.8% as compared to a benefit of 1.0% for the year
ended December 31, 2023. The lower effective tax rate for the year ended December 31, 2024, was primarily attributable to the release of valuation
allowances on the Company's net operating losses and the decrease in tax expense related to unrealized gains on investments from related parties that are
eliminated for financial statement purposes. This benefit was partially offset by increases in income before income tax, the effective state income tax rates
associated with the Company's operations, and the expiration of a portion of the Company's NOL carryforwards.
Loss of Associated Companies, Net of Taxes
The Company recorded a loss from associated companies, net of taxes, of $5,615 in 2024, as compared to $8,878 in 2023. For the details of each
of these investments and the related mark-to-market adjustments in both periods, see Note 10 - "Investments" to the Consolidated Financial Statements,
included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Report.
Net Income
Net income for the year ended December 31, 2024 was $271,222, as compared to $154,002 for the year ended December 31, 2023. The increase in
net income was primarily due to higher operating income driven by higher total revenue and higher income tax benefits. See above explanations for further
details.
36

Segment Analysis
Year Ended December 31,
2024
2023
Revenue:
Diversified Industrial
$
1,242,970 
$
1,193,964 
Energy
145,019 
179,438 
Financial Services
454,225 
416,911 
Supply Chain
185,634 
115,144 
Total
$
2,027,848 
$
1,905,457 
Segment income (loss) before interest expense and income taxes:
Diversified Industrial
$
85,476 
$
70,937 
Energy
12,209 
16,247 
Financial Services
116,250 
74,248 
Supply Chain
15,912 
8,726 
Corporate and Other
(3,865)
570 
Income before interest expense and income taxes
225,982 
170,728 
Interest expense
8,015 
18,400 
Income tax benefit
(53,255)
(1,674)
Net income
$
271,222 
$
154,002 
Segment depreciation and amortization:
Diversified Industrial
$
42,598 
$
41,424 
Energy
8,632 
10,065 
Financial Services
838 
835 
Supply Chain
5,643 
3,569 
Corporate and Other
1,599 
672 
Total depreciation and amortization
$
59,310 
$
56,565 
Loss of associated companies, net of taxes:
Corporate and other
$
5,615 
$
8,878 
Total
$
5,615 
$
8,878 
Diversified Industrial
Net sales in 2024 increased by $49,006, or 4.1%, as compared to 2023. The increase was primarily driven by higher sales for the Joining Materials
business unit, Building Materials business unit, and Electrical Products business unit. The increase of $23,700 for the Joining Materials business unit was
primarily driven by higher precious metal prices and sales volume. The increase of $17,100 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. The increase of $8,500 for the
Electrical Products business unit was primarily driven by strong demand from both industrial and aerospace & defense sectors.
Segment operating income in 2024 increased by $14,539, or 20.5%, as compared to 2023. Higher operating income in 2024 was primarily driven
by higher net sales as mentioned above and improved profit margin from the Electrical Products business unit.
Energy
Net revenue in 2024 decreased $34,419, or 19.2%, as compared to 2023, primarily due to lower rig hours.
Segment operating income in 2024 decreased $4,038, or 24.9%, as compared to 2023. The decrease of operating income in 2024 was primarily
driven by lower rig hours, as compared to 2023.
Supply Chain
The Company added the Supply Chain segment on May 1, 2023 with revenue of $185,634 and $115,144 for the year of 2024 and 2023,
respectively, and operating income of $15,912 and $8,726 for the year of 2024 and 2023, respectively.
Financial Services
37

Revenue in 2024 increased $37,314, or 9.0%, as compared to 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 2023.
Segment operating income in 2024 increased $42,002, or 56.6%, as compared to 2023. The increase was due primarily to higher revenue
mentioned above and lower provisions for credit losses of $44,084, partially offset by higher SG&A expenses of $29,300 and finance interest expense of
$8,568 in 2024 as compared to 2023. 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
expense was driven by higher credit performance fees of $31,900 due to higher credit risk transfer balances as well as higher personnel expense of $3,700
related an increase in employees. The higher finance interest expense was due primarily to an increase in higher interest rates.
Net Interest Income, Margin and Interest Rate Spreads
Net interest income is the difference between interest earned on interest-earning assets and interest incurred on interest-bearing liabilities. By its
nature, net interest income is especially vulnerable to changes in the mix and amounts of interest- earning assets and interest-bearing liabilities. In addition,
changes in the interest rates and yields associated with these assets and liabilities can significantly impact net interest income. The following table
summarizes the average balances, the amount of interest earned or incurred and the applicable yields for interest-earning assets and the costs of interest-
bearing liabilities that generate net interest income. For purposes of calculating the yields in these schedules, the average loan balances also include the
principal amounts of nonaccrual and restructured loans. However, interest received on nonaccrual loans is included in income only to the extent that cash
payments have been received and not applied to principal reductions. In addition, interest on restructured loans is generally accrued at reduced rates.
Year Ended December 31,
2024
2023
Average
Interest
Average
Interest
Outstanding
Earned/
Yield/
Outstanding
Earned/
Yield/
Balance
Paid
Rate
Balance
Paid
Rate
Interest-earning assets:
Loans receivable
$
1,740,506  $
356,395 
20.5 %
$
1,914,585  $
335,253 
17.5 %
PPP loans
8,505 
263 
3.1 %
31,704 
616 
1.9 %
Held-to-maturity securities
270,225 
22,470 
8.3 %
209,618 
18,002 
8.6 %
Available-for-sale investments
6,020 
499 
8.3 %
4,432 
265 
6.0 %
Federal funds sold
2,202 
87 
4.0 %
968 
38 
3.9 %
Interest-bearing deposits
192,666 
4,755 
2.5 %
217,840 
6,712 
3.1 %
Total interest-earning assets
2,220,124 
384,469 
17.3 %
2,379,147 
360,886 
15.2 %
Non interest-earning assets
15,411 
4,456 
Total assets
$
2,235,535 
$
2,383,603 
Interest-bearing liabilities:
Savings accounts
$
350,309 
19,869 
5.7 %
$
300,095 
14,189 
4.7 %
Time deposits
1,405,912 
69,033 
4.9 %
1,642,555 
66,144 
4.0 %
Other borrowings
$
8,408 
98 
1.2 %
$
26,634 
99 
0.4 %
Total interest-bearing liabilities
1,764,629 
89,000 
5.0 %
1,969,284 
80,432 
4.1 %
Non interest-bearing liabilities
79,739 
82,506 
Total liabilities
1,844,368 
2,051,790 
Shareholder's equity
391,167 
331,813 
Total liabilities and shareholder's equity
$
2,235,535 
$
2,383,603 
Net interest income
$
295,469 
$
280,454 
Spread on average interest-bearing funds
12.3 %
11.1 %
Net interest margin
13.3 %
11.8 %
Return on assets
3.8 %
2.4 %
Return on equity
21.7 %
17.2 %
Equity to assets
17.5 %
13.9 %
Equity to assets (excluding PPP loans)
17.6 %
14.1 %
WebBank has several lending arrangements with companies where it originates credit card and other loans for consumers and small businesses.
These loans are classified as held for sale and are typically sold after origination.
38

The following table presents the effects of changing rates and volumes on WebBank's net interest income for the periods indicated. The rate
column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to
changes in volume (changes in volume multiplied by prior rate). The total column represents the sum of the prior columns. For purposes of this table,
changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately, based on the changes due to rate and the
changes due to volume.
Year Ended December 31,
2024 vs 2023
2023 vs 2022
Increase/(Decrease)
Increase/(Decrease)
Due to Volume
Due to Rate
Total
Due to Volume
Due to Rate
Total
Interest earning assets:
Loans receivable
$
(24,498) $
45,639  $
21,141 
$
139,273  $
31,766  $
171,039 
PPP loans
(1,870)
1,517 
(353)
(2,480)
(74)
(2,554)
Held-to-maturity securities
5,019 
(551)
4,468 
5,215 
3,857 
9,072 
Available-for-sale investments
113 
122 
235 
105 
(6)
99 
Federal funds sold
49 
— 
49 
(4)
17 
13 
Interest-bearing deposits
(719)
(1,238)
(1,957)
(51)
3,738 
3,687 
Total earning assets
(21,906)
45,489 
23,583 
142,058 
39,298 
181,356 
Savings accounts
2,590 
3,089 
5,679 
734 
9,603 
10,337 
Time deposits
(5,529)
8,419 
2,890 
15,409 
38,177 
53,586 
Other borrowings
5 
(6)
(1)
(397)
(1)
(398)
Total funds
(2,934)
11,502 
8,568 
15,746 
47,779 
63,525 
Net variance
$
(18,972) $
33,987  $
15,015 
$
126,312  $
(8,481) $
117,831 
Balance Sheet Analysis
Loan Portfolio
As of December  31, 2024, net loans receivable accounted for 85% of WebBank's total assets, as compared to 78% at the end of 2023. The
following table presents WebBank's loans outstanding by type of loan as of December 31, 2024 and the four other most recent year-ends.
As of December 31,
2024
2023
2022
2021
2020
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
Real estate loans:
Commercial - owner occupied
$
55 
— %
$
72 
— %
$
80 
— %
$
92 
— %
$
209 
— %
Commercial - other
4,430 
0.3 %
2,006 
0.1 %
907 
0.1 %
571 
0.1 %
463 
— %
Total real estate loans
4,485 
0.3 %
2,078 
0.1 %
987 
0.1 %
663 
0.1 %
672 
— %
Commercial and industrial
969,702 
53.1 %
980,722 
49.2 %
857,817 
54.1 %
779,536 
73.9 %
2,279,672 
90.6 %
Consumer loans
110,697 
6.1 %
142,410 
7.1 %
123,204 
7.8 %
76,067 
7.2 %
147,652 
5.9 %
Loans held for sale
739,822 
40.5 %
868,884 
43.6 %
602,675 
38.0 %
198,632 
18.8 %
88,171 
3.5 %
Total loans
1,824,706 
100.0 %
1,994,094 
100.0 %
1,584,683 
100.0 %
1,054,898 
100.0 %
2,516,167 
100.0 %
Less:
Allowance for loan losses
(26,463)
(25,486)
(29,690)
(13,925)
(27,059)
Total loans receivable, net
$
1,798,243 
$
1,968,608 
$
1,554,993 
$
1,040,973 
$
2,489,108 
The following table includes a maturity profile for the loans that were outstanding as of December 31, 2024:
Due During Years Ending December 31,
Real Estate
Commercial &
Industrial
Consumer
Loans Held for
Sale
2025
$
— 
$
760,125 
$
88,350 
$
739,822 
2026-2029
55 
209,577 
22,347 
— 
2030 and thereafter
4,430 
— 
— 
— 
Total
$
4,485 
$
969,702 
$
110,697 
$
739,822 
39

Nonperforming Lending Related Assets
Total non-accruing loans were $26,342 and $814 at December 31, 2024 and 2023, respectively.
As of December 31,
2024
2023
2022
2021
2020
Non-accruing loans:
Commercial and industrial
26,342 
814 
788 
— 
— 
Total
26,342 
814 
788 
— 
— 
Accruing loans delinquent:
90 days or more
9,240 
15,060 
15,940 
3,497 
8,701 
Total
9,240 
15,060 
15,940 
3,497 
8,701 
Total non-performing assets
$
35,582 
$
15,874 
$
16,728 
$
3,497 
$
8,701 
Total as a percentage of total assets
1.7 %
0.6 %
0.9 %
0.2 %
0.3 %
Summary of Loan Loss Experience
The methodologies used to estimate the allowance for credit losses ("ACL"), which includes the allowance for loan losses and reserves for
unfunded loan commitments, depend upon the impairment status and portfolio segment of the loan. Loan groupings are created for each loan class and are
then graded against historical and industry loss rates. After applying historic loss experience, as described above, we review the quantitatively derived level
of ACL for each segment using qualitative criteria. We track various risk factors that influence our judgment regarding the level of the ACL across the
portfolio segments. The following table summarizes activity in WebBank's ACL related to allowance for loan losses and reserves for unfunded
commitments for the periods indicated:
As of December 31,
2024
2023
2022
2021
2020
Balance at beginning of period (a)
$
25,486 
$
34,432 
$
13,925 
$
27,059 
$
36,682 
Charge offs:
Commercial and industrial
(10,576)
(51,691)
(6,095)
(8,101)
(14,250)
Consumer
(5,909)
(9,262)
(4,011)
(9,205)
(21,042)
Total charge offs
(16,485)
(60,953)
(10,106)
(17,306)
(35,292)
Recoveries:
Commercial real estate
— 
59 
27 
27 
22 
Commercial and industrial
8,425 
1,479 
1,534 
2,532 
1,313 
Consumer
404 
425 
1,133 
1,490 
2,388 
Total recoveries
8,829 
1,963 
2,694 
4,049 
3,723 
Net charge offs
(7,656)
(58,990)
(7,412)
(13,257)
(31,569)
Additions charged to operations
8,633 
50,044 
23,177 
123 
21,946 
Balance at end of period
$
26,463 
$
25,486 
$
29,690 
$
13,925 
$
27,059 
Ratio of net charge offs during the period to average loans outstanding
during the period
0.4 %
3.1 %
0.6 %
0.6 %
1.6 %
(a)    The beginning balance as of January 1, 2023 for the allowance for credit losses does not agree to the ending balances as of December 31, 2022 due to the adoption of
ASU 2016-13 on January 1, 2023.
The distribution of WebBank's allowance for credit losses on loans at the dates indicated is summarized as follows:
As of December 31,
2024
2023
2022
2021
2020
Amount
% of Loans in
Each
Category of
Total Loans
Amount
% of Loans in
Each
Category of
Total Loans
Amount
% of Loans in
Each
Category of
Total Loans
Amount
% of Loans in
Each
Category of
Total Loans
Amount
% of Loans in
Each
Category of
Total Loans
Commercial real estate
252 
0.2 %
75 
0.1 %
28 
0.1 %
23 
0.1 %
22 
— %
Commercial and industrial
17,805 
53.1 %
14,744 
49.2 %
18,493 
54.1 %
9,205 
73.9 %
9,293 
90.7 %
Consumer loans
8,406 
6.1 %
10,667 
7.1 %
11,169 
7.8 %
4,697 
7.2 %
17,744 
5.9 %
Loans held for sale
— 
40.6 %
— 
43.6 %
— 
38.0 %
— 
18.8 %
— 
3.4 %
Total loans
$
26,463 
100.0 %
$
25,486 
100.0 %
$
29,690 
100.0 %
$
13,925 
100.0 %
$
27,059 
100.0 %
Corporate and Other
40

Operating loss was $3,865 in 2024, as compared to income of $570 in 2023. The fluctuations were primarily due to changes in investment gains
and losses from both marketable securities and associated companies.
For additional information on the Company's investments, see Note 2 - "Summary of Significant Accounting Policies" and Note 10 -
"Investments" to the Consolidated Financial Statements, included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Report.
LIQUIDITY AND CAPITAL RESOURCES
Anticipated Sources and Uses of Cash Flow
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 to increase long-term value for the Company's unitholders and stakeholders through balance sheet improvements, capital
allocation policies, and operational and growth initiatives, which are further described in Part I, Item 1 - "Business - Business Strategy."
Management uses the following strategies to continue to enhance liquidity: (1) continue to implement improvements using the Steel Business
System throughout all the Company's operations to increase sales and operating efficiencies, (2) support profitable sales growth both organically and
potentially through acquisitions and (3) evaluate from time to time and as appropriate, strategic alternatives with respect to the Company's 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 flows and stakeholder value.
Historically, the Company has financed its operations and met its capital requirements primarily through funds generated from operations,
borrowings from lending institutions, sale of investments and sale of facilities or assets that were not fully utilized. The following table summarizes our
liquidity:
December 31,
2024
2023
Cash and cash equivalents
$
404,442 
$
577,928 
WebBank cash and cash equivalents
141,092 
170,286 
Cash and cash equivalents, excluding WebBank
263,350 
407,642 
Readily available borrowing capacity under the Credit Agreement
470,000 
399,300 
$
733,350 
$
806,942 
Debt and Financing Arrangements
The Company's senior credit facility which was amended and restated in its entirety in December 2021 (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 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 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 covenants as of December 31, 2024. 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 Company believes that it and its operating subsidiaries 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
41

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 December 31, 2024, the Company's working capital was $625,316, as compared to working capital of $562,224 as of December 31, 2023.
The increase in working capital during the year ended December 31, 2024, was primarily due to a decrease in deposits of $228,344, partially offset by a
decrease in cash and cash equivalents of $173,486 primarily due to an increase in purchases of the Company's common units of $109,411 and net revolver
payments of $71,648. As of  December  31, 2024, the availability under the Credit Agreement was approximately $470,000. During the years ended
December 31, 2024 and 2023, capital expenditures were $64,963 and $51,451, respectively. The Company currently expects capital expenditures in the
range of $34,000 to $44,000 in 2025. The Company and its subsidiaries have ongoing commitments, including funding of the minimum requirements of its
subsidiaries' pension plans. For the year ending December 31, 2025, the minimum required contribution to the Company's pension plans is $6,030.
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.
Sources and uses of cash flows from continuing operations for the years ended December 31, 2024 and 2023, are as follows:
December 31,
2024
2023
Net cash provided by operating activities
$
363,282 
$
21,222 
Net cash provided by (used in) investing activities
111,161 
(142,202)
Net cash (used in) provided by financing activities
(646,312)
464,561 
Net change for the period
$
(171,869)
$
343,581 
Cash Flows from Operating Activities
During the year ended December 31, 2024, the Company generated $363,282 of cash, which was primarily due to operating income of $271,222, a
net decrease of $129,062 in loans held for sale, depreciation and amortization of $59,310, $23,081 in non-cash lease expense, partially offset by a decrease
of $93,912 in deferred income taxes, a decrease of $44,430 in accounts payable and accrued liabilities, and a decrease of $11,948 in trade and other
receivables.
During the year ended December 31, 2023, the Company generated $21,222 of cash, which was primarily due to operating income of $154,002
and adjustments to operating income, including depreciation and amortization of $56,565 and provision for credit losses of $51,824, partially offset by
changes in operating assets and liabilities of $244,964.
Cash Flows from Investing Activities
During the year ended December 31, 2024, the Company generated $111,161 of cash, which was primarily due to proceeds from the maturities of
investments for $263,459, loan originations, net of collections of  $32,670 and proceeds from the sales of investments of $20,619, partially offset by
purchases of investments of $142,412 and purchases of property, plant, and equipment of $64,963.
During the year ended December  31, 2023, the Company used $142,202 of cash, which was primarily due to purchases of investments of
$208,836, loan originations, net of collections of $208,571 and purchases of property, plant, and equipment of $51,451, partially offset by proceeds from
the sales of investments of $213,319, an increase of $65,896 in cash upon consolidation of Steel Connect, and proceeds from the maturities of investments
for $45,731.
42

Cash Flows from Financing Activities
During the year ended December 31, 2024, the Company used $646,312 of cash, which was primarily due to a decrease in deposits of $424,649,
common share purchases of $109,411, net revolver repayments of $71,648, purchase of subsidiary shares of $16,181, a net decrease in other borrowings of
$11,814, and a distribution to preferred unit holders of $9,519.
During the year ended December 31, 2023, the Company generated $464,561 of cash, which was primarily due to an increase in deposits of
$513,211, partially offset by repayments of PPP borrowings of $26,486 and share purchases of $20,040.
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 $141,092 and $170,286 in cash and cash equivalents, time deposits placed at other institutions and federal funds
sold at December 31, 2024 and 2023, respectively. WebBank had $65,000 and $50,000 in lines of credit from its correspondent banks at December 31,
2024 and 2023 respectively. WebBank had $204,748 and $325,175 available from the Federal Reserve discount window at December 31, 2024 and 2023,
respectively. Therefore, WebBank had a total of $410,840 and $545,461 in cash, lines of credit and access to the Federal Reserve Bank discount window at
December 31, 2024 and 2023, respectively, which represents approximately 19.5% and 21.8%, respectively, of WebBank's total assets (excluding PPP
loans funded through the PPP Liquidity Facility).
Deposits
Deposits at WebBank at December 31, 2024 and 2023 were as follows:
2024
2023
Current
$
1,483,241 
$
1,711,585 
Long-term
173,801 
370,107 
Total
$
1,657,042 
$
2,081,692 
The decrease in deposits at December 31, 2024, as compared to 2023, is due to less funding needs driven by a reduction in held to maturity
investments, held for sale loans and loans receivable. The average original maturity for time deposits at December 31, 2024 was 10 months, as compared to
15 months at December 31, 2023.
The following table details the maturity of time deposits as of December 31, 2024:
Maturity
< 3 Months
3 to 6 Months
6 to 12 Months
> 12 Months
Total
Certificate of deposits less than $100
$
600,405 
$
197,232 
$
263,488 
$
168,657 
$
1,229,782 
Certificate of deposits of $100 or more
3,431 
19,341 
17,229 
5,144 
45,145 
Total certificates of deposits
$
603,836 
$
216,573 
$
280,717 
$
173,801 
$
1,274,927 
Off-Balance Sheet Risk
It is not the Company's usual business practice to enter into off-balance sheet arrangements such as guarantees on loans and financial
commitments, indemnification arrangements and retained interests in assets transferred to an unconsolidated entity for securitization purposes. SPLP uses
the same credit policy in making commitments and conditional obligations as it does for on-balance sheet instruments.
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 with Marketing Partners. Those instruments involve, to
varying degrees, elements of credit and interest rate risk in excess of the amount 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.
At December 31, 2024 and 2023, WebBank's undisbursed commitments under these instruments totaled $430,960 and $340,621, respectively.
Commitments to extend credit are agreements to lend to a borrower who meets the lending criteria established by WebBank through one of WebBank's
lending agreements with its Marketing Partners, 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, and in some cases
are subject to ongoing adjustment by WebBank. 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
43

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 Marketing Partner.
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.
Critical Accounting Policies and Estimates
The Company's discussion and analysis of financial condition and results of operations is based upon its consolidated financial statements, which
have been prepared in conformity with U.S. GAAP. Preparation of these consolidated financial statements requires the Company to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. Estimates are
based on historical experience, expected future cash flows and various other assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
Note 2 - "Summary of Significant Accounting Policies" to Consolidated Financial Statements, included in Part II, Item 8, "Financial Statements
and Supplementary Data" of this Report, includes a summary of the significant accounting policies and methods used in the preparation of the consolidated
financial statements. The following is a discussion of the critical accounting policies and methods used by the Company.
Goodwill and Other Intangible Assets, Net
Goodwill represents the difference between the purchase price and the fair value of identifiable net assets acquired in a business combination. We
review goodwill for impairment annually in the fourth quarter, and test for impairment during the year if an event occurs or circumstances change that
would indicate the carrying amount may be impaired. Examples of such events would include pertinent macroeconomic conditions, industry and market
considerations, overall financial performance and other factors. An entity can choose between using the Step 0 approach or the Step 1 approach.
For the Step 0 approach, an entity may assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting
unit is less than its carrying amount. An entity has an unconditional option to bypass the Step 0 assessment for any reporting unit in any period and proceed
directly to performing the first step of the goodwill impairment test. An entity may resume performing the Step 0 assessment in any subsequent period. For
the Step 1 approach, which is a quantitative approach, the Company will calculate the fair value of a reporting unit and compare it to its carrying amount.
There are several methods that may be used to estimate a reporting unit's fair value, including the income approach, the market approach and/or the cost
approach. The amount of impairment, if any, is determined by comparing the fair value of a reporting unit with its carrying amount and recognizing an
impairment charge based on the amount that the carrying amount exceeds the reporting unit's fair value. The loss recognized should not exceed the total
goodwill allocated to the reporting unit.
For 2024, the Company utilized a quantitative approach for all of its reporting units. The assessment was based on a combination of income and
market approaches to estimate the fair value of the reporting units, which indicated that the fair values of the reporting units exceeded their respective
carrying values. Significant assumptions used in the discounted cash flow analyses included expected future earnings and cash flows, which are based on
management's current expectations, as well as the related risk-adjusted discount rate used to estimate fair value. There were no goodwill impairment
charges recorded as a result of these assessments. It is possible in future periods that further declines in market conditions, customer demand or other
potential changes in operations may increase the risk that these assets are impaired. At December 31, 2024, the goodwill related to the Electrical Products
reporting unit is at risk of future impairment if the fair value of this reporting unit, and its associated assets, decrease in value due to the amount and timing
of expected future cash flows, decreased customer demand for Electrical Products' services, an inability to execute management's business strategies, or
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. 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. As of December 31, 2024 the Electrical Products reporting unit had
$46,611 of goodwill and its fair value exceeded its net book value by 13%.
44

Long-Lived Asset Testing
The Company's accounting policy for long-lived assets is to estimate useful lives and to depreciate or amortize such assets over such lives. The
Company tests long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be
recoverable. If the carrying amounts of the long-lived assets exceed the sum of the undiscounted cash flows, an impairment charge is recognized in the
amount by which the carrying amounts exceeds their fair values. The Company performs such assessments at the lowest level for which identifiable cash
flows are largely independent of the cash flows of other assets and liabilities, which is generally at the plant level, operating company level or the reporting
unit level, depending on the level of interdependencies in the Company's operations. The Company considers various factors in determining whether an
impairment test is necessary, including among other things: a significant or prolonged deterioration in operating results and projected cash flows;
significant changes in the extent or manner in which assets are used; technological advances with respect to assets which would potentially render them
obsolete; the Company's strategy and capital planning; and the economic climate in the markets it serves. When estimating future cash flows and if
necessary, fair value, the Company makes judgments as to the expected utilization of assets and estimated future cash flows related to those assets. The
Company considers historical and anticipated future results, general economic and market conditions, the impact of planned business and operational
strategies and other information available at the time the estimates are made. The Company believes these estimates are reasonable; however, changes in
circumstances or conditions could have a significant impact on its estimates, which might result in material impairment charges in the future.
Pension and Other Post-Retirement Benefit Costs
The Company maintains qualified and non-qualified pension and other post-retirement benefit plans for certain subsidiaries. The Company
recorded pension income of $5,218 for the year ended December 31, 2024 related to its significant pension plans, and, as of December 31, 2024, the
Company had recorded pension assets of $5,903 and pension liabilities totaling $16,447. Pension benefits are generally based on years of service and the
amount of compensation earned during the participants' employment. However, the qualified pension benefits have been frozen for all participants.
The pension and other post-retirement benefit costs are developed from actuarial valuations. Inherent in these valuations are key assumptions,
including discount and mortality rates and expected long-term rates of return on plan assets. Material changes in pension and other post-retirement benefit
costs may occur in the future due to changes in these assumptions, changes in the number of plan participants, changes in the level of benefits provided,
changes to the level of contributions to these plans and other factors.
Actuarial assumptions for its pension and other post-retirement benefit plans are determined each year to calculate liability information as of year-
end, and pension and other post-retirement benefit expense or income for the following year. The discount rate assumption is derived from the rate of return
on high-quality bonds.
The various pension plan assets are diversified as to type of assets, investment strategies employed and number of investment managers used.
Investments may include equities, fixed income, cash equivalents, convertible securities and private investment funds. Derivatives may be used as part of
the investment strategy. The transfer of assets may be directed between investment managers in order to rebalance the portfolio in accordance with asset
allocation guidelines established by the Company. The private investment funds, or the investment funds they are invested in, own marketable and non-
marketable securities and other investment instruments. Such investments are valued by the private investment funds, underlying investment managers or
the underlying investment funds at fair value, as described in their respective financial statements and offering memorandums. These values are utilized in
quantifying the value of the assets of its pension plans, which are then used in the determination of the unfunded pension liabilities on the Company's
consolidated balance sheets. Because of the inherent uncertainty of valuation of some of the pension plans' investments in private investment funds and the
nature of some of the underlying investments held by the investment funds, the recorded value may differ from the value that would have been used had a
ready market existed for some of these investments for which market quotations are not readily available. Management uses judgment to make assumptions
on which its employee benefit liabilities and expenses are based.
Allowance for Credit Losses
The ACL includes the allowance for loan losses, reserves for unfunded commitments and allowance on held to maturity debt securities. The ACL
represents WebBank’s estimate of current expected credit losses related to loans, including unfunded lending commitments as well as held to maturity debt
securities as of the balance sheet date. The ACL represents an amount that, in management's judgment, approximates the current principal amount of loans
that will not be collected over the life of
45

those loans. Determining the ACL is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes
available.
WebBank utilizes complex models to obtain reasonable and supportable forecasts of future economic conditions dependent upon specific
macroeconomic variables related to each of WebBank's loan portfolios. Loans deemed to be collateral dependent are individually evaluated for loss based
on the value of the underlying collateral.
The adequacy of the ACL is monitored on a regular basis and is based on management's evaluation of numerous factors, including: the credit loss
model outputs; quality of the current loan portfolio; the trend in the loan portfolio's risk ratings; current economic conditions; loan concentrations; loan
growth rates; past-due and non-performing trends; evaluation of specific loss estimates for all significant loans with probable or observed credit
weaknesses; historical charge-off and recovery experience; and other pertinent information. For additional information related to the Company's ACL, see
Note 6 - "Loans Receivable, Including Loans Held for Sale" included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Report.
Because current economic conditions and forecasts can change and future events are inherently difficult to predict, the anticipated amount of
estimated credit losses on loans, and therefore the appropriateness of the ACL, could change significantly. It is difficult to estimate how potential changes
in any one economic factor or input might affect the overall allowance because a wide variety of factors and inputs are considered in estimating the
allowance and changes in those factors and inputs considered may not occur at the same rate and may not be consistent across all product types.
Additionally, changes in factors and inputs may be directionally inconsistent, such that improvement in one factor may offset deterioration in others.
Management believes that the ACL was adequate as of December 31, 2024.
Income Taxes
As a limited partnership, we are generally not responsible for federal and state income taxes, and our profits and losses are passed directly to our
limited partners for inclusion in their respective income tax returns. Our subsidiaries that are corporate subsidiaries are subject to federal and state income
taxes. The table in Note 16 - "Income Taxes" to the Consolidated Financial Statements, included in Part II, Item 8, "Financial Statements and
Supplementary Data" of this Report, reconciles a hypothetical calculation of federal income taxes based on the federal statutory rate applied to the income
or loss before income taxes and equity method investments. The tax effect of income passed through to common unitholders is subtracted from the
hypothetical calculation.
Our subsidiaries that are subject to income taxes use the liability method of accounting for such taxes. Under the liability method, deferred tax
assets and deferred tax liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards. Deferred tax assets and deferred tax
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and deferred tax liabilities of a change in tax rates is recognized in income in the period that includes
the enactment date. Our subsidiaries evaluate the recoverability of deferred tax assets and establish a valuation allowance when it is more likely than not
that some portion of the deferred tax assets will not be realized.
When tax returns are filed, it is highly certain that most positions taken would be sustained upon examination by the taxing authorities, while
others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax
position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more
likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken
are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount
of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with
tax positions taken that exceeds the amount measured as described above is provided for and reflected as a liability for unrecognized tax benefits on the
consolidated balance sheets, along with any associated interest and penalties that would be payable to the taxing authorities upon examination.
Contingencies, Including Legal and Environmental Liabilities
The Company is subject to litigation, proceedings, claims or assessments and various contingent liabilities incidental to its business or assumed in
connection with certain business acquisitions. The Company accrues a charge for a loss contingency when it believe it is both probable that a liability has
been incurred and the amount of the loss can be reasonably estimated. If the loss is within a range of specified amounts, the most likely amount is accrued,
and the Company accrues the minimum amount in
46

the range if no amount within the range represents a better estimate. Generally, the Company records the loss contingency at the amount we expect to pay
to resolve the contingency and the amount is generally not discounted to the present value. Amounts recoverable under insurance contracts are recorded as
assets when recovery is deemed probable. Contingencies that might result in a gain are not recognized until realizable. Changes to the amount of the
estimated loss or resolution of one or more contingencies could have a material impact on our results of operations, financial position and cash flows.
The Company accrues for losses associated with environmental remediation obligations when such losses are probable and reasonably estimable.
Accruals for estimated losses from environmental remediation obligations generally are recognized no later than completion of the remedial feasibility
study. Such accruals are adjusted as further information develops or circumstances change. Costs of future expenditures for environmental remediation
obligations are not discounted to their present value. Recoveries of environmental remediation costs from other parties are recorded as assets when their
receipt is deemed probable. For more information see Note 19 - "Commitments and Contingencies" to the Consolidated Financial Statements, included in
Part II, Item 8, "Financial Statements and Supplementary Data" of this Report.
New or Recently Adopted Accounting Pronouncements
For a discussion of the Company's new or recently adopted accounting pronouncements, see Note 2 - "Summary of Significant Accounting
Policies" to the Consolidated Financial Statements, included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Report.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The Company is not required to provide this information as it is a "smaller reporting company," as defined in Rule 12b-2 of the Exchange Act.
47

Item 8. Financial Statements and Supplementary Data
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Reports of Deloitte & Touche LLP, Independent Registered Public Accounting Firm (PCAOB ID No. 34)
49
Consolidated Financial Statements:
Consolidated Balance Sheets as of December 31, 2024 and 2023
52
Consolidated Statements of Operations for the years ended December 31, 2024 and 2023
53
Consolidated Statements of Comprehensive Income for the years ended December 31, 2024 and 2023
54
Consolidated Statements of Changes in Capital for the years ended December 31, 2024 and 2023
55
Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023
56
Notes to Consolidated Financial Statements
57
48

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the unitholders and the Board of Directors of Steel Partners Holdings L.P.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Steel Partners Holdings L.P. and subsidiaries (the "Company") as of December 31, 2024,
and 2023, the related consolidated statements of operations, comprehensive income, changes in capital, and cash flows, for each of the two years in the
period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements
present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and 2023, and the results of its operations and its
cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United
States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's
internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued
by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 11, 2025, expressed an unqualified opinion on the
Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial
statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the
financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or
required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2)
involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion
on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical
audit matters or on the accounts or disclosures to which they relate.
Goodwill Impairment of the Electrical Products Reporting Unit — Refer to Notes 2 and 8 to the consolidated financial statements
Critical Audit Matter Description
The Company's evaluation of goodwill for impairment involves management performing an assessment of each reporting unit to determine if it is more
likely than not that the fair value of the reporting unit is less than its carrying value. On the annual testing date of December 1, 2024, management
performed a quantitative approach (Step 1) to evaluate the Electrical Products reporting unit for impairment. As of December 1, 2024, the Electrical
Products reporting unit had $46.6 million of goodwill and its fair value exceeded its net book value by 13%. In performing Step 1, management compared
the fair value of the reporting unit to its respective carrying value. The Company determined the fair value estimate of the reporting unit based on a
combination of income and market approaches. The income approach utilized a discounted cash flow model that required management to make significant
estimates and assumptions related to expected revenue growth rates, expected adjusted earnings before interest, taxes and depreciation ("Adjusted
EBITDA"), and discount rates. Changes in these assumptions could have a significant impact on the
49

fair value, which could then result in a goodwill impairment charge. The fair value of the reporting unit exceeded its carrying value as of the measurement
date and therefore no impairment was recognized.
We identified goodwill impairment of the Electrical Products reporting unit as a critical audit matter because of the significant amount of goodwill recorded
at the reporting unit, the significant estimates and assumptions management made to estimate the fair value of the reporting unit and the relatively small
difference between its fair value and carrying value. This required a high degree of auditor judgment and an increased extent of effort, including the need to
involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management's estimates and assumptions related to
the expected revenue growth rates, expected Adjusted EBITDA, and the selection of the discount rate.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to goodwill impairment included the following, among others:
•
We tested the effectiveness of controls over management's goodwill impairment evaluation, including those over the determination of the fair
value, such as controls related to management's forecasts of future revenue and expected Adjusted EBITDA.
•
We evaluated management's ability to accurately forecast by comparing historical results to management's historical forecasts.
•
We evaluated the reasonableness of management's forecasts of expected revenue and expected growth rates and Adjusted EBITDA by comparing
management's forecasts with:
–
Historical cash flow and trends
–
Underlying business strategies and growth plans
–
Internal communications to management and the Board of Directors
–
External communications, independent industry reports, and forecasted information from selected companies in the reporting unit's peer
group.
•
With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) Company's valuation methodologies and (2) discount
rate by:
–
Testing the source information underlying the determination of the discount rate and the mathematical accuracy of the calculation.
–
Developing an independent range of the discount rate and comparing it to the discount rate selected by management.
Income Taxes — Realizability of Deferred Tax Assets Related to Steel Connect Inc. — Refer to Note 16 to the consolidated financial statements
Critical Audit Matter Description
Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be
recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the
enactment date. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some
portion or all of the recorded deferred tax assets will not be realized in future periods. This methodology is subjective and requires significant estimates and
judgments in the determination of the recoverability of deferred tax assets and in the calculation of certain tax liabilities.
During the year ended December 31, 2024, the Company reassessed the need for a valuation allowance against deferred tax assets related to the Steel
Connect, Inc. tax paying entity by evaluating pre-tax income over the prior three years, concluding this resulted in cumulative pre-tax income. In assessing
pre-tax income, the Company considered current sources of revenue and future cash flows and after considering historical and projected future taxable
income and existing taxable temporary differences, management determined that it was more likely than not that the deferred tax assets would be realized.
As a result, during the second quarter of fiscal year 2024, the Company released substantially all of the valuation allowance on the Steel Connect NOLs.
The Company did not release the valuation allowance relating to approximately $0.9 million of Steel Connect state NOLs that the Company anticipates will
expire unutilized. This release of the valuation allowance resulted in a non-cash income tax benefit of $73.4 million.
We identified management's determination that it is more likely than not that sufficient taxable income will be generated in the future to realize deferred tax
assets as a critical audit matter because of the significant judgments and estimates management makes related to taxable income. This required a high
degree of auditor judgment and an increased extent of effort, including the
50

need to involve our income tax specialists and assistance of our firm's professionals with expertise in the accounting for income taxes, when performing
audit procedures to evaluate the reasonableness of management's estimates of taxable income.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the determination that it is more likely than not that sufficient taxable income will be generated in the future to realize
deferred tax assets included the following, among others:
•
We tested the effectiveness of controls over deferred tax assets, including management's controls over the estimates of taxable income and the
determination of whether it is more likely than not that the deferred tax assets will be realized.
•
With the assistance of our firm's professionals with expertise in the accounting for income taxes, we evaluated the reasonableness of the methods,
assumptions, and judgments used by management to determine whether the deferred tax assets would be realized in the future.
•
With the assistance of our income tax specialists, we evaluated whether the sources of management's estimated future taxable income were of the
appropriate character and sufficient to utilize the deferred tax assets under the relevant tax law prior to expiration.
•
We tested the reasonableness of management's estimates of taxable income by comparing the estimates to:
–
Internal budgets.
–
Historical taxable income, as adjusted for nonrecurring items.
–
Internal communications to management and the Board of Directors.
–
Forecasted information included in Company press releases as well as in analyst and industry reports for the Company and certain of its peer
companies.
•
We evaluated whether the estimates of future taxable income were consistent with evidence obtained in other areas of the audit.
/s/ Deloitte & Touche LLP
New York, New York
March 11, 2025
We have served as the Company's auditor since 2018.
51

STEEL PARTNERS HOLDINGS L.P.
Consolidated Balance Sheets
(in thousands, except common units)
December 31, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
404,442 
$
577,928 
Trade and other receivables - net of allowance for doubtful accounts of $1,509 and $2,481, respectively
227,996 
216,429 
Loans receivable, including loans held for sale of $739,822 and $868,884, respectively, net
1,566,981 
1,582,536 
Inventories, net
195,617 
202,294 
Prepaid expenses and other current assets
48,649 
48,169 
Total current assets
2,443,685 
2,627,356 
Long-term loans receivable, net
231,262 
386,072 
Goodwill
145,670 
148,838 
Other intangible assets, net
97,280 
114,177 
Deferred tax assets
80,273 
581 
Other non-current assets
149,429 
341,465 
Property, plant and equipment, net
275,775 
253,980 
Pension asset
5,903 
— 
Operating lease right-of-use assets
66,297 
76,746 
Long-term investments
84,693 
41,225 
Total Assets
$
3,580,267 
$
3,990,440 
LIABILITIES AND CAPITAL
Current liabilities:
Accounts payable
$
131,768 
$
131,922 
Accrued liabilities
101,592 
117,943 
Deposits
1,483,241 
1,711,585 
Other current liabilities
101,768 
103,682 
Total current liabilities
1,818,369 
2,065,132 
Long-term deposits
173,801 
370,107 
Long-term debt
119,588 
191,304 
Other borrowings
1,632 
15,065 
Preferred unit liability
155,613 
154,925 
Accrued pension liabilities
16,447 
46,195 
Deferred tax liabilities
10,047 
18,353 
Long-term operating lease liabilities
53,134 
61,790 
Other non-current liabilities
58,212 
62,161 
Total Liabilities
2,406,843 
2,985,032 
Commitments and Contingencies
Capital:
Partners' capital common units: 19,078,201 and 21,296,067 issued and outstanding (after deducting 20,727,941 and 18,367,307
units held in treasury, at cost of $438,708 and $329,297, respectively
1,234,793 
1,079,853 
Accumulated other comprehensive loss
(102,381)
(121,223)
Total Partners' Capital
1,132,412 
958,630 
Noncontrolling interests in consolidated entities
41,012 
46,778 
Total Capital
1,173,424 
1,005,408 
Total Liabilities and Capital
$
3,580,267 
$
3,990,440 
See accompanying Notes to Consolidated Financial Statements
52

STEEL PARTNERS HOLDINGS L.P.
Consolidated Statements of Operations
(in thousands, except common units and per common unit data)
December 31,
2024
2023
Revenue:
Diversified Industrial net sales
$
1,242,970 
$
1,193,964 
Energy net revenue
145,019 
179,438 
Financial Services revenue
454,225 
416,911 
Supply Chain revenue
185,634 
115,144 
Total revenue
2,027,848 
1,905,457 
Costs and expenses:
Cost of goods sold
1,152,355 
1,103,017 
Selling, general and administrative expenses
547,125 
504,960 
Asset impairment charges
671 
865 
Finance interest expense
89,000 
80,432 
Provision for credit losses
7,740 
51,824 
Interest expense
8,015 
18,400 
Gains from sales of businesses
— 
(58)
Realized and unrealized losses (gains) on securities, net
2,983 
(7,074)
Other income, net
(3,623)
(8,115)
Total costs and expenses
1,804,266 
1,744,251 
Income from operations before income taxes and equity method investments
223,582 
161,206 
Income tax benefit
(53,255)
(1,674)
Loss of associated companies, net of taxes
5,615 
8,878 
Net income
271,222 
154,002 
Net income attributable to noncontrolling interests in consolidated entities
(9,660)
(3,173)
Net income attributable to common unitholders
$
261,562 
$
150,829 
Net income per common unit - basic
Net income attributable to common unitholders
$
13.07 
$
7.04 
Net income per common unit - diluted
Net income attributable to common unitholders
$
11.38 
$
6.43 
Weighted-average number of common units outstanding - basic
20,006,429 
21,433,900 
Weighted-average number of common units outstanding - diluted
24,053,388 
25,356,796 
See accompanying Notes to Consolidated Financial Statements
53

STEEL PARTNERS HOLDINGS L.P.
Consolidated Statements of Comprehensive Income
(in thousands)
December 31,
2024
2023
Net income
$
271,222 
$
154,002 
Other comprehensive income (loss), net of tax:
Currency translation adjustments
(3,650)
2,120 
Changes in pension liabilities and other post-retirement benefit obligations
22,492 
28,531 
Other comprehensive (loss) income
18,842 
30,651 
Comprehensive income
290,064 
184,653 
Comprehensive income attributable to noncontrolling interests
(9,660)
(3,173)
Comprehensive income attributable to common unitholders
$
280,404 
$
181,480 
See accompanying Notes to Consolidated Financial Statements
54

STEEL PARTNERS HOLDINGS L.P.
Consolidated Statements of Changes in Capital
(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) Income
Capital
Entities
Capital
Balance at December 31, 2022
39,509,772 
(17,904,679)
$
(309,257)
$
952,094 
$
(151,874)
$
800,220 
$
1,240 
$
801,460 
Net income
— 
— 
— 
150,829 
— 
150,829 
3,173 
154,002 
Cumulative effect of change in accounting
principle for current expected credit
losses, net of tax
— 
— 
— 
(3,862)
— 
(3,862)
— 
(3,862)
Currency translation adjustments
— 
— 
— 
— 
2,120 
2,120 
— 
2,120 
Changes in pension liabilities and post-
retirement benefit obligations
— 
— 
— 
— 
28,531 
28,531 
— 
28,531 
Equity compensation - restricted units
169,332 
— 
— 
1,617 
— 
1,617 
— 
1,617 
Tax withholding related to vesting of
restricted units
(15,730)
— 
— 
(605)
— 
(605)
— 
(605)
Purchases of SPLP common units
— 
(462,628)
(20,040)
(20,040)
— 
(20,040)
— 
(20,040)
Noncontrolling interests assumed upon
consolidation of Steel Connect
— 
— 
— 
— 
— 
— 
44,718 
44,718 
Adjustment to interest in consolidated
subsidiaries
— 
— 
— 
(110)
— 
(110)
(2,481)
(2,591)
Other, net
— 
— 
— 
(70)
— 
(70)
128 
58 
Balance at 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
— 
— 
— 
261,562 
— 
261,562 
9,660 
271,222 
Currency translation adjustments
— 
— 
— 
— 
(3,650)
(3,650)
— 
(3,650)
Changes in pension liabilities and post-
retirement benefit obligations
— 
— 
— 
— 
22,492 
22,492 
— 
22,492 
Equity compensation - restricted units
128,355 
— 
— 
2,228 
— 
2,228 
— 
2,228 
Tax withholding related to vesting of
restricted units
(13,125)
— 
— 
(1,077)
— 
(1,077)
— 
(1,077)
Share-based long term incentive plan unit
awards
27,538 
— 
— 
1,604 
— 
1,604 
— 
1,604 
Purchases of SPLP common units
— 
(2,360,634)
(109,411)
(109,411)
— 
(109,411)
— 
(109,411)
Adjustment to interest in consolidated
subsidiaries
— 
— 
— 
— 
— 
— 
(15,484)
(15,484)
Other, net
— 
— 
— 
34 
— 
34 
58 
92 
Balance at December 31, 2024
39,806,142 
(20,727,941)
$
(438,708)
$
1,234,793 
$
(102,381)
$
1,132,412 
$
41,012 
$
1,173,424 
    
See accompanying Notes to Consolidated Financial Statements
55

STEEL PARTNERS HOLDINGS L.P.
Consolidated Statements of Cash Flows
(in thousands)
Year Ended December 31,
2024
2023
Cash flows from operating activities:
Net income
$
271,222 
$
154,002 
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses
7,740 
51,824 
Loss of associated companies, net of taxes
5,615 
8,878 
Realized and unrealized losses (gains) on securities, net
2,983 
(7,074)
Gains from sale of businesses
— 
(58)
Derivative gains on economic interests in loans
(5,940)
(4,713)
Non-cash pension expense
5,326 
11,806 
Deferred income taxes
(93,912)
(30,069)
Depreciation and amortization
59,310 
56,565 
Non-cash lease expense
23,081 
18,377 
Equity-based compensation
2,228 
1,617 
Asset impairment charges
671 
865 
Other
1,351 
4,166 
Net change in operating assets and liabilities:
Trade and other receivables
(11,948)
4,802 
Inventories
6,116 
19,247 
Prepaid expenses and other assets
4,807 
(7,718)
Accounts payable, accrued and other liabilities
(44,430)
4,914 
Net decrease (increase) in loans held for sale
129,062 
(266,209)
Net cash provided by operating activities
363,282 
21,222 
Cash flows from investing activities:
Purchases of investments
(142,412)
(208,836)
Proceeds from maturities of investments
263,459 
45,731 
Proceeds from sales of investments
20,619 
213,319 
Principal repayment on Steel Connect Convertible Note
— 
1,000 
Loan originations, net of collections
32,670 
(208,571)
Purchases of property, plant and equipment
(64,963)
(51,451)
Proceeds from sale of property, plant and equipment
2,093 
1,846 
Increase in cash upon consolidation of Steel Connect
— 
65,896 
Other
(305)
(1,136)
Net cash provided by (used in) investing activities
111,161 
(142,202)
Cash flows from financing activities:
Net revolver (repayments) borrowings
(71,648)
11,115 
Repayments of term loans
(68)
(67)
Purchases of the Company's common units
(109,411)
(20,040)
Purchases of the Company's preferred units
(1,945)
— 
Net decrease in other borrowings
(11,814)
(26,486)
Distribution to preferred unitholders
(9,519)
(9,633)
Purchase of subsidiary shares from noncontrolling interests
(16,181)
(2,934)
Tax withholding related to vesting of restricted units
(1,077)
(605)
Net (decrease) increase in deposits
(424,649)
513,211 
Net cash (used in) provided by financing activities
(646,312)
464,561 
Net change for the period
(171,869)
343,581 
Effect of exchange rate changes on cash and cash equivalents
(1,617)
(101)
Cash and cash equivalents at beginning of period
577,928 
234,448 
Cash and cash equivalents at end of period
$
404,442 
$
577,928 
See accompanying Notes to Consolidated Financial Statements
56

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
All amounts used in the Notes to Consolidated Financial Statements are in thousands, except common and preferred units, per common and
preferred unit, share, per share data or as otherwise noted.
1. NATURE OF THE BUSINESS AND BASIS OF PRESENTATION
Nature of the Business
Steel Partners Holdings L.P. ("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, banking, defense, supply chain management and logistics 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 21 - "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 ("Management Agreement") discussed in further detail in Note 20 - "Related Party
Transactions."
Basis of Presentation
The consolidated financial statements include the accounts of the Company and its majority or wholly-owned subsidiaries. All material inter-
company accounts and transactions have been eliminated in consolidation.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates in Preparation of Consolidated Financial Statements
The Company's consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S. ("U.S.
GAAP"). The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses, and related
disclosure of contingent assets and liabilities during the reporting period. The more significant estimates include: (1) revenue recognition; (2) the valuation
allowances for trade and other receivables, loans receivable and inventories; (3) the valuation of goodwill, indefinite-lived intangible assets, long-lived
assets and associated companies; (4) the valuation of deferred tax assets; (5) contingencies, including legal and environmental liabilities; (6) fair value of
derivatives; (7) post-employment benefit liabilities; (8) estimates and assumptions used in the determination of fair value of certain securities; and (9)
estimates of loan losses. Actual results may differ from the estimates used in preparing the consolidated financial statements; and, due to substantial
holdings in and/or restrictions on certain investments, the value that may be realized could differ from the estimated fair value.
Cash and Cash Equivalents
Cash and cash equivalents include cash and deposits in depository institutions and financial institutions, and includes WebBank cash at the Federal
Reserve Bank. The Company considers all highly liquid debt instruments with maturities of three months or less when purchased to be cash equivalents.
Cash and cash equivalents include qualifying money market funds and exclude amounts where availability is restricted by loan agreements or other
contractual provisions. Cash equivalents are stated at cost, which approximates market value.
Marketable Securities and Long-Term Investments
Marketable securities consist of short-term deposits, corporate debt and equity instruments, and mutual funds. The Company classifies its
marketable securities as current assets based on the nature of the securities and their availability for use in current operations. Long-term investments
consist of equity securities and certain associated company investments. Held-to-maturity securities are classified in Other non-current assets. SPLP
determines the appropriate classifications of its investments at the acquisition date and re-evaluates the classifications at each balance sheet date.
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•
Available-for-sale equity securities are reported at fair value, with unrealized gains and losses recognized in Realized and unrealized gains on
securities, net in the consolidated statements of operations.
•
Available-for-sale debt securities are reported at fair value, with unrealized gains and losses recognized in accumulated other comprehensive income or
loss ("AOCI") as a separate component of SPLP's Partners' capital in both 2024 and 2023.
•
Associated companies represent equity method investments in companies where the Company's ownership is generally between 20% and 50% of the
outstanding equity and it has the ability to exercise significant influence, but not control, over the investee. For equity method investments where the
fair value option has been elected, unrealized gains and losses are reported in the Company's consolidated statements of operations as part of Loss of
associated companies, net of taxes. For the equity method investments where the fair value option has not been elected, SPLP records the investment at
cost and subsequently increases or decreases the investment by its proportionate share of the net income or loss and other comprehensive income or
loss of the investee.
•
Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts.
Dividend and interest income is recognized when earned. Realized gains and losses on marketable securities and long-term investments are
included in earnings and are derived using the specific-identification method. Commission expense is recorded as a reduction of sales proceeds on
investment sales. Commission expense on purchases is included in the cost of investments on the Company's consolidated balance sheets.
Other Than Temporary Impairment
If the Company believes a decline in the market value of any available-for-sale debt security, equity method or held-to-maturity security below
cost is other than temporary, a loss is charged to earnings, which establishes a new cost basis for the security. Impairment losses are included in Asset
impairment charges in the Company's consolidated statements of operations. SPLP's determination of whether a security is other than temporarily impaired
incorporates both quantitative and qualitative information. The Company considers a number of factors including, but not limited to, the length of time and
the extent to which the fair value has been less than cost, the length of time expected for recovery, the financial condition of the issuer, the reason for the
decline in fair value, changes in fair value subsequent to the balance sheet date, the ability and intent to hold investments to maturity, and other factors
specific to the individual investment.
Specifically, for held-to-maturity securities, the Company considers whether it plans to sell the security or it is more-likely-than-not that it will be
required to sell the security before recovery of its amortized cost. The credit component of an other-than-temporary impairment loss is recognized in
earnings and the non-credit component is recognized in AOCI in situations where the Company does not intend to sell the security and it is more likely-
than-not that the Company will not be required to sell the security prior to recovery. SPLP's assessment involves a high degree of judgment and
accordingly, actual results may differ materially from those estimates and judgments.
Trade Receivables, Net
Trade receivables, net, include amounts billed and due from customers. The Company maintains an allowance for credit losses to provide for the
estimated amount that will not be collected. The allowance for credit losses is based on current and historical information and reasonable and supportable
forecasts of future events and circumstances and includes a combination of factors including management's evaluation of the financial condition of the
customer, historical experience, credit quality, whether any amounts are currently past due, the length of time accounts may be past due and management's
determination of a customer's current ability to pay its obligations. Trade receivable balances are charged off against the allowance when it is determined
that the receivables will not be recovered, and payments subsequently received on such receivables are credited to recovery of accounts written off. The
Company believes that the credit risk with respect to trade receivables is limited due to this credit evaluation process. As of December 31, 2024, the top 10
of the Company's largest customer balances accounted for 30% of the Company's trade receivables. The Company's allowance for doubtful accounts for
trade receivables was $1,509 and $2,481 as of December 31, 2024 and 2023, respectively. The Company recorded charges of $381 to the allowance offset
by recoveries of $1,353 for the year ended December 31, 2024 and charges of $419 to the allowance offset by recoveries of $352 for the year ended
December 31, 2023.
Loans Receivable, Including Loans Held for Sale
WebBank's loan activities include several lending arrangements with companies where it originates credit card and other loans for consumers and
small businesses. These loans are classified as Loans receivable and are typically sold after origination. As part of these arrangements, WebBank earns fees
that are recorded in non-interest income. Fees earned from these
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lending arrangements are recorded as fee income. WebBank also purchases participations in commercial and industrial loans through loan syndications.
Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding
unpaid principal balances adjusted for charge-offs, the allowance for credit losses, and any deferred fees or costs on originated loans. Interest income is
accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the
related loan yield over the estimated life of the loan.
Loans held for sale are carried at the lower of amortized cost basis or fair value. Gains and losses are recorded in noninterest income based on the
difference between sales proceeds and amortized cost.
Loans that are collateral-dependent are measured at the lower of amortized cost or the fair value of the collateral less the cost to sell.
Loans are reported as past due when either principal or interest is due and unpaid for a period of 30 days or more. The accrual of interest on loans
is discontinued at the time the loan is 90 days delinquent for commercial loans, 120 days for consumer loans and 180 days for small business loans unless
the loan is well-secured and in process of collection. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or
interest is considered doubtful.
All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on
these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all
the principal and interest amounts contractually due are brought current and future payments are reasonably assured.
Allowance for Credit Losses
The Allowance for Credit Losses ("ACL"), which consist of the allowance for loan losses, reserves for unfunded loan commitments, and the
allowance on held to maturity debt securities, represents management's estimate of current expected credit losses over the contractual term of WebBank’s
loan portfolio, unfunded lending commitments, and held to maturity debt securities as of the balance sheet date.
The reserves for unfunded lending commitments is included in other current liabilities on the consolidated balance sheets. The allowance for held
to maturity debt securities is estimated separately from loans and carried at net amortized cost included in other non-current assets on the consolidated
balance sheets. The ACL for WebBank's held to maturity debt securities portfolio is not presented separately on the consolidated balance sheet due to
immateriality.
The ACL is a valuation account that is deducted from the loan's amortized cost basis to present the net amount expected to be collected on the
loans. Loans are charged against the ACL and recognized in the consolidated statements of operations when management believes the recorded loan
balance is confirmed as uncollectible.
Management estimates the allowance balance using relevant information, from internal and external sources, relating to past events, current
conditions, and reasonable and supportable forecasts. The allowance for credit losses is measured on a collective (pool) basis when similar risk
characteristics exist. Specific reserves cover impaired loans, or loans individually valuated for impairment, and are primarily measured based on the fair
value of collateral. Adjustments to the fair value of collateral are made for anticipated selling costs. A specific reserve may be zero if the fair value of
collateral on the measurement date is greater than the carrying balance of the impaired loan. Additionally, the present value of expected future cash flows
discounted at the original contractual interest rate may also be used, when practical. WebBank leverages economic projections from a third-party provider
on a quarterly basis to generate macroeconomic factors for a two-year reasonable and supportable timeframe, before reverting to the baseline loss-curve
implied loss expectations.
After applying historic loss experience, the quantitatively derived level of ACL is reviewed for each segment using qualitative criteria. Various
risk factors are tracked that influence our judgment regarding the level of the ACL across the portfolio segments. Primary qualitative factors that may be
reflected in the quantitative models include:
•
Asset quality trends
•
Risk management and loan administration practices
•
Portfolio management and controls
•
Effect of changes in the nature and volume of the portfolio
•
Changes in lending policies and underwriting policies
•
Existence and effect of any portfolio concentrations
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•
National economic business conditions and other macroeconomic adjustments
•
Regional and local economic and business conditions
•
Data availability and applicability
•
Industry monitoring
•
Value of underlying collateral
Changes in the level of the ACL reflect changes in these factors. The magnitude of the impact of each of these factors on the qualitative
assessment of the ACL changes from quarter to quarter according to the extent these factors are already reflected in historic loss rates and according to the
extent these factors diverge from one another. Also considered is the uncertainty inherent in the estimation process when evaluating the ACL.
Inventories
Inventories are generally stated at the lower of cost (determined by the first-in, first-out method or average cost method) and net realizable value.
Cost is determined by the last-in, first-out ("LIFO") method for certain precious metal inventory held in the U.S., and remaining precious metal inventory is
primarily carried at fair value. For precious metal inventory, no segregation among raw materials, work in process and finished products is practicable. For
other inventory, the cost of work in process and finished products comprises the cost of raw materials, direct labor and overhead costs attributable to the
production of inventory.
Non-precious metal inventories are evaluated for estimated excess and obsolescence based upon assumptions about future demand and market
conditions, and are adjusted accordingly. If actual market conditions are less favorable than those projected, future write-downs may be required.
Goodwill and Other Intangible Assets, Net
Goodwill, which is not amortized, represents the difference between the purchase price and the fair value of identifiable net assets acquired in a
business combination. Goodwill is tested for impairment at a reporting unit level, and all of the Company’s goodwill is assigned to its reporting units.
Reporting units are determined based upon the Company’s organizational structure in place at the date of the goodwill impairment testing and are generally
one level below the operating segment level. The Company tests goodwill annually for impairment as of December 1st, and additionally on an interim
basis, if events occur or circumstances change that would indicate the carrying amount may be impaired. Examples of such events would include pertinent
macroeconomic conditions, industry and market considerations, overall financial performance and other factors. An entity can choose between using a
qualitative impairment test often referred to as “Step 0” or a quantitative impairment test often referred to as “Step 1”.
For the Step 0 approach, an entity may assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting
unit is less than its carrying amount. An entity has an unconditional option to bypass the Step 0 assessment for any reporting unit in any period and proceed
directly to performing a Step 1 of the goodwill impairment test. An entity may resume performing the Step 0 assessment in any subsequent period. For the
Step 1 approach, which is a quantitative approach, the Company will calculate the fair value of a reporting unit and compare it to its carrying amount.
There are several methods that may be used to estimate a reporting unit's fair value, including the income approach, the market approach and/or the cost
approach. The amount of impairment, if any, is determined by comparing the fair value of a reporting unit with its carrying amount and recognizing an
impairment charge based on the amount that the carrying amount exceeds the reporting unit's fair value. The loss recognized should not exceed the total
goodwill allocated to the reporting unit.
For finite-lived intangible assets, the Company evaluates the carrying amount of such assets when circumstances indicate the carrying amount may
not be recoverable. Conditions that could have an adverse impact on the cash flows and fair value of the long-lived assets are deteriorating business
climate, condition of the asset or plans to dispose of the asset before the end of its useful life. If the assets' carrying amounts exceed the sum of the
undiscounted cash flows, an impairment charge is recognized in the amount by which the carrying amounts exceeds their fair values. The Company
performs such assessments at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities,
which is generally at the plant level, operating company level or the reporting unit level, depending on the level of interdependencies in the Company's
operations.
Indefinite-lived intangible assets are tested for impairment at least annually, or when events or changes in circumstances indicate that it is more
likely than not that the asset is impaired. Companies can use the same two testing approaches for indefinite-lived intangibles as for goodwill. There were no
impairments of goodwill or other intangible assets in 2024 and 2023.
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Derivatives
The Company uses various hedging instruments to reduce the impact of changes in precious metal prices. These instruments are recorded as either
fair value hedges, economic hedges, cash flow hedges or derivatives with no hedging designation.
Precious Metals
The Company's precious metal and commodity inventories are subject to market price fluctuations. The Company enters into commodity futures
and forward contracts to mitigate the impact of price fluctuations on its precious and certain non-precious metal inventories that are not subject to fixed
price contracts. The Company's hedging strategy is designed to protect it against normal volatility; therefore, abnormal price changes in these commodities
or markets could negatively impact the Company's earnings.
Fair Value Hedges. The fair values of these derivatives are recognized as derivative assets and liabilities on the Company's consolidated balance
sheets. The net change in fair value of the derivative assets and liabilities, and the change 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.
The fair value hedges are associated primarily with the Company's precious metal inventory carried at fair value.
Economic Hedges. As these derivatives are not designated as accounting hedges under U.S. GAAP, they are accounted for as derivatives with no
hedge designation. The derivatives are marked to market, and both realized and unrealized gains and losses are recorded in current period 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.
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 18 - "Fair Value Measurements"). At December 31, 2024, outstanding derivatives mature within 3 to 5 years. Gains and losses resulting
from changes in 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 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.
Property, Plant and Equipment, Net
Property, plant and equipment is recorded at cost. Depreciation of property, plant and equipment is recorded principally on the straight line method
over the estimated useful lives of the assets, which range as follows: machinery and equipment 3 to 15 years and buildings and improvements 10 to 30
years. Leasehold improvements are amortized over the shorter of the terms of the related leases or the estimated useful lives of the improvements. Interest
cost is capitalized for qualifying assets during the assets' acquisition period. Maintenance and repairs are charged to expense, and renewals and betterments
are capitalized. Gains or losses on dispositions is recorded in Other income, net.
The Company tests long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may
not be recoverable. If the carrying amounts of the long-lived assets exceed the sum of the undiscounted cash flows, an impairment charge is recognized in
the amount by which the carrying amounts exceeds their fair values, which is generally determined using a discounted cash flow methodology. The
Company performs such assessments at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and
liabilities, which is generally at the plant level, operating company level or the reporting unit level, depending on the level of interdependencies in the
Company's operations. The Company considers various factors in determining whether an impairment test is necessary, including among other things: a
significant or prolonged deterioration in operating results and projected cash flows; significant changes in the extent or manner in which assets are used;
technological advances with respect to assets which would potentially render them obsolete; the Company's strategy and capital planning; and the
economic climate in the markets it serves. When estimating future cash flows and if necessary, fair value, the Company makes judgments as to the expected
utilization of assets and estimated future cash flows related to those assets. The Company considers historical and anticipated future results, general
economic and market conditions, the impact of planned business and operational strategies and other information available at the
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time the estimates are made. The Company believes these estimates are reasonable; however, changes in circumstances or conditions could have a
significant impact on its estimates, which might result in material impairment charges in the future.
Leases
The Company determines if an agreement qualifies as a lease or contains a lease in the period that the agreement is executed. An agreement is or
contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The right to control the use
of an asset includes the right to obtain substantially all of the economic benefits of the underlying asset and the right to direct how and for what purpose the
asset is used.
Right of use ("ROU") assets represent the Company's right to use an underlying asset during the reasonably certain lease term. Lease liabilities
represent the Company's obligation to make payments over the life of the lease. A ROU asset and a lease liability are recognized at commencement of the
lease based on the present value of the lease payments over the life of the lease. Since the interest rate implicit in a lease is generally not readily
determinable, the Company uses an incremental borrowing rate to determine the present value of the lease payments. The incremental borrowing rate
represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar lease term to obtain an asset of similar
value. Our lease terms may include options to extend or terminate the lease when the Company is reasonably certain that we will exercise that option.
Initial direct costs are included as part of the ROU asset upon commencement of the lease. The Company has applied the practical expedient
available for lessees in which lease and non-lease components are accounted for as a single lease component for all of our asset classes. An ROU asset and
corresponding lease liability are not recorded for leases with an initial term of 12 months or less (short-term leases), and the Company recognizes lease
expense for these leases as incurred over the lease term.
Deferred Debt Issue Costs
Costs to issue debt are capitalized and deferred when incurred and subsequently amortized to interest expense over the expected life of the
revolving credit facility. Deferred debt issuance costs for line-of-credit arrangements are presented in the Company's consolidated balance sheets in other
assets.
Business Combinations
Business combinations are accounted for using the purchase method of accounting. The purchase price of an acquisition is measured as the
aggregate of the fair value of the consideration transferred at the acquisition date. The purchase price is allocated to the fair values of the tangible and
intangible assets acquired and liabilities assumed at date of acquisition, with any excess recorded as goodwill. These fair value determinations require
management to make estimates which are based on all available information and may involve the use of assumptions with respect to the timing and amount
of future revenues and expenses, the weighted average cost of capital, and royalty rates associated with the transaction and the assets or liabilities acquired.
In addition to using management estimates the Company uses a variety of information sources to determine the estimated fair values of acquired assets and
liabilities including third-party appraisals for the estimated value and lives of identifiable intangible assets and property, plant and equipment. This
judgment and determination affect the amount of consideration paid that is allocable to assets and liabilities acquired in the business purchase transaction.
The purchase price allocation may be provisional during a measurement period of up to one year to provide reasonable time to obtain the information
necessary to identify and measure the assets acquired and liabilities assumed. Any such measurement period adjustments are recognized in the period in
which the adjustment amount is determined. Transaction costs associated with the acquisition are expensed as incurred.
Revenue Recognition
General
The Company accounts for a contract when it has approval and commitment from all parties, the rights and payment terms of the parties can be
identified, the contract has commercial substance and the collectability of the consideration, or transaction price, is probable. At the inception of each
contract, the Company evaluates the promised goods and services to determine whether the contract should be accounted for as having one or more
performance obligations. A performance obligation is a promise to transfer a distinct good or service to a customer and represents the unit of accounting for
revenue
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recognition. Revenues are recognized when control of the promised goods or services are transferred to the customer, in an amount that reflects the
consideration the Company expects to be entitled to in exchange for those goods or services.
The Company records all shipping and handling fees billed to customers as revenue. The Company has elected to account for shipping and
handling activities that are performed after the customer obtains control of a good as activities to fulfill the promise to transfer the good. If revenue is
recognized for the related good before the shipping and handling activities occur, the related costs of those shipping and handling activities are accrued.
Sales and usage-based taxes are excluded from revenues. The Company does not have any material service-type warranty arrangements. The
expected costs associated with the Company's assurance warranties are recognized as expense when the products are sold. The Company does not have any
material significant financing arrangements as payment is received shortly after the goods are sold or services are performed. Cash received from customers
prior to shipment of goods, or otherwise not yet earned, is recorded as deferred revenue.
The Company determines the transaction for each contract based on the best estimate of the consideration the Company expects to receive, which
includes assumptions regarding variable consideration. The Company includes such estimated amounts in the transaction price to the extent it is probable
that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.
Variable consideration is primarily estimated using the most likely amount method.
Generally, the Company's sales contracts with customers contain only one performance obligation. In certain circumstances, contracts with
customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on
its relative standalone selling price. The Company generally determines the standalone selling price based on the prices charged to similar customers or by
using the expected cost plus margin approach. The Company's performance obligations are generally part of contracts with customers that have a duration
of less than one year, and therefore, the Company has not provided disclosures with respect to remaining performance obligations.
The Company recognizes revenue for each performance obligation when (or as) the performance obligation is satisfied by transferring control of
the promised goods or services underlying the performance obligation to the customer. The transfer of control can occur over time or at a point in time.
Performance obligations are satisfied at a point in time unless they meet at least one of the following criteria, in which case they are satisfied over time:
•
The customer simultaneously receives and consumes the benefits provided by the Company's performance as it performs;
•
The Company's performance creates or enhances an asset (for example, work in process) that the customer controls as the asset is created or enhanced;
or
•
The Company's performance does not create an asset with an alternative use to us and the Company has an enforceable right to payment for
performance completed to date.
Given the typical duration of the Company's contracts with customers, as noted directly above, is less than one year, the Company generally
expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within Selling,
general and administrative expenses.
For certain of the services that the Company's Diversified Industrial and Energy segments provide, the Company has determined that it has a right
to consideration from a customer in an amount that corresponds directly with the value to the customer of the Company's performance completed to date,
and therefore, the Company recognizes revenue in the amount to which the entity has a right to invoice when that amount corresponds directly with the
value of the Company’s performance to date.
The Company has also entered into rebate agreements with certain customers. These programs are typically structured to incentivize the customers
to increase their annual purchases from the Company. The rebates are usually calculated as a percentage of the purchase amount, and such percentages may
increase as the customer's level of purchases rise. Rebates are recorded as a reduction of net sales in the Company's consolidated statements of operations.
As of December 31, 2024 and 2023, accrued rebates payable totaled $15,231 and $16,109, respectively, and are included in Accrued liabilities on the
Company's consolidated balance sheets.
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Diversified Industrial Segment
The Diversified Industrial segment is comprised of manufacturers of engineered niche industrial products. The majority of revenues recognized
are for the sale of manufactured goods in the U.S. Other revenue recognized is for repair and maintenance services. Customer contracts are generally short-
term in nature and are based on individual customer purchase orders. The terms and conditions of the customer purchase orders are dictated by either the
Company's standard terms and conditions or by a master service agreement.
Diversified Industrial revenues related to product sales are recognized when control of the promised goods is transferred to the customer, in an
amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods. This condition is usually met at a point-
in-time when the product has been shipped to the customer, or in certain circumstances when the product has been delivered to the customer, depending on
the terms of the contract. However, revenues for certain custom manufactured goods are recognized over time as the customer order is fulfilled (for
example, contracts for sale of custom manufactured goods that do not have an alternative use and for which the Company has an enforceable right to
payment). Generally, a cost incurred input method is used to determine the timing of revenue recognition for over time arrangements. Service revenues are
primarily recognized in the amount to which the entity has a right to invoice.
Certain customers may receive sales incentives, such as right of return, rebates, volume discounts and early payment discounts, which are
accounted for as variable consideration. The Company estimates these amounts based on the expected incentive amount to be provided to customers and
reduces revenues, and these estimates are typically constrained. The Company adjusts its estimate of revenue at the earlier of when the expected value or
most likely amount of consideration we expect to receive changes or when the consideration becomes fixed.
Diversified Industrials' service revenues are generated primarily by repair and maintenance work performed on equipment used at mass merchants,
supermarkets and restaurants. Service revenues are primarily recognized in the amount to which the entity has a right to invoice.
Energy Segment
The Energy segment provides drilling and production services to the oil and gas industry in the U.S. The services provided include well
completion and recompletion, well maintenance and workover, flow testing, down hole pumping, plug and abatement, well logging and perforating
wireline services. Service revenues are recognized in the amount to which the entity has a right to invoice. Consideration for Energy contracts is generally
fixed.
An immaterial portion of Energy revenues are service revenues related to Energy's youth sports business. These service revenues are recognized
when services are provided to the customer, in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those
services. Consideration for the Energy's sports business contracts is generally fixed.
Financial Services Segment
WebBank generates revenue through a combination of interest income and non-interest income. Interest income is derived from interest and fees
earned on loans and investments. Interest income is accrued on the unpaid principal balance, including amortization of premiums and accretion of
discounts. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield over the
estimated life of the loan. Non-interest income is primarily derived from premiums on the sale of loans, loan servicing fees, origination fees earned on
certain loans and fee income on contractual lending arrangements.
Supply Chain Segment
The Supply Chain segment recognizes revenue from its contracts with customers primarily from the sale of supply chain management services.
Revenue is recognized when control of the promised goods or services transferred to a customer, in an amount that reflects the consideration the Company
expects to be entitled to in exchange for those goods or services. Amounts billed to customers under supply chain management services arrangements
include revenue attributable to the services performed as well as for materials procured on the customer's behalf as part of its service to them. The majority
of these arrangements consist of two distinct performance obligations (i.e. warehousing/inventory management service and a separate
kitting/packaging/assembly service), revenue related to each of which is recognized over time as services are performed using an input method based on the
level of efforts expended.
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Principal Versus Agent Revenue Recognition
For revenue generated from contracts with customers involving another party, the Company evaluates whether it is acting as the principal or the
agent in the transaction. This determination requires significant judgment and impacts the amount and timing of revenue recognized. The Company
determines whether it is a principal or an agent, which is dependent on whether the Company has control of the specified goods or services before they are
transferred to the customer, whether the Company is primarily responsible for fulfillment, whether the Company has inventory risk and whether the
Company has latitude in establishing price. Revenues are recognized on a gross basis if the Company is acting in the capacity of a principal and on a net
basis if it’s acting in the capacity of an agent.
Concentration of Revenue
No single customer accounted for 10% or more of the Company's consolidated revenues in 2024 or 2023.
Fair Value Measurements
The Company measures certain assets and liabilities at fair value (see Note 18 - "Fair Value Measurements"). Fair value is the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair values of assets
and liabilities are determined based on a three-level measurement input hierarchy. Level 1 inputs are quoted prices in active markets for identical assets or
liabilities as of the measurement date. Level 2 inputs are other than quoted market prices that are observable, either directly or indirectly, for an asset or
liability. Level 2 inputs can 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 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.
Pension Plans
The Company sponsors qualified and non-qualified pension and other post-retirement benefit plans covering certain of its current or former
employees. In accordance with accounting standards for employee pension benefits, the Company recognizes on a plan-by-plan basis the unfunded status of
its pension and post-retirement benefit plans in the consolidated financial statements and measures its pension plan assets and benefit obligations as of
December 31, except for Steel Connect’s employee benefit plans which are measured as of its fiscal year end, July 31 (and approximates the value at
December 31). The obligation for the Company's pension and post-retirement benefit plans and the related annual costs of employee benefits are calculated
based on several long-term assumptions, including discount rates and expected mortality for employee benefit liabilities, rates of return on plan assets and
expected annual rates for salary increases for employee participants.
Equity-Based Compensation
The Company accounts for restricted stock units granted to employees and non-employee directors as compensation expense, which is recognized
in exchange for the services received. The compensation expense is based on the fair value of the equity instruments on the grant-date and is recognized as
an expense over the service period of the recipients. The Company accounts for forfeitures in the period in which they occur.
Income Taxes
SPLP and certain of its subsidiaries, as limited partnerships, are generally not responsible for federal and state income taxes, and their profits and
losses are passed directly to their partners for inclusion in their respective income tax returns. SPLP's subsidiaries that are corporate entities are subject to
federal and state income taxes and file corporate income tax returns.
SPLP's subsidiaries that are subject to income taxes use the liability method of accounting for such taxes. Under the liability method, deferred tax
assets and deferred tax liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards. Deferred tax assets and deferred tax
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and deferred tax liabilities of a change in tax rates is recognized in income in the period that
65

includes the enactment date. Such subsidiaries evaluate the recoverability of deferred tax assets and establish a valuation allowance when it is more likely
than not that some portion of the deferred tax assets will not be realized.
When tax returns are filed, it is highly certain that most positions taken would be sustained upon examination by the taxing authorities, while
others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax
position is recognized in the Company's consolidated financial statements in the period during which, based on all available evidence, management
believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any.
Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured
as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the
benefits associated with tax positions taken that exceeds the amount measured as described above is provided for and reflected as a liability for
unrecognized tax benefits on the Company's consolidated balance sheets, along with any associated interest and penalties that would be payable to the
taxing authorities upon examination.
SPLP's policy is to record estimated interest and penalties related to the underpayment of income taxes as income tax provision in its consolidated
statements of operations.
The Company does not release income tax effects from AOCI until the underlying asset or liability to which the income tax relates has been
derecognized from the balance sheet or otherwise terminated.
Foreign Currency Translation
Assets and liabilities of SPLP's foreign subsidiaries are translated at current exchange rates and related revenues and expenses are translated at
average rates of exchange in effect during the year. Resulting cumulative translation adjustments are recorded as a separate component of other
comprehensive income or loss. Gains and losses arising from transactions denominated in a currency other than the functional currency of the reporting
entity are included in earnings.
Legal Contingencies
The Company is subject to litigation, proceedings, claims or assessments and various contingent liabilities incidental to its business or assumed in
connection with certain business acquisitions. The Company accrues a charge for a loss contingency when it believe it is both probable that a liability has
been incurred and the amount of the loss can be reasonably estimated. If the loss is within a range of specified amounts, the most likely amount is accrued,
and the Company accrues the minimum amount in the range if no amount within the range represents a better estimate. Generally, the Company records the
loss contingency at the amount we expect to pay to resolve the contingency, and the amount is generally not discounted to the present value. Amounts
recoverable under insurance contracts are recorded as assets when recovery is deemed probable. Contingencies that might result in a gain are not
recognized until realizable. Changes to the amount of the estimated loss or resolution of one or more contingencies could have a material impact on our
results of operations, financial position and cash flows.
Environmental Liabilities
The Company accrues for losses associated with environmental remediation obligations when such losses are probable and reasonably estimable.
Accruals for environmental liabilities are included in Accrued liabilities and Other non-current liabilities. Accruals for estimated losses from environmental
remediation obligations generally are recognized no later than completion of the remedial feasibility study.
These accruals are adjusted periodically as assessment and remediation efforts progress or as additional technical or legal information becomes
available. Costs of future expenditures for environmental remediation obligations are not discounted to their present value. Recoveries of environmental
remediation costs from other parties are recorded as assets when their receipt is deemed probable. The actual settlement of the Company’s liability for
environmental matters could materially differ from its estimates due to a number of uncertainties such as the extent of contamination, changes in
environmental laws and regulations, potential improvements in remediation technologies and the participation of other responsible parties.
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
66

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.
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. During the year ended December 31, 2024, the amendments in ASU 2023-07 were
adopted retrospectively. See Note 21 - "Segment Information" for the updated disclosure. This ASU did not have any impact on the Company's
consolidated balance sheets or statements of operations.
Accounting Standards Not Yet Effective
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures
(Subtopic 220-40), which requires a public business entity to disclose specific information about certain costs and expenses in the notes to its financial
statements for interim and annual reporting periods. Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU
2024-03. The objective of the disclosure requirements is to provide disaggregated information about a public business entity's expenses to help investors:
(a) better understand the entity's performance, (b) better assess the entity's prospects for future cash flows, and (c) compare an entity's performance over
time and with that of other entities. Early adoption is permitted. The new guidance may be applied either on a prospective or retrospective basis. The
amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after
December 15, 2027. The Company is currently evaluating the impact of this guidance on the Company's consolidated financial statement disclosures;
however, adoption is not expected to impact its consolidated balance sheets or statements of operations.
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 statements of operations.
In August 2023, the FASB issued ASU 2023-05, Business Combinations-Joint Venture Formations (Subtopic 805-60): Recognition and Initial
Measurement. 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 statements of operations.
3. 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 21 - "Segment
Information."
The following table presents the Company's revenues disaggregated by geography for the years ended December  31, 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.
67

Year Ended December 31,
2024
2023
United States
$
1,811,906 
$
1,744,076 
Foreign
215,942 
161,381 
Total revenue
$
2,027,848 
$
1,905,457 
Contract Balances
Differences in the timing of revenue recognition, billings and cash collections result in billed trade receivables, unbilled receivables (contract
assets) and deferred revenue (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. The balances of contract assets as of December 31, 2024 and 2023 were $3,409 and $5,317, respectively. As of December 31,
2024 and 2023, the Company's return assets account was not material.
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
19,655 
Recognition of unearned revenue
(21,033)
Balance at December 31, 2024
$
6,010 
Balance at December 31, 2022
$
4,380 
Deferral of revenue
23,004 
Recognition of unearned revenue
(19,996)
Balance at December 31, 2023
$
7,388 
4. LEASES
The Company has operating and finance leases for operating plants, warehouses, corporate offices, housing facilities, vehicles and equipment. The
Company's leases have remaining lease terms of up to 17 years.
The components of lease cost are as follows:
Year Ended December 31,
2024
2023
Operating lease cost
$
22,451 
$
17,497 
Short-term lease cost
$
630 
$
880 
Finance lease cost:
Amortization of right-of-use assets
$
2,002 
$
1,782 
Interest on lease liabilities
282 
227 
Total finance lease cost
$
2,284 
$
2,009 
68

Supplemental cash flow information related to leases is as follows:
Year Ended December 31,
2024
2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
$
21,438 
$
15,401 
Operating cash flows from finance leases
$
212 
$
221 
Financing cash flows from finance leases
$
2,467 
$
2,342 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases
$
10,634 
$
15,068 
Finance leases
$
2,394 
$
1,795 
Supplemental balance sheet information related to leases is as follows:
December 31, 2024
December 31, 2023
Location on

Consolidated Balance Sheet
Operating leases
Operating lease right-of-use assets
$
66,297 
$
76,746 
Operating lease right-of-use assets
Current operating lease liabilities
$
16,995 
$
17,770 
Other current liabilities
Non-current operating lease liabilities
53,134 
61,790 
Long-term operating lease liabilities
Total operating lease liabilities
$
70,129 
$
79,560 
Finance leases
Finance lease assets
$
5,472 
$
7,344 
Property, plant and equipment, net
Current finance lease liabilities
$
1,823 
$
2,086 
Other current liabilities
Non-current finance lease liabilities
2,785 
2,631 
Other non-current liabilities
Total finance lease liabilities
$
4,608 
$
4,717 
Year Ended December 31,
2024
2023
Weighted-average remaining lease term (years)
Operating leases
6.96 years
6.68 years
Finance leases
2.89 years
2.64 years
Weighted-average discount rate
Operating leases
5.63 %
5.31 %
Finance leases
6.46 %
5.43 %
Maturities of lease liabilities, as of December 31, 2024, are as follows:
Operating Leases
Finance Leases
2025
$
20,680 
$
2,089 
2026
16,370 
1,572 
2027
12,838 
1,014 
2028
9,240 
391 
2029
6,362 
66 
Thereafter
29,337 
7 
Total lease payments
94,827 
5,139 
Present value of current lease liabilities
16,995 
1,823 
Present value of long-term lease liabilities
53,134 
2,785 
Total present value of lease liabilities
70,129 
4,608 
Difference between undiscounted cash flows and discounted cash flows
$
24,698 
$
531 
69

5. 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 Steel Partners Group transferred an aggregate
of 3,597,744 shares of common stock, par value $0.10 per share, of 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. The Series E Convertible Preferred Stock was 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 voted together with the Steel Connect common stock and participated 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 was not consolidated for federal income tax purposes as of the Exchange
Transaction because the ownership in Steel Connect was 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:
70

(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 
$
— 
$
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 the Company's consolidated financial statements since the date of the Exchange
Transaction.
71

6. LOANS RECEIVABLE, INCLUDING LOANS HELD FOR SALE
Major classifications of Loans receivable, including loans held for sale, held by WebBank at December 31, 2024 and 2023 are as follows:
Total
Current
Non-current
December 31,
2024
%
December 31,
2023
%
December 31,
2024
December 31,
2023
December 31,
2024
December 31,
2023
Loans held for sale
$
739,822 
$
868,884 
$
739,822 
$
868,884 
$
— 
$
— 
Commercial real estate loans
$
4,485 
— %
$
2,078 
— %
— 
— 
4,485 
$
2,078 
Commercial and industrial
969,702 
90 %
980,722 
87 %
760,125 
646,890 
209,577 
333,832 
Consumer loans
110,697 
10 %
142,410 
13 %
88,350 
92,248 
22,347 
50,162 
Total loans
1,084,884 
100 %
1,125,210 
100 %
848,475 
739,138 
236,409 
386,072 
Less:
Allowance for credit losses
(26,463)
(25,486)
(21,316)
(25,486)
(5,147)
— 
Total loans receivable, net
$
1,058,421 
$
1,099,724 
827,159 
713,652 
231,262 
386,072 
Loans receivable, including loans held
for sale 
$
1,566,981 
$
1,582,536 
$
231,262 
$
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 $1,798,486 and
$1,967,021 at December 31, 2024 and 2023, respectively.
Loans with an amortized cost of approximately $225,601 and $381,256 were pledged as collateral for potential borrowings at December 31, 2024
and 2023, respectively. WebBank serviced $1,699 and $1,744 in loans for others at December 31, 2024 and 2023, respectively.
WebBank sold loans classified as loans held for sale of $29,767,668 and $19,907,907 during the year ended December  31, 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 were $29,886,737 and $20,356,321 during the year ended December 31, 2024 and 2023,
respectively.
WebBank's allowance for credit losses ("ACL") increased $977, or 4%, during the year ended December 31, 2024, as compared to the year ended
December 31, 2023. Changes in the ACL are summarized as follows:
Commercial Real
Estate Loans
Commercial &
Industrial
Consumer Loans
Total
December 31, 2022
$
28 
$
18,493 
$
11,169 
$
29,690 
Impact of adopting ASC 326
1 
1,144 
3,597 
4,742 
Charge-offs
— 
(51,691)
(9,262)
(60,953)
Recoveries
59 
1,479 
425 
1,963 
Provision
(13)
45,319 
4,738 
50,044 
December 31, 2023
$
75 
$
14,744 
$
10,667 
25,486 
Charge-offs
— 
(10,576)
(5,909)
(16,485)
Recoveries
— 
8,425 
404 
8,829 
Provision
177 
5,212 
3,244 
8,633 
December 31, 2024
$
252 
$
17,805 
$
8,406 
$
26,463 
(a)
72

The ACL and outstanding loan balances are summarized as follows:
December 31, 2024
Commercial Real
Estate Loans
Commercial &
Industrial
Consumer Loans
Total
Allowance for credit losses:
Individually evaluated for impairment
$
— 
$
6,360 
$
— 
$
6,360 
Collectively evaluated for impairment
252 
11,445 
8,406 
20,103 
Total
$
252 
$
17,805 
$
8,406 
$
26,463 
Outstanding loan balances:
Individually evaluated for impairment
$
— 
$
27,798 
$
— 
$
27,798 
Collectively evaluated for impairment
4,485 
941,904 
110,697 
1,057,086 
Total
$
4,485 
$
969,702 
$
110,697 
$
1,084,884 
December 31, 2023
Commercial Real
Estate Loans
Commercial &
Industrial
Consumer Loans
Total
Allowance for credit 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 $8,140 and $10,270 at December 31, 2024 and 2023,
respectively. Consumer loans past due 90 days or more and still accruing interest were $1,100 and $4,790 at December 31, 2024 and 2023, respectively.
The Company had nonaccrual loans of $26,342 and $814 at December 31, 2024 and December 31, 2023, respectively.
Past due loans (accruing and nonaccruing) are summarized as follows:
December 31, 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
Commercial real estate loans
$
4,485 
$
— 
$
— 
$
— 
$
4,485 
$
— 
$
— 
Commercial and industrial
949,692 
11,870 
8,140 
20,010 
969,702 
8,140 
26,342 
Consumer loans
107,327 
2,270 
1,100 
3,370 
110,697 
1,100 
— 
Total loans
$
1,061,504 
$
14,140 
$
9,240 
$
23,380 
$
1,084,884 
$
9,240 
$
26,342 
(a)    Represents nonaccrual loans that are not past due more than 30 days; however, full payment of principal and interest is still not expected.
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
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.
 (a)
 (a)
73

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:
December 31, 2024
Non - Graded
Pass
Special 
Mention
Sub- 
standard
Doubtful
Total Loans
Commercial real estate loans
$
— 
$
4,485 
$
— 
$
— 
$
— 
$
4,485 
Commercial and industrial
731,622 
210,282 
— 
27,798 
— 
969,702 
Consumer loans
110,697 
— 
— 
— 
— 
110,697 
Total loans
$
842,319 
$
214,767 
$
— 
$
27,798 
$
— 
$
1,084,884 
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 December 31, 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
$
1,602 
$
1,102 
$
579 
$
97 
$
59 
$
1,046 
$
— 
$
4,485 
Sub-standard
— 
— 
— 
— 
— 
— 
— 
— 
 Total Commercial Real Estate Loans
$
1,602 
$
1,102 
$
579 
$
97 
$
59 
$
1,046 
$
— 
$
4,485 
Commercial & Industrial
Risk Rating:
Pass
$
12,386 
$
78,722 
$
68,967 
$
49,974 
$
233 
$
— 
$
— 
$
210,282 
Non - graded
562,512 
9,193 
571 
1,712 
3,131 
5 
154,498 
731,622 
Sub-standard
1,360 
96 
23,906 
— 
— 
2,436 
— 
27,798 
 Total Commercial & Industrial
$
576,258 
$
88,011 
$
93,444 
$
51,686 
$
3,364 
$
2,441 
$
154,498 
$
969,702 
 Current period gross charge-offs
$
3,088 
$
5,196 
$
1,830 
$
112 
$
296 
$
54 
$
— 
$
10,576 
Consumer Loans
Risk Rating:
Non - graded
$
43,952 
$
34,964 
$
11,688 
$
872 
$
69 
$
96 
$
19,056 
$
110,697 
 Total Consumer Loans
$
43,952 
$
34,964 
$
11,688 
$
872 
$
69 
$
96 
$
19,056 
$
110,697 
 Current period gross charge-offs
$
303 
$
3,727 
$
1,615 
$
126 
$
33 
$
105 
$
— 
$
5,909 
74

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 
 Current period gross charge-offs
$
1,751 
$
11,932 
$
37,036 
$
508 
$
458 
$
6 
$
— 
$
51,691 
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 
 Current period gross charge-offs
$
2,315 
$
3,634 
$
242 
$
163 
$
301 
$
95 
$
2,512 
$
9,262 
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 years ended December  31, 2021 and 2020, WebBank issued 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 December 31, 2024, the total PPP loans and associated liabilities were $4,140 and $3,136,
respectively, with $2,526 and $1,614 recorded to Loans receivable, net and Long-term loans receivable, net, respectively, and $1,504 and $1,632 included
in Other current liabilities and Other borrowings, respectively, in the Company's consolidated balance sheet as of December 31, 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 received forgiveness payments from the SBA and borrowers of $12,520 during the year ended
December 31, 2024.
7. INVENTORIES, NET
A summary of Inventories, net is as follows:
75

December 31, 2024
December 31, 2023
Finished products
$
63,667 
$
62,798 
In-process
32,744 
34,376 
Raw materials
60,149 
68,895 
Fine and fabricated precious metal in various stages of completion
38,745 
36,393 
195,305 
202,462 
LIFO reserve
312 
(168)
Total
$
195,617 
$
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 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 December  31, 2024 and 2023, the Company had
approximately $36,117 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.
December 31, 2024
December 31, 2023
Supplemental inventory information:
Precious metals stated at LIFO cost
$
1,472 
$
2,113 
Precious metals stated under non-LIFO cost methods, primarily at fair value
$
37,585 
$
34,112 
Market value per ounce: (in whole dollars)
Silver
$
28.92 
$
23.93 
Gold
$
2,633.92 
$
2,069.11 
Platinum
$
907.78 
$
998.58 
Palladium
$
915.20 
$
1,108.32 
8. GOODWILL AND OTHER INTANGIBLE ASSETS, NET
A reconciliation of the change in the carrying amount of goodwill is as follows:
Diversified
Industrial
Energy
Financial Services
Supply Chain
Corporate and
Other
Total
Balance at 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 
Acquisitions
— 
— 
— 
— 
— 
— 
Other adjustments 
— 
— 
— 
(3,082)
— 
(3,082)
Currency translation adjustments
(86)
— 
— 
— 
— 
(86)
Balance at December 31, 2024:
Gross goodwill
155,337 
67,143 
9,474 
19,703 
81 
251,738 
Accumulated impairments
(41,278)
(64,790)
— 
— 
— 
(106,068)
Net goodwill
$
114,059 
$
2,353 
$
9,474 
$
19,703 
$
81 
$
145,670 
    Related to the Exchange Transaction with Steel Connect. See Note 5 - "Acquisitions and Divestitures".
(a)
(a)
76

Diversified
Industrial
Energy
Financial Services
Supply Chain
Corporate and
Other
Total
Balance at December 31, 2022:
Gross goodwill
$
155,183 
$
67,143 
$
9,474 
$
— 
$
81 
$
231,881 
Accumulated impairments
(41,278)
(64,790)
— 
— 
— 
(106,068)
Net goodwill
113,905 
2,353 
9,474 
— 
81 
125,813 
Acquisitions 
— 
— 
— 
22,785 
— 
22,785 
Currency translation adjustments
240 
— 
— 
— 
— 
240 
Balance at 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 
    Related to the Exchange Transaction with Steel Connect. See Note 5 - "Acquisitions and Divestitures".
For 2024, the Company utilized a quantitative approach for all of its reporting units. The assessment was based on a combination of income and
market approaches to estimate the fair value of the reporting units, which indicated that the fair values of the reporting units exceeded their respective
carrying values. Significant assumptions used in the discounted cash flow analyses included expected future earnings and cash flows, which are based on
management's current expectations, as well as the related risk-adjusted discount rate used to estimate fair value. There were no goodwill impairment
charges recorded as a result of these assessments. It is possible in future periods that further declines in market conditions, customer demand or other
potential changes in operations may increase the risk that these assets are impaired. At December 31, 2024, the goodwill related to the Electrical Products
reporting unit is at risk of future impairment if the fair value of this reporting unit, and its associated assets, decrease in value due to the amount and timing
of expected future cash flows, decreased customer demand for Electrical Products' services, an inability to execute management's business strategies, or
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. 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. As of December 31, 2024 the Electrical Products reporting unit had
$46,611 of goodwill and its fair value exceeded its net book value by 13%.
A summary of Other intangible assets, net is as follows:
December 31, 2024
December 31, 2023
Gross Carrying
Amount
Accumulated
Amortization
Net
Gross Carrying
Amount
Accumulated
Amortization
Net
Customer relationships
$
216,675 
$
157,854 
$
58,821 
$
216,968 
$
144,686 
$
72,282 
Trademarks, trade names and brand names
57,116 
25,121 
31,995 
57,160 
23,431 
33,729 
Developed technology, patents and patent applications
33,312 
26,848 
6,464 
33,102 
25,086 
8,016 
Other
16,610 
16,610 
— 
16,662 
16,512 
150 
Total
$
323,713 
$
226,433 
$
97,280 
$
323,892 
$
209,715 
$
114,177 
Trademarks with indefinite lives as of December 31, 2024 and 2023 were $22,165 and $22,210, respectively. Amortization expense related to
intangible assets was $17,079 and $16,587 for the years ended December 31, 2024 and 2023, respectively. The estimated amortization expense for each of
the five succeeding years and thereafter is as follows:
Year Ending December 31,
2025
2026
2027
2028
2029
Thereafter
Estimated amortization expense
$
15,704 
$
13,694 
$
13,014 
$
12,767 
$
10,518 
$
9,418 
(a)
(a)
77

9. PROPERTY, PLANT AND EQUIPMENT, NET
A summary of property, plant and equipment, net is as follows:
December 31, 2024
December 31, 2023
Land
$
22,343 
$
22,810 
Buildings and improvements
127,892 
118,552 
Machinery, equipment and other
528,983 
481,923 
Construction in progress
17,914 
21,098 
697,132 
644,383 
Accumulated depreciation
(421,357)
(390,403)
Property, plant and equipment, net
$
275,775 
$
253,980 
Depreciation expense was $42,231 and $39,978 for the years ended December 31, 2024 and 2023, respectively.
10. INVESTMENTS
The following table summarizes the Company's long-term investments as of December 31, 2024 and 2023:
Ownership %
Long-Term Investments Balance
December 31,
December 31,
2024
2023
2024
2023
DMC Global, Inc. 
9.9 %
— %
$
14,502 
$
— 
PCS-Mosaic 
58.3 %
58.3 %
11,671 
19,067 
Other long-term investments 
58,520 
22,158 
Total
$
84,693 
$
41,225 
(a)    Gross unrealized losses for DMC Global, Inc. totaled $12,189 for the year ended 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.
Loss of Associated Companies, Net of Taxes
Year Ended December 31,
2024
2023
STCN convertible notes
$
— 
$
391 
STCN common stock
— 
5,251 
PCS-Mosaic
5,615 
3,236 
Total
$
5,615 
$
8,878 
For the year ended December 31, 2024, the Company recorded a non-cash impairment charge of $5,615, net of taxes, related to an other-than-
temporary impairment ("OTTI") recognized on our equity method investment in PCS-Mosaic. During the year ended December 31, 2024, the Company
noted that certain factors were present that indicated that the investments decline in fair value was other-than-temporarily impaired, primarily driven by the
investee's decrease in revenue and operating results, and current forecasted results which were lower than expected performance at the time of the
investment. The Company calculated the fair value of PCS-Mosaic using a discounted cash flow model. After the evaluation, the Company determined the
investment in PCS-Mosaic to be other than temporarily impaired and adjusted its carrying value to its fair value. The Company may be required to
recognize an impairment loss in future reporting periods if and when our evaluation of the aforementioned factors indicates that the investment in PCS
Mosaic is determined to be other than temporarily impaired. Such determination will be based on the prevailing facts and circumstances at that time.
The amount of unrealized gains that relate to equity securities still held as of December 31, 2024 and 2023 are as follows:
Year Ended December 31,
2024
2023
Net losses (gains) recognized during the period on equity securities
$
2,983 
$
(7,074)
Less: Net (gains) recognized during the period on equity securities sold during the period
(4,672)
(7,046)
Unrealized (gains) recognized during the period on equity securities still held at the end of the period
$
(1,689)
$
(28)
(a)
(b)
(c)
78

Equity Method Investments
As of December 31, 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 Corporate and Other.
Beginning May 1, 2023, STCN was consolidated by the Company. Refer to Note 5 - "Acquisitions and Divestitures" for further details of the
exchange transactions between the Company and STCN.
Other Investments
WebBank has 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.
December 31, 2024
Amortized Cost
Gross Unrealized Gains
Estimated Fair Value
Carrying Value
Collateralized securities
$
127,647 
$
2,005 
$
129,652 
$
127,647 
Contractual maturities within:
Less than five years
121,427 
Five years to ten years
314 
After ten years
5,906 
Total
$
127,647 
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 assesses the ACL for HTM debt securities consistent with the approach described in Note 6 - "Loans Receivable, Including Loans Held
for Sale" for loans carried at amortized cost. 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 $1,306 and $2,199 at
December 31, 2024 and 2023, respectively is included in the net amortized cost balance of the securities. WebBank recorded a benefit for credit losses of
$893 and a provision for credit losses of $1,780 on HTM debt securities for the years ended December 31, 2024 and 2023, respectively.
79

11. DEPOSITS
A summary of WebBank deposits is as follows:
December 31, 2024
December 31, 2023
Time deposits year of maturity:
2024
$
— 
$
1,343,003 
2025
1,101,126 
348,826 
2026
173,787 
21,281 
2027
— 
— 
2028
— 
— 
2029
14 
— 
Total time deposits
1,274,927 
1,713,110 
Savings deposits
382,115 
368,582 
Total deposits 
$
1,657,042 
$
2,081,692 
Current
$
1,483,241 
$
1,711,585 
Long-term
173,801 
370,107 
Total deposits
$
1,657,042 
$
2,081,692 
(a)    WebBank has $0 and $1,075 at December 31, 2024 and 2023, respectively, of time deposits with balances greater than $250. The carrying value 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 deposits was $1,680,853 and $2,104,345 at December 31, 2024 and 2023, respectively.
12. 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:
December 31, 2024
December 31, 2023
Long-term debt:
Credit Agreement
118,800 
190,449 
Other debt - domestic
855 
922 
Subtotal
119,655 
191,371 
Less portion due within one year
67 
67 
Long-term debt
119,588 
191,304 
Total debt
$
119,655 
$
191,371 
Long-term debt as of December 31, 2024 matures in each of the next five years as follows:
Total
2025
2026
2027
2028
2029
Thereafter
Long-term debt
$
119,655 
$
67 
$
118,868 
$
720 
$
— 
$
— 
$
— 
As of December 31, 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 December 31, 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
(a)
80

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 December 31, 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 5.70% at December 31, 2024. As of December 31, 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
December 31, 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 December 31, 2024.
Moduslink 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 December 31, 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 December 31, 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.
13. 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 18 - "Fair Value Measurements"). As of December 31, 2024, outstanding derivatives mature within 3 to 5 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 December 31, 2024, the Company had the following outstanding forward contracts with settlement dates through January 2024. There were
no futures contracts outstanding as of December 31, 2024.
Commodity
Amount 

(in whole units)
Notional Value
Silver
3,114 ounces
$
175 
Gold
1 ounces
$
(50)
Palladium
1,036 ounces
$
990 
Platinum
68 ounces
$
64 
Copper
154,000 pounds
$
645 
Tin
18 metric tons
$
533 
81

Fair Value Hedges: Certain forward contracts are accounted for as fair value hedges under U.S. GAAP for the Company's precious metal
inventory carried at fair value. These contracts hedge 1,500 ounces (in whole units) of silver and a majority of the Company's pounds of copper. The fair
value 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 and tin, are accounted for as
economic hedges. As these derivatives are not designated as accounting hedges under U.S. GAAP, 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, the Company has determined that there is minimal
credit risk of default. 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)
December 31, 2024
December 31, 2023
Balance Sheet Location
Fair Value
Balance Sheet Location
Fair Value
Derivatives designated as ASC Topic 815 hedges
Commodity contracts
Prepaid expenses and other current
assets
$
82 
Other liabilities
$
(25)
Derivatives not designated as ASC Topic 815 hedges
Commodity contracts
Prepaid expenses and other current
assets
$
28 
Prepaid Expenses and Other Current
Assets
$
75 
Economic interests in loans
Other non-current assets
$
5,410 
Other non-current assets
$
4,903 
The effects of fair value and cash flow hedge accounting in the consolidated statements of operations for the years ended December 31, 2024 and
2023 are not material.
The effects of derivatives not designated as ASC Topic 815 hedging instruments in the consolidated statements of operations for the years ended
December 31, 2024 and 2023 are as follows:
Amount of Gain (Loss) Recognized in Income
Year Ended December 31,
Derivatives Not Designated as Hedging Instruments
Location of Gain (Loss) Recognized in Income
2024
2023
Commodity contracts
Other (expense) income, net
$
(644)
$
895 
Economic interests in loans
Financial Services Revenue
5,940 
4,713 
Total derivatives
$
5,296 
$
5,608 
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 consolidated balance sheets. The contractual amounts of those instruments reflect the
extent of involvement WebBank has in particular classes of financial instruments.
As of December 31, 2024 and 2023, WebBank's undisbursed loan commitments totaled $430,960 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.
82

Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee, and in some cases are subject
to ongoing adjustment by WebBank . 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 Marketing Partner.
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.
14. PENSION AND OTHER POST-RETIREMENT BENEFITS
The Company's significant pension plans include two defined benefit pension plans. The WHX Pension Plan II ("WHX Plan II") is sponsored by
the Company's subsidiary, Handy & Harman Ltd. ("HNH"). HNH's subsidiary, JPS Industries Holdings LLC ("JPS"), sponsors the Retirement Pension Plan
for Employees of JPS Industries Holdings LLC ("JPS Pension Plan"). All future benefit accruals under the WHX Plan and JPS Pension Plan were frozen as
of December 31, 2015, or such earlier effective dates as were applicable to each respective group. The WHX Plan II and the JPS Pension Plan are
collectively the "SPLP Plans".
Steel Connect sponsors two defined benefit pension plans covering certain of ModusLink's employees in its Netherlands facility and one unfunded
defined benefit pension plan covering certain of its employees in Japan (collectively the "STCN Plans"). The annual measurement date for the STCN Plans
is July 31  which is the same as Steel Connect's fiscal year end. The STCN Plans accrued pension liabilities were approximately $3,680 and $3,738 as of
May 1, 2024, the Exchange Transaction closing date, and December 31, 2024, respectively.
The Company's other pension and post-retirement benefit plans are not significant individually or in the aggregate. The financial tables below do
not include amounts for the STCN Plans.
For the WHX II Plan and the JPS Pension Plan, net actuarial losses are being amortized over the average future lifetime of the participants in each
plan's population. The Company believes that use of the future lifetime of the participants is appropriate because the plans are inactive.
The following table presents the components of net pension expense (income) for the Company's pension plans:
Year Ended December 31,
2024
2023
Interest cost
$
16,675 
$
18,123 
Expected return on plan assets
(20,042)
(17,868)
Amortization of actuarial loss and prior service credit
8,585 
11,470 
Total
$
5,218 
$
11,725 
Pension expense (income) is included in Selling, general and administrative expenses in the consolidated statements of operations.
Actuarial assumptions used to develop the components of pension expense were as follows:
Year Ended December 31,
2024
2023
Weighted-average discount rate
4.95 %
5.27 %
Weighted-average expected long-term rate of return on plan assets
6.50 %
6.50 %
Summarized below is a reconciliation of the funded status for the Company's qualified defined benefit pension plans:
st
83

December 31,
2024
2023
Change in benefit obligation:
Benefit obligation at January 1
$
363,184 
$
372,632 
Interest cost
16,675 
18,123 
Actuarial (gain) loss
(15,074)
4,743 
Benefits paid
(33,247)
(32,314)
Benefit obligation at December 31
331,538 
363,184 
Change in plan assets:
Fair value of plan assets at January 1
324,401 
291,378 
Actual returns on plan assets
26,703 
48,210 
Benefits paid
(33,247)
(32,314)
Company contributions
10,208 
17,127 
Fair value of plan assets at December 31
328,065 
324,401 
Funded status
$
(3,473)
$
(38,783)
Amounts recognized on the consolidated balance sheets:
Non-current liability
$
(3,473)
$
(38,783)
Total
$
(3,473)
$
(38,783)
The table below summarizes the weighted-average assumptions used to determine benefit obligations:
Year Ended December 31,
2024
2023
Weighted-average discount rate
5.40 %
4.96 %
Pretax amounts included in Accumulated other comprehensive loss are as follows:
Year Ended December 31,
2024
2023
Net actuarial loss
$
139,117 
$
169,436 
Accumulated other comprehensive loss
$
139,117 
$
169,436 
Other pretax changes in plan assets and benefit obligations recognized in comprehensive income are as follows:
Year Ended December 31,
2024
2023
Current year actuarial gain
$
(21,734)
$
(25,599)
Amortization of actuarial loss
(8,585)
(11,470)
Total recognized in comprehensive income
$
(30,319)
$
(37,069)
Benefit obligations were in excess of plan assets at both December 31, 2024 and 2023. Additional information for the plans with accumulated
benefit obligations in excess of plan assets follows:
December 31,
2024
2023
Projected benefit obligation
$
331,538 
$
363,184 
Accumulated benefit obligation
$
331,538 
$
363,184 
Fair value of plan assets
$
328,065 
$
324,401 
In determining the expected long-term rate of return on plan assets, the Company evaluated input from various investment professionals. In
addition, the Company considered its historical compound returns, as well as the Company's forward-looking expectations. The Company determines its
actuarial assumptions for its pension plans each year to calculate liability information as of December 31, and pension expense or income for the following
year. The discount rate assumption is derived from the rate of return on high-quality bonds as of December 31 of each year.
The Company's investment policy is to maximize the total rate of return with a view to long-term funding objectives of the pension plans to ensure
that funds are available to meet benefit obligations when due. Pension plan assets are diversified to the extent necessary to minimize risk and to achieve an
optimal balance between risk and return. Target asset allocation ranges are identified in the Steel Partners Pension Investment Committee Investment Policy
Statement, as reviewed and updated from
84

time to time. Pension plans' assets are diversified as to type of assets, investment strategies employed and number of investment managers used.
Investments may include equities, fixed income, cash equivalents, convertible securities and private investment funds. Derivatives may be used as part of
the investment strategy. The Company may direct the transfer of assets between investment managers in order to rebalance the portfolio in accordance with
asset allocation guidelines established by the Steel Partners Pension Investment Committee.
The table below presents the fair value of the Company's plan assets by asset category segregated by level within the fair value hierarchy, as
follows:
Assets at Fair Value as of December 31, 2024
Asset Class
Level 1
Level 2
Level 3
Total
Equity securities:
U.S. and international mid-cap
$
42,249 
$
— 
$
— 
$
42,249 
U.S. and international large-cap
93,629 
— 
— 
93,629 
U.S. and international small-cap
3,687 
— 
— 
3,687 
Mortgage backed securities
— 
12,245 
— 
12,245 
U.S. Government debt securities
— 
2,289 
— 
2,289 
Corporate bonds and loans
2,851 
14,419 
— 
17,270 
Convertible promissory notes
— 
170 
1,814 
1,984 
Subtotal
$
142,416 
$
29,123 
$
1,814 
173,353 
Pension assets measured at net asset value
Hedge funds and hedge fund-related strategies
104,367 
Private equity
41,886 
Total pension assets measured at net asset value
146,253 
Cash and cash equivalents
7,397 
Net payables
1,062 
Total pension assets
$
328,065 
Assets at Fair Value as of December 31, 2023
Asset Class
Level 1
Level 2
Level 3
Total
Equity securities:
U.S. and international mid-cap
$
39,219 
$
— 
$
— 
$
39,219 
U.S. and international large-cap
77,721 
— 
— 
77,721 
U.S. and international small-cap
6,051 
— 
— 
6,051 
Mortgage and other asset-backed securities
— 
14,318 
— 
14,318 
U.S. Government debt securities
— 
1,244 
— 
1,244 
Corporate bonds and loans
5,032 
14,420 
— 
19,452 
Convertible promissory notes
— 
— 
1,814 
1,814 
Subtotal
$
128,023 
$
29,982 
$
1,814 
159,819 
Pension assets measured at net asset value
Hedge funds and hedge fund-related strategies
110,999 
Private equity
42,691 
Total pension assets measured at net asset value
153,690 
Cash and cash equivalents
10,626 
Net payables
266 
Total pension assets
$
324,401 
(1)    Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value
hierarchy.
During 2024, the changes to the pension plans' Level 3 assets were as follows:
Year Ended December 31, 2024
Convertible Promissory
Notes
Beginning balance as of January 1, 2024
$
1,814 
Gains or losses included in changes in net assets
— 
Settlements
— 
Ending balance as of December 31, 2024
$
1,814 
 (1)
 (1)
85

During 2023, the changes to the pension plans' Level 3 assets were as follows:
Year Ended December 31, 2023
Convertible Promissory
Notes
Beginning balance as of January 1, 2023
$
2,643 
Gains or losses included in changes in net assets
171 
Settlements
(1,000)
Ending balance as of December 31, 2023
$
1,814 
The Company's policy is to recognize transfers in and transfers out of Level 3 as of the date of the event or change in circumstances that caused
the transfer. During 2024 and 2023, there was no transfer in or transfer out of Level 3.
The following tables present the category, fair value, unfunded commitments, redemption frequency and redemption notice period of those assets
for which fair value was estimated using the net asset value per share (or its equivalents), as well as plan assets which have redemption notice periods, as of
December 31, 2024 and 2023:
Class Name
Fair Value
December 31, 2024
Unfunded
Commitments
Redemption
Frequency
Redemption Notice
Period
Hedge funds
$
104,367 
$
— 
(1)
 60 - 180 days
Private equity
41,886 
10,102 
 (2)
(2)
Class Name
Fair Value
December 31, 2023
Unfunded
Commitments
Redemption
Frequency
Redemption Notice
Period
Hedge funds
$
110,999 
$
— 
(1)
 60 - 180 days
Private equity
42,691 
11,731 
(2)
(2)
(1)    Various. Includes funds with monthly, quarterly and annual redemption frequencies, redemption windows of 1 to 5 years following the anniversary of the initial
investments, limited redemptions of 25% per quarter to 20% per annum, as well as subject to 10% holdback.
(2)    Voluntary withdrawals are not permitted. The funds have various durations from 3 to 11 years.
Hedge Funds and Hedge Fund-Related Strategies. The strategies include U.S. and international equity, event driven, value driven and long-term capital
growth.
Private Equity. The strategies include growth and value oriented private companies and investment funds, as well as asset and revenue based lending.
Contributions
Employer contributions consist of funds paid from employer assets into a qualified pension trust account. The Company's funding policy is to
contribute annually an amount that satisfies the minimum funding standards of the Employee Retirement Income Security Act.
For the year ending December 31, 2025, the minimum required contribution to the Company's pension plans is approximately $6,030. 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.
Benefit Payments
Estimated future benefit payments for the SPLP Plans are as follows:
86

Years
Pension Benefit
Payments
2025
$
36,699 
2026
35,418 
2027
34,082 
2028
32,607 
2029
31,145 
2027-2031
132,256 
15. CAPITAL AND ACCUMULATED OTHER COMPREHENSIVE LOSS
As of December 31, 2024, the Company had 19,078,201 Class A units (regular common units) outstanding.
Common Unit Repurchases
The Board of Directors has approved the repurchase of up to an aggregate of 9,520,240 of the Company's common units (the "Repurchase
Program"). 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.
During the year ended December 31, 2024, the Company purchased 2,360,634 common units for an aggregate purchase price of $109,411. Under
the Repurchase Program, during the year ended December 31, 2024, the Company purchased 1,092,831 common units for an aggregate purchase price of
$46,021. From the inception of the Repurchase Program until December 31, 2024 the Company had purchased 8,901,451 common units for an aggregate
purchase price of approximately $210,418. As of December 31, 2024, there remained 618,789 units that may yet be purchased under the Repurchase
Program. From January 1, 2025 through March 3, 2025, the Company repurchased 1,999 common units for $82.
In addition to common units repurchased under the Repurchase Program, on September 1, 2024, the Company's Board of Directors approved the
Company entering into a purchase agreement with 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.
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 includes, as appropriate, any tandem distribution equivalent rights granted with respect to an award (collectively, the "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 (the "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 155,000 restricted units under the Second A&R 2018 Plan during the year ended December 31, 2024. Such LP
Units were valued based upon the market value of the Company's LP Units on the date of grant, and collectively represent approximately $3,390 of
unearned compensation that will be recognized as expense ratably over the vesting period of the units. The grants have a cliff vesting period of
approximately two years from the date of grant. As of December 31, 2024, total unrecognized compensation costs related to restricted units were $3,404
and are expected to be recognized over a weighted average remaining period of 1.8 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 $9,519 and $9,633 to preferred unitholders for the
years ended December 31, 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 directors of the general partner of the Company approved the repurchase of
87

up to 400,000 of the Company's 6.0% Series A preferred units (the "Preferred Repurchase Program"). Any purchases made by the Company and/or its
applicable subsidiaries under the Preferred 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. The Preferred Repurchase Program has no termination date. During
the year ended December 31, 2024, the Company repurchased 80,881 preferred units for $1,945. On February 6, 2025, the board of directors of the general
partner of the Company approved the repurchase of an additional 1,000,000 of the Company's 6.0% Series A preferred units. From January 1, 2025 through
March 3, 2025, the Company repurchased 508,812 preferred units for $12,486.
The SPLP Preferred Units have no voting rights, except that holders of the preferred units 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 December 31, 2024 and 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 December  31, 2024 and 2023, there were 6,341,247 and 6,422,128 SPLP Preferred Units outstanding,
respectively.
On February 14, 2025, the Board of SPH GP declared a regular quarterly cash distribution of $0.375 per unit, payable March 15, 2025 to
unitholders of record as of March 1, 2025, on its SPLP Preferred Units.
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. 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 was
$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 ("VWAP") 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. As of the annual measurement date on
December  31, 2024, 76,323 Incentive Units vested as the Company’s VWAP exceeded the baseline equity value of $41.82, and upon vesting, were
classified as Class C units. Following their issuance, the Incentive Units will automatically convert to common units at a future date (as discussed below).
The Incentive Unit award was granted in 2012 for accounting purposes and expense was recognized over the derived service period; therefore, no expense
will be recognized for future issuances or vesting of Incentive Unit Awards.
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. As of December 31, 2024, the number of Incentive Units for future vesting in awards was 19,154,524, which is the sum of 19,078,201,
common units outstanding and 76,323 vested Incentive Units as of year end. As of December 31, 2024, the baseline equity value per common unit was
calculated as $42.97 due to vesting of Incentive Units. 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.
88

Accumulated Other Comprehensive Loss
Changes, net of tax, where applicable, in AOCI are as follows:

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 
$
— 
$
2,120 
$
28,531 
$
30,651 
Balance at December 31, 2023
$
(92)
$
(14,993)
$
(106,138)
$
(121,223)
Net other comprehensive income attributable to common unitholders 
$
— 
$
(3,650)
$
22,492 
$
18,842 
Balance at December 31, 2024
$
(92)
$
(18,643)
$
(83,646)
$
(102,381)
(a)    Net of tax provision of approximately $7,275 and tax benefit of approximately $8,980 for the years ended December 31, 2024 and 2023, respectively, principally
related to changes in pension liabilities and other post-retirement benefit obligations.
16. INCOME TAXES
The income tax balances as of December 31, 2024, are inclusive of Steel Connect as a result of the Exchange Transaction.
The domestic and foreign components of income before income taxes were as follows:
Year Ended December 31,
2024
2023
Income before income taxes and equity method investments
Domestic
$
218,189 
$
154,220 
Foreign
5,393 
6,986 
Total
$
223,582 
$
161,206 
The components of the income tax benefits were as follows:
Year Ended December 31,
2024
2023
Current tax provision:
Federal
$
29,569 
$
16,821 
State
9,325 
9,035 
Foreign
1,763 
2,539 
Total income taxes, current
40,657 
28,395 
Deferred tax benefit:
Federal
(84,980)
(26,064)
State
(9,098)
(3,715)
Foreign
166 
(290)
Total income taxes, deferred
(93,912)
(30,069)
Income tax benefit
$
(53,255)
$
(1,674)
Effective Tax Rate Recognition
Reconciliation of the income tax benefit computed at the federal statutory rate of 21 percent to the actual income tax rate are as follows:
(a)
(a)
89

Year Ended December 31,
2024
2023
Income before income taxes and equity method investments
$
223,582 
$
161,206 
Federal income tax provision at statutory rate
$
46,952 
$
33,853 
Loss passed through to common unitholders 
1,783 
4,216 
48,735 
38,069 
State income taxes, net of federal effect
4,441 
5,179 
Change in valuation allowance
(76,081)
(12,554)
Foreign tax rate differences
(507)
437 
Uncertain tax positions
(3,177)
(276)
Federal and state audits
(294)
56 
Unrealized gain on investments 
2,136 
(4,640)
Impairment of subsidiary investments
(4,032)
— 
Expiration of NOL carryforwards
4,823 
— 
Tax-deferred equity contributions
— 
(28,022)
Deferred credit
— 
(1,929)
Transactions between related parties
2,175 
2,140 
Unrealized gain on investment in SPLP common units by related parties
(32,941)
— 
Permanent differences and other
1,467 
(134)
Income tax benefit
$
(53,255)
$
(1,674)
(a)    Represents taxes at statutory rate on income and losses for which no tax expense or benefit is recognizable by SPLP and certain of its subsidiaries which are taxed as
pass-through entities. Such income and losses are allocable directly to SPLP's unitholders and taxed when realized.
(b)    Represents taxes on unrealized gains on investment from related parties, which are eliminated for financial statement purposes.
Income tax benefit was $53,255 and $1,674 for 2024 and 2023, respectively. The Company's effective tax rate for the year ended December 31,
2024, was a benefit of 23.8% as compared to a benefit of 1.0% for the year ended December 31, 2023. The increase in the tax benefit for the year ended
December 31, 2024, was primarily attributable to the release of valuation allowances on the Company's net operating losses as described below and the
decrease in tax expense related to unrealized gains on investments from related parties that are eliminated for financial statement purposes. This benefit was
partially offset by increases in income before income tax, the effective state income tax rates associated with the Company's operations, and the expiration
of a portion of the Company's NOL carryforwards.
Deferred Taxes
The effects of temporary differences that give rise to the deferred tax assets and liabilities are presented as follows:
(a)
(b)
90

December 31,
2024
2023
Deferred Tax Assets:
Operating loss carryforwards
$
101,321 
$
117,930 
Postretirement and postemployment employee benefits
2,675 
11,079 
Tax credit carryforwards
1,609 
923 
Accrued costs
10,158 
8,875 
Investment impairments and unrealized losses
2,874 
1,086 
Inventories
5,126 
5,551 
Environmental costs
5,778 
6,441 
Section 174 costs 
12,814 
9,218 
Allowance for doubtful accounts and loan losses
7,486 
7,353 
Lease liabilities
13,678 
14,996 
Deferred compensation
3,477 
5,030 
Other
1,886 
1,961 
Gross deferred tax assets
168,882 
190,443 
Deferred Tax Liabilities:
Intangible assets
(25,079)
(25,673)
Fixed assets
(31,500)
(28,454)
Unrealized gain on investment 
(4,033)
(37,803)
Right of use assets
(12,728)
(14,448)
Other
(1,006)
(1,445)
Gross deferred tax liabilities
(74,346)
(107,823)
Valuation allowance 
(24,310)
(100,392)
Net deferred tax assets (liabilities)
$
70,226 
$
(17,772)
(a)    Legislation enacted in 2017 amended Section 174 to require capitalization of all research and development ("R&D") costs incurred in tax years beginning after
December 31, 2021. These costs are required to be amortized over five years if the R&D activities are performed in the U.S., or over 15 years if the activities were
performed outside the U.S. The Company capitalized $24,888 and $23,940 of R&D expenses incurred as of December 31, 2024 and 2023, respectively.
(b)    The prior year balance includes taxes on unrealized gains on investment from related parties, which are eliminated for financial statement purposes.
(c)    Certain subsidiaries of the Company establish valuation allowances when they determine, based on their assessment, that it is more likely than not that certain deferred
tax assets will not be fully realized. This assessment is based on, but not limited to, historical operating results, uncertainty in projections of taxable income and other
uncertainties that may be specific to a particular business.
The net change in the total valuation allowance for the year ended December 31, 2024, was a decrease of $76,082. This decrease is primarily due
to the release of the U.S. valuation allowance associated with the portion of the Company's net deferred tax assets, including NOLs, attributable to Steel
Connect. The Company 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, the Company determined that it is more likely than not that the deferred tax assets will be
realized. As a result, the Company released substantially all of its valuation allowance on the NOLs carried forward after July 31, 2024, other than the
valuation allowance relating to $933 of state NOLs that the Company anticipates will expire unutilized. This release of the valuation allowance resulted in a
non-cash income tax benefit of $73,380 for the year ended December 31, 2024.
The Company recognized a total benefit of $37,773, of which $4,833 were attributable to state income taxes, related to the redemption of SPLP
common units held by related parties in anticipation of the Short-Form Merger. The Company redeemed such units as part of the transaction that took place
on January 2, 2025, related to the acquisition of Steel Connect equity. As the reversal of the related deferred tax liability was apparent as of December 31,
2024, the Company recognized such benefit during the period.
At December 31, 2024, the Company's corporate subsidiaries had U.S. federal NOL carryforwards of $350,684; of this amount, $243,572 expire
in 2025 through 2037 and $107,112 are not subject to expiration. In addition, there are federal NOLs that can only be utilized by the corporate subsidiaries
that generated the prior year losses, commonly called separate return limitation year ("SRLY") NOLs, totaling $29,193, of which $23,619 will expire in
2028 through 2037, and $5,574 which are not subject to expiration.
The Company's corporate subsidiaries have NOLs in foreign jurisdictions totaling $81,169. A valuation allowance has been established against a
significant portion of the deferred tax asset associated with the foreign NOLs. There are also NOLs in
(a)
(b)
(c)
91

various U.S. states in which the subsidiaries operate. As of December 31, 2024, the amount totaled $18,612 and expires in 2025 through 2045. A valuation
allowance has been established against a significant portion of the deferred tax asset associated with these state NOLs.
U.S. income taxes were not provided on cumulative undistributed foreign earnings as of December 31, 2024 and 2023. The Company's foreign
undistributed earnings generally remain indefinitely reinvested in foreign operations, and therefore no provision for U.S. income taxes was accrued, with
the exception of the foreign earnings of Steel Connect. The Company believes that in future years Steel Connect will repatriate its foreign earnings and has
accrued for potential withholding taxes that may be imposed as a result of the repatriation, which the Company believes would be minor. Foreign laws may
delay or add cost to any such repatriation, and these costs or delays may be significant.
The Company's corporate subsidiaries have no federal research and development credit carryforwards as of December 31, 2024, and state research
and development credit carryforwards of $17,740, a significant amount of which do not expire. The Company has a reserve against a significant portion of
its deferred tax assets associated with the credit carryforwards.
The Company's net deferred income tax assets and liabilities were reported on the consolidated balance sheet as follows.
Year Ended December 31,
2024
2023
Deferred tax assets
$
80,273 
$
581 
Deferred tax liabilities
(10,047)
(18,353)
Net deferred income tax liabilities
$
70,226 
$
(17,772)
Unrecognized Tax Benefits
U.S. GAAP provides that the tax effects from an uncertain tax position can be recognized in the consolidated financial statements only if the
position is more likely than not of being sustained on audit, based on the technical merits of the position. The change in the amount of unrecognized tax
benefits for 2024 and 2023 was as follows:
Balance at December 31, 2022
$
39,857 
Additions for tax positions related to current year
414
Additions for tax positions related to prior years
1,258 
Payments
— 
Reductions due to lapsed statutes of limitations and expiration of credits
(1,576)
Balance at December 31, 2023
$
39,953 
Additions for tax positions related to current year
585 
Additions for tax positions related to prior years
2,040 
Payments
— 
Reductions due to lapsed statutes of limitations and expiration of credits
(5,770)
Balance at December 31, 2024
$
36,808 
The Company's total gross unrecognized tax benefits were $36,808 and $39,953 at December 31, 2024 and 2023, respectively, of which $33,454,
if recognized, would affect the provision for income taxes. In 2024, the Company reversed $5,770 of reserves upon the expiration of the statutes of
limitations with applicable taxing authorities and the expiration of time for utilizing certain credits for which a full reserve is maintained. As of
December 31, 2024, it is reasonably possible that unrecognized tax benefits may decrease by $4,592 in the next 12 months due to the expiration of statutes
of limitations. The Company recognizes interest and penalties, if applicable, related to uncertain tax positions in its income tax provision in the
consolidated statement of operations. For 2024 and 2023, the amount of such interest and penalties recognized was $2,164 and $1,434, respectively.
The Company is subject to U.S. federal income tax, as well as income taxes in various domestic states and foreign jurisdictions in which the
Company operated or formerly operated. The Company is not currently under U.S. federal tax examination or under audit in any foreign jurisdictions, and
the Company is generally no longer subject to U.S. federal income tax examination for any year prior to 2020, or to state or local income tax examinations
for any year prior to 2019. Nonetheless,
92

NOLs generated in prior years are subject to examination and potential adjustment by the taxing authorities upon their utilization in subsequent years’ tax
returns.
The Company has ongoing state audits in various state tax jurisdictions. It is difficult to predict the final outcome or timing of resolution of any
particular tax matter, but the Company has not identified any material adjustments with respect to the state audits to date.
17. 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:
December 31,
2024
2023
Net income
$
271,222 
$
154,002 
Net income attributable to noncontrolling interests in consolidated entities
(9,660)
(3,173)
Net income attributable to common unitholders
261,562 
150,829 
Effect of dilutive securities:
Interest expense from SPLP Preferred Units 
12,229 
12,311 
Net income attributable to common unitholders – assuming dilution
$
273,791 
$
163,140 
Net income per common unit - basic
Net income attributable to common unitholders
$
13.07 
$
7.04 
Net income per common unit – diluted
Net income attributable to common unitholders
$
11.38 
$
6.43 
Denominator for net income per common unit - basic
20,006,429 
21,433,900 
Effect of dilutive securities:
Incentive units
— 
114,797 
Unvested restricted common units
45,315 
20,062 
SPLP Preferred Units
4,001,644 
3,788,037 
Denominator for net income per common unit - diluted 
24,053,388 
25,356,796 
(a)    Assumes the SPLP Preferred Units were redeemed in common units as described in Note 15 - "Capital and Accumulated Other Comprehensive Loss."
18. FAIR VALUE MEASUREMENTS
Financial assets and liabilities measured at fair value on a recurring basis in the Company's consolidated financial statements as of December 31,
2024 and 2023 are summarized by type of inputs applicable to the fair value measurements as follows:
December 31, 2024
Level 1
Level 2
Level 3
Total
Assets:
Long-term investments
$
67,667 
$
411 
$
4,944 
$
73,022 
Precious metal and commodity inventories recorded at fair value
41,202 
— 
— 
41,202 
Economic interests in loans 
— 
— 
5,410 
5,410 
Commodity contracts on precious metal and commodity inventories
— 
110 
— 
110 
Warrants 
— 
— 
1,182 
1,182 
Total
$
108,869 
$
521 
$
11,536 
$
120,926 
Liabilities:
Other precious metal liabilities
37,067 
— 
— 
37,067 
Total
$
37,067 
$
— 
$
— 
$
37,067 
(a)
(a)
 (a)
(b)
(c)
93

December 31, 2023
Level 1
Level 2
Level 3
Total
Assets:
Long-term investments
$
15,965 
$
447 
$
5,746 
$
22,158 
Precious metal and commodity inventories recorded at fair value
35,361 
— 
— 
35,361 
Economic interests in loans 
— 
— 
4,903 
4,903 
Commodity contracts on precious metal and commodity inventories
— 
75 
— 
75 
Warrants 
— 
— 
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 detail of the long-term investments see Note 10 - "Investments." The investment in PCS-Mosaic of $11,671 and 19,067 as of December 31, 2024 and
December 31, 2023, respectively, is not included in the fair value leveling tables as it is valued at cost.
(b)    For additional detail of the economic interests in loans see Note 13 - "Financial Instruments."
(c)    Included within Other non-current assets in the Company's consolidated balance sheets.
There were no transfers of securities among the various measurement input levels during the years ended December 31, 2024 or 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 13 - "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 in
Associated
Companies 
Economic Interests
in Loans 
Warrants 
Total
Balance at December 31, 2022
$
52,336 
$
5,728 
$
3,564 
$
61,628 
Purchases
2,898 
— 
— 
2,898 
Sales, cash collections, and eliminations
(49,521)
(5,538)
— 
(55,059)
Realized gains on sale
(7)
4,713 
(2,128)
2,578 
Unrealized gains
40 
— 
— 
40 
Balance at December 31, 2023
5,746 
4,903 
1,436 
12,085 
Purchases
476 
— 
— 
476 
Sales, cash collections, and eliminations
— 
(5,433)
— 
(5,433)
Realized gains on sale
(20)
5,940 
(254)
5,666 
Unrealized losses
(1,258)
— 
— 
(1,258)
Balance at December 31, 2024
$
4,944 
$
5,410 
$
1,182 
$
11,536 
(a)    Unrealized gains and losses are recorded in Loss of associated companies, net of taxes in the Company's consolidated statements of operations.
 (a)
(b)
(c)
(a)
(b)
(b)
94

(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 December 31, 2023 was
eliminated as the Company's ownership of Steel Connect increased to 84.0% on May 1, 2023, as discussed in Note 5 - "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 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 13 -
"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 flows 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.
95

19. 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, results of operations or cash flows 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 December 31, 2024, on a consolidated basis, the Company recorded
liabilities of $1,995 and $25,625 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:
96

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 $14,421 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 $802 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 $2,407 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. 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. 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.
97

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 certain 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 investigations. Post-remediation groundwater
monitoring will be conducted following completion of soil excavation. A reserve of $2,883 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 $1,036 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 (the "plaintiff"), filed a verified complaint, Reith v.
Lichtenstein, et al., C.A. No. 2018-0277-MTZ (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 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 included 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 demanded damages in an unspecified amount for STCN and its stockholders, together with rescission, disgorgement and other equitable
relief. On August 13, 2021, the Company and the remaining Reith litigation defendants ("defendants") entered into a memorandum of understanding (the
"MOU") with the plaintiff in connection with the settlement of the Reith litigation. The Court of Chancery declined to approve the proposed settlement on
September 23, 2022.
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, the defendants and Mr. Reith entered into a Stipulation and Agreement of Compromise, Settlement and Release (the
"Settlement Agreement") to resolve the Reith litigation (the "Settlement"). Among other things, the Second Proposed Settlement Agreement requires that
defendants shall cause their insurers to make a cash payment of $6,000 to STCN (the "Settlement Payment") 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 Settlement Agreement.
On December 13, 2024, the Court approved the Settlement and approved an award of $1,154 in fees and expenses to plaintiff's counsel, and
granted a mootness fee to plaintiff's counsel of $463 (collectively, "Counsel's Awards"). The Court also approved the requirement in the Second Proposed
Settlement Agreement that STCN adopt (i) certain amendments to the Stockholders' Agreement relating to the allocation of the Reith Net Litigation
Proceeds (as defined in the Stockholders' Agreement) and (ii) certain corporate governance policies and practices, including a formal review process for
compensation clawbacks, enhancing the process for granting equity awards and keeping records of equity awards granted under STCN's stock plans,
further enhancing board committee independence, and reducing the materiality threshold for review of related party transactions under the Stockholders'
Agreement. The Stockholders' Agreement terminated in connection with the consummation of the Short-Form Merger.
On December 16, 2024, the Court entered an order and final judgment memorializing its approval of the Settlement (the "Judgment"). The
Judgment became effective on January 15, 2025. On January 2, 2025, the Company entered into a Contingent
98

Value Rights Agreement (the "CVR Agreement") with Equiniti Trust Company, LLC, as rights agent. Pursuant to the CVR Agreement, at the effective time
of the Short-Form Merger, eligible holders of Steel Connect Common Stock received contingent value rights to receive a portion of the Reith Net Litigation
Proceeds (as defined in the CVR Agreement), if any, pursuant to the terms of the CVR Agreement (such right, a "Reith CVR"). The Company is
cooperating with the rights agent to administer the payment of the Reith CVR Per Share Payment Amount (as defined in the CVR Agreement) due to the
Holders (as defined in the CVR Agreement) in accordance with the CVR Agreement, including the timeline established in Section 2.4 thereof. By February
5, 2025, STCN had received all funds associated with the Settlement Payment from the insurers. On February 6, 2025, the Company paid the full amount
owed plaintiff's counsel under Counsel's Awards.
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 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 December 31, 2024. In many cases these claims involved more than 100 defendants. There
remained approximately 58 pending asbestos claims as of December 31, 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 December 31, 2024 and 2023, BNS Sub has accrued $1,339 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.
Emhart Industries, Inc. v. New England Container Company Inc., et al. BNS Sub is one of seven remaining defendants related to the Centredale
Manor Superfund Site in North Providence (the "Centradale Site") pending in the United States District Court for the District of Rhode Island. A third-
party plaintiff, Emhart Industries ("Emhart"), is seeking contribution pursuant to CERCLA from BNS Sub and the six other defendants for remediation
costs incurred and to be incurred by Emhart at the Centredale Site. Emhart seeks contribution damages from BNS Sub in an amount to be determined at
trial. A trial was held in the fall of 2024. In the event BNS is held liable a separate proceeding in 2025 will be held to determine the allocation of any
liability. A reserve of $100 has been established. The possible liability, if any, with respect to this dispute cannot be determined at this time.
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 certain 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, results of operations or cash flows.
99

20. 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 December 31, 2024 and 2023 are presented below:
Year Ended December 31,
2024
2023
Receivable from related parties:
Receivable from other related parties
587 
234 
Total
$
587 
$
234 
Payables to related parties:
Accrued management fees
$
— 
$
170 
Payables to other related parties
1,288 
2,359 
Total
$
1,288 
$
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 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 measured as of the last day of each fiscal year (see Note 15 - "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 $15,056 and $12,490 for the years ended
December 31, 2024 and 2023, respectively, and net of reimbursement for use of Company assets of $31 and $150 for the years ended December 31, 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 sheets were $0 and $170 at
December 31, 2024 and 2023, respectively. Prepaid amounts for management fees included in Prepaid expenses and other current assets on the Company's
consolidated balance sheets were $3,800 and $0 at December 31, 2024 and 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: 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 were approximately $2,532 and $4,627 during the years ended December 31, 2024 and 2023, respectively, of
which $2,532 and $4,623 was reimbursement for executive travel during the years ended December 31, 2024 and 2023, respectively. Unpaid amounts for
reimbursable expenses were approximately $1,131 and $2,185 at December 31, 2024 and 2023, respectively, and are included in Other current liabilities on
the Company's consolidated balance sheets. Beginning in 2024, the Manager will reimburse SPLP for costs associated with the use of Company assets not
related to the duties and functions under the Management Agreement. Reimbursable expenses incurred by SPLP in connection with the use of Company
assets by the Manager were approximately $461 during the year ended December 31, 2024, which remained unpaid as of December 31, 2024. Unpaid
amounts for reimbursable expenses related to the use of Company assets are included in Prepaid expenses and other current assets 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., Steel Partners, Ltd. and affiliates. In
100

total, Steel Services currently charges approximately $88 annually to these companies. Upon closing of the Exchange Transaction on May 1, 2023, STCN
became a consolidated subsidiary of the Company as described in Note 5 - "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 $228 and $167 for the years ended December 31, 2024 and 2023, respectively.
Other
At December  31, 2024 and 2023, several related parties and consolidated subsidiaries had deposits totaling $27 and $110 at WebBank,
respectively. Approximately $27 of these deposits, including interest which was not significant, have been eliminated in consolidation as of December 31,
2024 and 2023.
The Company recorded revenue of $0 and $19 from its transactions with related parties during the years ended December 31, 2024 and 2023,
respectively.
21. SEGMENT INFORMATION
SPLP operates through the following segments: Diversified Industrial, Energy, Supply Chain and Financial Services 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 Supply
Chain segment is comprised of the operations of Steel Connect's wholly-owned subsidiary, ModusLink, which provides supply chain management and
logistics services. 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.
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 our
consolidated subsidiaries and other related companies as further discussed in Note 20 - "Related Party Transactions."
Steel Services charged the Diversified Industrial, Energy, Financial Services, and Supply Chain segments $56,805, $9,842, $2,458, and $2,521,
respectively, for the year ended December 31, 2024. For the year ended December 31, 2023, Steel Services charged the Diversified Industrial, Energy,
Financial Services, and Supply Chain segments $54,796, $9,491, $2,160, and $2,468, respectively, for these services. These service fees are reflected as
expenses in the segment income (loss) below, but are eliminated in consolidation.
The Company's chief operating decision maker is the Executive Chairman. The chief operating decision maker uses Income before interest
expense and income taxes to allocate resources (including employees, property, and financial or capital resources) for each segment predominantly in the
annual budget and forecasting process. The chief operating decision maker considers budget-to-actual variances on a monthly basis when making decisions
about allocating capital and personnel to the segments and for evaluating the performance for each segment by comparing the results and return on assets of
each segment with one another and in the compensation of certain employees.
Segment information is presented below:
101

Year Ended December 31,
2024
2023
Revenue:
Diversified Industrial
$
1,242,970 
$
1,193,964 
Energy
145,019 
179,438 
Financial Services
454,225 
416,911 
Supply Chain
185,634 
115,144 
Total
$
2,027,848 
$
1,905,457 
Income (loss) before interest expense and income taxes:
Diversified Industrial
$
85,476 
$
70,937 
Energy
12,209 
16,247 
Financial Services
116,250 
74,248 
Supply Chain
15,912 
8,726 
Corporate and other
(3,865)
570 
Income before interest expense and income taxes
225,982 
170,728 
Interest expense
8,015 
18,400 
Income tax benefit
(53,255)
(1,674)
Net income
$
271,222 
$
154,002 
Loss of associated companies, net of taxes:
Corporate and other
$
5,615 
$
8,878 
Total
$
5,615 
$
8,878 
December 31, 2024
Diversified Industrial
Energy
Financial Services
Supply Chain
Total
Revenue
$
1,242,970 
$
145,019 
$
454,225 
$
185,634 
$
2,027,848 
Less:
Cost of goods sold
913,344 
110,808 
— 
128,203 
Selling, general and administrative expenses
244,225 
23,538 
241,235 
42,578 
Finance interest expense
— 
— 
89,000 
— 
Provision for credit losses
— 
— 
7,740 
— 
Other segment items 
(75)
(1,536)
— 
(1,059)
Segment income
85,476 
12,209 
116,250 
15,912 
$
229,847 
Reconciliation of profit & loss
Realized and unrealized gains on securities, net
2,983 
Unallocated corporate expense
(4,733)
Interest expense
8,015 
Income from operations before income taxes and equity method
investments
$
223,582 
 Other segment items includes asset impairment charges, gain on disposal of fixed assets and certain overhead expenses.
(a)
(a)
102

December 31, 2023
Diversified Industrial
Energy
Financial Services
Supply Chain
Total
Revenue
$
1,193,964 
$
179,438 
$
416,911 
$
115,144 
$
1,905,457 
Less:
Cost of goods sold
882,197 
138,229 
— 
82,591 
Selling, general and administrative expenses
245,272 
26,896 
209,549 
25,234 
Finance interest expense
— 
— 
80,432 
— 
Provision for credit losses
— 
— 
51,824 
— 
Other segment items 
(4,442)
(1,934)
858 
(1,407)
Segment income
70,937 
16,247 
74,248 
8,726 
$
170,158 
Reconciliation of profit & loss
Realized and unrealized gains on securities, net
(7,074)
Unallocated corporate expense
(2,374)
Interest expense
18,400 
Income from operations before income taxes and equity method
investments
$
161,206 
 Other segment items includes asset impairment charges, gains on disposal of fixed assets and certain overhead expenses.
Year Ended December 31, 2024
Capital

Expenditures
Depreciation and

Amortization
Diversified Industrial
$
27,178 
$
42,598 
Energy
3,956 
8,632 
Financial Services
302 
838 
Supply Chain
4,146 
5,643 
Corporate and other
29,381 
1,599 
Total
$
64,963 
$
59,310 
Year Ended December 31, 2023
Capital

Expenditures
Depreciation and

Amortization
Diversified Industrial
$
40,720 
$
41,424 
Energy
8,512 
10,065 
Financial Services
314 
835 
Supply Chain
1,727 
3569
Corporate and other
178 
672 
Total
$
51,451 
$
56,565 
December 31,
2024
2023
Total Assets:
Diversified Industrial
$
786,961 
$
799,630 
Energy
71,968 
80,342 
Financial Services
2,097,205 
2,498,825 
Supply Chain
181,902 
167,874 
Corporate and other
442,231 
443,769 
Total
$
3,580,267 
$
3,990,440 
The following table presents geographic revenue and long-lived asset information as of and for the years ended December 31, 2024 and 2023.
Foreign revenue is based on the country in which the legal subsidiary generating the revenue is domiciled. Long-lived assets in 2024 and 2023 consist of
property, plant and equipment, non-current operating lease right-of-use assets, plus approximately $4,843 in both 2024 and 2023, of land and buildings
from previously operating businesses and other non-operating assets. Such assets are carried at the lower of cost or fair value less cost to sell and are
included in Other non-current assets on the Company's consolidated balance sheets as of December 31, 2024 and 2023. Neither revenue nor long-lived
assets from any single foreign country were material to the consolidated financial statements of the Company.
(a)
(a)
103

2024
2023
Revenue
Long-lived
Assets
Revenue
Long-lived
Assets
Geographic information:
United States
$
1,811,906 
$
304,515 
$
1,744,076 
$
288,180 
Foreign
215,942 
42,400 
161,381 
47,390 
Total
$
2,027,848 
$
346,915 
$
1,905,457 
$
335,570 
22. 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 raises
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
As of December 31, 2024
Amount
Ratio
Amount
Ratio
Amount
Ratio
Amount
Ratio
Total Capital
(to risk-weighted assets)
$
401,792 
18.70 %
$
172,332 
8.00 %
$
226,186 
10.50 %
$
215,416 
10.00 %
Tier 1 Capital
(to risk-weighted assets)
$
374,865 
17.40 %
$
129,249 
6.00 %
$
183,103 
8.50 %
$
172,332 
8.00 %
Common Equity Tier 1 Capital
(to risk-weighted assets)
$
374,865 
17.40 %
$
96,937 
4.50 %
$
150,791 
7.00 %
$
140,020 
6.50 %
Tier 1 Capital
(to average assets)
$
374,865 
17.90 %
$
83,913 
4.00 %
n/a
n/a
$
104,892 
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.
104

23. SUPPLEMENTAL CASH FLOW INFORMATION
A summary of supplemental cash flow information for the years ended December 31, 2024 and 2023 is presented in the following table:
Year Ended December 31,
2024
2023
Cash paid during the period for:
Interest
$
120,575 
$
87,616 
Taxes
$
49,538 
$
33,296 
24. SUBSEQUENT EVENTS
Steel Connect Short-Form Merger and Delisting
The Audit Committee of the Board of Directors of Steel Connect approved a short-form merger transaction between Steel Connect and an indirect,
wholly-owned subsidiary of Steel Partners Holdings L.P., which at the effective time of the Short-Form Merger, together with its affiliates, owned greater
than 90% of the outstanding common stock, par value $0.01 per share of Steel Connect, on an as-converted basis, which approval was made in accordance
with the terms of the stockholders' agreement, dated April 30, 2023.
On January 2, 2025, in compliance with Section 267 of the Delaware General Corporation Law, an indirect, wholly-owned subsidiary of SPLP
merged with and into Steel Connect, with Steel Connect surviving the Short-Form Merger and becoming an indirect wholly-owned subsidiary of SPLP. The
funds required to pay the aggregate cash consideration in the Short-Form Merger and related fees and expenses was approximately $31,200, which was
funded from amounts available under SPLP's existing senior credit agreement.
In connection with the closing of the Short-Form Merger, Steel Connect notified the NASDAQ Capital Market of its intent to remove the Steel
Connect Common Stock from listing on Nasdaq and requested that Nasdaq (i) suspend trading of the Steel Connect Common Stock on Nasdaq prior to the
opening of trading on January 3, 2025 and (ii) file a Notification of Removal from Listing and/or Registration on Form 25 with the SEC to delist and
deregister the Steel Connect Common Stock under Section 12(b) of the Securities Exchange Act of 1934, as amended.
In addition, Steel Connect filed a certification on Form 15 with the SEC suspending Steel Connects reporting obligations under Sections 13 and
15(d) of the Exchange Act with respect to the Steel Connect Common Stock.
Trinity Place Stock Purchase Agreement
On February 5, 2025 (the "SPA Effective Date"), Steel IP Investments, LLC (the "Purchaser"), a wholly-owned subsidiary of SPLP, entered into a
Stock Purchase Agreement (the "Stock Purchase Agreement") with Trinity Place Holdings Inc. ("TPHS") and TPHS Lender LLC (the "Seller"), pursuant to
which the Purchaser has agreed to purchase from Seller, and the Seller has agreed to sell to Purchaser, 25,862,245 shares of common stock (the "TPHS
Common Stock"), par value $0.01 per share of TPHS (such shares are referred to collectively herein as the "TPHS Shares"), representing approximately
40% of the outstanding common stock of TPHS, in accordance with the terms and conditions of the Stock Purchase Agreement. The aggregate
consideration payable to the Seller is $2,586 for the TPHS Shares and certain agreements pursuant to the Stock Purchase Agreement.
On the SPA Effective Date, the Purchaser and TPHS entered into a shareholder rights agreement, pursuant to which SPLP will make a loan in the
aggregate amount of up to $5,000 to TPHS.
105

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. 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 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 December 31, 2024.
Management's Annual Report on Internal Control Over Financial Reporting
The Company's management, including the Principal Executive Officer and Principal Financial Officer, is responsible for establishing and
maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) based upon the criteria
established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
("COSO"). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of the Company's consolidated financial statements for external reporting purposes in accordance with U.S. GAAP. Because of its
inherent limitations, internal control over financial reporting may not prevent or detect misstatements. A control system, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have
been detected.
With the participation of the Company's management, including the Company's Principal Executive Officer and the Principal Financial Officer,
the Company conducted an evaluation of the effectiveness of the internal control over financial reporting of the Company as referred to above as of
December 31, 2024. Based on such evaluation, management concluded that, as of December 31, 2024, the Company's internal control over financial
reporting was effective.
Deloitte & Touche LLP, our independent registered public accounting firm, has audited our consolidated financial statements included in this
report and has issued an attestation report on our internal control over financial reporting, which is included herein.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2024 that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.
106

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the unitholders and the Board of Directors of Steel Partners Holdings L.P.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Steel Partners Holdings L.P and subsidiaries (the "Company") as of December 31, 2024,
based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December
31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated
financial statements as of and for the year ended December 31, 2024, of the Company and our report dated March 11, 2025, expressed an unqualified
opinion on those financial statements.
Basis for Opinion
The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of
internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting. Our
responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company's internal control over financial reporting is a process designed 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. A company's internal control
over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP
New York, New York
March 11, 2025
107

Item 9B. Other Information
During the three months ended December  31, 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 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
108

PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this Item 10, which will be included in the Company's definitive proxy statement for its 2025 Annual Meeting of
Limited Partners, to be filed with the SEC pursuant to Schedule 14A within 120 days of the end of the Company's fiscal year (the "2025 Proxy Statement"),
is incorporated herein by reference.
Item 11. Executive Compensation
The information required by this Item 11 included in the 2025 Proxy Statement is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item 12 included in the 2025 Proxy Statement is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item 13 from the 2025 Proxy Statement is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services
The information required by this Item 14 from the 2025 Proxy Statement is incorporated herein by reference.
PART IV
Item 15. Exhibits, Financial Statement Schedules
(a)    Financial Statements - The following financial statements of Steel Partners Holdings L.P., and subsidiaries, are included in Part II, Item 8 of this
Report:
Consolidated Balance Sheets as of December 31, 2024 and 2023
Consolidated Statements of Operations for the years ended December 31, 2024 and 2023
Consolidated Statements of Comprehensive Income for the years ended December 31, 2024 and 2023
Consolidated Statements of Changes in Capital for the years ended December 31, 2024 and 2023
Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023
Notes to Consolidated Financial Statements
(b)    Exhibits - The following documents are filed as exhibits hereto:
Exhibit No.
Description
3.1
Certificate of Limited Partnership (incorporated by reference to Exhibit 3.1 to Steel Partners Holdings L.P.'s Registration Statement on
Form 10, filed December 15, 2011).
3.2
Amendment to the Certificate of Limited Partnership, dated April 2, 2009 (incorporated by reference to Exhibit 3.2 to Steel Partners
Holdings L.P.'s Registration Statement on Form 10, filed December 15, 2011).
3.3
Amendment to the Certificate of Limited Partnership, dated January 20, 2010 (incorporated by reference to Exhibit 3.3 to Steel Partners
Holdings L.P.'s Registration Statement on Form 10, filed December 15, 2011).
3.4
Amendment to the Certificate of Limited Partnership, dated October 15, 2010 (incorporated by reference to Exhibit 3.4 to Steel Partners
Holdings L.P.'s Registration Statement on Form 10, filed December 15, 2011).
3.5
Tenth Amended and Restated Agreement of Limited Partnership of Steel Partners Holdings L.P., dated as of June 1, 2023 (incorporated
by reference to Exhibit 3.1 to Steel Partners Holdings L.P.'s Current Report on Form 8-K, filed June 5, 2023).
4.1
Certificate of Designations, Preferences and Rights of Series C Convertible Preferred Stock of ModusLink Global Solutions, Inc. filed
with the Secretary of State of the State of Delaware on December 15, 2017 (incorporated by reference to Exhibit 4.1 to Steel Partners
Holdings L.P.'s Current Report on Form 8-K, filed December 19, 2017).
109

4.2
Certificate of Designations, Preferences and Rights of Series E Convertible Preferred Stock of Steel Connect, Inc. (incorporated by
reference to Exhibit 4.2 to Steel Partners Holdings L.P.’s Annual Report on Form 10-K, filed March 8, 2024).
4.3
Description of Steel Partners Holdings L.P.’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934
(incorporated by reference to Exhibit 4.3 to Steel Partners Holdings L.P.’s Annual Report on Form 10-K, filed March 8, 2024).
10.1
Amended and Restated Credit Agreement, dated as of December 29, 2021,among SPH Group Holdings LLC, Steel Excel Inc. and IGo,
Inc., as Borrowers, PNC Bank, National Association, in its capacity as administrative agent, the lenders party thereto, and certain of the
Borrowers’ affiliates in their capacities as guarantors (incorporated by reference to Exhibit 10.1 to Steel Partners Holdings L.P.’s Current
Report on Form 8-K, filed on December 29, 2021).
10.1A
First Amendment and Consent to Amended and Restated Credit Agreement, dated as of June 26, 2023, by and among SPH Group
Holdings LLC and Steel Excel Inc. as borrowers, PNC Bank, National Association, in its capacity as administrative agent, the lenders
party thereto, and certain of the borrowers’ affiliates in their capacities as guarantors (incorporated by reference to Exhibit 10.1 to Steel
Partners Holdings L.P.'s Current Report on Form 8-K, filed June 27, 2023).
10.2
Sixth Amended and Restated Management Agreement by and between SP Corporate Services LLC and SP General Services LLC,
effective as of January 1, 2015 (incorporated by reference to Exhibit 10.1 to Steel Partners Holdings L.P.'s Current Report on Form 8-K,
filed January 13, 2015).
10.3
Incentive Unit Agreement by and between Steel Partners Holdings L.P. and SPH SPV-I LLC, effective as of May 11, 2012 (incorporated
by reference to Exhibit 10.2 to Steel Partners Holdings L.P.'s Current Report on Form 8-K, filed January 13, 2015).
10.4
Amendment to Incentive Unit Agreement by and between Steel Partners Holdings L.P. and SPH SPV-I LLC, effective as of February 18,
2022 (incorporated by reference to Exhibit 10.4 to Steel Partners Holdings L.P.’s Annual Report on Form 10-K, filed March 10, 2022).
10.5
Steel Partners Holdings L.P. Second Amended & Restated 2018 Incentive Award Plan (incorporated by reference to Exhibit 10.4 to Steel
Partners Holdings L.P.’s Annual Report on Form 10-K, filed March 10, 2022).
10.6
Steel Partners Holdings L.P. Second Amended and Restated 2018 Incentive Award Plan Form Restricted Unit Agreement (Directors)
(incorporated by reference to Exhibit 10.2 to Steel Partners Holdings L.P.’s Quarterly Report on Form 10-Q, filed August 5, 2021).
10.7
Steel Partners Holdings L.P. Second Amended and Restated 2018 Incentive Award Plan Form Restricted Unit Agreement (incorporated
by reference to Exhibit 10.3 to Steel Partners Holdings L.P.’s Quarterly Report on Form 10-Q, filed August 5, 2021).
10.8
Preferred Stock Purchase Agreement dated as of December 15, 2017, by and between ModusLink Global Solutions, Inc. and SPH Group
Holdings LLC. (incorporated by reference to Exhibit 10.1 to Steel Partners Holdings L.P.'s Current Report on Form 8-K, filed December
19, 2017).
10.9
Letter Agreement - Permitted Investments and Investment in PCS-Mosaic Co-Invest L.P. (incorporated by reference to Exhibit 10.1 to
Steel Partners Holdings L.P.’s Quarterly Report on Form 10-Q, filed May 5, 2022).
10.10
2022 Long Term Incentive Plan for Senior Management (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on
Form 8-K, filed with the SEC on August 22, 2022).
10.11
Form of Award Agreement Under the 2022 Long Term Incentive Plan for Senior Management (incorporated by reference to Exhibit
10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on August 22, 2022).
10.12
Form of Bonus, Confidentiality and Non-Solicitation Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Current
Report on Form 8-K, filed with the SEC on August 22, 2022).
10.13
Offer letter between Steel Services and Mr. Martin (incorporated by reference to Exhibit 10.3 to Steel Partners Holdings L.P.’s Quarterly
Report on Form 10-Q, filed August 9, 2023).
10.14*
Offer letter between Steel Services and Mr. O’Herrin (incorporated by reference to Exhibit 10.1 to Steel Partners Holdings L.P.'s Current
Report on Form 8-K, filed August 7, 2023).
10.15
Transfer and Exchange Agreement, dated as of April 30, 2023, by and among Steel Partners Holdings L.P., Steel Excel, Inc.,
WebFinancial Holding Corporation and Steel Connect, Inc. (incorporated by reference to Exhibit 10.1 to Steel Partners Holdings L.P.'s
Current Report on Form 8-K, filed May 1, 2023).
10.16
Stockholders’ Agreement, dated as of April 30, 2023, by and among Steel Connect, Inc., Steel Partners Holdings L.P., and the other
stockholders signatory therein (incorporated by reference to Exhibit 10.2 to Steel Partners Holdings L.P.'s Current Report on Form 8-K,
filed May 1, 2023).
10.17
Voting Agreement, dated as of April 30, 2023, by and among Steel Connect, Inc., Steel Partners Holdings L.P., WebFinancial Holding
Corporation, WHX CS, LLC, WF Asset Corp., Steel Partners, Ltd., Warren G. Lichtenstein, and Jack L. Howard. (incorporated by
reference to Exhibit 10.3 to Steel Partners Holdings L.P.'s Current Report on Form 8-K, filed May 1, 2023).
**
*
*
*
*
*
*
*
110

19.1
Insider Trading Policy
21.1
Subsidiaries of Steel Partners Holdings L.P.
24.1
Power of Attorney (included in the signature page)
31.1
Certification by the Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification by the Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification by 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.
32.2
Certification by 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.
97.1
Steel Partners Holdings L.P. Policy for the Recovery of Erroneously Awarded Compensation (incorporated by reference to Exhibit 97.1
to Steel Partners Holdings L.P.’s Annual Report on Form 10-K, filed March 8, 2024).
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.
* Management contract or compensatory plan or arrangement.
** Schedules and exhibits have been omitted pursuant to Item 601 (a)(5) of Regulation S-K.
Item 16. Form 10-K Summary
None.
+
+
+
+
+
#
#
*
*
*
*
*
*
+ 
#
111

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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:
STEEL PARTNERS HOLDINGS L.P.
March 11, 2025
By:
Steel Partners Holdings GP Inc.
Its General Partner
By:
/s/ Warren G. Lichtenstein
Warren G. Lichtenstein
Executive Chairman
POWER OF ATTORNEY
Each of the undersigned do hereby appoint Warren G. Lichtenstein and Ryan O'Herrin, and each of them severally, his or her true and lawful
attorney to execute on behalf of the undersigned any and all amendments to this Annual Report on Form 10-K and to file the same with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange Commission; each of such attorneys shall have the power to act hereunder
with or without the other.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons in the capacities
indicated with respect to Steel Partners Holdings GP Inc., the general partner of Steel Partners Holdings L.P., and on behalf of the registrant and on the
dates indicated below:
By:
/s/ Warren G. Lichtenstein
March 11, 2025
Warren G. Lichtenstein, Executive Chairman
Date
(Principal Executive Officer)
By:
/s/ Ryan O'Herrin
March 11, 2025
Ryan O'Herrin, Chief Financial Officer
Date
(Principal Financial Officer)
By:
/s/ Gary W. Tankard
March 11, 2025
Gary W. Tankard, Chief Accounting Officer
Date
(Principal Accounting Officer)
By:
/s/ Jack L. Howard
March 11, 2025
Jack L. Howard, Director
Date
By:
/s/ James Benenson III
March 11, 2025
James Benenson III, Director
Date
By:
/s/ Eric P. Karros
March 11, 2025
Eric P. Karros, Director
Date
By:
/s/ John P. McNiff
March 11, 2025
John P. McNiff, Director
Date
By:
/s/ Lon Rosen
March 11, 2025
Lon Rosen, Director
Date
By:
/s/ Rory Tahari
March 11, 2025
Rory Tahari, Director
Date
112

EXHIBIT 19.1
INSIDER TRADING POLICY
Steel Partners Holdings L.P.
Revised as of December 11, 2024
THE NEED FOR A POLICY
This policy was created to promote compliance with applicable securities laws by (i) all directors, officers and employees of
Steel Partners Holdings L.P. and its wholly-owned subsidiaries listed on Schedule A attached hereto (“SPH”), which Schedule
A may be updated from time to time as necessary by the General Counsel and/or Deputy General Counsel (as defined herein),
and (ii) any person or any officers, directors or employees of any entity designated by the General Counsel and/or Deputy
General Counsel which assists SPH or its subsidiaries in providing management or accounting duties to third parties who are
involved in providing such services (collectively, “Covered Persons”). We are also adopting this policy to avoid even the
appearance of improper conduct on the part of anyone employed by or associated with SPH and its subsidiaries, which would
damage our reputation for integrity and ethical conduct. Among other things, this policy prohibits insider trading by Covered
Persons with respect to the securities of SPH and the securities of companies in which SPH owns 10% or more of the voting
securities any company on which SPH or its manager, SP General Services LLC, has a representative on the board of directors,
any customer or vendor of SPH, any acquisition target of SPH, or any company designated by the Chief Compliance Office, as
listed on the attached Covered Securities list, which list will be updated as necessary by the General Counsel and/or Deputy
General Counsel, as well as any other company, where, in all cases, inside information was obtained as a result of the Covered
Person’s employment or relationship to SPH (“Covered Securities”). For purposes of this policy, the General Counsel and/or
Deputy General Counsel shall be the person designated from time to time by the Board of Directors of the general partner of
Steel Partners Holdings L.P. to serve in such capacity.
WHAT IS “INSIDER TRADING”?
Insider trading is, in addition to being a violation of SPH’s Policy on Insider Trading, a violation of securities laws. The
penalties for insider trading are discussed below.
The term “insider trading” generally refers to (1) trading in securities while in possession or aware of material non-public
information, or (2) communications of material non-public information to others who may trade while in possession or aware
of such information.
This means insiders are prohibited from doing the following:
•
trading in securities while in possession or aware of material non-public information concerning such
securities or material non-public information that could affect the price of that company’s securities (even if
SPH does not do business with such company);
•
having others trade on the insider’s behalf while the insider is in possession or aware of material non-public
information; and
1

•
communicating non-public information concerning securities to others who may then trade in such securities or
pass on the information to others who may trade in such securities. This conduct is known as “tipping.”
The elements of insider trading are discussed below:
1.
Who is an Insider?
The concept of “insider” is broad and generally includes any person who possesses non-public information about the Covered
Securities and who has a duty to SPH to keep this information confidential. In the case of SPH, “insiders” include officers and
directors of SPH, as well as other persons who routinely have access to material information that is not publicly available or
who are working on significant corporate transactions or projects. In addition, a person can be a “temporary insider” if he or
she enters into a relationship to serve SPH and as a result is given access to information in connection with such service.
Outsiders who can become temporary insiders include, among others, attorneys, accountants, consultants, investment bankers
and the employees of organizations providing such services to SPH. Insiders are included in the term “Covered Persons” for
the purposes of this policy.
2.
What is Material Information?
“Material information” generally is defined as information for which there is a substantial likelihood that a reasonable
investor would consider such information important in making his or her investment decisions, or information that is
reasonably likely to affect the price of the Covered Securities. It is important to remember that materiality will always be
judged with the benefit of hindsight.
“Inside” information could be material because of its expected effect on the price of the Covered Securities, the securities of
another company, or the securities of several companies. Moreover, the resulting prohibition against the misuse of material
non-public information includes not only restrictions on trading in the Covered Securities, but restrictions on trading in the
securities of other companies affected by the material non-public information.
Examples. Common examples of information that may be regarded as material are:
•
Earnings or sales results;
•
Guidance on earnings estimates and changing or confirming such guidance on a later date;
•
Changes in dividend/distribution policies or the declaration of a stock split or the offering of additional
securities;
•
Proposals, agreements or news regarding a pending or proposed merger, acquisition, tender offer, joint venture,
divestiture, leveraged buy out, significant sale of assets or the disposition of a subsidiary;
•
Changes in relationships with major customers, or obtaining or losing customers;
•
Major financing developments;
•
Changes in management or other major personnel changes;
•
Criminal indictments or material civil litigation or government investigations;
•
Significant disputes with major suppliers, vendors or customers;
•
Labor disputes including strikes or lockouts;
•
Substantial changes in accounting methods;
2

•
Debt service or liquidity problems;
•
Impending bankruptcy or insolvency;
•
Public offerings or private sales of debt or equity securities; and
•
A significant cybersecurity incident, such as a data breach, or any other significant disruption in SPH’s
operations, loss or potential loss, breach or unauthorized access of its property or assets, whether at SPH’s
facilities or through SPH’s information technology infrastructure.
Either positive or negative information may be material.
3.
What is Non-Public Information?
In order for information to qualify as “inside” information it must not only be “material,” it must be “non-public.” “Non-
public” information is information which has not been made available to investors generally. At such time as material, non-
public information has been released to the investing public, it loses its status as “inside” information.
However, for “non-public” information to become public information it must be disseminated through recognized channels of
distribution designed to reach the securities marketplace, which are limited to disclosure by filing a report with the Securities
and Exchange Commission (“SEC”) or disclosure by release to a national business and financial wire service (such as Dow
Jones or Reuters) or a national newspaper (such as The Wall Street Journal). Further, sufficient time must pass for the
information to become available in the market. See “Policy Statement: Prohibition of Insider Trading—When Information is
Public” below. Additionally, the information disseminated must be some form of “official” disclosure or announcement. In
other words, the fact that rumors, speculation, or statements attributed to unidentified sources are public is insufficient to be
considered widely disseminated even when the information is accurate.
Partial disclosure does not constitute public dissemination. So long as any material component of the “inside” information has
yet to be publicly disclosed, the information is deemed “non-public” and may not be misused.
4.
What is Trading?
Trading means broadly any purchase, sale or other transaction to acquire, transfer or dispose of securities, including gifts or
other contributions, exercises of stock options granted under the SPH’s stock plans, sales of stock acquired upon the exercise
of options and trades made under an employee benefit plan, such as a 401(k) plan. For information on specific exceptions to
this, see “Policy Statement: Exceptions to the Prohibition on Trading.”
THE CONSEQUENCES
The consequences of insider trading violations can be staggering:
For individuals who trade on inside information (or tip such information to others):
•
A civil penalty of up to three times the profit gained or loss avoided;
•
A criminal fine (no matter how small the profit) of up to $5 million;
•
A jail term of up to 20 years; and
3

•
A court injunction or a cease and desist order to stop the violation and penalties for violations of such orders or
the federal securities laws.
For SPH (as well as possibly any supervisory person) that fails to take appropriate steps to prevent illegal trading by an
employee or tipping of inside information by an employee:
•
A civil penalty of the greater of $1 million or three times the profit gained or loss avoided as a result of the
employee’s violation; and
•
A criminal penalty of up to $25 million.
Moreover, if a person violates this policy or fails to comply with this policy or SPH’s procedures, SPH imposed sanctions,
including dismissal, could result. Needless to say, any of the above consequences, even an SEC investigation that does not
result in prosecution, can tarnish one’s reputation and irreparably damage a career. Further, the Dodd-Frank Wall Street
Reform and Consumer Protection Act includes a mandatory “bounty” of 10 to 30 percent for anyone providing the SEC with
information that leads to a successful enforcement action resulting in monetary sanctions of over $1 million.
POLICY STATEMENT
Prohibition of Insider Trading
If a Covered Person has material non-public information relating to any Covered Securities, it is our policy that neither that
person nor any related person may trade such securities or engage in any other action to take advantage of, or pass on to
others, that information.
Transactions that may be necessary or justifiable for independent reasons (such as the need to raise money for an emergency
expenditure) are not exempted from the insider trading laws or from our policy. The fact that the Covered Person may have
relied on other factors in purchasing or selling securities, while in possession or aware of material non-public information, will
not absolve the person from liability under the law.
When Information is Public. As you can appreciate, it is also improper for a Covered Person to enter a trade immediately after
a public announcement of material information, including earnings releases, has been made regarding a Covered Security.
Because SPH’s non-employee unitholders and the investing public should be afforded the time to receive the information and
act upon it, as a general rule you should not engage in any trades until the close of market on the second business day after
the information has been released. If an announcement is made before the market opens on a business day, the day of the
announcement will be the first business day for purposes of this policy. Thus, if an announcement is made on a Monday after
market close, Thursday generally would be the first day on which you could trade in the Covered Security. If an announcement
is made on a Friday after market close, Wednesday generally would be the first day on which you could trade. If an
announcement is made on a Monday before the market opens, Wednesday would be the first day on which you could trade.
Twenty-Twenty Hindsight. If your securities trades become the subject of scrutiny, they will be viewed after-the-fact with the
benefit of hindsight. As a result, before engaging in any trade, you should carefully consider how regulators and others might
view your trade in hindsight.
4

Applicability to Other Companies. During the course of his or her employment or engagement, a person may obtain material
non-public information about current or potential customers, suppliers, business partners or others doing business with SPH or
in which SPH has an investment or an interest. The provisions on confidentiality and the prohibition on trading while in
possession or aware of non- public information also apply to the securities of these other companies. Thus, the term “Covered
Securities” as used in this policy can also mean the securities of those other companies. See definition of “Covered Securities”
above.
Trades by Family Members and Controlled Entities. The very same restrictions apply to your family members and others
living in your household, as well as any trust, corporations or other entities controlled by you. Covered Persons are expected to
be responsible for the compliance of their immediate family, personal household and controlled entities.
Prevention of Insider Trading by Others. SPH, its directors and officers and some supervisory personnel could be deemed
“controlling persons” subject to potential liability under the securities laws. Accordingly, it is incumbent on these persons to
maintain an awareness of possible insider trading violations by persons under their control and to take measures where
appropriate to prevent such violations. Directors, officers and other supervisory personnel who become aware of a potential
insider trading violation or a violation of this policy should immediately advise the General Counsel and/or Deputy General
Counselor the Chair of the Audit Committee of the Board of Directors of Steel Partners Holdings GP Inc. and should take
steps where appropriate to prevent persons under their supervision from using inside information for trading purposes.
Additionally, any employee who violates this policy or any federal or state laws governing insider trading or tipping, or knows
of or suspects any such violation by any other director, officer or employee must report the violation immediately to the
General Counsel and/or Deputy General Counselor the Chair of the Audit Committee.
Confidentiality
Serious problems could arise for SPH and you by an unauthorized disclosure of internal information about SPH, whether or
not for the purpose of facilitating improper trading in the Covered Securities. Generally, securities regulations provide that
when a company (such as SPH) discloses material, non- public information, it must provide broad, non-exclusionary public
access to the information. Violations of these regulations can result in SEC enforcement actions, resulting in injunctions and
severe monetary penalties. It is our policy that all Covered Persons must maintain all non-public information about SPH in
strict confidence, and should not communicate such information to any person.
Proprietary information includes non-public information, analyses and plans that are created or obtained by SPH for its
business purposes, other than that which constitutes confidential information entrusted to SPH or its personnel by an external
source. In order to safeguard proprietary and non- public information, Covered Persons should: (i) use proprietary or non-
public information only for the specific business purposes for which the information was given, created or obtained; (ii) avoid
discussions of proprietary or non-public information in the presence of others who do not have a need to know such
information (including other Covered Persons), and exercise extreme caution when discussing proprietary or non-public
information in hallways, elevators, trains, subways, airplanes, restaurants, social gatherings or other public places; (iii) keep
limited partners’ identities confidential; (iv) keep proprietary and non-public information in a secure manner; (v) exercise care
to avoid placing documents containing proprietary or non-public information in areas where they may be read by unauthorized
persons, and store such documents in secure locations when they are not in use; and (vi) avoid using speakerphones in
circumstances where proprietary or non-public information may be
5

overheard, and be aware that mobile telephones must be used with great care because their transmissions may be picked up by
others.
The prohibition regarding the unauthorized disclosure of internal information about SPH applies to inquiries about SPH which
may be made by the financial press, investment analysts or others in the financial community. It is important that all such
communications on behalf of SPH be made only through authorized individuals. If you receive any inquiries of this nature,
you should decline comment and refer the inquiry directly to the Chief Financial Officer, the person responsible for our
investor relations.
Tipping Information to Others. Covered Persons must not pass confidential or non-public information on to others. Tipping
results in liability for the insider who communicated the information, even if such insider does not actually trade himself or
herself, and for the person who received the information if the person has reason to know that it was an improper disclosure
and acts on such information or passes it on to others who may act on it.
Tipping and the Internet. The prohibition against tipping applies to all forms of communication, including those conducted via
the internet. Information communicated via e-mail, internal and external, is sometimes confidential and material in nature and
thus subject to insider trading rules. You are cautioned that various chat rooms and message boards dedicated to the stock
market are largely unsecured and unregulated and should not be used to communicate any information regarding SPH or the
Covered Securities, whether confidential or not. Further, it is the policy of SPH that no Covered Person shall initiate or
respond to messages posted in internet forums that pertain to SPH or companies that we have or may have an investment in
and do or may do business with and about which you may learn something in the course of your employment or engagement.
Such forums often contain rumors and misinformation that you may, as a loyal employee, feel compelled to correct. However,
doing so (even with innocent intentions) could be considered tipping and therefore in violation of insider trading rules. Should
you come across information posted online that you believe to be false or potentially damaging to SPH, please do not respond
directly; instead, please contact the General Counsel and/or Deputy General Counsel.
PROCEDURES
Pre-Clearance of All Trades
To provide assistance in preventing inadvertent violations and avoiding even the appearance of an improper trade (which could
result, for example, where an officer engages in a trade while unaware of a pending major development), Covered Persons,
prior to any trades in Covered Securities are required to consult and submit the request for approval to trade securities on
Annex A attached hereto with the General Counsel and/or Deputy General Counsel to confirm that you are not in possession
or aware of specific material non-public information. Covered Persons are responsible for ensuring that they are in possession
of the current list of Covered Securities, which list will be updated as necessary by the General Counsel and/or Deputy
General Counsel. Approval will generally be limited to the trading windows governing the applicable Covered Securities at
times when the Covered Person is not in possession of material non-public information. A Covered Person may not trade, even
after consultation, if he or she is actually in possession or aware of material non-public information. If you contemplate a trade
in Covered Securities, you should contact the General Counsel and/or Deputy General Counsel in advance. Pre-trade advice
generally is valid for two trading days, unless you come into contact with material non-public information during that time. In
the event an approved transaction is not consummated within two calendar days from the date of approval or such
6

other time period agreed to by the General Counsel and/or Deputy General Counsel, it must be re-approved before it may be
consummated at a later date. The General Counsel and/or Deputy General Counsel may take into account various factors in
determining whether to grant a request for pre-clearance, including whether the Company is engaged in a stock repurchase
plan. Additionally, (i) in the four business days before and after any public announcement of a Company stock repurchase
program, no trading by directors and Section 16 officers will be permitted in the class of equity securities that is the subject of
the stock repurchase program; and (ii) any sales by Covered Persons may not be coordinated with (or hedged against) any
share purchases by the Company without General Counsel and/or Deputy General Counsel approval.
No Trading During “Closed Window” Periods
In order to further minimize the possibility of an inadvertent and unintended insider trading violation, all Covered Persons are
prohibited from trading in SPH’s securities during the following restricted trading period (a “closed window” or “blackout
period”): the period beginning two days before the end of each fiscal quarter through and ending after the close of market on
the second business day following the issuance of SPH press release of its quarterly or annual financial results or filing of
applicable Form 10-Q or Form 10-K if such a press release is not issued. Please realize that the “open window” periods are of
general applicability only and do not serve to permit otherwise illegal trades. Trading in SPH’s securities is permitted only
during the “open windows,” and all trades by Covered Persons must be approved in advance by the General Counsel and/or
Deputy General Counsel. Other events or developments during such periods may still cause some Covered Persons to be in
possession or aware of material, non-public information – in such event, you still may not trade. A Covered Person may not
trade even during the “open window” periods or with authorization if he or she is actually in possession or aware of material
non-public information. Also, trading during the “open window” periods is not a substitute for compliance with required pre-
clearance procedures.
Restricted Trading Periods
There may be material non-public information available to Covered Persons even during the normal open window periods, for
example, when a proposed acquisition is pending. In those and other instances, such as where required by securities regulation,
SPH will announce a “closed window” or “blackout period” for trading in SPH’s securities and if appropriate, in securities of
another company. Any Covered Person subject to any such restricted trading period shall keep such restricted period strictly
confidential and should not communicate the existence of such restricted period to any person.
Standing Orders
Standing orders (except standing orders under approved Rule 10b5-1 plans, see below) should be used only for a very brief
period of time. The problem with purchases or sales resulting from standing instructions to a broker is that there is no control
over the timing of the trade. The broker could execute a trade when you are in possession or aware of material non-public
information and you could still have significant liabilities as a result.
10b5-1 Plans
Rule 10b5-1 provides a defense from insider trading under SEC Rule 10b-5. To be eligible for this defense, Covered Persons
may enter into a “10b5-1 plan” for trading in Covered Securities. If the plan meets the requirements of Rule 10b5-1, Covered
Securities may be purchased or sold without regard to certain insider
7

trading restrictions. Once a Rule 10b5-1 trading plan is established, the Covered Persons retain no discretion over trades under
the plan, and the pre-planned trades can be executed through a broker (over whom the insider exercises no influence) at later
dates without regard to the subsequent acquisition of material non-public information.
To comply with SPH’s insider trading policy, Covered Persons (i) may only enter into a Rule 10b5-1 trading plan during a
trading window; (ii) cannot enter into a Rule 10b5-1 trading plan while in possession of any material non-public information;
and (iii) may not influence any trading decisions under the Rule 10b5-1 trading plan.
To ensure the proposed plan meets the requirements of Rule 10b5-1 and other legal requirements, you are encouraged to
consult with the General Counsel and/or Deputy General Counsel before establishing such a plan and such plan must be
approved by the General Counsel and/or Deputy General Counsel prior to the entry into such plan. Covered Persons must
provide the General Counsel and/or Deputy General Counsel with a draft of the Rule 10b5-1 trading plan he or she intends to
utilize.
The General Counsel and/or Deputy General Counsel is responsible for implementing and monitoring SPH’s policies and
procedures regarding Rule 10b5-1 trading plans, including updating these policies and procedures as may be necessary or
advisable from time to time and ensuring that its policies and procedures are consistently operating to prohibit Covered
Persons from exerting or having discretion over the execution of any trades made pursuant to any discretionary Rule 10b5-1
trading plans.
Additional Prohibited Transactions
Because we believe it is improper and inappropriate for any Covered Persons to engage in short-term or speculative
transactions involving Covered Securities, it is SPH’s policy that Covered Persons should not engage in any of the following
activities with respect to Covered Securities:
No Short Sales. No Covered Person shall engage in selling Covered Securities “short” – that is, the sale of securities that are
not owned by the Covered Person, other than in the exercise of their duties with respect to SPH. (A person who sells “short” is
betting that the price of the security is going down – he borrows the security, sells it, and expects to be able to return the
securities by repurchasing them at a lower price in the future.) SEC rules already prevent officers and directors from making
“short sales” or sales of securities that, if owned, will not be delivered for a period longer than 20 days after the sale. Again,
we are simply expanding this rule to all Covered Persons.
No Short Term Trading. No Covered Person shall engage in selling Covered Securities that were held for less than six months.
The SEC’s short swing profit rules already penalize officers and directors who sell SPH securities within six months of a
purchase by requiring such person to disgorge all profits to SPH whether or not the person had knowledge of any material non-
public information.
No Hedging or Pledging. Hedging transactions involve the purchase of financial instruments (including prepaid variable
forward contracts, equity swaps, collars and exchange funds), or any other transactions that hedge or offset, or are designed to
hedge or offset, any decrease in the market value of registrant equity securities. Such transactions may permit a Covered
Person to continue to own the Company’s securities but without the full risks and rewards of ownership. When that occurs, the
Covered Person may no longer have the same objectives as the Company’s other unitholders. Therefore, no Covered Person
shall engage in
8

hedging or monetization transactions or similar arrangements with respect to the Company’s securities. However, the
Company may determine to grant exceptions to this prohibition if the Covered Person submits a request at least two weeks
prior to the execution of the documents evidencing the proposed transaction, along with an explanation of why the Company
should allow the transaction pledge. The Chief Compliance Officer is under no obligation to approve any request for pre-
clearance and may determine not to permit the arrangement for any reason. Notwithstanding the pre-clearance of any request,
the Company assumes no liability for the consequences of any transaction made pursuant to such request.
In addition, no Covered Person, whether or not in possession of material non-public information, may purchase the Company’s
securities on margin, or borrow against any account in which the Company’s securities are held, or pledge the Company’s
securities as collateral for a loan. However, the Company may determine to grant exceptions to this prohibition if a Covered
Person submits a request to pledge the Company’s securities as collateral for a loan (not including margin debt) and (1) clearly
demonstrates the financial capacity to repay the loan without resorting to the pledged securities and (2) specifies the
percentage amount that the securities being pledged represent of the total number of securities of the Company held by the
person making the request, as well as any other information requested by the Company. Requests for an exception must be
submitted to the Chief Compliance Officer at least two weeks prior to the execution of the documents evidencing the proposed
pledge. The Chief Compliance Officer is under no obligation to approve any request for pre-clearance and may determine not
to permit the arrangement for any reason. Notwithstanding the pre-clearance of any request, the Company assumes no liability
for the consequences of any transaction made pursuant to such request.
No Buying or Selling “Derivative Securities.” No Covered Person shall buy or sell puts (i.e., options to sell), calls (i.e., options
to purchase), future contracts, or other forms of derivative securities relating to Covered Securities, other than in the exercise
of their duties with respect to SPH. For these purposes, a security will be considered a derivative of another security if its
value is derived from the value of the other security.
Form 144 Reports
Directors and certain officers designated by the Board of Directors are required to file a Form 144 before making an open
market sale of SPH securities. Form 144 notifies the SEC of your intent to sell SPH securities. Although often prepared and
filed by your broker, this form and its timely filing is each individual’s personal responsibility and is in addition to the Section
16 reports that may be required to be filed.
Post-Transaction Notification
Because Section 16(a) of the Exchange Act requires that certain transactions be reported on Form 4s filed within two business
days following the date of the transaction, SPH’s policy requires immediate notification of sufficient details of any transaction
to allow time to prepare and file the required reports within the two-business-day deadline. Since SPH requires a day to
prepare the Form 4 and a day to transmit the form to the SEC, all officers and directors must report the details of any
transaction in SPH’s securities to us at least by the close of business of the date the transaction occurred. This includes all
purchases, sales, transfers by gift or otherwise, trades pursuant to approved 10b5-1 plans, and option exercises.
9

Use of Knowledgeable Stockbroker
Each Covered Person is encouraged to select one stockbroker to effect all of his or her transactions in the Covered Securities,
and that broker should become familiar with SPH’s insider trading policy and the restrictions that apply to his or her
transactions in the Covered Securities. Remember, however, that a broker has no legal responsibility for a client’s Section 16
filings or short-swing profit rule violations. Therefore, the best protection will come from your own awareness of the possible
pitfalls. However, use of the same broker familiar with this policy will help you constantly monitor your compliance, not only
with this policy but also with your other securities laws obligations, such as compliance with Rule 144.
Restrictions on Use of Brokers
Each Covered Person is restricted from transacting in the Covered Securities under a Rule 10b5-1 trading plan with any broker
which is an affiliate of SPH, its subsidiaries or which is affiliated with a control person of SPH or its subsidiaries. In addition,
each Covered Person shall not effect any transactions in the Covered Securities under a Rule 10b5-1 trading plan with a broker
with whom he or she is affiliated.
EVEN IF YOU PRE-CLEAR A TRANSACTION AND EVEN IF IT IS DURING AN OPEN WINDOW PERIOD,
YOU, ANY COMPANY, TRUST OR ENTITY CONTROLLED BY YOU, YOUR SPOUSE AND YOUR FAMILY
MEMBERS AND OTHERS LIVING IN YOUR HOUSEHOLD MAY NOT TRADE IN THE COVERED
SECURITIES IF YOU ARE IN POSSESSION OR AWARE OF MATERIAL, NON- PUBLIC INFORMATION
ABOUT THE COVERED SECURITY. THE PROCEDURES SET FORTH HEREIN ARE IN ADDITION TO THE
GENERAL INSIDER TRADING POLICY AND ARE NOT A SUBSTITUTE THEREFOR.
Exceptions to the Prohibitions on Trading
The only exceptions to the prohibitions of trading in SPH’s policy with respect to Covered Securities as outlined above are the
following:
Bona Fide Gifts. Bona fide gifts of Covered Securities are not deemed to be transactions for the purposes of this policy.
Whether a gift is truly bona fide will depend on the circumstances surrounding a specific gift. The more unrelated the donee is
to the donor, the more likely the gift would be considered “bona fide” and not a “transaction.” For example, gifts to charities,
churches or non- profit organizations would not be deemed to be “transactions.” However, gifts to dependent children
followed by a sale of the “gifted securities” in close proximity to the time of the gift may imply some economic benefit to the
donor and, therefore, may be deemed to be a “transaction” and not a “bona fide gift.”
Stock Option Exercises. SPH’s policy does not apply to the exercise of an employee stock option as long as the exercise is just
a purchase of stock with no associated sale (even if the sale is part of a “cashless exercise” where the employee pays the
exercise price in shares of SPH’s stock). The policy does apply, however, to any sale of stock as part of a broker-assisted
cashless exercise of an option, or any other market sale for the purpose of generating the cash needed to pay the exercise price
or the related taxes of an option.
Restricted Stock Units. This policy does not apply to the vesting of restricted stock units (RSUs), or the exercise of a tax
withholding right pursuant to which you elect to have SPH withhold shares of stock to satisfy minimum tax withholding
requirements upon the vesting of any RSUs.
10

ADMINISTRATION OF POLICY
Any person who has any questions about specific transactions may obtain additional guidance from our General Counsel
and/or Deputy General Counsel. SPH reserves the right to amend and interpret the policy from time to time.
CERTIFICATION OF COMPLIANCE
All Covered Persons will be required to certify their understanding of and compliance with this policy on an annual basis.
Remember, however, the ultimate responsibility for adhering to the policy and avoiding improper transactions rests
with you. In this regard, it is imperative that you use your best judgment.

11

RECEIPT AND ACKNOWLEDGMENT
I,     , hereby acknowledge that I have received and read a copy of the Steel Partners Holdings L.P. Insider Trading Policy and
agree to comply with its terms. I understand that violation of insider trading or tipping laws or regulations may subject me to
severe civil and/or criminal penalties, and that violation of the terms of the above-titled policy may subject me to discipline by
SPH or my employer up to and including termination for cause.
    
Signature    
    
Date
12

SCHEDULE A
13

ANNEX A
Steel Partners Holdings L.P. (“SPH”)
Request for Approval to Trade Securities
Type of Security [check all applicable boxes]
Common stock
Preferred stock
Restricted stock
Stock option
Number of Shares        
Proposed Date of Transaction     
Type of Transaction
Stock option exercise – Exercise Price $    /share Exercise Price paid as follows:
Broker’s cashless exchange
cash
pledge
other      Withholding tax paid as follows:
Broker’s cashless exchange
cash
other     
Purchase
Sale
Gift
Other     
Broker Contact Information
Company Name         Contact Name         Telephone         Email Address         Account Number        
Social Security or other Tax Identification Number     
Current Status at SPH (check all applicable boxes)
Executive Officer
Board Member

14

Filing Information (check all applicable boxes and complete blanks)
Date of filing of last Form 3 or 4     
Is a Form 144 necessary to effect the trade for which you seek pre-clearance here, and have you confirmed with your broker
that it will be filed with the SEC (a Form 144 is required if the amount of securities to be sold in reliance upon this rule during
any period of three months exceeds 5,000 shares or other units or has an aggregate sale price in excess of $50,000)?
Date of filing of last Form 144     
I am not currently in possession of any material non-public information relating to SPH and its subsidiaries. I hereby certify that
the statements made on this form are true and correct.
I understand that clearance may be rescinded prior to effectuating the above transaction if material non- public information regarding SPH
arises and, in the reasonable judgment of SPH, the completion of my trade would be inadvisable. I also understand that the ultimate
responsibility for compliance with the insider trading provisions of the federal securities laws rests with me and that clearance of any
proposed transaction should not be construed as a guarantee that I will not later be found to have been in possession of material non-public
information.
I also hereby certify that:
•
if the trade being pre-cleared requires a Form 144, I will make reasonable best efforts to file or cause my broker to file timely a
Form 144 as required by Rule 144 under the Securities Act of 1933, as amended;
•
if I have a Rule 10b5-1 plan in effect, I will act in good faith with respect to such plan, and the transaction(s) contemplated by
this request do not and are not intended to alter, manipulate, hedge and/or reduce or eliminate the economic consequence of any
transactions contemplated by the Rule 10b5-1 plan; and
•
if I am an executive officer or director, I will not coordinate any of my sales with, or hedge any of them against, Company stock
repurchases.
Signature             Date         Print Name         
Telephone Number and Email Address Where You May Be Reached
Request Approved (transaction must be completed within two business days after approval, and must not be completed during a closed
window or blackout period (as defined in Steel Partners Holdings L.P.’s Insider Trading Policy).
Request Denied
Request Approved with the following modification     
Signature         Date     

15

COVERED SECURITIES
16

EXHIBIT 21.1
Schedule of Subsidiaries
(as of December 31, 2024) 
STEEL PARTNERS HOLDINGS GP INC., a Delaware corporation.
SPH GROUP LLC, a Delaware limited liability company.
SPH GROUP HOLDINGS LLC, a Delaware limited liability company.
STEEL SERVICES LTD, a Delaware corporation.
WEBFINANCIAL HOLDING CORPORATION, a Delaware corporation.
HANDY & HARMAN LTD., a Delaware corporation.
STEEL EXCEL INC., a Delaware corporation.
580 SABAL PALM ROAD LLC, a Delaware limited liability company.
STEEL PARTNERS INSURANCE INC., a Delaware corporation.
STEEL IP INVESTMENTS, LLC., a Delaware limited liability company.
WEBFINANCIAL HOLDING CORPORATION SUBSIDIARIES
WEBBANK HOLDING CORP., a Delaware corporation.
WEBBANK, a Utah chartered industrial bank.
NATIONAL PARTNERS PFCO LLC, a Delaware limited liability company.
NATIONAL PARTNERS PFCO OF NEW YORK LLC, a Delaware limited liability company.
NATIONAL PARTNERS PFCO INC OF CALIFORNIA, a Delaware corporation.
WEB ASSET CORP., a Delaware corporation.
WEBFINANCIAL HOLDING LLC, a Delaware limited liability company.
DUNMORE INTERNATIONAL CORP., a Delaware corporation.
DUNMORE EUROPE GMBH, a German limited liability company
STEEL CONNECT INC., a Delaware corporation.
HANDY & HARMAN LTD. SUBSIDIARIES
HANDY & HARMAN GROUP, LTD. ("HHG"), a Delaware corporation.
WF ASSET CORP., a Delaware corporation.
WHX CS LLC, a Delaware limited liability company..
(1)

HANDY & HARMAN ("HANDY & HARMAN"), a New York corporation, a direct subsidiary of HHG.
BAIRNCO LLC ("BAIRNCO"), a Delaware limited liability company, a direct subsidiary of HHG.
HANDY & HARMAN HOLDING CORPORATION, a Delaware corporation, a direct subsidiary of HHG.
JPS INDUSTRIES HOLDINGS LLC., a Delaware limited liability company, a direct subsidiary of HHG.
JPS COMPOSITE MATERIALS CORPORATION, a Delaware corporation.
SL INDUSTRIES, INC., a Delaware corporation, a direct subsidiary of HHG.
HANDY & HARMAN INTERNATIONAL, LTD., a Delaware corporation.
HANDY & HARMAN NETHERLANDS, BV., a Netherlands corporation.
HANDYTUBE CORPORATION, a Delaware corporation.
INDIANA TUBE CORPORATION, a Delaware corporation.
LUCAS-MILHAUPT, INC., a Wisconsin corporation.
LUCAS-MILHAUPT BRAZING MATERIALS (SUZHOU) CO. LTD., a China corporation.
LUCAS-MILHAUPT HONG KONG LIMITED, a Hong Kong corporation.
LUCAS MILHAUPT RIBERAC SA, a France corporation.
LUCAS-MILHAUPT WARWICK LLC, a Delaware limited liability company.
OMG, INC., a Delaware corporation (formerly known as Olympic Manufacturing Group, Inc.)
CEDRO DE MEXICO, S.A. DE C.V., a Mexico limited liability company.
DAVALL GEARS LTD., a United Kingdom corporation.
MOLLART UNIVERSAL JOINTS LTD., a United Kingdom corporation.
MTE CORPORATION, a Wisconsin corporation.
SL DELAWARE HOLDINGS, INC., a Delaware corporation.
SL MONTEVIDEO TECHNOLOGY, INC., a Minnesota corporation. .
TPE DE MEXICO, S. DE R.L. DE C.V., a Mexico limited liability company.
STEEL EXCEL INC. SUBSIDIARIES 
STEEL ENERGY SERVICES LTD., a Delaware corporation.
ATLANTIC SERVICE CO. LTD., a Canada corporation, a direct subsidiary of Kasco LLC.
ATLANTIC SERVICE CO. (UK) LTD., a United Kingdom corporation, a direct subsidiary of Kasco LLC.
BERTRAM & GRAF GMBH, a German limited liability company, a direct subsidiary of Kasco LLC.
KASCO LLC, a Delaware limited liability company, a direct subsidiary of Steel Energy Services Ltd.
(2)

KASCO ENSAMBLY S.A. DE C.V., a Mexico limited liability company, a direct subsidiary of Kasco LLC. 
KASCO MEXICO LLC, a Delaware limited liability company, a direct subsidiary of Kasco LLC.
SUN WELL SERVICE, LLC., a Delaware limited liability company.
ROGUE PRESSURE SERVICES LLC., a Delaware limited liability company.
BLACK HAWK ENERGY SERVICES, LLC., a Delaware limited liability company.
BASIN WELL LOGGING WIRELINE SERVICES, INC., a New Mexico corporation.
STEEL SPORTS INC., a Delaware corporation.
BASEBALL HEAVEN INC., a Delaware corporation.
UK ELITE SOCCER INC., a New Jersey corporation.
LASORDA LEGACY ACADEMY CO LLC, a Delaware limited liability company.
STEEL UNITED VA, LLC, a Delaware limited liability company.
DGTH LLC, a Delaware corporation.
1001 HERMOSA AVENUE LLC, a Delaware limited liability company.
Steel Connect Inc. Subsidiaries
CMG SECURITIES CORPORATION, a Massachusetts corporation.
CMG@VENTURES, INC., a Delaware corporation.
CMG@VENTURES CAPITAL CORP., a Delaware corporation.
CMG@VENTURES SECURITIES CORP., a Delaware corporation.
MODUSLINK PTS, INC., a Delaware corporation.
MODUSLINK RECOVERY LLC, a Delaware limited liability company.
MODUSLINK SECURITIES CORPORATION, a Delaware corporation.
STEEL CONNECT SUB LLC, a Delaware limited liability company.
MODUSLINK THAILAND LLC, a Delaware limited liability company.
MODUSLINK CORPORATION, a Delaware corporation.
MODUSLINK (THAILAND) COMPANY LIMITED, a Thailand corporation.
SALESLINK LLC, a Delaware limited liability company.
MODUSLINK PTE. LTD., a Singapore corporation.
MODUSLINK MEXICO S.A. DE C.V., a Mexico limited liability company.
SOL HOLDINGS, INC., a Delaware corporation.
SOL SERVICES CORPORATION, S.A. DE C.V., a Mexico limited liability company.

SALESLINK MEXICO HOLDING CORP., a Delaware corporation.
SALESLINK SERVICES, S. DE R.L. DE C.V., a Mexico limited liability company.
MODUSLINK B.V., a Netherlands corporation.
MODUSLINK CZECH REPUBLIC S.R.O., a Czech Republic corporation.
MODUS MEDIA INTERNATIONAL (IRELAND) LIMITED, a Delaware corporation.
MODUS MEDIA INTERNATIONAL IRELAND (HOLDINGS) LIMITED, an Ireland corporation.
MODUSLINK KILDARE LIMITED, an Ireland corporation.
MODUSLINK SERVICES EUROPE, an Ireland corporation.
SALESLINK SOLUTIONS INTERNATIONAL IRELAND LIMITED, an Ireland corporation.
MODUSLINK AUSTRALIA PTY LIMITED, an Australia corporation.
MODUSLINK SOFTWARE (SHENZHEN) CO. LTD., a China corporation.
MODUSLINK ELECTRONIC TECHNOLOGY (SHENZHEN) CO. LTD., a China corporation.
MODUSLINK (SHANGHAI) CO. LTD., a China corporation.
MODUSLINK (KUNSHAN) CO. LTD., a China corporation.
MODUSLINK (CHINA) CO. LTD., a China corporation.
MODUSLINK (WAIGAOQIAO) CO. LTD., a China corporation.
MODUSLINK (HONG KONG) PTE. LTD., a Hong Kong corporation.
MODUSLINK SOFTWARE TECHNOLOGY (CHONGQING) CO., LTD., a China corporation.
MODUSLINK (M) SDN. BHD., a Malaysia corporation.
________________________
(1) This list omits subsidiaries which, considered in the aggregate, would not constitute a significant subsidiary.
(2) Other than Handy & Harman Ltd. and its subsidiaries.

EXHIBIT 31.1
PRINCIPAL EXECUTIVE OFFICER CERTIFICATION
I, Warren G. Lichtenstein, certify that:
1.
I have reviewed this Annual Report on Form 10-K for the year ended December 31, 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:
March 11, 2025
/s/ Warren G. Lichtenstein
Warren G. Lichtenstein
Executive Chairman of Steel Partners Holdings GP Inc.

EXHIBIT 31.2
PRINCIPAL FINANCIAL OFFICER CERTIFICATION
I, Ryan O'Herrin, certify that:
1.
I have reviewed this Annual Report on Form 10-K for the year ended December 31, 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:
March 11, 2025
/s/ Ryan O'Herrin
Ryan O'Herrin
Chief Financial Officer

of Steel Partners Holdings GP Inc.

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 Annual Report of Steel Partners Holdings L.P. (the “Partnership”) on Form 10-K for the year ended December 31, 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:
March 11, 2025
/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.

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 Annual Report of Steel Partners Holdings L.P. (the “Partnership”) on Form 10-K for the year ended December 31, 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:
March 11, 2025
/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.