Steel Partners (SPLP) Q2 2024 earnings summary

Executive summary

• Revenue for Q2 2024 increased 6.4% year-over-year to $533.2 million, driven by growth in Diversified Industrial, Financial Services, and Supply Chain segments, partially offset by a decline in Energy segment revenue.

• Net income for Q2 2024 was $124.9 million, up 113.2% from Q2 2023, aided by a one-time non-cash income tax benefit of $71.6 million from the release of Steel Connect's deferred tax asset valuation allowance.

• Year-to-date revenue reached $1.01 billion, up 6.7%, and net income increased 91.5% to $159.7 million.

• Steel Connect's results have been consolidated since May 2023, contributing to segment growth.

• Operating income before interest and taxes rose to $67.6 million from $49.1 million year-over-year.

Financial highlights

• Q2 2024 revenue: $533.2 million (+6.4% YoY); six-month revenue: $1.01 billion (+6.7% YoY).

• Q2 2024 net income: $124.9 million; six-month net income: $159.7 million.

• Q2 2024 EPS (basic): $5.72; six-month EPS (basic): $7.33.

• Adjusted EBITDA for Q2 2024 was $83.8 million (15.7% margin), up from $73.6 million (14.7%) in Q2 2023.

• Cash from operations for the six months ended June 30, 2024 was $266.4 million, up from a use of $54.5 million in the prior year period.

Outlook and guidance

• Management expects to remain in compliance with all credit facility covenants and maintain adequate liquidity for at least the next twelve months.

• Full-year 2024 capital expenditures are projected to be $70–77 million, up from $51.5 million in 2023.

• Management emphasized continued discipline in capital allocation, supporting free cash flow and debt reduction.

• Over $100 million of debt has been paid down since the start of the year.