Steel Partners Holdings L.P. (SPLP): Business Model Canvas [11-2024 Updated]
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Steel Partners Holdings L.P. (SPLP) Bundle
Steel Partners Holdings L.P. (SPLP) operates on a multifaceted business model that integrates diverse industrial manufacturing with financial services. This unique approach allows SPLP to serve a wide range of customer segments, from industrial manufacturers to small enterprises seeking banking solutions. Discover how SPLP's strategic partnerships, key activities, and robust value propositions position it as a leader in both the industrial and financial sectors.
Steel Partners Holdings L.P. (SPLP) - Business Model: Key Partnerships
Collaborations with diversified industrial manufacturers
Steel Partners Holdings L.P. engages with various diversified industrial manufacturers to enhance its product offerings and operational efficiencies. For the three months ended September 30, 2024, the revenue from the Diversified Industrial segment was $318,642,000, a 6.5% increase from $299,098,000 in the same period of 2023.
Key partnerships in this area include relationships with manufacturers in the Joining Materials, Electrical Products, and Building Materials sectors. These collaborations enable SPLP to leverage technological advancements and improve product quality, which is crucial for maintaining competitive advantage.
Affiliations with financial institutions for lending services
SPLP has established affiliations with several financial institutions to secure lending services. As of September 30, 2024, the company reported loans receivable of $1,430,323,000, down from $1,582,536,000 on December 31, 2023. These partnerships facilitate access to capital, which is vital for financing growth initiatives and managing liquidity.
Additionally, SPLP's senior credit facility, which amounts to $600,000,000, includes provisions for revolving credit loans and standby letters of credit, enhancing its financial flexibility.
Partnerships with supply chain management firms
In 2023, SPLP added a Supply Chain segment, generating revenue of $136,595,000 for the nine months ended September 30, 2024, compared to $70,190,000 in the same period of 2023, indicating a 94.6% increase. This growth is attributed to strategic partnerships with supply chain management firms, which optimize logistics and inventory management.
These collaborations also help mitigate risks associated with supply chain disruptions, ensuring that SPLP can maintain steady production and delivery schedules.
Relationships with brokers for investment transactions
SPLP maintains relationships with various brokers to facilitate investment transactions. For the nine months ended September 30, 2024, the company recorded net income of $196,620,000, significantly higher than $111,305,000 in the previous year. These brokers assist in the execution of trades and provide market insights, which are essential for effective portfolio management.
Furthermore, the company recorded realized and unrealized gains on securities, netting $2,994,000 for the nine months ended September 30, 2024, demonstrating the effectiveness of its investment strategies, supported by broker relationships.
| Partnership Type | Key Metrics | Financial Impact |
|---|---|---|
| Diversified Industrial Manufacturers | Revenue: $318,642,000 (Q3 2024) | 6.5% increase YoY |
| Financial Institutions | Loans Receivable: $1,430,323,000 (Sept 2024) | Access to $600,000,000 credit facility |
| Supply Chain Management Firms | Supply Chain Revenue: $136,595,000 (9M 2024) | 94.6% increase YoY |
| Brokers for Investment Transactions | Net Income: $196,620,000 (9M 2024) | Realized gains: $2,994,000 (9M 2024) |
Steel Partners Holdings L.P. (SPLP) - Business Model: Key Activities
Manufacturing and distributing engineered niche industrial products
Steel Partners Holdings L.P. (SPLP) operates in the diversified industrial sector, focusing on manufacturing and distributing engineered niche industrial products. For the three months ended September 30, 2024, the Diversified Industrial segment reported net sales of $318,642,000, an increase of 6.5% compared to $299,098,000 for the same period in 2023. The increase was primarily driven by higher sales in the Joining Materials, Electrical Products, and Building Materials business units. The segment's operating income for the same period was $26,346,000, compared to $14,756,000 in the prior year.
Providing banking services through WebBank
WebBank, a wholly owned subsidiary of SPLP, provides banking services, including asset-based lending and credit risk transfer. For the three months ended September 30, 2024, the Financial Services segment generated revenue of $113,027,000, up from $106,405,000 in the same period of 2023, reflecting an increase of 6.2%. The segment's operating income turned positive at $23,945,000 compared to an operating loss of $2,588,000 in the same quarter of 2023. This improvement was largely attributed to increased interest income and fees.
Offering supply chain management and logistics solutions
SPLP added a Supply Chain segment on May 1, 2023, which has shown significant growth. For the three months ended September 30, 2024, the Supply Chain segment reported revenue of $48,488,000, compared to $40,009,000 in the same period of 2023, marking an increase of 21.2%. The segment's operating income was $2,637,000 for the same quarter, a decrease from $4,011,000 in the previous year, primarily due to increased selling, general, and administrative expenses.
| Period | Revenue (in $000) | Operating Income (in $000) |
|---|---|---|
| Q3 2024 (Diversified Industrial) | 318,642 | 26,346 |
| Q3 2024 (Financial Services) | 113,027 | 23,945 |
| Q3 2024 (Supply Chain) | 48,488 | 2,637 |
Engaging in investment management and capital allocation
SPLP actively engages in investment management and capital allocation strategies to enhance shareholder value. For the nine months ended September 30, 2024, SPLP reported net income of $196,620,000, compared to $111,305,000 for the same period in 2023, an increase of 76.7%. The company's cash flows from operating activities generated $368,173,000 during the same period, reflecting a significant improvement from $11,675,000 in the prior year. This positive cash flow, along with a net decrease in loans held for sale of $215,665,000, illustrates the effectiveness of its capital allocation strategies.
Steel Partners Holdings L.P. (SPLP) - Business Model: Key Resources
Diverse portfolio of operating subsidiaries
Steel Partners Holdings L.P. (SPLP) maintains a diverse portfolio of operating subsidiaries across various sectors, including Diversified Industrial, Energy, Financial Services, and Supply Chain. For the nine months ended September 30, 2024, the total revenue generated was approximately $1.53 billion, reflecting an increase of 6.3% compared to the same period in 2023.
| Segment | Revenue (2024, $ in thousands) | Revenue (2023, $ in thousands) | Percentage Change |
|---|---|---|---|
| Diversified Industrial | 945,576 | 918,570 | 2.9% |
| Energy | 109,182 | 145,220 | -24.8% |
| Financial Services | 338,575 | 304,570 | 11.2% |
| Supply Chain | 136,595 | 70,190 | 94.5% |
Experienced management team across sectors
SPLP boasts a highly experienced management team with a proven track record across various industries. This expertise enhances operational efficiencies and strategic decision-making. The management's focus has led to improved segment operating income for the Financial Services segment, which saw a significant increase to $80.8 million for the nine months ended September 30, 2024, compared to $48.2 million in the same period in 2023.
Strong financial backing and capital resources
The financial structure of SPLP is robust, supported by a senior secured revolving credit facility amounting to $600 million. As of September 30, 2024, SPLP's total capital to risk-weighted assets ratio was reported at 18.80%, significantly exceeding the regulatory requirements. The company recorded a net income of $196.6 million for the nine months ended September 30, 2024, an increase from $111.3 million in 2023.
| Financial Metric | Value (2024) | Value (2023) |
|---|---|---|
| Net Income ($ in thousands) | 196,620 | 111,305 |
| Total Capital ($ in thousands) | 381,256 | 359,747 |
| Debt to Equity Ratio | 0.51 | 0.55 |
Intellectual property and proprietary technologies
SPLP has developed a range of proprietary technologies and holds various patents. As of September 30, 2024, the total carrying amount of identifiable intangible assets was approximately $324.4 million. The company also holds trademarks with indefinite lives valued at $22.2 million as of the same date.
| Type of Intellectual Property | Value ($ in thousands) |
|---|---|
| Developed Technology and Patents | 33,290 |
| Trademarks | 22,216 |
| Other Intangible Assets | 16,664 |
Steel Partners Holdings L.P. (SPLP) - Business Model: Value Propositions
Comprehensive range of industrial and financial services
Steel Partners Holdings L.P. (SPLP) operates a diversified global holding company structure, which encompasses a wide array of industrial and financial services. As of September 30, 2024, the company reported total assets of $3.63 billion, showcasing its extensive operational footprint. The revenue generated for the nine months ended September 30, 2024, amounted to $1.53 billion, representing a year-over-year increase from $1.44 billion in the same period of 2023.
Customized supply chain solutions tailored to client needs
SPLP offers customized supply chain solutions that cater specifically to the needs of its clients. The company’s ability to provide tailored services has been evidenced by the increase in operating income, which rose by $5.16 million for the nine months ended September 30, 2024, compared to the previous year. This strategic focus on customization enhances client satisfaction and retention, fostering long-term partnerships.
Strong market presence in niche industrial sectors
SPLP maintains a strong market presence in several niche industrial sectors, including energy, building materials, and electrical products. For the three months ended September 30, 2024, SPLP reported segment operating income of $23.95 million in financial services, a significant recovery from an operating loss of $2.59 million in the previous year. This demonstrates the company's resilience and expertise in navigating market challenges and capitalizing on growth opportunities in specialized markets.
Reliable banking services with competitive rates
The financial services segment of SPLP provides reliable banking solutions, which include competitive rates on loans and deposits. For the nine months ended September 30, 2024, the company generated $34 million in revenue from this segment, indicating an 11.2% increase compared to the same period in 2023. This growth is attributed to higher interest income and fees, reflecting SPLP's strategic positioning in the financial sector.
| Metric | As of September 30, 2024 | As of September 30, 2023 | Change (%) |
|---|---|---|---|
| Total Assets | $3.63 billion | $3.99 billion | -9.2% |
| Total Revenue (9 months) | $1.53 billion | $1.44 billion | 6.3% |
| Operating Income (Financial Services) | $23.95 million | $(2.59 million) | N/A |
| Financial Services Revenue (9 months) | $34 million | $30.5 million | 11.2% |
Steel Partners Holdings L.P. (SPLP) - Business Model: Customer Relationships
Direct sales through experienced personnel
Steel Partners Holdings L.P. (SPLP) employs a direct sales approach that leverages an experienced sales team. This team is responsible for managing relationships with clients and ensuring the delivery of tailored solutions. In the nine months ended September 30, 2024, SPLP reported a net income of $196,620,000, showcasing the effectiveness of their sales strategy in driving profitability .
Client-focused service model in banking and logistics
The company has established a client-focused service model particularly in its Financial Services and Supply Chain segments. Revenue for the Financial Services segment increased by $34,005,000, or 11.2%, in the nine months ended September 30, 2024, compared to the same period in 2023. This growth was mainly attributed to higher interest income and fees . Additionally, the Supply Chain segment generated revenue of $136,595,000 for the same period, reflecting a 94.6% increase due to consolidation impacts and heightened sales volume .
Long-term partnerships with key industrial clients
SPLP emphasizes the establishment of long-term partnerships with key industrial clients, which is evident from their diversified portfolio across various sectors. The diversified industrial segment reported net sales of $27,006,000, or a 2.9% increase, in the nine months ended September 30, 2024 . This indicates the company's commitment to nurturing relationships that yield consistent revenue streams.
Engagement through digital platforms for services and support
To enhance customer engagement, SPLP utilizes digital platforms that provide services and support to clients. This strategy aligns with modern consumer preferences for digital interaction. The company’s overall revenue for the three months ended September 30, 2024, was $520,423,000, an increase of 5.7% from the previous year, illustrating the positive impact of digital engagement on sales .
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Income | $36,873,000 | $27,887,000 | +32.4% |
| Revenue (Financial Services) | $6,622,000 | $6,622,000 | +6.2% |
| Revenue (Supply Chain) | $136,595,000 | $70,190,000 | +94.6% |
| Net Sales (Diversified Industrial) | $27,006,000 | $26,000,000 | +2.9% |
Steel Partners Holdings L.P. (SPLP) - Business Model: Channels
Direct sales force for industrial products
Steel Partners Holdings L.P. utilizes a direct sales force to effectively market and distribute its industrial products. This approach allows the company to maintain close relationships with key customers and respond promptly to their needs. As of September 30, 2024, net sales for the Diversified Industrial segment increased by $19,544, representing a growth of 6.5% compared to the same period in 2023. This increase was primarily driven by higher sales in the Joining Materials, Electrical Products, and Building Materials business units.
Online banking and financial services platform
SPLP's financial services segment has also expanded its reach through an online banking and financial services platform. For the three months ended September 30, 2024, revenue increased by $6,622, or 6.2%, compared to the same period in 2023. This revenue growth was attributed to increases in interest income and fees from higher credit risk transfer and asset-based lending.
Distribution networks for supply chain solutions
The company has established robust distribution networks for its supply chain solutions, which have been critical for its operational efficiency. As of September 30, 2024, the Supply Chain segment reported revenues of $136,595 for the nine months ended, an increase from $70,190 for the same period in 2023. This growth reflects a strategic focus on enhancing supply chain capabilities and increasing sales volume.
| Channel | Revenue Growth (2024 vs 2023) | Key Factors |
|---|---|---|
| Direct Sales Force | $19,544 (6.5%) | Increased sales in Joining Materials, Electrical Products, and Building Materials |
| Online Banking & Financial Services | $6,622 (6.2%) | Higher interest income and fees from asset-based lending |
| Distribution Networks | $136,595 | Increased sales volume and operational efficiencies |
Investor relations through public disclosures and communications
Steel Partners Holdings L.P. maintains strong investor relations through public disclosures and effective communications. The company reported a net income of $196,620 for the nine months ended September 30, 2024, compared to $111,305 for the same period in 2023. This strong financial performance is communicated through regular updates to investors, ensuring transparency and fostering trust.
Steel Partners Holdings L.P. (SPLP) - Business Model: Customer Segments
Industrial manufacturers and distributors
Steel Partners Holdings L.P. primarily serves industrial manufacturers and distributors through its diversified industrial segment. For the three months ended September 30, 2024, the Diversified Industrial segment generated net sales of $318,642,000, representing a 6.5% increase from the same period in 2023. This growth was driven by increased demand across various business units, including Joining Materials, Electrical Products, and Building Materials.
Small to medium-sized enterprises seeking banking solutions
The Financial Services segment of SPLP caters to small to medium-sized enterprises (SMEs) by providing asset-based lending and credit risk transfer solutions. For the nine months ended September 30, 2024, the segment recorded revenue of $338,575,000, which is an increase of 11.2% compared to the same period in 2023. The increase is attributed to higher interest income and fees, reflecting a growing demand for banking solutions among SMEs.
Corporations requiring supply chain management services
SPLP has positioned itself to serve corporations needing supply chain management services through its Supply Chain segment. Revenue from this segment reached $136,595,000 for the nine months ended September 30, 2024, a significant increase of 94.6% compared to the same period in 2023. This growth is primarily due to the consolidation of Steel Connect, which has enhanced SPLP's capabilities in supply chain management.
Investors looking for diversified financial opportunities
Steel Partners Holdings also appeals to investors seeking diversified financial opportunities. The Company reported a net income of $196,620,000 for the nine months ended September 30, 2024, a substantial increase from $111,305,000 in the same period of 2023. The robust financial performance demonstrates SPLP's ability to deliver value to its investors through strategic investments and operational efficiencies.
| Customer Segment | Revenue (Q3 2024) | Revenue (Q3 2023) | Percentage Change | Key Drivers |
|---|---|---|---|---|
| Industrial Manufacturers and Distributors | $318,642,000 | $299,098,000 | 6.5% | Increased demand across business units |
| Small to Medium-Sized Enterprises | $113,027,000 | $106,405,000 | 6.2% | Higher interest income and fees |
| Corporations (Supply Chain Management) | $136,595,000 | $70,190,000 | 94.6% | Consolidation of Steel Connect |
| Investors | $196,620,000 | $111,305,000 | 76.7% | Strategic investments and operational efficiencies |
Steel Partners Holdings L.P. (SPLP) - Business Model: Cost Structure
Manufacturing and operational costs for products
For the nine months ended September 30, 2024, the cost of goods sold (COGS) amounted to $872,929, an increase of $38,952, or 4.7%, compared to the same period in 2023. The increase was primarily driven by the consolidation of the Supply Chain segment and higher net sales from the Diversified Industrial segment.
Administrative and compliance expenses for banking
Selling, general and administrative expenses (SG&A) for the nine months ended September 30, 2024, totaled $412,301, reflecting an increase of $36,049, or 9.6%, compared to the same period in 2023. This increase was mainly due to higher SG&A expenses from the Financial Services segment of $22,600 and from the Supply Chain segment of $16,400.
Marketing and sales expenses across segments
The SG&A expenses for the three months ended September 30, 2024, were $137,310, an increase of $12,376, or 9.9%, from the same period in 2023, driven by higher expenses in the Financial Services segment of $7,600 and the Supply Chain segment of $4,900.
Research and development costs for innovation
Research and development (R&D) costs are not explicitly detailed in the financial statements; however, the overall investment in innovation is reflected in the higher operating expenses and strategic initiatives across segments. The company has also emphasized enhancing its operational efficiencies through the Steel Business System, which includes R&D initiatives aimed at improving product offerings and operational performance.
| Cost Category | Q3 2024 ($ thousands) | Q3 2023 ($ thousands) | Change ($ thousands) | Change (%) |
|---|---|---|---|---|
| Cost of Goods Sold | 295,577 | 283,285 | 12,292 | 4.3 |
| Selling, General and Administrative Expenses | 137,310 | 124,934 | 12,376 | 9.9 |
| Interest Expense | 1,993 | 4,115 | (2,122) | (51.6) |
| All Other Expense, Net | 29,856 | 58,539 | (28,683) | (48.9) |
Steel Partners Holdings L.P. (SPLP) - Business Model: Revenue Streams
Sales from diversified industrial products
For the three months ended September 30, 2024, net sales from the Diversified Industrial segment increased by $19,544, or 6.5%, compared to the same period in the previous year. The total revenue for this segment was driven by higher sales from various business units:
| Business Unit | Increase in Revenue ($ thousands) | Primary Driver |
|---|---|---|
| Joining Materials | 9,100 | Higher precious metal prices and sales volume |
| Electrical Products | 5,200 | Strong demand from industrial and aerospace & defense sectors |
| Building Materials | 4,000 | Higher sales volume from roofing products |
For the nine months ended September 30, 2024, net sales increased by $27,006, or 2.9%, reflecting similar trends across the business units.
Interest income and fees from WebBank operations
Revenue from the Financial Services segment for the three months ended September 30, 2024, increased by $6,622, or 6.2%. This increase was primarily attributed to:
- Higher interest income and fees from asset-based lending.
- Increased credit risk transfer and held-for-sale volume.
- Higher interest from held-to-maturity investments.
For the nine months ended September 30, 2024, revenue from this segment rose by $34,005, or 11.2%, driven by similar factors.
Service fees from supply chain management
The Supply Chain segment, added on May 1, 2023, reported revenue of $48,488 and $136,595 for the three and nine months ended September 30, 2024, respectively. This represents an increase of $8,479, or 21.2%, for the three-month period compared to the same period of 2023, driven primarily by higher sales volume.
Investment income from managed assets and securities
Investment income is generated from various managed assets and securities. As of September 30, 2024, the total long-term investments were valued at $78,329, with the following significant components:
| Investment Type | Value ($ thousands) | Ownership % |
|---|---|---|
| DMC Global, Inc. | 25,610 | 9.8% |
| PCS-Mosaic | 19,058 | 58.3% |
| Other long-term investments | 33,661 | N/A |
Investment income from these assets contributes significantly to the overall revenue streams of Steel Partners Holdings.
Updated on 16 Nov 2024
Resources:
- Steel Partners Holdings L.P. (SPLP) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Steel Partners Holdings L.P. (SPLP)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Steel Partners Holdings L.P. (SPLP)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.