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Steel Partner Insider Spring 2016

The newsletter for employees of Steel Partners

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Steel Partner Insider Spring 2016

  1. 1. Spring 2016 • INSIDER 1 We’re all investors at Steel Partners, and we’ve invested well — in good companies, a continuous improvement culture, operational excellence programs, and in each other. We are a collective of self- starters with a common vision and numerous shared successes. Let’s keep the momentum going, continue to nurture and grow our investments, and support one another. Respectfully, Warren Lichtenstein Dear Colleagues: SPRING 2016 I got an email from a club volleyball coach who in the course of conversation mentioned that his team, which costs about $2,000 per player (before travel expenses), had instituted a ban on parents watching practices, except for the first practice per month. Some parents, he noted, were “irrrrrraaaaaateeeee” about this policy, which I take to mean they are a bit miffed. I started thinking about why these parents would be so upset. Perhaps some simply enjoyed watching their kids practice. Maybe a few worried about something untoward happening away from their watchful eyes. But maybe it’s because I had just finished watching the nutty sports parent documentary “Trophy Kids,” in which parents referred to their “investment” in their child and talked about getting a high school coach they didn’t like fired as “business,” and I realized why these parents were upset: because they were investors being denied a voice in their investment. And then I started thinking, you don’t have to have spent $2,000 on a single season for a single team to think along these lines — I’ve seen that kind of investor thinking among parents in my days as a rec league-level coach in multiple sports. But it’s especially true if you have parents paying $2,000 a clip — or you’re a high school coach who has players on your team whose parents have done that, many, many times. You can gripe about parents talking too much, you can demand that parents write the check and shut up, but if you’re a coach who thinks that you can discount that investor thinking, right or wrong as it may be, and survive and thrive, you’re taking a huge risk. Look at Tom Maier, a high school basketball coach who appeared as parental roadkill in “Trophy Kids.” He had a long, successful career as a high school basketball coach. Then he ran into the buzzsaw of parents who had spent, as one said in the movie, “Two Lamborghinis” on their players’ development. If they didn’t like what he was doing, they didn’t have to lump it; they could, and did, consider transferring their players, er, sons to other schools. Or, they could go to the school administration and let them know what’s up. Maier, who said in the movie that he wasn’t old-school, he was “right school,” right-schooled his way out of job. I won’t say that Maier would still have a job today if he followed what I’m about to lay out, but the chances are certainly better than huffing he was right, even if he probably was. So here is how a coach can operate as a CEO to make sure he or she can best negotiate his or her way through the youth-sports complex as it stands today: 1. You are no longer a God-like figure accountable to no one, no matter if you’ve been that way in the past. 2. The parents are your shareholders — they have fronted the money for the investment, and they expect the coach/CEO to protect and enhance that investment. Part of that process for a coach/CEO is to communicate clearly and regularly — the equivalent of quarterly reports or SEC filings — to let your parents/ investors know what you’re doing, why you’re doing it, your expectation of results, and the results that you are seeing. You’re not trying to make everyone happy; that’s impossible. But at least you’re keeping them informed, and by staying in contact you’re learning which parents/ shareholders trust you — and which ones could become dissidents trying to rally other shareholders against you. 3. As a coach/CEO, think of your school administration or club board as your board of directors. Even in rec league, you’ve got something like that. You also need to foment trust and show results to your board, which could then have your back if the shareholders get restless. The board is also going to give you direction. For example, if you’re a school coach, are you expected to attract transfers to your program? Are they OK with you just working with whomever shows up? 4. What about the kids? I’d love to have an easy answer for that. In a way, they’re your employees, your talent, the ones executing your plan. But given they are relatives of your shareholders (and perhaps your board), the relationship gets a little more complicated. This isn’t as easy to manage as locking the gym doors and coaching to your heart’s content. It’s not necessarily fair to a coach. But a coach at any youth level has to be aware of these relationships and manage them in order to minimize disruption from parents/shareholders and have a positive experience for all. In the case of this emailer, he’s handling things pretty well. There is an actual parent board who approved the policy limiting parents in practice. It’s the parents who aren’t on the board who got Why A Coach Is A CEO Who Should Treat Parents As Shareholders! By Bob Cook, Forbes Contributor upset, or those parents who like to coach from the stands. In that case, all you can do is manage your parents/shareholders, let them know what you’re trying to do, and hope they trust you. While you do have to manage your stakeholders as if you’re a CEO, a chief executive who doesn’t make the moves he or she thinks is best, and only makes moves in fear of what others think, is also a coach/ CEO who won’t be around long. From Forbes©, January 24, 2016, published by Forbes, Inc. All rights reserved. Used by permission and protected by the Copyright Laws of the United States. The printing, copying, redistribution, or retransmission of this Content without express written permission is prohibited.
  2. 2. Spring 2016 • INSIDER 32 INSIDER • Spring 2016 Strong as Steel Naming Contest Winner He’s a Winner! Of the Fall 2015 SP Insider contest, that is. Mark Guyer, Head of Continuous Improvement for API Laminates in Poynton, England was the BIG winner of the October 2015 Strong as Steel Naming contest. When he learned he had won, he said he was “really chuffed about it.” Congratulations, Mark! Did You Know? • Steel comprises approximately 75 percent of all major appliances. • Susan G. Komen organization has invested over $2 billion dollars in breast cancer education, research, advocacy, health services and social support programs since it was founded in 1982. • The first use of the term “coaching” to mean an instructor or trainer arose around 1830 in Oxford University slang for a tutor who “carries” a student through an exam. The first use of the term in relation to sports came in 1861. • Gemba is a Japanese word meaning “the real place.” In business, gemba refers to the place where value is created. • The euphonium is a large, conical-bore, baritone- voiced brass instrument that derives its name from the Greek word euphonos, meaning “well-sounding” or “sweet-voiced.” • Engineering has existed since ancient times as humans devised fundamental inventions such as the wedge, lever, wheel, and pulley. • The first evidence of whiskey production in Scotland comes from an entry in the Exchequer Rolls for 1494. • Boys & Girls Club youth development programs, training and services impacted more than 4 million children and teens last year. • One of the first users of a virtual tour was Queen Elizabeth II, when she officially opened the visitor centre of Dudley Castle in England in June 1994. Because the Queen’s officials had requested titles, descriptions and instructions of all activities, the system was named and described as: “Virtual Tour, being a cross between Virtual Reality and Royal Tour.” Mark Guyer, who was really chuffed with his iPad! Mind Like a Steel Trap Contest Want to be the happy (or chuffed) owner of a new iPad Mini or a one-ounce Steel Partners commemorative silver bar? Employees who submit the correct answers – yep, they all have to be correct and they can all be found in this newsletter – to newsletter@ will be entered in a random drawing to win the iPad Mini, while 25 runners-up will receive a one-ounce silver bar. Winners will be notified by email and announced in the next Steel Partners Insider newsletter. • What state is known as the Volunteer State? • How many years ago did the Challenger shuttle tragedy occur? • Who wrote The Lean CEO: Leading the Way to World-Class Excellence? • What is the English translation of Escondido? • What is the acronym STEM short for? • What’s another word for corrective action? • Who was the first woman to coach a men’s professional basketball team? • What Steel Partners company’s business focuses on e-commerce solutions? • What is the Maori word for meat? • What might someone in Great Britain say if they’re very pleased? Comments? Suggestions? This is your Steel Partners Insider! If you have ideas for future articles or information you’d like to see included, please contact the Steel Partners communications team. Steel Partners Insider is for all employees, so this publication highlights activities and interests happening all across Steel Partners Holdings L.P. and its affiliated companies! To submit ideas, please e-mail newsletter@steelpartners. com or contact the following communications team member: Jennifer Golembeske 914.461.1276 For the past seven years, thousands of friends and families have gathered at the Manhattan Beach Pier to walk for kids with special needs and education. Every year of the SKECHERS Pier to Pier Friendship Walk has broken new records in attendance and donations – and this year was no different! More than 12,000 people joined together at the beach on October 25, 2015, blowing away the $1.2 million goal by raising $1.4 million for children. Steel Sports once again played an important role in helping the event eclipse the million dollar mark through its sponsorship of the #P2PSteelSports Selfie Challenge, which pledged $5 donated to the Walk for each photo posted on Instagram, Facebook or Twitter with the #P2PSteelSports hashtag. One of the best parts of the annual Skechers Pier to Pier Friendship Walk is sharing the funds raised from the event. Supported by celebs like Tommy Lasorda, Brooke Burke-Charvet, Sugar Ray Leonard and Denise Austin, the Skechers Foundation presented record-breaking funds: a $434,000 check for the Friendship Foundation to help children with special needs, and $932,000 dedicated to six education foundations. The launch of our scholarship program was also celebrated – with $25,000 in scholarships for 11 well-deserving high school students, who were recognized for their great potential, leadership and contributions to their schools and communities. Now the largest event supporting children with special needs and education, the SKECHERS Pier to Pier Friendship Walk has broken fundraising records every year since its 2009 launch. To date, the Walk has raised more than $5.5 million. Some of the 12,000 people who took part in the walk. Steel Gives Back Steel Sports Co-sponsors SKECHERS Foundation Pier to Pier Friendship Walk Rabbi Yossi Mintz, Michael Greenberg, Warren Lichtenstein and Sugar Ray Leonard Tommy Lasorda, Michael Greenberg, Brooke Burke-Charvet and Jimmy Kimmel Emily Fast, Camille Murray and Caroline Perry LinkedIn: Steel Partners Holdings - Twitter: @steelholding
  3. 3. Spring 2016 • INSIDER 54 INSIDER • Spring 2016 Thirty miles northeast of San Diego sits a hidden gem – Escondido. Not only is Escondido nestled in a shallow valley surrounded by rocky hills, its name means hidden in Spanish. Escondido is rich in beauty, history and culture, but there’s no hiding that it is as well known for its caring and generous community. In response to the loss of one mother to breast cancer and the diagnoses of three other mothers of players on their son Andy’s soccer team, Bill Bickel, VP Finance of MTE Corporation, and his wife Pam founded Kickin’ It Challenge. Having lost family members and friends to breast cancer as well, Bill and Pam pledged to take action and make a difference in an intimately familiar way – by organizing a soccer tournament from which 100% of the proceeds would benefit breast cancer research and services. With the help and support of friends in the soccer community, the inaugural Kickin’ It Challenge tournament was held in June 2012. They were off and running. And kicking, too. With over 13 million Americans playing soccer in the US, it is the nation’s third most played team sport, behind basketball and baseball/softball. But soccer’s popularity is not what drives teams, players and families to the Kickin’ It Challenge tournament. They come for the event’s unique combination of competition, fun, breast cancer awareness, giving back, and the lessons everyone takes home with them at the end of the two-day tournament. “It’s not unusual for teams to play in honor of a friend, a relative, or even a coach,” said Bill. “Two years ago we had a boys under 9 team playing in honor of their coach who was there to coach them in their tournament games two weeks post-mastectomy. It was a huge weekend for them, and a great lesson for all about uniting in the fight against breast cancer.” The weekend is filled with emotion, spirit and fun. The Power of Pink Challenge encourages teams to display their spirit by wearing unique pink soccer attire. Each year two teams – one boys’ team and one girls’ team – are recognized with POP awards. Other unforgettable moments include male coaches dressed in pink tutus, referees donating their fees back to the tournament, and groups of kids donating funds they raised in anticipation of the tourney. Teams “go pink” for the Power of Pink Challenge. Steel Gives Back “It is deeply personal. Initially we were inspired to take action to help support the fight against this horrible disease when we lost a member of our community to breast cancer. No child should lose a mother this way, and we won’t stop until a cure for breast cancer is found.” - Pam Bickel, Kickin’ It Challenge Kickin’ It Challenge – Unite in the Fight Kickin’ It Challenge continues to be a Bickel family affair. Pam is president and, according to Bill, “the real force behind the event,” Bill is CFO, and Andy is chief gopher and emergency referee. With the increased success in each year, the Bickels and their crew are surprised at how, as Bill says, “their little idea has become a really big thing.” In four short years, the event has contributed a total of $150,000 to Susan G. Komen San Diego, San Diego County’s largest funder of breast cancer services and an affiliate of Susan G. Komen, the organization that has invested $2.6 billion in groundbreaking research, community health outreach, advocacy and programs in more than 30 countries since 1982. The Kickin’ It Challenge two-event- one-cause goal for 2016 is $50,000. According to Annie Alwine, Director of Marketing & Communications for Susan G. Komen San Diego, Kickin’ It Challenge is the affiliate’s largest third-party fundraising event. “We have many amazing volunteers who fundraise for the Komen cause, and the Bickel family tops the list. The dedication and passion of Pam Bickel and her committee is inspiring. They work year-round to make each Kickin’ It Challenge event bigger and better. Their contribution to breast cancer services and support in San Diego is remarkable and our community would be at a loss without them.” Held during the third weekend in June at Frances Ryan Park in Escondido, this year’s Kickin’ It Challenge dates are June 18 and 19. The two-day tourney is open to all youth competitive teams American Cancer Society Key Statistics for Breast Cancer in the US Breast cancer is the most common cancer among American women, except for skin cancers. About 1 in 8 (12%) women in the U.S. will develop invasive breast cancer during their lifetime. American Cancer Society’s estimates for breast cancer in the U.S. for 2016: • About 246,660 new cases of invasive breast cancer will be diagnosed in women. • About 61,000 new cases of carcinoma in situ (CIS) will be diagnosed. (CIS is non-invasive and is the earliest form of breast cancer). • About 40,450 women will die from breast cancer. Breast cancer is the second leading cause of cancer death in women, exceeded only by lung cancer. The chance that breast cancer will be responsible for a woman’s death is about 1 in 36 (about 3%). Death rates from breast cancer have been declining since about 1989, with larger decreases in women younger than 50. These decreases are believed to be the result of earlier detection through screening and increased awareness, as well as improved treatment. At this time there are more than 2.8 million breast cancer survivors in the U.S. Business leaders from across the Steel Partners spectrum came together in mid- March at Shutters On The Beach in Santa Monica for the 2016 CEO Summit. The conference is an outstanding opportunity for leadership to team up and brainstorm with their SP peers, get to know the other SP businesses, discuss best practices and lean implementation, and create bandana fashion statements. What? That’s right. As soon as the PowerPoint presentations and panel sessions concluded, participants divided into five teams to engage in teamwork-building activities disguised as games, and each team’s first order of business was stylizing their team bandanas. Once united by their bandana-wear, each team faced a variety of challenges and earned bicycle parts by completing each. At the end of the camaraderie-filled session, five beautiful new Steel-built bikes were constructed and donated to Boys & Girls Clubs of Santa Monica (BGCSM). More photos from the 2016 CEO Summit and Bike Build can be seen on the back page of this newsletter. Let’s Go Build a Bike! Steel Gives Back With Warren Lichtenstein and five beautiful new Steel-built bikes are Garron Campbell, BGCSM Branch Director (left) and Roy Shioda, BGCSM Director of Operations. The Boys & Girls Clubs mission is to inspire and enable all young people, especially those who need Boys & Girls Clubs most, to reach their full potential as caring, responsible, productive citizens. Kicking’ It Challenge founders and organizers Bill, Pam and Andy Bickel. ages 8 – 18, and the Bickels expect to host 110 teams with 1,500 soccer players during the 2016 tournament. A companion “Gala Bash” fundraising event for adults was added in 2015. Featuring a silent auction, DJ and buffet, the 2016 Gala Bash will take place on June 24. For more information on Kickin’ It Challenge or to make a donation, visit To learn more about the good work done by Susan G. Komen San Diego, visit
  4. 4. Spring 2016 • INSIDER 76 INSIDER • Spring 2016 being innovators, we work to inspire that desire and passion for innovation in our Challenger Center students.” To commemorate the 30-year anniversary of the shuttle tragedy, Aerojet Rocketdyne vice president Tyler Evans ceremoniously presented a $100,000 check, representing an annual installment of Aerojet Rocketdyne’s $1.5 million commitment made several years ago toward the expansion and relocation of the Powerhouse Science Center and its new Challenger Center. “We are honored to be a long-time partner with the National Challenger Center and learning centers across the nation, especially on this meaningful anniversary,” said Aerojet Rocketdyne CEO and President Eileen Drake. “Working together, we are helping to inspire and educate the next generation of America’s aerospace leaders, those students who may actually be on future missions to the International Space Station, Mars and beyond.” Student “astronauts” from Silva Valley Elementary in El Dorado Hills, CA, and other dig- nitaries were also in attendance. Silva Valley has been “flying missions” from the Sac- ramento Challenger mission control simulator since 1998. To date, 72 Silva Valley fifth grade classes have participated in the unique hands-on learning experience field trip. ModusLink® 4-Minute Click-to-Ship Recognized By Business Intelligence Group as 2016 BIG Innovation Award Winner As reported by BusinessWire on February 5, 2016: Organizations from across the globe submitted their recent innovations for consideration in the 2016 BIG Innovation Awards, which were then judged by a select group of business leaders, innovators and executives. “This year we saw new innovations from virtually all industries. It is clear that the role of technology in improving business results and consumer experiences is accelerating,” said Russ Fordyce, Managing Director of the Business Intelligence Group. Through a heavy investment in its new e-fulfillment operations, technology, and processes, ModusLink has been able to strengthen its wide array of e-commerce solutions. Consequently, the 4-Minute Click-to-Ship technology has become one of ModusLink’s most recent achievements. ModusLink implemented state-of-the-art solutions into the order fulfillment process to ensure that products remain in constant motion from the time the product is initially picked to its arrival at the shipping dock. ModusLink is able to meet the instant gratification standard that consumers have come to expect from this industry. between the Folsom Cordova Unified School District and Aerojet Rocketdyne is designed to inspire the next generation of aerospace leaders. As part of this effort, Riverview STEM Academy provided a unique opportunity for its students to “tour” our highly secured facility – without ever having to leave their school. Via a two-way, live-streaming broadcast, Toby Hargreaves helped provide the virtual tour between Aerojet Rocketdyne’s Sacramento’s manufacturing bay and 265 students gathered in a multipurpose room at Riverview. Two Aerojet Rocketdyne rocket scientists, Lyn Van Winkle and David Daniewicz, led the tour, showed and discussed real Aerojet Rocketdyne hardware and answered live questions from the students. Watch the video to see how the students were able to experience rocket science in a new way with this two-way, live-streamed broadcast: Aerojet Rocketdyne Commemorates 30th Challenger Anniversary with Major Donation Aerojet Rocketdyne, a leader in funding and designing the Sacramento Challenger Learning Center since its construction in 1997, recently participated in events commemorating the 30th anniversary of the Space Shuttle Challenger tragedy. The Challenger Learning Center, a living legacy to the astronauts of the Space Shuttle Challenger, continues to inspire the future 30 years after the accident. The leading science, technology, engineering and math (STEM) education organization, founded by the Challenger families, has educated over 4.4 million students at more than 40 Challenger Learning Centers around the globe. “The Challenger Center is inspiring today’s students to see their full potential and follow a path that leads to a career in the STEM industry,” said Dr. Lance Bush, president and CEO of the Challenger Center. “Never before has this mission been so critical. Just as the Challenger crew demonstrated a true commitment to Aerojet Rocketdyne Plays Key Role in Missile Defense Test In late January, Aerojet Rocketdyne announced the successful testing of its liquid Divert and Attitude Control System (DACS) on the Exoatmospheric Kill Vehicle (EKV) in the latest flight test of the Missile Defense Agency’s Ground-based Midcourse Defense (GMD) program. The Aerojet Rocketdyne DACS has a mission- critical role. The vital GMD program currently is the United States’ primary defense against long- range ballistic missile attacks. During the test, a Boeing- developed interceptor, carrying the Raytheon- built EKV, was launched from Vandenberg Air Force Base, CA, following the launch of a threat representative air-launched target missile from a C-17 over the Pacific Ocean west of Hawaii. “On this flight, we validated key design improvements in the DACS, demonstrating improved performance, reliability and producibility,” said Michael Bright, Aerojet Rocketdyne vice president of Missile Defense and Strategic Systems. “The overall goal of the Missile Defense Agency is to make a more capable and reliable system, and this successful test demonstrated significant progress toward reaching that goal.” The design, development and qualification of these design improvements were performed at Aerojet Rocketdyne’s Los Angeles site. Matt Widman, the thruster program manager, added, “This successful flight represented three years of hard work and dedication by our entire team. We are very proud of this accomplishment and look forward to many years of production of this advanced propulsion system.” Students Get Glimpse of Aerojet Rocketdyne in Virtual Tour Recently, Riverview STEM Academy in Rancho Cordova, CA, connected with future rocket scientists in a virtual tour of Aerojet Rocketdyne’s Sacramento facility. The continued partnership In The News In The News Employee Discounts All Steel Partners employees are eligible to use our vehicle manufacturer discount programs with Ford and GM. For each partner program, the manufacturers’ websites contain information on how to participate, sample vehicle pricing, shopping tools, as well as rules and FAQs. The company code should be taken to the dealership in order to qualify for the vehicle discount. The dealer will also need to see proof of employment. We recommend the employee visit to print out their company’s page for validation as well. Ford X-Plan Partner Recognition Program • The program offers 4% below factory price for new vehicles. • Employees, members of the employee’s household, and retirees are eligible. • Each employee is entitled to 2 control numbers per year, which can be generated on the www. website. • Upon accessing the website, each employee will be required to enter the code WP791. General Motors Supplier Discount Program • The program discount is different for every GM vehicle. • The discount price can be found below the MSRP and applied to the purchase or lease of eligible NEW Chevrolet, Buick, GMC and Cadillac vehicles by requesting an authorization number and presenting it to your GM Dealer. • Register via the website https:// vpp/do/company-search. • Use: Company name: Steel Partners Company code: 175525 (l to r) Tyler Evans, Aerojet Rocketdyne vice president, presents a cer- emonial check to Michele Wong, Powerhouse Science Center board president and Harry Laswell, Powerhouse Science Center executive director & COE, at the Sacramento Challenger Learning Center. Spring 2016 • INSIDER 7 Students enjoy a virtual tour of Aerojet Rocketdyne
  5. 5. Spring 2016 • INSIDER 98 INSIDER • Spring 2016 SP Supply Chain Corner 2015 Recap Steel Partners maintains 21 national supply contracts, which repre- sent over $90MM in annual spend and generate more than $37MM in savings. Finance, Human Resources and Supply Chain collabo- rated on opportunities for supplier consolidation and savings in the areas of benefits, insurance and third-party advisors. We created an intranet site as a central location for contracts, key contacts and key correspondence. Below are select highlights from our September Summit, highlighting some of the best practices and cross-company collaboration: Strategic Sourcing – The Make vs. Buy Analysis Given the results of the growing trend of near-shoring and the insights outlined in the Q3 2014 Steel Partners study, The Future of Global Manufacturing and LCC Sourcing, Bob Murphy, SVP of Supply Chain for OMG, was invited to present to the team on how to evalu- ate internal production vs. third-party sourcing. He broke down the factors that may influence a company’s decision to buy a part rather than produce it internally, including lack of in-house expertise, small volume requirements, desire for multiple sourcing, and the fact that the item may not be critical to its strategy. Similarly, he discussed factors that may persuade a company to choose insourcing, including existing idle production capacity, better quality control or proprietary technology that needs to be protected. Finally, the team benefited from Bob’s live exam- ple of OMG’s evaluation process and decision to insource OMG’s heat-treating needs, which required capital investment, significant governmental and environmental approvals and increased utility involvement. Ultimately, OMG’s evaluation of the value chain, as well as the differences in cost and service levels, heavily supported the decision to insource the heat-treating operation. Talent Development - Lucas Milhaupt Internship Program Exceptional people and leaders drive our businesses. Thus, recruiting, developing and retaining the best talent available is essential to our business success. While there are many ways to identify and recruit talent, Jon Ollinger, head of the Steel Purchasing Council, presented on Lucas Milhaupt’s strategic internship program and outlined its benefits and results. Jon shared a low-cost approach, which has proven to be highly successful – a partnership with Marquette University. The Applied Learning Course is a program in which college students are paired with local companies to provide exposure to company culture, markets and various functional disciplines. The students or interns assume responsibility on challenging projects and see them through from strategy to impact. Typically, the internship assignment consists of a semester or 12-week program with a company mentor. Since 2010, the Lucas program has resulted in two full- time hires and over $160,000 in annual savings. In addition to the savings and talent acquisitions, this program has afforded Lucas a strong relationship with Marquette University, including guest lectures and an advisory board role to the supply chain department. Undergraduate interns and new hires can and should be a low cost and effective talent acquisition and internal development channel. Mergers & Acquisitions Handy & Harman Ltd. Handy & Harman Ltd. (HNH) announced on April 21, 2016 that it has commenced a tender offer through a wholly owned subsidiary to purchase all of the outstanding shares of SL Industries, Inc. (SLI) for $40.00 per share in cash. The tender offer is being made pursuant to the merger agreement entered into by HNH and SLI and announced on April 7, 2016. Consummation of the tender offer is subject to certain conditions, including the tender of a number of shares that constitutes at least (1) a majority of SLI’s outstanding shares and (2) 60% of SLI’s outstanding shares not owned by HNH or any of its affiliates, as well as other customary conditions. Steel Partners and its affiliates began purchasing shares of SL Industries in 1991 and currently own approximately 25.1% of its outstanding shares. As promptly as practicable following the completion of the tender offer, HNH will acquire all remaining SLI shares through a merger of one of its wholly owned subsidiaries into SLI at the tender offer price. “We are extremely pleased to have commenced our tender offer for SLI. HNH affiliates have been long-term investors in SLI, and we look forward to a prompt closing and to integrating SLI into the HNH/Steel family of businesses.” – Warren Lichtenstein CoSine Communications, Inc. On December 28, 2015, CoSine Communications, Inc. effected a 1-for-80,000 reverse stock split of its common stock pursuant to which stockholders owning fewer than 80,000 shares of CoSine’s common stock had such shares converted into the right to receive $4.40 for each share of CoSine’s common stock held immediately prior to the effectiveness of the reverse stock split. CoSine’s common stock was delisted from the OTC Pink marketplace and its trading symbol COSN was deleted effective at the open of trading on December 29, 2015. Subsequent to the reverse stock split and pursuant to the terms of an Agreement and Plan of Merger dated as of December 29, 2015, CoSine merged with and into a wholly owned subsidiary of WebFinancial Holding Corporation, itself an indirect subsidiary of Steel Partners Holdings, L.P., with WebFinancial Holding Corporation’s subsidiary as the surviving entity. ModusLink Global Solutions Announces Executive Changes As reported by BusinessWire on March 29, 2016: Warren G. Lichtenstein Appointed as Interim Chief Executive Officer;James R. Henderson Appointed as Chief Executive Officer of ModusLink Supply Chain Business ModusLink Global Solutions™, Inc. (the “Company”) MLNK +0.96% today announced that its Board of Directors has appointed Warren G. Lichtenstein as its interim Chief Executive Officer, replacing John J. Boucher who resigned as President and Chief Executive Officer on March 23, 2016 to pursue other interests. Mr. Lichtenstein will remain Chairman of the Board. The Company also disclosed today that James R. Henderson has been appointed as the Chief Executive Officer of the Company’s principal operating subsidiary, ModusLink Corporation (“ModusLink”). “Jim is an experienced business executive with an impressive track record in sales, operations and supply chain management,” stated Mr. Lichtenstein. “I’ve worked with Jim for years and his knowledge of our industry and the markets we serve, along with his extensive hands-on operational experience, make him the perfect fit to lead ModusLink in this important period in our corporate evolution. We have the cash resources on hand to grow our core business and enhance operational capabilities. On behalf of the Board, I would like to welcome Jim to ModusLink and look forward to collaborating with him as we continue to execute our strategy while driving long-term shareholder value.” Mr. Henderson is a seasoned industry veteran with significant public company and turnaround experience. Throughout his career, he has held various leadership positions with global corporations and supply chain and distribution businesses. Most recently, Mr. Henderson served as Acting Chief Executive Officer of School Specialty, Inc., a leading distributor of educational supplies, furniture and curriculum products to the education and healthcare industries, where he helped navigate the Company’s turnaround, enhance distribution and manufacturing capabilities to stabilize the core business, and drive process improvements throughout. Prior to School Specialty, he served as Chief Executive Officer of Point Blank Solutions, a worldwide leader in the manufacturing and distribution of protective products and ballistic armor to the U.S. Military, Federal and Law Enforcement agencies, and international markets. Previously, he was CEO of other public companies across multiple industries. “While the global market remains challenging, we have strong and long- standing client relationships, a strategic global footprint, and some of the best talent in the industry. My focus over the coming year is to continue to drive operational efficiencies on behalf of our employees and the clients they serve, while working with the team to grow sales and expand our pipeline across the globe. I look forward to taking on this role and working with the ModusLink team to deliver unprecedented value for our clients,” stated Mr. Henderson. In addition to his prior management roles, Mr. Henderson has and currently serves on a number of corporate Boards. He has served as a Director of Aerojet Rocketdyne since 2008, Chairman of the Board of School Specialty, Inc. since June 2013, and a Board member of Aviat Networks since January 2015. Previously, Mr. Henderson served as a Director of RELM Wireless Corporation, DGT Holdings Corp., SL Industries, Angelica Corporation, ECC International Corp., and Point Blank Solutions, among others. James Henderson In The News Leverage Spend - Risk Management and Premium Pooling Steel Partners continues to seek economies of scale across our portfolio. In 2015, we expanded from traditional procurement areas into other areas including insurance policy renewal programs and pooling insurance premiums to enhance coverage and obtain better coverage while reducing premium costs ~20%, up to $5MM per annum. Ted Yerdon, VP & Treasurer for Steel Partners, presented on the engagement of Risk International, an independent, outsourced risk management services company with over 75 professionals. Their list of clients includes The Carlyle Group and United Technologies Corporation. While Risk International provides additional risk management resources and advises on Enterprise and Hazard Risk, each individual company maintains control and authority. 2016 Plan In 2016, with Jon Olinger taking the helm of the Steel Purchasing Council, Steel Partners will continue to identify categories for savings and opportunities for collaboration and knowledge-transfer across businesses. We will continue to host our annual Supply Chain forum again in Q3 as well as category-specific meetings as needed. We welcome feedback on our market updates or other suggestions on how we can better collaborate or leverage our supply chain. Bob Murphy Jon Ollinger Ted Yerdon During the September Summit, Finance, Human Resources and Supply Chain collaborated on opportunities for supplier consolidation and savings in the areas of benefits, insurance and third-party advisors.
  6. 6. Spring 2016 • INSIDER 1110 INSIDER • Spring 2016 Steel Sports Welcomes Eight Members to New Advisory Board Since its founding in 2011, Steel Sports consistently scores goals and bats in runs while following its founding principle: to promote a lifelong enjoyment of sports, while emphasizing a positive consumer experience and instilling the core values of discipline, teamwork, safety, respect and integrity. In a recent move to up their game, Steel Sports brought together a collection of marquee individuals, each of whom has produced an incredible career in the professional sports arena, to serve on its new advisory board. Tommy Lasorda, Dusty Baker, Bobby Valentine, Julie Foudy, Nancy Lieberman, Jim Thompson, Frank Catalanotto and Urijah Faber are the first eight members to join the board. Besides achieving numerous accolades on the field and in the field house, each member firmly believes in the Steel Sports vision for youth sports and wants to continue making a difference in the lives of young athletes. The advisory board members act as Steel Sports ambassadors, promoting its mission of transforming the existing youth sports culture to help create an environment where athletes learn to compete while absorbing life lessons. “What sets this group apart, aside from their achievements on the field, are the tremendous leadership qualities each one has displayed throughout their lives,” says Steel Sports CEO David Shapiro. “Steel Sports is incredibly fortunate to have such an accomplished group of advisors who believe in our vision of improving youth sports as a whole where we can use it as a vehicle to change the trajectory of our nation’s youth.” • National Baseball Hall of Fame manager Tommy Lasorda manned the Los Angeles Dodgers dugout for 21 years from 1976- 1996 and won two World Series titles in 1981 and 1988. He managed USA Baseball to an Olympic gold medal in 2000 and recently visited the National Youth Baseball Championships in New York to offer his support and advice to the youth players and coaches. • Current Washington Nationals manager Dusty Baker is the only three-time MLB Manager of the Year in history. A National League All-Star as a player and a former U.S. Marine, Baker speaks frequently on leadership, teamwork, motivation and success. Baker is entering his 21st season as a manager, his first with Washington after stints with the San Francisco Giants, Chicago Cubs and Cincinnati Reds. • Bobby Valentine is a former MLB player and manager, and he is currently the Sacred Heart University athletic director in Fairfield, CT. After a 10-year playing career he managed for 23 seasons, seven of those in the Japanese Pacific League. In 2015, Valentine was awarded the MLB Players Alumni Association Lifetime Achievement Award for his on-field accomplishments and off-field contributions to communities across the nation. • National Soccer Hall of Fame member Julie Foudy won two FIFA Women’s World Cup titles and two Olympic gold medals, among her many achievements, during her 18-year career with the U.S. women’s national soccer team. Foudy currently serves as an analyst, reporter and the primary color commentator for women’s soccer broadcasts on ESPN and ABC. Along with her husband, Foudy created the Julie Foudy Sports Leadership Academy for girls, ages 12-18, which strives to create leaders both on and off the field. • Nancy Lieberman’s basketball career has seen her go from Hall of Fame player to a pioneer as a coach. Lieberman was inducted into the Basketball Hall of Fame in 1996 after a long career as an outstanding point guard in college and the professional level. She is currently an assistant coach with the Sacramento Kings, becoming the second female assistant coach in NBA history when she was hired last July. In November 2009, Lieberman became the first woman to coach a men’s professional basketball team when she took the Texas Legends head coaching position in the NBA Development League. • Former MLB player Frank Catalanotto enjoyed a 14-year career with five different teams, and he played for the Italian national team at the 2006 and 2009 World Baseball Classic. Catalanotto serves as the lead instructor at Baseball Heaven’s Steel Sports Academy in Long Island, where he grew up. • An American mixed martial artist, Urijah Faber competes as a bantamweight in the Ultimate Fighting Championship. Faber held the WEC Featherweight title from 2006 to 2008, and now ranks #3 in the official UFC bantamweight rankings. He is widely regarded as one of the sport’s pioneers for establishing legitimacy to lighter weight classes in MMA. “I’m happy to be a part of the Steel Sports advisory board and be on board with a great group of people,” says Dusty Baker. “I believe in what they stand for in helping our future, our children through youth sports. I just like the direction Steel Sports is taking with our young people, both mentally and physically.” “Our children are our future, and Steel Sports is driven to ensure today’s youth become better people through participation in sports,” says Julie Foudy. “We want kids to be active and enjoy sports, but it’s just as important to help shape their lives off the field. I’m pleased to join the Steel Sports advisory board and continue a path together to make a difference in the lives of young athletes.” Steel Coaching System: Reach Your Potential Over the last year, a key instrument for the Steel Sports coaching toolbox has been in development. The idea for a Steel Sports Coaching Manual was born in March of last year and then took shape at the Steel Sports Coaching Summit on July 30, 2015. A decision to consult experts in the field led to a unique partnership between Steel Sports and the Center for Applied Coaching & Sport Science (CACSS) within the College of Physical Activity and Sports Studies at West Virginia University (WVU). Steel Sports and CACSS have complementary visions and missions. The Steel Sports vision is to be the premier youth sports program in the country, with the primary focus to promote lifelong enjoyment of sports while emphasizing positive experience and instilling the core values of discipline, teamwork, safety, respect and integrity. The mission of the CACSS at WVU is “to generate original research and materials that will fill the gap between cutting edge sport science knowledge and technology, best teaching practices, and real world coaching across all levels of sport.” Thus, the Steel Sports Coaching Manual moved from good idea to exceptional coaching system collaboration when Steel Sports and CACSS joined forces. “At the youth level, a coach’s role is crucial, as players look to their coach for guidance, structure and reassurance. This is why we believe continuous coaching education is paramount,” says Warren Lichtenstein. “The Steel Coaching System is an athlete- centered coaching program that is backed by positivity, providing a curriculum that standardizes our ideas, cultures and beliefs and provides a consistent message across all of our platforms.” The Steel Coaching System, which will be continually evaluated, will rollout this summer at Baseball Heaven, Steel Sports’ state-of-the- art baseball facility on Long Island. Back row, left to right: David Shapiro (Steel Sports), Nanette Yang (Steel Sports), Warren Lichtenstein, J.T. Mellendick (WVU), Clayton Kuklick (WVU), Frank Catalanotto (Baseball Heaven), Steve Jones (UK Elite), Jim Parque (Big League Edge), Sal Trovato (Baseball Heaven), Keith Osik (Baseball Heaven), Gary Book (UK Elite), Andy Broadbent (UK Elite), Dusty Baker, and Bobby Valentine. Front row, seated left to right: Joe Franciskovich (Steel Sports), Jonathan Elbaz (Steel Sports), Tommy Lasorda, Jollene Butler (Steel Sports), Kristen Dieffenbach (WVU), Mick Smoothey (UK Elite), and Roch King (WVU). • Jim Thompson is the founder and CEO of Positive Coaching Alliance (PCA), a national non-profit organization transforming the culture of youth sports. PCA develops BETTER ATHLETES, BETTER PEOPLE through resources for youth and high school sports coaches, parents, administrators and student- athletes. PCA resources have reached more than 8.6 million youth, and are on track to reach 20 million youth athletes by 2020. With an All-Star Advisory Board in place, Steel Sports looks ahead to a future rich with collaboration and positive impact that extend far beyond the playing field.
  7. 7. Spring 2016 • INSIDER 1312 INSIDER • Spring 2016 Warren Lichtenstein is Chairman and CEO of Steel Partners. When his son started playing sports, he realized there was a huge opportunity to make a difference in youth sports and he founded Steel Sports and added it to the Steel Partners portfolio of companies. He provided the initial Seed Funding for both the PCA-Los Angeles Chapter (which launched in June 2015) and the PCA-New York City Chapter (which launched January 2016). Jim Thompson interviewed Warren for Impact on March 21, 2016. Jim Thompson: What was your sports experience like as a young person? Warren Lichtenstein: Apart from Little League I didn’t play organized sports. There was a dirt lot next to a church that I went to every day after school where we played pickup ball. We made our own calls (no adults around) and had fun. JT: Sounds like my experience growing up in North Dakota, what I now call the “golden age of sandlot ball.” It may not have been as golden as I remember it, but it was a lot of fun. I assume your son Stefan’s sports experience has been quite different? WL: Yes, he never picked up a ball on his own until I enrolled him in Little League. One of the dads coaching had played football and baseball at USC and he created a positive environment for the boys. I saw Stefan gaining self-confidence from it both athletically and socially. He also played AYSO soccer, which was very organized— AYSO has its act together. He also has played flag football, tennis and he skies. He played youth basketball and the first year he had a coach that was a yeller, but other than that he’s had good experiences. JT: Did you follow professional sports as a kid? WL: I didn’t really. If I did I would want to know every stat about every player so I focused on other things that interested me. I could tell you, however, which companies we bought and sold and for how much! JT: You’ve been very successful in business with Steel Partners, but Steel Sports, which you founded, seems more like a mission than a business. WL: It is. My goal with Steel Sports is consistent with your goal with PCA—to create a complete cultural shift in how sports is taught to kids, how parents connect with their kids over sports, getting rid of negative coaching in favor of positive coaching, and having coaches coach the way they would want to be coached. I definitely want Steel Sports to make money but I don’t expect it to earn the same return on sales or return on invested capital as my other companies. You can’t leverage a baseball field 12:1 like you can an office building. You also are often competing with mom-and- pop operations that likely aren’t even profitable. Our organization recognizes the value that sports and fitness has in providing meaningful and life-changing experiences for our nation’s youth and that’s more important than financial returns. I’ve loved everything you do in PCA and have stolen from you—5 compliments for every criticism, flushing errors—even your former Chief Revenue Office, David Shapiro, who is now our CEO! JT: I guess that’s why you call it “Steal” Sports. WL: Hah! I guess we will from now on! Seriously, you and PCA have ingrained in David all the disciplines needed to be a great leader. JT: You have been an important supporter of PCA. You provided initial Seed Funding for both our Los Angeles Chapter and our New York City Chapter. What made you decide to invest serious money in PCA? WL: What you’ve done with PCA is amazing. When I was starting Steel Sports I called hundreds of people in the industry. I’m a digger. I want to meet everyone and know everything about what I am about to do. I kept coming back to PCA. Your books and the philosophies behind them—it’s taken years to put that together at such a high-level, superior quality of thinking. I was shocked to find that you didn’t have a Chapter in LA or New York City. I wanted to help you do that. JT: I think we intentionally delayed moving into LA and New York City because they are so big and we wanted to make sure we had our model down before we tackled them. When you made the offer of Seed Funding it was, “Okay, now it’s time to do Los Angeles, ready or not!” WL: I think you were probably ready to expand to LA and New York City before you realized it. My son has a poster on his bedroom wall that says, “Potential is interesting but execution is everything.” You are executing a program that I hope will infiltrate every major youth sports organization. My hope for PCA is that it becomes part of every coach training program—if you don’t have a PCA certification card, you aren’t allowed to coach. It will take a while to change the culture of sports. I think the story of Exodus in the Bible is an interesting example. My view is that God made the Israelites leaving Egypt wander in the desert for 40 years to get through three generations. The first generation was tainted from its time in Egypt and by the time the third generation came around, good habits had replaced bad habits and then they reached the Promised Land. As new generations learn the good habits of how to coach using positive reinforcement, youth sports will improve. JT: I know you are close to Tommy Lasorda. How has that relationship impacted you? WL: When I moved to LA I actually didn’t know who Tommy was. We were at a dinner together and we just connected. He then came to one of Stefan’s games and I saw how people mobbed him. I didn’t realize he is like a god in Los Angeles. During the game, one kid never touched the ball when he swung the bat. Tommy stopped the game and went up to the plate and showed the kid something and said something to him. The next pitch he hit the ball! He only talked to the kid for about 75 seconds. I was amazed. If we can apply the way Tommy interacted with that kid, we can change the world. JT: Has your exposure to Tommy and PCA changed the way you do business? WL: Yes, 10 years ago I was good at mitigating risk including mitigating my own weakness in managing people. Now I think managing people and motivating people is one of my strengths. We have 15,000 employees and I make it possible for every one of them to attend a PCA workshop. I love your book, Developing Better Athletes, Better People, and I give it out to every leader in my company. I think of it as a mini-version of Jim Collins’ book, Good to Great, applied to sports. JT: Warren, it has been great talking with you. I am so grateful to you for your support of the Positive Coaching Alliance movement. WL: I think Steel Sports and PCA are riding a wave together. We will grow together and we are on the verge of really changing everything. I will be supporting both organizations for a long time.
  8. 8. Spring 2016 • INSIDER 1514 INSIDER • Spring 2016 Operational Excellence Steel Business System Meeting The Steel Business System conference was held January 12-13, 2016 at Caesar’s Palace in Las Vegas. The conference was initiated in 2008 for the H&H companies to share best practices in applying the Business System tools to the manufacturing locations. This year marked the beginning of a larger audience for the conference, including participants from Steel Partner affiliated companies who came to learn about the Steel Business System and how it can holistically be applied to improve all aspects of the businesses embracing the principles, values and tools. Senior leadership of each of the businesses was represented by President, Finance, Operations, Commercial and HR leadership functions from all H&H companies, as well as several Steel Partner affiliated companies including Moduslink, SL Industries, Aerojet Rocketdyne, Steel Excel, WebBank and API. Jacob Stoller, author of The Lean CEO: Leading the Way to World- Class Excellence, served as keynote presenter at dinner on the first night of the conference. Each conference participant received a copy of Stoller’s book. The conference agenda covered a wide array of Business System best practices and various Kaizen events, presented by leaders from many Steel Partners companies. Participants learned about best practices at other companies, with an emphasis on lean learning. The intent for next year is to continue with the broader audience of all Steel Partner affiliates in order to focus on building the culture of lean and problem solving across the business units. Hugh McGovern, President of OMG, on left, with meeting Keynote Speaker Jacob Stoller. Stoller addresses meeting participants. Left to right: The API Team - Dino Kiriakopoulos, Karen Smith, Ian Marchant, Claire Chadwick, Jaime Bryant, Will Oldham and Mark Guyer. Left to right: Lori Veley, Pete Marciniak, Rick Jones, Stephanie Dalton and Walter Brooks. Operational Excellence H&H Hall of Fame Awards Since 2011, project teams that have applied the H&H Business System tools to real world Kaizen projects at Handy & Harman have been recognized and rewarded annually with H&H Hall of Fame Awards. These projects best exemplify the spirit and behaviors desired from using the tools of the H&H Business System. The projects must be cross-functional in nature and participation, utilize the tools of the Business System, be linked to Strategy Deployment Initiatives or Key Performance Indicators, and have sustainable results. This year, 11 of the 20 projects submitted by H&H companies for consideration were selected for Hall of Fame awards. 2015 awardees are: • HandyTube – 3P on Qnergy cell • ITC – 3P on Mill 6 Coiler • JPS Statesville – SMED in Preparation Area • Kasco Mexico – Heat Treat / Coil Manufacturing Capacity Increase • Kasco Wales – Wales Coil Capacity Increase • Lucas Milhaupt Milwaukee – Handy 1 Schedule / Pull System • Lucas Milhaupt Milwaukee – Supplies Kaizen • Lucas Milhaupt Warwick – LOMA SWAT • OMG Hickman – COPQ at Hickman • OMG Fastenmaster – Bilwinco SMED / Standard Work • OMG Roofing – Olyflow Hercules Cell Congratulations to the companies and team members who were recognized with 2015 Hall of Fame awards, and thank you for making continuous improvement your goal. JPS Statesville SMED in Preparation Area Team, from left: Gary Wallace, Wes Young, Tina Alexander, Ann Hewitt, Eric Lussier, Albert McClelland and Bonnie Davis. Lucas-Milhaupt Milwaukee Supplies Kaizen Team, from left: Jeff Svoboda, Marlon Evans (present for his participation at ITC Kaizen), Brenda Povlich, Stephanie Christensen, Jon Ollinger, Dennis Herrmann and Mike Hultman. Lucas-Milhaupt Milwaukee Handy 1 Schedule/Pull System Team, from left: Jeff Svoboda, Terry Pierce, Stephen Powalisz, Jonathan Steiner and Jeff Hall; not pictured: John Treager and Dennis Mikula. ITC Evansville 3P on Mill 6 Coiler Team, from left: Jeff Svoboda, Rick Johnson, Ron Hawkins, Tom Daming, Daron McDonald, Bruce Pate, Cregg Stambush, Mike Nelson, Keith Dupont and Eric Lussier; not pictured: David Hassman and Jack Hatcher. OMG Hickman COPQ Team, from left: George Hammond, Jason Hildenbrand, Tina Duncan, Eric Lussier, Kevin Bramlett, Hugh McGovern and Hector Quinones.
  9. 9. Spring 2016 • INSIDER 1716 INSIDER • Spring 2016 Operational Excellence SLPE Receives High Marks from SLI SL Industries (SLI) and its subsidiaries – MTE, SLI-MTI and SL Power Electronics (SLPE) – are known as industry leaders in high performance power solutions. Each specializes in the delivery of power electronics and technology within the communities and industries they serve – medical, industrial, aerospace, computer, datacom, telecom, transportation and utility applications. And, as is customary with Steel Partners companies, the focus is on lean implementation and profitability. At the SLI Leadership Conference held February 22 – 23, CEO Bill Fejes recognized SLPE for the Best Performance Improvement in 2015. Areas assessed in determining the annual award winner include year-over-year improvement in profitability and working capital turns. It’s easy to understand the benefit of improved profitability, but working capital turns are important as well. Directly reflecting effective management of Accounts Receivables, Accounts Payable and Inventory, working capital turns dramatically affect cash. If fewer dollars are committed to working capital, more funds are available for things like capital investments, process improvements and quality of work life enhancements. Congratulations to all SLPE team members at locations near and far – Ventura, Canton, Mexicali, Xianghe and Shanghai – for being recognized for the best year-over- year performance improvement within SLI in 2015. KASCO Presents First Annual President’s Award Steel Partners’ company KASCO has been an industry leader in providing quality products, parts, repairs, and services to the meat processing and retail institutional food industries for more than 110 years. To achieve the trust of its customers and industry leader distinction, KASCO relies on internal leadership. To recognize leaders within the company for excellent service and outstanding performance, the KASCO President’s Award was established this year. On February 2, 2016, KASCO President Brian Turner presented Charles “Chuck” Isenberg with the First Annual President’s Award, in recognition of his outstanding KPI performance in 2015. Hailing from Southern California, Chuck is a Business Team Leader who manages a team of 11 Field Service Representatives that specializes in the service and repair of commercial food equipment and retail store equipment. Chuck will celebrate 42 years in the business in July, including 16 years as a division manager and 20 years as KASCO’s west coast business manager. Candidates for the award included nine other Business Team Leaders who manage the remaining 120 plus KASCO service reps across North America. The KPIs evaluated for the award included Revenue $ Increase Over Goal, Revenue % Increase Over Goal, Inventory Turns, Service Calls on Time, and Routes on Time. “Chuck sets a high standard for his team and other KASCO leaders,” says President Ryan Turner. “His dedication and fine leadership converts to outstanding performance, keeping KASCO in its industry leader position. Thank you, Chuck, and congratulations from your KASCO colleagues!” The SLPE Daily Focus • Be Responsive and Proactively Dependable (High Sense of Urgency) • Practice Daily Management (Gemba) • Be Process Oriented and Data Driven • Champion Continuous Improvement (Kaizen) VP Sales & Marketing Tim McCreery (left) and President Brian Turner (right) present Chuck Isenberg with the First Annual President’s Award. Countermeasures – Just Keep Digging What do archaeological teams and SL Industries (SLI) countermeasure teams have in common? They just keep digging until they find the Holy Grail. Or their version of it. In archaeology, the Holy Grail can be any historical tidbit that helps reconstruct past lifeways in human societies, bringing us closer to understanding the people and cultures that came before us Though not equipped with shovels and box screens, countermeasure teams dig and sift all the same. They, too, survey, excavate and analyze much material before finding their Holy Grail – the root cause to their problem or issue. A countermeasure, also known as a corrective measure, is action taken to counter or offset a missed goal or objective. As a general concept it implies precision, and is any solution or system designed to prevent an undesirable outcome in a process. At SLI, a recurring need for countermeasures existed in two main functions: • Daily Management Gemba Boards, when there is a miss on a SQDIP goal • Strategy Deployment, when there is a miss on a TTI (Target To Improve) SLI, through its subsidiaries, designs, manufactures and markets a vast variety of power electronics that are used in multiple industries and environments that demand high-level performance, making precision critical. SLI leadership was not satisfied with the effectiveness of their countermeasure process and decided it needed improvement. At the February 2015 SLI Leadership Meeting, a hands-on training session on how to implement an effective countermeasure was held for the top 45 leaders from all SLI business units. Bruce Graham, a professional trainer and facilitator, introduced a new way of looking at and examining the layers of the countermeasure process. The countermeasures image at SLI also needed an overhaul. What had long been viewed as a negative process – my strategy deployment fell short so my punishment is that I need to develop countermeasures to correct the problem – should instead be regarded as a positive opportunity to re-evaluate and correct a process so it will work at its best. SLI countermeasures often fixed symptoms but seldom burrowed to the root cause of a process, leaving the way open for future failure, as in the Gemba Boards and Strategy Deployment cases. Identifying and targeting the root cause would take on new focus and importance. It would also be viewed as an opportunity to improve a process rather than considering it a failure that required punishment – an opportunity to turn lemons into lemonade. Graham introduced two techniques for identifying root cause: the 7 QC Tools and the 5 Whys? Approach. The 7 QC Tools are often used to reduce variation of output or slightly shift the distribution to a more desirable target. The 5 Whys? are mainly used to find the single root cause or the combination of root causes that triggered a miss versus goal. In the investigative stage of the problem solving process, the practice of asking “Why?” five times throughout the process brings the team closer to the root cause with each ask, and closer to the goal of identifying and targeting the root cause to be addressed by the countermeasure. In other words, just keep digging! Following the Leadership Meeting, Graham facilitated countermeasure training at each of the SLI business units to deploy the process deeper into the organization. As a result, the countermeasure process is now viewed as a welcomed and game-changing process, and the SLI approach has changed: countermeasure teams are digging deeper, issues are seen earlier, root causes are being identified, time is being extended to treat the root cause, and countermeasure teams are finding their version of the Holy Grail. To help reinforce the positive value of countermeasures, four SLI Teams were recognized as having implemented the Best Countermeasures in 2015. MTE Teal Inventory Countermeasure – reduced inventory 25% in 2015 Team members: Niall Finnegan, VP Global Operations, Teal San Diego Facility Angel Escarega, Materials Manager, Teal Tecate Facility Tony Ruvalcaba, Plant Manager, Teal San Diego Facility Joel Perez, Buyer/Planner, Teal Tecate Facility Ryan Thomas, Materials Control Specialist, Teal San Diego Facility MTE Reactor Terminal Alignment Countermeasure – eliminated a key customer complaint and associated product returns Team members: Rafael Ibanez, VP Quality, MTE San Diego Facility Jaime Ruiz, Quality Engineer, MTE Mexicali Facility Roberto Chain, Manufacturing Engineer, MTE Mexicali Facility Liborio Ruiz, Production Supervisor, MTE Mexicali Facility Victor Valdez, Quality Supervisor, MTE Mexicali Facility MTE A/R Collections Countermeasure – improved DSO by 17% thereby freeing up a significant amount of cash Team members: Bill Bickel, VP Finance, MTE San Diego Facility Melanie Dobner, Controller, MTE Menomonee Falls Susan Grunewald, Credit/Collections Specialist, MTE Menomonee Falls Sheila Zenner, Sr. Sales Operations Manager, MTE Menomonee Falls Elaine Litchfield, Business Programmer Analyst, MTE San Diego SLPE Mexicali OTD Countermeasure – improved OTD to customer request from <60% to >90% thereby improving customer satisfaction Team members: Jim Morrissey, VP Supply Chain, SL Power Ventura Facility Kisha Ward, Director of Operational Excellence & Quality, SL Power Ventura Facility Mary Lizarraga, Master Control Planner, SL Power Mexicali Facility Jose Casanova, Plant Manager, SL Power Mexicali Facility Operational Excellence
  10. 10. Spring 2016 • INSIDER 1918 INSIDER • Spring 2016 Excerpts from the Annual Letter April 13, 2016 To the Unitholders of Steel Partners Holdings L.P.: Nothing in the world can take the place of hard work and persistence. Potential is interesting, but execution is everything. There is no substitute for putting in the time and effort on the road to success. Steel Partners’ philosophies and strategies continue to endure and serve us well. We work hard and play hard. We invest on the basis of value, not popularity. We invest in good companies with simple business models at prices that have built-in margins of safety. We create a continuous improvement culture and implement operational excellence programs. We control costs and use leverage prudently. We avoid complex businesses or investments that cannot be easily explained or understood. We reward people who deliver results and ensure the right core principles and culture. Steel Partners and our affiliates have been successful at starting, buying, operating and building businesses over long periods of time. Our capital is not short-term, and our assets and liabilities are aligned. Often, we compete with private equity firms and strategic buyers, who are bidding up prices to levels which would not provide us with the margin of safety we seek or a high enough return on our invested capital. Therefore, they buy a lot of businesses, and we don’t. Over the past few years, we have accelerated our M&A efforts and called our friends at various private equity firms, investment banks and hedge funds in order to increase our deal flow. We have been moderately successful in creating our own deals and a proprietary pipeline, but, frankly, we have failed miserably when we have tried to buy businesses by participating in auctions. The truth is, I really don’t like participating in auctions. It is expensive, time consuming, and we never win the prize. Undeterred, we continue to look for bolt-on acquisitions for our existing companies and companies we are invested in: OMG, Lucas Milhaupt, JPS Composite Materials, Kasco SharpTech, Handy Tube, Indiana Tube, WebBank, API Group, Steel Energy, Steel Sports, Aerojet Rocketdyne, and ModusLink Global Solutions. We are also looking to buy new platform businesses, which are within our circle of competence and fairly priced. At Steel Partners, we have the flexibility to buy parts of businesses (10-15%) with the ability to own up to 100% over time. The more we own, the greater our ability to achieve economies of scale and implement operational excellence and strategic programs through the Steel Business System, Steel Procurement Council, Steel Environmental Health & Safety Council, and Steel Grow. We can also implement capital allocation policies, corporate development guidelines, and reduce overhead costs, such as legal and accounting, through SPH Services. We did this successfully at Handy & Harman, API, JPS, and are now buying all of SL Industries through Handy & Harman. This way, we can buy part of the company and live with the business and managers for a period of time and then decide if we want to own the entire business. Granted, we have made some mistakes in the past and have lost money, and will probably make more errors in the future. But hopefully, our successes will far outweigh and outnumber our mistakes and potentially increase our ownership over time. In addition to looking for acquisitions, we will also use our capital to purchase our own shares when they are trading at a discount. In 2015, Steel Partners and our affiliates purchased 1,091,175 shares for $19.2 million at an average price of $17.63. We will continue to buy and build for the long-term. In a sense, we are investing for our children and future generations. Over the last few months, the prices of stocks have gone down at a number of companies we would like to own for the long run. This has created more buying opportunities at attractive prices. During the past year, we continued our program to simplify our business structure by reducing the number of entities, organizations, and companies we own and manage. As you can see in the org chart below, we have done a good job thus far, but still have more to do as part of this initiative. We have publicly announced that Handy & Harman would like to acquire 100% of SL Industries. I am pleased to announce that on April 7, 2016, Handy & Harman entered into an agreement to acquire SL Industries for $40/share in cash or approximately $166 million in total. Steel Partners and our affiliates currently own approximately 25.1% of SL Industries’ outstanding shares. In 1991, when we first purchased shares of SL Industries, it was trading at around $3.50. I was on the board from 1993-1997, and by 1997, SL Industries was trading at $11-12. I served as Chairman and CEO of SL Industries from 2002-2005, and by 2005, SL Industries was trading at $17-18. I have continued to serve on the board at various points over the past decade, as the stock has climbed. When this transaction is consummated, we will be on track with our business simplification plan. Below you can see the progress we have made with our business simplification plan: Current State 2016 (Pending Handy & Harman & SL Industries deal) *DGT and SPH Services are included in SPLP *CoSine and WebBank are included in WebFinancial Holding Corp. Proceeding into 2016, we will continue to focus on our capital allocation, our business simplification plan, and the organizational development of our people, culture and relationships in a coherent manner. We are looking to make acquisitions where we will gain a competitive advantage. We have diligently developed our culture around the Steel Business System to maximize the productivity and efficiency in all areas of our business. We are retaining great people and developing a great bench. All of us at Steel Partners continue to be active owners who want to grow and protect our investments, and intend to have a meaningful stake in our company forever. Today, our team owns approximately 51% of Steel Partners Holding LP, so we are clearly eating our own cooking and completely aligned with our stockholders. Thank you for your continued support and input. We look forward to a productive and prosperous future. Respectfully, Warren G. Lichtenstein “Never let the fear of striking out get in your way.” - Babe Ruth 2016 Pro Forma for Transactions Completed/Announced Steel Partners Holdings L.P.* (NYSE: SPLP) Handy & Harman Ltd. 70.1% Initial Acq. Date 1/24/1997 ModusLink Global Solutions 31.5% Initial Acq. Date 6/13/2012 Aerojet Rocketdyne Holdings, Inc. 6.6% Initial Acq. Date 8/4/2000 (GenCorp) Steel Excel, Inc. 58.3% Initial Acq. Date 2/09/2007 (ADAPTEC) WebFinancial Holding Corp.* 90.7%
  11. 11. Spring 2016 • INSIDER 2120 INSIDER • Spring 2016 In 1980, Aerojet Rocketdyne (AR) initiated a groundwater extraction and treatment (GET) system at its Sacramento location to treat groundwater contaminated from Cold War rocket testing. Over the years, that system was expanded with advances in treatment technology to maximize cleanup efforts. To date, over 146 billion gallons of groundwater has been treated and over one million pounds of chemicals have been removed. All treatment and discharge is done under Environmental Protection Agency and state agency oversight. However, for many years, the water treated at the GET facilities was discharged to a nearby surface water body on the AR property. Recognizing the need for water conservation and severe drought conditions in California, AR identified and developed smart ways to reuse the water after treatment and discharge. With the use of industrial water in Sacramento so critical to AR’s operation and the potential limitations of municipal water during drought conditions, AR made modifications to its GET facilities to reuse the “clean” treated water in its industrial system. Currently, 1.5 million gallons of treated water is being conserved and re-used per day in AR’s Sacramento operations. This re-use of treated water by AR also alleviates the pressure on the local city water system and reservoir. AR treated water has also been supplied to other local water districts and the county water services. Collaboration between AR’s groundwater remediation projects and water- strapped municipalities has helped provide drought solutions that benefit both the local water purveyors and, at the same time, ensure AR is able to meet its groundwater remediation requirements and operational needs. Steel Safety OMG Roofing Products of Agawam, Massachusetts, achieved an all-time record Recordable Incident Rate (RIR) for 2015 of 1.35. The RIR shows the rate of injuries and illnesses for every 100 full-time employees. This is the third year in a row that OMG achieved a new record, and the fifth year in a row that OMG has maintained an RIR significantly below the average rate for their industry. This amazing accomplishment is the result of OMG management and employee commitment to place safety as a top priority. Teams across all departments at all locations strive for continuous improvement in all areas including safety as a critical component. Management and employees engage in regular dialogue to ensure behaviors are supporting the company’s safety goals. The graph shows OMG performance and the national average for similar industries. OMG results are 50% less than the average, placing it in the realm of world-class safety achievements. Congratulations to the OMG family for their excellent record and dedication to a safe work environment. OMG plans continued success in 2016 on their safety achievements and goal of zero accidents and injuries. OMG, Inc. Continues to Set New Safety Record Aerojet Rocketdyne’s Sacramento Operations Saves Water Two of the seven Sacramento Groundwater Treatment Facilities: Arget (on-property) and Mather Field (off-property). Do you know why Tennessee is called the Volunteer State? During the War of 1812, at the request of President James Madison, General Andrew Jackson rallied 1,500 men from his home state to fight at the Battle of New Orleans. The name became even more self-fulfilling during the Mexican War when Governor Aaron V. Brown issued a call for 2,800 men to battle Santa Ana and 30,000 Tennesseans volunteered. The term “Volunteer State” recognizes the long-standing tradition of Tennesseans to go above and beyond the call of duty when called by their country. In true Tennessean fashion, Eric Lussier does much the same for his company and in life. A lifelong Tennessean and diehard University of Tennessee Volunteers football fan, Bristol, TN, was home for Eric until he enrolled in UT at Knoxville, where he earned a BS in Industrial Engineering and an MS in Industrial Engineering and Engineering Management. After which, he added an MS in Industrial and Systems Engineering from the University of Alabama at Huntsville to his credentials. “I chose industrial engineering because I like studying the interface between people and systems-processes. It provided enough technical detail to maintain my interest, but also focused on the softer skills of leadership and management of people.” While an industrial engineering co-op student at AlliedSignal in Gallatin, Eric had a life-changing experience when he was trained in lean manufacturing techniques by Osamu “Sam” Iida, a Japanese Sensei. Pivotal to the direction of his career path, Eric frequently returns to the lessons on lean that he learned from Iida and says, “Those principles formed the foundation of the Steel Business System as it exists today.” Eric has worked in multiple man- ufacturing operations roles. He learned qual- ity systems in the automo- tive supply industry and became a certified Black Belt and Mas- ter Black Belt in Lean Six Sigma while with Al- liedSignal and ARC Automotive (a division of Sequa). It was his time with ARC Automotive that engineered Eric’s move to H&H. John Quicke, with whom he worked at ARC, recruited Eric to develop an Operational Excel- lence program, which became the H&H Business System. Eric’s proudest professional achievement to date is developing the H&H Business System, which became the pilot for the Steel Business System, with Jeff Svoboda. When Eric joined H&H in February 2008, there were nine companies within H&H that had no common suppliers, customers or processes. “The challenge presented to us was how to improve a collection of disparate businesses and put them on a path of operational excellence to grow the company profitably. We built the Business System with a foundation based on lean manufacturing and modeled our House after the Danaher Business System. The greatest recognition we’ve received recently came from Cliff Ransom in his investor newsletter where he branded H&H as a ‘next generation Danaher,’ which was external validation of the culture we are trying to build within the companies.” A lifelong learner, Eric continues to add new interests to his stock, livestock among them. He and his family – wife Diane, whom he met at UT, 8th-grader euphonium-playing Caleb, and 6th-grader and percussionist Jacob – live on a “gentleman’s farm” in Tennessee. They raise Kiko (the Maori word for meat) goats and free-range chickens, which along with dogs, cats and a rabbit round out the Lussier menagerie. This year they plan to give beekeeping a try. Eric and Diane agree that raising their sons on the farm with livestock teaches them valued work ethic as well as personal responsibility and accountability. “I want to raise my boys to be producers not consumers, and have them give more than they take in life,” says Eric. Eric is a fan of board games and movies, especially Star Wars, Lord of the Rings, and Marvel superhero-related films. He teaches a weekly Sunday School class for adults and enjoys family weekend camping trips. An avid reader of non-fiction and fiction, a few of Eric’s favorites are Influence: The Psychology of Persuasion by Robert Cialdini and, the book that he feels influenced his thinking regarding lean manufacturing more than any other, The Goal by Eliyahu Goldratt. Atlas Shrugged by Ayn Rand is a fiction favorite. A rock solid Volunteer who goes above and beyond the call, no matter where the call comes from – Eric Lussier, Steel Partners Man of Steel. Eric with newborn Princess, daughter of Leia, in early March at his Tennessee Gentleman’s Farm. Man of Steel: Eric Lussier, VP H&H Business System, Handy & Harman Ltd. “Farming looks mighty easy when your plow is a pencil and you’re a thousand miles from the corn field.” ~ Dwight Eisenhower; a favorite quote of Eric Lussier Eric Lussier
  12. 12. Spring 2016 • INSIDER 2322 INSIDER • Spring 2016 Meet API Group The Steel Partners presence spans the globe and impacts a wide variety of markets. Businesses represented by Steel Partners affiliated companies are diverse, fascinating and extremely creative in enterprise, and API Group is no exception. A global company recognized as a brand enhancement specialist, API is a leading manufacturer and distributor of foils, films and laminates used to enhance the visual appeal of products and packaging, and to help customers communicate brand values and authenticity. With roots in the United Kingdom paper industry, API’s reputation is founded on a trading history going back over a century, including more than 40 years as an independent, publicly-quoted company. Today, API’s global operations employ more than 460 people, in 11 locations, who are dedicated to providing high quality, innovative materials and solutions for use in a vast range of applications including consumer packaging and printed media. API foils, films and laminates are used to add metallic and holographic finishes and effects to labels, cartons, containers and closures for many of the world’s leading consumer brands in premium sectors such as alcoholic drinks, confectionary, tobacco, perfumery, cosmetics and healthcare. API is known for its customer service ethos, technical expertise and a highly collaborative approach to working with supply chain partners to meet the most demanding requirements of brand owners and product representatives. API the Toast of the Champagne Industry API is delighted to have been chosen to supply Brand Enhancement materials for the next generation of premium products from Champagne house, Taittinger. Having worked in close collaboration over recent years, API has supported Taittinger’s marketing team to refine the graphics and the visual effects they wanted for the 2017 packs. This work builds on the now iconic ‘Bulles en Fete’ champagne gift cartons developed between API and Taittinger, which saw sales increase by as much as 40% in certain markets, with a new twist based on the latest packaging trends information and materials supplied by API’s creative team. API is also celebrating supplying a Fresnel lens laminate to the world famous Champagne house, Moët et Chandon. Developed in great secrecy and in partnership with the chosen design house and printer, the products will be hitting Duty Free stores around the world in time for the Christmas. API Shines at Packaging Innovations 2016 Interest in API’s Brand Enhancement products and creative solutions was highly visible at Packaging Innovations 2016, the leading packaging industry event in the UK, providing an opportunity for essential networking and a platform to promote their full suite of products to all those involved in all aspects of packaging. The event was a great success, with leads taken at the show up 43% over 2015 and a significant drive in traffic to the company’s website through a co-ordinated promotional campaign, which included Social Media. API Supports Next Generation of Packaging Designers at the Starpack Student Awards – Effective Packaging is in the Detail! The Starpack Industry Awards program is now in its 58th year and is the UK’s premier competition of its kind, recognizing innovation in packaging design and technology. The Student Starpack competition, established in 1964, challenges packaging designers of the future, students from a wide range of Universities and Colleges, to create and submit solutions to problems set by brand-leading FMCG companies, design agencies, and manufacturers – and win recognition for their excellence. The Partner Spotlight See and hear David Peters, Creative Development Manager for API, discuss creative trends and visual effects while representing API at Packaging Innovations 2016: http://www. packaging-innovations-2016-26-02-2016 The famous ‘Bulles en Fete’ gift pack developed in partnership between API and Taittinger. Major interest in API’s Brand Enhancement solutions Partner Spotlight expectation is that students really challenge conventional thinking and break the rules with off-the-wall creativity, and this is the key criterion for judging success. The Student Packaging Design Awards allows students to showcase their talent and demonstrate how to make a pack graphically attractive, including foils and laminates. In addition to looking good, the pack needs to meet the functional requirements to preserve and protect the contents and be produced cost-effectively with due regard to environmental issues. Judging took place in Grantham, UK on 23 March. Representatives on the Judging Design Panel included members of API’s Technical team and they were presented with eye-catching and inspiring packaging ideas and designs presented across the board. API supported the event by sponsoring the “Einstein’s Anniversary” Coin Collector’s Presentation Packaging challenge, which saw students briefed to produce a creative solution for a Presentation Gift Pack to hold a special limited edition coin made to celebrate the 100th Anniversary of Einstein’s publication of The Theory of Relativity. The winners will receive one week’s work experience with API to learn from industry experts, and results are officially announced in June. API Sees Customers Excel at the FSEA Gold Leaf Awards API attended the 2016 Foil & Specialty Effects Association (FSEA) Gold Leaf Awards held at the FSEA National Conference in Orlando, April 3 – 5. The conference showcases the most exciting and creative works across the graphic arts industry. In its 23rd year in 2016, the Gold Leaf Awards is the industry’s “Oscars,” with companies invited from around the world to enter their best work for review. Entries are judged on design, execution and level of difficulty in 25 categories with a gold, silver and bronze award presented in each category. Over 300 entries were made, with API foil used on 25% of the final winning designs, the second most represented foil supplier across all categories. API Chosen to Judge at World Whiskies Awards API recently helped celebrate the world’s best whiskies. The World Whiskies Awards event, part of the Whiskies and Spirit Conference, was held on 17 March 2016 and, as a respected supplier to the industry, API was chosen to judge one of the key awards. The Conference was followed by The Whisky Magazine Presentation dinner where the winners in seven categories – American Whisky, Blended Whisky, Blended Malt Whisky, Canadian Whisky, Flavoured Whisky, Grain Whisky and Single Malt Whisky – were announced. The first round of judging for the World Whiskies Awards had judges worldwide submitting their scores, with API part of the final decision- making in the all-important design categories on 1 February 2016. API was proud to present the award for the World’s Best Blended Malt Whisky category to Reference Series III.2 by Master of Malt. The Reference Series began with three blended malts – I, II and III – each made up of the same constituent parts, only in different quantities, with III containing over 50% incredibly well-aged single malts. Version III.2 is the extraordinary Reference Series III with 10% heavily peated Islay single malt added into the mix. Commenting on the Awards, Bob Almer, VP Sales, Americas at API said, “It is important that we celebrate success within our industry and recognize the best use of foil and acknowledge award-winning projects that deliver real impact for our customers. As one of the leading providers of materials for the enhancement of brands and packaging around the world, we are proud to be part of the prestigious FSEA Gold Leaf Awards.” Award winner Hallmark Cards, Inc. in the category of Best use of Holographic Foil Example of Design Student’s submission using API materials World’s Best Blended Malt Whisky category winner Reference Series III.2 by Master of Malt