Business Structure and Divisions - Star Equity completed the sale of its healthcare division, Digirad Health, on May 4, 2023, transitioning to two divisions: Building Solutions and Investments [16]. - The Building Solutions division includes KBS, EdgeBuilder, Glenbrook, and Timber Technologies, focusing on modular buildings and engineered wood products for residential and commercial markets [17]. - The Investments division manages corporate-owned real estate and minority investments in public companies, including a stake in Catalyst MedTech LLC acquired in May 2023 [18]. - EdgeBuilder and Glenbrook operate as a single entity, focusing on engineered structural wall panels and building materials distribution in the Upper Midwest [26]. - Timber Technologies' glulam products are gaining market share due to their superior strength and sustainability compared to traditional materials like steel and concrete [27]. Financial Performance - For the year ended December 31, 2024, the company reported revenue of $53.4 million, an increase of 16.5% compared to $45.8 million for the comparable period in 2023 [57]. - The company experienced a net loss attributable to common stockholders of $12.5 million for the year ended December 31, 2024, compared to a net income of $23.2 million for the same period in 2023 [57]. - 2024 revenues were $53.4 million, representing an increase of $7.6 million or 16.5% compared to 2023 revenues of $45.8 million [133]. - The increase in revenues was attributed to the inclusion of revenues from Timber Technologies (TT) and BLL in 2024, partially offset by lower revenues at KBS and the Edgebuilder and Glenbrook entities due to slower business activity [133]. - 2024 gross profit was $11.1 million, a decrease of $0.9 million or 7.3% compared to 2023 gross profit of $11.9 million [134]. - Loss from continuing operations in 2024 was $10.4 million, compared to a loss of $1.9 million in 2023, primarily due to a $4.6 million impairment and unrealized losses of $1.9 million [136]. - The company reported a net income (loss) attributable to common stockholders of $(12,478) thousand for 2024, compared to $23,216 thousand in 2023 [206]. Acquisitions and Investments - The company completed the acquisition of Timber Technologies Inc. for total consideration of $23.7 million, which includes $19.7 million in cash and contingent payments of up to $4.1 million based on EBITDA metrics [49]. - The company acquired certain assets of BLL for a purchase price of $3.3 million, with potential post-closing adjustments including an earn-out provision of up to $0.5 million [48]. - The total aggregate consideration for the acquisition of Digirad Health was $40 million, consisting of $19.7 million in cash, a $7 million promissory note, and $6 million in New Units [47]. - The company acquired assets from Timber Technologies, Inc. for $3.0 million, with a promissory note issued for the same amount secured by a mortgage [164][165]. Risks and Challenges - The company faces risks related to health pandemics, wars, inflation, and other global instability factors that could disrupt operations and financial results [62]. - The company faces significant risks associated with real estate ownership, including potential unanticipated losses or expenses due to market fluctuations and supply chain issues [64]. - The cost and availability of raw materials, particularly dimensional lumber and wood sheet products, are subject to significant fluctuations, which could adversely affect the company's revenue and earnings [64]. - Trade tariffs and other factors affecting commodities could materially impact the company's financial condition and cash flows, potentially increasing costs that may not be recoverable from customers [66]. - The construction industry is sensitive to economic conditions, and adverse changes could decrease demand and pricing for new projects, impacting the company's revenues [68]. - The company is exposed to significant liability claims and disputes, which could result in substantial monetary damages and impact financial condition [79]. - Future indebtedness could restrict operations and make the company more vulnerable to adverse economic conditions, potentially harming financial stability [83]. Stock and Market Conditions - The company's common stock has experienced volatility, influenced by operating results, financial situation, and market conditions [84]. - The common stock has a low trading volume, which may lead to price volatility if significant sales occur [85]. - The company must maintain a minimum closing bid price of $1.00 per share and a market value of publicly held shares of at least $5.0 million to avoid delisting from Nasdaq [86]. - As of February 14, 2024, the company received a notice for failing to meet the closing bid price requirement for 30 consecutive trading days [87]. Operational and Strategic Plans - Star Equity plans to pursue organic growth and strategic alternatives, including selective acquisitions and divestitures, to enhance market position and profitability [20]. - The company aims to leverage existing personnel and infrastructure for organic growth in markets where it already operates [24]. - The Building Solutions division continues to see significant demand for products despite a higher interest rate environment, although there have been delays in execution as customers finalize project financing [125]. - The Modular Building Institute reported that permanent modular construction increased from 2.14% in 2015 to 6.64% by the end of 2023, indicating a growing acceptance of offsite construction methods [126]. Financial Position and Equity - The company's total stockholders' equity decreased to $54.3 million as of December 31, 2024 [57]. - Goodwill and net intangible assets represented $27.4 million, or 31.6% of total assets, as of December 31, 2024, indicating potential risks of impairment that could negatively impact earnings [75]. - The company has a stock repurchase program authorized for up to $1 million, with $721,440 remaining available for purchase as of December 31, 2024 [118]. - Total assets increased to $83,048 million in 2024 from $75,496 million in 2023, representing a growth of 10.3% [209]. - Current liabilities rose to $12,470 million in 2024, up from $8,734 million in 2023, an increase of 42.0% [209]. - Total stockholders' equity fell to $54,336 million in 2024 from $65,299 million in 2023, a decrease of 16.8% [209]. Cash Flow and Financing Activities - Net cash used in operating activities for 2024 was $5.2 million, a decrease from $2.7 million provided in 2023 [152]. - Net cash used in investing activities was $12.0 million in 2024, compared to $16.2 million provided in 2023, primarily due to the acquisition of TT [153]. - Net cash provided by financing activities was $3.9 million in 2024, an increase from net cash used of $3.1 million in 2023 [154]. - Proceeds from borrowings amounted to $24,322 million in 2024, down from $41,153 million in 2023, a decrease of 41.0% [212]. Accounting and Revenue Recognition - The company recognizes revenue when control of promised goods or services is obtained, applying a five-step model for revenue recognition [174]. - The company accounts for business combinations using the acquisition method, recording identifiable assets and liabilities at fair value [176]. - The company has elected the measurement alternative under ASC 321 for its investment in Catalyst Parent, recording it at cost with adjustments for impairment [178].

Star Equity (STRR) Q4 2024 Earnings Call March 20, 2025 04:09 PM ET Company Participants Richard Coleman - Chief Executive OfficerDavid Noble - Chief Financial OfficerTheodore O'Neill - CEOJeffrey Eberwein - Executive Chairman of the BoardNone - Executive Conference Call Participants Tate Sullivan - Senior Research AnalystNone - Analyst Operator Greetings, ladies and gentlemen, and welcome to Star Equity Holdings Fourth Quarter twenty twenty four Results Conference Call. Please be advised that the discussio ...

Group 1 - Star Equity (STRR) reported quarterly earnings of $0.15 per share, exceeding the Zacks Consensus Estimate of a loss of $0.17 per share, and compared to a loss of $0.10 per share a year ago, representing an earnings surprise of 188.24% [1] - The company posted revenues of $17.1 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 22.11%, and compared to year-ago revenues of $14.11 million [2] - Star Equity has surpassed consensus EPS estimates two times over the last four quarters and topped consensus revenue estimates three times during the same period [2] Group 2 - The stock's immediate price movement will depend on management's commentary during the earnings call and the sustainability of earnings expectations [3][4] - Star Equity shares have declined about 2.2% since the beginning of the year, while the S&P 500 has seen a decline of 3.5% [3] - The current consensus EPS estimate for the coming quarter is -$0.32 on $15 million in revenues, and -$0.33 on $70 million in revenues for the current fiscal year [7] Group 3 - The Zacks Industry Rank indicates that the Diversified Operations sector is currently in the top 21% of over 250 Zacks industries, suggesting a favorable outlook for the industry [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5][6] - The current estimate revisions trend for Star Equity is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6]

Transaction Structure - The aggregate consideration for the transfer of Membership Interests includes $4,900,000 in cash and 775,000 shares of Series A Preferred Stock[15]. - The restructuring involved the formation of a Parent Company and the contribution of 100% of the Target Company's membership interests to it[12]. - The Target Company will continue to operate as a wholly-owned subsidiary of the surviving corporation after the mergers[14]. - The mergers are intended to qualify as a reorganization under Section 368(a) of the Code[12]. - The closing payments will be made in cash by wire transfer according to a specified Payment Spreadsheet[16]. - The Purchase Price is subject to adjustments based on the Closing Net Working Capital compared to the Target Net Working Capital[15]. - The Sellers owned 100% of the issued and outstanding membership interests of the Target Company prior to the Effective Date[12]. - The Parent Company will cease to exist following the merger with Merger Sub 2[13]. - The Board of Directors of Purchaser and the Board of Managers of the involved companies have approved the Agreement and the mergers[13]. - The transaction is structured to maintain the Target Company's status as an S Corporation for tax purposes[12]. Financial Obligations and Adjustments - At the Closing, the Purchaser will retain $1,000,000 in Cash Escrow and 100,000 shares of Escrow Stock for indemnification obligations[18]. - The Working Capital Escrow Amount is set at $250,000, which will also be held in a segregated account[18]. - The Estimated Closing Debt, Estimated Closing Cash on Hand, and Estimated Closing Transaction Expenses must be prepared and delivered by the Seller Representative at least three business days prior to the Closing Date[19]. - The Purchaser is required to deliver a Closing Balance Sheet and Purchaser Closing Statement within 120 calendar days of the Closing Date[20]. - If the Seller Representative disputes the Purchaser Closing Statement, they must provide a Dispute Notice within 30 calendar days[23]. - The final Purchase Price will be determined based on the Final Net Working Capital, Final Cash on Hand, Final Debt, and Final Transaction Expenses[26]. - If the Adjustment Amount is positive, the Purchaser will pay each Seller their Pro Rata Percentage of the Adjustment Amount within five calendar days[27]. - In the case of a negative Adjustment Amount, the Purchaser will disburse from the Working Capital Escrow Funds to cover the amount owed[28]. - Interest will accrue on any unpaid amounts at a rate of 8% per annum from the due date[29]. - An illustrative calculation of the Net Working Capital as if the Closing had occurred on January 31, 2025, is provided in the documentation[30]. Financial Statements and Internal Controls - The Target Company has consolidated balance sheets and statements of operations for the fiscal years ending December 31, 2022, 2023, and 2024, which fairly present its financial position[52]. - The Financial Statements indicate that the Target Company maintains proper internal accounting controls to ensure accurate financial reporting and asset accountability[53]. - The Target Company does not have any undisclosed liabilities that are required to be reflected on a balance sheet prepared in accordance with GAAP, except for those disclosed in the Interim Financial Statements[54]. Legal Compliance and Corporate Governance - The Membership Interests represent all of the issued and outstanding equity interests in the Parent Company on a fully diluted basis[45]. - The execution and delivery of the Agreement have been duly authorized by all requisite corporate action on the part of the Company[43]. - The Company is duly organized and in good standing under the laws of its respective states, ensuring compliance with legal requirements[44]. - There are no pending or threatened proceedings against the Company that materially affect its properties or assets[48]. - The Company has not been a party to any proceedings in the past four years, indicating a stable legal standing[49]. - The execution of the Agreement does not conflict with any provisions of the Company's Governing Documents or applicable laws[46]. Tax Compliance - The Company has not incurred any material liability for Taxes arising from extraordinary gains or losses since the date of the Interim Financial Statements[64]. - The Company has complied with all applicable Laws relating to Taxes and has duly filed all required Tax Returns[60]. - The unpaid Taxes of the Company did not exceed the reserve for Tax liability set forth in the Interim Financial Statements[64]. - The Company has timely paid all Taxes required to be paid, whether or not shown as due on any Tax Return[60]. - There are no Encumbrances for Taxes on any assets of the Company, other than current Taxes not yet due and payable[71]. - The Company has not executed any closing agreements with respect to Taxes[65]. - The Company has not participated in any "reportable transaction" as defined by the United States Treasury Regulations[75]. - The Company does not have any obligation to indemnify any employee or contractor for Taxes[73]. - The Company has not commenced any voluntary disclosure proceeding regarding Taxes that has not been fully resolved[69]. - The Company is not liable for Taxes of any other Person as a result of successor liability or other liabilities[72]. Operational Compliance and Assets - The Company has complied with all applicable laws regarding unclaimed property and does not hold any abandoned property[81]. - The Company has timely filed all required FinCEN and IRS forms related to foreign bank accounts[83]. - The Company has collected blanket resale certificates from all customers exempt from sales taxes[84]. - The Company has been treated as an "S corporation" for tax purposes since January 1, 2020, and is currently a disregarded entity for tax purposes[85][86]. - The Company has not sold or transferred any assets that would hinder the continuation of its historic business post-merger[89]. - The Company has good and marketable title to all assets reflected in the Interim Financial Statements, free of encumbrances[112]. - The tangible assets currently used in the business are in good condition and adequate for their intended use[113]. - The Company has not received any written notice regarding violations of building codes or zoning ordinances affecting its real property[93]. - All necessary licenses and permits for conducting business are in full force and effect[105]. - The Company has maintained compliance with data protection laws and has not faced any claims regarding the handling of Personally Identifiable Information[106][108]. Accounts and Inventory Management - All Accounts Receivable are valid and collectible within 90 days after invoicing, with no disputes reported[115]. - The reserve for bad debts has been determined in accordance with GAAP and is consistently applied[115]. - All Inventory is owned free and clear of any Encumbrances and is fairly reflected on the Interim Financial Statements[117]. Employee Relations and Compliance - The Company has not received any fines or penalties related to service defects in the past three years[121]. - The Company owns all Intellectual Property Assets necessary for its operations, which are in good standing and enforceable[123]. - There are no outstanding licenses or claims against the Company's Intellectual Property Assets[124]. - Each Employee Plan complies with applicable laws and has been administered in accordance with its terms[129]. - All required contributions to Employee Plans have been timely made or reflected in the Financial Statements[132]. - The Company does not have any liabilities related to pension plans or multiemployer plans[134]. - No prohibited transactions have occurred with respect to any Employee Plan that would result in liability for the Company[137]. - The Company has complied with the Affordable Care Act and has offered "minimum essential coverage" to full-time employees since January 1, 2018[143]. - There have been no labor strikes or disputes against the Company in the past five years, indicating stable labor relations[144]. - The Company has not engaged in any plant closings or mass layoffs in the past six years, maintaining employment stability[146]. - All employees have been properly classified under applicable labor laws, ensuring compliance with wage and hour regulations[147]. - The Company has maintained workers' compensation coverage as required by law through insurance, not self-insurance[151]. Environmental and Insurance Compliance - The Company has not received any notices of environmental violations in the past five years, demonstrating compliance with environmental regulations[158]. - The Company possesses all necessary licenses and permits to operate its business, ensuring uninterrupted operations[161]. - The Company has a comprehensive list of insurance policies in effect, covering various operational risks[163]. - The Company has maintained all insurance policies in full force, with no claims pending that have been denied or disputed by underwriters[164]. - There are no outstanding bonds or letters of credit required to satisfy any contractual obligations[165]. Contracts and Relationships - The Company has a complete list of Material Contracts, including those with annual payments exceeding $25,000[166]. - No Material Customers or Suppliers have terminated or materially modified their relationships with the Company since December 31, 2023[172]. - The Company is in compliance with all applicable laws and has not received any notices of violations in the past three years[173]. - The Company has not engaged in any Affiliate Transactions that deviate from standard arms-length terms[178]. - The Company has implemented reasonable steps to safeguard the integrity and security of its Information Systems[180]. - The Company has not made claims in excess of current insurance coverage[164]. - The Company has not received any written notice of default under any insurance policy[164]. Seller and Purchaser Representations - Each Seller has the requisite power and authority to enter into the Agreement and consummate the transactions without the consent of any other person[183]. - The Membership Interests owned by each Seller are free from any encumbrances, except for restrictions under federal or state securities laws[186]. - There are no pending or threatened litigations against the Sellers related to their ownership of Membership Interests or the transactions contemplated by the Agreement[187]. - Each Seller does not have any claims against the Company arising from facts existing prior to the Closing, excluding vested benefits under employee benefits[188]. - Each Seller is an accredited investor and is acquiring Series A Preferred Stock for its own account, not for distribution or resale[191]. - The Purchaser has all requisite power and authority to execute and deliver the Agreement and consummate the transactions[195]. - No consent or approval from any governmental entity is required for the execution and delivery of the Agreement by the Purchaser[198]. - There are no pending or threatened proceedings against the Purchaser that would impair its ability to consummate the purchase of Membership Interests[199]. - No broker or finder is entitled to any commission or finder's fee in connection with the Agreement or the transactions as a result of Purchaser's actions[200].

Fourth Quarter Revenues Increased 21% and Gross Profit Increased 56% Generated Fourth Quarter Adjusted EBITDA of $1.1 Million ADT Acquisition Closed in March, Establishing Energy Services Division OLD GREENWICH, Conn, March 20, 2025 (GLOBE NEWSWIRE) -- Star Equity Holdings, Inc. (Nasdaq: STRR; STRRP) (“Star Equity” or the “Company”), a diversified holding company, reported today its financial results for the fourth quarter (Q4) and fiscal year (FY) ended December 31, 2024. All 2024 and 2023 amounts in this ...

OLD GREENWICH, Conn., March 13, 2025 (GLOBE NEWSWIRE) -- Star Equity Holdings, Inc. (Nasdaq: STRR; STRRP), (“Star Equity” or the “Company”), a diversified holding company, announced today that it will release its financial results for the fourth quarter ended December 31, 2024, before the market opens on Thursday, March 20, 2025. A conference call is scheduled for 10:00 a.m. ET (7:00 a.m. PT) on March 20, 2025, to discuss the results and management’s outlook. The call may be accessed by dialing: Toll Free: ...

Core Viewpoint - Star Equity Holdings, Inc. has announced preliminary key financial metrics for Q4 2024, indicating a strong performance compared to Q4 2023, driven by increased activity in the Building Solutions segment and the signing of two significant commercial contracts by its subsidiary KBS Builders, Inc. [1][2] Financial Metrics - For Q4 2024, Star expects to report revenues of approximately $17.1 million, an increase of 21.3% from $14.1 million in Q4 2023 [2][5] - Gross profit for Q4 2024 is projected to be around $4.4 million, up from $2.9 million in Q4 2023, reflecting improved margins [2][5] - Adjusted EBITDA from continuing operations is expected to be approximately $1.1 million, a turnaround from a loss of $0.1 million in Q4 2023 [2][5] Business Developments - KBS Builders, Inc. has signed two large commercial contracts valued at $3.1 million and $2.1 million for the construction of housing units in Maine, with manufacturing expected to begin in Q1 and Q2 of 2025 [2][5] - The company anticipates strong demand for new projects due to an ongoing housing shortage and increasing acceptance of modular construction methods [2][5] Company Overview - Star Equity Holdings, Inc. operates through three divisions: Building Solutions, Energy Services, and Investments [3] - The Building Solutions division includes modular building manufacturing, structural wall panel manufacturing, and glue-laminated timber manufacturing [4]

Core Viewpoint - Star Equity Holdings, Inc. has acquired Alliance Drilling Tools, LLC, marking a significant milestone in its growth strategy by establishing a new "Energy Services" operating division [1][4][9]. Transaction Highlights - The acquisition closed on March 3, 2025, with an enterprise value of $12.65 million, which includes real estate valued at approximately $3.0 million [6][7]. - Star Equity paid $4.9 million in cash, partially funded by $2.5 million in debt financing, and issued 775,000 shares of Series A Preferred Stock valued at $7.75 million [7]. Company Overview - Alliance Drilling Tools, founded in 2009, specializes in the rental, sale, and repair of downhole tools for the oil and gas, geothermal, mining, and water-well industries [3][8]. - ADT generated approximately $10.5 million in revenue for the full year 2024, with a gross margin of 48% and Adjusted EBITDA of $2.4 million [4]. Strategic Fit - The acquisition allows Star to diversify its operating portfolio and leverage ADT's specialized industry knowledge to capitalize on growth opportunities in the energy sector [4][9]. - ADT will retain its brand and continue operations as a division of Star, which now comprises three divisions: Building Solutions, Energy Services, and Investments [4][9]. Future Growth Potential - Star plans to enhance ADT's growth through strategic investments aimed at expanding operational capacity and meeting rising demand for its services [4][6].

Core Viewpoint - Star Equity Holdings, Inc. announced a $3.2 million contract for a multifamily housing project in Maine, further enhancing its market position in New England [1][2][3] Group 1: Contract Details - The contract involves the manufacturing of 40 modules for five 4-unit townhouse condominiums in Lincoln County, Maine [2] - Production is set to begin in January 2025, with delivery expected in the second quarter of 2025 [2] - This project is the second of two potential contracts exceeding $5 million mentioned in the company's Q3 2024 earnings release, with the first being a $2.1 million project in Vermont [2] Group 2: Company Insights - Rick Coleman, CEO of Star, emphasized the project as a significant win for KBS in Maine, reinforcing its strong reputation in the region [3] - The company is actively converting large commercial projects from its sales pipeline into booked backlog, indicating a positive trend in business operations [3] - The company believes its location and expertise position it well to address the housing shortage in New England, providing high-quality construction solutions [3] Group 3: Company Structure - Star Equity Holdings, Inc. operates as a diversified holding company with two main divisions: Building Solutions and Investments [4] - The Building Solutions division includes modular building manufacturing, structural wall panel and wood foundation manufacturing, and glue-laminated timber manufacturing [5] - The Investments division manages the company's real estate assets and investment positions in both private and public companies [6]

Core Viewpoint - Star Equity Holdings, Inc. has signed a $2.1 million contract for the manufacturing of multifamily apartments in Vermont, indicating a strong position in the New England commercial construction market, particularly in multifamily housing [1][3]. Contract Details - The $2.1 million contract involves the manufacturing of 16 modules for three 4-unit apartment buildings in Randolph, Vermont, with manufacturing set to begin in February and delivery expected in the second quarter of 2025 [2]. Market Position and Outlook - The CEO of Star Equity Holdings expressed confidence in the improved market conditions and increased demand for new housing, supported by recent multimillion-dollar contracts for affordable housing projects in Maine [3]. - The company believes that the improving interest rate environment, strong backlog, and sales pipeline indicate a momentum shift in the marketplace that is expected to continue into 2025 [3]. Company Structure - Star Equity Holdings operates through two divisions: Building Solutions and Investments [4]. - The Building Solutions division includes modular building manufacturing, structural wall panel and wood foundation manufacturing, and glue-laminated timber manufacturing [5]. - The Investments division manages and finances the company's real estate assets and investment positions in both private and public companies [6].