Core Viewpoint - Star Equity Holdings, Inc. is actively engaging with investors through a presentation at the Sidoti Small Cap Virtual Conference, highlighting its strategic focus on building long-term shareholder value through diversified business operations [1][2][3]. Company Overview - Star Equity Holdings, Inc. is a diversified holding company that aims to build long-term shareholder value by acquiring, managing, and growing businesses with strong fundamentals and market opportunities [3]. - The company operates through four divisions: Building Solutions, Business Services, Energy Services, and Investments [3]. Recent Developments - On August 22, 2025, the company completed the acquisition of Star Operating Companies, Inc., which was previously known as Star Equity Holdings, Inc. This merger resulted in the company changing its name and trading symbols on Nasdaq to STRR and STRRP effective September 5, 2025 [4]. Division Summaries - **Building Solutions**: This division operates in three niches: modular building manufacturing, structural wall panel and wood foundation manufacturing, and glue-laminated timber (glulam) manufacturing [5]. - **Business Services**: This division provides flexible and scalable recruitment solutions to a global clientele, focusing on mid-market and enterprise organizations [6]. - **Energy Services**: This division is involved in the rental, sale, and repair of downhole tools used in various industries including oil and gas, geothermal, mining, and water-well [7]. - **Investments**: This division manages and finances the company's real estate assets and investment positions in both private and public companies [8].

Board of Directors Authorizes New $3 Million Share Repurchase ProgramOLD GREENWICH, Conn., Sept. 10, 2025 (GLOBE NEWSWIRE) -- Star Equity Holdings, Inc. (Nasdaq: STRR and STRRP) formerly, Hudson Global, Inc. (Nasdaq: HSON and HSONP) (“Star” or the “Company”), a diversified holding company, announced today that it has completed its $5 million share repurchase program authorized in August 2023. In addition, the Company’s Board of Directors has authorized a new share repurchase program under which the Company ...

OLD GREENWICH, Conn., Sept. 08, 2025 (GLOBE NEWSWIRE) -- Star Equity Holdings, Inc. (Nasdaq: STRR and STRRP) (“Star” or the “Company”), a diversified holding company, announced today that its wholly owned subsidiary, Hudson RPO, operating inside its Business Services division, has rebranded to Hudson Talent Solutions (“HTS”), reflecting the business’ broadened vision and expanded global capabilities. The rebrand is accompanied by the launch of a new website, www.hudsontalent.com. The change is the culminati ...

OLD GREENWICH, Conn., Sept. 04, 2025 (GLOBE NEWSWIRE) -- Hudson Global, Inc. (Nasdaq: HSON; HSONP) announced today that it will change its corporate name to Star Equity Holdings, Inc. (“Star” or the “Company”), effective as of 12:01 a.m. Eastern Time on September 5, 2025. At the same time, the ticker symbols for its Common Stock and 10% Series A Cumulative Perpetual Preferred Stock (“Preferred Stock”) will change to STRR and STRRP, respectively, on NASDAQ. This name change follows the previously announced A ...

Core Viewpoint - The merger between Hudson Global, Inc. and Star Equity Holdings, Inc. has been successfully completed, creating a larger and diversified holding company that aims to leverage its increased size, diversified revenue streams, and improved profitability to deliver compelling returns to shareholders [5][8]. Company Structure and Operations - Hudson Global now operates with four reporting segments: Building Solutions, Business Services, Energy Services, and Investments [6][10]. - The Building Solutions division includes modular building manufacturing, structural wall panel and wood foundation manufacturing, and glue-laminated timber manufacturing [11]. - The Business Services division provides flexible recruitment solutions to a global client base, focusing on mid-market and enterprise-level organizations [12]. - The Energy Services division is involved in the rental, sale, and repair of downhole tools for various industries [13]. - The Investments division manages the company's real estate assets and investment positions in both private and public companies [14]. Financial and Market Impact - The merger results in pro-forma annualized revenues of $210 million, enhancing revenue diversity and positioning the company for potential inclusion in the Russell 2000 index [5]. - The merger allows for the utilization of Hudson Global's $240 million U.S. federal net operating losses (NOLs) [5]. Stock and Trading Information - Hudson Global's common stock will continue trading under the symbol "HSON," while its 10% Series A Cumulative Perpetual Preferred Stock will begin trading under "HSONP" [2]. - Star's common and preferred stock has been suspended from trading on Nasdaq as of August 22, 2025 [2]. Management and Governance - The board of directors of Hudson Global consists of seven members, with six being independent, and is led by CEO Jeff Eberwein and COO Rick Coleman [7].

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) [Filing Details](index=1&type=section&id=Filing%20Details) This document is a Quarterly Report on Form 10-Q for the period ended June 30, 2025, filed by Star Equity Holdings, Inc. The company's securities, including Common Stock and Series A Cumulative Perpetual Preferred Stock, are registered on the NASDAQ Global Market - The report is a Quarterly Report on Form 10-Q for the period ended June 30, 2025[2](index=2&type=chunk) Registered Securities | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :-------------------------------- | :---------------- | :-------------------------------------- | | Common Stock, par value $0.0001 per share | STRR | NASDAQ Global Market | | Series A Cumulative Perpetual Preferred Stock, par value $0.0001 per share | STRRP | NASDAQ Global Market | [Registrant Status](index=1&type=section&id=Registrant%20Status) Star Equity Holdings, Inc. is classified as a non-accelerated filer and a smaller reporting company. As of August 8, 2025, the company had 3,234,978 shares of Common Stock outstanding - The registrant is a non-accelerated filer and a smaller reporting company[5](index=5&type=chunk) - As of August 8, 2025, **3,234,978 shares** of Common Stock ($0.0001 par value) were outstanding[6](index=6&type=chunk) [Important Information Regarding Forward-Looking Statements](index=4&type=section&id=IMPORTANT%20INFORMATION%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) [Forward-Looking Statements Disclosure](index=4&type=section&id=Forward-Looking%20Statements%20Disclosure) This section highlights that the report contains forward-looking statements based on current beliefs and expectations, particularly in 'Item 2 — Management's Discussion and Analysis of Financial Condition and Results of Operations'. These statements are subject to risks and uncertainties that could cause actual results to differ materially, as described in 'Item 1A — Risk Factors'. The company does not undertake to update or revise these statements unless required by law - The report includes forward-looking statements, especially in 'Item 2 — Management's Discussion and Analysis of Financial Condition and Results of Operations'[9](index=9&type=chunk) - Forward-looking statements are identified by words like 'believe,' 'expect,' 'anticipate,' 'project,' 'could,' 'would,' and similar expressions[9](index=9&type=chunk) - Actual results may differ materially due to risks, uncertainties, and factors described in 'Item 1A — Risk Factors'[9](index=9&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including the Statements of Operations, Balance Sheets, Statements of Cash Flows, and Statements of Stockholders' Equity, along with detailed notes explaining the basis of presentation, significant accounting policies, revenue recognition, earnings per share, balance sheet information, leases, fair value measurements, debt, commitments, income taxes, segment information, mergers and acquisitions, related party transactions, preferred stock, and equity transactions [Condensed Consolidated Statements of Operations](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For the three months ended June 30, 2025, Star Equity Holdings, Inc. reported a net income of $3.451 million, a significant improvement from a net loss of $3.787 million in the prior year. Total revenues increased by 75.8% to $23.708 million, driven by growth in Building Solutions and the new Energy Services segment. Gross profit surged by 182.2% to $6.253 million, while operating expenses increased by 21.5% Condensed Consolidated Statements of Operations (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change (2025 vs 2024) | | :----------------------------------- | :----- | :----- | :-------------------- | | Revenues | $23,708 | $13,483 | +$10,225 (+75.8%) | | Cost of revenues | $17,455 | $11,267 | +$6,188 (+54.9%) | | Gross profit | $6,253 | $2,216 | +$4,037 (+182.2%) | | Operating expenses | $7,205 | $5,929 | +$1,276 (+21.5%) | | Income (loss) from operations | $(952) | $(3,713) | +$2,761 (+74.4%) | | Total other income (expense), net | $4,860 | $(113) | +$4,973 (+4400.9%) | | Income (loss) before income taxes | $3,908 | $(3,826) | +$7,734 (+202.1%) | | Income tax benefit (provision) | $(457) | $39 | $(496) (-1271.8%) | | Net Income (loss) | $3,451 | $(3,787) | +$7,238 (+191.1%) | | Net income (loss) attributable to common shareholders | $2,778 | $(4,266) | +$7,044 (+165.1%) | | Basic EPS attributable to common shareholders | $0.87 | $(1.34) | +$2.21 | | Diluted EPS attributable to common shareholders | $0.86 | $(1.34) | +$2.20 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, total assets increased to $102.414 million from $83.048 million at December 31, 2024, primarily driven by increases in current assets, property and equipment, and intangible assets. Total liabilities also increased to $39.801 million from $28.712 million, mainly due to higher accounts payable, accrued liabilities, and short-term debt. Total stockholders' equity grew to $62.613 million Condensed Consolidated Balance Sheets (in thousands) | Asset/Liability/Equity | June 30, 2025 | December 31, 2024 | Change | | :----------------------------------- | :------------ | :---------------- | :----- | | Total current assets | $35,185 | $24,414 | +$10,771 | | Property and equipment, net | $16,653 | $10,207 | +$6,446 | | Intangible assets, net | $20,399 | $18,930 | +$1,469 | | Goodwill | $9,922 | $8,453 | +$1,469 | | Total assets | $102,414 | $83,048 | +$19,366 | | Total current liabilities | $23,284 | $12,470 | +$10,814 | | Total liabilities | $39,801 | $28,712 | +$11,089 | | Total stockholders' equity | $62,613 | $54,336 | +$8,277 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, net cash used in operating activities decreased to $1.144 million from $4.265 million in 2024, primarily due to improved operating results. Net cash used in investing activities significantly decreased to $4.550 million from $18.944 million, mainly reflecting lower acquisition-related cash payments compared to the prior year. Net cash provided by financing activities also decreased to $3.532 million from $8.322 million, due to lower net debt utilization and less acquisition funding Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | Change (2025 vs 2024) | | :----------------------------------- | :----- | :----- | :-------------------- | | Net cash provided (used) by operating activities | $(1,144) | $(4,265) | +$3,121 | | Net cash provided (used) by investing activities | $(4,550) | $(18,944) | +$14,394 | | Net cash provided (used) by financing activities | $3,532 | $8,322 | $(4,790) | | Net change in cash, cash equivalents, and restricted cash | $(2,162) | $(14,887) | +$12,725 | | Cash, cash equivalents, and restricted cash at end of period | $3,469 | $4,059 | $(590) | - Cash paid for interest increased to **$394 thousand** in 2025 from **$146 thousand** in 2024[19](index=19&type=chunk) - Issuance of Preferred Stock as a non-cash financing activity amounted to **$7.045 million** in 2025[19](index=19&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=11&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY) Total stockholders' equity increased from $54.336 million at December 31, 2024, to $62.613 million at June 30, 2025. This increase was primarily driven by the issuance of preferred shares as part of an acquisition ($7.045 million) and net income for the period ($3.451 million), partially offset by preferred stock dividends Condensed Consolidated Statements of Stockholders' Equity (in thousands) | Item | Balance at Dec 31, 2024 | Balance at Jun 30, 2025 | Change | | :----------------------------------- | :---------------------- | :---------------------- | :----- | | Perpetual Preferred Stock Amount | $18,988 | $26,033 | +$7,045 | | Common stock Amount | $2 | $2 | $0 | | Treasury Stock | $(6,007) | $(6,007) | $0 | | Additional paid-in capital | $159,880 | $158,837 | $(1,043) | | Accumulated deficit | $(118,527) | $(116,252) | +$2,275 | | Total stockholders' equity | $54,336 | $62,613 | +$8,277 | - Issuance of Preferred Shares as part of acquisition contributed **$7.045 million** to equity in Q1 2025[20](index=20&type=chunk) - Net income for the six months ended June 30, 2025, was **$2.275 million**, reducing the accumulated deficit[13](index=13&type=chunk)[20](index=20&type=chunk) [Note 1. Basis of Presentation and Significant Policies](index=12&type=section&id=Note%201.%20Basis%20of%20Presentation%20and%20Significant%20Policies) The unaudited condensed consolidated financial statements are prepared in accordance with SEC instructions for Form 10-Q and U.S. GAAP, with all material adjustments included. Star Equity Holdings, Inc. is a multi-industry diversified holding company with three divisions: Building Solutions, Investments, and the newly established Energy Services (following the ADT acquisition on March 3, 2025). A significant development is the proposed merger with Hudson Global, Inc., which, if consummated, would make Star Equity a wholly-owned subsidiary of Hudson and delist it from NASDAQ - The Company completed a merger with Alliance Drilling Tools, Inc. (ADT) on March 3, 2025, establishing the Energy Services division[24](index=24&type=chunk)[25](index=25&type=chunk) - Star Equity Holdings, Inc. entered into a Merger Agreement with Hudson Global, Inc. on May 21, 2025, under which Star Equity would become a wholly-owned subsidiary of Hudson and be delisted from NASDAQ, pending stockholder approval[26](index=26&type=chunk)[27](index=27&type=chunk) - The Company is evaluating new accounting standards ASU 2024-03 and ASU 2025-01 regarding expense disaggregation disclosures, effective for fiscal years beginning after December 15, 2026[30](index=30&type=chunk) [Note 2. Revenue](index=13&type=section&id=Note%202.%20Revenue) Total revenues for the three months ended June 30, 2025, were $23.708 million, with Building Solutions contributing $20.384 million and Energy Services (newly acquired ADT) contributing $3.324 million. For the six months ended June 30, 2025, total revenues were $36.632 million. The majority of revenue is recognized at a point in time, with Energy Services also recognizing revenue over time for equipment rentals Revenue Disaggregation (Three Months Ended June 30, 2025, in thousands) | Segment | Revenue from Contracts with Customers | | :-------------------- | :------------------------------------ | | Building Solutions | $20,384 | | Energy Services | $3,324 | | **Total Revenues** | **$23,708** | Revenue Disaggregation (Six Months Ended June 30, 2025, in thousands) | Segment | Revenue from Contracts with Customers | | :-------------------- | :------------------------------------ | | Building Solutions | $32,502 | | Energy Services | $4,130 | | **Total Revenues** | **$36,632** | - Energy Services revenue includes equipment rental, sales of new/used drilling tools, parts, supplies, and repair services. Revenue from 'lost-in-hole' reimbursements totaled **$385 thousand** for the six months ended June 30, 2025[33](index=33&type=chunk)[35](index=35&type=chunk) [Note 3. Basic and Diluted Net Income (Loss) Per Share](index=15&type=section&id=Note%203.%20Basic%20and%20Diluted%20Net%20Income%20(Loss)%20Per%20Share) For the three months ended June 30, 2025, basic net income per share attributable to common shareholders was $0.87, and diluted was $0.86. This is a significant improvement from a basic and diluted loss per share of $(1.34) in the prior year. For the six months ended June 30, 2025, basic and diluted EPS were $0.35, compared to $(2.20) in 2024. Common stock equivalents were excluded from diluted EPS calculations in periods of net loss as they were antidilutive Net Income (Loss) Per Share Attributable to Common Shareholders | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to common shareholders (in thousands) | $2,778 | $(4,266) | $1,123 | $(6,969) | | Basic EPS | $0.87 | $(1.34) | $0.35 | $(2.20) | | Diluted EPS | $0.86 | $(1.34) | $0.35 | $(2.20) | - For the three and six months ended June 30, 2025, **2.2 million** stock warrants were excluded from EPS calculations as they were antidilutive[38](index=38&type=chunk) [Note 4. Supplementary Balance Sheet Information](index=15&type=section&id=Note%204.%20Supplementary%20Balance%20Sheet%20Information) This note provides detailed breakdowns of inventories, property and equipment, warranty reserves, notes receivable, and long-term investments. Inventories increased to $9.207 million, and net property and equipment rose to $16.653 million, largely due to acquisitions. The company holds significant notes receivable, including the Catalyst Note ($8.603 million) and MDOS Note ($0.745 million). Long-term investments include a cost method investment in Catalyst and a fair value elected investment in Enservco, which experienced an unrealized loss of $491 thousand for the six months ended June 30, 2025 Inventories (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Raw materials | $4,494 | $2,644 | | Work-in-process | $557 | $735 | | Finished goods | $4,156 | $2,018 | | **Total inventories, net** | **$9,207** | **$5,397** | Property and Equipment, Net (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Gross property and equipment | $20,590 | $12,908 | | Accumulated depreciation | $(3,937) | $(2,701) | | **Total property and equipment, net** | **$16,653** | **$10,207** | - Long-term investments include a **$953 thousand** cost method investment in Catalyst (after a **$0.4 million** impairment in 2025) and a **$264 thousand** fair value elected investment in Enservco, which incurred a **$491 thousand** unrealized loss for the six months ended June 30, 2025[48](index=48&type=chunk)[49](index=49&type=chunk)[57](index=57&type=chunk) [Note 5. Leases](index=19&type=section&id=Note%205.%20Leases) The company has operating and finance leases for corporate offices, vehicles, and equipment, with remaining terms ranging from 1 to 20 years. Operating lease costs for the six months ended June 30, 2025, were $763 thousand, significantly higher than $233 thousand in the prior year. The weighted-average remaining lease term for operating leases is 17.0 years, with a weighted-average discount rate of 12.94% Lease Expense (Six Months Ended June 30, in thousands) | Lease Type | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Operating lease cost | $763 | $233 | | Total finance lease cost | $34 | $40 | Weighted Average Lease Metrics (June 30, 2025) | Metric | Operating Leases | Finance Leases | | :-------------------------------- | :--------------- | :------------- | | Weighted average remaining lease term (in years) | 17.0 | 2.3 | | Weighted average discount rate | 12.94 % | 5.80 % | - Total future minimum lease payments for operating leases amount to **$23.579 million**, with a present value of **$8.619 million**[60](index=60&type=chunk) [Note 6. Fair Value Measurements](index=20&type=section&id=Note%206.%20Fair%20Value%20Measurements) The company categorizes its financial assets and liabilities measured at fair value into a three-level hierarchy. As of June 30, 2025, total assets measured at fair value were $1.967 million (Level 1) and $73 thousand (Level 3), while liabilities included a Level 3 earn-out liability of $(167) thousand. A significant realized gain of $5.5 million was recognized from the sale of Servotronics, Inc. common shares during the quarter Assets and Liabilities Measured at Fair Value (June 30, 2025, in thousands) | Item | Level 1 | Level 2 | Level 3 | Total | | :-------------------------- | :------ | :------ | :------ | :---- | | Equity securities | $1,763 | $— | $— | $1,763 | | Lumber derivative contracts | $13 | $— | $— | $13 | | Investment in Enservco | $191 | $— | $73 | $264 | | BLL acquisition related earn-out | $— | $— | $(167) | $(167) | | **Total** | **$1,967** | **$—** | **$(94)** | **$1,873** | - A **$5.5 million** realized gain was recognized on equity securities, primarily from the Servotronics tender offer, for the three months ended June 30, 2025[68](index=68&type=chunk) - Lumber derivative contracts resulted in a total gain of **$86 thousand** for the three months ended June 30, 2025, and a total loss of **$23 thousand** for the six months ended June 30, 2025[70](index=70&type=chunk) [Note 7. Debt](index=23&type=section&id=Note%207.%20Debt) Total debt increased to $14.333 million at June 30, 2025, from $11.316 million at December 31, 2024, with a weighted-average interest rate of 7.67%. This increase is primarily due to new revolving credit facilities and term loans, including the Austin Loan Agreement for ADT and the Bridgewater Facility for Timber Technologies Solutions. The company maintains compliance with its debt covenants Debt Summary (in thousands) | Debt Type | June 30, 2025 Amount | June 30, 2025 Weighted-Average Interest Rate | December 31, 2024 Amount | December 31, 2024 Weighted-Average Interest Rate | | :----------------------------------- | :------------------- | :------------------------------------ | :------------------- | :------------------------------------ | | Total Short-term Revolving Credit Facilities | $5,430 | 8.42% | $2,156 | 8.75% | | Total Short-term debt | $7,345 | 8.29% | $3,911 | 8.30% | | Long Term Debt, net of current portion | $6,988 | 7.81% | $7,405 | 7.73% | | **Total Debt** | **$14,333** | **7.67%** | **$11,316** | **7.93%** | - ADT entered into an Austin Loan Agreement on March 3, 2025, providing a working capital line of credit up to **$3.0 million** and a term loan up to **$0.8 million**[72](index=72&type=chunk) - The Premier Loan Agreement for EBGL was extended to December 5, 2025, with **$2.0 million** availability as of June 30, 2025. KBS's KeyBank Loan Agreement was extended to July 29, 2026[73](index=73&type=chunk)[75](index=75&type=chunk) [Note 8. Commitments and Contingencies](index=25&type=section&id=Note%208.%20Commitments%20and%20Contingencies) The company is subject to various legal and administrative proceedings in the normal course of business, including claims related to regulatory compliance, customer disputes, employment practices, and product liability. While the timing and outcome of these matters are unpredictable, management does not currently expect them to have a material adverse effect on the company's financial position or results of operations - The company is subject to litigation and administrative proceedings, such as claims related to regulatory standards, customer disputes, and employment practices[83](index=83&type=chunk) - Management does not currently expect the resolution of these matters to have a material adverse effect on financial position or results of operations[83](index=83&type=chunk) [Note 9. Income Taxes](index=25&type=section&id=Note%209.%20Income%20Taxes) For the six months ended June 30, 2025, the company recorded an income tax benefit of $1.7 million, a significant increase from $4 thousand in the prior year. This benefit includes a discrete benefit of $2.0 million related to the valuation allowance release associated with Star's pre-existing tax attributes due to the ADT acquisition. The company maintains a full valuation allowance against its deferred tax assets and had $300 thousand in unrecognized tax benefits related to uncertain tax positions Income Tax Benefit (Provision) (in thousands) | Period | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Three Months Ended June 30, | $(457) | $39 | | Six Months Ended June 30, | $1,733 | $4 | - The six-month income tax benefit for 2025 includes a **$2.0 million** discrete benefit from the valuation allowance release due to the ADT acquisition[88](index=88&type=chunk) - As of June 30, 2025, unrecognized tax benefits related to uncertain tax positions amounted to approximately **$300 thousand**[89](index=89&type=chunk) [Note 10. Segments](index=25&type=section&id=Note%2010.%20Segments) Star Equity Holdings, Inc. operates through three reportable segments: Building Solutions, Energy Services (newly established with the ADT acquisition), and Investments. Segment performance is evaluated based on gross profit and operating income (loss). For the six months ended June 30, 2025, Building Solutions generated $32.502 million in revenue and $8.172 million in gross profit, while Energy Services, from its acquisition date, generated $4.130 million in revenue and $1.366 million in gross profit - The company's three reportable segments are Building Solutions, Energy Services, and Investments[91](index=91&type=chunk) Segment Performance (Six Months Ended June 30, 2025, in thousands) | Segment | Revenues | Cost of Revenues | Gross Profit | Income (loss) from operations | | :---------------- | :------- | :--------------- | :----------- | :---------------------------- | | Building Solutions | $32,502 | $24,330 | $8,172 | $567 | | Energy Services | $4,130 | $2,764 | $1,366 | $117 | | Investments | $316 | $149 | $167 | $33 | | Corporate and Intersegment eliminations | $(316) | $— | $(316) | $(4,516) | | **Total** | **$36,632** | **$27,243** | **$9,389** | **$(3,799)** | - EBITDA for the six months ended June 30, 2025, was **$3.386 million**, with Building Solutions contributing **$2.545 million** and Investments contributing **$4.605 million**[94](index=94&type=chunk) [Note 11. Mergers and Acquisitions](index=27&type=section&id=Note%2011.%20Mergers%20and%20Acquisitions) Star Equity completed two significant acquisitions: Alliance Drilling Tools (ADT) on March 3, 2025, for $12.568 million, establishing the Energy Services segment, and Timber Technologies Solutions (TT) on May 17, 2024, for $23.7 million, enhancing the Building Solutions segment. Both acquisitions involved cash and preferred shares/mortgage debt, and their purchase price allocations are preliminary. Pro forma results indicate that these acquisitions significantly increased revenue and gross profit for the respective periods - Acquired Alliance Drilling Tools (ADT) on March 3, 2025, for a total consideration of **$12.568 million**, including cash payments and preferred shares[95](index=95&type=chunk)[97](index=97&type=chunk) - ADT acquisition resulted in **$1.468 million** in goodwill and **$3.1 million** in identified intangible assets (Trade Names and Customer Relationships) assigned to the Energy Services segment[99](index=99&type=chunk) - Acquired Timber Technologies Solutions (TT) on May 17, 2024, for **$23.7 million**, including cash and a Term Loan Secured by a Mortgage[102](index=102&type=chunk) [Note 12. Related Party Transactions](index=30&type=section&id=Note%2012.%20Related%20Party%20Transactions) As of June 30, 2025, Mr. Eberwein, the Executive Chairman, owned approximately 25.43% of the company's outstanding Common Stock and 1,182,414 shares of Series A Preferred Stock. Additionally, the CEO, Richard Coleman, held board positions at Catalyst (2025 and 2024) and Enservco (2024) due to the company's long-term investments - Mr. Eberwein, Executive Chairman, owned **820,374 shares (25.43%)** of Common Stock and **1,182,414 shares** of Series A Preferred Stock as of June 30, 2025[106](index=106&type=chunk) - CEO Richard Coleman held board positions at Catalyst (2025, 2024) and Enservco (2024) due to company investments[106](index=106&type=chunk) [Note 13. Perpetual Preferred Stock](index=30&type=section&id=Note%2013.%20Perpetual%20Preferred%20Stock) Holders of Series A Preferred Stock are entitled to preferential cumulative cash dividends at 10.0% per annum of the $10.00 liquidation preference, payable quarterly. The stock is not convertible or redeemable by the company and has limited voting rights only if dividends are in arrears for six or more consecutive quarters. The company declared and paid two quarterly dividends of $0.25 per share in Q1 and Q2 2025, totaling approximately $0.5 million and $0.7 million respectively, and is current on payments - Series A Preferred Stock holders receive **10.0%** per annum cumulative cash dividends on a **$10.00** liquidation preference, payable quarterly[107](index=107&type=chunk) - Dividends of **$0.25 per share** were declared and paid in March and June 2025, totaling approximately **$0.5 million** and **$0.7 million**, respectively[108](index=108&type=chunk) - The Series A Preferred Stock is not convertible and not subject to redemption by the Company[107](index=107&type=chunk) [Note 14. Equity Transactions](index=30&type=section&id=Note%2014.%20Equity%20Transactions) A one-for-five reverse stock split of common stock became effective on June 14, 2024, proportionally adjusting all outstanding stock options and warrants. As of June 30, 2025, 10.9 million warrants (representing 2.2 million common stock equivalents) with an exercise price of $7.50 remained outstanding and will expire in January 2027. The company also repurchased $0.3 million (73,855 shares) of its common stock in 2024 under a $1 million buyback program - A one-for-five reverse stock split of common stock became effective on June 14, 2024[109](index=109&type=chunk)[110](index=110&type=chunk) - As of June 30, 2025, **10.9 million** warrants (**2.2 million** common stock equivalents) with a **$7.50** exercise price were outstanding, expiring in January 2027[111](index=111&type=chunk) - The company repurchased **$0.3 million (73,855 shares)** of common stock in 2024 under a **$1 million** buyback program[112](index=112&type=chunk) [Note 15. Preferred Stock Rights](index=31&type=section&id=Note%2015.%20Preferred%20Stock%20Rights) On August 21, 2024, the Board declared a dividend of one right per common stock share to purchase one one-thousandth of a Series C Participating Preferred Stock share at an exercise price of $12.00. This Rights Plan aims to preserve the company's net operating loss carryforwards by diminishing the risk of an 'ownership change' under Section 382 of the Internal Revenue Code. The rights become exercisable upon certain triggering events and can cause substantial dilution to an acquiring person - The Board declared a dividend of one right per common stock share to purchase Series C Participating Preferred Stock, with an exercise price of **$12.00** per one one-thousandth of a share[113](index=113&type=chunk) - The Rights Plan is intended to preserve net operating loss carryforwards by mitigating the risk of an 'ownership change' under Section 382 of the Internal Revenue Code[114](index=114&type=chunk) - The rights will expire on the earliest of August 21, 2027, redemption by the Board, exchange, repeal of Section 382, or determination of no NOLs[118](index=118&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for the three and six months ended June 30, 2025, compared to the prior year. It covers an overview of the company's diversified divisions (Building Solutions, Energy Services, Investments), strategic goals, market conditions, and detailed analysis of revenues, gross profit, operating expenses, other income/expense, income taxes, and liquidity. Key highlights include significant revenue and gross profit growth driven by acquisitions and improved operational efficiencies, alongside a proposed merger with Hudson Global, Inc [Overview](index=32&type=section&id=Overview) Star Equity Holdings, Inc. is a diversified multi-industry holding company with three divisions: Building Solutions (modular buildings, wall panels, glulam, building materials), Energy Services (drilling tools and services via ADT acquisition), and Investments (real estate, public and private equity stakes). A proposed merger with Hudson Global, Inc. would make Star Equity a wholly-owned subsidiary of Hudson, leading to delisting from NASDAQ - Star Equity operates three divisions: Building Solutions (KBS, EdgeBuilder, Glenbrook, TT), Energy Services (ADT), and Investments[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) - The Energy Services division was newly created following the acquisition of Alliance Drilling Tools, Inc. (ADT) in Q1 2025[122](index=122&type=chunk)[124](index=124&type=chunk) - A merger agreement with Hudson Global, Inc. is in place, which would result in Star Equity becoming a wholly-owned subsidiary of Hudson and delisting from NASDAQ[126](index=126&type=chunk)[127](index=127&type=chunk) [Strategy](index=33&type=section&id=Strategy) Star Equity's strategy leverages its holding company structure to focus on capital allocation, strategic leadership, M&A, and investor relations, while operating companies concentrate on organic growth, operational improvements, and bolt-on acquisitions. The company aims to improve market position and profitability through organic growth and strategic alternatives like selective acquisitions, divestitures, equity offerings, debt financings, or corporate restructuring, prioritizing 'value' acquisitions - The holding company structure allows Star Equity management to focus on capital allocation, strategic leadership, M&A, and investor relations[128](index=128&type=chunk) - The company explores strategic alternatives, including organic growth, selective acquisitions, divestitures, equity offerings, debt financings, or corporate restructuring[129](index=129&type=chunk) - Acquisition strategy prioritizes 'value' buyers, pursuing transactions only if post-transaction potential value for stockholders is high[133](index=133&type=chunk) [Operating Business](index=33&type=section&id=Operating%20Business) The operating companies are positioned for growth in large markets, focusing on organic expansion in existing geographies, introducing new services (e.g., commercial multi-family segment, logistics), and acquiring complementary businesses. Despite economic uncertainties and higher interest rates, the Building Solutions division sees strong demand and improved profitability from price increases and margin protection. The Energy Services demand is tied to oil and gas prices and drilling activity, with the total U.S. rig count down 4% year-over-year in June 2025 - Building Solutions benefits from increased acceptance of offsite/prefab construction, offering shorter time to market, higher quality, and cost savings[131](index=131&type=chunk) - The demand for Energy Services is linked to oil and gas prices and drilling activity; the total U.S. rig count was down **4%** year-over-year in June 2025[132](index=132&type=chunk) - Growth strategy includes organic growth in core businesses, introduction of new services (e.g., logistics, on-site installation), and acquisition of complementary businesses[133](index=133&type=chunk) [Segments](index=34&type=section&id=Segments) The company's three reportable segments are Building Solutions (KBS, EdgeBuilder, Glenbrook, TT), Energy Services (ADT), and Investments. Building Solutions manufactures modular housing, structural wall panels, and glulam, and supplies building materials. Energy Services provides drilling tools and services to the oil & gas, geothermal, mining, and water-well industries. The Investments division manages corporate-owned real estate and minority equity investments - Building Solutions includes KBS (modular buildings), EdgeBuilder (structural wall panels, wood foundations), Glenbrook (building materials), and TT (glue-laminated timber products)[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk) - Energy Services, consisting of ADT, provides sale and rental tools and services to the Oil & Gas, Geothermal, Mining, and Waterwells sectors[143](index=143&type=chunk) - Investments division holds real estate leased to subsidiaries and manages minority investments in public companies, as well as debt and equity holdings in Catalyst and Enservco[144](index=144&type=chunk) [Critical Accounting Policies and Estimates](index=35&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The preparation of financial statements requires management to make significant estimates, assumptions, and judgments impacting revenue, net income/loss, and asset/liability values. Key areas include revenue recognition, goodwill valuation, asset impairment, business combination accounting, and income taxes, which are considered critical accounting policies - Significant estimates and judgments are made in revenue recognition, goodwill valuation, asset impairment, business combination accounting, and income taxes[145](index=145&type=chunk) - These critical accounting policies and estimates have the greatest potential impact on the financial statements[145](index=145&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) The company experienced significant financial improvements for both the three and six months ended June 30, 2025, compared to 2024. Total revenues increased by 75.8% and 62.1% respectively, driven by the ADT acquisition and improved performance in Building Solutions. Gross profit saw substantial growth, while operating expenses increased at a slower rate relative to revenue. Net income turned positive, largely due to a realized gain on equity securities and an income tax benefit [Comparison of the Three Months Ended June 30, 2025 and 2024](index=35&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) For the three months ended June 30, 2025, total revenues increased by 75.8% to $23.708 million, and gross profit surged by 182.2% to $6.253 million. The company reported a net income of $3.451 million, a significant turnaround from a $3.787 million net loss in the prior year, primarily due to a $5.5 million realized gain on equity securities and improved operational performance Key Financial Highlights (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change (Dollars) | Change (Percent) | | :----------------------------------- | :----- | :----- | :--------------- | :--------------- | | Total revenues | $23,708 | $13,483 | $10,225 | 75.8 % | | Gross profit | $6,253 | $2,216 | $4,037 | 182.2 % | | Income (loss) from operations | $(952) | $(3,713) | $2,761 | 74.4 % | | Net income (loss) | $3,451 | $(3,787) | $7,238 | 191.1 % | - Building Solutions revenues increased due to the inclusion of TT revenues and improved activity at KBS and EBGL[147](index=147&type=chunk) - A **$5.5 million** realized gain from the sale of Servotronics, Inc. common shares was the largest component of Other income (expense) in Q2 2025[154](index=154&type=chunk) [Comparison of the Six Months Ended June 30, 2025 and 2024](index=37&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) For the six months ended June 30, 2025, total revenues grew by 62.1% to $36.632 million, and gross profit increased by 147.7% to $9.389 million. The company achieved a net income of $2.275 million, a substantial improvement from a $6.011 million net loss in the prior year, supported by a $1.7 million income tax benefit and realized gains on investments Key Financial Highlights (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | Change (Dollars) | Change (Percent) | | :----------------------------------- | :----- | :----- | :--------------- | :--------------- | | Total revenues | $36,632 | $22,601 | $14,031 | 62.1 % | | Gross profit | $9,389 | $3,790 | $5,599 | 147.7 % | | Income (loss) from operations | $(3,799) | $(6,675) | $2,876 | 43.1 % | | Net income (loss) | $2,275 | $(6,011) | $8,286 | 137.8 % | - Building Solutions revenues increased by **43.8%** to **$32.502 million**, driven by TT inclusion and improved results at KBS and EBGL[158](index=158&type=chunk) - Energy Services generated **$4.130 million** in revenue and **$1.366 million** in gross profit from its acquisition date[160](index=160&type=chunk)[162](index=162&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity sources include cash and cash equivalents, cash from operations, and credit facilities. As of June 30, 2025, cash and cash equivalents were $3.5 million, and total debt was $14.3 million. Net cash used in operating activities decreased significantly to $1.1 million for the six months ended June 30, 2025, due to improved operating results. Net cash used in investing activities also decreased, reflecting lower acquisition funding compared to the prior year Summary Cash Flows (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | | :----------------------------------- | :----- | :----- | | Net cash provided (used) by operating activities | $(1,144) | $(4,265) | | Net cash provided (used) by investing activities | $(4,550) | $(18,944) | | Net cash provided (used) by financing activities | $3,532 | $8,322 | - As of June 30, 2025, the company had **$3.5 million** in cash and cash equivalents and **$14.3 million** in total debt[172](index=172&type=chunk) - Net cash used in investing activities in 2025 was primarily for the ADT acquisition (**$4.2 million**), significantly less than the **$19.1 million** used for the TT acquisition in 2024[170](index=170&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that there are no applicable quantitative and qualitative disclosures about market risk for the company - The company has no applicable quantitative and qualitative disclosures about market risk[177](index=177&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025. The internal control over financial reporting was also deemed effective based on the COSO framework. No material changes in internal control over financial reporting occurred during the most recent fiscal quarter - Disclosure controls and procedures were effective as of June 30, 2025[178](index=178&type=chunk) - Internal control over financial reporting was effective as of June 30, 2025, based on the COSO framework[179](index=179&type=chunk) - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[181](index=181&type=chunk) [PART II. OTHER INFORMATION](index=42&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 8, 'Commitments and Contingencies,' for a summary of legal proceedings, indicating no new material information beyond what is already disclosed in the financial notes - Legal proceedings information is summarized in Note 8, 'Commitments and Contingencies,' of the condensed consolidated financial statements[184](index=184&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) The company reiterates the importance of considering risks from this 10-Q and its Annual Report on Form 10-K. New risks highlighted include those associated with the company's acquisition strategy, such as management diversion, increased costs, unanticipated liabilities, integration difficulties, and potential negative effects on business relationships. Losses in the investment portfolio are also identified as a risk that could adversely affect financial results - Risks from the company's acquisition strategy include management diversion, increased costs, unanticipated liabilities, integration difficulties, and negative effects on business relationships[186](index=186&type=chunk)[187](index=187&type=chunk) - There is no assurance that acquisitions will be successful or achieve anticipated synergies[188](index=188&type=chunk) - Losses in the investment portfolio, recognized in net income, could adversely affect results of operations, financial condition, and liquidity[189](index=189&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section states that there were no unregistered sales of equity securities, use of proceeds, or issuer purchases of equity securities to report for the period - No unregistered sales of equity securities, use of proceeds, or issuer purchases of equity securities were reported[190](index=190&type=chunk) [Item 3. Defaults Upon Senior Securities](index=42&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section indicates that there were no defaults upon senior securities to report - No defaults upon senior securities were reported[191](index=191&type=chunk) [Item 4. Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[192](index=192&type=chunk) [Item 5. Other Information](index=43&type=section&id=Item%205.%20Other%20Information) No Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements were adopted or terminated by the company's directors or executive officers during the fiscal quarter ended June 30, 2025 - None of the company's directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the fiscal quarter ended June 30, 2025[193](index=193&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Merger Agreement with Hudson Global, Inc., related support agreements, certifications from the Principal Executive and Financial Officers, and XBRL interactive data files - Exhibit 2.1 is the Agreement and Plan of Merger with Hudson Global, Inc., dated May 21, 2025[196](index=196&type=chunk) - Includes certifications of the Principal Executive Officer and Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) and Section 906 of the Sarbanes-Oxley Act of 2002[196](index=196&type=chunk) - XBRL Instance Document and Taxonomy Extension files are included as exhibits[196](index=196&type=chunk) [SIGNATURES](index=45&type=section&id=SIGNATURES) [Signatures](index=45&type=section&id=Signatures) The report is duly signed on behalf of Star Equity Holdings, Inc. by Richard K. Coleman, Jr., Chief Executive Officer (Principal Executive Officer), and David J. Noble, Chief Financial Officer (Principal Financial and Accounting Officer), dated August 13, 2025 - The report was signed by Richard K. Coleman, Jr., Chief Executive Officer, and David J. Noble, Chief Financial Officer[199](index=199&type=chunk) - The signing date for the report is August 13, 2025[199](index=199&type=chunk)

Financial Data and Key Metrics Changes - In Q2 2025, revenue increased by 76% compared to 2024, primarily driven by organic growth from the KBS business and the inclusion of Alliance Drilling Tools and Timber Technologies [5][6] - Gross margin improved to 26% from 16% in the same quarter last year, attributed to higher revenues and the inclusion of higher margin businesses [5] - Net income from operations was $3,500,000 in Q2 2025, compared to a net loss of $3,800,000 in Q2 2024 [10] - Non-GAAP adjusted net income was $6,000,000 or $1.87 per share, compared to an adjusted net loss of $900,000 or $0.29 per share in 2024 [10] - Non-GAAP adjusted EBITDA was $7,000,000 in Q2 2025, compared to an adjusted EBITDA loss of $500,000 in the same period last year [10] Business Line Data and Key Metrics Changes - Building Solutions division revenues increased by 51% to $20,400,000 compared to $13,500,000 in the same quarter last year, driven by increased KBS revenues and Timber Technologies [6] - Energy Services division generated $3,300,000 in revenue, with non-GAAP adjusted EBITDA of $500,000 [7] Market Data and Key Metrics Changes - Building Solutions backlog was strong at $25,700,000 at quarter end, compared to $14,000,000 at the end of 2024, indicating high confidence in the division's outlook [6] - The investments division's holdings in public equity securities decreased to $1,800,000 from $3,400,000 in 2024 [12] Company Strategy and Development Direction - The company is focused on creating shareholder value through targeted business development initiatives and identifying additional accretive acquisition opportunities across all divisions [15] - A definitive merger agreement with Hudson Global was entered into, expected to generate considerable value for shareholders through increased scale and diversification of revenue streams [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Building Solutions outlook for the next few quarters, expecting at least flat performance compared to Q2 [36] - The Energy Services division is also expected to maintain its performance, while the new Hudson business is anticipated to continue its trend of higher year-over-year revenue and EBITDA [36] Other Important Information - The company reported a consolidated cash flow from operations outflow of $1,700,000 in Q2 2025, an improvement from an outflow of $1,900,000 in Q2 2024 [10] - The company’s unrestricted cash balance at the end of Q2 2025 was $1,900,000, down from $4,000,000 in 2024, primarily due to cash used for the acquisition of ADT [11] Q&A Session Summary Question: Which business division has the best pricing power? - Management indicated that the Building Solutions division has the opportunity to maintain or raise prices depending on lumber market volatility, while the Energy Services division has also been able to increase prices selectively [18][19] Question: What is the plan for the merger with Hudson Global? - The plan is to close the merger as quickly as possible after the shareholder vote scheduled for August 21 [20] Question: Why is the Energy Services division able to implement price increases? - The high service level and mission-critical nature of the tools rented by ADT allow for selective price increases despite some pricing pressure in the market [25][26] Question: Can you clarify the nature of the large commercial contracts won? - The backlog includes a mix of commercial contracts, with a significant portion being multifamily and other types of projects [28][29] Question: What guidance can be provided for Q3 and Q4? - While formal guidance is not provided, management is confident in maintaining performance levels in Building Solutions and Energy Services, and expects cost savings from the merger to be realized over time [35][36]

Group 1 - Star Equity reported quarterly earnings of $1.86 per share, significantly beating the Zacks Consensus Estimate of a loss of $0.26 per share, and showing improvement from a loss of $0.29 per share a year ago, resulting in an earnings surprise of +815.38% [1] - The company posted revenues of $23.71 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 35.47%, and up from $13.48 million in the same quarter last year [2] - Over the last four quarters, Star Equity has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] Group 2 - Star Equity shares have underperformed the market, losing about 11.1% since the beginning of the year, while the S&P 500 has gained 9.6% [3] - The company's earnings outlook, including current consensus earnings expectations for upcoming quarters, will be crucial for investors [4] - The current consensus EPS estimate for the coming quarter is -$0.22 on revenues of $18.5 million, and -$0.98 on revenues of $69.42 million for the current fiscal year [7] Group 3 - The Zacks Industry Rank indicates that the Diversified Operations industry is currently in the top 20% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [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] - The estimate revisions trend for Star Equity was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6]

[Star Equity Holdings, Inc. 2025 Second Quarter Financial Results](index=1&type=section&id=Star%20Equity%20Holdings%2C%20Inc.%202025%20Second%20Quarter%20Financial%20Results) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company reported significant Q2 2025 growth with a 75.8% revenue surge and a shift to positive net income and Adjusted EBITDA Q2 2025 vs. Q2 2024 Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $23.7 million | $13.5 million | +75.8% | | Gross Profit | $6.3 million | $2.2 million | +182.2% | | Net Income (Loss) | $3.5 million | ($3.8 million) | N/A | | Diluted EPS | $1.07 | ($1.19) | N/A | | Adjusted EBITDA | $7.0 million | ($0.5 million) | N/A | Year-to-Date (6M) 2025 vs. 2024 Financial Highlights | Metric | 6M 2025 | 6M 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $36.6 million | $22.6 million | +62.1% | | Gross Profit | $9.4 million | $3.8 million | +147.7% | | Net Income (Loss) | $2.3 million | ($6.0 million) | N/A | | Diluted EPS | $0.71 | ($1.90) | N/A | | Adjusted EBITDA | $6.2 million | ($1.6 million) | N/A | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management attributes strong performance to the Building Solutions division, acquisitions, and a significant investment gain - Consolidated revenue growth of **76%** was driven by strong performance in the Building Solutions division and contributions from the acquisitions of TT and ADT[4](index=4&type=chunk) - The Investments Division generated **$5.8 million in adjusted EBITDA**, primarily from a **$5.5 million realized gain** on the sale of its investment in Servotronics[4](index=4&type=chunk) - A definitive merger agreement has been signed with Hudson Global, Inc. (Nasdaq: HSON), with shareholder votes scheduled for August 21, 2025. The merger is expected to create value through scale, diversification, and cost savings[4](index=4&type=chunk) [Financial Performance Analysis](index=3&type=section&id=Financial%20Performance%20Analysis) Q2 2025 saw dramatic improvement with 75.8% revenue growth and a 10-point gross margin expansion, leading to profitability [Revenues](index=3&type=section&id=Revenues) Total revenues grew 75.8% to $23.7 million, fueled by the Building Solutions and new Energy Services segments Revenues by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Building Solutions | $20,384 | $13,483 | +51.2% | | Energy Services | $3,324 | $— | N/M | | **Total Revenues** | **$23,708** | **$13,483** | **+75.8%** | [Gross Profit](index=3&type=section&id=Gross%20Profit) Consolidated gross profit surged 182.2% to $6.3 million, with total gross margin expanding to 26.4% Gross Profit by Segment (in thousands) | Segment | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Building Solutions | $5,243 | $2,229 | +135.2% | | Energy Services | $1,084 | $— | N/M | | **Total Gross Profit** | **$6,253** | **$2,216** | **+182.2%** | Gross Margin by Segment | Segment | Q2 2025 | Q2 2024 | Change (ppt) | | :--- | :--- | :--- | :--- | | Building Solutions | 25.7% | 16.5% | +9.2% | | Energy Services | 32.6% | — | N/M | | **Total Gross Margin** | **26.4%** | **16.4%** | **+10.0%** | [Operating Expenses](index=3&type=section&id=Operating%20Expenses) SG&A expenses rose 20.2% due to acquisitions but improved as a percentage of revenue from 39.6% to 27.1% - SG&A expenses increased by **20.2% to $6.4 million** in Q2 2025, driven by acquisitions and M&A costs[10](index=10&type=chunk)[37](index=37&type=chunk) - SG&A as a percentage of revenue improved significantly, falling to **27.1% in Q2 2025 from 39.6% in Q2 2024**[10](index=10&type=chunk) [Net Income and Adjusted EBITDA](index=3&type=section&id=Net%20Income%20and%20Adjusted%20EBITDA) The company achieved a significant turnaround, reporting a Q2 2025 net income of $3.5 million and Adjusted EBITDA of $7.0 million Net Income (Loss) and EPS | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income (Loss) | $3.5 million | ($3.8 million) | | Diluted EPS | $1.07 | ($1.19) | | Non-GAAP Adj. Net Income | $6.0 million | ($0.9 million) | | Non-GAAP Adj. Diluted EPS | $1.86 | ($0.29) | - Q2 2025 non-GAAP adjusted EBITDA was a gain of **$7.0 million** versus a loss of $0.5 million in Q2 2024, mainly due to realized gains on securities at the Investments Division[13](index=13&type=chunk) [Operating Cash Flow](index=5&type=section&id=Operating%20Cash%20Flow) Operating cash outflow for Q2 2025 was $1.7 million, with year-to-date outflow improving significantly to $1.1 million Cash Flow from Operations | Period | 2025 | 2024 | | :--- | :--- | :--- | | Q2 | ($1.7 million) | ($1.9 million) | | 6M (YTD) | ($1.1 million) | ($4.3 million) | [Operational and Corporate Updates](index=5&type=section&id=Operational%20and%20Corporate%20Updates) The company maintained a strong backlog, declared a preferred stock dividend, and protected its significant NOL carryforwards [Building Solutions Backlog](index=5&type=section&id=Building%20Solutions%20Backlog) The Building Solutions division ended Q2 2025 with a strong backlog of $25.7 million, supporting a positive outlook Building Solutions Backlog Trend (in thousands) | Quarter | Beginning Backlog | New Orders | Recognized Revenue | Ending Backlog | | :--- | :--- | :--- | :--- | :--- | | Q1 2025 | $17,190 | $22,841 | $12,118 | $27,913 | | Q2 2025 | $27,913 | $18,223 | $20,398 | $25,739 | - The quarter-end backlog of **$25.7 million** and a strong sales pipeline indicate continued strong demand for new projects[8](index=8&type=chunk) [Shareholder Returns and Corporate Actions](index=5&type=section&id=Shareholder%20Returns%20and%20Corporate%20Actions) The company declared a $0.25 per share cash dividend for Series A Preferred Stock and maintained its share repurchase program - A cash dividend of **$0.25 per share** was declared for Series A Preferred Stock in Q2 2025[18](index=18&type=chunk) - As of June 30, 2025, **$721 thousand remains authorized** for repurchase under the company's stock repurchase program[17](index=17&type=chunk) [Net Operating Losses (NOLs)](index=5&type=section&id=Net%20Operating%20Losses%20(NOLs)) The company protects its significant federal and state NOL carryforwards with a shareholder rights plan - The company holds valuable NOLs: **$44.6 million federal and $17.6 million state** as of year-end 2024[19](index=19&type=chunk) - A rights agreement is in place to protect the NOLs, limiting stock ownership to **4.99%** without board approval[19](index=19&type=chunk) [Financial Statements](index=9&type=section&id=Financial%20Statements) Condensed financial statements detail a shift to profitability and growth in total assets and stockholders' equity [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statement of operations shows a net income of $3.5 million in Q2 2025, a reversal from a $3.8 million loss in Q2 2024 Q2 Statement of Operations Summary (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $23,708 | $13,483 | | Gross Profit | $6,253 | $2,216 | | Income (Loss) from Operations | ($952) | ($3,713) | | Net Income (Loss) | $3,451 | ($3,787) | | Net Income (Loss) Attributable to Common | $2,778 | ($4,266) | [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets grew to $102.4 million and stockholders' equity increased to $62.6 million Balance Sheet Summary (in thousands) | Line Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $35,185 | $24,414 | | **Total Assets** | **$102,414** | **$83,048** | | Total Current Liabilities | $23,284 | $12,470 | | **Total Liabilities** | **$39,801** | **$28,712** | | **Total Stockholders' Equity** | **$62,613** | **$54,336** | [Non-GAAP Financial Measures Reconciliation](index=12&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) Reconciliations detail adjustments from GAAP net income to non-GAAP measures like adjusted net income and adjusted EBITDA - Q2 2025 GAAP Net Income of **$3.5 million** is reconciled to Non-GAAP Adjusted Net Income of **$6.0 million**. Key adjustments include acquired intangible amortization ($785k), M&A transaction costs ($503k), and impairment of cost method investment ($371k)[42](index=42&type=chunk) - Q2 2025 Non-GAAP Adjusted EBITDA of **$7.0 million** was primarily driven by the Investments division (**$5.8 million**) and the Building Solutions division (**$2.3 million**)[46](index=46&type=chunk) [Supplemental Information](index=15&type=section&id=Supplemental%20Information) Supplemental data details the company's debt structure and provides a breakdown of segment-level financial performance Total Debt Summary (in thousands) | Category | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Short-term debt | $7,345 | $3,911 | | Long Term Debt, net | $6,988 | $7,405 | | **Total Debt** | **$14,333** | **$11,316** | | Weighted-Average Interest Rate | 7.67% | 7.93% | Q2 2025 Segment Performance (in thousands) | Segment | Revenues | Gross Profit | Net Income (Loss) from Operations | | :--- | :--- | :--- | :--- | | Building Solutions | $20,384 | $5,243 | $1,270 | | Energy Services | $3,324 | $1,084 | $109 | | Investments | $158 | $84 | $0 | [About the Company and Forward-Looking Statements](index=6&type=section&id=About%20the%20Company%20and%20Forward-Looking%20Statements) Star Equity Holdings is a diversified holding company, and this report contains forward-looking statements subject to risks - The company operates through three main divisions: **Building Solutions, Energy Services, and Investments**[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) - The report includes forward-looking statements that are subject to risks and uncertainties, including those related to the proposed merger with Hudson, business operations, and market conditions[28](index=28&type=chunk)

Financial Performance - The company reported a consolidated revenue increase of 76% in Q2 2025, driven by strong performance in the Building Solutions division and contributions from recent acquisitions [5][6] - Q2 2025 revenues reached $23.7 million, up from $13.5 million in Q2 2024, with a gross profit increase of 182.2% to $6.3 million [6][11] - The company achieved a net income of $3.5 million in Q2 2025, compared to a net loss of $3.8 million in the same period last year [11][12] Division Performance - The Building Solutions division saw revenues increase by 75.8% to $23.7 million, with a gross profit increase of 135.2% to $5.2 million [6][9] - The Energy Services division reported robust performance despite challenging macroeconomic conditions, contributing to overall revenue growth [5] - The Investments division generated $5.8 million in adjusted EBITDA, primarily from a realized gain on an investment in Servotronics [5][13] Backlog and Future Outlook - The Building Solutions backlog stood at $25.7 million at the end of Q2 2025, indicating strong demand for new projects [5][8] - The company expressed optimism for strong performance in the second half of 2025, supported by a solid sales pipeline and customer feedback [5][8] Operating Expenses and Cash Flow - Q2 2025 SG&A expenses increased by 20.2% to $6.4 million, but as a percentage of revenue, they decreased to 27.1% from 39.6% in Q2 2024 [10] - Cash flow from operations improved, with an outflow of $1.7 million in Q2 2025 compared to $1.9 million in Q2 2024, attributed to favorable operational results [15] Merger and Strategic Initiatives - The company signed a definitive merger agreement with Hudson Global, expected to enhance shareholder value through increased scale and diversification [5][12] - Shareholder meetings for the merger approval are scheduled for August 21, 2025 [5]