Financial Data and Key Metrics Changes - The company's revenue for Q1 2025 increased by 41.7% compared to Q1 2024, primarily due to the inclusion of revenues from Timber Technologies and Alliance Drilling Tools acquisitions [5] - Gross margin improved to 24.3% from 17.3% in the same quarter last year, attributed to higher revenues and the addition of Timber Technologies [5] - Net loss from continuing operations was $1,200,000 in Q1 2025, an improvement from a net loss of $2,200,000 in Q1 2024 [9] - Non-GAAP adjusted EBITDA from continuing operations was a loss of $800,000 in Q1 2025, compared to a loss of $1,100,000 in the same period last year [10] Business Line Data and Key Metrics Changes - Building Solutions segment revenues increased by 32.9% compared to Q1 2024, although it was below internal expectations due to delays in commercial projects [5] - The Building Solutions division backlog reached a record $27,900,000 at quarter end, up from $14,800,000 at the end of Q1 2024, indicating strong future demand [6] - The Energy Services division was established with the acquisition of Alliance Drilling Tools, and integration is proceeding smoothly [6] Market Data and Key Metrics Changes - The company noted a significant uptick in customer interest and activity over the past couple of quarters, indicating a positive market environment [6] - There were no signs of projects being put on hold due to tariff impacts, with a strong backlog supporting future growth [19] Company Strategy and Development Direction - The management team is focused on creating shareholder value through targeted business development initiatives and identifying additional accretive opportunities across all divisions [12] - The company is exploring organic growth opportunities within the Energy Services division and considering further acquisitions [6] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong backlog and ongoing projects, suggesting that the construction demand built up over time is now being realized [19] - The company is monitoring input costs, such as lumber prices, but does not foresee significant negative impacts on their operations [20] Other Important Information - Consolidated cash flow from operations for Q1 2025 was an inflow of $600,000, a significant improvement from an outflow of $2,400,000 in Q1 2024 [10] - The company's unrestricted cash balance at the end of Q1 2025 was $1,900,000, down from $4,000,000 at the end of 2024, primarily due to acquisition-related cash outflows [10] Q&A Session Summary Question: Inquiry about project delays due to tariffs - Management clarified that delays were specific to a large project at EdgeBuilder, which experienced a temporary pause but is expected to resume and recognize revenue in Q2 [16][17] Question: Signs of projects being put on hold - Management indicated that there are no signs of projects being put on hold, with a strong backlog supporting ongoing construction activities [19] Question: Gross profit margin changes in Alliance Drilling - Management explained that the gross profit margin fluctuations are a function of quarterly activity levels and reaffirmed the high-margin nature of the Alliance Drilling business [26][27] Question: Equipment rental revenue structure - Management described the rental terms as project-based, with high rental rates due to the nature of the equipment used in drilling operations [30]

Financial Data and Key Metrics Changes - The company's revenue for Q1 2025 increased by 41.7% compared to Q1 2024, primarily due to the inclusion of revenues from Timber Technologies and Alliance Drilling Tools acquisitions [5] - Gross margin improved to 24.3% from 17.3% in the same quarter last year, attributed to higher revenues and the addition of Timber Technologies [5] - Gross profit was $3,100,000, up 99.2% versus Q1 2024, driven by increased revenue at KBS and the addition of TT and ADT [8] - The net loss from continuing operations was $1,200,000 in Q1 2025, an improvement from a net loss of $2,200,000 in Q1 2024 [10] - Non-GAAP adjusted EBITDA from continuing operations was a loss of $800,000, compared to a loss of $1,100,000 in the same period last year [11] Business Line Data and Key Metrics Changes - Building Solutions segment revenues increased by 32.9% compared to Q1 2024, although still below internal expectations due to delays in commercial projects [5] - The Building Solutions division backlog reached a record $27,900,000 at quarter end, compared to $14,800,000 at the end of Q1 2024, indicating strong future demand [6] - The establishment of the Energy Services division was highlighted by the acquisition of Alliance Drilling Tools, with a focus on organic growth and potential additional acquisitions [6] Market Data and Key Metrics Changes - The company noted a significant uptick in customer interest and activity over the past couple of quarters, indicating a positive market environment [6] - There were no signs of projects being put on hold due to tariff impacts, with a strong backlog supporting confidence in future quarters [19] Company Strategy and Development Direction - The management team is focused on creating shareholder value through targeted business development initiatives and identifying additional accretive opportunities across all divisions [13] - The company is monitoring input costs like lumber and OSB, but does not see significant exposure to new home construction, which has slowed down [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the backlog and the momentum in the Building Solutions division, with no signs of a temporary situation regarding project delays [19] - The company is optimistic about the integration of Alliance Drilling Tools and the growth opportunities within the Energy Services division [6] Other Important Information - Consolidated cash flow from operations for Q1 2025 was an inflow of $600,000, a significant improvement from an outflow of $2,400,000 in Q1 2024 [11] - The unrestricted cash balance at the end of the quarter was $1,900,000, down from $4,000,000 at the end of 2024, primarily due to cash used for the acquisition of ADT [11] Q&A Session Summary Question: Dynamics between Edge Builder and Building Solutions regarding project delays - Management clarified that delays were specific to a large project at EdgeBuilder, which paused for two months but is back on track for revenue recognition in Q2 [16] Question: Early signs of projects being put on hold due to pricing - Management indicated that there are no signs of projects being put on hold, with a strong backlog supporting ongoing construction demand [18] Question: Gross profit margin changes in Alliance Drilling - Management explained that the gross profit margin fluctuation is a function of intra-quarter activity and that Alliance Drilling maintains high gross margins [25][27] Question: Equipment rental revenue terms in Alliance - Management described the rental terms as project-based, with high rental rates due to the nature of the equipment used in drilling operations [30]

Group 1 - Star Equity reported a quarterly loss of $0.52 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.25, and compared to a loss of $0.45 per share a year ago, indicating an earnings surprise of -108% [1] - The company posted revenues of $12.92 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 13.84%, while year-ago revenues were $9.12 million [2] - Star Equity shares have underperformed the market, losing about 0.4% since the beginning of the year compared to the S&P 500's gain of 0.1% [3] Group 2 - The current consensus EPS estimate for the coming quarter is -$0.21 on $17 million in revenues, and for the current fiscal year, it is -$0.54 on $70 million in revenues [7] - The Zacks Industry Rank indicates that the Diversified Operations industry is currently in the top 27% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

For immediate release May 14, 2025 Star Equity Holdings, Inc. Announces 2025 First Quarter Financial Results Q1 2025 revenues increased to $12.9 million vs. $9.1 million in Q1 2024 Alliance Drilling Tools acquisition marks entry into Energy Services Quarter-end Building Solutions backlog stands at record $27.9 million Old Greenwich, CT. - Star Equity Holdings, Inc. (Nasdaq: STRR; STRRP) ("Star" or the "Company"), a diversified holding company, reported today its financial results for the first quarter (Q1) ...

Q1 2025 revenues increased to $12.9 million vs. $9.1 million in Q1 2024 "In the first quarter of 2025, consolidated revenues increased by 42% primarily due to inclusion of revenues from the acquisitions of Timber Technologies Solutions ("TT") and Alliance Drilling Tools ("ADT"), in addition to improved results at KBS Builders ("KBS")," commented Rick Coleman, Chief Executive Officer. "First quarter 2025 Building Solutions overall revenues increased compared to the same quarter last year, but were still belo ...

Core Viewpoint - Star Equity Holdings, Inc. will release its financial results for Q1 2025 on May 14, 2025, before market opens, followed by a conference call to discuss results and management's outlook [1]. Company Overview - Star Equity Holdings, Inc. is a diversified holding company with three business divisions: Building Solutions, Energy Services, and Investments [3]. Building Solutions Division - The Building Solutions division includes three businesses: modular building manufacturing, structural wall panel and wood foundation manufacturing (including building supply distribution), and glue-laminated timber (glulam) column, beam, and truss manufacturing [4]. Energy Services Division - The Energy Services division focuses on the rental, sale, and repair of downhole tools utilized in the oil and gas, geothermal, mining, and water-well industries [5]. Investments Division - The Investments division manages and finances the company's real estate assets and investment positions in both private and public companies [6].

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].

Financial Data and Key Metrics Changes - In Q4 2024, revenue increased by 21.1% to $17.1 million compared to $14.1 million in Q4 2023 [6] - For the full year 2024, revenue rose 16.5% to $53.4 million from $45.8 million in 2023 [6] - Q4 2024 gross profit increased by 55.3% to $4.5 million from $2.9 million in Q4 2023, primarily due to Timber Technologies' contribution [7] - Full year 2024 gross profit declined by 7.2% to $11.1 million from $11.9 million in 2023 [15] - Q4 2024 net loss from continuing operations was $2.5 million compared to net income of $1.8 million in Q4 2023 [18] - Non-GAAP adjusted net income for Q4 was $0.5 million or $0.15 per diluted share, compared to an adjusted net loss of $0.3 million in Q4 2023 [18] Business Line Data and Key Metrics Changes - The Building Solutions division faced demand softness in the first half of 2024 but saw momentum shift in the second half, particularly in Q4 [8] - The signed backlog at year-end stood at $17.2 million and has increased year-to-date as demand builds [10] - Non-GAAP adjusted EBITDA for the Building Solutions division increased to $2.3 million in Q4 2024 from $0.7 million in Q4 2023 [18] Market Data and Key Metrics Changes - The company is monitoring the impact of the current administration's fiscal policy on operations, particularly regarding tariffs on Canadian lumber [10][11] - The Energy Services division was established through the acquisition of Alliance Drilling Tools, which is expected to contribute significantly to consolidated results [12] Company Strategy and Development Direction - The company is focused on expanding its Building Solutions division, which is gaining market share through factory-built construction [10] - The acquisition of Alliance Drilling Tools diversifies the operating portfolio and provides a new growth platform [12] - The company is evaluating opportunities for organic growth and additional acquisitions [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong activity in the Business Solutions division and the growing sales pipeline [25] - The company is encouraged by recent performance and backlog growth, indicating a positive outlook for 2025 [25] Other Important Information - SG&A expenses increased by 31.7% in Q4 2024 compared to Q4 2023, primarily due to the impacts of acquisitions [16] - The outstanding balance on interest-bearing debt increased to $11.3 million from $2.0 million at the end of 2023 [21] - The company provided a notice of default regarding a $1 million promissory note related to Enservco, which will not impact the P&L due to overcollateralization [23][44] Q&A Session Summary Question: Inquiry about Building Solutions and margin improvement - Management indicated that margin improvements in the Building Solutions division are driven by increased revenues and spreading fixed costs across more projects [28] Question: Clarification on $1.7 million of other expenses - The $1.7 million write-down was related to an investment in Digirad, reclassified from SG&A to other income for better alignment with investment activities [34] Question: Impact of Enservco on Alliance Drilling - Management confirmed that the issues with Enservco do not impact Alliance Drilling [46] Question: Thoughts on selling the company or parts of it - The Executive Chairman stated that all options are on the table to maximize shareholder value, acknowledging the stock's undervaluation [66]

Financial Data and Key Metrics Changes - In Q4 2024, revenue increased by 21.1% to $17.1 million compared to $14.1 million in Q4 2023, while full year 2024 revenue rose 16.5% to $53.4 million from $45.8 million in 2023 [6] - Q4 2024 gross profit increased by 55.3% to $4.5 million from $2.9 million in Q4 2023, primarily due to the acquisition of Timber Technologies [7] - For the full year 2024, gross profit declined by 7.2% to $11.1 million from $11.9 million in 2023, attributed to a one-time purchase price accounting adjustment and lower revenues in certain businesses [7][15] - Q4 2024 net loss from continuing operations was $2.5 million compared to net income of $1.8 million in Q4 2023, while non-GAAP adjusted net income was $0.5 million or $0.15 per diluted share [18] Business Line Data and Key Metrics Changes - The Building Solutions division faced demand softness in the first half of 2024 but saw momentum shift in the second half, with a signed backlog of $17.2 million at year-end [10] - Non-GAAP adjusted EBITDA for the Building Solutions division increased to $2.3 million in Q4 2024 from $0.7 million in Q4 2023 [18] Market Data and Key Metrics Changes - The company is monitoring the impact of current fiscal policies, including tariffs on Canadian lumber, which could affect construction costs and demand [11] - The Energy Services division was established through the acquisition of Alliance Drilling Tools, which generated approximately $10.5 million in revenue for full year 2024 [12][13] Company Strategy and Development Direction - The company is focused on expanding its Building Solutions division, leveraging structural tailwinds as factory-built construction gains market share [10] - The acquisition of Alliance Drilling Tools diversifies the operating portfolio and is expected to contribute significantly to consolidated results [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the sales pipeline and backlog, indicating substantial growth potential into 2025 [30] - The company is taking preemptive actions to mitigate risks associated with input costs and is optimistic about the long-term growth of its operating companies [11][12] Other Important Information - The company ended 2024 with an outstanding interest-bearing debt of $11.3 million, up from $2.0 million at the end of 2023, largely due to the Timber Technologies acquisition [21] - Cash balance decreased to $5.6 million from $18.9 million at the end of 2023, reflecting the financing related to acquisitions [21] Q&A Session Summary Question: Inquiry about Building Solutions and margin improvement - Management indicated that margin improvements in the Building Solutions division are driven by increased revenues and spreading fixed costs across more projects [28] Question: Clarification on other expenses in the quarter - The $1.7 million in other expenses was primarily due to a write-down on an investment related to Digirad, reclassified from SG&A to other income [34] Question: Impact of Enservco on Alliance Drilling - Management confirmed that the issues with Enservco do not impact Alliance Drilling [46] Question: Thoughts on selling the company or parts of it - Management stated that all options are on the table to maximize shareholder value, acknowledging the stock's undervaluation [66]

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]