Star Equity (STRR) - 2024 Q2 - Quarterly Report

Report Details This section provides key filing information for Star Equity Holdings, Inc.'s Form 10-Q, including filer classification and outstanding common stock - Star Equity Holdings, Inc. (STRR, STRRP) filed a Form 10-Q for the quarterly period ended June 30, 2024[1] - The registrant is classified as a Non-accelerated filer and a Smaller reporting company[2] - As of August 7, 2024, there were 3,234,099 shares of Common Stock outstanding[2] Important Information Regarding Forward-Looking Statements This section outlines the nature of forward-looking statements in the report, their inherent risks, and the company's disclosure obligations - This report contains forward-looking statements, particularly in 'Item 2 — Management's Discussion and Analysis,' based on current beliefs and projections[4] - Actual results may differ materially due to risks and uncertainties described in 'Item 1A — Risk Factors' and the Annual Report on Form 10-K[4] - The company undertakes no obligation to update or revise any forward-looking statements, except as required by applicable law[4] PART I. FINANCIAL INFORMATION This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis Item 1. Financial Statements (Unaudited) Unaudited financial statements show revenue growth from acquisitions, but declining gross profit and net income, resulting in a net loss, with increased assets and liabilities and decreased equity Condensed Consolidated Statements of Operations This section presents the company's unaudited consolidated statements of operations for the three and six months ended June 30, 2024 and 2023 Three Months Ended June 30, 2024 vs. 2023 (in thousands) | Metric | 2024 | 2023 | Change | % Change | | :---------------------------------------- | :----- | :----- | :----- | :------- | | Total Revenues | $13,483 | $8,893 | $4,590 | 51.6% | | Gross Profit | $2,216 | $2,603 | $(387) | (14.9)% | | Income (Loss) from Continuing Operations | $(3,713) | $(2,036) | $(1,677) | (82.4)% | | Income (Loss) from Discontinued Operations | $— | $26,957 | $(26,957) | (100.0)% | | Net Income (Loss) Attributable to Common Shareholders | $(4,266) | $25,112 | $(29,378) | (117.0)% | | Basic and Diluted EPS (Attributable to Common Shareholders) | $(1.34) | $8.09 | $(9.43) | (116.6)% | | Weighted-Average Common Shares Outstanding | 3,172 | 3,104 | 68 | 2.2% | Six Months Ended June 30, 2024 vs. 2023 (in thousands) | Metric | 2024 | 2023 | Change | % Change | | :---------------------------------------- | :----- | :----- | :----- | :------- | | Total Revenues | $22,601 | $21,239 | $1,362 | 6.4% | | Gross Profit | $3,790 | $6,869 | $(3,079) | (44.8)% | | Income (Loss) from Continuing Operations | $(6,675) | $(1,884) | $(4,791) | 254.3% | | Income (Loss) from Discontinued Operations | $— | $27,376 | $(27,376) | (100.0)% | | Net Income (Loss) Attributable to Common Shareholders | $(6,969) | $25,068 | $(32,037) | (127.8)% | | Basic and Diluted EPS (Attributable to Common Shareholders) | $(2.20) | $8.08 | $(10.28) | (127.2)% | | Weighted-Average Common Shares Outstanding | 3,170 | 3,104 | 66 | 2.1% | Condensed Consolidated Balance Sheets This section provides the company's unaudited consolidated balance sheets as of June 30, 2024, and December 31, 2023 Balance Sheet Highlights (in thousands) | Metric | June 30, 2024 | December 31, 2023 | Change | % Change | | :-------------------------- | :------------ | :---------------- | :----- | :------- | | Cash and cash equivalents | $2,457 | $18,326 | $(15,869) | (86.6)% | | Total current assets | $25,978 | $39,152 | $(13,174) | (33.7)% | | Property and equipment, net | $10,513 | $3,482 | $7,031 | 201.9% | | Intangible assets, net | $20,377 | $12,518 | $7,859 | 62.8% | | Goodwill | $7,878 | $4,438 | $3,440 | 77.5% | | Total assets | $80,866 | $75,496 | $5,370 | 7.1% | | Total current liabilities | $12,951 | $8,734 | $4,217 | 48.3% | | Long-term debt | $8,275 | $— | $8,275 | N/A | | Total liabilities | $22,423 | $10,197 | $12,226 | 119.9% | | Total stockholders' equity | $58,443 | $65,299 | $(6,856) | (10.5)% | Condensed Consolidated Statements of Cash Flows This section details the company's unaudited consolidated cash flows from operating, investing, and financing activities Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2024 | 2023 | Change | | :---------------------------------------- | :--------- | :--------- | :--------- | | Net cash provided by (used) by operating activities | $(4,265) | $1,865 | $(6,130) | | Net cash provided by (used) by investing activities | $(18,944) | $20,397 | $(39,341) | | Net cash provided by (used) by financing activities | $8,322 | $(3,979) | $12,301 | | Net change in cash, cash equivalents, and restricted cash | $(14,887) | $16,902 | $(31,789) | | Cash, cash equivalents, and restricted cash at end of period | $4,059 | $21,421 | $(17,362) | - Cash paid for interest was $146 thousand in 2024, down from $231 thousand in 2023[12] - Cash paid for income taxes was $92 thousand in 2024, compared to $0 in 2023[12] Condensed Consolidated Statements of Stockholders' Equity This section outlines changes in the company's stockholders' equity for the six months ended June 30, 2024 Stockholders' Equity Changes for Six Months Ended June 30, 2024 (in thousands) | Item | Balance at Dec 31, 2023 | Changes during period | Balance at June 30, 2024 | | :---------------------------------------- | :---------------------- | :-------------------- | :----------------------- | | Perpetual Preferred Stock Amount | $18,988 | $— | $18,988 | | Common stock Amount | $2 | $— | $2 | | Treasury Stock | $(5,728) | $— | $(5,728) | | Additional paid-in capital | $160,126 | $(845) | $159,281 | | Accumulated deficit | $(108,089) | $(6,011) | $(114,100) | | Total stockholders' equity | $65,299 | $(6,856) | $58,443 | - Stock-based compensation for the six months ended June 30, 2024, was $128 thousand[14] - Dividends to holders of preferred stock totaled $(958) thousand for the six months ended June 30, 2024[14] Notes to Condensed Consolidated Financial Statements This section provides detailed explanatory notes supporting the condensed consolidated financial statements [Note 1. Basis of Presentation and Significant Policies](index=12&type=section&id=Note%201.%20