Financial Performance - Total revenues for the three months ended September 30, 2024, were $13,663,000, an increase of 30% compared to $10,435,000 for the same period in 2023[12] - Gross profit for the three months ended September 30, 2024, was $2,817,000, up from $2,203,000 in the same period last year, reflecting a gross margin improvement[12] - The net loss attributable to common shareholders for the three months ended September 30, 2024, was $(2,511,000), compared to a loss of $(3,101,000) in the same period of 2023[12] - Net income for the nine months ended September 30, 2024, was a loss of $7,981,000 compared to a net income of $23,404,000 for the same period in 2023[18] - For Q3 2024, consolidated revenue was $13.7 million, a 30% increase from $10.4 million in Q3 2023[86] - The company reported a consolidated gross profit of $2.8 million for Q3 2024, compared to $2.2 million in Q3 2023[86] Expenses and Losses - Operating expenses increased to $8,139,000 for the three months ended September 30, 2024, compared to $3,864,000 in the prior year, primarily due to higher selling, general, and administrative expenses[12] - The company experienced a significant impairment of cost method investment totaling $4,086,000[18] - The company incurred a segment loss from operations of $5.3 million in Q3 2024, compared to a loss of $1.7 million in Q3 2023[86] - Depreciation and amortization totaled $1.0 million in Q3 2024, compared to $569 thousand in Q3 2023[86] Cash Flow and Assets - Cash and cash equivalents decreased to $5,492,000 as of September 30, 2024, from $18,326,000 at December 31, 2023[14] - Total current assets were $25,250,000 as of September 30, 2024, down from $39,152,000 at December 31, 2023[14] - Total cash, cash equivalents, and restricted cash at the end of the period was $7,095,000, down from $21,252,000 at the end of the previous year[20] - The company reported a net cash used in investing activities of $12,493,000, compared to a net cash provided of $19,503,000 in the same period last year[18] - The company reported a decrease in accounts receivable by $5,166,000, indicating improved collection efforts[18] Liabilities and Equity - Total liabilities increased to $27,349,000 as of September 30, 2024, compared to $10,197,000 at December 31, 2023[14] - The company reported a total stockholders' equity of $58,374,000 as of September 30, 2024, down from $65,299,000 at December 31, 2023[16] - The balance of accumulated deficit increased to $116,070,000 as of September 30, 2024, from $110,313,000 at the end of the previous quarter[22] Dividends and Stock - The company declared dividends of $0.25 per share of Series A perpetual preferred stock for the three months ended September 30, 2024[12] - The Series A Preferred Stock has a 10.0% annual dividend rate, with dividends totaling approximately $0.5 million declared in 2024[96] - The company repurchased $0.2 million worth of its common stock during Q3 2024 as part of a $1 million stock buyback program[97] Acquisitions and Investments - The company completed the sale of its Healthcare division, Digirad Health, for a total consideration of $40 million, which included $19.7 million in cash[33] - Timber Technologies was acquired for a total consideration of $23.1 million, including $19.1 million in cash and a $3.0 million term loan[89] - Big Lake Lumber was acquired for $2.8 million in cash and an earn-out provision of up to $0.5 million, expanding market share in the Greater Minneapolis area[92] Future Outlook - The company anticipates continued growth in revenues and improvements in operational efficiency in the upcoming quarters[8] Internal Controls and Compliance - The company identified a material weakness in internal control over financial reporting due to insufficient accounting resources to address complex matters[157] - Management is taking steps to enhance the skills of accounting staff and has retained outside financial consultants for technical accounting reviews[158] - The company’s disclosure controls and procedures were deemed ineffective as of September 30, 2024, due to the identified material weakness[157]
Star Equity (STRR) - 2024 Q3 - Quarterly Report