Summary of Star Equity Holdings Conference Call Company Overview - Company: Star Equity Holdings (NasdaqGS:HSON) - Date: October 20, 2025 - Revenue Projection: Expected to exceed $250 million with strong organic growth from existing businesses [1] - Adjusted EBITDA: Anticipated to be at least $15 million for 2026, with a goal of reaching $40 million by the end of the decade [1][2] Core Strategies - Three Pillars for Value Creation: 1. Organic growth from existing businesses 2. Selective acquisitions of private or public companies 3. Effective capital allocation, including share repurchases and monetizing non-core assets [1][2] - Acquisition Strategy: - Focus on low maintenance CAPEX and asset-light business models - Preference for B2B businesses in fragmented industries with bolt-on acquisition targets [4][5] - Emphasis on acquiring companies with strong management teams or the ability to find such teams [4] Financial Position - Cash and Debt: As of June 30, the company had $27 million in cash and $13 million in debt at operating subsidiary levels [15] - Preferred Stock: Issued non-convertible preferred stock with a 10% cash yield, which is tax-efficient and non-dilutive to common shareholders [3][16] Market Opportunities - Public Companies: There are approximately 44,000 public companies in the U.S. with EBITDA under $30 million, many of which may not be suitable for public trading [6] - Private Companies: A significant number of private businesses lack succession plans, presenting acquisition opportunities [7][8] Business Segments - Building Solutions Division: Generates about $80 million in revenue and $10 million in EBITDA, with a focus on wood-based construction [11][12] - Business Services Division: Involves talent acquisition and advisory services, targeting Fortune 500 clients [12] - Energy Services Division: Focuses on mission-critical services with low maintenance CAPEX [13] Investment Philosophy - Value Investing Approach: The company operates similarly to a private equity firm, focusing on consolidating microcaps to reduce overhead costs and enhance value [5][18] - Management Structure: Maintains a small corporate team to handle public company responsibilities, allowing operating management teams to focus on growth [18][19] Conclusion - Stock Valuation: The company believes its stock is undervalued and encourages investment [2][20] - Future Growth: Plans to continue pursuing bolt-on acquisitions across its three business divisions to achieve scale and potentially be added to the Russell index [8][14]