Financial Data and Key Metrics Changes - The company reported a non-GAAP adjusted EBITDA loss of $1.1 million in Q1 2024, compared to a positive $0.8 million in Q1 2023 [2] - Consolidated cash flow from continuing operations was an outflow of $2.4 million in Q1 2024, down from an inflow of $5.1 million in Q1 2023 [6] - The net loss from continuing operations was $2.2 million in Q1 2024, compared to a net breakeven result in Q1 2023 [54] Business Line Data and Key Metrics Changes - The Building Solutions Division generated a non-GAAP adjusted EBITDA loss of $0.3 million in Q1 2024, down from a positive $2.2 million in Q1 2023 [2] - The Building Solutions Division reported revenues of $45.8 million and adjusted EBITDA of $4.4 million for the full year 2023 [11] Market Data and Key Metrics Changes - The company noted that its sales pipeline and signed backlog remain roughly equivalent to historical averages, indicating stable demand despite current challenges [40] - The engineered wood products market, which Timber Technologies operates in, is experiencing increasing adoption over structural alternatives, suggesting a growing market opportunity [9] Company Strategy and Development Direction - The acquisition of Timber Technologies is part of the company's growth strategy, aimed at creating additional shareholder value through targeted business development initiatives [30] - The company is focused on expanding its Building Solutions Division and exploring new opportunities within its investments division [40] Management's Comments on Operating Environment and Future Outlook - Management indicated that the weaker-than-expected results were primarily due to economic headwinds and financing delays affecting large commercial projects [49] - The company believes the impact of current challenges is temporary and anticipates strong demand for new construction in the markets it serves [40] Other Important Information - As of March 31, 2024, the company had $1.9 million in interest-bearing debt and a consolidated unrestricting cash balance of $14.7 million, up from $5.0 million a year ago [7] - The company has a vacant factory and is considering expansion opportunities for its glue-lam business [34] Q&A Session Summary Question: Can you talk about the synergies between Timber Technologies and the other components of Building Solutions? - Management indicated that while shipping products from Wisconsin to the East Coast may not be ideal, there are opportunities for expansion in their vacant factory [34] Question: What is the financing structure for the Timber Technologies acquisition? - The company utilized cash for the acquisition but also secured a $7 million acquisition term loan from Bridgewater Bank at a 7.85% rate [17] Question: Is the engineered wood products label applicable to existing operations at KBS and Edge Builder? - Management clarified that it is a different sector, but there are opportunities for expansion in both businesses [20]
Star Equity (STRR) - 2024 Q1 - Earnings Call Transcript