Star Equity Holdings, Inc. (Nasdaq: STRR; STRRP) (“Star Equity” or
the “Company”), a diversified holding company, reported today its
financial results for the third quarter (Q3) ended
September 30, 2023. All 2023 and 2022 amounts in this release
are unaudited.
Following the sale of our Digirad Health
business on May 4, 2023, all financial results for the 2023 and
2022 reporting periods, unless stated otherwise, relate to
continuing operations, which currently include two divisions:
Construction and Investments.
Q3 2023 Financial
Highlights vs. Q3 2022
(unaudited)
- Revenues decreased by 6.1% to
$10.4 million from $11.1 million.
- Gross profit decreased by 28.3% to
$2.2 million from $3.1 million.
- Net loss from continuing operations
was $2.4 million (or $0.15 per basic and diluted share)
compared to a net loss from continuing operations of
$1.0 million (or $0.06 per basic and diluted share).
- Non-GAAP adjusted net income was
$0.2 million (or $0.01 per diluted share) compared to a net income
of $0.3 million (or $0.02 per diluted share).
- Non-GAAP adjusted EBITDA was a loss
of $14 thousand versus income of $0.6 million.
Year-to-Date 2023 Financial Highlights
vs. Year-to-Date 2022 (unaudited)
- Revenues decreased by 19.9% to
$31.7 million from $39.5 million.
- Gross profit increased by 29.9% to
$9.1 million from $7.0 million.
- Net loss from continuing operations
was $3.7 million (or $0.24 per basic and diluted share)
compared to a net loss from continuing operations of
$6.7 million (or $0.46 per basic and diluted share).
- Non-GAAP adjusted net loss from
continuing operations was $0.2 million (or $0.01 per diluted share)
compared to a net loss of $2.1 million (or $0.14 per diluted
share).
- Non-GAAP adjusted EBITDA from
continuing operations improved to a net loss of $50 thousand
versus a loss of $1.0 million.
- As of September 30, 2023, cash
and cash equivalents increased to $20.7 million compared to
cash and cash equivalents of $14.1 million at
September 30, 2022
- Debt decreased to $0.5 million
at September 30, 2023 from $3.5 million at
September 30, 2022.
Rick Coleman, Chief Executive Officer, noted,
“In the third quarter of 2023, Construction revenue and gross
profit declined versus the third quarter of 2022. Year-to-date,
however, gross profit increased 28% versus the prior year despite
lower revenues. Continued credit tightening in the quarter caused
some delays in commercial projects, but single-family residential
activity and our overall backlog and sales pipeline remained robust
due to our focus on select niche markets where we’ve built
significant expertise and a strong reputation.”
Mr. Coleman continued, “In addition, we were
excited to announce our acquisition of Big Lake Lumber on October
31st. This accretive bolt-on acquisition for our Glenbrook business
represents an important step in the execution of our growth
strategy, which includes organic Construction division expansion,
bolt-on acquisitions, acquisitions in new industries, and
thoughtfully exploring new opportunities at our Investments
division.”
Revenues
The Company’s Q3 2023 revenues decreased 6.1% to
$10.4 million from $11.1 million in Q2 2022.
|
Revenues in $ thousands |
|
Q3 2023 |
|
Q3 2022 |
|
% change |
|
9M 2023 |
|
9M 2022 |
|
% change |
|
Construction |
|
$ |
10,435 |
|
|
$ |
11,107 |
|
|
(6.1)% |
|
$ |
31,674 |
|
|
$ |
39,544 |
|
|
(19.9)% |
| Investments |
|
|
89 |
|
|
|
159 |
|
|
(44.0)% |
|
|
405 |
|
|
|
475 |
|
|
(14.7)% |
|
Intersegment elimination |
|
|
(89 |
) |
|
|
(159 |
) |
|
(44.0)% |
|
|
(405 |
) |
|
|
(475 |
) |
|
(14.7)% |
|
Total Revenues |
|
$ |
10,435 |
|
|
$ |
11,107 |
|
|
(6.1)% |
|
$ |
31,674 |
|
|
$ |
39,544 |
|
|
(19.9)% |
Q3 2023 Construction revenue decreased by 6.1%
from the prior year and year-to-date 2023 revenue decreased 19.9%
from year-to-date 2022. While our sales pipeline and construction
backlog remain strong, credit tightening has slowed overall
construction activity and delayed some commercial project
starts.
Gross Profit
|
Gross profit (loss) in $ thousands |
|
Q3 2023 |
|
Q3 2022 |
|
% change |
|
9M 2023 |
|
9M 2022 |
|
% change |
|
Construction |
|
$ |
2,248 |
|
|
$ |
3,132 |
|
|
(28.2)% |
|
$ |
9,241 |
|
|
$ |
7,203 |
|
|
28.3 |
% |
|
Construction gross margin |
|
|
21.5 |
% |
|
|
28.2 |
% |
|
(6.7)% |
|
|
29.2 |
% |
|
|
18.2 |
% |
|
11.0 |
% |
|
Investments |
|
|
44 |
|
|
|
100 |
|
|
(56.0)% |
|
|
236 |
|
|
|
253 |
|
|
(6.7)% |
|
Intersegment elimination |
|
|
(89 |
) |
|
|
(158 |
) |
|
(43.7)% |
|
|
(405 |
) |
|
|
(474 |
) |
|
(14.6)% |
|
Total gross profit |
|
$ |
2,203 |
|
|
$ |
3,074 |
|
|
(28.3)% |
|
$ |
9,072 |
|
|
$ |
6,982 |
|
|
29.9 |
% |
|
Total gross margin |
|
|
21.1 |
% |
|
|
27.7 |
% |
|
(6.6)% |
|
|
28.6 |
% |
|
|
17.7 |
% |
|
10.9 |
% |
Q3 2023 Construction gross profit decreased
28.2% due primarily to lower revenues, while year-to-date 2023
gross profit increased 28.3% from the prior year periods despite
lower revenues. The year-to-date increase is due to higher pricing
levels and lower input costs.
Operating Expenses
On a consolidated basis, Q3 2023 sales, general
and administrative (“SG&A”) expenses increased by
$0.3 million, or 10.9%, versus the prior year period. The
major drivers of the increase in SG&A were increases in legal
and outside services expense related to our Investments activities
and the sale of our Healthcare business. SG&A as a percentage
of revenue increased in Q3 2023 to 32.9% versus 27.9% in Q3
2022.
Net Income
Q3 2023 net loss from continuing operations was
$2.4 million, or $0.15 per basic and diluted share, compared to net
loss of $1.0 million, or $0.06 per basic and diluted share in the
same period in the prior year. Q3 2023 non-GAAP adjusted net income
from continuing operations was $0.2 million, or $0.01 per basic and
diluted share, compared to non-GAAP adjusted net income from
continuing operations of $0.3 million, or $0.02 per basic and
diluted share, in the prior year period.
Year-to-date 2023 net loss from continuing
operations was $3.7 million, or $0.24 per basic and diluted
share, compared to net loss of $6.7 million, or $0.46 per
basic and diluted share, in the same period in the prior year. Year
to date 2023 non-GAAP adjusted net loss from continuing operations
was $0.2 million, or $0.01 per basic and diluted share,
compared to adjusted net loss from continuing operations of
$2.1 million, or $0.14 per basic and diluted share, in the
prior year period.
Non-GAAP Adjusted EBITDA
Q3 2023 non-GAAP adjusted EBITDA was a loss of
$14 thousand versus income of $0.6 million in the same
quarter of the prior year, primarily due to decreased revenues and
increased corporate expenses. Year-to-date 2023 non-GAAP adjusted
EBITDA was a loss of $50 thousand, compared to a loss of
$1.0 million in year-to-date 2022, primarily due to improved
margins at our Construction division.
Operating Cash Flow
Q3 2023 cash flow from operations was an inflow
of $0.8 million, compared to an outflow of $3.2 million
for the same period in the prior year. The increase in cash flow
was due in part to decreased use of cash for working capital in
2023. Year-to-date 2023 cash flow from operations was an inflow of
$2.7 million, compared to an outflow of $0.2 million for
year-to-date 2022. This was also due in part to decreased use of
cash for working capital in 2023.
Preferred Stock Dividends
In Q3 2023, the Company’s board of directors
declared a cash dividend to holders of our Series A Preferred Stock
of $0.25 per share, for an aggregate amount of approximately
$0.5 million. The record date for this dividend was September
1, 2023, and the payment date was September 12, 2023.
Conference Call Information
A conference call is scheduled for 10:00 a.m. ET
(7:00 a.m. PT) on November 8, 2023 to discuss the results and
management’s outlook. The call may be accessed by dialing (833)
630-1956 (toll free) or (412) 317-1837 (international), five
minutes prior to the scheduled start time and referencing Star
Equity. A simultaneous webcast of the call may be accessed online
from the Events & Presentations link on the Investor Relations
page at www.starequity.com/events-and-presentations/presentations;
an archived replay of the webcast will be available within 15
minutes of the end of the conference call.
If you have any questions, either prior to or
after our scheduled Earnings Conference call, please e-mail
admin@starequity.com or lcati@equityny.com.
Use of Non-GAAP Financial Measures by
Star Equity Holdings, Inc.
This release presents the non-GAAP financial
measures “adjusted net income (loss),” “adjusted net income (loss)
per basic and diluted share,” and “adjusted EBITDA from continuing
operations.” The most directly comparable measures for these
non-GAAP financial measures are “net income (loss),” “net income
(loss) per basic and diluted share,” and “cash flows from operating
activities.” The Company has included below unaudited adjusted
financial information, which presents the Company’s results of
operations after excluding acquired intangible asset amortization,
unrealized gain (loss) on equity securities and lumber derivatives,
litigation costs, transaction costs, financing costs, and income
tax adjustments. Further excluded in the measure of adjusted EBITDA
are stock-based compensation, interest, depreciation, and
amortization.
A discussion of the reasons why management
believes that the presentation of non-GAAP financial measures
provides useful information to investors regarding the Company’s
financial condition and results of operations is included as
Exhibit 99.2 to the Company’s report on Form 8-K filed with the
Securities and Exchange Commission on November 8, 2023.
About Star Equity Holdings,
Inc.
Star Equity Holdings, Inc. is a diversified
holding company with two divisions: Construction and Investments.
Prior to the May 4, 2023 sale of Digirad Health, Star Equity
Holdings had three divisions: Healthcare, Construction, and
Investments.
Construction
Our Construction division manufactures modular
housing units for commercial and residential real estate projects
and operates in two businesses: (i) modular building manufacturing
and (ii) structural wall panel and wood foundation manufacturing,
including building supply distribution operations for professional
builders.
Investments
Our Investments division manages and finances the Company’s real
estate assets as well as its investment positions in private and
public companies.
Healthcare
Our Healthcare division, which operated as
Digirad Health until the sale of Digirad Health on May 4, 2023,
provided products and services in the area of nuclear medical
imaging with a focus on cardiac health.
Forward-Looking Statements
“Safe Harbor” Statement under the Private
Securities Litigation Reform Act of 1995: This release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements in this
release that are not statements of historical fact are hereby
identified as “forward-looking statements” for the purpose of the
safe harbor provided by Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Forward-looking Statements include, without limitation,
statements regarding (i) the plans and objectives of management for
future operations, including plans or objectives relating to
acquisitions and related integration, development of commercially
viable products, novel technologies, and modern applicable
services, (ii) projections of income (including income/loss),
EBITDA, earnings (including earnings/loss) per share, capital
expenditures, cost reductions, capital structure or other financial
items, (iii) the future financial performance of the Company or
acquisition targets and (iv) the assumptions underlying or relating
to any statement described above. Moreover, forward-looking
statements necessarily involve assumptions on the Company’s part.
These forward-looking statements generally are identified by the
words “believe”, “expect”, “anticipate”, “estimate”, “project”,
“intend”, “plan”, “should”, “may”, “will”, “would”, “will be”,
“will continue” or similar expressions. Such forward-looking
statements are not meant to predict or guarantee actual results,
performance, events or circumstances and may not be realized
because they are based upon the Company's current projections,
plans, objectives, beliefs, expectations, estimates and assumptions
and are subject to a number of risks and uncertainties and other
influences, many of which the Company has no control over. Actual
results and the timing of certain events and circumstances may
differ materially from those described above as a result of these
risks and uncertainties. Factors that may influence or contribute
to the inaccuracy of forward-looking statements or cause actual
results to differ materially from expected or desired results may
include, without limitation, the substantial amount of debt of the
Company and the Company’s ability to repay or refinance it or incur
additional debt in the future; the Company’s need for a significant
amount of cash to service and repay the debt and to pay dividends
on the Company’s preferred stock; the restrictions contained in the
debt agreements that limit the discretion of management in
operating the business; legal, regulatory, political and economic
risks in markets and public health crises that reduce economic
activity and cause restrictions on operations (including the recent
coronavirus COVID-19 outbreak); the length of time associated with
servicing customers; losses of significant contracts or failure to
get potential contracts being discussed; disruptions in the
relationship with third party vendors; accounts receivable
turnover; insufficient cash flows and resulting lack of liquidity;
the Company's inability to expand the Company's business;
unfavorable changes in the extensive governmental legislation and
regulations governing healthcare providers and the provision of
healthcare services and the competitive impact of such changes
(including unfavorable changes to reimbursement policies); high
costs of regulatory compliance; the liability and compliance costs
regarding environmental regulations; the underlying condition of
the technology support industry; the lack of product
diversification; development and introduction of new technologies
and intense competition in the healthcare industry; existing or
increased competition; risks to the price and volatility of the
Company’s common stock and preferred stock; stock volatility and in
liquidity; risks to preferred stockholders of not receiving
dividends and risks to the Company’s ability to pursue growth
opportunities if the Company continues to pay dividends according
to the terms of the Company’s preferred stock; the Company’s
ability to execute on its business strategy (including any cost
reduction plans); the Company’s failure to realize expected
benefits of restructuring and cost-cutting actions; the Company’s
ability to preserve and monetize its net operating losses; risks
associated with the Company’s possible pursuit of acquisitions; the
Company’s ability to consummate successful acquisitions and execute
related integration, as well as factors related to the Company’s
business including economic and financial market conditions
generally and economic conditions in the Company’s markets; failure
to keep pace with evolving technologies and difficulties
integrating technologies; system failures; losses of key management
personnel and the inability to attract and retain highly qualified
management and personnel in the future; and the continued demand
for and market acceptance of the Company’s services. For a detailed
discussion of cautionary statements and risks that may affect the
Company’s future results of operations and financial results,
please refer to the Company’s filings with the Securities and
Exchange Commission, including, but not limited to, the risk
factors in the Company’s most recent Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q. This release reflects management’s
views as of the date presented.
All forward-looking statements are necessarily
only estimates of future results, and there can be no assurance
that actual results will not differ materially from expectations,
and, therefore, you are cautioned not to place undue reliance on
such statements. Further, any forward-looking statement speaks only
as of the date on which it is made, and we undertake no obligation
to update any forward-looking statement to reflect events or
circumstances after the date on which the statement is made or to
reflect the occurrence of unanticipated events.
|
For more information contact: |
|
|
| Star Equity Holdings,
Inc. |
The Equity Group |
|
| Rick Coleman |
Lena Cati |
|
| Chief Executive Officer |
Senior Vice President |
|
| 203-489-9508 |
212-836-9611 |
|
|
rick.coleman@starequity.com |
lcati@equityny.com |
|
(Financial tables follow)
Star Equity Holdings,
Inc.Condensed Consolidated Statements of
Operations(Unaudited) (In thousands, except for
per share amounts)
| |
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Revenues: |
|
|
|
|
|
|
|
|
|
Construction |
|
$ |
10,435 |
|
|
$ |
11,107 |
|
|
$ |
31,674 |
|
|
$ |
39,544 |
|
|
Total revenues |
|
|
10,435 |
|
|
|
11,107 |
|
|
|
31,674 |
|
|
|
39,544 |
|
| |
|
|
|
|
|
|
|
|
| Cost of revenues: |
|
|
|
|
|
|
|
|
|
Construction |
|
|
8,187 |
|
|
|
7,975 |
|
|
|
22,433 |
|
|
|
32,341 |
|
|
Investments |
|
|
45 |
|
|
|
58 |
|
|
|
169 |
|
|
|
221 |
|
|
Total cost of revenues |
|
|
8,232 |
|
|
|
8,033 |
|
|
|
22,602 |
|
|
|
32,562 |
|
| |
|
|
|
|
|
|
|
|
| Gross profit |
|
|
2,203 |
|
|
|
3,074 |
|
|
|
9,072 |
|
|
|
6,982 |
|
| |
|
|
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
3,434 |
|
|
|
3,096 |
|
|
|
11,327 |
|
|
|
9,981 |
|
|
Amortization of intangible assets |
|
|
430 |
|
|
|
430 |
|
|
|
1,290 |
|
|
|
1,290 |
|
|
Total operating expenses |
|
|
3,864 |
|
|
|
3,526 |
|
|
|
12,617 |
|
|
|
11,271 |
|
| |
|
|
|
|
|
|
|
|
| Income (loss) from continuing
operations |
|
|
(1,661 |
) |
|
|
(452 |
) |
|
|
(3,545 |
) |
|
|
(4,289 |
) |
| |
|
|
|
|
|
|
|
|
| Other income (expense): |
|
|
|
|
|
|
|
|
|
Other income (expense), net |
|
|
(965 |
) |
|
|
(713 |
) |
|
|
(506 |
) |
|
|
(1,157 |
) |
|
Interest income (expense), net |
|
|
433 |
|
|
|
(120 |
) |
|
|
569 |
|
|
|
(400 |
) |
|
Total other income (expense), net |
|
|
(532 |
) |
|
|
(833 |
) |
|
|
63 |
|
|
|
(1,557 |
) |
| |
|
|
|
|
|
|
|
|
| Income (loss) before income
taxes from continuing operations |
|
|
(2,193 |
) |
|
|
(1,285 |
) |
|
|
(3,482 |
) |
|
|
(5,846 |
) |
| Income tax benefit (provision)
from continuing operations |
|
|
(172 |
) |
|
|
299 |
|
|
|
(233 |
) |
|
|
(861 |
) |
| Income (loss) from continuing
operations, net of tax |
|
|
(2,365 |
) |
|
|
(986 |
) |
|
|
(3,715 |
) |
|
|
(6,707 |
) |
| Income (loss) from
discontinued operations, net of tax |
|
|
(257 |
) |
|
|
(898 |
) |
|
|
27,119 |
|
|
|
(454 |
) |
| Net income (loss) |
|
|
(2,622 |
) |
|
|
(1,884 |
) |
|
|
23,404 |
|
|
|
(7,161 |
) |
| Deemed dividend on Series A
perpetual preferred stock |
|
|
(479 |
) |
|
|
(479 |
) |
|
|
(1,437 |
) |
|
|
(1,437 |
) |
| Net income (loss) attributable
to common shareholders |
|
$ |
(3,101 |
) |
|
$ |
(2,363 |
) |
|
$ |
21,967 |
|
|
$ |
(8,598 |
) |
| |
|
|
|
|
|
|
|
|
| Net income (loss) per
share |
|
|
|
|
|
|
|
|
| Net income (loss) per share,
continuing operations |
|
|
|
|
|
|
|
|
|
Basic* |
|
$ |
(0.15 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.46 |
) |
|
Diluted |
|
$ |
(0.15 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.46 |
) |
| Net income (loss) per share,
discontinued operations |
|
|
|
|
|
|
|
|
|
Basic* |
|
$ |
(0.02 |
) |
|
$ |
(0.06 |
) |
|
$ |
1.74 |
|
|
$ |
(0.03 |
) |
|
Diluted |
|
$ |
(0.02 |
) |
|
$ |
(0.06 |
) |
|
$ |
1.72 |
|
|
$ |
(0.03 |
) |
| Net income (loss) per
share |
|
|
|
|
|
|
|
|
|
Basic* |
|
$ |
(0.17 |
) |
|
$ |
(0.12 |
) |
|
$ |
1.50 |
|
|
$ |
(0.49 |
) |
|
Diluted* |
|
$ |
(0.17 |
) |
|
$ |
(0.12 |
) |
|
$ |
1.49 |
|
|
$ |
(0.49 |
) |
| Net income (loss) per share,
attributable to common shareholders |
|
|
|
|
|
|
|
|
|
Basic* |
|
$ |
(0.20 |
) |
|
$ |
(0.15 |
) |
|
$ |
1.41 |
|
|
$ |
(0.59 |
) |
|
Diluted* |
|
$ |
(0.20 |
) |
|
$ |
(0.15 |
) |
|
$ |
1.40 |
|
|
$ |
(0.59 |
) |
| Weighted-average common shares
outstanding |
|
|
|
|
|
|
|
|
|
Basic* |
|
|
15,681 |
|
|
|
15,434 |
|
|
|
15,573 |
|
|
|
14,503 |
|
|
Diluted* |
|
|
15,819 |
|
|
|
15,434 |
|
|
|
15,743 |
|
|
|
14,503 |
|
| |
|
|
|
|
|
|
|
|
| Dividends declared per share
of Series A perpetual preferred stock |
|
$ |
0.25 |
|
|
$ |
0.25 |
|
|
$ |
0.75 |
|
|
$ |
0.75 |
|
*Earnings per share may not add due to
rounding
Star Equity Holdings,
Inc.Condensed Consolidated Balance Sheets
(Unaudited) (In thousands, except share
amounts)
|
|
|
September 30,
2023(unaudited) |
|
December 31, 2022 |
|
Assets: |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
20,691 |
|
|
$ |
4,377 |
|
|
Restricted cash |
|
|
561 |
|
|
|
142 |
|
|
Investments in equity securities |
|
|
4,309 |
|
|
|
3,490 |
|
|
Accounts receivable, net of allowances of $116 and $270,
respectively |
|
|
3,727 |
|
|
|
7,975 |
|
|
Note receivable, current portion |
|
|
223 |
|
|
|
73 |
|
|
Inventories, net |
|
|
4,243 |
|
|
|
4,678 |
|
|
Other current assets |
|
|
859 |
|
|
|
682 |
|
|
Current assets – discontinued operations |
|
|
— |
|
|
|
17,851 |
|
|
Total current assets |
|
|
34,613 |
|
|
|
39,268 |
|
|
Property and equipment, net |
|
|
5,217 |
|
|
|
5,665 |
|
|
Operating lease right-of-use assets, net |
|
|
1,569 |
|
|
|
1,856 |
|
|
Intangible assets, net |
|
|
12,062 |
|
|
|
13,352 |
|
|
Goodwill |
|
|
4,438 |
|
|
|
4,438 |
|
|
Cost method investment |
|
|
6,000 |
|
|
|
— |
|
|
Notes receivable |
|
|
8,327 |
|
|
|
1,285 |
|
|
Other assets |
|
|
36 |
|
|
|
— |
|
|
Non-current assets – discontinued operations |
|
|
— |
|
|
|
7,438 |
|
|
Total assets |
|
$ |
72,262 |
|
|
$ |
73,302 |
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity: |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
1,141 |
|
|
$ |
1,447 |
|
|
Accrued liabilities |
|
|
1,386 |
|
|
|
462 |
|
|
Accrued compensation |
|
|
1,633 |
|
|
|
1,838 |
|
|
Accrued warranty |
|
|
42 |
|
|
|
38 |
|
|
Lumber derivative contracts |
|
|
94 |
|
|
|
104 |
|
|
Deferred revenue |
|
|
1,479 |
|
|
|
1,673 |
|
|
Short-term debt |
|
|
537 |
|
|
|
3,383 |
|
|
Operating lease liabilities |
|
|
395 |
|
|
|
372 |
|
|
Finance lease liabilities |
|
|
54 |
|
|
|
82 |
|
|
Current liabilities – discontinued operations |
|
|
— |
|
|
|
18,146 |
|
|
Total current liabilities |
|
|
6,761 |
|
|
|
27,545 |
|
|
Deferred tax liabilities |
|
|
254 |
|
|
|
— |
|
|
Operating lease liabilities, net of current portion |
|
|
1,208 |
|
|
|
1,510 |
|
|
Finance lease liabilities, net of current portion |
|
|
45 |
|
|
|
96 |
|
|
Non-current liabilities – discontinued operations |
|
|
— |
|
|
|
2,396 |
|
|
Total liabilities |
|
|
8,268 |
|
|
|
31,547 |
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
Preferred stock, $0.0001 par value: 10,000,000 shares authorized:
Series A Preferred Stock, 8,000,000 shares authorized, liquidation
preference ($10.00 per share), 1,915,637 shares issued and
outstanding at September 30, 2023. (Liquidation preference:
$18,988,390 as of September 30, 2023.) |
|
|
18,988 |
|
|
|
18,988 |
|
|
Series C Preferred stock, $0.0001 par value: 25,000 shares
authorized; no shares issued or outstanding |
|
|
— |
|
|
|
— |
|
|
Common stock, $0.0001 par value: 50,000,000 shares authorized;
15,826,217 and 15,177,919 shares issued and outstanding (net of
treasury shares) at September 30, 2023 and December 31,
2022, respectively |
|
|
2 |
|
|
|
1 |
|
|
Treasury stock, at cost; 258,849 shares at September 30, 2023
and December 31, 2022, respectively |
|
|
(5,728 |
) |
|
|
(5,728 |
) |
|
Additional paid-in capital |
|
|
160,549 |
|
|
|
161,715 |
|
|
Accumulated deficit |
|
|
(109,817 |
) |
|
|
(133,221 |
) |
|
Total stockholders’ equity |
|
|
63,994 |
|
|
|
41,755 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
72,262 |
|
|
$ |
73,302 |
|
Star Equity Holdings,
Inc.Reconciliation of Non-GAAP Financial
Measures(Unaudited) (In thousands, except per
share amounts)
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Net income (loss) from continuing operations |
|
$ |
(2,365 |
) |
|
$ |
(986 |
) |
|
$ |
(3,715 |
) |
|
$ |
(6,707 |
) |
|
Acquired intangible amortization |
|
|
430 |
|
|
|
430 |
|
|
|
1,290 |
|
|
|
1,290 |
|
|
Unrealized loss (gain) on equity securities (1) |
|
|
971 |
|
|
|
834 |
|
|
|
24 |
|
|
|
834 |
|
|
Unrealized loss (gain) on lumber derivatives (2) |
|
|
137 |
|
|
|
153 |
|
|
|
(10 |
) |
|
|
1,298 |
|
|
Interest income |
|
|
440 |
|
|
|
— |
|
|
|
686 |
|
|
|
— |
|
|
Transaction costs related to sale (3) |
|
|
123 |
|
|
|
— |
|
|
|
1,281 |
|
|
|
— |
|
|
Transaction costs related to mergers and acquisitions (4) |
|
|
17 |
|
|
|
— |
|
|
|
17 |
|
|
|
— |
|
|
Loss (Gain) on sale of assets |
|
|
38 |
|
|
|
— |
|
|
|
(386 |
) |
|
|
— |
|
|
Write off of lease liabilities |
|
|
240 |
|
|
|
— |
|
|
|
240 |
|
|
|
— |
|
|
Financing costs (5) |
|
|
2 |
|
|
|
115 |
|
|
|
151 |
|
|
|
324 |
|
|
Income tax (benefit) provision |
|
|
171 |
|
|
|
(299 |
) |
|
|
232 |
|
|
|
861 |
|
|
Non-GAAP adjusted net income (loss) from continuing
operations |
|
$ |
204 |
|
|
$ |
250 |
|
|
$ |
(190 |
) |
|
$ |
(2,097 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations per diluted
share |
|
$ |
(0.15 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.46 |
) |
|
Acquired intangible amortization |
|
|
0.03 |
|
|
|
0.03 |
|
|
|
0.08 |
|
|
|
0.09 |
|
|
Unrealized loss (gain) on equity securities (1) |
|
|
0.06 |
|
|
|
0.05 |
|
|
|
— |
|
|
|
0.06 |
|
|
Unrealized loss (gain) on lumber derivatives (2) |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
0.09 |
|
|
Interest income |
|
|
0.03 |
|
|
|
— |
|
|
|
0.04 |
|
|
|
— |
|
|
Transaction costs related to sale (3) |
|
|
0.01 |
|
|
|
— |
|
|
|
0.08 |
|
|
|
— |
|
|
Transaction costs related to mergers and acquisitions (4) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Loss (Gain) on sale of assets |
|
|
— |
|
|
|
— |
|
|
|
(0.02 |
) |
|
|
— |
|
|
Write off of lease liabilities |
|
|
0.02 |
|
|
|
— |
|
|
|
0.02 |
|
|
|
— |
|
|
Financing costs (5) |
|
|
— |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.02 |
|
|
Income tax (benefit) provision |
|
|
0.01 |
|
|
|
(0.02 |
) |
|
|
0.01 |
|
|
|
0.06 |
|
|
Non-GAAP adjusted net income (loss) from continuing
operations per basic share (6) |
|
$ |
0.01 |
|
|
$ |
0.02 |
|
|
$ |
(0.01 |
) |
|
$ |
(0.14 |
) |
|
Non-GAAP adjusted net income (loss) from continuing
operations per diluted
share (6) |
|
$ |
0.01 |
|
|
$ |
0.02 |
|
|
$ |
(0.01 |
) |
|
$ |
(0.14 |
) |
(1) Reflects adjustments for any unrealized
gains or losses in equity securities.(2) Reflects adjustments
for any unrealized gains or losses in lumber derivatives
value..(3) Reflects one time transaction costs related to the
sale of the Healthcare Division.(4) Reflects one time
transaction costs related to potential mergers and
acquisitions.(5) Reflects financing costs from our credit
facilities.(6) Per share amounts are computed independently
for each discrete item presented. Therefore, the sum of the
quarterly per share amounts will not necessarily equal to the total
for the year, and the sum of individual items may not equal the
total.
Star Equity Holdings,
Inc.Reconciliation of Non-GAAP Financial
Measures(Unaudited) (In thousands)
|
For The Three Months Ended September 30, 2023 |
|
Construction |
|
Investments |
|
Star Equity Corporate |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations |
|
$ |
(108 |
) |
|
$ |
(763 |
) |
|
$ |
(1,494 |
) |
|
$ |
(2,365 |
) |
|
Depreciation and amortization |
|
|
515 |
|
|
|
45 |
|
|
|
9 |
|
|
|
569 |
|
|
Interest (income) expense |
|
|
7 |
|
|
|
(193 |
) |
|
|
(247 |
) |
|
|
(433 |
) |
|
Income tax (benefit) provision |
|
|
1 |
|
|
|
— |
|
|
|
170 |
|
|
|
171 |
|
|
EBITDA from continuing operations |
|
|
415 |
|
|
|
(911 |
) |
|
|
(1,562 |
) |
|
|
(2,058 |
) |
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss (gain) on equity securities (1) |
|
|
— |
|
|
|
971 |
|
|
|
— |
|
|
|
971 |
|
|
Unrealized loss (gain) on lumber derivatives (2) |
|
|
137 |
|
|
|
— |
|
|
|
— |
|
|
|
137 |
|
|
Interest income |
|
|
— |
|
|
|
440 |
|
|
|
— |
|
|
|
440 |
|
|
Stock-based compensation |
|
|
9 |
|
|
|
— |
|
|
|
67 |
|
|
|
76 |
|
|
Transaction costs related to sale (4) |
|
|
— |
|
|
|
— |
|
|
|
123 |
|
|
|
123 |
|
|
Transaction costs related to mergers and acquisitions (5) |
|
|
— |
|
|
|
— |
|
|
|
17 |
|
|
|
17 |
|
|
Loss (Gain) on sale of assets |
|
|
— |
|
|
|
38 |
|
|
|
— |
|
|
|
38 |
|
|
Write off of lease liabilities |
|
|
240 |
|
|
|
— |
|
|
|
— |
|
|
|
240 |
|
|
Financing costs (6) |
|
|
2 |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
Non-GAAP adjusted EBITDA from continuing
operations |
|
$ |
803 |
|
|
$ |
538 |
|
|
$ |
(1,355 |
) |
|
$ |
(14 |
) |
| For The Three Months
Ended September 30, 2022 |
|
Construction |
|
Investments |
|
Star Equity Corporate |
|
Total |
| |
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations |
|
$ |
975 |
|
|
$ |
(561 |
) |
|
$ |
(1,400 |
) |
|
$ |
(986 |
) |
| Depreciation and
amortization |
|
|
489 |
|
|
|
58 |
|
|
|
— |
|
|
|
547 |
|
| Interest expense |
|
|
78 |
|
|
|
42 |
|
|
|
— |
|
|
|
120 |
|
| Income tax (benefit)
provision |
|
|
— |
|
|
|
— |
|
|
|
(299 |
) |
|
|
(299 |
) |
| EBITDA from continuing
operations |
|
|
1,542 |
|
|
|
(461 |
) |
|
|
(1,699 |
) |
|
|
(618 |
) |
| |
|
|
|
|
|
|
|
|
| Unrealized loss (gain) on
equity securities (1) |
|
|
— |
|
|
|
834 |
|
|
|
— |
|
|
|
834 |
|
| Unrealized loss (gain) on
lumber derivatives (2) |
|
|
153 |
|
|
|
— |
|
|
|
— |
|
|
|
153 |
|
| Stock-based compensation |
|
|
6 |
|
|
|
— |
|
|
|
99 |
|
|
|
105 |
|
| Severance and
retention (9) |
|
|
— |
|
|
|
— |
|
|
|
3 |
|
|
|
3 |
|
| Financing costs (6) |
|
|
98 |
|
|
|
17 |
|
|
|
— |
|
|
|
115 |
|
| Non-GAAP adjusted
EBITDA from continuing operations |
|
$ |
1,799 |
|
|
$ |
390 |
|
|
$ |
(1,597 |
) |
|
$ |
592 |
|
| For The Nine Months
Ended September 30, 2023 |
|
Construction |
|
Investments |
|
Star Equity Corporate |
|
Total |
| |
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations |
|
$ |
1,746 |
|
|
$ |
178 |
|
|
$ |
(5,639 |
) |
|
$ |
(3,715 |
) |
| Depreciation and
amortization |
|
|
1,530 |
|
|
|
169 |
|
|
|
21 |
|
|
|
1,720 |
|
| Interest (income) expense |
|
|
52 |
|
|
|
(276 |
) |
|
|
(345 |
) |
|
|
(569 |
) |
| Income tax (benefit)
provision |
|
|
1 |
|
|
|
— |
|
|
|
231 |
|
|
|
232 |
|
| EBITDA |
|
|
3,329 |
|
|
|
71 |
|
|
|
(5,732 |
) |
|
|
(2,332 |
) |
| |
|
|
|
|
|
|
|
|
| Unrealized loss (gain) on
equity securities (1) |
|
|
— |
|
|
|
24 |
|
|
|
— |
|
|
|
24 |
|
| Unrealized loss (gain) on
lumber derivatives (2) |
|
|
(10 |
) |
|
|
— |
|
|
|
— |
|
|
|
(10 |
) |
| Interest income (3) |
|
|
— |
|
|
|
686 |
|
|
|
— |
|
|
|
686 |
|
| Stock-based compensation |
|
|
18 |
|
|
|
— |
|
|
|
261 |
|
|
|
279 |
|
| Transaction costs related to
sale (4) |
|
|
— |
|
|
|
— |
|
|
|
1,281 |
|
|
|
1,281 |
|
| Transaction costs related to
mergers and acquisitions (5) |
|
|
— |
|
|
|
— |
|
|
|
17 |
|
|
|
17 |
|
| Loss (Gain) on sale of
assets |
|
|
— |
|
|
|
(386 |
) |
|
|
— |
|
|
|
(386 |
) |
| Write off of lease
liabilities |
|
|
240 |
|
|
|
— |
|
|
|
— |
|
|
|
240 |
|
| Financing costs (6) |
|
|
134 |
|
|
|
17 |
|
|
|
— |
|
|
|
151 |
|
| Non-GAAP adjusted
EBITDA |
|
$ |
3,711 |
|
|
$ |
412 |
|
|
$ |
(4,173 |
) |
|
$ |
(50 |
) |
| For The Nine Months
Ended September 30, 2022 |
|
Construction |
|
Investments |
|
Star Equity Corporate |
|
Total |
| |
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations |
|
$ |
153 |
|
|
$ |
(794 |
) |
|
$ |
(6,066 |
) |
|
$ |
(6,707 |
) |
| Depreciation and
amortization |
|
|
1,471 |
|
|
|
221 |
|
|
|
— |
|
|
|
1,692 |
|
| Interest expense |
|
|
269 |
|
|
|
131 |
|
|
|
— |
|
|
|
400 |
|
| Income tax (benefit)
provision |
|
|
— |
|
|
|
— |
|
|
|
861 |
|
|
|
861 |
|
| EBITDA |
|
|
1,893 |
|
|
|
(442 |
) |
|
|
(5,205 |
) |
|
|
(3,754 |
) |
| |
|
|
|
|
|
|
|
|
| Unrealized loss (gain) on
equity securities (1) |
|
|
— |
|
|
|
834 |
|
|
|
— |
|
|
|
834 |
|
| Unrealized loss (gain) on
lumber derivatives (2) |
|
|
1,298 |
|
|
|
— |
|
|
|
— |
|
|
|
1,298 |
|
| Stock-based compensation |
|
|
17 |
|
|
|
— |
|
|
|
300 |
|
|
|
317 |
|
| Severance and
retention (9) |
|
|
— |
|
|
|
— |
|
|
|
3 |
|
|
|
3 |
|
| Financing costs (6) |
|
|
259 |
|
|
|
65 |
|
|
|
— |
|
|
|
324 |
|
| Non-GAAP adjusted
EBITDA |
|
$ |
3,467 |
|
|
$ |
457 |
|
|
$ |
(4,902 |
) |
|
$ |
(978 |
) |
(1) Reflects adjustments for any unrealized
gains or losses on equity securities.(2) Reflects adjustments
for any unrealized gains or losses in lumber derivatives
value.(3) We allocate all corporate interest income to the
Investments Division.(4) Reflects one time transaction costs
related to the sale of the Healthcare Division.(5) Reflects
one time transaction costs related to potential mergers and
acquisitions.(6) Reflects financing costs from our credit
facilities.
Star Equity Holdings,
Inc.Supplemental Debt
Information(Unaudited) (In thousands)
A summary of the Company’s credit facilities are
as follows:
| |
|
September 30, 2023 |
|
December 31, 2022 |
| |
|
Amount |
|
Weighted-Average Interest Rate |
|
Amount |
|
Weighted-Average Interest Rate |
|
Revolving Credit Facility – Premier |
|
$ |
537 |
|
|
9.25 |
% |
|
$ |
— |
|
|
— |
% |
| Revolving Credit
Facility – eCapital EBGL |
|
|
— |
|
|
— |
% |
|
|
2,592 |
|
|
10.25 |
% |
| Revolving Credit
Facility – Webster |
|
|
— |
|
|
— |
% |
|
|
— |
|
|
— |
% |
| Total Short-term
Revolving Credit Facilities |
|
$ |
537 |
|
|
9.25 |
% |
|
$ |
2,592 |
|
|
10.25 |
% |
| eCapital - Star Loan
Principal, net |
|
$ |
— |
|
|
— |
% |
|
$ |
791 |
|
|
10.50 |
% |
| Short Term
Loan |
|
$ |
— |
|
|
— |
% |
|
$ |
791 |
|
|
10.50 |
% |
| Total Short-term
debt |
|
$ |
537 |
|
|
9.25 |
% |
|
$ |
3,383 |
|
|
10.31 |
% |
Star Equity Holdings,
Inc.Supplemental Segment
Information(Unaudited) (In thousands)
| |
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Revenue by segment: |
|
|
|
|
|
|
|
|
|
Construction |
|
$ |
10,435 |
|
|
$ |
11,107 |
|
|
$ |
31,674 |
|
|
$ |
39,544 |
|
|
Investments |
|
|
89 |
|
|
|
159 |
|
|
|
405 |
|
|
|
475 |
|
|
Intersegment elimination |
|
|
(89 |
) |
|
|
(159 |
) |
|
|
(405 |
) |
|
|
(475 |
) |
| Consolidated revenue |
|
$ |
10,435 |
|
|
$ |
11,107 |
|
|
$ |
31,674 |
|
|
$ |
39,544 |
|
| |
|
|
|
|
|
|
|
|
| Gross profit (loss) by
segment: |
|
|
|
|
|
|
|
|
|
Construction |
|
$ |
2,248 |
|
|
$ |
3,132 |
|
|
$ |
9,241 |
|
|
$ |
7,203 |
|
|
Investments |
|
|
44 |
|
|
|
100 |
|
|
|
236 |
|
|
|
253 |
|
|
Intersegment elimination |
|
|
(89 |
) |
|
|
(158 |
) |
|
|
(405 |
) |
|
|
(474 |
) |
| Consolidated gross profit |
|
$ |
2,203 |
|
|
$ |
3,074 |
|
|
$ |
9,072 |
|
|
$ |
6,982 |
|
| |
|
|
|
|
|
|
|
|
| Income (loss) from continuing
operations by segment: |
|
|
|
|
|
|
|
|
|
Construction |
|
$ |
(21 |
) |
|
$ |
1,150 |
|
|
$ |
1,960 |
|
|
$ |
681 |
|
|
Investments |
|
|
(71 |
) |
|
|
97 |
|
|
|
(527 |
) |
|
|
236 |
|
|
Corporate, eliminations and other |
|
|
(1,569 |
) |
|
|
(1,699 |
) |
|
|
(4,978 |
) |
|
|
(5,206 |
) |
| Segment income (loss) from
operations |
|
$ |
(1,661 |
) |
|
$ |
(452 |
) |
|
$ |
(3,545 |
) |
|
$ |
(4,289 |
) |
| |
|
|
|
|
|
|
|
|
| Depreciation and amortization
by segment: |
|
|
|
|
|
|
|
|
|
Construction |
|
$ |
515 |
|
|
$ |
489 |
|
|
$ |
1,530 |
|
|
$ |
1,471 |
|
|
Investments |
|
|
45 |
|
|
|
58 |
|
|
|
169 |
|
|
|
221 |
|
|
Star Equity corporate |
|
|
9 |
|
|
|
— |
|
|
|
21 |
|
|
|
— |
|
| Total depreciation and
amortization |
|
$ |
569 |
|
|
$ |
547 |
|
|
$ |
1,720 |
|
|
$ |
1,692 |
|
Star Equity (NASDAQ:STRR)
過去 株価チャート
から 12 2024 まで 1 2025
Star Equity (NASDAQ:STRR)
過去 株価チャート
から 1 2024 まで 1 2025
