Star Equity Holdings, Inc. (Nasdaq: STRR; STRRP) (“Star Equity” or
the “Company”), a diversified holding company, reported today its
financial results for the fourth quarter (Q4) and fiscal year (FY)
ended December 31, 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.
Q4 2023
Financial Highlights vs. Q4 2022
(unaudited)
- Revenues decreased by 19.8% to
$14.1 million from $17.6 million.
- Gross profit decreased by 47.0% to
$2.9 million from $5.4 million.
- Net income from continuing
operations was $1.8 million (or $0.11 income per basic and diluted
share) compared to net income from continuing operations of $0.9
million (or $0.06 income per basic and diluted share).
- Non-GAAP adjusted net loss from
continuing operations was $0.4 million (or $0.02 loss per basic and
diluted share), as compared to adjusted net income of $0.5 million
(or $0.03 income per basic and diluted share).
- Non-GAAP adjusted EBITDA from
continuing operations was a loss of $0.1 million versus a gain of
$0.9 million.
FY 2023
Financial Highlights vs. FY 2022
(unaudited)
- Revenues decreased by 19.9% to
$45.8 million from $57.1 million.
- Gross profit decreased by 3.6% to
$11.9 million from $12.4 million.
- Net loss from continuing operations
was $1.9 million (or $0.12 loss per basic and diluted share)
compared to a net loss from continuing operations of $5.8 million
(or $0.40 loss per basic and $0.39 loss per diluted share).
- Non-GAAP adjusted net loss from
continuing operations was $1.5 million (or $0.10 loss per basic and
diluted share) compared to net loss of $2.5 million (or $0.17 loss
per basic and diluted share).
- Non-GAAP adjusted EBITDA from
continuing operations was a loss of $0.2 million compared to a loss
of $0.1 million.
- As of December 31, 2023, cash
and cash equivalents increased to $18.9 million versus
$4.5 million at December 31, 2022.
- Generated a positive cash inflow
from continuing operations of $2.7 million versus an outflow of
$3.9 million.
- Debt decreased to $2.0 million
at December 31, 2023 from $3.4 million at
December 31, 2022.
Rick Coleman, Chief Executive Officer, noted,
“In the fourth quarter of 2023, Construction revenue and gross
profit declined versus the fourth quarter of 2022. However, for the
full year 2023, we significantly improved Construction gross
margins from 21.6% to 26.0% due to strong pricing discipline and an
improved business mix. Credit tightening in the second half of 2023
caused delays in some commercial projects pushing revenue into
2024. However, 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 closed
the accretive Big Lake Lumber bolt-on acquisition in the fourth
quarter and have integrated it into our Glenbrook operation. During
the coming quarters we will continue to evaluate Construction
division acquisition opportunities to augment our organic growth
strategy, and will also explore potential acquisitions in new
industries, and opportunities in our Investments division.”
Revenues
The Company’s Q4 2023 revenues decreased 19.8%
to $14.1 million from $17.6 million in the fourth quarter of the
prior year due primarily to Construction division project
delays.
|
Revenues in $ thousands (Unaudited) |
|
Q4 2023 |
|
Q4 2022 |
|
% change |
|
FY 2023 |
|
FY 2022 |
|
% change |
|
Construction |
|
$ |
14,111 |
|
|
$ |
17,605 |
|
|
(19.8 |
)% |
|
$ |
45,785 |
|
|
$ |
57,149 |
|
|
(19.9 |
)% |
| Investments |
|
|
159 |
|
|
|
158 |
|
|
0.6 |
% |
|
|
564 |
|
|
|
633 |
|
|
(10.9 |
)% |
|
Intersegment elimination |
|
|
(159 |
) |
|
|
(158 |
) |
|
0.6 |
% |
|
|
(564 |
) |
|
|
(633 |
) |
|
— |
% |
|
Total Revenues |
|
$ |
14,111 |
|
|
$ |
17,605 |
|
|
(19.8 |
)% |
|
$ |
45,785 |
|
|
$ |
57,149 |
|
|
(19.9 |
)% |
Construction Q4 2023 and FY 2023 revenues
decreased 19.8% and 19.9%, respectively, versus the prior year
periods. The decrease in revenues reflects lower revenues at KBS
and EBGL related to slower business activity due to economic
headwinds such as higher interest rates. We believe these economic
effects are temporary and our backlog and sales pipeline remain
strong.
Gross Profit
The Company’s consolidated Q4 2023 gross profit
decreased 47.0% to $2.9 million from $5.4 million in the fourth
quarter of the prior year due to lower revenues in the Construction
division.
|
Gross profit (loss) in thousands (Unaudited) |
|
Q4 2023 |
|
Q4 2022 |
|
% change |
|
FY 2023 |
|
FY 2022 |
|
% change |
|
Construction |
|
$ |
2,913 |
|
|
$ |
5,457 |
|
|
(46.6 |
)% |
|
$ |
12,154 |
|
|
$ |
12,660 |
|
|
(4.0 |
)% |
|
Construction gross margin |
|
|
20.6 |
% |
|
|
31.0 |
% |
|
(33.5 |
)% |
|
|
26.5 |
% |
|
|
22.2 |
% |
|
19.4 |
% |
| Investments |
|
|
100 |
|
|
|
90 |
|
|
11.1 |
% |
|
|
336 |
|
|
|
343 |
|
|
(2.0 |
)% |
|
Intersegment elimination |
|
|
(159 |
) |
|
|
(159 |
) |
|
— |
% |
|
|
(564 |
) |
|
|
(633 |
) |
|
(10.9 |
)% |
|
Total gross profit |
|
$ |
2,854 |
|
|
$ |
5,388 |
|
|
(47.0 |
)% |
|
$ |
11,926 |
|
|
$ |
12,370 |
|
|
(3.6 |
)% |
|
Total gross margin |
|
|
20.2 |
% |
|
|
30.6 |
% |
|
(34.0 |
)% |
|
|
26.0 |
% |
|
|
21.6 |
% |
|
20.4 |
% |
Construction Q4 2023 gross profit decreased
46.6% versus Q4 2022 due to lower revenue. FY 2023 Construction
gross profit decreased 4.0% from the prior year period also due to
lower revenue. However, we have significantly increased prices to
offset higher input costs and have seen an improvement in our gross
margin percentage in 2023. Our backlog and sales pipeline remain
strong despite economic headwinds.
Operating Expenses
Q4 2023 sales, general and administrative
(SG&A) expenses decreased $1.0 million versus Q4 2022.
SG&A expenses as a percentage of revenue decreased in Q4 2023
to 22.8% versus 23.9% in Q4 2022. FY 2023 SG&A expenses
increased $0.3 million or 2.4%, versus the prior year, primarily
due to increased legal and outside services expenses related to the
sale of Digirad Health, the acquisition of Big Lake Lumber, and our
Investments division-related activities. SG&A expenses as a
percentage of revenue increased in FY 2023 to 31.8% versus 24.8% in
FY 2022 as operating expenses were higher on a lower revenue
base.
Net Income/Loss
Q4 2023 net income from continuing operations
was $1.8 million, or $0.11 income per basic and diluted share,
compared to net income from continuing operations of $0.9 million,
or $0.06 income per basic and diluted share, in the same period of
the prior year. Q4 2023 non-GAAP adjusted net loss from continuing
operations was $0.4 million, or $0.02 loss per basic and diluted
share, compared to adjusted non-GAAP net income from continuing
operations of $0.5 million, or $0.03 income per basic and diluted
share, in the same period of the prior year.
FY 2023 net loss from continuing operations was
$1.9 million, or $0.12 loss per basic and diluted share, compared
to a net loss from continuing operations of $5.8 million, or $0.40
loss per basic and diluted share in FY 2022. FY 2023 non-GAAP
adjusted net loss from continuing operations was $1.5 million, or
$0.10 loss per basic and diluted share, compared to an adjusted
non-GAAP net loss from continuing operations of $2.5 million, or
$0.17 loss per basic and diluted share in the prior year.
Non-GAAP adjusted EBITDA
Q4 2023 non-GAAP adjusted EBITDA decreased to a
loss of $0.1 million from a gain of $0.9 million in the same
quarter of the prior year due to decreased gross profit at our
Construction division. FY 2023 non-GAAP adjusted EBITDA decreased
to a loss of $0.2 million, compared to a loss of $0.1 million in FY
2022, primarily due to decreased gross profit at our Construction
division resulting from slower business activity, which we believe
is temporary.
Operating Cash Flow
Q4 2023 cash flow from consolidated operations
was an inflow of $0.0 million, compared to an outflow of
$3.6 million for the same period in the prior year. FY 2023
cash flow from operations was an inflow of $2.7 million, compared
to an outflow of $3.9 million for FY 2022. The improvement in cash
flow from operating activities is attributable to strong
collections at our Construction division and lower cash expenditure
for working capital.
Preferred Stock
In each quarter of 2023, the Company’s Board of
Directors declared and paid a cash dividend of $0.25 per share to
holders of the Company’s 10% Series A Cumulative Perpetual
Preferred Stock, representing $1.00 per share on an annual
basis.
Conference Call Information
A conference call is scheduled for 10:00 a.m. ET
(7:00 a.m. PT) on March 22, 2024 to discuss the results and
management’s outlook. The call may be accessed by dialing
(833)-630-1956 (USA & Canada) or (412) 317-1837
(international), five minutes prior to the scheduled start time and
referencing Star. A simultaneous webcast of the call may be
accessed online from the Events & Presentations link on the
Investor Relations page at
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 March 22, 2024.
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 |
|
|
admin@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 EndedDecember 31, |
|
Twelve Months EndedDecember 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Revenues: |
|
|
|
|
|
|
|
|
|
Construction |
|
$ |
14,111 |
|
|
$ |
17,605 |
|
|
$ |
45,785 |
|
|
$ |
57,149 |
|
|
Investments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Total revenues |
|
|
14,111 |
|
|
|
17,605 |
|
|
|
45,785 |
|
|
|
57,149 |
|
| |
|
|
|
|
|
|
|
|
| Cost of revenues: |
|
|
|
|
|
|
|
|
|
Construction |
|
|
11,198 |
|
|
|
12,148 |
|
|
|
33,631 |
|
|
|
44,489 |
|
|
Investments |
|
|
59 |
|
|
|
69 |
|
|
|
228 |
|
|
|
290 |
|
|
Total cost of revenues |
|
|
11,257 |
|
|
|
12,217 |
|
|
|
33,859 |
|
|
|
44,779 |
|
| |
|
|
|
|
|
|
|
|
| Gross profit |
|
|
2,854 |
|
|
|
5,388 |
|
|
|
11,926 |
|
|
|
12,370 |
|
| |
|
|
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
3,211 |
|
|
|
4,214 |
|
|
|
14,538 |
|
|
|
14,195 |
|
|
Amortization of intangible assets |
|
|
444 |
|
|
|
429 |
|
|
|
1,734 |
|
|
|
1,719 |
|
|
Total operating expenses |
|
|
3,655 |
|
|
|
4,643 |
|
|
|
16,272 |
|
|
|
15,914 |
|
| |
|
|
|
|
|
|
|
|
| Income (loss) from continuing
operations |
|
|
(801 |
) |
|
|
745 |
|
|
|
(4,346 |
) |
|
|
(3,544 |
) |
| |
|
|
|
|
|
|
|
|
| Other income (expense): |
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
1,358 |
|
|
|
(179 |
) |
|
|
852 |
|
|
|
(1,336 |
) |
|
Interest income (expense), net |
|
|
404 |
|
|
|
(164 |
) |
|
|
973 |
|
|
|
(564 |
) |
|
Total other (expense) income, net |
|
|
1,762 |
|
|
|
(343 |
) |
|
|
1,825 |
|
|
|
(1,900 |
) |
| |
|
|
|
|
|
|
|
|
| Income (loss) from continuing
operations before income taxes |
|
|
961 |
|
|
|
402 |
|
|
|
(2,521 |
) |
|
|
(5,444 |
) |
| Income tax benefit
(provision) |
|
$ |
847 |
|
|
$ |
478 |
|
|
|
614 |
|
|
|
(383 |
) |
| Income (loss) from continuing
operations, net of income taxes |
|
|
1,808 |
|
|
|
880 |
|
|
|
(1,907 |
) |
|
|
(5,827 |
) |
| Income (loss) from
discontinued operations, net of income taxes |
|
|
(80 |
) |
|
|
1,029 |
|
|
|
27,039 |
|
|
|
575 |
|
| Net income (loss) |
|
|
1,728 |
|
|
|
1,909 |
|
|
|
25,132 |
|
|
|
(5,252 |
) |
|
Deemed dividend on Series A cumulative perpetual preferred
stock |
|
|
(479 |
) |
|
|
(479 |
) |
|
|
(1,916 |
) |
|
|
(1,916 |
) |
| Net income (loss) attributable
to common shareholders |
|
$ |
1,249 |
|
|
$ |
1,430 |
|
|
$ |
23,216 |
|
|
$ |
(7,168 |
) |
| |
|
|
|
|
|
|
|
|
| Net income (loss) per
share |
|
|
|
|
|
|
|
|
| Net income (loss) per share,
continuing operations |
|
|
|
|
|
|
|
|
| Basic* |
|
$ |
0.11 |
|
|
$ |
0.06 |
|
|
$ |
(0.12 |
) |
|
$ |
(0.40 |
) |
| Diluted |
|
$ |
0.11 |
|
|
$ |
0.06 |
|
|
$ |
(0.12 |
) |
|
$ |
(0.39 |
) |
| Net income (loss) per share,
discontinued operations |
|
|
|
|
|
|
|
|
| Basic* |
|
$ |
(0.01 |
) |
|
$ |
0.07 |
|
|
$ |
1.73 |
|
|
$ |
0.04 |
|
| Diluted |
|
$ |
(0.01 |
) |
|
$ |
0.07 |
|
|
$ |
1.71 |
|
|
$ |
0.04 |
|
| Net income (loss) per
share |
|
|
|
|
|
|
|
|
| Basic* |
|
$ |
0.11 |
|
|
$ |
0.12 |
|
|
$ |
1.61 |
|
|
$ |
(0.36 |
) |
| Diluted* |
|
$ |
0.11 |
|
|
$ |
0.12 |
|
|
$ |
1.59 |
|
|
$ |
(0.35 |
) |
| Net income (loss) per share,
attributable to common shareholders |
|
|
|
|
|
|
|
|
| Basic* |
|
$ |
0.08 |
|
|
$ |
0.09 |
|
|
$ |
1.48 |
|
|
$ |
(0.49 |
) |
| Diluted* |
|
$ |
0.08 |
|
|
$ |
0.09 |
|
|
$ |
1.47 |
|
|
$ |
(0.48 |
) |
| Weighted-average common shares
outstanding |
|
|
|
|
|
|
|
|
| Basic* |
|
|
15,826 |
|
|
|
15,483 |
|
|
|
15,638 |
|
|
|
14,751 |
|
| Diluted* |
|
|
15,874 |
|
|
|
15,570 |
|
|
|
15,775 |
|
|
|
14,829 |
|
| |
|
|
|
|
|
|
|
|
| Dividends declared per share
of Series A perpetual preferred stock |
|
$ |
0.25 |
|
|
$ |
0.25 |
|
|
$ |
1.00 |
|
|
$ |
1.00 |
|
*Earnings per share may not add due to rounding
|
Star Equity Holdings, Inc.Condensed
Consolidated Balance Sheets
(Unaudited)(In thousands,
except share amounts and par value) |
| |
| |
|
December 31,2023 |
|
December 31,2022 |
| Assets: |
|
|
|
|
| Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
18,326 |
|
|
$ |
4,377 |
|
|
Restricted cash |
|
|
620 |
|
|
|
142 |
|
|
Equity securities |
|
|
4,838 |
|
|
|
3,490 |
|
|
Lumber derivative contracts |
|
|
19 |
|
|
|
— |
|
|
Accounts receivable, net |
|
|
6,004 |
|
|
|
7,975 |
|
|
Note receivable, current portion |
|
|
399 |
|
|
|
73 |
|
|
Inventories, net |
|
|
3,420 |
|
|
|
4,678 |
|
|
Other current assets |
|
|
1,180 |
|
|
|
682 |
|
|
Current assets – discontinued operations |
|
|
— |
|
|
|
17,851 |
|
|
Total current assets |
|
|
34,806 |
|
|
|
39,268 |
|
| Property and equipment,
net |
|
|
7,828 |
|
|
|
5,665 |
|
| Operating lease right-of-use
assets, net |
|
|
1,470 |
|
|
|
1,856 |
|
| Intangible assets, net |
|
|
12,518 |
|
|
|
13,352 |
|
| Goodwill |
|
|
4,438 |
|
|
|
4,438 |
|
| Cost method investment |
|
|
6,000 |
|
|
|
— |
|
| Notes receivable |
|
|
8,427 |
|
|
|
1,285 |
|
| Other assets |
|
|
9 |
|
|
|
— |
|
| Non-current assets –
discontinued operations |
|
|
— |
|
|
|
7,438 |
|
|
Total assets |
|
$ |
75,496 |
|
|
$ |
73,302 |
|
| |
|
|
|
|
| Liabilities and
Stockholders’ Equity: |
|
|
|
|
| Current liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
1,571 |
|
|
$ |
1,447 |
|
|
Accrued liabilities |
|
|
1,506 |
|
|
|
462 |
|
|
Accrued compensation |
|
|
1,772 |
|
|
|
1,838 |
|
|
Accrued warranty |
|
|
44 |
|
|
|
38 |
|
|
Lumber derivative contracts |
|
|
— |
|
|
|
104 |
|
|
Deferred revenue |
|
|
1,377 |
|
|
|
1,673 |
|
|
Short-term debt |
|
|
2,019 |
|
|
|
3,383 |
|
|
Operating lease liabilities |
|
|
403 |
|
|
|
372 |
|
|
Finance lease liabilities |
|
|
42 |
|
|
|
82 |
|
|
Current liabilities - discontinued operations |
|
|
— |
|
|
|
18,146 |
|
|
Total current liabilities |
|
|
8,734 |
|
|
|
27,545 |
|
| Deferred tax liabilities |
|
|
318 |
|
|
|
470 |
|
| Operating lease liabilities,
net of current portion |
|
|
1,102 |
|
|
|
1,510 |
|
| Finance lease obligation, net
of current portion |
|
|
43 |
|
|
|
96 |
|
| Other liabilities |
|
|
— |
|
|
|
— |
|
| Non-current liabilities -
discontinued operations |
|
|
— |
|
|
|
1,926 |
|
|
Total liabilities |
|
|
10,197 |
|
|
|
31,547 |
|
| |
|
|
|
|
| Commitments and contingencies
(Note 9) |
|
|
|
|
| |
|
|
|
|
| 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 2023 and 2022.
(Liquidation preference: $18,988,390 as of December 31, 2023
and 2022.) |
|
|
18,988 |
|
|
|
18,988 |
|
| Preferred stock, $0.0001 par
value: 25,000 shares authorized; Series C Preferred stock, no
shares issued or outstanding |
|
|
— |
|
|
|
— |
|
| Common stock, $0.0001 par
value: 50,000,000 and 50,000,000 shares authorized; 15,826,217 and
15,177,919 shares issued and outstanding (net of treasury shares)
at December 31, 2023 and 2022, respectively |
|
|
2 |
|
|
|
1 |
|
| Treasury stock, at cost;
258,849 shares at December 31, 2023 and 2022,
respectively |
|
|
(5,728 |
) |
|
|
(5,728 |
) |
| Additional paid-in
capital |
|
|
160,126 |
|
|
|
161,715 |
|
| Accumulated deficit |
|
|
(108,089 |
) |
|
|
(133,221 |
) |
|
Total stockholders’ equity |
|
$ |
65,299 |
|
|
|
41,755 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
75,496 |
|
|
$ |
73,302 |
|
| |
|
Star Equity Holdings, Inc.Reconciliation
of Non-GAAP Financial
Measures(Unaudited)(In thousands,
except per share amounts) |
| |
| |
|
Three Months EndedDecember 31, |
|
Twelve Months EndedDecember 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| |
|
|
|
|
|
|
|
|
| Net income (loss) from
continuing operations |
|
$ |
1,808 |
|
|
$ |
880 |
|
|
$ |
(1,907 |
) |
|
$ |
(5,827 |
) |
|
Acquired intangible amortization |
|
|
444 |
|
|
|
429 |
|
|
|
1,734 |
|
|
|
1,719 |
|
|
Unrealized (gain) loss on equity securities (1) |
|
|
(109 |
) |
|
|
59 |
|
|
|
(85 |
) |
|
|
893 |
|
|
Unrealized (gain) loss on lumber derivatives (2) |
|
|
(113 |
) |
|
|
(530 |
) |
|
|
(123 |
) |
|
|
768 |
|
|
Severance and retention costs (3) |
|
|
— |
|
|
|
2 |
|
|
|
— |
|
|
|
5 |
|
|
Transaction costs related to sale (4) |
|
|
80 |
|
|
|
— |
|
|
|
1,361 |
|
|
|
— |
|
|
Transaction costs related to mergers and acquisitions (5) |
|
|
86 |
|
|
|
— |
|
|
|
103 |
|
|
|
— |
|
|
Loss (Gain) on sale of assets |
|
|
— |
|
|
|
— |
|
|
|
(386 |
) |
|
|
— |
|
|
Financing costs (6) |
|
|
8 |
|
|
|
122 |
|
|
|
159 |
|
|
|
446 |
|
|
One time credits (7) |
|
|
(576 |
) |
|
|
— |
|
|
|
(576 |
) |
|
|
— |
|
|
Bargain purchase gain (8) |
|
|
(1,170 |
) |
|
|
— |
|
|
|
(1,170 |
) |
|
|
— |
|
|
Income tax expense |
|
|
(846 |
) |
|
|
(478 |
) |
|
|
(614 |
) |
|
|
(478 |
) |
| Non-GAAP adjusted net
income (loss) from continuing operations |
|
$ |
(388 |
) |
|
$ |
484 |
|
|
$ |
(1,504 |
) |
|
$ |
(2,474 |
) |
| |
|
|
|
|
|
|
|
|
| Net income (loss) per
basic share from continuing operations |
|
$ |
0.11 |
|
|
$ |
0.06 |
|
|
$ |
(0.12 |
) |
|
$ |
(0.40 |
) |
|
Acquired intangible amortization |
|
|
0.03 |
|
|
|
0.03 |
|
|
|
0.11 |
|
|
|
0.12 |
|
|
Unrealized (gain) loss on equity securities (1) |
|
|
(0.01 |
) |
|
|
— |
|
|
|
(0.01 |
) |
|
|
0.06 |
|
|
Unrealized (gain) loss on lumber derivatives (2) |
|
|
(0.01 |
) |
|
|
(0.03 |
) |
|
|
(0.01 |
) |
|
|
0.05 |
|
|
Severance and retention costs (3) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Transaction costs related to sale (4) |
|
|
0.01 |
|
|
|
— |
|
|
|
0.09 |
|
|
|
— |
|
|
Transaction costs related to mergers and acquisitions (5) |
|
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
Loss (Gain) on sale of assets |
|
|
— |
|
|
|
— |
|
|
|
(0.02 |
) |
|
|
— |
|
|
Financing costs (6) |
|
|
— |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.03 |
|
|
One time credits (7) |
|
|
(0.04 |
) |
|
|
— |
|
|
|
(0.04 |
) |
|
|
— |
|
|
Bargain purchase gain (8) |
|
|
(0.07 |
) |
|
|
— |
|
|
|
(0.07 |
) |
|
|
— |
|
|
Income tax expense |
|
|
(0.05 |
) |
|
|
(0.03 |
) |
|
|
(0.04 |
) |
|
|
(0.03 |
) |
| Non-GAAP adjusted net
income (loss) per basic share from continuing operations
(9) |
|
$ |
(0.02 |
) |
|
$ |
0.03 |
|
|
$ |
(0.10 |
) |
|
$ |
(0.17 |
) |
| Non-GAAP adjusted net
income (loss) per diluted share from continuing operations
(9) |
|
$ |
(0.02 |
) |
|
$ |
0.03 |
|
|
$ |
(0.10 |
) |
|
$ |
(0.17 |
) |
(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) Reflects the severance expense for
certain employees(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.(7) Reflects one time insurance
and other credits(8) Reflects the bargain purchase
gain related to the acquisition of Big Lake
Lumber(9) Per share amounts are computed
independently for each discrete item presented. Therefore, the sum
of the quarterly per share amounts will not necessarily equate 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 December 31,
2023 |
|
Construction |
|
Investments |
|
Star EquityCorporate |
|
Total |
| |
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations |
|
$ |
771 |
|
|
$ |
1,246 |
|
|
$ |
(209 |
) |
|
$ |
1,808 |
|
| Depreciation and
amortization |
|
|
540 |
|
|
|
59 |
|
|
|
8 |
|
|
|
607 |
|
| Interest (income) expense |
|
|
32 |
|
|
|
(191 |
) |
|
|
(246 |
) |
|
|
(405 |
) |
| Income tax expense |
|
|
(289 |
) |
|
|
— |
|
|
|
(557 |
) |
|
|
(846 |
) |
| EBITDA from continuing
operations |
|
|
1,054 |
|
|
|
1,114 |
|
|
|
(1,004 |
) |
|
|
1,164 |
|
| |
|
|
|
|
|
|
|
|
| Unrealized (gain) loss on
equity securities (1) |
|
|
— |
|
|
|
(109 |
) |
|
|
— |
|
|
|
(109 |
) |
| Unrealized (gain) loss on
lumber derivatives (2) |
|
|
(113 |
) |
|
|
— |
|
|
|
— |
|
|
|
(113 |
) |
| Interest income (3) |
|
|
— |
|
|
|
444 |
|
|
|
— |
|
|
|
444 |
|
| Stock-based compensation |
|
|
14 |
|
|
|
— |
|
|
|
46 |
|
|
|
60 |
|
| Transaction costs related to
sale (4) |
|
|
— |
|
|
|
— |
|
|
|
80 |
|
|
|
80 |
|
| Transaction costs related to
mergers and acquisitions (5) |
|
|
65 |
|
|
|
— |
|
|
|
21 |
|
|
|
86 |
|
| Loss (Gain) on sale of
assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| One time credits (6) |
|
|
|
|
|
|
(576 |
) |
|
|
(576 |
) |
| Financing costs (7) |
|
|
8 |
|
|
|
— |
|
|
|
— |
|
|
|
8 |
|
| Bargain purchase gain (9) |
|
|
(345 |
) |
|
|
(825 |
) |
|
|
— |
|
|
|
(1,170 |
) |
| Non-GAAP adjusted EBITDA from
continuing operations |
|
$ |
683 |
|
|
$ |
624 |
|
|
$ |
(1,433 |
) |
|
$ |
(126 |
) |
| For the
Three Months Ended December 31,
2022 |
|
Construction |
|
Investments |
|
Star EquityCorporate |
|
Total |
| |
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations |
|
$ |
2,252 |
|
|
$ |
(176 |
) |
|
$ |
(1,196 |
) |
|
$ |
880 |
|
| Depreciation and
amortization |
|
|
503 |
|
|
|
69 |
|
|
|
9 |
|
|
|
581 |
|
| Interest (income) expense |
|
|
147 |
|
|
|
51 |
|
|
|
(34 |
) |
|
|
164 |
|
| Income tax (benefit)
expense |
|
|
383 |
|
|
|
— |
|
|
|
(861 |
) |
|
|
(478 |
) |
| EBITDA from continuing
operations |
|
|
3,285 |
|
|
|
(56 |
) |
|
|
(2,082 |
) |
|
|
1,147 |
|
| |
|
|
|
|
|
|
|
|
| Unrealized (gain) loss on
equity securities (1) |
|
|
— |
|
|
|
59 |
|
|
|
— |
|
|
|
59 |
|
| Unrealized (gain) loss on
lumber derivatives (2) |
|
|
(530 |
) |
|
|
— |
|
|
|
— |
|
|
|
(530 |
) |
| Stock-based compensation |
|
|
4 |
|
|
|
— |
|
|
|
111 |
|
|
|
115 |
|
| Severance and retention costs
(7) |
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
2 |
|
| Financing costs (8) |
|
|
96 |
|
|
|
26 |
|
|
|
— |
|
|
|
122 |
|
| Non-GAAP adjusted EBITDA from
continuing operations |
|
$ |
2,855 |
|
|
$ |
29 |
|
|
$ |
(1,969 |
) |
|
$ |
915 |
|
| For the
Twelve Months Ended December 31,
2023 |
|
Construction |
|
Investments |
|
Star EquityCorporate |
|
Total |
| |
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations |
|
$ |
2,517 |
|
|
$ |
1,424 |
|
|
$ |
(5,848 |
) |
|
$ |
(1,907 |
) |
| Depreciation and
amortization |
|
|
2,070 |
|
|
|
228 |
|
|
|
29 |
|
|
|
2,327 |
|
| Interest (income) expense |
|
|
84 |
|
|
|
(467 |
) |
|
|
(591 |
) |
|
|
(974 |
) |
| Income tax expense |
|
|
(288 |
) |
|
|
— |
|
|
|
(326 |
) |
|
|
(614 |
) |
| EBITDA from continuing
operations |
|
|
4,383 |
|
|
|
1,185 |
|
|
|
(6,736 |
) |
|
|
(1,168 |
) |
| |
|
|
|
|
|
|
|
|
| Unrealized (gain) loss on
equity securities (1) |
|
|
— |
|
|
|
(85 |
) |
|
|
— |
|
|
|
(85 |
) |
| Unrealized (gain) loss on
lumber derivatives (2) |
|
|
(123 |
) |
|
|
— |
|
|
|
— |
|
|
|
(123 |
) |
| Interest income (3) |
|
|
— |
|
|
|
1,130 |
|
|
|
— |
|
|
|
1,130 |
|
| Stock-based compensation |
|
|
32 |
|
|
|
— |
|
|
|
307 |
|
|
|
339 |
|
| Transaction costs related to
sale (4) |
|
|
— |
|
|
|
— |
|
|
|
1,361 |
|
|
|
1,361 |
|
| Transaction costs related to
mergers and acquisitions (5) |
|
|
65 |
|
|
|
— |
|
|
|
38 |
|
|
|
103 |
|
| Loss (Gain) on sale of
assets |
|
|
— |
|
|
|
(386 |
) |
|
|
— |
|
|
|
(386 |
) |
| One time credits (6) |
|
|
— |
|
|
|
— |
|
|
|
(576 |
) |
|
|
(576 |
) |
| Write off of lease
liabilities |
|
|
240 |
|
|
|
— |
|
|
|
— |
|
|
|
240 |
|
| Financing costs (8) |
|
|
142 |
|
|
|
17 |
|
|
|
— |
|
|
|
159 |
|
| Bargain purchase gain (9) |
|
|
(345 |
) |
|
|
(825 |
) |
|
|
— |
|
|
|
(1,170 |
) |
| Non-GAAP adjusted EBITDA from
continuing operations |
|
$ |
4,394 |
|
|
$ |
1,036 |
|
|
$ |
(5,606 |
) |
|
$ |
(176 |
) |
| For the
Twelve Months Ended December 31,
2022 |
|
Construction |
|
Investments |
|
Star EquityCorporate |
|
Total |
| |
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations |
|
$ |
2,405 |
|
|
$ |
(970 |
) |
|
$ |
(7,262 |
) |
|
$ |
(5,827 |
) |
| Depreciation and
amortization |
|
|
1,974 |
|
|
|
290 |
|
|
|
9 |
|
|
|
2,273 |
|
| Interest (income) expense |
|
|
416 |
|
|
|
182 |
|
|
|
(34 |
) |
|
|
564 |
|
| Income tax expense |
|
|
383 |
|
|
|
— |
|
|
|
— |
|
|
|
383 |
|
| EBITDA from continuing
operations |
|
|
5,178 |
|
|
|
(498 |
) |
|
|
(7,287 |
) |
|
|
(2,607 |
) |
| |
|
|
|
|
|
|
|
|
| Unrealized (gain) loss on
equity securities (1) |
|
|
— |
|
|
|
893 |
|
|
|
— |
|
|
|
893 |
|
| Unrealized (gain) loss on
lumber derivatives (2) |
|
|
768 |
|
|
|
— |
|
|
|
— |
|
|
|
768 |
|
| Stock-based compensation |
|
|
21 |
|
|
|
— |
|
|
|
411 |
|
|
|
432 |
|
| Severance and retention costs
(7) |
|
|
— |
|
|
|
— |
|
|
|
5 |
|
|
|
5 |
|
| Financing costs (8) |
|
|
355 |
|
|
|
91 |
|
|
|
— |
|
|
|
446 |
|
| Non-GAAP adjusted EBITDA from
continuing operations |
|
$ |
6,322 |
|
|
$ |
486 |
|
|
$ |
(6,871 |
) |
|
$ |
(63 |
) |
(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 one time insurance and
other credits(7) Reflects the severance expense
for certain employees.(8) Reflects financing costs
from our credit facilities.(9) Reflects the
bargain purchase gain related to the acquisition of Big Lake
Lumber
Star Equity Holdings, Inc.Supplemental
Debt Information(Unaudited)
A summary of the Company’s credit facilities and
related party notes are as follows (dollars in thousands)
| |
|
December 31, 2023 |
|
December 31, 2022 |
| |
|
Amount |
|
Weighted-Average InterestRate |
|
Amount |
|
Weighted-Average InterestRate |
|
Revolving Credit Facility - Premier |
|
$ |
2,019 |
|
|
9.25% |
|
$ |
— |
|
|
—% |
| Revolving Credit Facility -
eCapital EBGL |
|
|
— |
|
|
—% |
|
|
2,592 |
|
|
10.25% |
| Total Short-term
Revolving Credit Facilities |
|
$ |
2,019 |
|
|
9.25% |
|
$ |
2,592 |
|
|
10.25% |
| eCapital - Star Loan
Principal, net |
|
$ |
— |
|
|
—% |
|
$ |
791 |
|
|
10.50% |
| Short Term
Loan |
|
$ |
— |
|
|
—% |
|
$ |
791 |
|
|
10.50% |
| Total Short-term
debt |
|
$ |
2,019 |
|
|
9.25% |
|
$ |
3,383 |
|
|
10.31% |
| |
|
Star Equity Holdings, Inc.Supplemental
Segment Information(Unaudited)(In
thousands) |
| |
| |
|
Three Months EndedDecember 31, |
|
Twelve Months EndedDecember 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Revenue by segment: |
|
|
|
|
|
|
|
|
|
Construction |
|
$ |
14,111 |
|
|
$ |
17,605 |
|
|
$ |
45,785 |
|
|
$ |
57,149 |
|
|
Investments |
|
|
159 |
|
|
|
158 |
|
|
|
564 |
|
|
|
633 |
|
|
Intersegment elimination |
|
|
(159 |
) |
|
|
(158 |
) |
|
|
(564 |
) |
|
|
(633 |
) |
| Consolidated revenue |
|
$ |
14,111 |
|
|
$ |
17,605 |
|
|
$ |
45,785 |
|
|
$ |
57,149 |
|
| |
|
|
|
|
|
|
|
|
| Gross profit (loss) by
segment: |
|
|
|
|
|
|
|
|
|
Construction |
|
$ |
2,913 |
|
|
$ |
5,457 |
|
|
$ |
12,154 |
|
|
$ |
12,660 |
|
|
Investments |
|
|
100 |
|
|
|
90 |
|
|
|
336 |
|
|
|
343 |
|
|
Intersegment elimination |
|
|
(159 |
) |
|
|
(159 |
) |
|
|
(564 |
) |
|
|
(633 |
) |
| Consolidated gross profit |
|
$ |
2,854 |
|
|
$ |
5,388 |
|
|
$ |
11,926 |
|
|
$ |
12,370 |
|
| |
|
|
|
|
|
|
|
|
| Income (loss) from continuing
operations by segment: |
|
|
|
|
|
|
|
|
|
Construction |
|
$ |
135 |
|
|
$ |
2,879 |
|
|
$ |
2,095 |
|
|
$ |
3,560 |
|
|
Investments |
|
|
74 |
|
|
|
(44 |
) |
|
|
(453 |
) |
|
|
192 |
|
|
Corporate, eliminations and other |
|
|
(1,010 |
) |
|
|
(2,090 |
) |
|
|
(5,988 |
) |
|
|
(7,296 |
) |
| Segment loss from
operations |
|
$ |
(801 |
) |
|
$ |
745 |
|
|
$ |
(4,346 |
) |
|
$ |
(3,544 |
) |
| |
|
|
|
|
|
|
|
|
| Depreciation and amortization
by segment: |
|
|
|
|
|
|
|
|
|
Construction |
|
$ |
540 |
|
|
$ |
503 |
|
|
$ |
2,070 |
|
|
$ |
1,974 |
|
|
Investments |
|
|
59 |
|
|
|
69 |
|
|
|
228 |
|
|
|
290 |
|
|
Star equity corporate |
|
|
8 |
|
|
|
9 |
|
|
|
29 |
|
|
|
9 |
|
| Total depreciation and
amortization |
|
$ |
607 |
|
|
$ |
581 |
|
|
$ |
2,327 |
|
|
$ |
2,273 |
|
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
