Star Equity Holdings, Inc. (Nasdaq: STRR; STRRP) (“Star” or the
“Company”), a diversified holding company, reported today its
financial results for the second quarter (Q2) ended June 30,
2024. All 2024 and 2023 amounts in this release are unaudited.
Following the sale of our Digirad Health
business on May 4, 2023, all financial results for the 2023
reporting period, unless stated otherwise, relate to continuing
operations, which currently include two divisions: Building
Solutions (formerly known as Construction) and Investments.
Q2 2024 Financial
Highlights vs. Q2 2023
(unaudited)
- Revenues increased by 51.6% to
$13.5 million from $8.9 million.
- Gross profit decreased by 14.9% to
$2.2 million from $2.6 million.
- Net loss from continuing operations
was $3.8 million (or $1.19 per basic and diluted share)
compared to net loss from continuing operations of
$1.4 million (or $0.44 per basic and diluted share).
- Non-GAAP adjusted net loss was $0.9
million (or $0.29 per basic and diluted share) compared to net loss
of $0.9 million (or $0.29 per basic and diluted share).
- Non-GAAP adjusted EBITDA was a loss
of $0.5 million versus a loss of $0.8 million.
Year-to-Date
2024 Financial Highlights vs.
Year-to-Date 2023
(unaudited)
- Revenues increased by 6.4% to
$22.6 million from $21.2 million.
- Gross profit decreased by 44.8% to
$3.8 million from $6.9 million.
- Net loss from continuing operations
was $6.0 million (or $1.90 per basic and diluted share)
compared to a net loss from continuing operations of
$1.4 million (or $0.43 per basic and diluted share).
- Non-GAAP adjusted net loss from
continuing operations was $2.3 million (or $0.73 per basic and
diluted share) compared to a net loss of $1.1 million (or
$0.36 per basic and diluted share).
- Non-GAAP adjusted EBITDA from
continuing operations was a loss of $1.6 million versus a loss
of $36 thousand.
Rick Coleman, Chief Executive Officer, noted,
“In the second quarter of 2024, Building Solutions revenue
increased versus the second quarter of 2023, while gross margin
declined – primarily due to a one-time purchase price accounting
adjustment related to our second quarter 2024 Timber Technologies
acquisition. Our sales pipeline remains strong, but consistent with
industry trends, the conversion of these opportunities to signed
backlog has been slower than historical norms. Despite continued
demand for new projects, the ongoing effects of credit tightening
have created financing challenges and project timing delays for our
partners and customers. We’re optimistic about new construction
opportunities in the markets we serve, and believe the current
macroeconomic impacts are temporary.”
Mr. Coleman added, “We are very pleased with the
integration of our May 17, 2024 Timber Technologies acquisition,
which we believe will generate considerable value for our
shareholders. As we’ve noted in previous quarters, identifying,
evaluating, and completing accretive acquisitions remains an
important pillar of our holding company growth strategy for
delivering shareholder value. We remain focused on all elements of
our growth strategy including Building Solutions division
expansion, acquisitions in new industries, and exploring new
opportunities at our Investments division.”
Mr. Coleman concluded, “Subsequent to quarter
end, we recently closed two sale-leaseback transactions for our
South Paris, Maine and Big Lake, Minnesota facilities for a total
of $8.3 million (net proceeds before capital gain taxes, if any),
and at the same time entered into long-term lease agreements for
both facilities. These transactions align well with our commitment
to strategic capital allocation and prioritization of
EBITDA-generating assets.”
Revenues
The Company’s Q2 2024 revenues increased 51.6%
to $13.5 million from $8.9 million in Q2 2023.
|
Revenues in $ thousands |
Q2 2024 |
|
Q2 2023 |
|
% change |
|
6M 2024 |
|
6M 2023 |
|
% change |
|
Building Solutions |
$ |
13,483 |
|
|
$ |
8,893 |
|
|
|
51.6 |
% |
|
$ |
22,601 |
|
|
$ |
21,239 |
|
|
|
6.4 |
% |
| Investments |
|
194 |
|
|
|
158 |
|
|
|
22.8 |
% |
|
|
382 |
|
|
|
316 |
|
|
|
20.9 |
% |
|
Intersegment elimination |
|
(194 |
) |
|
|
(158 |
) |
|
|
22.8 |
% |
|
|
(382 |
) |
|
|
(316 |
) |
|
|
20.9 |
% |
|
Total Revenues |
$ |
13,483 |
|
|
$ |
8,893 |
|
|
|
51.6 |
% |
|
$ |
22,601 |
|
|
$ |
21,239 |
|
|
|
6.4 |
% |
|
|
Q2 2024 and 6M 2024 Building Solutions revenue
increased by 51.6% and 6.4%, respectively, from the prior year as a
result of the inclusion of revenues from TT from the date of
acquisition and the inclusion of full year revenues from BLL which
we acquired in the fourth quarter of 2023. These were partially
offset by slower business activity at both KBS and EBGL. Economic
headwinds, higher interest rates, and project delays contributed to
the slowdown, which we believe is temporary. Specifically, some of
our larger commercial projects expected to commence in the first
half of 2024 were delayed into future periods. Our backlog and
sales pipeline indicate continued strong demand for new projects,
although the revenue impact and timing are uncertain.
Gross
Profit
|
Gross profit (loss) in $ thousands |
Q2 2024 |
|
Q2 2023 |
|
% change |
|
6M 2024 |
|
6M 2023 |
|
% change |
|
Building Solutions |
$ |
2,229 |
|
|
$ |
2,664 |
|
|
|
(16.3 |
)% |
|
$ |
3,907 |
|
|
$ |
6,993 |
|
|
|
(44.1 |
)% |
|
Building Solutions gross margin |
|
16.5 |
% |
|
|
30.0 |
% |
|
|
(13.5 |
)% |
|
|
17.3 |
% |
|
|
32.9 |
% |
|
|
(15.6 |
)% |
|
Investments |
|
181 |
|
|
|
97 |
|
|
|
86.6 |
% |
|
|
265 |
|
|
|
192 |
|
|
|
38.0 |
% |
|
Intersegment elimination |
|
(194 |
) |
|
|
(158 |
) |
|
|
22.8 |
% |
|
|
(382 |
) |
|
|
(316 |
) |
|
|
20.9 |
% |
|
Total gross profit |
$ |
2,216 |
|
|
$ |
2,603 |
|
|
|
(14.9 |
)% |
|
$ |
3,790 |
|
|
$ |
6,869 |
|
|
|
(44.8 |
)% |
|
Total gross margin |
|
16.4 |
% |
|
|
29.3 |
% |
|
|
(12.9 |
)% |
|
|
16.8 |
% |
|
|
32.3 |
% |
|
|
(15.5 |
)% |
|
|
Q2 2024 and 6M 2024 Building Solutions gross
profit decreased 16.3% and 44.1% vs the same periods of last year.
The decline for the 6M period was primarily due to fixed costs
remaining at constant levels as revenue declined at KBS and EBGL,
while the decline for the Q2 period was due to the one time
purchase price accounting adjustment recorded of approximately
$574 thousand related to the Timber Technologies
acquisition.
Operating Expenses
On a consolidated basis, Q2 2024 sales, general
and administrative (“SG&A”) expenses increased by
$1.1 million, or 26.8%, versus the prior year period. SG&A
as a percentage of revenue decreased in Q2 2024 to 39.6% versus
47.3% in Q2 2023. The major driver of the increase in SG&A was
an impairment of approximately $1.3 million related to our
cost method investment in TTG that we acquired as part of the
Digirad sale. We recorded this impairment after consideration of
the financial performance of TTG Parent LLC relative to comparable
company valuation multiples.
Net Income
Q2 2024 net loss from continuing operations was
$3.8 million, or $1.19 per basic and diluted share, compared to a
net loss of $1.4 million, or $0.44 per basic and diluted share
in the same period in the prior year. Q2 2024 non-GAAP adjusted net
loss from continuing operations was $0.9 million, or $0.29 per
basic and diluted share, compared to non-GAAP adjusted net income
from continuing operations of $0.9 million, or $0.29 per basic and
diluted share, in the prior year period.
Year-to-date 2024 net loss from continuing
operations was $6.0 million, or $1.90 per basic and diluted
share, compared to net loss of $1.4 million, or $0.43 per
basic and diluted share, in the same period in the prior year. Year
to date 2024 non-GAAP adjusted net loss from continuing operations
was $2.3 million, or $0.73 per basic and diluted share,
compared to adjusted net loss from continuing operations of
$1.1 million, or $0.36 per basic and diluted share, in the
prior year period.
Non-GAAP Adjusted EBITDA
Q2 2024 non-GAAP adjusted EBITDA was a loss of
$0.5 million versus a loss of $0.8 million in the same
quarter of the prior year, primarily due to decreased revenues.
Year-to-date 2024 non-GAAP adjusted EBITDA was a loss of
$1.6 million, compared to a loss of $36 thousand in
year-to-date 2023, primarily due to lower margins at our Building
Solutions division.
Operating Cash Flow
6M 2024 cash flow from operations was an outflow
of $4.3 million, compared to an inflow of $1.9 million
for Q2 2023. The decrease in net cash provided by operating
activities is attributable to lower results from operations,
particularly in our Building Solutions division, and increased net
working capital expenditures.
Preferred Stock Dividends
In Q2 2024, 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 June 1,
2024, and the payment date was June 11, 2024.
NOL Carryforward
As of December 31, 2023, Star had $43.2 million
of U.S. federal and state net operating losses (“NOL”), which the
Company considers to be a valuable asset for its stockholders.
Certain of these NOLs will expire in 2025 through 2042 unless
previously utilized. In order to protect the value of the NOL for
all stockholders, the Company has a rights agreement and charter
amendment in place that limit beneficial ownership of the Company’s
common stock to 4.99%. Stockholders who wish to own more than 4.99%
of Star common stock, or who already own more than 4.99% of Star
common stock and wish to buy more, may only acquire additional
shares with the Board’s prior written approval.
Share Repurchase Program
On August 7th, 2024, the Company’s board of
directors authorized a new stock repurchase program. Under this
program, the Company is authorized to repurchase up to $1 million
of its issued and outstanding shares of common stock.
Conference Call Information
A conference call is scheduled for 10:00 a.m. ET
(7:00 a.m. PT) on August 13, 2024 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 August 13, 2024.
About Star Equity Holdings,
Inc.
Star Equity Holdings, Inc. is a diversified
holding company with two divisions: Building Solutions and
Investments. Prior to the May 4, 2023 sale of Digirad Health, Star
Equity Holdings had three divisions: Healthcare, Building
Solutions, and Investments.
Building Solutions
Our Building Solutions division operates in
three businesses: (i) modular building manufacturing; (ii)
structural wall panel and wood foundation manufacturing, including
building supply distribution operations; and (iii) glue-laminated
timber (glulam) column, beam, and truss manufacturing.
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
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. All statements in this press 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.
Such statements are based upon management’s current beliefs, views,
estimates and expectations, including as pertains to (i) the plans
and objectives of management for future operations, including plans
or objectives relating to acquisitions and related integration,
(ii) projections of income, EBITDA, earnings 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. 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 cyclical nature of our operating businesses, the
Company’s debt and its ability to repay, refinance, or incur
additional debt in the future; the Company’s need for a significant
amount of cash to service, 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; 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 its business
operations; the liability and compliance costs regarding
environmental regulations; the lack of product diversification;
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; general economic and
financial market conditions; 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
press 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.
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 Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Revenues: |
|
|
|
|
|
|
|
|
Building Solutions** |
$ |
13,483 |
|
|
$ |
8,893 |
|
|
$ |
22,601 |
|
|
$ |
21,239 |
|
|
Investments |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Total revenues |
|
13,483 |
|
|
|
8,893 |
|
|
|
22,601 |
|
|
|
21,239 |
|
| |
|
|
|
|
|
|
|
| Cost of revenues: |
|
|
|
|
|
|
|
|
Building Solutions** |
|
11,254 |
|
|
|
6,229 |
|
|
|
18,694 |
|
|
|
14,246 |
|
|
Investments |
|
13 |
|
|
|
61 |
|
|
|
117 |
|
|
|
124 |
|
|
Total cost of revenues |
|
11,267 |
|
|
|
6,290 |
|
|
|
18,811 |
|
|
|
14,370 |
|
| |
|
|
|
|
|
|
|
| Gross profit |
|
2,216 |
|
|
|
2,603 |
|
|
|
3,790 |
|
|
|
6,869 |
|
| |
|
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
5,339 |
|
|
|
4,209 |
|
|
|
9,433 |
|
|
|
7,893 |
|
|
Amortization of intangible assets |
|
590 |
|
|
|
430 |
|
|
|
1,032 |
|
|
|
860 |
|
|
Total operating expenses |
|
5,929 |
|
|
|
4,639 |
|
|
|
10,465 |
|
|
|
8,753 |
|
| |
|
|
|
|
|
|
|
| Income (loss) from continuing
operations |
|
(3,713 |
) |
|
|
(2,036 |
) |
|
|
(6,675 |
) |
|
|
(1,884 |
) |
| |
|
|
|
|
|
|
|
| Other income (expense): |
|
|
|
|
|
|
|
|
Other income (expense), net |
|
(334 |
) |
|
|
568 |
|
|
|
65 |
|
|
|
459 |
|
|
Interest income (expense), net |
|
221 |
|
|
|
163 |
|
|
|
595 |
|
|
|
136 |
|
|
Total other income (expense), net |
|
(113 |
) |
|
|
731 |
|
|
|
660 |
|
|
|
595 |
|
| |
|
|
|
|
|
|
|
| Income (loss) before income
taxes from continuing operations |
|
(3,826 |
) |
|
|
(1,305 |
) |
|
|
(6,015 |
) |
|
|
(1,289 |
) |
| Income tax benefit (provision)
from continuing operations |
|
39 |
|
|
|
(61 |
) |
|
|
4 |
|
|
|
(61 |
) |
| Income (loss) from continuing
operations, net of tax |
|
(3,787 |
) |
|
|
(1,366 |
) |
|
|
(6,011 |
) |
|
|
(1,350 |
) |
| Income (loss) from
discontinued operations, net of tax |
|
— |
|
|
|
26,957 |
|
|
|
— |
|
|
|
27,376 |
|
| Net income (loss) |
|
(3,787 |
) |
|
|
25,591 |
|
|
|
(6,011 |
) |
|
|
26,026 |
|
| Dividend on Series A perpetual
preferred stock |
|
(479 |
) |
|
|
(479 |
) |
|
|
(958 |
) |
|
|
(958 |
) |
| Net income (loss) attributable
to common shareholders |
$ |
(4,266 |
) |
|
$ |
25,112 |
|
|
$ |
(6,969 |
) |
|
$ |
25,068 |
|
| |
|
|
|
|
|
|
|
| Net income (loss) per
share |
|
|
|
|
|
|
|
| Net income (loss) per share,
continuing operations |
|
|
|
|
|
|
|
|
Basic and diluted* |
$ |
(1.19 |
) |
|
$ |
(0.44 |
) |
|
$ |
(1.90 |
) |
|
$ |
(0.43 |
) |
| Net income (loss) per share,
discontinued operations |
|
|
|
|
|
|
|
|
Basic and diluted* |
$ |
— |
|
|
$ |
8.68 |
|
|
$ |
— |
|
|
$ |
8.82 |
|
| Net income (loss) per
share |
|
|
|
|
|
|
|
|
Basic and diluted* |
$ |
(1.19 |
) |
|
$ |
8.24 |
|
|
$ |
(1.90 |
) |
|
$ |
8.38 |
|
| Net income (loss) per share,
attributable to common shareholders |
|
|
|
|
|
|
|
|
Basic and diluted* |
$ |
(1.34 |
) |
|
$ |
8.09 |
|
|
$ |
(2.20 |
) |
|
$ |
8.08 |
|
| Weighted-average common shares
outstanding *** |
|
|
|
|
|
|
|
|
Basic and diluted |
|
3,172 |
|
|
|
3,104 |
|
|
|
3,170 |
|
|
|
3,104 |
|
| |
|
|
|
|
|
|
|
| Dividends declared per share
of Series A perpetual preferred stock |
$ |
0.25 |
|
|
$ |
0.25 |
|
|
$ |
0.50 |
|
|
$ |
0.50 |
|
*Earnings per share may not add due
to rounding**Formerly known as Construction***All share amounts
reflect 1 for 5 reverse stock split effective June 14, 2024,
retroactively
|
Star Equity Holdings, Inc.Condensed
Consolidated Balance Sheets (Unaudited) (In
thousands, except share amounts) |
| |
| |
June 30,
2024(unaudited) |
|
December 31,2023 |
| Assets: |
|
|
|
| Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
2,457 |
|
|
$ |
18,326 |
|
|
Restricted cash |
|
1,602 |
|
|
|
620 |
|
|
Investments in equity securities |
|
3,833 |
|
|
|
4,838 |
|
|
Lumber derivative contracts |
|
— |
|
|
|
19 |
|
|
Accounts receivable, net of allowances of $230 and $191,
respectively |
|
6,213 |
|
|
|
6,004 |
|
|
Note receivable, current portion |
|
399 |
|
|
|
399 |
|
|
Inventories, net |
|
5,789 |
|
|
|
3,420 |
|
|
Other current assets |
|
1,390 |
|
|
|
1,180 |
|
|
Assets held for sale |
|
4,295 |
|
|
|
4,346 |
|
|
Total current assets |
|
25,978 |
|
|
|
39,152 |
|
| Property and equipment,
net |
|
10,513 |
|
|
|
3,482 |
|
| Operating lease right-of-use
assets, net |
|
1,270 |
|
|
|
1,470 |
|
| Intangible assets, net |
|
20,377 |
|
|
|
12,518 |
|
| Goodwill |
|
7,878 |
|
|
|
4,438 |
|
| Cost method investment |
|
4,710 |
|
|
|
6,000 |
|
| Notes receivable |
|
8,640 |
|
|
|
8,427 |
|
| Other assets |
|
1,500 |
|
|
|
9 |
|
|
Total assets |
$ |
80,866 |
|
|
$ |
75,496 |
|
| |
|
|
|
| Liabilities and
Stockholders’ Equity: |
|
|
|
| Current liabilities: |
|
|
|
|
Accounts payable |
$ |
1,867 |
|
|
$ |
1,571 |
|
|
Accrued liabilities |
|
2,628 |
|
|
|
1,506 |
|
|
Accrued compensation |
|
1,065 |
|
|
|
1,772 |
|
|
Accrued warranty |
|
47 |
|
|
|
44 |
|
|
Deferred revenue |
|
845 |
|
|
|
1,377 |
|
|
Short-term debt |
|
6,052 |
|
|
|
2,019 |
|
|
Operating lease liabilities |
|
419 |
|
|
|
403 |
|
|
Finance lease liabilities |
|
28 |
|
|
|
42 |
|
|
Total current liabilities |
|
12,951 |
|
|
|
8,734 |
|
| Long-term debt, net of current
portion |
|
8,275 |
|
|
|
— |
|
| Deferred tax liabilities |
|
281 |
|
|
|
318 |
|
| Operating lease liabilities,
net of current portion |
|
887 |
|
|
|
1,102 |
|
| Finance lease liabilities, net
of current portion |
|
29 |
|
|
|
43 |
|
|
Total liabilities |
|
22,423 |
|
|
|
10,197 |
|
| |
|
|
|
| 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 June 30, 2024. (Liquidation preference:
$18,988,390 as of June 30, 2024 and December 31,
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: 10,000,000 shares authorized;
3,224,550 and 3,165,243 shares issued and outstanding (net of
treasury shares) at June 30, 2024 and December 31, 2023,
respectively * |
|
2 |
|
|
|
2 |
|
|
Treasury stock, at cost; 51,770 shares at June 30, 2024 and
December 31, 2023, respectively * |
|
(5,728 |
) |
|
|
(5,728 |
) |
| Additional paid-in
capital |
|
159,281 |
|
|
|
160,126 |
|
| Accumulated deficit |
|
(114,100 |
) |
|
|
(108,089 |
) |
|
Total stockholders’ equity |
|
58,443 |
|
|
|
65,299 |
|
|
Total liabilities and stockholders’ equity |
$ |
80,866 |
|
|
$ |
75,496 |
|
*All share amounts reflect 1 for 5
reverse stock split effective June 14, 2024, retroactively
|
Star Equity Holdings, Inc.Reconciliation
of Non-GAAP Financial Measures(Unaudited) (In
thousands, except per share amounts) |
| |
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Net income (loss) from
continuing operations |
$ |
(3,787 |
) |
|
$ |
(1,366 |
) |
|
$ |
(6,011 |
) |
|
$ |
(1,350 |
) |
|
Acquired intangible amortization |
|
590 |
|
|
|
430 |
|
|
|
1,032 |
|
|
|
860 |
|
|
Unrealized loss (gain) on equity securities(1) |
|
303 |
|
|
|
(945 |
) |
|
|
75 |
|
|
|
(947 |
) |
|
Unrealized loss (gain) on lumber derivatives(2) |
|
(1 |
) |
|
|
(104 |
) |
|
|
19 |
|
|
|
(147 |
) |
|
Litigation costs |
|
46 |
|
|
|
— |
|
|
|
55 |
|
|
|
— |
|
|
Transaction costs related to sale(3) |
|
(9 |
) |
|
|
1,158 |
|
|
|
92 |
|
|
|
— |
|
|
Transaction costs related to mergers and acquisitions(4) |
|
112 |
|
|
|
— |
|
|
|
544 |
|
|
|
— |
|
|
Purchase accounting adjustment(5) |
|
574 |
|
|
|
— |
|
|
|
574 |
|
|
|
— |
|
|
Impairment of cost method investment |
|
1,290 |
|
|
|
— |
|
|
|
1,290 |
|
|
|
— |
|
|
Financing costs(6) |
|
7 |
|
|
|
54 |
|
|
|
15 |
|
|
|
149 |
|
|
Income tax (benefit) provision |
|
(39 |
) |
|
|
61 |
|
|
|
(4 |
) |
|
|
61 |
|
| Non-GAAP adjusted net
income (loss) from continuing operations |
$ |
(914 |
) |
|
$ |
(890 |
) |
|
$ |
(2,319 |
) |
|
$ |
(1,128 |
) |
| |
|
|
|
|
|
|
|
| Net income (loss) from
continuing operations per diluted share |
$ |
(1.18 |
) |
|
$ |
(0.43 |
) |
|
$ |
(1.88 |
) |
|
$ |
(0.43 |
) |
|
Acquired intangible amortization |
|
0.18 |
|
|
|
0.14 |
|
|
|
0.32 |
|
|
|
0.27 |
|
|
Unrealized loss (gain) on equity securities(1) |
|
0.09 |
|
|
|
(0.30 |
) |
|
|
0.02 |
|
|
|
(0.30 |
) |
|
Unrealized loss (gain) on lumber derivatives(2) |
|
— |
|
|
|
(0.03 |
) |
|
|
0.01 |
|
|
|
(0.05 |
) |
|
Litigation costs |
|
0.01 |
|
|
|
— |
|
|
|
0.02 |
|
|
|
— |
|
|
Transaction costs related to sale(3) |
|
— |
|
|
|
0.37 |
|
|
|
0.03 |
|
|
|
— |
|
|
Transaction costs related to mergers and acquisitions(4) |
|
0.03 |
|
|
|
— |
|
|
|
0.17 |
|
|
|
— |
|
|
Purchase accounting adjustment(5) |
|
0.18 |
|
|
|
— |
|
|
|
0.18 |
|
|
|
— |
|
|
Impairment of cost method investment |
|
0.40 |
|
|
|
— |
|
|
|
0.40 |
|
|
|
— |
|
|
Financing costs(6) |
|
— |
|
|
|
0.02 |
|
|
|
— |
|
|
|
0.05 |
|
|
Income tax (benefit) provision |
|
(0.01 |
) |
|
|
0.02 |
|
|
|
— |
|
|
|
0.02 |
|
| Non-GAAP adjusted net
income (loss) from continuing operations per basic and diluted
share(7) |
$ |
(0.29 |
) |
|
$ |
(0.29 |
) |
|
$ |
(0.73 |
) |
|
$ |
(0.36 |
) |
(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 the one time
purchase accounting adjustment related to the fair value of
inventory and impacted net income. (6) Reflects financing
costs from our credit facilities.(7) Per share amounts are
computed independently for each discrete item presented. Therefore,
the sum of the quarterly per share amounts will not necessarily
equal 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 June 30, 2024 |
BuildingSolutions |
|
Investments |
|
Star EquityCorporate |
|
Total |
| |
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations |
$ |
(1,115 |
) |
|
$ |
(1,265 |
) |
|
$ |
(1,407 |
) |
|
$ |
(3,787 |
) |
| Depreciation and
amortization |
|
774 |
|
|
|
13 |
|
|
|
8 |
|
|
|
795 |
|
| Interest (income) expense |
|
138 |
|
|
|
(199 |
) |
|
|
(160 |
) |
|
|
(221 |
) |
| Income tax (benefit)
provision |
|
— |
|
|
|
— |
|
|
|
(39 |
) |
|
|
(39 |
) |
| EBITDA from continuing
operations |
|
(203 |
) |
|
|
(1,451 |
) |
|
|
(1,598 |
) |
|
|
(3,252 |
) |
| |
|
|
|
|
|
|
|
| Unrealized loss (gain) on
equity securities(1) |
|
— |
|
|
|
303 |
|
|
|
— |
|
|
|
303 |
|
| Unrealized loss (gain) on
lumber derivatives(2) |
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
| Interest income(3) |
|
— |
|
|
|
360 |
|
|
|
— |
|
|
|
360 |
|
| Litigation costs |
|
— |
|
— |
|
— |
|
|
|
46 |
|
|
|
46 |
|
| Stock-based compensation |
|
14 |
|
|
|
— |
|
|
|
56 |
|
|
|
70 |
|
| Transaction costs related to
sale(4) |
|
— |
|
|
|
— |
|
|
|
(9 |
) |
|
|
(9 |
) |
| Transaction costs related to
mergers and acquisitions(5) |
|
— |
|
|
|
— |
|
|
|
112 |
|
|
|
112 |
|
| Purchase accounting
adjustment(6) |
|
574 |
|
|
|
— |
|
|
|
— |
|
|
|
574 |
|
| Impairment of cost method
investment |
|
— |
|
|
|
1,290 |
|
|
|
— |
|
|
|
1,290 |
|
| Financing costs(7) |
|
7 |
|
|
|
— |
|
|
|
— |
|
|
|
7 |
|
| Non-GAAP adjusted
EBITDA from continuing operations |
$ |
391 |
|
|
$ |
502 |
|
|
$ |
(1,393 |
) |
|
$ |
(500 |
) |
| For
The Three Months
Ended June 30, 2023 |
BuildingSolutions |
|
Investments |
|
Star EquityCorporate |
|
Total |
| |
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations |
$ |
200 |
|
|
$ |
992 |
|
|
$ |
(2,558 |
) |
|
$ |
(1,366 |
) |
| Depreciation and
amortization |
|
510 |
|
|
|
61 |
|
|
|
8 |
|
|
|
579 |
|
| Interest (income) expense |
|
16 |
|
|
|
(105 |
) |
|
|
(74 |
) |
|
|
(163 |
) |
| Income tax (benefit)
provision |
|
— |
|
|
|
— |
|
|
|
61 |
|
|
|
61 |
|
| EBITDA from continuing
operations |
|
726 |
|
|
|
948 |
|
|
|
(2,563 |
) |
|
|
(889 |
) |
| |
|
|
|
|
|
|
|
| Unrealized loss (gain) on
equity securities(1) |
|
— |
|
|
|
(945 |
) |
|
|
— |
|
|
|
(945 |
) |
| Unrealized loss (gain) on
lumber derivatives(2) |
|
(104 |
) |
|
|
— |
|
|
|
— |
|
|
|
(104 |
) |
| Interest income(3) |
|
— |
|
|
|
246 |
|
|
|
— |
|
|
|
246 |
|
| Stock-based compensation |
|
4 |
|
|
|
— |
|
|
|
98 |
|
|
|
102 |
|
| Transaction costs related to
sale(4) |
|
— |
|
|
|
— |
|
|
|
1,158 |
|
|
|
1,158 |
|
| (Gain) Loss on sale of
buildings |
|
— |
|
|
|
(424 |
) |
|
|
— |
|
|
|
(424 |
) |
| Financing costs(7) |
|
48 |
|
|
|
6 |
|
|
|
— |
|
|
|
54 |
|
| Non-GAAP adjusted
EBITDA from continuing operations |
$ |
674 |
|
|
$ |
(169 |
) |
|
$ |
(1,307 |
) |
|
$ |
(802 |
) |
(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 the one time purchase accounting
adjustment related to the fair value of inventory and impacted net
income. (7) Reflects financing costs from our credit
facilities.
| For The Six Months
Ended June 30, 2024 |
BuildingSolutions |
|
Investments |
|
Star EquityCorporate |
|
Total |
| |
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations |
$ |
(2,040 |
) |
|
$ |
(802 |
) |
|
$ |
(3,169 |
) |
|
$ |
(6,011 |
) |
| Depreciation and
amortization |
|
1,341 |
|
|
|
117 |
|
|
|
25 |
|
|
|
1,483 |
|
| Interest (income) expense |
|
174 |
|
|
|
(390 |
) |
|
|
(379 |
) |
|
|
(595 |
) |
| Income tax (benefit)
provision |
|
— |
|
|
|
— |
|
|
|
(4 |
) |
|
|
(4 |
) |
| EBITDA |
|
(525 |
) |
|
|
(1,075 |
) |
|
|
(3,527 |
) |
|
|
(5,127 |
) |
| |
|
|
|
|
|
|
|
| Unrealized loss (gain) on
equity securities(1) |
|
— |
|
|
|
75 |
|
|
|
— |
|
|
|
75 |
|
| Unrealized loss (gain) on
lumber derivatives(2) |
|
19 |
|
|
|
— |
|
|
|
— |
|
|
|
19 |
|
| Interest income(3) |
|
— |
|
|
|
770 |
|
|
|
— |
|
|
|
770 |
|
| Litigation costs(3) |
|
— |
|
|
|
— |
|
|
|
55 |
|
|
|
55 |
|
| Stock-based compensation |
|
24 |
|
|
|
— |
|
|
|
104 |
|
|
|
128 |
|
| Transaction costs related to
sale(4) |
|
— |
|
|
|
— |
|
|
|
92 |
|
|
|
92 |
|
| Transaction costs related to
mergers and acquisitions(5) |
|
— |
|
|
|
— |
|
|
|
544 |
|
|
|
544 |
|
| Purchase accounting
adjustment(6) |
|
574 |
|
|
|
— |
|
|
|
— |
|
|
|
574 |
|
| Impairment of cost method
investment |
|
— |
|
|
|
1,290 |
|
|
|
— |
|
|
|
1,290 |
|
| Financing costs(7) |
|
15 |
|
|
|
— |
|
|
|
— |
|
|
|
15 |
|
| Non-GAAP adjusted
EBITDA |
$ |
107 |
|
|
$ |
1,060 |
|
|
$ |
(2,732 |
) |
|
$ |
(1,565 |
) |
| For The Six Months
Ended June 30, 2023 |
BuildingSolutions |
|
Investments |
|
Star EquityCorporate |
|
Total |
| |
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations |
$ |
1,854 |
|
|
$ |
941 |
|
|
$ |
(4,145 |
) |
|
$ |
(1,350 |
) |
| Depreciation and
amortization |
|
1,015 |
|
|
|
124 |
|
|
|
12 |
|
|
|
1,151 |
|
| Interest expense |
|
45 |
|
|
|
(83 |
) |
|
|
(98 |
) |
|
|
(136 |
) |
| Income tax (benefit)
provision |
|
— |
|
|
|
— |
|
|
|
61 |
|
|
|
61 |
|
| EBITDA |
|
2,914 |
|
|
|
982 |
|
|
|
(4,170 |
) |
|
|
(274 |
) |
| |
|
|
|
|
|
|
|
| Unrealized loss (gain) on
equity securities(1) |
|
— |
|
|
|
(947 |
) |
|
|
— |
|
|
|
(947 |
) |
| Unrealized loss (gain) on
lumber derivatives(2) |
|
(147 |
) |
|
|
— |
|
|
|
— |
|
|
|
(147 |
) |
| Interest Income |
|
— |
|
|
|
246 |
|
|
|
— |
|
|
|
246 |
|
| Stock-based compensation |
|
9 |
|
|
|
— |
|
|
|
194 |
|
|
|
203 |
|
| Transaction costs |
|
— |
|
|
|
— |
|
|
|
1,158 |
|
|
|
1,158 |
|
| Gain on sale of assets |
|
— |
|
|
|
(424 |
) |
|
|
— |
|
|
|
(424 |
) |
| Financing costs(7) |
|
132 |
|
|
|
17 |
|
|
|
— |
|
|
|
149 |
|
| Non-GAAP adjusted
EBITDA |
$ |
2,908 |
|
|
$ |
(126 |
) |
|
$ |
(2,818 |
) |
|
$ |
(36 |
) |
(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 the one time TT purchase accounting
adjustment related to the fair value of inventory and impacted net
income. (7) 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: |
| |
| |
June 30, 2024 |
|
December 31, 2023 |
| |
Amount |
|
Weighted-AverageInterest Rate |
|
Amount |
|
Weighted-AverageInterest Rate |
|
Revolving Credit Facility - Premier EBGL |
$ |
3,379 |
|
|
|
9.25 |
% |
|
$ |
2,019 |
|
|
|
9.25 |
% |
| Revolving Credit Facility -
KeyBank KBS |
$ |
1,048 |
|
|
|
7.50 |
% |
|
$ |
— |
|
|
|
— |
% |
| Total Short-term
Revolving Credit Facilities |
$ |
4,427 |
|
|
|
8.84 |
% |
|
$ |
2,019 |
|
|
|
9.25 |
% |
| Bridgewater - TT Term
Loan |
$ |
1,400 |
|
|
|
7.85 |
% |
|
$ |
— |
|
|
|
— |
% |
| Term Loan Secured by
Mortgage |
|
225 |
|
|
|
7.50 |
% |
|
|
— |
|
|
|
— |
% |
| Total Short-term
debt |
$ |
6,052 |
|
|
|
8.45 |
% |
|
$ |
2,019 |
|
|
|
9.25 |
% |
| |
|
|
|
|
|
|
|
| Bridgewater - TT Term Loan,
net of current portion |
$ |
5,500 |
|
|
|
7.85 |
% |
|
$ |
— |
|
|
|
— |
% |
| Term Loan Secured by Mortgage,
net of current portion |
|
2,775 |
|
|
|
7.50 |
% |
|
|
— |
|
|
|
— |
% |
| Long Term Debt, net of
current portion |
$ |
8,275 |
|
|
|
7.75 |
% |
|
$ |
— |
|
|
|
— |
% |
| |
|
|
|
|
|
|
|
| Total
Debt |
$ |
14,327 |
|
|
|
8.08 |
% |
|
$ |
2,019 |
|
|
|
9.25 |
% |
|
Star Equity Holdings, Inc.Supplemental
Segment Information(Unaudited) (In
thousands) |
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Revenue by segment: |
|
|
|
|
|
|
|
|
Building Solutions |
$ |
13,483 |
|
|
$ |
8,893 |
|
|
$ |
22,601 |
|
|
$ |
21,239 |
|
|
Investments |
|
194 |
|
|
|
158 |
|
|
|
382 |
|
|
|
316 |
|
|
Intersegment elimination |
|
(194 |
) |
|
|
(158 |
) |
|
|
(382 |
) |
|
|
(316 |
) |
| Consolidated revenue |
$ |
13,483 |
|
|
$ |
8,893 |
|
|
$ |
22,601 |
|
|
$ |
21,239 |
|
| |
|
|
|
|
|
|
|
| Gross profit (loss) by
segment: |
|
|
|
|
|
|
|
|
Building Solutions |
$ |
2,229 |
|
|
$ |
2,664 |
|
|
$ |
3,907 |
|
|
$ |
6,993 |
|
|
Investments |
|
181 |
|
|
|
97 |
|
|
|
265 |
|
|
|
192 |
|
|
Intersegment elimination |
|
(194 |
) |
|
|
(158 |
) |
|
|
(382 |
) |
|
|
(316 |
) |
| Consolidated gross profit |
$ |
2,216 |
|
|
$ |
2,603 |
|
|
$ |
3,790 |
|
|
$ |
6,869 |
|
| |
|
|
|
|
|
|
|
| Income (loss) from continuing
operations by segment: |
|
|
|
|
|
|
|
|
Building Solutions |
$ |
(842 |
) |
|
$ |
199 |
|
|
$ |
(1,740 |
) |
|
$ |
1,981 |
|
|
Investments |
|
(1,191 |
) |
|
|
(437 |
) |
|
|
(1,147 |
) |
|
|
(456 |
) |
|
Corporate, eliminations and other |
|
(1,680 |
) |
|
|
(1,798 |
) |
|
|
(3,788 |
) |
|
|
(3,409 |
) |
| Segment income (loss) from
operations |
$ |
(3,713 |
) |
|
$ |
(2,036 |
) |
|
$ |
(6,675 |
) |
|
$ |
(1,884 |
) |
| |
|
|
|
|
|
|
|
| Depreciation and amortization by
segment: |
|
|
|
|
|
|
|
|
Building Solutions |
$ |
774 |
|
|
$ |
510 |
|
|
$ |
1,341 |
|
|
$ |
1,015 |
|
|
Investments |
|
13 |
|
|
|
61 |
|
|
|
117 |
|
|
|
124 |
|
|
Star Equity corporate |
|
8 |
|
|
|
8 |
|
|
|
25 |
|
|
|
12 |
|
| Total depreciation and
amortization |
$ |
795 |
|
|
$ |
579 |
|
|
$ |
1,483 |
|
|
$ |
1,151 |
|
Star Equity (NASDAQ:STRRP)
過去 株価チャート
から 8 2024 まで 9 2024
Star Equity (NASDAQ:STRRP)
過去 株価チャート
から 9 2023 まで 9 2024
