STRR - Earnings call transcript Q1 2022 | Star Equity Holdings, Inc.

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Operator

Greetings, ladies and gentlemen, and welcome to the Star Equity Holdings Inc.

First Quarter 2022 Results Conference Call. Please be advised that discussions on today's call may include forward-looking statements. Such forward-looking statements involve certain risks and uncertainties and that may cause actual results to differ materially from those contained in the forward-looking statements. Please refer to Star Equity's most recent 10-K and 10-Q filings for a more complete description of risk factors that could affect those projections and assumptions. obligations information, forward-looking future no result as assumes new of events company to statements update a The or otherwise. that including adjusted under US note, non-GAAP are all earnings also on not management which call, Please recognized measures will per financial share, measures, income, EBITDA, net EBITDA, GAAP. financial adjusted and adjusted this reference

issued required SEC rules measures measures their to reconciled GAAP by and financial financial As most our in this release earnings are regulations, these morning. comparable non-GAAP

receive not would the please XXX-XXX-XXXX did If Equity and of and this site XXX-XXX-XXXX. contact to representative, be copy at Eberwein, Group, you Equity's earnings on call, release may Relations of after Also, the the the Star call at is a Star like via the Equity, pleasure Cati Investor Equity. introduce one It replay call, site. at Shortly is now or Internet will at live be Web Lena a being accessed my company's after Jeff over also available its Star Chairman www.starequity.com. the Executive Web broadcast

Jeff Eberwein

Thank our thank results quarter for you call. you, conference first XXXX us today Good Operator. morning joining and for all

Coleman; are XXXX, the with revenues, an and call Officer, a increase financial with Nobel. XX% margins. recorded On the improvement our Chief in and and David Chief improved first Executive Officer, me we today Financial in of Rick In quarter operating performance,

the revenue versus four gross by prior grew points improved division X.X% percentage quarter, Healthcare XX.X%. year by Our margin to and

impact price improved improved to costs. we implemented pricing, at operations, due due of large the projects that and by increased and EdgeBuilder, pricing XX.X% revenue grew mitigate material substantially increases commodity Gross higher raw division mitigation. to Construction Our margin to commercial

progress XX% our We toward a margin achieving division. gross goal over maintaining Construction for our continue of and make to

new which $XX.X growth it of CEO, could January now and to equity fund of million, I'll internal acquisitions high-return With pursue Rick Construction offering investments, bolt-ons divisions, sectors. Healthcare for over for proceeds go Rick, our ahead. the completion entry With our XXXX we're our Coleman. or business be please that, into to to either gross our well-positioned or turn

Richard Coleman

COVID-XX by Thanks, our availability same Gross gross in as cameras. radiopharmaceuticals and million. were Jeff. and the driven quarter sold sold. period well same year, contracts continues business total primarily the were revenue higher for a last percentage period patient, also pandemic. The favorable the profit drivers increased In by increased higher fewer the the scanning recover mix percentage $XX.X also over processed of of increased to higher-margin revenue, cameras margin increase by points factors There profit Healthcare partially including total over X.X% of to X.X positive mix and division from year, by the quarter, due was increased first the as our offset in to contributing days. contract last employee a decrease more by as sold, quarter, Customer, XX.X%, positive products products

review will call our Now, quarter Dave provide first results the Noble, Construction please ahead. additional Dave, who will highlights. our turn the and to CFO, division, go I over of financial

David Noble

Rick. Thanks,

the Let division. touch me Construction first upon

as The to in Construction margin This of and large midst and division the and of respectively. XX.X% XXXX revenues revenue second Star gross dormitories contract prior-year we're revenue $X.X Construction quarter. increase executing the in a KBS million better margin timing, revenue price a The EdgeBuilder in revenue risk. $X than the to XX.X%, the percentage revenue but gross during of -- well increase during mitigation as projects was first which in quarter. business, $XXX,XXX as quarter $XX.X in to Together, risk increase was first based First due business KBS to the offset small materials The was for were revenues for mentioned, miss, the percentage Construction more very Equity's large quarter. compares in driven timing. period, X.X% accounted really an at million our revenues million by I for commercial due consolidated on decrease our in build

projects. pricing We and in our have the also higher significantly both increased projects levels to residential offset on input costs commercial

Our levels. backlog and sales pipeline remain at record

Star by on SG&A XXXX XX.X% let's a to Now, Holdings. basis, year. increased versus QX in On turn QX consolidated Equity last

increased in and percentage litigation due XX.X% a QX versus outside revenue in was was onetime a of headcount this in SG&A the services, part QX side While increased healthcare as cost on to XX.X% factor. to also big XXXX.

of profit company's quarter results positive from adjusted XXXX Moving in company's on the Non-GAAP XXXX. XXXX. first continuing a was leading negative and had of first net Equity improvement was compared from loss in across This compared first divisions. million operations construction the from EBITDA XXXX adjusted to to a million to continuing of million adjusted a the operations operations in operations the $X.X of quarter XXXX. continuing at of of net compares improvements $X.X net increased $X.X first due loss Non-GAAP of to Star to million. of we loss million increasing the a the for $X.X for both net quarter first line quarter the $X.X healthcare the first for to This million bottom gross XXXX, quarter quarter from loss $X.X in

outflow $X.X outflow of quarter registered an of first we $X.X operating the cash operating an million of XXXX, compared quarter of the to in first cash million For XXXX.

outstanding was were million cash and facilities million $XX in balance our credit with March $XX.X cash sheet equivalent. balance of liquidity As XX, The and strong. our on XXXX,

of in the position $X.X million at was first end Our the net negative overall debt quarter.

over I like Now, would turn for questions. operator call the to to the

Operator

comes proceed Litchfield Thank with Please your line the Research. from you. [Operator question questions. Theodore of Instructions] first Hills Our with O'Neill

Theodore O'Neill

much. very Thanks

that issue a in should On it's Is the KBS quarter, is being you saying? rebound the timing business that down QX? this just were you in saying -- are what

David Noble

that our year, on as year revenues million we mentioned, this but last are $X certain continued second a recognized late the executing project. I into quarter project We Yes.

in not but to it's business. there any slowdown lumpiness in due revenues, So, is

Our pipeline is full. is production schedule and strong our

Theodore O'Neill

Okay. If have in And looks I got almost is almost of litigation SG&A $XXX,XXX amount? I cost quarter. see -- on drop the there SG&A, pull that of this right, going -- it since are by QX like the that $XXX,XXX to if out, we

David Noble

I I'll sure, audit yes, around some Yes, in quarter. that's Yes, cost there take statement. not a some are et increases in cetera, second will cost fair that. itself repeat that the other mean but

Theodore O'Neill

Thanks very much.

Operator

Thank you.

questions. of Group. Maxim comes question line Sullivan Please with from Tate next the Our with proceed your

Tate Sullivan

have versus COO since Rick, of beginning you [indiscernible], far? talk thank last the strategic but month seen near what and you CEO the your year and goal you've morning. Hi, been long-term Star so about [Indiscernible] you. for term starting Good can

Richard Coleman

Sure, happy to do that.

and the doing. So, got as the in from guess the month usual that time -- diving onboard, first up what I is already of the I since rest with catching the being has teams

at making would are the and XXXX Dave team great forward. We that business the positioning success during rest I say going last progress for that of KBS. of really began half

EdgeBuilder our course, at there. ourselves as again, And of and minor changes to that been opportunities for of some We're for business, to position strong, be construction the healthcare now is looking try business well portion continues making growth to stronger strong, Our has even way. growth. and

Tate Sullivan

about then, project, million David, mentioned, pipeline. And backlog KBS Great. Thank -- think of it as $X I hope you? Is be much and and Do on record above-average please? Is duplicate that still better to of forward for going of Rick. side, sized sales kind project you university an going you, Dave the you types of projects talk to that project size are Can with to that have multiple project? concentration, smaller?

David Noble

will that. Sure. take Dave, I

Richard Coleman

Okay.

David Noble

you go, or Rick, go? want want to to me You

Richard Coleman

No, go ahead.

David Noble

clearly, would based that Okay, ever. that's that's ASP. largest yes, single we've the project the projects in done so say that fundamentals I we business And on the in evaluate

in million is that the So, scale which it's that typical. shy away have of state sense commercial $X multifamily we secure and size these some a it us, large range, if they got more we a for from more a $X trying that's in bit factory. not more number but doing projects in and win production other that multifamily to do million, anything probably bring as size, slots and higher And makes million, that of months, we've projects, $X realistically, XX well. project. But on do last projects we focused little of margins, standardization, the our hopefully will really I would and would

away but we of size to one, a big not size, shy range. doing that a would they're going that's but others say sort half that typically, than be of from more would I So,

Jeff Eberwein

four it's that Hey, size, is dorms. one Tate. of question, the total is the This about is million project but Really Jeff. things $X good

And that way, kind so, project. in four a of of it's subsets

that gets thing it's with an into for all working vertical. a things a cyclical. lot us a well-known a be And colleges/universities, have it think markets, we There's new I can needs. university construction it's different on a modular. do. lot other is with. that a It's working We're a just small very their we're our study can of can -- great case important housing student be thought a with know And different And that in market. player things lot of we is that prestigious, big end of to different

clients, end markets, have better. And so, the we more projects, the diversity of

Tate Sullivan

I conversations slower been mean, expected, and going this addressed fundamental Thank about you have end with costs, market you, through market more customer on general you funding and concerns rates, your than and Jeff. lumber or the at projects none me, any on higher or side, everything we interest that is in point? with come KBS And for the and costs, always but hear one delayed, any in higher

David Noble

high very as mean, that as for expect pipeline an haven't full. endowment, very the that we're I that been. ever The it's university project which yet. but at it's one that's -- is condition, We seen It's funded mean might as extreme their is as doing, large. our it's by still I strong

element was We Martha's that by XXXcX government. financing was some housing project from a And real on funded X in million help the that just that. finished to with size. workforce Massachusetts no there's So, Vineyard

point, seen don't you Financing Even yet. that at there. that, to we projects, we be place, some I we the not still -- demand yet. have see but seems mean, So, really any seen I just seen haven't see the might in haven't slowdown. that and is in private

Jeff Eberwein

over of time, would quality sensitive, lower-end less and saying, price focused we've what a business, it it's more it's gone a projects. more client I period more price deliver. -- do residential, on lot a say complicated to higher was long this used transformed Dave point good And time too higher-end, question, to we've a And like and much

So, that business done over I we've transition period of think years helpful. the that is

Tate Sullivan

I being gross may, XX%, if more on healthcare, profit One quarter, expand we'd benefits as margin quarter, I up XX% mean, one-time gross well, at Thank can can -- you as so margins, talk still margin, prior is you. that it about still please? odd there margin business profit were from look true in the XX% that you the to a that on

Jeff Eberwein

had as in and were is -- sales good same often but usually -- doesn't QX in this I say the we in Yes, quarter, is one-time department. we thing that selling the margin that do would have very And a benefits. does. cameras There the low is Jeff. the business highest selling gross we margins are camera cameras, no highest services QX, fourth pretty

And so, that was helpful.

business if the higher is to disappointed gross over margin wouldn't be only time. this XX%. that it be We'd of I than like So,

low So, it XXs. call

Tate Sullivan

Okay, thank you all.

Operator

any Instructions] back Thank would questions further comments. the no at closing over to I time. turn [Operator call are you. Jeff you. like to for Eberwein There Thank this

Jeff Eberwein

Operator. you, Thank

I'd to questions we're discuss call, this Before take additional you call, might concluding to like available any your have. always note and

don't contact So, to please hesitate us.

investors continue We and in existing our with to weeks coming share months. story potential and will the

As always, support. your shareholders, continued our all feedback and Thank appreciate and you. we

Operator

participation. conclude Thank appreciate teleconference. you. This does We today's your

may your lines You rest at disconnect day. the of your this Enjoy time.

Star Equity (STRR) 23 May 222022 Q1 Earnings call transcript