STRR - Earnings call transcript Q1 2024 | Star Equity Holdings, Inc.

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Operator

Greetings, ladies and gentlemen, and welcome to Star Equity Holdings First Quarter 2024 Results Conference Call. Please be advised that the discussions on today's call may include forward-looking statements. Such forward-looking statements involve certain risks and uncertainties 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, 10-Q and other filings for a more complete description of risk factors that could affect these projections and assumptions. The company assumes no obligation to update forward-looking statements as a result of new information, future events or otherwise. Please also note that on this call, management will reference non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted net income and adjusted earnings per share, which are all financial measures not recognized under U.S. GAAP.

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

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

Richard Coleman

XXXX first operator. call. you, for us Thank our morning, joining Good results conference for Thanks quarter everyone.

our Chief earlier call Executive with on the On XXXX announced Eberwein; our of today's we'll the Timber first we Officer, results, an acquisition Noble. We'll Financial and which Technologies, call update discuss quarter morning. with begin Jeff Chairman, then Dave and this today me are our

found be acquisition details we on the filed with and the Additional can Exchange updated presentation on www.starequity.com. on at X-K investor Securities the and Commission our website

[ our (sic) expected than the Our Business of ] weaker headwinds XXXX due primarily to first facing were results quarter continued impact Solutions economic Buildings division.

been is into is of while which due slipped be project the now customer first could completed quarter this X fall. projects to we to have quarter remaining financed to and the the in Three delays. not large expected and completed now second Specifically, commercial scheduled be completed, projects, completed financing be these

XXXX. decreased revenue million result, first of to quarter in to XXXX $X.X a our first compared $XX.X quarter million XX.X% the As

environment expanding These our XX.X% profit Our versus period decreased last gross and same year-over-year. XX.X% reason quarter-to-quarter the revenue strong backlog seeing in unusual believe for sector-wide, signed for and a diversifying and and there we XX.X% the the is the new roughly challenging are to fluctuations pipeline averages. markets focus year, base. Despite our construction equivalent gross key our We impact that we're margin and demand on is historical was aren't sales by temporary remain serve. in our

partner that reputation discuss later. mark high-quality acquisitions is continue new exploring Solutions is at our and our Technologies, strong, Business division. elements industries our Investments opportunities we expansion, focus our Our of on to a reliable by growth would strategy, which entry new as and This of all Timber I'll focus including and division into acquisition exemplified

additional Now I'll Dave, Dave turn quarter the consolidated to ahead. highlights. CFO, first go to Noble, our call over provide please financial

Unknown Executive

right... Dave? All

Richard Coleman

having mobile connection and on [Technical Difficulty] is Dave his difficulties.

President Senior So going Vice to we're our Strategy. and of Finance have

David Noble

Okay. Go ahead, guys.

Sorry, on I was mute.

Shawn Miles

All right.

a which net outside net XXXX. XXXX, QX in Let's consolidated from activities. At QX Star $X.X the XXXX, compared of in a flow from XXXX. Non-GAAP before our this loss $X.X cash lower operations, now on for to of Healthcare an was and our million adjusted million division services mainly QX adjusted is stand-alone in increased of increases of cash Solutions million due QX Investments reported million loss and as primarily in sold QX, SG&A turn $X.X sale basis, note, working million Solutions QX operations down from Non-GAAP now Building decrease part XXXX. loss divisions. Of of was On historical results result million relate net net continuing of financial positive results. $X.X $X.X Due million of company Health, an to of XXXX. Building million last revenues QX from Equity, bottom May Building our adjusted positive which of X, was versus QX $X.X to operations and we inflow Star discontinued QX all Equity's in capital higher which QX versus of for breakeven net expenditures. is legal non-GAAP in was for our our a to QX Solutions generated related continuing income operations. of include compared we comparisons loss versus in Digirad million EBITDA XXXX. Consolidated a of public QX a XXXX, In line, costs, in flow in only operations continuing to operations driven by $X.X outflow XX.X% in and business $X.X the adjusted acquisition by continuing of This an a $X.X EBITDA continuing was from of to year, expenses to reported division

XXXX, $X.X just $X.X stood consolidated March first end unrestricted XX, balance sheet strong. we quarter, consolidated $XX.X to had of million at our our and interest-bearing in as cash the a As year million ago. remained QX of debt, of the million At and balance compared at liquidity the end

Turning our to Investments division.

to end to $X.X from and $X.X rollover $X.X are Our investments million, million, our receivable the and equity equity valued quarter sale securities at Healthcare our while resulted of amounted the at TTG note million business respectively. of the

some acquisition. to call Tech like Timber to Rick back on to provide information our the turn additional Now over I'd

Richard Coleman

Thank you.

mentioned, its division Timber which, the leader the Building established manufacturing continue a this operations at to will we in I manufacturer wood as existing has glue-laminated will founding As Technologies, square XXXX, foot of engineered since facility. within manufacturing the wood day-to-day Tech run its products its and team in XX,XXX our itself announced Solutions a morning, of products. Timber Wisconsin-based operate acquisition

also acquire manufacturing of a to XXXX. the in of the associated and transaction we June will part estate in acquisition, close As real facility expected separate

Construction noted, Solutions our expanded you opportunities. Building better division the to division's future As capabilities probably to describe we've renamed and

materials is one With have experiencing sustainable the increasing compared or to strength, such industry, adoption also share sustainability entered building acquisition solid timber superior market environmental concrete taking of glue-laminated as durability the and glulam, Its that aluminum. alternatives. steel, products and Timber over and from are engineered Tech, structural wood products, we less wood

believe is market growth Midwest products and that the for poised markets. range Northwest. multifamily construction important broader in consolidation. Timber we strong currently are manufacture a augment We and footprint the segments market long-term but components Tech's residential products has this They and of end a Tech of Timber serve, that

are the you months. decking, coming sheds to sharing to airline we're agricultural example, market, treatment hangars. We expanding bridge livestock and in looking barns, believe machine For forward dairy products and their and used is crane wastewater facilities, mats, an this industrial build in more with even

we unaudited reported of EBITDA division profitability of overall trailing cash EBITDA Timber strong million. Again, creating adjusted Timber of reported our to the of In roughly million and Building scale, Timber X/X fiscal million. expect half on have using Building $XX.X comparison, financials revenues pro unaudited million financials Solutions division XX-month revenue division's generation financial addition basis, and In history of over Solutions forma $X.X Tech's of of $X.X Tech's and $XX.X revenue adjusted XXXX a Tech would XXXX, represented to position. our EBITDA. year and our improve In

XXXX I want acquisition and our in growth of to emphasize Before transaction strategy. overall opening questions, that the steps floor the the significant Lumber of execution are to Big Lake this

months. shareholder been $XX we May, the Digirad through additional our and million business are sale has last on of As today XX our case the Equity made financially following X in when ago last much creating established targeted for progress the focused company better is several structure. than business value also especially initiatives. Star our and years, a development great years operationally holding business we We've

now and to stronger the undervalued to and coming disciplined upside Solutions we through stakes which for sheet, months, operator turn cleaner a balance organic an our Investments companies, believe continue have we look we well-established shareholder sharing Building division public our potential. In division forward efforts and have We acquisitions. I create in to a accretive the call over with questions. significant several determined and as the profitable growth progress value will private

Operator

from Hills O'Neill first question with today Theodore The Instructions] comes Litchfield [Operator Research.

Theodore O'Neill

self-explanatory. seems quarter the Rick,

Could Technologies. you helpful on out Or ship the make So I'd questions that And and this other going you much Solutions? Timber this synergies Building pretty And like is is couple of Technologies is a talk Coast? components between be it Can what -- to financing then about could are stuff talk the of you sense? here? is this about The local the Timber a the about please? shipping? by Does that for to something well, East things. you -- to limited ask business as there

Richard Coleman

Yes.

let give That's easy me the take one. the first. shipping -- me about question Just

from product East the to the shipping not Wisconsin approach. think best probably is Coast the I

looking our very, an at very vacant of expansion However, as factory, we how of is and we vacant group Solutions business division. number the Building one expand do We're in you into different a expanding of executives factory our glulam to talented of alternatives. alternatives have those recall. a have of our And

-- close our located sitting Colfax, I'm around drive new in We're factory currently to in businesses our short Minneapolis to the Wisconsin, area. very and

for So synergies. obvious opportunities are there

for the different those to between cooperation us. we that rationale as the yield and identified haven't for expect the We but deal, the benefits coordination divisions do going is

Theodore O'Neill

bit little for this? financing the a talk about just you could And

Richard Coleman

that take one? to want you do Dave,

David Noble

Sure.

in which our local leverage Bridgewater So extent on area. we a the the purchase it did financing cash some this, we to to hoard Bank, lot of to were piece, use Minneapolis the able help but bank with is

acquisition term a million this loan. those amortizes we X-year X rate, it's in structure think It's is so over which at did And a we X.XX% a pretty years, attractive. $X that and environment

Operator

next Group. Sullivan The question Instructions] comes Maxim with Tate [Operator from

Tate Sullivan

products On at a already Timber, wood glulam? EdgeBuilder? applies label to KBS Lake, and the consideration EWP can it you is Or the with say engineered or different that you what do

Richard Coleman

for Yes, there some of I different sector. both expansion are it's in Obviously, a opportunities businesses. those say would

new down probably us and we that strong it some overlap is a is the and growing. there's believe for sector but road, one So

Tate Sullivan

Timber engineered -- else? I mean, so Technologies, there refers And the just specifically EWP, industry to wood or products,

Richard Coleman

the Yes. engineered Technologies of a wood Timber part products industry. is

Tate Sullivan

timber, does briefly, of the company have? And what can what what is facility for just you manufacturing the kind glue-laminated process -- --

Richard Coleman

It's have years that of of dedication we're in has It's and first build The the inputs get this a that really companies products facility very those The over into primary for There the with combining a business. attempted lumber much and sophisticated has process and number it's the might impressive and talent structural is over to very large. very, that have successful company undertaken a than been its failed, building the a -- built inception. expanding business been to -- think. facility. of wood more all, pleased team glue. since and very But years are the different and one very

Tate Sullivan

square separate it XX,XXX did all separate facility And and or facility? facility, facilities, it then is foot you mention, the the one is X manufacturing

Richard Coleman

That's all all. It's one.

Tate Sullivan

Okay.

for is square? XX,XXX transaction estate the So real the subsequent

Richard Coleman

Yes, the -- right.

Tate Sullivan

on Okay. pipeline in KBS, Or it's to is I then And lower market? purely it the seeing the financing are related mean, competition being financing willing environment, and to any to confirm, availability? mostly prices you mentioned, the from you out pushed take this

Richard Coleman

that to some feedback in longer getting we more. we're can gather, degree, the costing just Financing the the the experiencing, From and is intelligence taking everyone is issue. and industry that same

So in financing. in completed delayed be small month, when ours, a a a for small to has if like business is we month relatively impact project quarter or it business, this on expect the our particular significant large that project

Operator

This call concludes turn to for the Rick I over will Coleman closing Instructions] remarks. question-and-answer [Operator session. today's back

Richard Coleman

operator. Thank you,

might discuss any we're and want available us. your Don't additional reemphasize hesitate have. Before always to that to I to concluding, you contact call questions take

as and As continued support. in interest Thank always, we well company your our you. as appreciate your feedback

Operator

joining at section and been Investors recorded be of call Conference for Today's available will the website Star www.starequity.com. Equity Call. Quarter First you the Thank has our Holdings on

Star Equity (STRR) 20 May 242024 Q1 Earnings call transcript