Star Equity Holdings, Inc. · NASDAQ:STRR
Star Equity — Digirad — IPO Roadshow (May 2020)
32 slides from Star Equity's IPO roadshow presentation, May 12, 2020
Slide 1: Free Writing Prospectus
Free Writing Prospectus Filed Pursuant to Rule 433 Issuer Free Writing Prospectus Dated May 12, 2020 (to Preliminary Prospectus dated April 30, 2020) Registration Statement No. 333 - 237928 This free writing prospectus relates to the proposed public offering of securities of Digirad Corporation (the
Slide 2: Digirad Corporation Investor Presentation - May 2020
Building & Construction Real Estate & Investments Healthcare Investor Presentation - May 2020 DIGIRAD Corporation A Diversified Holding Company (HoldCo) seeking growth both organically and through acquisitions Common Stock Nasdaq: DRAD Series A 10% Preferred Stock Nasdaq: DRADP
Slide 3: Safe Harbor Statement
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995 : This presentation contains forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 . All statements in this presentation that are not statements of historical fact are
Slide 4: Offering Summary
4 Offering Summary ISSUER: Digirad Corporation (“Digirad” or the “Company”) EXCHANGE //SYMBOL : Nasdaq GM // DRAD Shares Outstanding (1) : 2,055,158 OFFERING SIZE: $5.0 million (excluding 15% over - allotment option) OFFERING TYPE : S - 1 Follow - On Offering SECURITIES OFFERED: Common stock (or pre
Slide 5: Digirad Corporation (NasdaqGM: DRAD)
Digirad Corporation (NasdaqGM: DRAD) Common Stock: ( Nasdaq: DRAD) 2.05 million shares as of 3/31/20 Series A Preferred Stock ( Nasdaq: DRADP) 1.92 million shares as of 3/31/20 10% annual cash dividend 5 Digirad Corporation has three operating business divisions: Diagnostic Imaging Diagnostic Servic
Slide 6: Management team
6 Management team DAVID NOBLE CHIEF OPERATING OFFICER & CHIEF FINANCIAL OFFICER • Over 20 years of experience in investment banking; recently was Head of Equity Capital Markets for the Americas at HSBC. • Served as Managing Member of Noble Point LLC, a business and financial advisory firm. • Holds a
Slide 7: Investment Highlights
Investment Highlights 7 FY 2019 Highlights (vs. FY 2018) Benefits of Digirad’s HoldCo Structure • Improved revenue, cash flow, and earnings due to cost savings and other efficiencies • Optimized capital allocation expected to maximize ROIC and ROE over the long term • Operating CEOs focused substant
Slide 8: HoldCo Structure
HoldCo Structure 8 Publicly - Traded HoldCo CEO: Matt Molchan Healthcare CEO: Matt Molchan Real Estate & Investments Building & Construction GM: Matt Mosher/Scott Jarchow HoldCo Chairman (Jeff Eberwein) HoldCo COO and CFO (David Noble) HoldCo VP - Legal (Hannah Bible) Bank Relationships Treasury Fin
Slide 9: Operating Business Divisions
Operating Business Divisions 9 Healthcare Building & Construction Real Estate & Investments 1 2 3
Slide 10: Digirad Health
Digirad Health 10 1 Diagnostic Imaging Diagnostic Services Mobile Healthcare Across the USA Healthcare Offers mobile imaging services to medical providers in - office Provides mobile diagnostic imaging including CT, MRI, PET, PET/CT, and nuclear medicine and healthcare expertise Develops, sells, and
Slide 11: Digirad Health: Diagnostic Imaging
Digirad Health: Diagnostic Imaging 11 Manufactures, sells, and services a wide range of solid - state cameras that offer unmatched imaging and flexibility SUPERIOR - Image quality - Greater flexibility - Smaller footprint - Fast imaging acquisition times NATION - WIDE FIELD SERVICE Engineers provide
Slide 12: Digirad Health: Diagnostic Services
Offers mobile imaging services to medical providers on - site as an alternative to purchasing the equipment themselves or outsourcing the procedures to other providers Digirad Health: Diagnostic Services 12 Website : https : //www . digirad . com/diagnostic - services/ STAFF Offers highly - skilled,
Slide 13: Digirad Health: Mobile Healthcare
LARGE FLEET - Bone Densitometry - Cath Lab - CT Scanners - Mammography Units - MRI Units - Nuclear Medicine Units - PET/CT Units - Ultrasound Units Digirad Health: Mobile Healthcare 13 Provides provisional healthcare and contract diagnostic imaging through a convenient, mobile - service platform EXP
Slide 14: Digirad Health: Financial Highlights
$49.3 $47.7 $11.6 $12.0 $12.0 $13.9 $3.6 $4.9 $42.9 $41.3 $10.8 $10.6 $- $20 $40 $60 $80 $100 $120 FY 2018 FY 2019 Q4 2018 Q4 2019 Revenue by Healthcare Division ($ in million) Diagnostic Services Diagnostic Imaging Mobile Healthcare 14 Digirad Health: Financial Highlights $9.5 $10.2 $1.8 $2.7 $5.1
Slide 15: Building and Construction
Building and Construction 15 2 KBS Builders EGBL Building & Construction • Manufactures and distributes modular housing units • Commercial and residential projects • Manufactures engineered wood products and building materials for both residential and commercial contractors • Operates a professional
Slide 16: Building and Construction: KBS Builders
MODULAR UNITS - Residential homes / town houses - Apartment buildings and condos - Multi - story commercial/office buildings - Other commercial applications, hospitals, schools, etc. Building and Construction: KBS Builders 16 Maine - based designer, manufacturer, and distributor of modular housing u
Slide 17: Building and Construction: EGBL
Website: https://edgebuilderwallpanels.com/ Building and Construction: EGBL 17 - Operates a 34 , 000 sq . ft . leased wall panel manufacturing plant in Prescott, WI and services the Midwest Area - Clients : commercial contractors - Operates a 30 , 000 sq . ft . leased professional lumber yard and sh
Slide 18: Building and Construction: Financial Highlights
18 Building and Construction: Financial Highlights $34.5 $8.5 $11.3 $- $5 $10 $15 $20 $25 $30 $35 $40 FY 2018 Q4 2019 FY 2019 Revenue ($ in million) ATRM Part of HoldCo Since 9/10/2019 $3.0 $1.5 $2.0 $- $1 $1 $2 $2 $3 $3 $4 FY 2018 Q4 2019 FY 2019 Gross Profit ($ in million) ATRM Part of HoldCo Sinc
Slide 19: KBS Growth Drivers – Actionable Near Term Opportunities
19 KBS Growth Drivers – Actionable Near Term Opportunities • Commercial and residential segments driving growth over past 6 months o Key hires driving success o New sales associates targeting commercial scale projects o $ 50 m+ total pipeline and backlog validates our strategy shift towards commer
Slide 20: Real Estate & Investments
Real Estate & Investments 20 3 Real Estate & Investments Real Estate Investments • Owns the real estate assets of HoldCo • Future acquisition targets could have underappreciated real estate assets • Strategic investments could be made in potential acquisition targets for HoldCo
Slide 21: 2019 Financial Highlights & Growth Initiatives
2019 FINANCIAL HIGHLIGHTS & GROWTH INITIATIVES 21
Slide 22: 2019 Financial Highlights
22 2019 Financial Highlights $102.8 $25.9 $27.5 $11.3 $8.5 $0.08 $0.07 $- $20 $40 $60 $80 $100 $120 $140 FY 2018 FY 2019 Q4 2018 Q4 2019 Revenue by Business Division ($ in million) Healthcare Building & Construction Real Estate & Investments $104.2 $114.2 $25.9 $36.1 $20.3 $6.4 $2.0 $1.5 - $0.2 $0.0
Slide 23: 2019 Summary Condensed Balance Sheet
23 2019 Summary Condensed Balance Sheet (in thousands $) December, 31 2019 Total cash $1,821 Other current assets 27,728 Property and equipment 22,138 Operating lease right-of-use assets 4,827 Intangible assets 22,903 Goodwill 9,978 Other assets 1,165 Total assets $90,560 Current liabilities 28,178
Slide 24: Growth Strategy
24 Growth Strategy Seeking attractive acquisition opportunities to: • Expand existing business divisions through bolt - on acquisitions • Create new business divisions for HoldCo Organic Growth Healthcare • Expand geographic and client footprint for higher margin segments such as camera sales and mo
Slide 25: Investment Highlights
25 Investment Highlights Diversified business lines with multiple revenue streams Healthcare business historically has provided stable cash flow $ 114M of Revenue and $7.7M of Adj. EBITDA in 2019 Platform for future bolt - on acquisitions and other growth opportunities Experienced management team wi
Slide 26: Appendix
APPENDIX 26
Slide 27: HoldCo: Future Acquisitions Strategy
HoldCo: Future Acquisitions Strategy TARGETS : PUBLIC OR PRIVATE COMPANIES • Annual Revenues of $ 3 - 10 M that can benefit from lower overhead costs as part of HoldCo structure • Existing assets, earnings, and cash flows (no start - ups or venture capital - type situations ) • Opportunities for imp
Slide 28: Historical Financial Data – Statements of Operations
28 Historical Financial Data – Statements of Operations (In thousands) Three Months Ended December 31, Twelve Months Ended December 31, 2019 2018 2019 2018 Revenues: Healthcare $ 27,540 $ 25,928 $102,846 $ 104,180 Building and Construction 8,528 — 11,257 — Real Estate and Investments 74 — 82 — Total
Slide 29: Historical Financial Data – Balance Sheets
29 Historical Financial Data – Balance Sheets (In thousands) December 31, 2019 December 31, 2018 Assets: Current assets: Cash and cash equivalents $ 1,821 $ 1,545 Restricted cash 240 167 Equity securities 26 153 Accounts receivable, net 18,571 12,642 Inventories, net 7,097 5,402 Other current assets
Slide 30: Other Publicly-Traded Holding Companies
SEPTEMBER 2018 Other Publicly - Traded Holding Companies (1) Based on Bloomberg data as of 03/04/20 - $ in millions. (2) SPLP is a publicly - traded partnership as opposed to a C - corp structure. (3) Incentive fees paid to management teams. Small Cap: Ticker Market Capitalization (1) Business Highl
Slide 31: Contact us
31 Contact us Jeff Eberwein Chairman of the Board of Directors David Noble COO/CFO ir@digirad.com Investor Relations Lena Cati The Equity Group Inc. Vice President 212 - 836 - 9611 / lcati@equityny.com
Slide 32: Digirad Corporation
Building & Construction Real Estate & Investments Healthcare Investor Presentation - May 2020 DIGIRAD Corporation A Diversified Holding Company (HoldCo) seeking growth both organically and through acquisitions Common Stock Nasdaq: DRAD Series A 10% Preferred Stock Nasdaq: DRADP