Star Equity Holdings, Inc. · NASDAQ:STRR
Star Equity — Investor Presentation (June 2022)
36 slides from Star Equity's investor presentation, Jun 3, 2022
Slide 1: A Diversified Holding Company
* Star Equity Holdings A Diversified Holding Company Common Stock: Series A 10% Preferred Stock: Nasdaq-STRR Nasdaq: STRRP Growing shareholder value through excellence in operations and disciplined capital allocation Investor Presentation June 2022 as Investments
Slide 2: Forward-looking Statements
Forward-looking Statements KStar, “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
Slide 3: About Star Equity Holdings
About Star Equity Holdings (Nasdaq: STRR; STRRP) KStar. Common Stock (Nasdaq: STRR): Stock Price 7: $1.03 * Diversified holding company with three divisions * Operating divisions are led by local management; corporate HQ functions like a private equity firm and Wa milena cee manages lnves ments thon
Slide 4: Investment Highlights
Investment Highlights KStar. Benefits of Our Holding Company Structure Financial Highlights ¢ Enhanced revenue, cash flow, and earnings (Q1 2022 vs. Q1 2021) growth due to stronger operations, cost savings, better funding, and other efficiencies $106.6M $25.1M . oo. . . Consolidated Revenue Consolid
Slide 5: Business Divisions and Corporate Structure
Business Divisions and Corporate Structure *Star Equity Holdings OPERATING CEOs ° Manage Operating Businesses * Develop Organic Growth Opportunities * Pursue Bolt-on Acquisitions CURRENT OPERATING BUSINESSES Healthcare (bolt-on acquisitions to expand existing divisions) FUTURE OPERATING BUSINESSES F
Slide 6: Our Differentiated Corporate Strategy and Structure
*Star Our Differentiated Corporate Strategy and Structure fauity Holdings Similar to Private Equity, but with Key Distinctions Looking for accretive bolt- ons and/or new verticals Open-ended investment time horizon allows for flexible holding periods Willing and able to pursue Flexible deal structur
Slide 7: Business Divisions: Healthcare
Business Divisions: Healthcare Star Equity Holdings
Slide 8: Healthcare: Digirad Health
Star Healthcare KStar. Digirad Health Across the USA | Diagnostic Imaging | | Diagnostic Services | Designs, manufactures, and sells Offers mobile imaging services to medical proprietary solid-state imaging cameras providers in their facilities for hospitals and physicians Services existing installe
Slide 9: Digirad Health: Diagnostic Imaging
Digirad Health: Diagnostic Imaging * Star Equity Holdings Designs, manufactures, and sells proprietary solid-state cameras under the Digirad brand name with ® unmatched imaging and flexibility; services the existing installed base * SUPERIOR - Image quality - Greater flexibility - Smaller footprint
Slide 10: Digirad Health: Diagnostic Services
Digirad Health: Diagnostic Services *Star Equity Holdings Offers mobile imaging services to medical providers on-site at their facilities as an alternative to purchasing equipment themselves or outsourcing procedures to other providers SOLUTIONS / EQUIPMENT Provides turnkey, diagnostic solutions to
Slide 11: Healthcare: Financial Summary
Healthcare: Financial Summary * KStar. Healthcare in continued to rebound to more normal levels following a COVID-slowdown, with healthcare providers returning to normal operations and onsite visits. ~ Revenue ($ in millions) Gross Profit ($ in millions) $14 $60 $58.6 $12.5 $12 58 $ $10.2 $56 $10 $5
Slide 12: Business Divisions: Construction
Business Divisions: Construction % Star Equity Holdings Star Modular Construction
Slide 13: Construction
Construction *Star Equity Holdings Star Modular Construction Maine/New England Minneapolis-area KBS Builders EBGL | Designs and manufactures custom, modular housing units for single-family and multi-family projects Rapidly expanding presence in commercial-scale projects in the Greater Boston Area Ow
Slide 14: Construction: KBS Builders
Construction: KBS Builders Star Equity Holdings Maine-based designer and manufacturer of modular housing units MODULAR UNITS 3 MANUFACTURING PLANTS - Residential homes and town Two operated by KBS houses South Paris, Maine: approx. 85,000 sq. ft.; - Apartment buildings and capacity of 500-600 modula
Slide 15: Construction: KBS Builders — Progress on Multifamily Initiative
Construction: KBS Builders — Progress on Multifamily Initiative *Star Equity Holdings PROJECT COMPLETED PROJECT COMPLETED PROJECT COMPLETED PROJECT COMPLETED CONTRACT SIGNED CONTRACT PENDING Martin Realty Manufacture of 58 building modules to be used forthe construction of 32 housing units to renova
Slide 16: Construction: EBGL
Construction: EBGL *Star Equity Holdings Two faci EDGEBUILDER: - Operates a 34,000 sq. ft. leased wall panel and wood products manufacturing plant in Prescott, WI - Services the Midwest Area - Clients: commercial contractors PRODUCTS Wall panels, permanent wood foundations, and engineered wood o 2 p
Slide 17: Construction: Financial Summary
Construction: Financial Summary* *Star Equity Holdings + FY 2021 Construction margins were affected by COVID-related r: + Starting in early 2021, to offset these higher costs, the Company si in. Q4 2021. Margins are expected to benefit further from these increases in 2022. ind historic in raw materi
Slide 18: Business Divisions: Investments
Business Divisions: Investments % Star Equity Holdings
Slide 19: Investments
Investments * Star Equity Holdings Star Investments Real Estate Investments | Owns and manages the real estate assets of Star Equity’s operating companies Negotiates standalone financing to optimize financial leverage and cost of capital Strategic investments in potential acquisition targets or JVs
Slide 20: Star Real Estate
Star Real Estate KStar. Formed in April 2019 with two purchase and leased back transactions: Star Real Estate Holdings USA, Inc. (“SRE”) ( &) SIGNIFICANT STRATEGIC VALUE & UPSIDE POTENTIAL * Acquired and manages three manufacturing plants in * Three plants are within 15 miles of each other — the lar
Slide 21: Financial Highlights and Growth Initiatives
Financial Highlights and Growth Initiatives KStar. Growing SHAREHOLDER VALUE through EXCELLENCE IN OPERATIONS AND DISCIPLINED CAPITAL ALLOCATION
Slide 22: Financial Highlights
Financial Highlights * * Star Equity Holdings ( . oe >) Revenue by Business Division Gross Profit by Business Division (Sin millions) (Sin millions) $120 $106.6 &o $100 $15.2 $78.2 $14.0 $80 $48.0 $14 $3.0 $4. $60 $28.9 $9 $40 $12.5 $58.6 $10.2 $20 $49.2 $4 ~ FY 2020 FY2021 ay) FY 2020 FY2021 Health
Slide 23: Growth Strategy
Growth Strategy * Star Equity Holdings ORGANIC GROWTH OPPORTUNITIES Healthcare Increase sales of proprietary, high-margin portable nuclear imaging cameras through continued advances in hardware design and upgrades Extend and grow high-margin, post-warranty camera support contracts through increased
Slide 24: Fully Funded and Positioned for Growth
Fully Funded and Positioned for Growth xStar Equity Holdings RECENT ACTIONS TAKEN TO STRENGTHEN BALANCE SHEET * Sold DMS Health Technologies, Inc. business unit for $18.8 million; transaction closed on March 31, 2021 * MD Office Solutions (“MDOS”), a small regional operation in Northern California,
Slide 25: Our Acquisition Strategy
Our Acquisition Strategy TARGETS: PUBLIC OR PRIVATE COMPANIES Market cap of $5-50M and more valuable inside our holding company structure Existing assets, earnings, and cash flows (no start-ups or venture capital-type situations) High SG&A and public company costs as a percentage of revenue that can
Slide 26: Investment Highlights
Investment Highlights * Star Equity Holdings ‘SS Diversified business lines with multiple revenue streams ss Healthcare business historically has provided stable cash flow *St ar é Construction business has significant growth potential Equity Holdings | “ $106.6 million of revenue, $15.2 million of
Slide 27: Corporate Management Team
Corporate Management Team KStar, JEFFREY EBERWEIN EXECUTIVE CHAIRMAN * Over 25 years of Wall Street experience; Founder and CEO of Lone Star Value Management * Portfolio Manager at Soros Fund Management and Viking Global * CEO of Hudson Global, Inc., a global recruitment company; extensive public co
Slide 28: Operating Companies Management Team
Operating Companies Management Team KStar, MARTY SHIRLEY : INTERIM PRESIDENT i DIGIRAD HEALTH, INC. | + Appointed Interim President of DHI in May 2022; joined Digirad in 2006; formerly President of DHI’s Services business H + Over 35 years of clinical and industrial experience in medical imaging ind
Slide 29: * *
*Star Equity Holdings *Star Equity Holdings
Slide 30: Historical Financial Data: Statements of Operations
Historical Financial Data: Statements of Operations (s in 000s) KStar, ‘Three Months Ended March 31, 2022 2021 Revenues Hasitnere S148 $13,307 Construction 13531 30007 Total reverse 25,069 72356 costofrevenues Hasttneare 10282 10,709 Construction 10065 93503 Investmeres 29 5s rca Total cost of reven
Slide 31: Historical Financial Data — Balance Sheets
Historical Financial Data — Balance Sheets (5 in 000s) * Star Equity Holdings arch 3, 202 {unc Decerbe 3 2021 — Gpeicrerrh 5 15.035 5 538 Pees Ses 28 EHS eer 15310 sant Genes a7? tse ees ae ice Ca Sees oe coo ness Poh Intangible assets, net 14642 15,072 OMS Heath, Goodwill 6.046 6.046 Ss ‘Other asse
Slide 32: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA (5 in 000s) KStar, Star Equity For The ThreeMorths Ended March 31,2022 Healthcare ___ Construction ___Investments Corporate Total Netincome ss) from continuing operations sm) 6S) SSBB) SS B.7ON) Depreciation and amortization 315 487 9 = son Interest es
Slide 33: Supplemental Debt Information
Supplemental Debt Information (s in 000s) Revolving Credit Facilty-Gerber KBS Revolving Credit Facilty-Gerber EBGL Revolving Credit Facility-SNB Total Short-term Revolving Credit Facilities Gerber Star Loan Principal, net Short Term Loan Total Short-termdebt *Star Equity Holdings March 34, 2022 Dece
Slide 34: Capitalization Table
Capitalization Table KStar, Fully Diluted Capital Structure \in thousands except price pershare) Shares Price Market Value Common Shares* 15,082 $ 103 $ 15,535 Warrants (May 2020) * 702 $ -$ - Warrants (January 2022) > 10,925 $ eas. - 110% Series Preferred# 1916$ 10.00 $ 19,156 INetDebt/(Cash) = $ 2
Slide 35: Other Publicly-Traded Holding Companies
Other Publicly-Traded Holding Companies KStar. Small Ca Market Capt Recently cearganizedholding company (Selo/ Telit Ine, ne Co-sponsored by funds managed by 210 Capital and Goldman Sachs Asset Management * Durable medical equipment Great Elm Group Inc. GEG 67 + Realestate + investment management +
Slide 36: Contact Us
Contact Us *Star Equity Holdings Jeff Eberwein Executive Chairman Rick Coleman CEO David Noble CFO admin@starequity.com * Star Equity Holdings THE EQUITY GROUP INC. Trusted Partners in Investor Relations & ‘Corporate Communications Investor Relations Lena Cati The Equity Group Inc. Senior Vice Presi
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