Star Equity Holdings, Inc. · NASDAQ:STRR
Star Equity — Investor Presentation (December 2021)
36 slides from Star Equity's investor presentation, Dec 1, 2021
Slide 1: A Diversified Holding Company with a Private Equity Strategy
* Star Equity Holdings A Diversified Holding Company with a Private Equity Strategy Common Stock: Series A 10% Preferred Stock: Nasdaq: STRR Nasdaq: STRRP Growing shareholder value through excellence in operations and disciplined capital allocation Investor Presentation December 2021 Investments
Slide 2: Forward-looking Statements
Forward-looking Statements Star, “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 1985. All statements in this presentation that are not stat
Slide 3: About Star Equity Holdings
About Star Equity Holdings (Nasdaq: STRR; STRRP) * Star Equity Holdings Diversified holding company with a private equity strategy Business divisions are operated by local management; corporate HQ functions like a PE firm Recently closed sale of non-continuing healthcare businesses for over $20 mill
Slide 4: Investment Highlights
Investment Highlights * Star Equity Holdings Benefits of Our Holding Company Structure 2020 Financial Summary (vs. 2019) ¢ Enhanced revenue, cash flow, and earnings growth due $78.2M $14.0M to stronger operations, cost savings, better funding, and Revenue Gross Profit other efficiencies +7.2% -18.5%
Slide 5: Our Differentiated Corporate Strategy and Structure
* Star Our Differentiated Corporate Strategy and Structure Laquity Holdings Similar to Private Equity 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 Flexible deal structuring: pursu
Slide 6: Business Divisions and Corporate Structure
Business Divisions and Corporate Structure OPERATING CEOs °* Manage Operating Businesses © Develop Organic Growth Opportunities * Pursue Bolt-on Acquisitions a ae Vs CURRENT OPERATING BUSINESSES Healthcare {bolt-on acquisitions to expand existing divisions) FUTURE OPERATING BUSINESSES Future Acquisi
Slide 7: Business Divisions: Healthcare
oe Star Business Divisions: Healthcare KStar,
Slide 8: Healthcare
Star Healthcare KStar, Digirad Heal 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 installed
Slide 9: Digirad Health: Diagnostic Imaging
Digirad Health: Diagnostic Imaging KStar. Designs, manufactures, and sells proprietary solid-state cameras under the Digirad brand name with unmatched imaging and flexibility; Services the existing installed base * Digirad cameras SUPERIOR FLEXIBLE SOLUTION. - Image quality Customers: Physicians 7)
Slide 10: Digirad Health: Diagnostic Services
Digirad Health: Diagnostic Services KStar, 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 Mainly Digirad cameras SOLUTIONS / EQUIPMENT QR STAFF Provides turnkey, diagnos
Slide 11: Healthcare: Financial Summary
Healthcare: Financial Summary * *Star Equity Holdings Revenue ($ in millions) Gross Profit ($ in millions) $18 70 ; $61.6 $16 $15.4 $60 $14 $49.2 $50 $12 $43.0** $10.2 $.3** $20 $35.9** $10 j 8 $7522 $30 2 $6 $20 fn $10 $2 cS is FY 2019 FY 2020 9M 2020 9M 2021 FY 2019 FY 2020 9™M 2020 9M 2021 ring t
Slide 12: Business Divisions: Construction
Pe ; Star Business Divisions: Construction KStar,
Slide 13: Construction
* Star Construction Equity Holdings Star Modular Constructi Maine/New England Minneapolis-area | KBS Builders | | EBGL | * Designs and manufactures custom, * Designs and manufactures structural wall modular housing units for single-family panels for commercial-scale, multi-family and multi-family pr
Slide 14: Construction: KBS Builders
Construction: KBS Builders %* Star Equity Holdings Maine-based designer and manufacturer of modular housing units and wall panels MODULAR UNITS - Residential homes and town houses - Apartment buildings and condos - Multi-story commercial/office buildings - Other commercial applications, hospitals, s
Slide 15: Construction: KBS Builders - Key 2020 Wins
Construction: KBS Builders - Key 2020 Wins *Star Equity Holdings size __| $6.7 Million $2 Million Tocci Building Corporation 3-phase contract to manufacture 124 building modules creating 28 single-family and townhouse units for the U.S. Army Natick Soldier Systems Center in Natick, MA South Paris, M
Slide 16: Construction: EBGL
* Star Construction: EBGL Eau a HOldines Two facilities, but managed together 8 EDGEBUILDER: GLENBROOK: - Operates a 34,000 sq. ft. leased wall panel and - Operates a 30,000 sq. ft. leased professional lumber yard and wood products manufacturing plant in Prescott, WI showroom in Oakdale, MN - Servic
Slide 17: Construction: Financial Summary
Construction: Financial Summary* x Star quity Holdings Revenue Gross Profit ($ in millions) (S$ in millions) $35 $34.0** $5 $28.9 $4.1 $30 $4 $25 $3 $2,782 $19.1** §2.0* $20 H $2 $15 * $11.3 si $10 $5 = : wn Loo FY 2019 Fy2020 9M2020 9M 2021 FY 2019 Fy2020 9M2020 9M2021 * Star Modular Construction w
Slide 18: Business Divisions: Investments
Business Divisions: Investments ‘ep a Star lrcermente
Slide 19: Investments
Investments %* Star Equity Holdings Star Investmen | Real Estate | | Investments | * Owns and manages the real *° Strategic investments in estate assets of Star Equity’s potential acquisition targets or operating companies JVs for Star Equity * Negotiates standalone financing to optimize financial l
Slide 20: Star Real Estate
Star Real Estate * Star Equity Holdings Formed in April 2019 with two purchase and leased back transactions: Star Real Estate Holdings USA, Inc. (“SRE”) (&) SIGNIFICANT STRATEGIC VALUE & UPSIDE POTENTIAL * Acquired and manages three manufacturing plants in * Three plants are within 15 miles of each
Slide 21: Financial Highlights and Growth Initiatives
Financial Highlights and Growth Initiatives * Star Equity Holdings Growing SHAREHOLDER VALUE through EXCELLENCE IN OPERATIONS AND DISCIPLINED CAPITAL ALLOCATION
Slide 22: Financial Highlights
Financial Highlights * %*Star Equity Holdings Revenue by Business Division Gross Profit by Business Division ($ in millions***) ($ in millions***) 90 : $78.2 Grote sig $17.2 $80 $72.9 = $17 $2.0 $14.0 $70 $15 = $28.9 ee $60 $55.0 $34.0 $13 gaa soa $50 $11 S83* 40 $19.1 $9 $27 $30 $7 $20 $49.2 $43.0
Slide 23: Growth Strategy
Growth Strategy %* Star Equity Holdings ORGANIC GROWTH OPPORTUNITIES Healthcare Construction ¢ Increase sales of proprietary, high-margin portable * Increase KBS’s modular manufacturing output by nuclear imaging cameras through continued debottlenecking / expanding South Paris plant and fully re- ad
Slide 24: Fully Funded and Positioned for Growth
Fully Funded and Positioned for Growth * Star Equity Holdings RECENTLY CLOSED SALE OF ASSETS FOR $20.14 MILLION PROCEEDS TO FUND..... * Sold DMS Health Technologies, Inc. business unit for $18.75 * Growth in the Construction million; transaction closed on March 31, 2021 division © Proceeds used to p
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 me Diversified business lines with multiple revenue streams »s Healthcare business historically has provided stable cash flow \ * Star @ Construction business has significant growth potential Equity Holdings | “ $78.2 million of revenue, $14.0 million of
Slide 27: Management Team
%* Star Equity Holdings Management Team a ae | Corporate i} O | JEFFREY EBERWEIN DAVID NOBLE MATTHEW MOLCHAN MATT MOSHER RON SCHUMACHER EXECUTIVE CHIEF OPERATING OFFICER & ceo: GENERAL MANAGER: —_ EXECUTIVE CHAIRMAN: CHAIRMAN CHIEF FINANCIAL OFFICER DIGIRAD HEALTH, INC KBS BUILDERS, INC EDGEBUILDER,
Slide 28: Appendix
* Star | Appendix Equity Holdings
Slide 29: Historical Financial Data: Statements of Operations
Historical Financial Data: Statements of Operations * (¢ in 000s) x Star . quity Holdings Nine Menths ended ester 30, revenues: estes 8 foes as907 auo2s 19.961 rn nr estes am zon nes Total corttrevenues as samt 10097 asa99 v0 ae 1298 1496 Sa tenesewres oa i a ‘Senouaoaloreatabse ____ Heahcaetosseete
Slide 30: Historical Financial Data — Balance Sheets
Historical Financial Data — Balance Sheets * ($ in 000s) KStar. "el eles meine pny an ese ety ee 30
Slide 31: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA * (5 in 000s) *Star Equity Holdings Diagnostic Diagnostic ‘Star Equity ForThe Nine Months Ended September 30,2021 services Imaging Construction __Investments__Carporate etal ‘Net income (loss) from continuing operations 2250 $ 3,068 S$ (5,563) $ (284)
Slide 32: Supplemental Debt Information
Supplemental Debt Information * (¢ in 000s) KStar, i _Septem December31,2020 Welghted-Average ‘Amount ‘Amount Interest Rate Revolving Credit Facllty - Gerber KBS 3 3,452 $ 4098 6.00% Revolving Credit Faclity - Gerber EBGL 2,036 2016 6.00% Revolving Credit Faclity -SNB 7,398 42,710 2.64% ‘Total Short
Slide 33: Star Equity's U.S. Federal Tax NOL Carryforward
Star Equity’s U.S. Federal Tax NOL Carryforward * Star Equity Holdings U.S. Federal Tax NOL as of 12/31/2020 $94.9M U.S. Federal Tax Usable NOL as of 12/31/2020 $94.9M U.S. Federal Statutory Tax Rate 21% Potential Cash Taxes Saved $19.9M Shares Outstanding! 5.1M Potential Value Per Share (0% disc ra
Slide 34: Capitalization Table
Capitalization Table %*Star Equity Holdings Fully Diluted Capital Structure as of September 30, 2021 in thousands except price per share) Shares Price Market Value (Common Shares * 51212 § 2.72 $ 13,929] Marrants * 730 $ 0.47 S343) flows Series A Preferred * 1916 $ 10.00 $ 19,156] Inet Debt $8,286)
Slide 35: Other Publicly-Traded Holding Companies
Other Publicly-Traded Holding Companies *Star Equity Holdings SE small ca Market Capt) Great Elm Group Inc. ALI Regional Holdings Inc. Elah Holdings Inc. Crawford United Corp Ault Global Holdings Inc. BBX Capital Corp SWK Holdings Corp INNOVATE Corp. Steel Partners Holdings LP‘)?! Boston Omaha Corp”
Slide 36: Contact Us
Contact Us x Star quity Holdings Equity Holdings Jeff Eberwein THE Executive Chairman ES EQUITY GROUP David Nable Tee COO/CFO admin@starequity.com Investor Relations Lena Cati The Equity Group Inc. Vice President 212-836-9611 / Icati@equityny.com
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