For immediate release
May 14, 2025

Q1 2025 revenues increased to $12.9 million vs. $9.1 million in Q1 2024

Old Greenwich, CT. - Star Equity Holdings, Inc. (Nasdaq: STRR; STRRP) (“Star” or the “Company”), a diversified holding company, reported today its financial results for the first quarter (Q1) ended March 31, 2025. All 2025 and 2024 amounts in this release are unaudited.

•Revenues increased by 41.7% to $12.9 million from $9.1 million.

•Gross profit increased by 99.2% to $3.1 million from $1.6 million.

•Net loss was $1.2 million (or $0.37 per basic and diluted share) compared to net loss of $2.2 million (or $0.70 per basic and diluted share).

•Non-GAAP adjusted net loss was $1.7 million (or $0.52 per basic and diluted share) compared to net loss of $1.4 million (or $0.44 per basic and diluted share).

•Non-GAAP adjusted EBITDA was a loss of $0.8 million versus a loss of $1.1 million.

“In the first quarter of 2025, consolidated revenues increased by 42% primarily due to inclusion of revenues from the acquisitions of Timber Technologies Solutions (“TT”) and Alliance Drilling Tools (“ADT”), in addition to improved results at KBS Builders (“KBS”),” commented Rick Coleman, Chief Executive Officer. “First quarter 2025 Building Solutions overall revenues increased compared to the same quarter last year, but were still below our expectations as certain commercial projects pushed into the second quarter and residential demand picked up later in the quarter than expected. Looking forward, our Building Solutions backlog, representing orders under contract, stood at a record $27.9 million at quarter end. Given these dynamics, we expect the division to show strong second quarter and full-year 2025 performance.”

Mr. Coleman added, “I’m pleased to report our integration of ADT has been progressing smoothly. With the ADT audit completed, we are now focused squarely on ADT’s future growth. In addition to organic growth initiatives, we continue to identify and evaluate acquisition opportunities for both our Building Solutions and Energy Services divisions.”

The Company’s Q1 2025 revenues increased 41.7% to $12.9 million from $9.1 million in Q1 2024.

Q1 2025 Building Solutions revenue increased by 32.9% from the prior year, mainly as a result of the inclusion of revenues from TT (acquisition closed on May 17, 2024) and improved results at KBS. These improvements were partially offset by slower business activity at EdgeBuilder-Glenbrook (“EBGL”). Economic uncertainty and project delays contributed to the Q1 slowdown at EBGL, which we continue to believe is temporary. Our record backlog of $27.9 million for our Building Solutions segment and strong sales pipeline indicate continued strong demand for new projects. Although the revenue impact and timing are uncertain, customer feedback gives us confidence in our ability to convert this pipeline into signed contracts in the coming months.

Q1 2025 Building Solutions gross profit increased 74.6% versus the same period last year primarily due to the inclusion of revenues from TT and ADT, as well as improved gross profit and gross margin at KBS.

On a consolidated basis, Q1 2025 sales, general and administrative (“SG&A”) expenses increased by $1.2 million, or 28.5%, versus the prior year period, while as a percentage of revenue SG&A decreased in Q1 2025 to 40.7% versus 44.9% in Q1 2024. The major driver of this increase in Q1 2025 was the inclusion of SG&A from TT and, to a lesser extent, ADT, as well as increased M&A expenses in Q1 2025 versus Q1 2024.

Q1 2025 net loss was $1.2 million, or $0.37 per basic and diluted share, compared to a net loss of $2.2 million, or $0.70 per basic and diluted share in the same period in the prior year. Q1 2025 non-GAAP adjusted net loss was $1.7 million, or 0.52 per basic and diluted share, compared to non-GAAP adjusted net loss of $1.4 million, or $0.44 per basic and diluted share, in the prior year period.

Q1 2025 non-GAAP adjusted EBITDA was a loss of $0.8 million versus a loss of $1.1 million in the same quarter of the prior year, primarily due to improved operating performance at our Building Solutions division.

Q1 2025 cash flow from operations was an inflow of $563 thousand, compared to an outflow of $2.4 million for Q1 2024. The increase in net cash provided by operating activities is attributable to favorable results from operations, particularly in our Building Solutions division, and strong accounts receivable collections.

(1) Includes impact of Timber Technologies from date of acquisition on May 17, 2024.

(2) Backlog defined as future revenue under contract (i.e., signed orders).

In Q1 2025, the Company’s board of directors declared a cash dividend to holders of our Series A Preferred Stock of $0.25 per share, for an aggregate amount of approximately $0.5 million. The record date for this dividend was March 1, 2025, and the payment date was March 10, 2025.

As of December 31, 2024, Star had $44.6 million of U.S. federal and $17.6 million of state net operating losses (“NOLs”), which the Company considers to be a valuable asset for its stockholders. Certain of these NOLs will expire in 2025 through 2044 unless previously utilized. In order to protect the value of the NOLs for all stockholders, the Company has a rights agreement and charter amendment in place that limit beneficial ownership of the Company’s common stock to 4.99%. Stockholders who wish to own more than 4.99% of Star common stock, or who already own more than 4.99% of Star common stock and wish to increase their holdings, may only acquire additional shares with the Board’s prior written approval.

Share Repurchase Program

On August 7, 2024, the Company’s board of directors authorized a new stock repurchase program under which the Company is authorized to repurchase up to $1.0 million of its issued and outstanding shares of common stock. The Company repurchased 73,855 shares for $279 thousand under this program in 2024. Under the program, the Company had remaining authorization to repurchase up to $721 thousand of its issued and outstanding shares of common stock as of March 31, 2025.

A conference call is scheduled for 10:00 a.m. ET (7:00 a.m. PT) on May 14, 2025 to discuss the results and management’s outlook. The call may be accessed by dialing (833) 630-1956 (toll free) or (412) 317-1837 (international), five minutes prior to the scheduled start time and referencing Star Equity. A simultaneous webcast of the call may be accessed online from the Events & Presentations link on the Investor Relations page at www.starequity.com/events-and-presentations/presentations; an archived replay of the webcast will be available within 15 minutes of the end of the conference call.

If you have any questions, either prior to or after our scheduled Earnings Conference call, please e-mail admin@starequity.com or lcati@equityny.com.

This release presents the non-GAAP financial measures “adjusted net income (loss),” “adjusted net income (loss) per basic and diluted share,” and “adjusted EBITDA from continuing operations.” The most directly comparable measures for these non-GAAP financial measures are “net income (loss),” “net income (loss) per basic and diluted share,” and “cash flows from operating activities.” The Company has included below unaudited adjusted financial information, which presents the Company’s results of operations after excluding acquired intangible asset amortization, unrealized gain (loss) on equity securities and lumber derivatives, litigation costs, transaction costs, financing costs, interest income, impairment of cost method investment, loss/gain on equity method investment, recruitment fee, and income tax adjustments. Further excluded in the measure of adjusted EBITDA are stock-based compensation, interest, depreciation, and amortization.

A discussion of the reasons why management believes that the presentation of non-GAAP financial measures provides useful information to investors regarding the Company’s financial condition and results of operations is included as Exhibit 99.2 to the Company’s report on Form 8-K filed with the Securities and Exchange Commission on May 14, 2025.

Star Equity Holdings, Inc. is a diversified holding company with three divisions: Building Solutions, Energy Services, and Investments.

Our Building Solutions division operates in three businesses: (i) modular building manufacturing; (ii) structural wall panel and wood foundation manufacturing, including building supply distribution operations; and (iii) glue-laminated timber (glulam) column, beam, and truss manufacturing.

Our Energy Services division engages in the rental, sale, and repair of downhole tools used in the oil and gas, geothermal, mining, and water-well industries.

Our Investments division manages and finances the Company’s real estate assets as well as its investment positions in private and public companies.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this press release that are not statements of historical fact are hereby identified as “forward-looking statements” for the purpose of the safe harbor provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based upon management’s current beliefs, views, estimates and expectations, including as pertains to (i) the plans and objectives of management for future operations, including plans or objectives relating to acquisitions and related integration, (ii) projections of income, EBITDA, earnings per share, capital expenditures, cost reductions, capital structure or other financial items, (iii) the future financial performance of the Company or acquisition targets and (iv) the assumptions underlying or relating to any statement described above. Forward-looking statements generally are identified by the words “believe”, “expect”, “anticipate”, “estimate”, “project”, “intend”, “plan”, “should”, “may”, “will”, “would”, “will be”, “will continue” or similar expressions. Such forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be realized because they are based upon the Company's current projections, plans, objectives, beliefs, expectations, estimates and assumptions and are subject to a number of risks and uncertainties and other influences, many of which the Company has no control over. Actual results and the timing of certain events and circumstances may differ materially from those described above as a result of these risks and uncertainties. Factors that may influence or contribute to the inaccuracy of forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation, the cyclical nature of our operating businesses, the Company’s debt and its ability to repay, refinance, or incur additional debt in the future; the Company’s need for a significant amount of cash to service, repay the debt, and to pay dividends on the Company’s preferred stock; the restrictions contained in the debt agreements that limit the discretion of management in operating the business; legal, regulatory, political and economic risks in markets and public health crises that reduce economic activity and cause restrictions on operations; the length of time associated with servicing customers; losses of significant contracts or failure to get potential contracts being discussed; disruptions in the relationship with third party vendors; accounts receivable turnover; insufficient cash flows and resulting lack of liquidity; the Company's inability to expand its business operations; the liability and compliance costs regarding environmental regulations; the lack of product diversification; existing or increased competition; risks to the price and volatility of the Company’s common stock and preferred stock; stock volatility and in liquidity; risks to preferred stockholders of not receiving dividends and risks to the Company’s ability to pursue growth opportunities if the Company continues to pay dividends according to the terms of the Company’s preferred stock; the Company’s ability to execute on its business strategy (including any cost reduction plans); the Company’s failure to realize expected benefits of restructuring and cost-cutting actions; the Company’s ability to preserve and monetize its net operating losses; risks associated with the Company’s possible pursuit of acquisitions; the Company’s ability to consummate successful acquisitions and execute related integration; general economic and financial market conditions; failure to keep pace with evolving technologies and difficulties integrating technologies; system failures; losses of key management personnel and the inability to attract and retain highly qualified management and personnel in the future; and the continued demand for and market acceptance of the Company’s services. For a detailed discussion of cautionary statements and risks that may affect the Company’s future results of operations and financial results, please refer to the Company’s filings with the Securities and Exchange Commission, including, but not limited to, the risk factors in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. This press release reflects management’s views as of the date presented.

All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ materially from expectations. Therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

(Financial tables follow)

*Earnings per share may not add due to rounding

**Formerly known as Construction

***All share amounts reflect 1 for 5 reverse stock split effective June 14, 2024, retroactively *All share amounts reflect 1 for 5 reverse stock split effective June 14, 2024, retroactively

(1)Reflects adjustments for any unrealized gains or losses in equity securities.

(2)Reflects adjustments for any unrealized gains or losses in lumber derivatives value.

(3)Reflects transaction costs related to the sale of the Healthcare Division.

(4)Reflects transaction costs related to potential mergers and acquisitions.

(5)Reflects financing costs from our credit facilities.

(6)Per share amounts are computed independently for each discrete item presented. Therefore, the sum of the quarterly per share amounts will not necessarily equal the total for the year, and the sum of individual items may not equal the total.

(1)Reflects adjustments for any unrealized gains or losses on equity securities.

(2)Reflects adjustments for any unrealized gains or losses in lumber derivatives value.

(3)We allocate all corporate interest income to the Investments Division.

(4)Reflects transaction costs related to the sale of the Healthcare Division.

(5)Reflects transaction costs related to potential mergers and acquisitions.

(6)Reflects financing costs from our credit facilities.

A summary of the Company’s credit facilities are as follows:

In addition to financial results calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), information containing non-GAAP financial measures for Star Equity Holdings, Inc. (the “Company”) was disclosed in the Company's press release (the “Press Release”) dated May 14, 2025 announcing results for the three months ended March 31, 2025 that accompanied a conference call held by the Company on May 14, 2025. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. Management encourages readers to rely upon the GAAP numbers, but includes the non-GAAP financial measures as supplemental metrics to assist readers. Definitions of the non-GAAP financial measures are included in the Press Release.

In the Press Release, the Company presented the non-GAAP financial measures “adjusted net income (loss),” “adjusted net income (loss) per basic and diluted share,” “adjusted EBITDA” Company management uses these non-GAAP financial measures to evaluate the Company's performance. Company management finds it useful to use financial measures that do not include acquired intangible asset amortization, income tax adjustments, unrealized gain (loss) on lumber derivatives and available-for-sale securities, litigation costs, financing costs, transaction costs, financing fees, and other one-time transactions. While we may have these types of items and charges in the future, Company management believes that they are not reflective of the day-to-day offering of its products and services and relate more to strategic, multi-year corporate actions, without predictable trends, and that may obscure the trends and financial performance of the Company's core business. In the case of “adjusted EBITDA,” Company management believes the exclusion of interest, taxes, depreciation and amortization, and stock-based compensation is a very common measure utilized in the investment community and it helps Company management benchmark its operations and results with the industry.

The limitation associated with using these non-GAAP financial measures is that these measures exclude items that impact the Company's current period operating results. This limitation is best addressed by using these non-GAAP financial measures in combination with “net income (loss),” “net income (loss) per basic and diluted share,” and "operating cash flow" (the most comparable GAAP measures) because these non-GAAP financial measures do not reflect items that impact current period operating results and may be higher or lower than the most comparable GAAP measure.