Q1 2024 Star Equity Holdings Inc Earnings Call

Greetings, ladies and gentlemen, and welcome to start equity Holdings first quarter 2024 results conference call.

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 statement. 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.

Richard Coleman: 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. As required by SEC rules and regulations, these non-GAAP financial measures are reconciled to their most comparable GAAP measures in our earnings release issued this morning. If you do not receive a copy of the earnings release and would like one after the call, please contact Star Equity at 203-489-9500 or its Investor Relations Representative, Lena Cady of the Equity Group, at 212-836-9611.

Richard Coleman: Also, this call is being broadcast live over the internet and may be accessed on Star Equity's website via www.starequity.com. Please note, this call is being recorded. Shortly after the call, a replay will also be available on the company's website. It is now my pleasure to introduce Rick Coleman, Chief Executive Officer of Star Equity. Thank you, operator. Good morning, everyone. Thanks for joining us for our first quarter 2024 results.

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 start equities. 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.

Speaker Change: Which are all financial measures not recognized under U S. GAAP.

Speaker Change: As required by FCC rules and regulations. These non-GAAP financial measures are reconciled to their most comparable GAAP measures.

Speaker Change: In our earnings release issued this morning.

Speaker Change: If you did not receive a copy of the earnings release and would like one after the call. Please contact star equity at 2034899500.

Speaker Change: Or it's Investor Relations representative Lena Kt of the equity group at 2128369611.

Speaker Change: Also this call is being broadcast live over the Internet and maybe accessed at Star equities website via Www Dot star equity Dotcom.

Speaker Change: Please note this call is being recorded.

Speaker Change: Shortly after the call a replay will also be available on the company's web site.

Speaker Change: It is now my pleasure to introduce Rick Coleman, Chief Executive Officer of STAAR equity.

Speaker Change: Okay.

Richard Coleman: Thank you operator.

Richard Coleman: Good morning, everyone.

Richard Coleman: Thanks for joining us for our first quarter 2024 results conference call. On the call with me today are our executive chairman, Jeff Eberwein, and our chief financial officer, Dave Noble. We'll begin today's call with an update on our first quarter 2024 results, and then we'll discuss the acquisition of timber technologies, which we announced earlier this morning. Additional acquisition details can be found in the 8K we filed with the Securities and Exchange Commission and on the updated investor presentation on our website at www.starequity.com.

Speaker Change: Thanks for joining us for our first quarter 2024 results conference call on the call with me today are our executive Chairman, Jeff Eberwein, and our Chief Financial Officer, Dave Noble.

Richard Coleman: Our first quarter 2024 results were weaker than expected, due primarily to the continued impact of economic headwinds facing our business solutions division. Specifically, four large commercial projects, which we expected to be completed in the first quarter, could not be completed due to customer financing delays. Three of these projects slipped into the second quarter and have now been completed, while the remaining project is now financed and is scheduled to be completed this fall.

Speaker Change: We will begin today's call with an update on our first quarter 2024 results and then we'll discuss the acquisition of timber technologies, which we announced earlier this morning.

Speaker Change: Additional acquisition details can be found on the 8-K, we filed with Securities and Exchange Commission and the updated investor presentation on our website at Www Dot star equity Dot com.

Speaker Change: Our first quarter 2024 results were weaker than expected due primarily to the continued impact of economic headwinds facing our business solutions Division.

Richard Coleman: As a result, our first quarter 2024 revenue decreased 26.1% to $9.1 million compared to $12.3 million in the first quarter of 2023. Our gross margin was 17.3% versus 34.6% in the same period last year, and our gross profit decreased by 63.1% year over year.

Speaker Change: Specifically for large commercial projects, which we expected to be completed in the first quarter.

Speaker Change: Could not be completed due to customer financing boys.

Speaker Change: Three of these projects slipped into the second quarter and have now been completed while the remaining project is now financed and is scheduled to be completed this fall.

Speaker Change: As a result, our first quarter 2024 revenue decreased 26, 1%.

Speaker Change: $9 1 million compared to $12 $3 million in the first quarter of 2023.

Speaker Change: Our gross margin was 17, 3% versus 34, 6% in the same period last year and our gross profit decreased by 63, 1% year over year.

Richard Coleman: These quarter-to-quarter fluctuations aren't unusual and are a key reason for our focus on expanding and diversifying our revenue base. In spite of the challenging environment sector-wide, our sales pipeline and signed backlog remain roughly equivalent to historical averages. We believe the impact we're seeing is temporary and that there is strong demand for new construction in the markets we serve. Our reputation as a reliable and high-quality partner is strong, and we continue to focus on all elements of our growth strategy, including business solutions division expansion, acquisitions that would mark our entry into new industries, and exploring new opportunities at our investments division. This focus is exemplified by our acquisition of timber technologies, which I'll discuss later.

Speaker Change: These quarter to quarter fluctuations aren't unusual and are a key reason for our focus on expanding and diversifying our revenue base.

Speaker Change: Despite the challenging environment sector wide, our sales pipeline and signed backlog remained roughly equivalent to historical averages.

Speaker Change: We believe the impact we're seeing is temporary and that there is strong demand for new construction in the markets we serve.

Speaker Change: Our reputation as a reliable and high quality partner is strong and we continue to focus on all elements of our growth strategy include.

Including business solutions Division expansion acquisitions that would mark our entry into new industries, and exploring new opportunities and our investments division.

Speaker Change: This focus is exemplified by our acquisition of timber technologies, which I'll discuss later.

Speaker Change: Now I'll turn the call over to Dave Noble our CFO to provide additional first quarter consolidated financial highlights Dave. Please go ahead.

Richard Coleman: Now I'll turn the call over to Dave Noble, our CFO, to provide additional first quarter consolidated financial highlights. Dave, please go ahead. Dave Noble is having some connection difficulties, so we're going to have our Senior Vice President of Finance. Okay, go ahead, guys. I'm sorry I was on mute.

Speaker Change: Dave.

Speaker Change: Alright.

Speaker Change: During this draft.

Speaker Change: Good morning, and connection difficulty so we're going to have.

Speaker Change: I'm sorry.

Speaker Change: Okay.

Okay go ahead, guys I'm, sorry, I was on mute.

Speaker Change: Yeah.

Speaker Change: Right.

David James Noble: Let's now turn to Star Equity's consolidated financial results. Due to the sale of our healthcare business on May 4th, 2023, all results and historical comparisons relate only to continuing operations, which include our building solutions and investments division. Of note, DigiRed Health, which we sold last year, is now reported as part of our discontinued operation. In Q1 2024, SG&A increased by 11.1% versus Q1 2023. This was mainly due to increases in legal and outside services expenses related to acquisition activities.

Speaker Change: Let's now turn to start with <unk> consolidated financial results due to the sale of our health care business on May four 2023.

Speaker Change: Our results in historical comparisons relate only to continuing operations, which include our building solutions and investments Division.

Speaker Change: Of note did you add health, which we sold last year is now reported as part of our discontinued operations.

Speaker Change: In Q1 2020 for SG&A increased by 11, 1% versus Q1 of 2023.

Speaker Change: This is mainly due to increases in legal and outside services expenses related to acquisition activities.

Speaker Change: At the bottom line historically, we reported a net loss from continuing operations of $10 $2 million in Q1.

David James Noble: At the bottom line for Star Equity, we reported a net loss from continuing operations of $2.2 million in Q1, compared to a net breakeven result in Q1 of 2023. Non-GAAP adjusted net loss from continuing operations in Q1 was $1.4 million compared to an adjusted net income of $0.5 million in Q1 of 2023. Non-GAAP-adjusted EBITDA from continuing operations was a loss of $1.1 million in Q1 versus a positive $0.8 million in Q1 of 2023, on a standalone basis before public company costs.

Speaker Change: <unk> to a net breakeven results in Q1 of 2023.

Speaker Change: non-GAAP adjusted net loss from continuing operations in Q1 was $1 $4 million compared to an adjusted net income of.

Speaker Change: Zero point $5 million in Q1 of 2023.

Speaker Change: non-GAAP adjusted EBITDA from continuing operations was a loss of $1 $1 million in Q1 versus a positive zero point $8 million in Q1 of 2023.

Speaker Change: On a standalone basis before public company costs are building solutions division generated a non-GAAP adjusted EBITDA loss of $3 million in Q1.

David James Noble: Building Solutions Division generated a non-GAF Adjustees without loss of $0.3 million in Q1, which was down from positive $2.2 million in Q1 of 2023. Consolidated cash flow from continuing operations for Q1 with an outflow of $2.4 million versus an inflow of $5.1 million in Q1 of 2023. This cash flow decrease was driven primarily by lower revenues for Building Solutions Division and higher networking capital expenditures. As of March 31st, 2024, our consolidated balance sheet and liquidity remain strong.

Speaker Change: Which was down from positive $2 $2 million in Q1 of 2023.

Speaker Change: Consolidated cash flow from continuing operations for Q1, with an outflow of $2 $4 million versus an inflow of $5 $1 million in Q1 of 2023.

Speaker Change: This cash flow decrease was driven primarily by lower revenues for our building solutions Division and higher net working capital expenditures.

Speaker Change: As of March 31, 2024, our consolidated balance sheet and liquidity remained strong.

David James Noble: At the end of the first quarter, we had just $1.9 million in interest-bearing debt, and our consolidated unrestricted cash balance stood at $14.7 million at the end of Q1, as compared to $5.0 million a year ago. Turning to our investments division, our equity securities at the end of the quarter amounted to $5.6 million, while our rollover equity and no receivable investments, which resulted from the sale of our healthcare business to TTG, are valued at $6.0 million and $7.6 million, respectively. Now, I'd like to send a call back to Rick to provide some additional information on our TimberTech acquisition.

Speaker Change: At the end of the first quarter, we had just $1 $9 million interest bearing debt and our consolidated unrestricted cash balance stood at $14 $7 million at the end of Q1 as compared to 5.0 million a year ago.

Speaker Change: Turning to our investments division our equity securities at the end of the quarter amounted to $5 $6 billion, while our rollover equity and note receivable investment, resulting from the sale of our health care business CTG are valued at $6 1 million and $7 $6 million respectively.

Speaker Change: Yeah.

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

Richard Coleman: Thank you.

Richard Coleman: As I mentioned this morning, we announced the acquisition of Timber Technologies, a Wisconsin-based engineered wood products manufacturer, which, since its founding in 2003, has established itself as a leader in the manufacturing of glue-laminated wood products. Timber Tech will operate within our building solutions division, and its team will continue to run the day-to-day manufacturing operations at its existing 69,000 square foot facility. As part of the acquisition, we will also acquire the manufacturing facility and associated real estate in a separate transaction expected to close in June of 2024.

Richard Coleman: As I mentioned this morning, we announced the acquisition of timber technologies, a Wisconsin based engineered wood products manufacturer.

Since its founding in 2003 has established itself as a leader in the manufacturing of Glu laminated wood products.

Speaker Change: <unk> will operate within our building solutions Division and his team will continue to run the day to day manufacturing operations at its existing 69000 square foot facility.

Speaker Change: As part of the acquisition, we will also acquire the manufacturing facility and associated real estate in a separate transaction expected to close in June of 2024.

Speaker Change: As you probably noted we have renamed our construction Bim vision to building solutions to better describe the divisions expanded capabilities and future opportunities.

Richard Coleman: As you probably noted, we've renamed our construction division to Building Solutions to better describe the division's expanded capabilities and future opportunities. With the acquisition of TimberTech, we entered the engineered wood products market, one that is experiencing increasing adoption over structural alternatives. Its glue laminated wood products, or glue lamb, have superior strength, durability, and environmental sustainability compared to solid timber and are also taking market share from less sustainable building materials such as steel, concrete, and aluminum.

Speaker Change: With the acquisition of timber Tech, we entered the engineered wood products industry.

Speaker Change: One that is experiencing increasing adoption over structural alternatives.

Speaker Change: It's glue laminated wood products or glue Lam have superior strength durability, and environmental sustainability compared with solid timber and we're also taking market share from less sustainable building materials, such as steel concrete and aluminum.

Richard Coleman: We believe that this market is poised for long-term growth and consolidation. Timber Tech has a strong market footprint in the Midwest and Northwest. They manufacture products that augment the multifamily and residential construction segments we currently serve, but TimberTech products are important components of a broader range of end markets. For example, their agricultural and industrial products are used to build livestock and dairy barns, bridge decking, wastewater treatment facilities, crane mats, machine sheds, and even airline hangars.

Speaker Change: We believe that this market is poised for long term growth and consolidation.

Speaker Change: Timber tech is a strong market footprint in the Midwest and northwest.

Speaker Change: Manufactured products that augment the multi family and residential construction segments. We currently serve.

Speaker Change: Timber tech products are important components of a broader range of end markets.

Speaker Change: For example, the agricultural and industrial products are used to build livestock and dairy barns bridge decking wastewater treatment facilities Crane match machine sheds and even airline Hirsch.

Richard Coleman: We believe this is an expanding market, and we're looking forward to sharing more with you in the coming months. In addition to creating scale, we expect TimberTech's history of profitability and strong cash generation to improve our overall financial position. In fiscal year 2023, TimberTech's unaudited financials reported revenue of $18.8 million and adjusted EBITDA of $5.5 million. In comparison, our Building Solutions Division reported 2023 revenues of $45.8 million and adjusted EBITDA of $4.4 million.

We believe this is an expanding market and we're looking forward to sharing more with you in the coming months.

Speaker Change: In addition to creating scale, we expect timber tech's history of profitability and strong cash generation to improve our overall financial position.

Speaker Change: In fiscal year, 2023, timber tax unaudited financials reported revenue of $18 $8 million and adjusted EBITDA of five and a half million dollars.

Speaker Change: In comparison, our building solutions Division reported 2023 revenues of $45 $8 million and adjusted EBITDA of $4 $4 million.

Speaker Change: Again, using unaudited financials on a trailing 12 months pro forma basis timber tech would've represented roughly one third of our building solutions division revenue and over half of the Division EBITDA.

Richard Coleman: Again, using unaudited financials on a trailing 12 months' performance basis, TimberTech would have represented roughly one third of our building solutions division revenue and over half of the division's EBITDA. Before opening the floor to questions, I want to emphasize that this transaction and the 2023 acquisition of Big Lake Lumber are significant steps in the execution of our overall growth strategy, as has been the case for several years and especially following the $40 million sale of our Digirad business last May.

Speaker Change: Before opening the floor to questions I want to emphasize that this transaction and the 2023 acquisition a big like lumber are significant steps in the execution of our overall growth strategy.

Speaker Change: As has been the case for several years and especially following the $40 million sale of our Digirad business last may.

Richard Coleman: We are focused on creating additional shareholder value through our targeted business development initiatives. Star Equity today is a much better business, operationally and financially, than five years ago when we established our holding company structure. We've also made great progress in the last 12 months. We have a stronger and cleaner balance sheet, a well-established building solutions division, and an investments division with stakes in several undervalued public and private companies, which we believe have significant upside potential.

Speaker Change: We are focused on creating additional shareholder value through our targeted business development initiatives.

Speaker Change: Star equity today is a much better business operationally and financially than five years ago, when we established our holding company structure.

Speaker Change: We've also made great progress in the last 12 months.

Speaker Change: We are a stronger and cleaner balance sheet are well established building solutions division and in investments Division with stakes in several undervalued public and private companies, which we believe have significant upside potential.

Speaker Change: In the coming months, we look forward to sharing our progress as we continue our determined efforts to create shareholder value through profitable organic growth and disciplined accretive acquisitions.

Richard Coleman: In the coming months, we look forward to sharing our progress as we continue our determined efforts to create shareholder value through profitable organic growth and disciplined accretive acquisitions. I'll now turn the call over to the operator for questions.

Speaker Change: I will now turn the call over to the operator for questions.

Speaker Change: We will now begin the question and answer session.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our roster. The first question today comes from Theodore O'Neill with Litchfield Hills Research. Please go ahead.

Speaker Change: To ask a question you May press Star then one on your telephone keypad.

Speaker Change: If you were using a speakerphone please pick up your handset before pressing the keys.

Speaker Change: To withdraw your question. Please press Star then two.

Speaker Change: At this time, we will pause momentarily to assemble our roster.

Speaker Change: The first question today comes from Theodore O'neill with Litchfield Hills Research. Please go ahead.

Theodore O'Neill: Hey, thanks very much. Rick, the quarter seems self-explanatory, so I'd like to ask questions about timber technologies. A couple of things. Could you talk about what the synergies are between timber technologies and the other components of building solutions?

Theodore O'Neill: Hey, Thanks, very much Rick the quarter seems self explanatory so I'd like to talk ask questions about timber technologies.

Theodore O'Neill: A couple of things could you talk about.

Theodore O'Neill: What the synergies are between timber technologies and the other components of building solutions and.

Theodore O'Neill: And is there a... Is there, is this going to be helpful to you on the East Coast? Can you ship this stuff out here? Does that make sense? Or is this something that is pretty much a local business, limited by shipping, and then could you talk about the financing for it as well?

Theodore O'Neill: And is there.

Theodore O'Neill: Is there is this going to be helpful to you on the East Coast could you ship. This stuff out here is that makes sense or is this something that is pretty much a local business limited by a limited by shipping and then could you just talk about the financing for it as well please.

Speaker Change: Yes, just give me.

Richard Coleman: Yeah, just give me let me take the question about shipping first. That's the easy one.

Let me take the question about shipping service, that's easy one I think shipping the product from.

Richard Coleman: I think shipping the product from Wisconsin to the East Coast is probably not the best approach. However, we do have a vacant factory, as you recall, and we have an expanding group of very, very talented executives in our Building Solutions Division. We're looking at a number of different alternatives of how to expand into our vacant factory, and the expansion of our glue lamp business is one of those alternatives. We're located, I'm currently sitting very close to our new factory in Colfax, Wisconsin, a short drive from our businesses in and around the Minneapolis area. So there are obvious opportunities for synergies. We haven't identified those as the rationale for the deal, but we do expect that the cooperation and coordination between the different divisions is going to yield benefits for us.

Speaker Change: From Wisconsin to the East Coast is probably not the best approach. However, we do have a vacant factor you hear your call and we have an expanding group of very very talented.

Speaker Change: Executives in our building solutions Division.

Speaker Change: We're looking at a number of different alternatives of how to expand into our vacant factory and the expansion of our group business is one of those alternatives.

Speaker Change: We are located.

Speaker Change: Yeah, I'm currently sitting very close to our new factory and Colfax, Wisconsin short drive to our businesses in.

Speaker Change: And round the Minneapolis area. So there are obvious opportunities for synergies we haven't.

Speaker Change: Identified those as the rationale for the deal, but we do expect the cooperation and coordination between the different divisions is going to yield benefits for us.

Speaker Change: And can you just talk a little bit about the financing for this.

David James Noble: And could you talk a little bit about the financing?

Okay.

David James Noble: David, you want to take that one? Sure. So on the financing piece, we did use, you know, a lot of our cash hoard to help purchase this, but we were able to leverage it to some extent with Bridgewater Bank, which is a local bank in the Minneapolis area.

Speaker Change: Sure, Yes, so on the financing piece, we did use a lot of our.

Speaker Change: Cash hoard to help purchases, but we were able to leverage it to some extent with Bridgewater Bank, which is a local bank in the Minneapolis area.

Speaker Change: And so we did a $7 million acquisition term loan has a five year structure.

Speaker Change: The amortizing over those five years, instead of 785% rate, which we think in this environment is pretty attractive.

Speaker Change: Okay. Thanks very much.

Theodore O'Neill: Okay, thanks very much.

Speaker Change: As a reminder, if you would like to ask a question. Please press Star then one entered the question queue.

Operator: As a reminder, if you would like to ask a question, please press star then 1 to enter the question queue. The next question comes from Tate Sullivan with Maxim Group. Please go ahead.

Speaker Change: Our next question comes from Tate Sullivan with Maxim Group. Please go ahead.

Tate H. Sullivan: Thank you. I'm Timberlake. Can you say that the engineered wood products label, or EWP, applies to what you already do at KBS and EdgeBuilder, or is it a different consideration with the glue lamp?

Tate H. Sullivan: Thank you on Timberlake can you can you say that the engineered wood products label or DWP applies to what you already do it.

Speaker Change: Yes in etch builder or is it a different consideration.

Tate H. Sullivan: Ooh.

Tate H. Sullivan: Yeah, I would I would say, it's a different a different sector.

Richard Coleman: Yeah, I would say it's a different, different sector. Obviously, there are some opportunities for expansion in both of those businesses, so there's probably some overlap down the road, but it is a new sector for us and one that we believe is strong and growing.

Tate H. Sullivan: Obviously, there are some opportunities for expansion in both of those businesses. So there's probably some overlap down the road, but it is a new sector for us and one that we believe is strong and growing.

Richard Coleman: and just that so EWP or engineered wood products, I mean specifically refers to timber technology in the industry thereof.

Tate H. Sullivan: And.

Peter: So EW Peter engineered wood products.

Typically refers to September technologies.

Speaker Change: The industry there Els.

Richard Coleman: Yes, timber technologies is a part of the engineered wood products industry.

Speaker Change: Yes, yes timber technologies as a part of the engineered wood products industry.

Richard Coleman: And what can you tell me about the manufacturing process process? Search just briefly for glue laminated timber what kind of facility that does the company have?

Speaker Change: And what can you what what is a manufacturing process, that's principally for glu laminated timber what kind of facility.

Speaker Change: Does the company.

Speaker Change: It's a very is it first of all it's a very impressive facility is very large.

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

Speaker Change: The company has been building and expanding in that facility for.

Speaker Change: Since its inception.

Speaker Change: The primary inputs, our lumber and blue, but the process of combining those to build structural wood products is much more sophisticated than one might think there'd been a number of different companies that have attempted over the years to get into the business and failed.

Speaker Change: And we're really pleased with the talent and.

Speaker Change: And dedication that this team has has undertaken over the years and built a very very successful business.

Speaker Change: Thank you did you mentioned it is it two separate facilities. The 69000 square foot facility and then the separate manufacturing facility or is it all one facility. That's all it's all one.

Tate H. Sullivan: Thank you. And is it, did you mention, two separate facilities, the 69,000 square foot facility and then the separate manufacturing facility, or is it all one facility?

Richard Coleman: That's all. It's all one.

Speaker Change: Oh, Okay. So the subsequent real estate transactions.

Richard Coleman: Okay, so the subsequent real estate transaction is for the 69,000 square feet.

Speaker Change: 69000 square.

Richard Coleman: Yes, that's correct.

Speaker Change: The yes the right.

Richard Coleman: Unknown Speaker And then on KBS, you mentioned it's mostly related to the financing environment, and to confirm, are you seeing any competition willing to take lower prices in this market, or is it purely the pipeline being pushed out from the financing availability?

Speaker Change: Okay.

Speaker Change: And then on PBS are you you mentioned I mean, it's mostly related to the financing environment to confirm or are you seen any competition willing to take lower prices.

Speaker Change: In this market or is it purely the pipeline being pushed out from from the financing availability.

Speaker Change: From the feedback that we're getting and the intelligence that we can gather everyone in the industry is experiencing to some degree.

Richard Coleman: From the feedback that we're getting and the intelligence that we can gather, everyone in the industry is experiencing, to some degree, the same issue. Financing is just taking longer and costing more. So in a small business, a relatively small business like ours, if we expect a large project to be completed in this particular month, it has a significant impact on our quarter or the month when that project is delayed for financial reasons.

Speaker Change: Same issue financing is just taking longer and costing more so in a small business a relatively small business like ours.

Speaker Change: We expect a large project to be completed in this particular month.

Speaker Change: It has a significant impact on our quarter or the month when that project is delayed for financing.

Speaker Change: Okay. Thank you very much.

Tate H. Sullivan: Okay, thank you very much.

Speaker Change: Once again, if he would like to ask a question. Please press Star then one to enter the question queue.

Operator: Once again, if you would like to ask a question, please press star, then 1 to enter the question queue. This concludes today's question and answer session. I will turn the call back over to Rick Coleman for closing remarks.

Speaker Change: This concludes today's question answer session I'll turn the call back over to Rick Coleman for closing remarks.

Richard Coleman: Thank you operator.

Richard Coleman: Before concluding, I want to reemphasize that you are always available to take your call and discuss any additional questions you might have. Don't hesitate to contact us. As always, we appreciate your interest in our company as well as your continued feedback and support. Thank you.

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

Richard Coleman: We appreciate your interest in our company as well as your continued feedback and support.

Speaker Change: Thank you.

Speaker Change: Thank you for joining the Star equity Holdings first quarter conference call.

Operator: Thank you for joining the Star Equity Holdings first quarter conference call. Today's call has been recorded and will be available on the investor section of our website at www.StarEquity.com.

Speaker Change: Today's call has been recorded and will be available on the investors section of our website at www STAAR equity dotcom.

Okay.

Operator: BF-WATCH TV 2021

Speaker Change: [music].