Star Equity Holdings, Inc. Announces 2023 Third Quarter Financial Results

Star Equity Holdings, Inc. Announces 2023 Third Quarter Financial Results

Ended the third quarter with cash and cash equivalents of $20.7 million; well positioned to expand existing businesses organically or grow through acquisitions of bolt-ons or new verticals

OLD GREENWICH, Conn., Nov. 08, 2023 (GLOBE NEWSWIRE) -- Star Equity Holdings, Inc. (Nasdaq: STRR; STRRP) (“Star Equity” or the “Company”), a diversified holding company, reported today its financial results for the third quarter (Q3) ended September 30, 2023. All 2023 and 2022 amounts in this release are unaudited.

Following the sale of our Digirad Health business on May 4, 2023, all financial results for the 2023 and 2022 reporting periods, unless stated otherwise, relate to continuing operations, which currently include two divisions: Construction and Investments.

Q3 2023 Financial Highlights vs. Q3 2022 (unaudited)

  • Revenues decreased by 6.1% to $10.4 million from $11.1 million.
  • Gross profit decreased by 28.3% to $2.2 million from $3.1 million.
  • Net loss from continuing operations was $2.4 million (or $0.15 per basic and diluted share) compared to a net loss from continuing operations of $1.0 million (or $0.06 per basic and diluted share).
  • Non-GAAP adjusted net income was $0.2 million (or $0.01 per diluted share) compared to a net income of $0.3 million (or $0.02 per diluted share).
  • Non-GAAP adjusted EBITDA was a loss of $14 thousand versus income of $0.6 million.

Year-to-Date 2023 Financial Highlights vs. Year-to-Date 2022 (unaudited)

  • Revenues decreased by 19.9% to $31.7 million from $39.5 million.
  • Gross profit increased by 29.9% to $9.1 million from $7.0 million.
  • Net loss from continuing operations was $3.7 million (or $0.24 per basic and diluted share) compared to a net loss from continuing operations of $6.7 million (or $0.46 per basic and diluted share).
  • Non-GAAP adjusted net loss from continuing operations was $0.2 million (or $0.01 per diluted share) compared to a net loss of $2.1 million (or $0.14 per diluted share).
  • Non-GAAP adjusted EBITDA from continuing operations improved to a net loss of $50 thousand versus a loss of $1.0 million.
  • As of September 30, 2023, cash and cash equivalents increased to $20.7 million compared to cash and cash equivalents of $14.1 million at September 30, 2022
  • Debt decreased to $0.5 million at September 30, 2023 from $3.5 million at September 30, 2022.

Rick Coleman, Chief Executive Officer, noted, “In the third quarter of 2023, Construction revenue and gross profit declined versus the third quarter of 2022. Year-to-date, however, gross profit increased 28% versus the prior year despite lower revenues. Continued credit tightening in the quarter caused some delays in commercial projects, but single-family residential activity and our overall backlog and sales pipeline remained robust due to our focus on select niche markets where we’ve built significant expertise and a strong reputation.”

Mr. Coleman continued, “In addition, we were excited to announce our acquisition of Big Lake Lumber on October 31st. This accretive bolt-on acquisition for our Glenbrook business represents an important step in the execution of our growth strategy, which includes organic Construction division expansion, bolt-on acquisitions, acquisitions in new industries, and thoughtfully exploring new opportunities at our Investments division.”

Revenues

The Company’s Q3 2023 revenues decreased 6.1% to $10.4 million from $11.1 million in Q2 2022.

Revenues in $ thousands Q3 2023 Q3 2022 % change 9M 2023 9M 2022 % change
Construction $10,435  $11,107  (6.1)% $31,674  $39,544  (19.9)%
Investments  89   159  (44.0)%  405   475  (14.7)%
Intersegment elimination  (89)  (159) (44.0)%  (405)  (475) (14.7)%
Total Revenues $10,435  $11,107  (6.1)% $31,674  $39,544  (19.9)%


Q3 2023 Construction revenue decreased by 6.1% from the prior year and year-to-date 2023 revenue decreased 19.9% from year-to-date 2022. While our sales pipeline and construction backlog remain strong, credit tightening has slowed overall construction activity and delayed some commercial project starts.

Gross Profit

Gross profit (loss) in $ thousands Q3 2023 Q3 2022 % change 9M 2023 9M 2022 % change
Construction $2,248  $3,132  (28.2)% $9,241  $7,203  28.3%
Construction gross margin  21.5%  28.2% (6.7)%  29.2%  18.2% 11.0%
Investments  44   100  (56.0)%  236   253  (6.7)%
Intersegment elimination  (89)  (158) (43.7)%  (405)  (474) (14.6)%
Total gross profit $2,203  $3,074  (28.3)% $9,072  $6,982  29.9%
Total gross margin  21.1%  27.7% (6.6)%  28.6%  17.7% 10.9%


Q3 2023 Construction gross profit decreased 28.2% due primarily to lower revenues, while year-to-date 2023 gross profit increased 28.3% from the prior year periods despite lower revenues. The year-to-date increase is due to higher pricing levels and lower input costs.

Operating Expenses

On a consolidated basis, Q3 2023 sales, general and administrative (“SG&A”) expenses increased by $0.3 million, or 10.9%, versus the prior year period. The major drivers of the increase in SG&A were increases in legal and outside services expense related to our Investments activities and the sale of our Healthcare business. SG&A as a percentage of revenue increased in Q3 2023 to 32.9% versus 27.9% in Q3 2022.

Net Income

Q3 2023 net loss from continuing operations was $2.4 million, or $0.15 per basic and diluted share, compared to net loss of $1.0 million, or $0.06 per basic and diluted share in the same period in the prior year. Q3 2023 non-GAAP adjusted net income from continuing operations was $0.2 million, or $0.01 per basic and diluted share, compared to non-GAAP adjusted net income from continuing operations of $0.3 million, or $0.02 per basic and diluted share, in the prior year period.

Year-to-date 2023 net loss from continuing operations was $3.7 million, or $0.24 per basic and diluted share, compared to net loss of $6.7 million, or $0.46 per basic and diluted share, in the same period in the prior year. Year to date 2023 non-GAAP adjusted net loss from continuing operations was $0.2 million, or $0.01 per basic and diluted share, compared to adjusted net loss from continuing operations of $2.1 million, or $0.14 per basic and diluted share, in the prior year period.

Non-GAAP Adjusted EBITDA

Q3 2023 non-GAAP adjusted EBITDA was a loss of $14 thousand versus income of $0.6 million in the same quarter of the prior year, primarily due to decreased revenues and increased corporate expenses. Year-to-date 2023 non-GAAP adjusted EBITDA was a loss of $50 thousand, compared to a loss of $1.0 million in year-to-date 2022, primarily due to improved margins at our Construction division.

Operating Cash Flow

Q3 2023 cash flow from operations was an inflow of $0.8 million, compared to an outflow of $3.2 million for the same period in the prior year. The increase in cash flow was due in part to decreased use of cash for working capital in 2023. Year-to-date 2023 cash flow from operations was an inflow of $2.7 million, compared to an outflow of $0.2 million for year-to-date 2022. This was also due in part to decreased use of cash for working capital in 2023.

Preferred Stock Dividends

In Q3 2023, 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 September 1, 2023, and the payment date was September 12, 2023.

Conference Call Information

A conference call is scheduled for 10:00 a.m. ET (7:00 a.m. PT) on November 8, 2023 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 [email protected] or [email protected].

Use of Non-GAAP Financial Measures by Star Equity Holdings, Inc.

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, 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 November 8, 2023.

About Star Equity Holdings, Inc.

Star Equity Holdings, Inc. is a diversified holding company with two divisions: Construction and Investments. Prior to the May 4, 2023 sale of Digirad Health, Star Equity Holdings had three divisions: Healthcare, Construction, and Investments.

Construction

Our Construction division manufactures modular housing units for commercial and residential real estate projects and operates in two businesses: (i) modular building manufacturing and (ii) structural wall panel and wood foundation manufacturing, including building supply distribution operations for professional builders.

Investments

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

Healthcare

Our Healthcare division, which operated as Digirad Health until the sale of Digirad Health on May 4, 2023, provided products and services in the area of nuclear medical imaging with a focus on cardiac health.

Forward-Looking Statements

“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 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. Forward-looking Statements include, without limitation, statements regarding (i) the plans and objectives of management for future operations, including plans or objectives relating to acquisitions and related integration, development of commercially viable products, novel technologies, and modern applicable services, (ii) projections of income (including income/loss), EBITDA, earnings (including earnings/loss) 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. Moreover, forward-looking statements necessarily involve assumptions on the Company’s part. These 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 substantial amount of debt of the Company and the Company’s ability to repay or refinance it or incur additional debt in the future; the Company’s need for a significant amount of cash to service and 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 (including the recent coronavirus COVID-19 outbreak); 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 the Company's business; unfavorable changes in the extensive governmental legislation and regulations governing healthcare providers and the provision of healthcare services and the competitive impact of such changes (including unfavorable changes to reimbursement policies); high costs of regulatory compliance; the liability and compliance costs regarding environmental regulations; the underlying condition of the technology support industry; the lack of product diversification; development and introduction of new technologies and intense competition in the healthcare industry; 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, as well as factors related to the Company’s business including economic and financial market conditions generally and economic conditions in the Company’s markets; 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 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, and, 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.

For more information contact:  
Star Equity Holdings, Inc.The Equity Group 
Rick ColemanLena Cati 
Chief Executive OfficerSenior Vice President 
203-489-9508212-836-9611 
[email protected][email protected] 


(Financial tables follow)

Star Equity Holdings, Inc.
Condensed Consolidated Statements of Operations
(Unaudited) (In thousands, except for per share amounts)

  Three Months Ended
September 30,
 Nine Months Ended
September 30,
   2023   2022   2023   2022 
Revenues:        
Construction $10,435  $11,107  $31,674  $39,544 
Total revenues  10,435   11,107   31,674   39,544 
         
Cost of revenues:        
Construction  8,187   7,975   22,433   32,341 
Investments  45   58   169   221 
Total cost of revenues  8,232   8,033   22,602   32,562 
         
Gross profit  2,203   3,074   9,072   6,982 
         
Operating expenses:        
Selling, general and administrative  3,434   3,096   11,327   9,981 
Amortization of intangible assets  430   430   1,290   1,290 
Total operating expenses  3,864   3,526   12,617   11,271 
         
Income (loss) from continuing operations  (1,661)  (452)  (3,545)  (4,289)
         
Other income (expense):        
Other income (expense), net  (965)  (713)  (506)  (1,157)
Interest income (expense), net  433   (120)  569   (400)
Total other income (expense), net  (532)  (833)  63   (1,557)
         
Income (loss) before income taxes from continuing operations  (2,193)  (1,285)  (3,482)  (5,846)
Income tax benefit (provision) from continuing operations  (172)  299   (233)  (861)
Income (loss) from continuing operations, net of tax  (2,365)  (986)  (3,715)  (6,707)
Income (loss) from discontinued operations, net of tax  (257)  (898)  27,119   (454)
Net income (loss)  (2,622)  (1,884)  23,404   (7,161)
Deemed dividend on Series A perpetual preferred stock  (479)  (479)  (1,437)  (1,437)
Net income (loss) attributable to common shareholders $(3,101) $(2,363) $21,967  $(8,598)
         
Net income (loss) per share        
Net income (loss) per share, continuing operations        
Basic* $(0.15) $(0.06) $(0.24) $(0.46)
Diluted $(0.15) $(0.06) $(0.24) $(0.46)
Net income (loss) per share, discontinued operations        
Basic* $(0.02) $(0.06) $1.74  $(0.03)
Diluted $(0.02) $(0.06) $1.72  $(0.03)
Net income (loss) per share        
Basic* $(0.17) $(0.12) $1.50  $(0.49)
Diluted* $(0.17) $(0.12) $1.49  $(0.49)
Net income (loss) per share, attributable to common shareholders        
Basic* $(0.20) $(0.15) $1.41  $(0.59)
Diluted* $(0.20) $(0.15) $1.40  $(0.59)
Weighted-average common shares outstanding        
Basic*  15,681   15,434   15,573   14,503 
Diluted*  15,819   15,434   15,743   14,503 
         
Dividends declared per share of Series A perpetual preferred stock $0.25  $0.25  $0.75  $0.75 


*Earnings per share may not add due to rounding


Star Equity Holdings, Inc.
Condensed Consolidated Balance Sheets
(Unaudited) (In thousands, except share amounts)

  September 30, 2023
(unaudited)
 December 31, 2022
Assets:    
Current assets:    
Cash and cash equivalents $20,691  $4,377 
Restricted cash  561   142 
Investments in equity securities  4,309   3,490 
Accounts receivable, net of allowances of $116 and $270, respectively  3,727   7,975 
Note receivable, current portion  223   73 
Inventories, net  4,243   4,678 
Other current assets  859   682 
Current assets – discontinued operations     17,851 
Total current assets  34,613   39,268 
Property and equipment, net  5,217   5,665 
Operating lease right-of-use assets, net  1,569   1,856 
Intangible assets, net  12,062   13,352 
Goodwill  4,438   4,438 
Cost method investment  6,000    
Notes receivable  8,327   1,285 
Other assets  36    
Non-current assets – discontinued operations     7,438 
Total assets $72,262  $73,302 
     
Liabilities and Stockholders’ Equity:    
Current liabilities:    
Accounts payable $1,141  $1,447 
Accrued liabilities  1,386   462 
Accrued compensation  1,633   1,838 
Accrued warranty  42   38 
Lumber derivative contracts  94   104 
Deferred revenue  1,479   1,673 
Short-term debt  537   3,383 
Operating lease liabilities  395   372 
Finance lease liabilities  54   82 
Current liabilities – discontinued operations     18,146 
Total current liabilities  6,761   27,545 
Deferred tax liabilities  254    
Operating lease liabilities, net of current portion  1,208   1,510 
Finance lease liabilities, net of current portion  45   96 
Non-current liabilities – discontinued operations     2,396 
Total liabilities  8,268   31,547 
     
Stockholders’ Equity:    
Preferred stock, $0.0001 par value: 10,000,000 shares authorized: Series A Preferred Stock, 8,000,000 shares authorized, liquidation preference ($10.00 per share), 1,915,637 shares issued and outstanding at September 30, 2023. (Liquidation preference: $18,988,390 as of September 30, 2023.)  18,988   18,988 
Series C Preferred stock, $0.0001 par value: 25,000 shares authorized; no shares issued or outstanding      
Common stock, $0.0001 par value: 50,000,000 shares authorized; 15,826,217 and 15,177,919 shares issued and outstanding (net of treasury shares) at September 30, 2023 and December 31, 2022, respectively  2   1 
Treasury stock, at cost; 258,849 shares at September 30, 2023 and December 31, 2022, respectively  (5,728)  (5,728)
Additional paid-in capital  160,549   161,715 
Accumulated deficit  (109,817)  (133,221)
Total stockholders’ equity  63,994   41,755 
Total liabilities and stockholders’ equity $72,262  $73,302 


Star Equity Holdings, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited) (In thousands, except per share amounts)

  Three Months Ended
September 30,
 Nine Months Ended
September 30,
   2023   2022   2023   2022 
Net income (loss) from continuing operations $(2,365) $(986) $(3,715) $(6,707)
Acquired intangible amortization  430   430   1,290   1,290 
Unrealized loss (gain) on equity securities (1)  971   834   24   834 
Unrealized loss (gain) on lumber derivatives (2)  137   153   (10)  1,298 
Interest income  440      686    
Transaction costs related to sale (3)  123      1,281    
Transaction costs related to mergers and acquisitions (4)  17      17    
Loss (Gain) on sale of assets  38      (386)   
Write off of lease liabilities  240      240    
Financing costs (5)  2   115   151   324 
Income tax (benefit) provision  171   (299)  232   861 
Non-GAAP adjusted net income (loss) from continuing operations $204  $250  $(190) $(2,097)
         
Net income (loss) from continuing operations per diluted share $(0.15) $(0.06) $(0.24) $(0.46)
Acquired intangible amortization  0.03   0.03   0.08   0.09 
Unrealized loss (gain) on equity securities (1)  0.06   0.05      0.06 
Unrealized loss (gain) on lumber derivatives (2)  0.01   0.01      0.09 
Interest income  0.03      0.04    
Transaction costs related to sale (3)  0.01      0.08    
Transaction costs related to mergers and acquisitions (4)            
Loss (Gain) on sale of assets        (0.02)   
Write off of lease liabilities  0.02      0.02    
Financing costs (5)     0.01   0.01   0.02 
Income tax (benefit) provision  0.01   (0.02)  0.01   0.06 
Non-GAAP adjusted net income (loss) from continuing operations per basic share (6) $0.01  $0.02  $(0.01) $(0.14)
Non-GAAP adjusted net income (loss) from continuing operations per diluted share (6) $0.01  $0.02  $(0.01) $(0.14)


(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 one time transaction costs related to the sale of the Healthcare Division.
(4) Reflects one time 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 to the total for the year, and the sum of individual items may not equal the total.


Star Equity Holdings, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited) (In thousands)

For The Three Months Ended September 30, 2023 Construction Investments Star Equity Corporate Total
         
Net income (loss) from continuing operations $(108) $(763) $(1,494) $(2,365)
Depreciation and amortization  515   45   9   569 
Interest (income) expense  7   (193)  (247)  (433)
Income tax (benefit) provision  1      170   171 
EBITDA from continuing operations  415   (911)  (1,562)  (2,058)
         
Unrealized loss (gain) on equity securities (1)     971      971 
Unrealized loss (gain) on lumber derivatives (2)  137         137 
Interest income     440      440 
Stock-based compensation  9      67   76 
Transaction costs related to sale (4)        123   123 
Transaction costs related to mergers and acquisitions (5)        17   17 
Loss (Gain) on sale of assets     38      38 
Write off of lease liabilities  240         240 
Financing costs (6)  2         2 
Non-GAAP adjusted EBITDA from continuing operations $803  $538  $(1,355) $(14)


For The Three Months Ended September 30, 2022 Construction Investments Star Equity Corporate Total
         
Net income (loss) from continuing operations $975  $(561) $(1,400) $(986)
Depreciation and amortization  489   58      547 
Interest expense  78   42      120 
Income tax (benefit) provision        (299)  (299)
EBITDA from continuing operations  1,542   (461)  (1,699)  (618)
         
Unrealized loss (gain) on equity securities (1)     834      834 
Unrealized loss (gain) on lumber derivatives (2)  153         153 
Stock-based compensation  6      99   105 
Severance and retention (9)        3   3 
Financing costs (6)  98   17      115 
Non-GAAP adjusted EBITDA from continuing operations $1,799  $390  $(1,597) $592 


For The Nine Months Ended September 30, 2023 Construction Investments Star Equity Corporate Total
         
Net income (loss) from continuing operations $1,746  $178  $(5,639) $(3,715)
Depreciation and amortization  1,530   169   21   1,720 
Interest (income) expense  52   (276)  (345)  (569)
Income tax (benefit) provision  1      231   232 
EBITDA  3,329   71   (5,732)  (2,332)
         
Unrealized loss (gain) on equity securities (1)     24      24 
Unrealized loss (gain) on lumber derivatives (2)  (10)        (10)
Interest income (3)     686      686 
Stock-based compensation  18      261   279 
Transaction costs related to sale (4)        1,281   1,281 
Transaction costs related to mergers and acquisitions (5)        17   17 
Loss (Gain) on sale of assets     (386)     (386)
Write off of lease liabilities  240         240 
Financing costs (6)  134   17      151 
Non-GAAP adjusted EBITDA $3,711  $412  $(4,173) $(50)


For The Nine Months Ended September 30, 2022 Construction Investments Star Equity Corporate Total
         
Net income (loss) from continuing operations $153  $(794) $(6,066) $(6,707)
Depreciation and amortization  1,471   221      1,692 
Interest expense  269   131      400 
Income tax (benefit) provision        861   861 
EBITDA  1,893   (442)  (5,205)  (3,754)
         
Unrealized loss (gain) on equity securities (1)     834      834 
Unrealized loss (gain) on lumber derivatives (2)  1,298         1,298 
Stock-based compensation  17      300   317 
Severance and retention (9)        3   3 
Financing costs (6)  259   65      324 
Non-GAAP adjusted EBITDA $3,467  $457  $(4,902) $(978)


(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 one time transaction costs related to the sale of the Healthcare Division.
(5) Reflects one time transaction costs related to potential mergers and acquisitions.
(6) Reflects financing costs from our credit facilities.


Star Equity Holdings, Inc.
Supplemental Debt Information
(Unaudited) (In thousands)

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

  September 30, 2023 December 31, 2022
  Amount Weighted-Average Interest Rate Amount Weighted-Average Interest Rate
Revolving Credit Facility – Premier $537  9.25% $  %
Revolving Credit Facility – eCapital EBGL    %  2,592  10.25%
Revolving Credit Facility – Webster    %    %
Total Short-term Revolving Credit Facilities $537  9.25% $2,592  10.25%
eCapital - Star Loan Principal, net $  % $791  10.50%
Short Term Loan $  % $791  10.50%
Total Short-term debt $537  9.25% $3,383  10.31%


Star Equity Holdings, Inc.
Supplemental Segment Information
(Unaudited) (In thousands)

  Three Months Ended
September 30,
 Nine Months Ended
September 30,
   2023   2022   2023   2022 
Revenue by segment:        
Construction $10,435  $11,107  $31,674  $39,544 
Investments  89   159   405   475 
Intersegment elimination  (89)  (159)  (405)  (475)
Consolidated revenue $10,435  $11,107  $31,674  $39,544 
         
Gross profit (loss) by segment:        
Construction $2,248  $3,132  $9,241  $7,203 
Investments  44   100   236   253 
Intersegment elimination  (89)  (158)  (405)  (474)
Consolidated gross profit $2,203  $3,074  $9,072  $6,982 
         
Income (loss) from continuing operations by segment:        
Construction $(21) $1,150  $1,960  $681 
Investments  (71)  97   (527)  236 
Corporate, eliminations and other  (1,569)  (1,699)  (4,978)  (5,206)
Segment income (loss) from operations $(1,661) $(452) $(3,545) $(4,289)
         
Depreciation and amortization by segment:        
Construction $515  $489  $1,530  $1,471 
Investments  45   58   169   221 
Star Equity corporate  9      21    
Total depreciation and amortization $569  $547  $1,720  $1,692