Star Equity Holdings (STRR) investor relations material

Company overview and strategy

• Operates as a diversified holding company with three divisions: Building Solutions, Business Services, and Energy Services, plus an Investments Division.

• Focuses on acquiring microcaps and private companies to transition from microcap to small-cap status.

• Maintains a small corporate team to handle public company matters, freeing operating management to focus on growth and operations.

• Utilizes internal M&A expertise similar to a private equity firm, supporting portfolio companies with finance, strategy, and capital allocation.

• Recent merger with Hudson brought a $240 million NOL, enhancing future tax efficiency.

Recent acquisitions and investment approach

• Completed three private company acquisitions, mainly in Building Solutions and Energy Services, all accretive and aligned with growth strategy.

• Invests in undervalued microcaps, sometimes launching public campaigns to unlock value, as seen with Superior Drilling Products and Servotronics.

• Recently acquired a 5.4% stake in GEE Group, seeking operational synergies and cost savings.

• Prefers cash, debt, or non-convertible preferred stock for acquisitions, avoiding common stock due to perceived undervaluation.

• Maintains low leverage, with debt less than one times EBITDA at the segment level.

Growth outlook and financial targets

• Projects $13 million EBITDA and $240 million revenue by 2026, with a goal of $40 million EBITDA by 2030, excluding acquisitions.

• Building Solutions expected to grow top line at 10% annually, targeting $15 million EBITDA by decade's end.

• Business Services aims to return to $100 million gross profit and $20 million EBITDA, with potential to reach $200 million gross profit and $50 million EBITDA long-term.

• Energy Services targets $10 million EBITDA, diversifying into alternative energy sectors.

• Real estate portfolio valued at $10–$15 million, with plans for monetization via sale-leasebacks.