Star Equity Holdings, Inc. reported significant financial developments in its 10-Q filing for the quarter ending September 30, 2024. The company, classified as a non-accelerated filer and a smaller reporting company, experienced a notable increase in revenues, with total revenues reaching $13.7 million for the three months ended September 30, 2024, compared to $10.4 million for the same period in 2023, marking a 30.9% increase. For the nine months ended September 30, 2024, revenues totaled $36.3 million, up from $31.7 million in the prior year, reflecting a 14.5% increase.
Despite the revenue growth, the company reported a decline in profitability. Gross profit for the three months ended September 30, 2024, was $2.8 million, an increase from $2.2 million in the same period in 2023. However, gross profit for the nine months decreased to $6.6 million from $9.1 million year-over-year. The company reported a net loss of $2.0 million for the third quarter, an improvement from a loss of $2.6 million in the same quarter of 2023. For the nine months, the net loss was $8.0 million, a stark contrast to a net income of $23.4 million in the previous year, primarily due to the sale of the Healthcare business unit in May 2023.
The Building Solutions division, which includes brands such as KBS and EdgeBuilder, contributed significantly to revenue growth, with revenues of $13.7 million for the third quarter, attributed to acquisitions and increased demand despite economic headwinds. However, the division reported an operating loss of $578,000 for the quarter, compared to a loss of $21,000 in the same period last year.
Strategically, Star Equity made several key moves, including the acquisition of Timber Technologies Inc. and Timber Properties, LLC, for a total consideration of $23.1 million. The company also executed a reverse stock split effective June 14, 2024, and completed an investment in Enservco Corporation, acquiring a 19.9% equity stake. Additionally, the company recognized gains from the sale of real estate assets, including a $3.6 million gain from the sale of its Maine premises.
As of September 30, 2024, total assets increased to $85.7 million, while total liabilities rose significantly to $27.3 million, primarily due to new debt incurred from acquisitions. The company reported a material weakness in internal controls over financial reporting, prompting management to invest in staff training and external consulting to address the issue.
About STAR EQUITY HOLDINGS, INC.
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