Star Equity Holdings initiates stock buyback program

OLD GREENWICH, CT – Star Equity Holdings, Inc. (NASDAQ:STRR), a company specializing in electromedical and electrotherapeutic apparatus, announced significant corporate developments in a recent SEC filing. On August 7, 2024, the company’s Board of Directors, following recommendations from the Compensation Committee, approved the 2024 Executive Incentive Bonus Plan, designed to incentivize executives through performance-based cash bonuses.

Under this new plan, executive bonuses will be tied to a mix of financial and strategic targets. Twenty percent of the potential bonus will be based on the company’s Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (AEBITDA) for both the first and second halves of fiscal 2024. Another ten percent will depend on meeting the corporate expense budget for the fiscal year. The remaining fifty percent will be awarded for achieving qualitative strategic company and individual objectives.

In another strategic move, the Board authorized a new stock repurchase program, the 2024 Stock Repurchase Program, which allows for the buyback of up to $1 million in common stock. This program grants the company flexibility to make repurchases based on various factors including market conditions, legal requirements, and capital availability. The repurchases may be conducted through open market transactions, accelerated share repurchase programs, or private negotiations, among other methods.

In other recent news, Star Equity Holdings has finalized the sale of two real estate properties, generating approximately $8.3 million in net proceeds. This move is part of the company’s strategic focus on capital allocation and earnings generation. The properties, a manufacturing facility in South Paris, Maine and a supply center in Big Lake, Minnesota, will continue to be operated by KBS Builders and Glenbrook Building Supply respectively, under long-term lease agreements.

In an effort to comply with Nasdaq’s minimum bid price requirement, Star Equity Holdings has also executed a 1-for-5 reverse stock split. This action, approved by shareholders and the Board of Directors, reduces the number of outstanding shares from approximately 15.8 million to around 3.2 million.

The company faced financial challenges in the first quarter of 2024, with revenues declining by 26.1% to $9.1 million and gross profit dropping by 63.1%. However, Star Equity Holdings remains confident in its sales pipeline and backlog.

In addition, Star Equity Holdings has strategically acquired Timber Technologies, a manufacturer of engineered wood products. This acquisition, expected to close in June 2024, was funded by a $7 million term loan from Bridgewater Bank at a 7.85% interest rate.

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