Star Equity's KBS Builders Secures Major Contracts Worth $5.2M
KBS Builders Secures Significant Commercial Contracts
Star Equity Holdings, Inc. is excited to announce that its subsidiary, KBS Builders, has successfully signed two major contracts worth a total of $5.2 million. These contracts focus on the manufacturing of housing units, promising to contribute positively not only to KBS's growth but also to addressing the ongoing housing shortage in the region.
Details of the Contracts
The first contract, valued at $3.1 million, involves the construction of 20 mixed-income housing units in Portland, Maine. This portion of the project will see KBS manufacturing 32 modular units, with production slated to kick off in the second quarter of 2025 and initial deliveries expected in the third quarter of the same year.
The second contract is a $2.1 million agreement for the creation of 14 housing units in the form of townhouses located in Bowdoinham, Maine. Manufacturing for this project will begin in the first quarter of 2025, with all deliveries concluding by the end of the second quarter of 2025.
Improving Financial Landscape
In conjunction with these contract announcements, Star Equity Holdings has disclosed preliminary financial metrics for the fourth quarter of 2024. Predicted revenues are approximately $17.1 million, a significant increase from the $14.1 million reported in the same quarter the previous year. Furthermore, gross profit is expected to rise to about $4.4 million, up from $2.9 million.
Star anticipates achieving a non-GAAP adjusted EBITDA from continuing operations around $1.1 million, a substantial turnaround from the loss of $0.1 million reported in the fourth quarter of 2023.
Market Outlook and Future Prospects
Rick Coleman, the CEO of Star Equity, has expressed optimism regarding the company's performance, noting a shift in momentum within the marketplace. He mentioned that increased activity from their Building Solutions customers has been evident, particularly following approvals for several projects that were on hold earlier in the year. This surge is expected to lead to enhanced revenues and margins as they move forward into 2025.
KBS Builders is indeed positioning itself as a leading player within the New England construction market. Coleman emphasized that the company's strong reputation and market presence would significantly benefit from the rising need for modular, factory-built construction, especially in light of a persistent housing shortage.
About Star Equity Holdings, Inc.
Star Equity Holdings, Inc. operates as a diversified holding company with three distinct divisions: Building Solutions, Energy Services, and Investments. As part of the Building Solutions division, KBS Builders focuses on the production of modular building systems and related components, aimed at meeting the demands of contemporary construction projects.
Building Solutions Division
This division encompasses three primary businesses, including modular building manufacturing, structural wall panel and wood foundation manufacturing, and glue-laminated timber products.
Energy Services Division
The Energy Services division specializes in the rental, sale, and repair of crucial tools used across various sectors such as oil and gas, geothermal industries, mining, and water-well services.
Investments Division
Star's Investments division plays a vital role in managing the company's real estate assets while overseeing investments in both private and public companies.
Frequently Asked Questions
What is the total value of the contracts signed by KBS Builders?
The total value of the contracts is $5.2 million.
Where will the housing units be constructed?
The units will be constructed in Portland and Bowdoinham, Maine.
When is the expected delivery for the housing units in Portland?
Deliveries for the Portland units are slated to begin in the third quarter of 2025.
What financial gains does Star Equity expect for Q4 2024?
Star Equity expects revenues to be around $17.1 million and gross profit to reach approximately $4.4 million.
What does KBS Builders specialize in?
KBS Builders focuses on modular building manufacturing and other construction-related solutions.
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