KBS Builders Wins $2.1 Million Contract For Multifamily Construction Project in Vermont

Rhea-AI Summary

Star Equity Holdings (NASDAQ: STRR) announced that its subsidiary, KBS Builders, has secured a $2.1 million contract to manufacture 16 modules for three 4-unit apartment buildings in Randolph, Vermont. Manufacturing will begin in February, with delivery scheduled for Q2 2025.

This contract follows two multimillion-dollar affordable housing projects in Maine announced in October. CEO Rick Coleman highlighted KBS's strong position in the New England commercial construction market, particularly in multifamily housing, affordable housing, workforce housing, and college dormitories. The company anticipates continued market momentum through 2025, supported by improving interest rates, strong backlog, and positive customer feedback.

Positive

• Secured new $2.1 million contract for multifamily housing project
• Strong backlog and sales pipeline indicating market momentum
• Expanding presence in New England commercial construction market
• Recent wins include multiple multimillion-dollar contracts

Negative

• None.

Insights

Financial Analyst

This $2.1 million contract win represents a significant revenue opportunity for STRR given its micro-cap status with a market cap of only $7.6 million. The project, comprising 16 modules for three 4-unit apartment buildings, showcases KBS Builders' growing presence in the commercial construction sector. The timing aligns well with anticipated Fed rate cuts in 2024, which should stimulate construction activity. The contract's value represents approximately 27.6% of STRR's current market capitalization, making it material to the company's financial outlook. This follows October's multimillion-dollar Maine contracts, indicating strong momentum in order flow. The improving interest rate environment could catalyze further growth in KBS's project pipeline, particularly in affordable housing where demand remains robust despite market cycles. The modular construction approach also offers cost and time advantages over traditional building methods, positioning KBS competitively in the New England market.

Construction Industry Analyst

The project's specifications reveal strategic positioning in the high-demand multifamily sector. Modular construction for apartment buildings typically delivers 20-30% faster completion times compared to traditional construction methods, while maintaining quality control through factory-based manufacturing. The Vermont location is notable, as the state faces a significant housing shortage, particularly in affordable multifamily units. KBS's ability to secure contracts in multiple New England states (Vermont and Maine) demonstrates regional market penetration and operational efficiency in terms of logistics and delivery capabilities. The Q2 2025 delivery timeline suggests efficient capacity utilization at KBS's manufacturing facilities. The company's diversification across various housing segments - affordable, workforce, energy-efficient and veteran housing - provides multiple revenue streams and reduces market-specific risks. This contract validates KBS's competitive advantages in the regional modular construction market.

OLD GREENWICH, Conn., Dec. 19, 2024 (GLOBE NEWSWIRE) -- Star Equity Holdings, Inc. (Nasdaq: STRR; STRRP) (“Star” or the “Company”), a diversified holding company, announced today that its wholly owned subsidiary, KBS Builders, Inc. (“KBS”), has signed a $2.1 million contract to manufacture multifamily apartments in Vermont.

The $2.1 million contract is for the manufacturing of 16 modules to be used for the construction of three 4-unit apartment buildings in Randolph, Vermont. Manufacturing is expected to commence in February, with delivery to be completed in the second quarter of 2025.

Rick Coleman, CEO of Star, commented, “We are pleased to announce the signing of another multifamily construction project in Vermont, demonstrating our robust position in the New England commercial construction market, particularly in multifamily housing. KBS has excelled in serving the commercial construction market and has exhibited vast capabilities in other key market segments such as affordable, workforce, energy-efficient, and veteran housing as well as college dormitories.”

Mr. Coleman continued, “This win, in addition to the two multimillion-dollar contracts for affordable housing projects in Maine announced in October, give us confidence in the improved market conditions and increased demand for new housing, particularly with respect to large projects. We believe that the improving interest rate environment, our strong backlog and sales pipeline, as well as feedback from our customers, indicate a momentum shift in the marketplace that should continue well into 2025. We believe KBS is well-positioned to capitalize on the opportunities arising from this growing demand.”

About Star Equity Holdings, Inc.

Star Equity Holdings, Inc. is a diversified holding company currently composed of two divisions: Building Solutions and Investments.

Building Solutions

Our Building Solutions division operates in three businesses: (i) modular building manufacturing; (ii) structural wall panel and wood foundation manufacturing, including building supply distribution operations; and (iii) glue-laminated timber (glulam) column, beam, and truss manufacturing.

Investments

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

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, free cash flow (FCF), 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 Coleman	Lena Cati
CEO	212-836-9611 / lcati@equityny.com
203-489-9508	Katie Murphy
admin@starequity.com	212-836-9612 / kmurphy@equityny.com

FAQ

What is the value and scope of KBS Builders' new Vermont contract (STRR)?

KBS Builders secured a $2.1 million contract to manufacture 16 modules for three 4-unit apartment buildings in Randolph, Vermont.

When will KBS Builders begin manufacturing and delivering the Vermont project (STRR)?

Manufacturing will begin in February, with delivery scheduled to be completed in the second quarter of 2025.

How many apartment units will be built under KBS Builders' new Vermont contract (STRR)?

The contract includes the construction of three 4-unit apartment buildings, totaling 12 apartment units.

What recent contracts has Star Equity Holdings (STRR) secured before the Vermont project?

Prior to the Vermont project, STRR announced two multimillion-dollar contracts for affordable housing projects in Maine in October.

What market segments does KBS Builders (STRR) serve in New England?

KBS Builders serves multiple segments including multifamily housing, affordable housing, workforce housing, energy-efficient housing, veteran housing, and college dormitories.