KBS Builders Wins $2 Million Contract for Nantucket Workforce Housing Project
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The contract signed by KBS Builders, a subsidiary of Star Equity Holdings, represents a strategic move within the modular construction sector, which is experiencing growth due to demands for cost-effective and timely solutions in the housing market. The importance of this contract lies in its potential to set a precedent for future public-private partnerships aimed at tackling the affordable housing crisis. Modular construction can be more cost-efficient and faster than traditional methods, which may lead to increased demand and higher profit margins for companies like KBS.
From a market research perspective, the contract's value at $2 million, while not transformative for a large company, is significant for the niche market of modular construction. It could signal underlying growth opportunities in the sector and possibly attract investor interest in companies with strong capabilities in modular housing. The announcement may also reflect positively on Star Equity's stock as it showcases the company's ability to secure substantial contracts and potentially expand its market share in the New England area.
Analyzing the financial implications of the contract, it is essential to consider the revenue recognition timing and the project's contribution to Star Equity's overall financial performance. Given the project's relatively short timeline, with manufacturing set to begin in March and completion by May, the financial impact will likely be reflected in the quarterly results of the fiscal year 2024. As the company has recently announced a similar project in Maine, the cumulative effect of these contracts could provide a boost to the company's revenue streams.
Investors should monitor the company's margins on these projects, as they can be indicative of operational efficiency and pricing power. If KBS can deliver these projects on time and within budget, it could enhance Star Equity's reputation and lead to more contracts, potentially improving long-term shareholder value. However, it's also important to consider the scalability of such projects and whether they can significantly impact earnings per share.
The use of modular units for affordable housing is a trend gaining traction in the construction industry, particularly in areas with high costs of living like Nantucket. The ability to manufacture these units off-site and assemble them on location can greatly reduce construction time and labor costs. This approach is environmentally friendly due to reduced waste and can also mitigate common delays caused by weather or labor shortages.
For the Town of Nantucket, this project is not just about immediate housing needs; it's an investment in the community's sustainability. For companies like KBS, it represents an opportunity to showcase their expertise in a burgeoning segment of the construction industry. The success of this project could lead to similar contracts with other municipalities, creating a ripple effect that could influence the industry's direction toward modular construction solutions.
OLD GREENWICH, Conn., Jan. 18, 2024 (GLOBE NEWSWIRE) -- Star Equity Holdings, Inc. (Nasdaq: STRR; STRRP) (“Star Equity” or the “Company”), a diversified holding company, announced today that its KBS Builders, Inc. (“KBS”) business has signed a
These modular units will be used to construct a multi-family building consisting of 20 apartments, offering affordable housing to those who live and work on the island. KBS expects to begin manufacturing these units in March, with delivery to be completed by May.
Rick Coleman, CEO of Star Equity, noted, “We are thrilled to start the year with the signing of another large affordable housing contract for KBS. Following the announcement of our
About Star Equity Holdings, Inc.
Star Equity Holdings, Inc. is a diversified holding company currently composed of two divisions: Construction and Investments.
Construction
Our Construction division manufactures modular housing units for commercial and residential real estate projects and operates in two businesses: (i) modular building manufacturing and (ii) structural wall panel and wood foundation manufacturing, including building supply distribution operations for professional builders.
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 | Senior Vice President |
| 203-489-9508 | 212-836-9611 |
| admin@starequity.com | lcati@equityny.com |
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