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Greetings, ladies and gentlemen, and welcome to Star Equity Holdings' first quarter 2026 financial results conference call. Please be advised that the discussions on today's call may include forward-looking statements. Such forward-looking statements involve certain risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. Please refer to Star Equity's most recent 10-K, 10-Q, and other filings for a more complete description of risk factors that could affect these projections and assumptions. The company assumes no obligation to update forward-looking statements as a result of new information, future events, or otherwise. Please also note that on this call, management may reference non-GAAP financial measures, including EBITDA, Adjusted EBITDA, adjusted net income, and adjusted earnings per share, which are all financial measures not recognized under U.S. GAAP.

As required by SEC rules and regulations, these non-GAAP financial measures are reconciled to the most comparable GAAP financial measures in our earnings release issued yesterday afternoon. If you did not receive a copy of the earnings release and would like one after the call, please contact Star Equity at 203-489-9500, or its investor relations representative, Lena Cati, of The Equity Group at 212-836-9611. This call is being broadcast live over the internet and may be accessed at the Star Equity's website via www.starequity.com. Shortly after the call, a replay will also be available on the company's website. It is now my pleasure to introduce Jeff Eberwein, Chief Executive Officer of Star Equity.

Thank you, operator, and welcome everyone. We greatly appreciate your interest in Star Equity Holdings, and we thank you for joining us today. I'll begin by reviewing the first quarter results for 2026 at the holding company level. After that, Jake Zabkowicz, Global CEO of Hudson Talent Solutions, will give us an update on the performance of our business services division. Finally, Rick Coleman, our Chief Operating Officer, will provide additional insights into the performance of our building solutions and energy services divisions. As highlighted on slide three of our earnings slides deck, our first quarter results reflect the merger we completed last August with revenue and gross profit showing strong year-over-year growth. These increases were driven largely by the inclusion of Star operating companies' results beginning after the merger closed August 22nd, 2025.

We have realized approximately $2.6 million of merger synergies on an annualized basis, as shown on slide four. That beats our initial expectation of about $2 million in merger synergies. Going back to the first quarter, we were impacted by the timing of new project starts and broader macroeconomic conditions. Despite these near-term pressures, we continued to make progress advancing our strategic priorities and strengthening our operating platform. Revenue increased 57% year-over-year to $50.1 million. Gross profit increased 25% to $20.6 million. We reported an Adjusted EBITDA loss of $1.6 million compared to a loss of $0.7 million in the prior year period. At the division level, our performance was mixed. Energy services delivered a strong quarter and continued to gain market share across key end markets.

Business services was worse than expected in a challenging talent environment, and we continue to invest for growth. Building solutions was impacted by delayed project awards and weather-related disruptions. That said, we're already seeing signs of improvement as we move through the second quarter, supported by new business wins, improving activity levels, and continued operational and cost focus across the organization. As shown on slide five, we ended the first quarter with $10.3 million of total cash, including $2.2 million of restricted cash. During Q1, we used $1.4 million in operating cash flow. We generated a little over $3 million from the sale leaseback transactions. We repurchased about $700,000 of stock on our share repurchase program, and we have $1.8 million remaining under the current authorization.

Over the last 12 months, we've repurchased approximately $3.3 million of stock. We continue to believe our stock is undervalued. We view share repurchases as an extremely attractive use of our capital. Across the company, we remain focused on disciplined execution, cost management, and investing in growth initiatives that we believe will enhance our competitive position and drive improved financial performance over the balance of the year. I'll turn it over to Jake to discuss our Hudson Talent Solutions business.

Thank you, Jeff, and good morning. Our business services division continued to demonstrate solid top-line growth in the first quarter, despite the challenging macroeconomic environment impacting many industries.

As shown on slide 10 of the deck, revenue increased by 9.8% and HTS year-over-year gross profit increased 6.4%, reflecting steady improvement despite continued macro-economic sustained pressures in the talent market. Regionally, the Americas and EMEA formed well with gross profit growth of 21% and 11% respectively, partially offset by an 8% decline in Asia Pac market, where the conditions remain more challenging. We have maintained a strong focus on innovation and operational efficiencies, including the expanded deployment of our agentic AI solutions to enhance recruiter productivity, improve candidate matching, and deliver greater value to our clients. These efforts are helping us navigate the current environment while positioning us to capitalize on improving market conditions in the future. As an example, new business activity accelerated meaningfully in the first quarter of 2026, exceeding levels seen in any quarter of 2025.

We've also achieved multiple renewals in Q1, with many of our existing clients opting for a non-competitive engagement process. This shows the depth and breadth of our partnerships in a very competitive market. We continue to take steps to strengthen our partnerships, maintain a disciplined approach to our investments, and grow the business. We're executing our playbook of land and expand with recent wins coming off the acquisition in Japan, giving us a foothold to address previously untapped opportunities. We have also taken steps to recalibrate our business in the Middle East, maintaining our commitment to have a presence in the region, but being realistic about the opportunity there, given the broader macroeconomic environment. The enhancements to our geographical footprint and our product offerings, particularly our digital offering, have driven robust new logo interest.

We have seen an uptick in customer conversations in recent months and are focused on forging long-term client relationships. We'll continue to take a disciplined approach as we execute our playbook for the remainder of the year. Looking ahead, we're focused on creating a more resilient, agile, and growth-oriented business for a longer term. I'm turning the call over to Rick, who will discuss the financial and operational performance of our building solutions and our energy services divisions. Rick.

Thanks, Jake, and good morning, everyone. I'll start with building solutions highlighted on slide eight. First quarter performance, while normally soft in the quarter, was below our expectations. A combination of delayed contracting awards, severe winter weather across our key markets, and continued macroeconomic pressures put downward pressure on both commercial and residential construction activity. Revenue for the quarter was $11.6 million, gross profit was $1.6 million, and Adjusted EBITDA was a loss of $900,000. While these results were impacted by near-term factors, our sales pipeline and customer conversations indicate underlying demand remains intact. We're also encouraged by recent wins, including a $4.2 million New Hampshire multifamily housing project we announced in April. Moving on to slide nine. Our quarter-end backlog was $8.0 million.

While the book-to-bill ratio of 0.72 is a significant decline from Q4, it partially reflects the timing of significant projects which slipped from Q1 to Q2. We expect backlog to rebuild as activity normalizes throughout the remainder of the year. Consistent with the strategy we outlined previously, we remain focused on disciplined project selection, operational execution, and margin management. We believe these priorities, combined with improving market conditions, position the business for stronger performance as the year progresses. Turning to slide 13, the energy services division delivered a strong quarter, maintaining the momentum we highlighted last quarter. Revenue was $3.5 million, gross profit was $1.5 million, and Adjusted EBITDA was $1 million. The business continues to gain share in core markets with particularly strong mining and geothermal performance.

These results reflect disciplined execution and the benefits of our diversified exposure across drilling applications, which continues to differentiate the platform and support consistent growth. Importantly, the division's strong growth has come as a result of market share gains in a declining rig count environment. We continue to invest in new tools to support this growth and believe the division is positioned to perform well in all conditions. Recognizing that we represent a relatively small percentage of our largest customers' purchases, we're also incorporating their specific needs in our investment decisions. In general, we believe we have significant opportunities to expand our presence in the geographies and markets we serve. I'll now turn the call back over to Jeff for closing remarks. Jeff?

Thank you, Rick. While the 1st quarter reflected expected seasonality and some near-term challenges, we're encouraged by improving activity levels, recent business wins, and the continued strength of our energy services platform. We look ahead, our priorities remain consistent: driving organic growth, improving operational efficiency, and maintaining a rigorous approach to capital allocation. In parallel, we continue to evaluate accretive M&A opportunities across our operating divisions, as well as potential new verticals where we can apply our operating model. Our confidence in the path forward is grounded in the progress made over the past year. 2025 marked a pivotal period for STAR following the August merger. We're beginning to realize the benefits of shared services, enhanced collaboration, and a more diversified holding company structure.

This has strengthened our operating and financial position, expanded our strategic flexibility, and increased our capacity to execute on a multi-pronged growth strategy. Across the organization, we're investing in people, technology, and processes to enhance scalability, deepen competitive advantages, and drive margin expansion and cash generation. This disciplined approach, combining organic execution with targeted external growth, positions us to compound value over time. With a stronger platform and a clear strategic roadmap, we believe we're well positioned to navigate the current environment and deliver improved performance over the balance of the year. We remain confident in our long-term outlook and continue to believe our shares are undervalued relative to the strength of our business and the opportunities ahead. Operator, can you please open the line for questions?

We will now begin the question and answer session. The first question today comes from Joe Gomes with Noble Capital. Please go ahead.

Good morning. Thanks for taking my questions.

Good day.

Jeff, I don't know if you could give us a little more insight into your recent announcement on GEE Group and what you think your game plan for that investment is?

Sure. Thanks for asking, Joe. You know, we identified GEE Group as an interesting investment, partly because it was trading below cash per share, which you don't, you don't see very often. Also, we thought it could potentially be a good fit for our business services division and could have some synergies with our Hudson Talent business. On top of that, Star itself is an amalgamation of a few different companies, and we completed a merger last year where we initially thought we would realize cost savings of $2 million, and that number came in at $2.6 million. We've shown, we believe we've shown that, merging another microcap into our structure, we can reduce a significant amount of unneeded duplicative costs.

On GEE Group specifically, you know, we were glad that they hired a financial advisor and that they decided to run a more formal process. We are participating from the outside. We only have public information. We don't have any material, non-public information on GEE Group at this time. We decided to really kick off the bidding process, for lack of a better term, by throwing a number out there, and importantly, our bid is contingent on the management team there agreeing to more normal and customary severance. We'll see how it plays out. There's scenarios where we could be the winning bidder. There's scenarios where other people outbid us. When we enter into these situations, we like to own somewhere between 5% and 10% of the target.

If we are outbid, we make money on our investment, and it also gives us more credibility when we, when we go public and bid that we, that we are also a shareholder. We'll just have to wait and see how it plays out. Either way, either one of those outcomes would be positive for us if we end up being the winning bidder or if someone outbids us and we make a nice profit on our investment.

Okay. Thanks for the, for the update. Then, you know, one of the things we've talked about in the past is monetization of some of the real estate assets and/or some of the private investments that you guys have, and maybe you could give us an update there. Kind of similarly, you know, you've got the Oxford, Maine plant that you've talked about potentially restarting. You know, where does that stand at this point?

Yeah, great. Another great questions, Joe. We have talked about having, we believe, at least $20 million of assets that don't really generate any EBITDA, or certainly not meaningful EBITDA, that we believe will get converted to cash over time. We did demonstrate that by completing the sale leasebacks on the assets that came with the Alliance Drilling Tools acquisition that we made a little over a year ago. The two remaining significant pieces of real estate we own, one is the real estate that came with the Timber Technologies acquisition two years ago. As you pointed out, we have an idle factory in Maine.

Both of those pieces of real estate, we believe, could either be monetized via sale leaseback transaction or just sold for cash. I think, I can't remember the estimate off the top of my head, but it's in our investor deck. It's somewhere in the $8 million-$10 million range for those two added together, we believe. On the Catalyst MedTech investment, you know, the majority shareholder there is a private equity firm in New York City. That business is doing well once again, completing acquisitions, having nice growth, having a nice future. Like all private equity investments, the private equity firm will exit at some point.

Our policy has always been we're just gonna mark this investment using the same methodology that the PE firm does. There was a downturn, a temporary downturn in the performance of that company, so the PE firm marked it down on their books. This was in the, I think really the 2024 timeframe that might have continued into 2025. We just marked it down on our books the same way they marked it down on their books. Now that performance has improved, they have marked it back up to our original mark from when we closed that transaction in May of 2023. Under GAAP accounting, we are not allowed to do that.

We're in the uncomfortable spot of having a different NAV for the exact same investment as what the PE firm has. Long story short, that will get converted to cash whenever the PE firm feels like it's right to investigate alternatives.

Okay, thanks for that. I'll get back in queue. Thank you.

Thank you.

The next question comes from Theodore O'Neill with Litchfield Hills Research. Please go ahead.

Oh, thanks very much. For Rick on the building solutions, can you talk about geographically where you're seeing some strength going here in the second quarter?

Go ahead, Rick.

Thanks, Theo. Sure. Happy to address that. We have good visibility to our pipeline, particularly in KBS, our modular home company in Maine, where we have larger projects, so higher revenue projects. We can see beginning at the early stage of the pipeline where the opportunities are. As we move through the pipeline and we begin talking about building modular components for our construction partners, we call that the active pipeline. The active pipeline are those projects where we're negotiating the terms, we're doing the initial design work, but we still haven't signed a contract. As we look into the active pipeline, we feel pretty confident there's strong demand still for more construction activity.

With interest rates where they are and a lot of uncertainty about interest rates, as well as, now we have, you know, war in the Middle East and a number of other things, it's just been very difficult to move those projects out of the pipeline and into construction-ready mode. I think that, based on what we're seeing here recently, we're gonna see significant improvement in the second quarter.

Okay. I don't know if this is question for you, Rick, but on the energy services, you or for Jeff, could you talk about if there are any dynamics related to the change in oil price and the drilling service business?

Yeah, I'll take that, Theo. You know, being from Texas originally, this is a sector I've followed most of my career. We're very happy I'll get to your question in a second. We've been very happy with this acquisition, and we feel like it's really thrived inside of Star. We have invested for growth. They had a plan to increase their market share, and we've executed really well on that plan since we completed the acquisition in March. If we just look at, you know, Q1 results, 2026 versus 2025, for example, like if you look at the pro forma table on our press release, you know, pretty nice year-on-year growth, and that was way before any increase in oil prices.

In fact, the industry shrank in Q1 2026 versus Q1 2025, if you just look at the rig count in the U.S., for example. They did a very good job of growing in some non-traditional sectors and winning business in things like geothermal, which has a really good growth outlook in the U.S. They've always been active in mining opportunities, water wells. They've also gotten into some carbon capture and some hydrogen drilling, which were really kind of off the radar screen a few years ago. We're excited about that business. It was performing very well. If activity improves later this year and into next year, and we think it will, we're poised to continue to have good growth there.

I'd say it's a little early for the clients to all of a sudden just flip a switch and start spending more capital. The early indicators are certainly there, and the conversations are happening.

Okay. My last question is about can you give us any sort of thoughts about Q2 operating expenses and whether we should be looking for them to be similar to Q1 levels?

You know, that's a really good question. We don't give guidance line by line on that. We do look at where the consensus is on Bloomberg. You know, the Q1 results were disappointing to us. We didn't hit our budget. You know, short term temporary factors. When we look out into Q2, when we look into the second half of the year, I think the Bloomberg consensus for Adjusted EBITDA is above $2 million, $2 million-$2.5 million, something like that. We're comfortable with that. If we hit that number, we'll have positive results for the first half of the year.

In other words, the Q2 positive EBITDA should exceed the Q1 loss. If we look out to the second half of the year, the Bloomberg consensus is that our Adjusted EBITDA should be $9 million. It's in the $8 million-$10 million range. We're very comfortable with that. Is that an absolute guarantee? No, it's not. That's what we're projecting internally. Could be higher than that, could be lower than that, but that is our best guess based on everything we're seeing in the business and based on what we see in the market and conversations with customers, what we see in our pipeline, historical conversion rates of that pipeline into backlog, which then translates into revenue.

Okay. Thanks, Jeff. Thanks very much.

As a reminder, if you would like to ask a question, please press star one to join the question queue. The next question comes from Michael Mathison with Sidoti. Please go ahead.

Good morning, you guys.

Good morning.

Couple questions from me. First sort of the big picture one for Business Services. In light of higher energy prices, global tensions, inflation, all the things we read about, can you comment on hiring trends in the three regions where Business Services operates?

Yeah, I'm gonna turn that over to Jake. Just at a high level, I would say our clients predominantly are Fortune 500 companies. In general, we're asking them to sign multi-year contracts, and we had some really nice, significant long-term contract renewals from two of our five top clients in Q1. That was really refreshing. Whenever there's uncertainty, regardless of the cause, just everything else being equal, it's not conducive to the Fortune 500 making long-term commitments. It's, you know, it's not helpful, but we don't wanna use it as an excuse. We wanna fight through it and keep pushing and keep providing good services. Jake, why don't I'm gonna turn it over to you to get a little more granular.

Yeah. Thank you, Jeff. Michael, good morning. How are you today?

Real good, thanks.

Thank you for the question. When you look at the overall macro hiring, you know, what we're seeing, it's truly spotty. What I mean by spotty is we definitely see some green shoots and some tailwinds in certain areas with some of our businesses. Quite conversely, we've also had some of our clients, you know, say, "Hey, hold on a second. Let's reevaluate where we're investing." If you look at each region, right? You take the APAC region in general at first, you know, the hiring volumes in APAC were still relatively strong, but the mix was different. What I mean by the mix, you saw a lot of more internal mobility or internal hiring and movement internally versus, you know, hiring externally and bringing new people into the businesses.

In some of our fee structures in that region, an internal placement is on a lower fee structure than an external placement for multiple purposes. One is that we're sourcing internally, and two is there's an optics of that cost of just moving internal placements around. When you look at EMEA and you look at the broader EMEA market, you know, I don't have to, you know, give you guys a update on what's happening over there, but it's causing a lot of pause and rethinking investments across all of the countries in EMEA. As I mentioned in the earnings call, we did take a structured approach to reevaluate our Middle East presence. We're gonna continue to be in the Middle East.

We're gonna continue to have entity and resources there, and we'll help support our enterprise-level clients in the Middle East. It is taking a drain in a lot of the hiring activity there and having our clients rethink again and pause in certain pockets, rethink of where they're gonna make investments. In the Americas, you know, we're seeing some pretty good signs of strength in the Americas right now. Latin America continues to be a growth market for us. We're signing new contracts there, you know, a couple this week already, that's exciting. It is at a smaller clip and a smaller pace than what we normally see. You know, we will see, you know, contracts, as Jeff mentioned, multi-year contracts.

We can hire anywhere from 100 to 1,000 people, if not north of that every single year. Now we're seeing some more project-based hiring. What we're seeing project-based hiring is a specific timeframe of less than a year and a specific number anywhere from 20 to a couple hundred. You get to more of the project-based versus versus that long-term forecast. I would say as a whole, we're still seeing relatively low attrition across all of the markets. There are some pockets where, you know, we are continuing to see some growth, which is great in many of our businesses.

To Jeff's point and to what we were talking about before, with our land and expand strategy and offering services in markets that were untapped to us before, is a critical strategy for our business. We're doing that in the likes of Japan, Latin America, and we're gonna continue to grow in those areas. Mike, I hope that answered your questions there.

It certainly did. Thank you, Jake. Very, very helpful. Turning to energy services, the revenue growth is striking, as you pointed out in your prepared remarks, speaking of market share gains and so forth. Do you feel like past a certain point, Alliance will have to invest in more drilling equipment, just to fulfill demand?

Yeah. We feel like we've already done that. We see them basically being flat with the Q1 run rate. We did. After we acquired it, we kinda took a countercyclical approach, and we saw an opportunity to increase share and enter some of these new markets. We approved one step at a time, a higher CapEx spend, and that higher CapEx spend very quickly led to revenue growth. We got, you know, positive feedback on our thesis very quickly. It is really a lot of that was just kind of a one-time increase that was needed to grow the business.

I think from here, we can keep that level flat and still have really good growth.

Great. Thank you. I'll close out with one more question coming back to building solutions. Obviously, the weather in the Northeast was horrendous, and that clearly played a role. In the balance of the year, do you see the book-to-bill coming back to 2025 levels?

Short answer, I Oh, I'm sorry. Jeff, why don't you go ahead?

Oh, yeah, go ahead. I was gonna say short answer, yes, and turn it over to Rick. Go ahead, Rick.

The problem is the numerator in that equation. As revenue picks up, we expect that that's going to continue to improve. I guess that's the, all the color that I can provide on that for now.

Okay. Well, great. Thank you for taking my questions. Good luck in the coming quarter.

Thank you.

Once again, if you would like to ask a question, please press star then one to join the question queue. That's star then one to ask a question. That concludes today's question and answer session. I will now turn the call over to Jeff Eberwein for closing remarks.

Well, thank you for joining us. Thank you for your interest in our company. We're available. Our contact information is on our website and is in the press release and our corporate material. Reach out if you have any follow-up questions. Thank you for your interest.

Thank you for joining the Star Equity Holdings first quarter conference call. Today's call has been recorded and will be available on the investors section of our website, www.starequity.com. Thank you for participating, and have a pleasant day.

Greetings everyone, and welcome to Star Equity Holdings fourth quarter 2025 financial results conference call. Please be advised that the discussions on today's call may include forward-looking statements. Such forward-looking statements involve certain risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. Please refer to Star Equity's most recent 10-K, 10-Q, and other filings for a more complete description of risk factors that could affect these projections and assumptions. The company assumes no obligation to update forward-looking statements as a result of new information, future events, or otherwise. Please also note that on this call, management will reference non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted net income, and adjusted earnings per share, which are all financial measures not recognized under U.S. GAAP.

As required by SEC rules and regulations, these non-GAAP financial measures are reconciled to their most comparable GAAP financial measures in our earnings release issued this morning. If you did not receive a copy of the earnings release and would like one after the call, please contact Star Equity at 203-489-9500, or its investors representative, Lena Cati from The Equity Group at 212-836-9611. Also, this call is being broadcast live over the Internet and may be accessed at Star Equity's website via www.starequity.com. Shortly after the call, a replay will also be available on the company's website. It is now my pleasure to introduce Jeff Eberwein, Chief Executive Officer of Star Equity.

Thank you, operator, and welcome everyone. We greatly appreciate your interest in Star Equity Holdings and thank you for joining us today. I'll begin by reviewing our fourth quarter results for 2025 at the holding company level. After that, Jake Zabkowicz, our Global CEO of Hudson Talent Solutions, will give us an update on the performance of our business services segment. Rick Coleman, our Chief Operating Officer, will provide insights into the performance of two business segments, building solutions and energy services. Our fourth quarter financial results reflect positive momentum and improvement over the prior year quarter, largely attributable to the addition of building solutions and energy services divisions, which were added in August 2025.

As compared to the fourth quarter of 2024, our fourth quarter 2025 revenue grew 69%, gross profit increased 38%, and adjusted EBITDA grew 156% to $2.2 million. Similarly, our 2025 full year results were impacted by the addition of these divisions starting in August. When compared to 2024, it drove a revenue increase of 23%, a 14% increase in gross profit, and an increase in adjusted EBITDA from $0.9 million to $4.2 million. If we look at the results on a pro forma basis, our full year revenue grew to approximately $225 million, a 7% increase. Our gross profit grew to approximately $95 million, a 6% increase, and our adjusted EBITDA almost tripled to $12.6 million.

We ended the year with $13.4 million in cash, including restricted cash. Year-end working capital, excluding cash, jumped to $22.4 million, which represents a temporary buildup that is expected to decline in the first quarter of 2026. Lastly, we ended 2025 with $215 million of usable NOL carryforwards. Now, I'll turn the call over to Jake to discuss our business services segment.

Thank you, Jeff, and good morning. Our business services segment delivered another strong quarter, demonstrating solid performance despite a challenging macroeconomic landscape that has affected many industries. We've continued to adapt to market shifts supported by enduring strength of our client relationships, which drive repeat business and consistent demand for our services. In the fourth quarter, our business services division achieved 3% increase in gross profit versus Q4 of 2024, while full year gross profit increased 2% compared to 2024. A resilient outcome given the economic challenges facing the talent market in 2025, and many companies in the sector experienced a continued revenue declines. Regionally, both APAC and Americas delivered strong performances with gross profit of 11.7% and 4.4% respectively. These gains were partially offset by EMEA, where gross profit declined 18.7%.

Throughout 2025, we made strategic investments to accelerate future growth while realizing cost efficiencies throughout operational improvements. We've also expanded our go-to-market strategy, enhancing our services portfolio to better meet the evolving needs of existing and prospective clients. At the same time, we continue to lead in digital transformation of the hiring industry, leveraging Agentic AI and advanced automation to streamline workflows, enhance decision-making, and respond rapidly to the evolving client demands. By expanding our digital ecosystem and strengthening our enterprise capabilities, we are delivering more innovative and efficient cost-effective talent solutions at scale.

These investments enable us to improve speed, accuracy, transparency across hiring life cycles while empowering our teams and clients with smarter tools and data-driven insights. Looking ahead, our talented and dedicated team is well-positioned to sustain this momentum. We remain focused on building a resilient, agile, and growth-orientated business that can quickly adapt and shift to the market dynamics while continuously delivering value to our clients and partners. This commitment is underpinned by continued investments in our people, technology, and culture of service excellence that prioritizes collaboration, accountability, and innovation. Now I'm turning the call over to Rick, who will be discussing financial and operational performance of our Building Solutions and Energy Services segments.

Thank you, Jake. Good morning, everyone. Residential and commercial building demand were relatively soft throughout the year, but our building solutions segment delivered strong results, including significantly higher sales and profitability. Fourth quarter 2025 building solutions revenue was up $18 million, gross profit was $4.6 million, and adjusted EBITDA was $1.9 million. For the full year 2025, revenue was $27.6 million, gross profit was $6.3 million, and adjusted EBITDA was $2.5 million. On a pro forma basis, all full year 2025 metrics improved over 2024, with revenue of $71.9 million, gross profit of $18 million, and adjusted EBITDA of $7.2 million. Building solutions backlog as of December 31, 2025 was $9.6 million, and the trailing twelve-month book-to-bill ratio was 0.89.

We expect the backlog trends to improve in the first half of the year as several high-value projects move from the pipeline to the backlog. For 2026, we expect the U.S. home construction market to be in a gradual, modest recovery. With solid underlying demand from a long-term housing shortage and favorable demographics, single-family construction and new home sales should improve in 2026. However, gains are likely to be modest and constrained by still elevated interest rates. At the same time, the market is adapting to the current environment and consumer affordability concerns with greater emphasis on smaller, more affordable homes and townhomes in lower cost regions, trends where we have significant strength and experience. In this environment, our strategy of project selectivity and disciplined execution will remain central to our approach.

By concentrating on high value, high margin opportunities and ensuring rigorous project management, we've been able to maintain healthy profit margins while deepening our existing client relationships. Those relationships, combined with our reputation for high quality work delivered on time and within budget, are critical to our continued success and position us well to expand our footprint across key markets. Turning to our energy services division, ADT's performance showed continued strength. Although the broader oil and gas sector experienced a weaker fourth quarter, the division expanded market share across all core markets, with particularly robust growth in mining and geothermal. These results highlight the team's ability to combine strong execution with innovation across a broad range of drilling markets and applications. Fourth quarter 2025 energy services revenue was $3.6 million, gross profit was $1.6 million, and adjusted EBITDA was $0.9 million.

Full year 2025 revenue was $4.9 million, gross profit was $1.9 million, and adjusted EBITDA was $1 million. On a pro forma basis, revenue for the full year 2025 was $13.2 million, gross profit was $5.5 million, and adjusted EBITDA was $2.9 million. Looking ahead, for both our building solutions and energy services segments, we plan to deepen our presence in core markets while thoughtfully entering new markets where we see attractive long-term demand. As always, our priority is to deliver sustainable long-term value for our shareholders, customers, and employees. I'll now turn the call back over to Jeff for some closing remarks. Jeff?

Thank you, Rick. 2025 marked a transformational year for Star and a critical step toward our long-term objectives of building scale and increasing value per share. The integration work since the merger is tracking well, and we are already realizing the anticipated cost synergies and enhanced collaboration benefits of our diversified holding company structure. The merger has also significantly strengthened our operating and financial position. We now have a broader range of strategic options and a greater capacity to execute on our multifaceted growth strategy. We remain confident in our long-term outlook and continue to believe that our stock is undervalued, strength of our business and the opportunities ahead. Reflecting that conviction, in 2025, we repurchased over $2.6 million of our stock and intend to continue using share repurchases under our recently approved plan as a tool to enhance shareholder value.

Across each of our business divisions, we are focused on driving organic growth, improving operational efficiency, and maintaining a rigorous approach to capital allocation. We're investing in people, technology, and processes to deepen our competitive advantages and improve scalability while also sharpening our focus on margin expansion and cash generation. In parallel, we continue to identify and evaluate potential accretive acquisitions that can build on the strengths of our existing operating divisions, as well as opportunities that could establish entirely new verticals. A disciplined approach to this dual path, growth from within and targeted external expansion, provides us operating flexibility and positions us to compound value over time. We're excited to build on the momentum of our fourth quarter performance as we work to deliver sustained long-term shareholder value.

With a more resilient balance sheet, a stronger operating platform, and a clear strategic roadmap, we believe Star is better positioned than ever to capture attractive opportunities, navigate market cycles, and expand our leadership in the markets we serve. We're committed to executing with discipline, maintaining a long-term mindset, and continuing to align our actions with the interests of shareholders. Operator, can you please open the line for questions?

At this time, we'll begin the question-and-answer session. To ask a question, you may press Star and then one using a touch-tone telephone. To withdraw your questions, you may press Star and two. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. Once again, that is Star and then one to join the question queue. Our first question today comes from Theodore O'Neill from Litchfield Hills Research. Please go ahead with your question.

Oh, thanks very much. For Rick, a couple of questions. The backlog dropped significantly, Q3 to Q4, and I'm wondering if that's a seasonal component to that. The second is, has weather had an impact since it's been severe in some places here where we are and out in Wisconsin as well. The third question is, are you seeing any delays in projects going forward as some people might be waiting for a change in interest rates?

Thanks, Theo. Good questions. We appreciate that. Yeah, we've seen, first of all, to the backlog. I think there's some seasonality to it, but, you know, the current backlog is a point in time. Affects our book-to-bill ratio, of course, but it can be impacted by a lot of different things. As projects move through the sales pipeline and get into what we refer to as the active pipeline, where we're actively negotiating the terms of a deal, a lot of things can happen at the back end. One of those is weather, as you mentioned. But weather can also affect site preparation for setting a modular home or wall panels. Design changes often come in at the last minute, permitting issues, and always financing is an issue.

The financing impact hits us two different ways. If interest rates are holding their own, as they are today at a relatively high level, that means there's fewer projects being built. Sometimes it's builders waiting to see some improvement. Sometimes it's just people not willing to move out of their existing low mortgage rates. That happens and, you know, banks also at the tail end want to see some additional information before they finalize a project. All of those things have an impact on us and keep us from moving something that we're ready to build to the final signature line. I'm not sure if all of that answered 100% of your questions. I know the weather, in particular, you asked more about.

We did have more weather impact than we expected, particularly around the Twin Cities area. You know, it's a temporary thing, and those projects haven't gone away, so we would expect to see some improvement in the coming quarters.

Okay. For Jeff, can you give us any update on what you're seeing in the M&A front?

Yeah, good question. We have a lot of activity right now. Nothing imminent, but when I look across our three divisions, operating divisions, we are in discussions on acquisition opportunities that would increase our size and be very complementary. There's a few things we're looking at in building solutions. One, you know, a few in energy services and also in our business services division. You know, it's active. Nothing is imminent, but you know, we're having some robust discussions and it's always hard to predict which ones get to the finish line, just because you have a buyer and a seller, and in some of these cases, they're private companies, and there's a lot of issues.

Can be family issues or just a lot of issues, you know, can come into play there. You know, we're working on several. Nothing's imminent, but I'll put it this way. It'd be disappointed if we didn't finalize one or more of those by the end of the year.

Okay. Thank you very much.

Thank you.

Our next question comes from Joe Gomes from Noble Capital Markets. Please go ahead with your question.

Good morning.

Morning, Joe.

I wanted to start off with just kind of big, broad, you know, did fourth quarter results come in line with your expectations going into the quarter? If not, what were the variances and what drove them?

Yeah, appreciate the question. I would say, you know, roughly in line with our expectations, but on the weaker side. You know, within business services, Europe, not just Europe, it's EMEA, has continued to be a weak spot for us. We see that turning around dramatically in 2026. We reengineered some things there. We have new leadership there, which is really important. But when I look at that division, you know, the EMEA piece of that was weaker than we expected. You know, building solutions as well, with weather and project slippage, you know, it was on the weaker side of our expectations. I'll say, you know, that weakness is gonna continue into Q1.

Q1 is gonna be our weakest quarter of the year, probably by far. Things are lining up pretty well for significant improvement the rest of the year. We think we're gonna continue to show year-over-year improvement. For people looking at quarter by quarter, you know, Q1 will be lower than Q4 in terms of revenue and EBITDA. When we look out at what the consensus is on Bloomberg for the full year for 2026, we're very comfortable with those numbers.

Okay. Thanks for that. I drill down a little bit more on the M&A front. I don't know if you can provide any additional color on the GEE Group investment that you had made.

Yeah. We think, look, we're only operating on public information there. It could potentially be a fit for our business services division. The business we're already in, Hudson Talent Solutions, has some similarities to that business. It's a business we think we understand pretty well, a business we're already in or at least adjacent to. We think there could be a lot of cost synergies, not just from GEE Group no longer being a public company, but also just inside of Star. We like the fact that their stock, before our announcement, was trading around cash. We've tried to interact with them as we disclosed, and they didn't engage with us. We crossed 5%, went public.

We wanted to let shareholders know about that lack of engagement. Since then, they announced that they've engaged an investment banker, and seems like they're gonna run a process. We expect to participate in that process, but we're very disciplined. You know, hopefully it gets sold. If it's accretive and attractive, we could participate in that process. If someone else comes in and just to be frank, you know, pays a higher value than what we see, we'll benefit as shareholders and go on to the next one. I will say the benefit of you know, our model is to increase size and scale over time, and Star is an amalgamation of three microcaps already.

We are looking for other microcaps that could be a fit for Star. I will say us going public on that one has led to frustrated shareholders, not only of GEE Group, but frustrated shareholders of other companies coming to us with ideas, which we like. That's a positive of our public actions. Even if we don't end up with GEE Group at the end of the day as part of Star, it'll be totally fine. We'll make money on our investment. It has already done a lot to lead to some interesting idea flow into Star's M&A team.

Great. One more for me. You talked about a temporary buildup in working capital. I wonder if you just could provide a little more color as to, you know, what's behind that and why you think that will turn around here in the first half of this year?

Yeah. Working capital, as you know, fluctuates each quarter and, it's very hard to predict, and it depends on the business. In a lot of cases, our counterparties are some pretty big companies and, they're very creditworthy. They have really high credit ratings, but they'll often, you know, stretch partners, sometimes. If we have a big invoice, hard to know if it's gonna get paid in December or get paid in January. Q4 was just one of those odd quarters where a lot of different things aligned to cause a working capital build-up and, a lot of payments came in, for example, in January. You know, don't wanna predict exactly where it's gonna end up at the end of Q1.

Usually, Q1 is a poor working capital quarter, and Q4 is a positive one. For whatever reason, it seems like that is gonna be the opposite this time around, where Q4 had a working capital build-up and Q1 will be from a working capital standpoint, much better than a typical Q1.

Okay, great. Thank you for that. I'll get back in queue. Thanks.

Thanks, Joe.

Our next question comes from Michael Matson from Sidoti & Company. Please go ahead with your question.

Good morning, you guys.

Morning.

A couple questions from me. Starting with business services. We all see the news. The headlines about hiring are very gloomy, just gloomy day by day. Hudson revenue was up 5% year-over-year. Can you comment about the verticals where you saw success in the quarter?

Sure. I'll let Jake answer that question.

Yeah. Mike, good morning. Thank you for that question. You know, we have a very unique position here at Hudson Talent Solutions, right? We are about 1,000 employees. We are in, you know, over 30 different countries, and that has actually allowed us to diversify, you know, both from a client perspective as well as from an industry perspective. You know, yes, the market is soft, unfortunately, with the macroeconomic challenges that, you know, everybody's facing. We're seeing some trepidation in both the, you know, investments in hiring, but also people wanting to leave their jobs. From a sector perspective, we did see an increase in our manufacturing and our life sciences businesses, which was pretty interesting.

We saw that based on our land and expand strategy, where we're taking our existing clients into new markets, into new regions and new geographies, that they have hiring needs for. Those are the two primarily, you know, stable industries that we've seen, you know, across the board consistently in 2025. With the addition to our acquisition strategy in 2025 as well, we brought on ACG Group, which is our Japanese acquisition, that we did in at the Q3 into Q4. We are excited about growing and landing and expanding new clients and existing clients into the Japanese market as well. More to come there. The team is actively working on it.

Yes, you know, the revenue growth was positive for FY 2025, considering the fact that many in our industry saw revenue declines in FY 2025.

Great. Turning to building solutions, I noted that the gross margin was 25% in the quarter. That met the target you discussed in the last quarterly call where it was below 20%. Do you feel like 25% is kind of the new normal? Obviously, it'll fluctuate a little bit quarter to quarter, but is that a good figure to use for modeling?

Short version, yes.

Yeah.

This is Jeff again.

Go ahead, Jeff.

Short version, yes, Michael. You know, it's always tricky in that business to look at it quarter by quarter, so we look at it more at trend over time. We've had a lot of initiatives underway to improve gross margin and, you know, mix plays a role. A lot of different things play a role, but our internal target is 25%. That is a number we expect to achieve over time and hopefully even improve on.

For modeling purposes, you know, I do think that's a good number to use, but I wouldn't want someone to think, you know, that there's some guarantee or expectation that we're gonna hit that number every single quarter just because there's a lot of issues that come into play with mix and weather and, you know, things like that. Short version, yes, that's a good number to use.

Sure. Understood. Things will be different quarter by quarter. You also mentioned or referred to the $2 million in administrative and SG&A expense synergies you were forecasting would come out of the merger. Can you talk about the timing for fully harvesting that? Do you think that'll all be baked in this year? At what point would you think some of the non-recurring charges would drop off and you'll just be at a steady state?

Yeah. Really good question. I think the key thing I look at is in our segment reporting, if one were to look at Q4 for the corporate column, the corporate and I'm looking at the adjusted EBITDA line. So it was $1.9 million. That number for Q4 was significantly lower than the pro forma number for Q3. I don't have that number off the top of my head, but that does represent a pretty good sequential decline. Said another way, if you take Q4 times four, you would get to somewhere in this $7.5 million-$8 million range for corporate, and that's a pretty good number. If you look at, you know, pro forma.

Well, if you just looked at corporate of the two companies separately before the merger, you know, I think it was a lot higher than 8. It was in the 10, 11 range, maybe even higher than that. So we've achieved most of the synergies already. You know, still some more to come, but you know, that 1.9 for corporate for Q4 was. I was happy to see that number.

Great. Just if you could talk about the non-recurring charges, you know, do you think that they'll drop off at some point, as the business stabilizes?

Yes.

Okay, great. Well, thank you for taking my questions, and congratulations on the quarter.

Thanks, Michael.

Our next question comes from George John Melas-Kyriazi from MKH Management. Please go ahead with your question.

Great. Thank you. Good morning, everybody. Could you give us some perspective on the growth that you expect in 2026 in revenue and net revenue, and what gives you some confidence that you will grow? Just also maybe try to understand on the business services side, if you exclude the acquisition in Japan, what was your organic growth profit growth?

Yeah. I'll turn it over to Jake here in a minute. When I look business by business, you know, our outlook right now is that Building Solutions will show some growth, you know, despite the low backlog number in Q4. When we look at our sales pipeline, what we expect will get converted into official backlog, it is pretty exciting. We do have to execute. There's a lot of moving parts and a lot of macro factors out there, but we'll be disappointed if Building Solutions doesn't have better results in 2026 than in 2025. Same thing for the Energy Services division. They have done an excellent job of diversifying away from traditional energy, meaning oil and gas.

They have been growing share in oil and gas, which has been good to see. They've done a very good job getting into some of these non-energy sectors that need service and use similar tools, and that would be mining, water, which are fairly big markets out west. Then the more recent ones are hydrogen drilling and even carbon capture, which is becoming a theme, and that's in addition to geothermal, which they've been in for some time. Really pleased to see that. We do have growth expectations for the business services divisions. Why don't I turn this over to Jake to talk about that division?

Yeah. Thanks, Jeff, great question. If we look at our trajectory and our growth strategy for FY 2026, it's gonna be very consistent with what we've implemented in FY 2025, where it's a three-prong approach, right? Prong number one is new logo growth, where we have our go-to-market team actively pursuing both active and passive deals out there in the industry and the market. They are meeting with new prospective clients, holding events, and participating in key events across the world, which is great.

The second prong is land and expand, which you've heard me say in a couple of these calls, where we take our existing clients, and we expand with them into either a new geography that we can support them in, or we take on an additional business unit or project within that client group. That has worked really well in FY 25. You know, part of those expansions lead to, you know, our also growth strategy in different regions. For instance, the investment in Latin America that we made in FY 25 or in Japan, in Q3, Q4 of last year. We're gonna continue that land and expand strategy. The third piece, as Jeff alluded to, earlier, is that we have an M&A strategy here in the business, services solutions, right?

We will continue to actively look at, you know, companies across the world to see if they can fit nicely within the Hudson Talent Solutions. That'll be our, you know, third key pillar in our growth strategy. Regarding your question on Japan, I don't have the exact number, but the Japanese revenue for FY 25 was minimal, because of the acquisition and when we started ramping up with our clients. We do expect that to continue to grow in FY 26. You know, from the actual number, it was. It had a minimal impact, but more of a growth strategy for our current and existing clients today.

Great. Super. Thanks, folks, again, for this clarity. Just a quick question on the tax side of things. With the significant NOL that Jeff Eberwein, you referred to, do you expect to pay cash taxes in 2026? If so, you know, can you give us roughly how much you expect? Those, of course, it depends on your results, but maybe give us a range.

Yeah. I'll let Matt Diamond, our Chief Accounting Officer, take a stab at that one.

Sure. Our cash taxes is one of those things that's tricky to predict. I'm gonna go back to the question before for one second just to say that the revenue for the full year for Japan was $254,000. It was not a significant driver on the growth rate. Like, if you back out that from the organic rate, it doesn't change the rounding at all in terms of business services for,

Great

For the full year, net revenue. Gross revenue rate. That'll be included in our 10-K. There will be some more information around the Japanese acquisition. In terms of cash taxes, there were a couple things that impacted our provision in the quarter. One was that there was what we would call a discrete item, where there was $1.1 million of an impairment, from a statutory perspective. These are investments that are intercompany, that our UK sub holds. It's just the way that our organizational entity chart works, in Hong Kong, India, Singapore, and Germany. In those entities, there was an impact where we wrote down the internal investment.

This is eliminated in consolidation, so there's no effect on our books in total, from an investment point of view, so you wouldn't see it in our financial statements. However, there is a deferred tax impact, and the deferred tax impact is $1.1 million. So that had a negative impact on our provision in the quarter. In terms of general cash taxes on a go-forward basis, the tricky part is that, 'cause we have revenue mix in different countries, and there are statutory rates that are in different countries. As you know, in the U.S., we have significant NOLs. We're, you know, $215 million of usable NOLs as of the end of this year, that we can utilize, but that's, you know, in the U.S. Internationally, U.K. has a statutory tax rate of 25%.

Australia has a statutory tax rate of 30%. In Australia, particularly, in the quarter, you know, we had strong results and therefore there was a you know, a provision and a cash tax impact from that. As long as we have, you know, positive results in these international entities where there are statutory tax rates, we will pay cash taxes. It's hard to predict because it depends on the mix in the country. It depends on forex rates. It depends on some things like that. But you know, going forward, we do expect to continue to pay taxes in these entities where we have positive results with statutory tax rates.

Yeah. George, hope that answered your question. I mean, if you want.

Well, yeah. Fantastic. I really appreciate that. It's education. I appreciate the education as well. Thank you.

Yeah. It's very frustrating given that we have a significant NOL, but that NOL is just for the U.S. You'll see in our 10-K when it gets filed, there'll be a table that shows where we paid cash taxes and, you know, number one almost always is Australia, and this is all from the business services where the business is global. The other ones you'll see there where we pay some cash taxes are the U.K. Those are the two bigger ones. Some smaller ones might be Hong Kong, China and India. You know, over time, as we have more income in the U.S., our tax rate will look for GAAP purposes more and more normal.

The cash taxes we pay every year will be, you know, a modest amount, you know, nothing that's a game changer. You know, $1 million or $2 million is what we would expect or what we would tell someone to model.

Great. Thank you.

Once again, if you would like to ask a question, please press star and then one. To withdraw your questions, you may press star and two. Our next question comes from David Siegfried who is a private investor. Please go ahead with your question.

Hey, good morning. Thanks for taking my call.

Good morning.

Hey, good morning. That sales leaseback, it looks like the Evanston, Wyoming property was completed. Are the other two gonna be closed here in the next month or two?

Yes.

That cash should show up maybe in first quarter?

That's our expectation.

Got it. Yeah. Did I understand correctly regarding building solutions that the pipeline would be potentially restored in the first half, 2026?

There are kind of two concepts here. We have a very strict definition for the word backlog. Backlog means signed contract, and we've received a cash deposit from the client. That's our definition. I don't know about other companies' definitions. Our backlog was down in the fourth quarter for all the reasons that Rick mentioned. When we look at the pipeline, the sales pipeline of all the projects, that hasn't really changed, and there's some pretty exciting things in that pipeline. When we look at a pipeline, we assign probabilities to it. We have the total pipeline, which is just all the projects that we're pursuing, and then we have the active pipeline, which is what Rick was referring to. The active pipeline are ones where it's really advanced.

There's been a lot of design work. We've probably already sent them a contract. It's you know, active pipeline is things that might have a greater than 50% chance of closing in a fairly short period of time, a quarter or two. Then once it's signed, it goes from active pipeline to backlog. I think we would be more concerned about the one-quarter dip in backlog if there was something going on in the pipeline or the active pipeline, and there simply isn't. Our pipeline is fine. Our active pipeline is fine. It's just a matter of time before some of those projects that we're pursuing get officially signed, and then they will turn into backlog.

Okay. Yeah. Thank you. Then with the new logo and expansions with HTS, I mean, I think it's one of the largest quarters that I've seen. I think I remember hearing that generally Q1 is seasonally large as well. Is that a good precursor to revenue growth in HTS for 2026?

I think I'll turn it over to Jake here. I think the short version is yes. We have a few large clients that we've had, in some cases, over 10 years. When we renew a contract, almost always it's got the same expiration date as the previous contract. We renew for three years, two years, four years. There's an unusually large number of those in Q1. When I first saw that number for Q4, I was like, "Oh, well, you know, did client X, Y, and Z that normally renews in Q1, did we get them renewed a little bit early?" The answer was no, those are new clients. Or not the ones I was thinking of. Jake, why don't you elaborate on that?

Yeah. David, as far as Q4 to Q1, we do see, just because of the cycle of buyers and the buying habits of our clients, you see a lot of renewals and signatures at the end of Q4 and also into the beginning of Q1, right? We've been fortunate enough to continue the great work, and I'm very proud of the team, both leveraging our digital ecosystem as well as just our land-and-expand strategy. Q4 and Q1 are usually strong renewal and new logo signatures, and you start to see that taper off throughout the year just because of buying habits within the client groups and the cyclical nature of our business.

Yeah. Makes sense. Well, good to see anyways.

Yeah.

They acquired The Philadelphia Group, integration. It sounds like you just hired the team. How is that going to help HTS going forward?

Yeah. Dave, great question. That's a tuck-in integration that we did, and very excited about bringing on Jessica and her team for a couple of reasons. One is it adds on to our contingent book of business, so, you know, contingent search, not on the retained side, but on the contingent side, which is nice. The team is also helping with some newly acquired clients and new logo clients that we've signed in Q3 or Q4 and Q1 of this year. Nice tuck in, very small, very similar to what we did with the previous acquisitions, you know, in 2025, but, you know, something we're excited to add on to our portfolio.

Okay, good. I see the AI certification for HTS. It's one of the first international organizations globally to earn independent validation. Would you say that's a competitive advantage for HTS?

You know, great question. We're really proud of it, and the team has done a phenomenal job on ensuring that we get that ISO certification. Is it a competitive advantage? Yeah, I do think it is 'cause we are one of the first. More would likely follow because of the adoption of Agentic AI in our workforce within our business units, and they should. However, as I've shared with our clients and our prospective clients, they're all excited to see that certification because it gives them a level of certainty and calmness as we bring AI into their workflows.

I'd say that's particularly true of the Fortune 500, which are the clients we are targeting. Those are the ones that would care about that the most. Some of the mid-size or regional clients, you know, might care a little bit less about it. But it kind of fits with our strategy of really targeting the larger multinational companies that hire thousands of people a year.

Got it. The restricted cash, I see that's what? $3.1 million. What's that? What's the restricted cash all about?

Yeah. That'll gradually get released over time. It's a bucket of a few different things. A lot of times when we do a sale leaseback, we will need to put a deposit. We will work into the language of the contract that if we hit certain metrics, that deposit gets released to us. Some of it is sale leasebacks. Others relate to some deposits we have, and in a couple situations, it relates to some of the bank agreements we have where in order to have a bank line in place, we need to promise to have, you know, X amount on deposit with them, as a requirement for that credit line. We put that in the restricted cash category. We've been able to renegotiate those lower over time.

Like, I'll give you an example. When we acquired Timber Technologies, we got an acquisition loan from Bridgewater Bank and all of this is public, but this is just an example. We got an acquisition loan from Bridgewater Bank. It's an amortizing loan. We were a new client for them, so they didn't have any history with us. Part of the deal was that we would put $1 million on deposit with them, and that money gets released over time. So that restricted cash will go from $1 million to $0 just with the passage of time and assuming we're not in violation of any covenants or anything.

Okay. No, that's helpful. Thank you for that information. Just regarding your corporate expense, you know, Q3, you're at $2.6, Q4, $2.2. Well, that was $1.9, but $300 was one time. It's good to see you getting to that run rate because I know that that's what you were shooting for within 6 months of November. You're a little bit ahead of that. That's good. There's still room to take out some corporate expense, I understand.

There is. I will say, though, you'll see this in our proxy when it comes out. A little bit counteracted by bonuses. You know, 2025 wasn't a super robust year, so we didn't have full bonuses in that. We do have some expense categories that we expect to decline into 2026 versus 2025. We do expect further progress. You know, it's possible that that's at least partially offset by having full bonuses instead of partial bonuses, which only happens if we're meeting and exceeding our targets. That's a high-class problem.

Yeah, definitely. You'd rather pay the bonus than record the revenue, right? Good. Regarding stock buyback, so 6,000 shares at $11 basically in Q4. That was just purchases, small purchases on the open market, correct?

Yeah. That was very frustrating to us. The window is only open a few times a year, and then when it's open, not only is it an illiquid stock, but we have to abide by the I think it's 10b-18 rules, which are very restrictive on when an issuer can buy back stock. We decided to change course, and this is all public. You'd find this in an 8-K that was filed around the end of the year or maybe beginning of January, where we put in place a 10b5-1 purchase plan. It's on autopilot, buying every single day, even when the window is closed. We followed all the rules that go with having a 10b5-1 program. It's just on autopilot.

It buys a little bit every day, subject to the 10b-18 trading rules. The buy order is with the trading desk, and it's, you know, up to $2 million. It's making progress, and we'll give an update on that. In our next call we'll give an update on how much we bought in Q1, but it's already significantly higher than that teeny-tiny amount we bought in Q4.

Yeah, good to hear. Then one last question, Jeff, regarding you buying common shares. Really good to see that. Do you think the board will follow your example?

You know, I don't wanna speak for the other members of the board. Let me just say, I think there'll be purchases from other insiders as well, not just me.

Okay. Yeah. Very good. Well, thank you for the time.

Thank you. Good question. Thank you, David.

Once again, if you would like to ask a question, please press star and one. Ladies and gentlemen, in showing no additional questions, we'll conclude today's question and answer session. I'd like to turn the floor back over to Jeff Eberwein for closing remarks.

Well, thank you for your interest in Star. As we mentioned, 2025 was a transformative year with the merger that was completed in August. The teams have worked really hard to get that integrated. We think we're well on our way to executing on our strategy, and we're very excited to show what we can do going forward.

Thank you for joining the Star Equity Holdings fourth quarter conference call. Today's call has been recorded and will be available in the investor section of our website, www.starequity.com. Once again, thank you very much for joining. The call has now concluded. Have a great day.