Star Equity Holdings, Inc.

Greetings, ladies and gentlemen, and welcome to the Star Equity Holdings, Inc. fourth quarter and year-end 2020 results conference call. As a reminder, certain statements made during this conference call, including the question and answer period, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal security laws. These forward-looking statements include but are not limited to statements about the company's revenues, costs and expenses, margin, operations, financial results, acquisitions, and other topics related to STAR's business strategy and outlook. These forward-looking statements are based on current assumptions and expectations and involve risks and uncertainties that could cause actual events and financial performance to differ materially. Risks and uncertainties include, but are not limited to, business and economic conditions, technological change, industry trends, and changes in the company's market and competition. More information about the risks and uncertainties is available in the company's filings with the U.S. Securities and Exchange Commission, including annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, as well as today's press release. The information discussed on this morning's conference call should be used in conjunction with the consolidated financial statements and notes included in those reports and speak only as of the date of this call. The company undertakes no obligation to update these forward-looking statements. In the earnings released today and in the comments, management remarks references to both GAAP results as well as adjusted results. The adjusted results are non-GAAP and do not include depreciation, amortization, I'm sorry, non-recurring charges. Also adjusted EBITDA which is non-GAAP measure that further excludes depreciation, amortization, interest, taxes, and stock-based compensation. Finally, free cash flow which is a non-GAAP measure taking operating cash flow and subtracting cash paid for capital expenditures. Management believes the presentation of the non-GAAP measures, along with GAAP financial statements and reconciliations, provide a more thorough analysis of ongoing financial performance. Investors can find the reconciliation results on a GAAP versus non-GAAP basis in the earnings release. If you do not receive a copy of the press report and would like one, please contact STAR at 203-489-7000. 9500 after the call or its investor relations representative, Lena Caddy, of the Equity Group at 212-836-9611. Also, this call is being broadcast live over the internet and may be accessed at STAR'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 Eberwine, Chairman of Star Equity Holdings, Inc.

Thank you, Operator. Good morning and thank you all for joining us today for our fourth quarter and year-end 2020 Financial Results Conference Call. On the call with me today are Matt Mulchin, CEO of DigiRad Health, and David Noble, our CFO and Chief Operating Officer. 2020 was a challenging but exciting year for our company. While our business experienced reduced revenue due to the COVID-19 pandemic, we made significant progress on our growth and value maximization strategy by improving operating and financial results at our building and construction division, and by announcing the sale of two assets in our DigiRad Health division for over $20 million, which are expected to close in Q1. Also, we rebranded the public company to better reflect our business strategy and structure. In the fourth quarter, our DigiRad Health division continued to be impacted by lower sales of new cameras and reduced camera rental activity levels due to the pandemic. Heading into 2021, however, our backlog of rental contracts has improved and is respected to return to normal levels as the year progresses. In 2020, sales of new cameras declined 59% versus 2019. Although sales of new cameras is expected to improve somewhat in 2021, it remains very dependent on capital decisions, capital spending decisions by healthcare providers. At our building and construction division, fourth quarter revenue improved 15% versus the fourth quarter of 2019 and also improved 15% versus the third quarter. Gross margins for this division were adversely impacted by an extreme increase in raw material prices. We increased our prices in January to offset these higher input costs, and our backlog remains very strong. We continue to expect margins in our building and construction division to improve over time, and we have made progress on our goal of substantially increasing our output capacity at KBS. Our plan there is to eventually increase our production to 15 to 20 modules per week versus the current run rate of approximately 7.5 per week, and we expect to make progress on this goal in 2021. In the first quarter of 2021, we have been focused on closing the sales of two pieces of our DigiRAD Health Division for over $20 million. The smaller deal for $1.3 million already closed, and we expect to to close the sale of DMS for $18.75 million by the end of March. With an estimated $18 million in immediate cash proceeds, we'll pay down some of our higher cost debt and fund high return internal growth investments. We'll also continue to explore acquisitions, which could be either bolt-ons for existing businesses or new platform companies, which would create new business segments for our holding company structure. With that, I'll turn it over to our healthcare CEO, Matt Mulchin. Matt, please go ahead.

Thanks, Jeff. Revenue from our healthcare division in Q4 2020 fell by 21.4% to $13.3 million over the same period in the prior year. This is due to a slowdown due to the COVID-19 pandemic. Although many doctor offices have reopened and hospitals are performing non-emergency procedures, Overall activity levels remain below pre-COVID levels. Gross profit for the Q4 2020 reporting period decreased by 45.4% and gross profit margin decreased by 8.6% over the same period last year due to lower revenue generated from high margin mobile scanning services and less camera sales. In diagnostic services, revenue and gross margin percentage for the fourth quarter of 2020 was 10.6 million and 16.3% compared to 12 million and 22.4% in last year's fourth quarter. The decrease in diagnostic services revenue and gross margin percentage compared to the prior year was primarily due to a decrease in testing days and scans resulting from the impact of the COVID-19 pandemic. In addition, non-GAAP adjusted EBITDA for diagnostic services decreased to 1.3 million from 2.1 million in the fourth quarter compared to last year's fourth quarter. This is mainly attributed to a decrease in revenue. In our diagnostic imaging business, revenue and gross margin percentage for the fourth quarter of 2020 was 2.7 million and 32.7% respectively, compared to 4.9 million and 42.4% respectively in the prior year fourth quarter. The decrease in diagnostic imaging revenue and gross margin was due to the slowdown of camera sales associated with capital funding delays and uncertainty due to the COVID-19 pandemic. Now I'm turning the call to Dave Noble, our CFO, who will provide additional financial highlights for the fourth quarter. Dave, please go ahead.