Star Equity Holdings, Inc.

Greetings, ladies and gentlemen, and welcome to the STAR Equity Holdings Incorporated second quarter 2021 results conference call. Some discussions made today include forward-looking statements. Actual results could differ materially from the statements made today. Please refer to STAR's most recent 10-K and 10-Q filings for a more complete description of risk factors that could affect these projections and assumptions. The company assumes no obligations 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 two non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted net income, or 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 didn't receive a copy of the press release and would like one, please contact STAR at 203-489-9500 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 on 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 Everwein, Executive Chairman of STAR Equity.

Thank you, Operator. Good morning and thank you all for joining us today for our second quarter 2021 results conference call. On the call with me today are Matt Mulchin, CEO of DigiRad Health, our Chief Financial and Chief Operating Officer, David Noble, and various executives in our construction business. In the second quarter 2021, business activity returned to more normal levels. Our healthcare rebounded, our healthcare division rebounded versus the second quarter of last year, with revenue increasing 57% versus the prior year quarter. Our construction division grew revenue 117%, with much of this growth attributable to significantly increased output at our KBS business in New England, coupled with increased activity levels at Edgefilter in the Midwest. The gross margin percentage at our construction division declined significantly in Q2 2021 versus the prior year's quarter. as a consequence of an unprecedented rise in raw material input costs, but is expected to begin to return to normal levels in the second half of this year due to steps we have taken to increase our product pricing and improve operations, as well as the expectation that raw material input costs will continue to normalize later this year. With the asset sales completed at the end of the first quarter 2021, we substantially improved our balance sheet and liquidity position, resulting in net debt declining from $14.3 million a year ago to $6.8 million at the end of the second quarter 2021. We are now much better positioned to fund high-return internal growth investments and pursue acquisitions, which, as we have previously discussed, could be bolt-ons in our healthcare or construction businesses or entry into an entirely new business sector. With that, I'll turn it over to our healthcare CEO, Matt Mulchen. Matt, please go ahead.

Thanks, Jeff. Revenue from our healthcare division in Q2 2021 increased by 57% to $14.9 million over the same period in the prior year. This division has largely recovered from the COVID-19 pandemic-related downturn and is now performing at pre-pandemic levels. Doctors' offices have reopened and we are operating at full capacity. Gross profit for the Q2 2021 reporting period increased by 56% and gross margin remained fairly consistent, decreasing slightly by 0.2% over the same period last year. In diagnostic services, revenue and gross margin percentage for the second quarter of 2021 were 11.7 million and 20.4% compared to 7.1 million and 13.3% in last year's second quarter. The increase in diagnostic services revenue and gross margin percentage compared to the prior year was primarily due to increasing scan volumes. In our diagnostic imaging business, we also saw improvement in the top line results. Revenue and gross margin percentage for the second quarter of 2021 was 3.1 million and 32.5% respectively, compared to 2.3 million and 52.8% respectively in the prior year's second quarter. The increase in diagnostic imaging revenue is related to increased camera sales, which is a good indication that hospitals and physician practices are recovering from the impact due to COVID-19. Now I'm going to turn the call over to Dave Noble, our CFO and COO, who will provide additional financial highlights for the second quarter. Dave, please go ahead.