Tuesday, July 21, 2020

KBS Modular Growing Stronger Under New Ownership

Digirad Corporation, a diversified holding company with three divisions: Healthcare, Building & Construction, and Real Estate & Investments, recently announced  that KBS Builders, Inc. has signed Phase 2 of its previously announced $5.2 million project with Tocci Building Corporation, a Massachusetts-based general contractor and construction management company.

For Phase 2 of this project, valued at $4.4 million, KBS will manufacture 84 building modules.  Phase 1, valued at $0.8 million for the manufacturing of 14 building modules, commenced in June.  

This $5.2 million project in total will result in the production of 22 single-family and townhouse units for the U.S. Army Natick Soldier Systems Center in Natick, MA.   Deliveries for both phases are expected to be completed before the end of the year.  All 98 modular units are being manufactured at KBS’s plant in South Paris, ME, which has a production capacity of 500 to 600 building modules per year.  

As previously announced, the federal government may exercise its option for Phase 3, which would increase the total project size by an additional 26 building modules and 6 living units, bringing the total potential project revenue for KBS to $6.7 million. 

Jeff Eberwein, Digirad’s Chairman, noted, “KBS started the third quarter on a strong note with the recent commencement of two significant commercial projects – the $5.2 million contract to manufacture living units for the U.S. Army and the $2.0 million contract to manufacture housing units for military veterans.  

Additionally, KBS continues to be involved in discussions on numerous other commercial construction projects for the New England market that we expect will be awarded later this year.  KBS recently increased its work force by over 20% to meet the higher manufacturing requirements for these two commercial projects as well as the future growth we expect.  

Furthermore, if KBS grows as expected in 2020, it will explore re-opening its Oxford, Maine plant, which we believe is capable of producing an additional 500 to 600 building modules per year at full capacity.”

ATRM Holdings, Inc. (“ATRM”) manufactures modular housing units for commercial and residential real estate projects.  ATRM operates in two businesses: (i) modular building manufacturing and (ii) structural wall panel and wood foundation manufacturing, including building supply retail operations.  

The modular building manufacturing business is operated by KBS Builders, Inc. (“KBS”), the structural wall panel and wood foundation manufacturing segment is operated by EdgeBuilder, Inc. (“EdgeBuilder”), and the retail building supplies are sold through Glenbrook Building Supply, Inc. (“Glenbrook”).  

KBS, EdgeBuilder, and Glenbrook are all wholly-owned subsidiaries of ATRM, which is a wholly-owned subsidiary of Digirad.

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