Board of Directors Approves Share Buyback Program POWAY, Calif.,
Feb. 5 /PRNewswire-FirstCall/ -- Digirad Corporation (NASDAQ:DRAD),
a leading provider of diagnostic imaging products, and personnel
and equipment leasing services, today reported that robust camera
sales, combined with company-wide efficiency measures, resulted in
17 percent growth in total sales, improved gross margin, and
generated strong cash flow in its fourth-quarter ended December 31,
2008. Digirad CEO Todd Clyde said that steps taken in 2008 allowed
the Company's product division to achieve profitability in the
quarter and for the full year. The focus is now on reshaping a more
powerful DIS core footprint from which we will further penetrate
our markets and expand our Centers of Influence locations, which
pair leading academic institutions with physicians in those
communities. "Progress toward consistent profitability and positive
cash flow are the priority at Digirad today," Clyde said.
"Achieving that stable financial and operating platform allows us
to make investments to drive product evolution, establish new
service initiatives, increase market share, and ultimately make
growth possible in 2010 and beyond." Fourth-Quarter Highlights: --
Total revenue rose to a record $22.0 million, compared to $18.8
million in fourth-quarter 2007. Product sales grew to $7.8 million
from $5.4 million in fourth-quarter 2007, and DIS revenues
increased to $14.2 million from $13.4 million in fourth-quarter
2007. -- Gross profit was $6.3 million, or 29 percent of revenue,
compared to $4.5 million, or 24 percent, in fourth-quarter 2007. --
Net loss was $3.4 million, or $(0.18) per share, including $3.8
million in restructuring charges and goodwill impairment that are
not expected to recur in coming periods, compared to net loss of
$1.1 million, or $(0.06) per share, in fourth-quarter 2007. -- Cash
and cash equivalents and securities available-for-sale totaled
$28.3 million, or $1.50 per share, on December 31, 2008. Cash and
cash equivalents and securities available-for-sale were $31.7
million on December 31, 2007 and $25.6 million on September 30,
2008. The increase during the 2008 fourth quarter resulted
primarily from strong camera sales coupled with consistent cash
collections of accounts receivables in both the product business
and the personnel and equipment leasing services business. -- DIS
asset utilization was 56 percent on 160 systems (nuclear and
ultrasound), compared to 61 percent on 136 systems (nuclear and
ultrasound) during fourth-quarter 2007. Full Year 2008 Summary: --
Total revenue rose to $80.4 million, compared to $73.9 million in
2007. Product sales were $24.2 million, compared to $21.5 million
for 2007, and DIS revenues were $56.2 million compared to $52.4
million for 2007. -- Gross profit was $20.1 million, or 25 percent
of revenue, compared to $20.5 million, or 28 percent, for 2007. The
decline in gross margin was largely the result of costs related to
initiatives to reduce turnover of mobile imaging services personnel
and upgrading the Company's fleet of mobile imaging systems. -- Net
loss was $6.9 million, or $(0.36) per share, including the
restructuring and goodwill impairment costs noted above, compared
to a net loss of $1.4 million, or $(0.07) per share, for
twelve-months 2007. The increase in net loss reflected costs
associated with the restructuring and goodwill impairment charge
and lower gross margins in the first three quarters of 2008 and
lower interest income, compared to 2007. Clyde continued, "The
financial and operational performance in the fourth quarter was a
strong indication that a leaner Digirad organization is adopting
the changes necessary to move the company forward and generate
greater value for our customers and shareholders." Corporate Goals
in 2009 -- Creating greater efficiency as we sell or close
additional underperforming hub operations; -- Continually improving
our approach to launching and growing Centers of Influence; --
Introducing new imaging technologies during the year; -- Moving
forward with the development of a longer-term technology platform
designed to attract new customer segments and take market share
from our competitors; and, -- Progressing toward consistent
profitability and positive cash flow. Share Buyback Approved The
Company also announced that its board of directors has authorized a
stock buyback program to repurchase up to an aggregate of $2
million of its issued and outstanding common shares. Digirad had
approximately 19 million shares outstanding as of December 31,
2008. At current valuations, this repurchase plan would authorize
the buyback of approximately 2.1 million shares, or approximately
11 percent of the company's outstanding shares. Chairman of the
Digirad Board of Directors R. King Nelson said, "The board believes
the Company's direction and goals towards generating positive cash
flow and earnings coupled with an undervalued stock price present a
unique investment opportunity. We are confident this will provide a
solid return to our shareholders." The timing of stock repurchases
and the number of shares of common stock to be repurchased will be
made in compliance with Rule 10b-18 under the Securities Exchange
Act of 1934. The timing and extent of the repurchase will depend
upon market conditions, applicable legal and contractual
requirements, and other factors. Conference Call Information A
conference call is scheduled for 11:00 a.m. EST today to discuss
the results and management's outlook. The call may be accessed by
dialing 800-762-8795 five minutes prior to the scheduled start time
and referencing Digirad. For callers outside the United States,
dial 480-248-5085. A simultaneous webcast of the call may be
accessed online from the Events & Presentations link on the
Investor Relations page at http://www.digirad.com/; an archived
replay of the webcast will be available within 15 minutes of the
end of the conference call. About Digirad Corporation Digirad
provides medical diagnostic imaging systems and personnel and
equipment leasing services to physicians' offices, hospitals and
imaging centers for cardiac, vascular, and general imaging
applications. Digirad's Cardius XPO line of nuclear imaging cameras
use patented solid-state technology and unique multi (single, dual,
triple) head design for superior performance and advanced features
for sharper digital images, faster processing, compact size,
lighter weight for portability, ability to handle patients up to
500 pounds, and improved patient comfort compared to standard
nuclear cameras. Digirad's 2020tc general-purpose nuclear imager
has a small footprint and may also be configured for fixed or
mobile use to supplement primary imaging. Digirad's installed base
of equipment exceeds 600 systems; in addition, a mobile fleet of
more than 145 nuclear and ultrasound imaging systems is being used
in 21 states, primarily in the eastern, midwestern and southwestern
United States. For more information, please visit
http://www.digirad.com/. Digirad(R), Digirad Imaging Solutions(R),
and Cardius(R) are registered trademarks of Digirad Corporation.
Forward-Looking Statements This press release contains statements
that are forward-looking statements as defined within the Private
Securities Litigation Reform Act of 1995. These include statements
regarding the efficacy of Digirad's centers of influence model, the
status of the negotiation of the sale or closure of underperforming
hub locations, and the ability to achieve positive cash flow and
profitability, drive technology progress and improve services
utilization to grow market share. These forward-looking statements
are subject to risks and uncertainties that could cause actual
results to differ materially from the statements made, including
the risks associated with changes in business conditions,
technology, customers' business conditions, work force, suppliers,
business prospects, economic outlook, operational policy or
structure, acceptance and use of Digirad's camera systems and
services, reliability, recalls, and other risks detailed in
Digirad's filings with the U.S. Securities and Exchange Commission,
including Annual Report on Form 10-K, Quarterly Reports on Form
10-Q, Current Reports on Form 8-K and other reports. Readers are
cautioned to not place undue reliance on these forward looking
statements, which speak only as of the date hereof. All forward
looking statements are qualified in their entirety by this
cautionary statement, and Digirad undertakes no obligation to
revise or update the forward looking statements contained herein.
Investor Contact: Company Contact: Matt Clawson Todd Clyde, CEO
Allen & Caron 858-726-1600 949-474-4300 Digirad Corporation
Condensed Consolidated Statements of Operations (In thousands,
except per share amounts) Three Months Ended Twelve Months Ended
December 31, December 31, 2008 2007 2008 2007 (unaudited)
(unaudited) Revenues: DIS $14,172 $13,420 $56,204 $52,440 Product
7,815 5,403 24,154 21,507 Total revenues 21,987 18,823 80,358
73,947 Cost of revenues: DIS 11,162 10,749 44,697 39,520 Product
4,543 3,582 15,590 13,909 Total cost of revenues 15,705 14,331
60,287 53,429 Gross profit 6,282 4,492 20,071 20,518 Operating
expenses: Research and development 805 631 2,764 3,072 Sales and
marketing 2,121 2,009 8,554 7,670 General and administrative 2,853
2,794 11,805 11,920 Amortization and impairment of intangible
assets 256 371 798 697 Goodwill impairment loss 2,466 -- 2,466 --
Restructuring loss 1,308 -- 1,308 -- Total operating expenses 9,809
5,805 27,695 23,359 Loss from operations (3,527) (1,313) (7,624)
(2,841) Interest income, net 212 343 819 1,566 Other expense (128)
(130) (60) (101) Net loss $(3,443) $(1,100) $(6,865) $(1,376) Net
loss per share - basic and diluted $(0.18) $(0.06) $(0.36) $(0.07)
Weighted average shares outstanding: Basic and diluted 18,986
18,916 18,955 18,845 Stock-based compensation expense is included
in the above as follows: Cost of DIS revenue $11 $10 $55 $71 Cost
of Product revenue 15 (11) 53 49 Research and development 11 15 47
77 Sales and marketing 29 35 115 102 General and administrative 20
32 446 606 Digirad Corporation Condensed Consolidated Balance
Sheets(1) (in thousands) December 31, 2008 2007 (unaudited) Assets
Cash and cash equivalents $13,525 $14,922 Securities
available-for-sale 14,759 16,740 Accounts receivable, net 9,324
8,536 Inventories, net 4,978 5,455 Property and equipment held for
sale 1,122 -- Other current assets 1,982 1,786 Total current assets
45,690 47,439 Property and equipment, net 13,428 16,235 Other
intangible assets, net 1,833 2,631 Goodwill 184 2,650 Restricted
cash 60 60 Total assets $61,195 $69,015 Liabilities and
stockholders' equity Accounts payable $2,197 $2,650 Accrued
compensation 3,457 3,547 Accrued warranty 906 930 Other accrued
liabilities 2,705 3,285 Deferred revenue 2,723 2,909 Current
portion of long-term debt 52 213 Total current liabilities 12,040
13,534 Long-term debt, net of current portion 54 -- Deferred rent
142 234 Total stockholders' equity 48,959 55,247 Total liabilities
and stockholders' equity $61,195 $69,015 (1) The condensed
consolidated balance sheet as of December 31, 2007, has been
derived from the audited financial statements as of that date.
DATASOURCE: Digirad Corporation CONTACT: Investors, Matt Clawson of
Allen & Caron, +1-949-474-4300, or Company, Todd Clyde, CEO of
Digirad Corporation, +1-858-726-1600, Web Site:
http://www.digirad.com/
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