Digirad Corporation (NASDAQ: DRAD) today reported the Company
continued to generate positive cash flow, improved gross margins in
its DIS (Digirad Imaging Solutions) business, and maintained its
total cash and investments position of more than $31 million in its
third quarter ended September 30, 2009, staying on track to record
positive net earnings for the year, despite lower camera sales in
its product segment.
Digirad CEO Todd Clyde said, "We continue to drive toward our
key 2009 goal of sustained profitability and positive cash flow,
even in the midst of health care reimbursement uncertainty and a
difficult economic environment. We are improving our revenues and
margins in DIS. We are happy to report the introduction of our
second of two new products this year, including our c.pax image
management solution for our camera and DIS customers. Although
capital equipment budgets at both the hospital and private practice
remain low, we believe our new proprietary Cardius® X-ACT imaging
system, introduced earlier this year, is ideally suited for large
volume nuclear medicine departments and practices. We believe that
we are well positioned to grow our revenues and market share when
the economic recovery begins."
Third Quarter Financial Highlights:
-- Total revenue was $16.9 million, compared to $20.2 million in
the third quarter of 2008, mainly due to the sale of fewer nuclear
gamma cameras that resulted from economy-driven tightening of
hospital budgets and debt availability. DIS revenue declined
slightly to $12.9 million compared to $14.0 million in the third
quarter of 2008 and the second quarter of 2009. Product revenues
also declined to $4.0 million compared to $6.2 million in the third
quarter 2008 and $5.0 million in the second quarter of 2009.
-- Gross profit was $4.5 million, or 27% of revenue, compared to
$4.8 million, or 24%, in the third quarter of 2008.
-- Net loss was $(0.4) million, or $(0.02) per share, compared
to net loss of $(0.9) million, or $(0.05) per share, in the third
quarter of 2008.
-- Cash and cash equivalents and securities available-for-sale
totaled $31.1 million, or $1.64 per share at September 30, 2009,
net of approximately $500,000 invested in the Company's stock as
part of its 10b-18 buyback program. Cash and cash equivalents and
securities available-for-sale were $28.3 million at December 31,
2008 and $31.5 million at June 30, 2009.
-- DIS asset utilization was 63% on 147 systems (nuclear and
ultrasound), compared to 57% on 158 systems (nuclear and
ultrasound) during the third quarter of 2008.
Year-to-Date Financial Highlights:
-- Total revenue was $53.2 million, compared to $58.4 million
for the first nine months of 2008, mainly due to the sale of
certain DIS hubs earlier this year and fewer nuclear gamma camera
sales. DIS revenue was $40.3 million for the first nine months of
this year compared to $42.0 million for the first nine months of
2008, and Product revenues were $12.9 million compared to $16.3
million for the first nine months of 2008.
-- Gross profit was $15.5 million, or 29% of revenue, compared
to $13.8 million, or 24%, for the first nine months of 2008.
-- Net income was $0.4 million, or $0.02 per share, compared to
net loss of $3.4 million, or $(0.18) per share, for the first nine
months of 2008.
-- DIS asset utilization was 63% on 149 systems (nuclear and
ultrasound), compared to 59% on 150 systems (nuclear and
ultrasound) during the first nine months of 2008.
Clyde continued, "Camera sales continue to be lower than we
anticipated, requiring additional restructuring in the third
quarter to align our cost structure to our camera business. We
continue to make progress in stabilizing all areas of our business,
despite the uncertainty in our current health care market. We are
encouraged with the positive momentum in our DIS business, which is
helping to offset our declining camera sales. I am very proud of
our team, as they have shown great ability to navigate through this
constantly changing economic and health care environment."
Conference Call Information
A conference call is scheduled for 11:00 a.m. EDT today to
discuss the results and management's outlook. The call may be
accessed by dialing 866-226-4514 five minutes prior to the
scheduled start time and referencing Digirad. A simultaneous
webcast of the call may be accessed online from the Events &
Presentations link on the Investor Relations page at
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 is a leading provider of diagnostic imaging products,
and personnel and equipment leasing services. For more information,
please visit www.digirad.com. Digirad®, Digirad Imaging Solutions®,
and Cardius® 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, reimbursement,
radiopharmaceutical shortages, 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.
(Financial tables follow)
Digirad Corporation
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ---------------------
2009 2008 2009 2008
--------- --------- ---------- ---------
Revenues:
DIS $ 12,903 $ 13,954 $ 40,319 $ 42,032
Product 4,025 6,249 12,878 16,339
--------- --------- ---------- ---------
Total revenues 16,928 20,203 53,197 58,371
Cost of revenues:
DIS 9,563 11,235 29,285 33,534
Product 2,852 4,145 8,402 11,046
--------- --------- ---------- ---------
Total cost of revenues 12,415 15,380 37,687 44,580
--------- --------- ---------- ---------
Gross profit 4,513 4,823 15,510 13,791
Operating expenses:
Research and development 864 654 2,490 1,959
Marketing and sales 1,698 2,036 5,422 6,433
General and administrative 2,139 2,941 6,783 8,952
Amortization of intangible
assets 133 173 448 542
Restructuring loss 193 -- 338 --
--------- --------- ---------- ---------
Total operating expenses 5,027 5,804 15,481 17,886
--------- --------- ---------- ---------
Income (loss) from operations (514) (981) 29 (4,095)
Interest and other, net 100 112 385 675
--------- --------- ---------- ---------
Net income (loss) $ (414) $ (869) $ 414 $ (3,420)
========= ========= ========== =========
Net income (loss) per share -
basic and diluted $ (0.02) $ (0.05) $ 0.02 $ (0.18)
========= ========= ========== =========
Weighted average shares
outstanding:
Basic 19,020 18,964 18,989 18,943
========= ========= ========== =========
Diluted 19,020 18,964 19,439 18,943
========= ========= ========== =========
Stock-based compensation
expense is included in the
above as follows:
Cost of DIS revenue $ 6 $ 12 $ 20 $ 44
Cost of Product revenue 14 13 43 38
Research and development 9 11 27 37
Marketing and sales 21 30 69 85
General and administrative 95 151 302 426
Digirad Corporation
Condensed Consolidated Balance Sheets(1)
(in thousands)
September 30, December 31,
2009 2008
------------- -------------
(unaudited)
Assets
Cash and cash equivalents $ 12,880 $ 13,525
Securities available-for-sale 18,188 14,759
Accounts receivable, net 8,558 9,324
Inventories, net 6,740 4,978
Property and equipment held for sale -- 1,122
Other current assets 1,398 1,982
------------- -------------
Total current assets 47,764 45,690
Property and equipment, net 10,838 13,428
Intangible assets, net 1,385 1,833
Goodwill 184 184
Restricted cash -- 60
------------- -------------
Total assets $ 60,171 $ 61,195
============= =============
Liabilities and stockholders' equity
Accounts payable $ 2,373 $ 2,197
Accrued compensation 3,038 3,457
Accrued warranty 532 906
Other accrued liabilities 2,336 2,811
Deferred revenue 2,469 2,723
------------- -------------
Total current liabilities 10,748 12,094
Deferred rent 171 142
Total stockholders' equity 49,252 48,959
------------- -------------
Total liabilities and stockholders' equity $ 60,171 $ 61,195
============= =============
(1) The condensed consolidated balance sheet as of December 31, 2008, has
been derived from the audited financial statements as of that date.
Investor Contact: Matt Clawson Allen & Caron 949-474-4300
Email Contact Company Contact: Todd Clyde CEO 858-726-1600 Email
Contact
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