Digirad Corporation (NASDAQ: DRAD) today reported that it generated
net income and continued generating positive cash flow. The Company
improved its total cash and investments position to $31.8 million
at December 31, 2009, despite lower sales, from $28.3 million at
December 31, 2008.
Digirad CEO Todd Clyde said, "We are pleased to have met each of
our 2009 operating and strategic goals, while maintaining our
overarching mandate of making progress towards consistent positive
cash flow and profitability. Specifically, we streamlined our hub
system in our Digirad Imaging Solutions business; launched our new
Cardius® X-ACT attenuation correction camera that increases
interpretive ease and accuracy; began selling c.pax™, our new
web-based structured reporting and picture archiving and
communication system (PACS); and, refined our Centers of Influence
program. We met the challenge of an uncertain healthcare
environment with a $7.7 million positive swing in operating profits
from 2008, generating more than $4.8 million in cash flow from
operations, and achieving positive net income for the year."
2009 Full Year Financial Highlights:
-- Total revenue in 2009 was $69.6 million, compared to $80.4 million in
2008, mainly due to the sale and closure of certain DIS hubs and fewer
nuclear gamma camera sales. DIS revenue was $52.3 million compared to
$56.2 million for 2008, and Product revenues were $17.3 million
compared to $24.2 for 2008.
-- Gross profit was $20.2 million, or 29% of revenue, compared to $20.1
million, or 25%, for 2008.
-- Net income was $0.6 million, or $0.03 per share, compared to net loss
of $6.9 million, or $0.36 per share, for 2008.
-- Cash and cash equivalents and available-for-sale securities totaled
$31.8 million, or $1.67 per share at December 31, 2009, net of
approximately $1.0 million invested in the Company's stock as part of
its 10b-18 buyback program. Cash and cash equivalents and available-
for-sale securities were $28.3 million at December 31, 2008 and $31.1
million at September 30, 2009.
-- DIS asset utilization was 64% on 148 systems (nuclear and ultrasound),
compared to 58% on 153 systems (nuclear and ultrasound) during 2008.
Fourth Quarter Financial Highlights:
-- Total revenue was $16.4 million, compared to $22.0 million in the
fourth quarter of 2008, mainly due to a shortfall in DIS sales and
fewer nuclear gamma camera sales that we believe resulted from
economy-driven tightening of hospital budgets and debt availability.
DIS revenue declined to $12.0 million compared to $14.2 million in the
fourth quarter of 2008 and $12.9 million in the third quarter of 2009.
Product revenues were $4.4 million in the fourth quarter of 2009
compared to $7.8 million in the comparable prior year quarter and $4.0
million in the third quarter of 2009.
-- Gross profit was $4.7 million, or 29% of revenue, compared to $6.3
million, or 29%, in the fourth quarter of 2008.
-- Net income was $0.2 million, or $0.01 per share, compared to a net
loss of $3.4 million, or $0.18 per share, in the fourth quarter of
2008.
-- DIS asset utilization was 66% on 137 systems (nuclear and ultrasound),
compared to 56% on 160 systems (nuclear and ultrasound) during the
fourth quarter of 2008.
Clyde continued, "Our goal is to provide the best nuclear and
ultrasound services available in the market, allowing our
physician-customers to deliver needed diagnostic tests in their
offices, while driving positive health care economics. Our two main
goals for 2010 are to:
-- Generate positive cash flow in excess of $2 million; and,
-- Achieve positive earnings.
We expect to accomplish these two fundamental goals by:
-- Retaining our DIS customers, despite reimbursement reductions, and
offering them new, expanded services;
-- Managing our operating expenses to adjust to the changing healthcare
environment;
-- Continuing to focus on accounts receivable collections, inventory
reduction and balance sheet management; and,
-- Introducing, in the middle of 2010, the first large-field-of-view,
solid-state portable camera to the hospital marketplace.
Throughout the coming months, we intend to make additional
changes to our DIS business model and to our physician-customer
partnerships, as we continue to stabilize our business and absorb
the impact of the 2010 reimbursement rate reduction of thirty-six
percent in nuclear cardiology and ten percent in echocardiography.
We plan on adding vascular and general imaging procedures to our
ultrasound services in 2010 to expand our channel offerings. We
anticipate the reimbursement reductions to impact our financials in
the first part of 2010; however, the steps just mentioned, along
with continued cost management, are expected to result in a
stronger second half of 2010, as well as positive cash flow and
profitability for the year."
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 877-941-1428 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 proposed
changes to our DIS business model and to our physician-customer
partnerships, stabilization of our DIS business, the impact of the
2010 reimbursement rate changes, our ability to provide value in
our service channel via strategic and technology initiatives, the
addition of vascular and general imaging procedures to our
ultrasound services, and our ability to generate positive cash flow
in 2010 . 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.
Digirad Corporation
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
--------------------- ---------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Revenues:
DIS $ 11,999 $ 14,172 $ 52,318 $ 56,204
Product 4,400 7,815 17,278 24,154
---------- ---------- ---------- ----------
Total revenues 16,399 21,987 69,596 80,358
Cost of revenues:
DIS 9,191 11,162 38,476 44,697
Product 2,493 4,543 10,895 15,590
---------- ---------- ---------- ----------
Total cost of revenues 11,684 15,705 49,371 60,287
---------- ---------- ---------- ----------
Gross profit 4,715 6,282 20,225 20,071
Operating expenses:
Research and development 870 805 3,360 2,764
Marketing and sales 1,555 2,121 6,977 8,554
General and administrative 2,138 2,853 8,921 11,805
Amortization of intangible
assets 142 256 590 798
Restructuring (gain) loss (19) 1,308 319 1,308
Goodwill impairment loss -- 2,466 -- 2,466
---------- ---------- ---------- ----------
Total operating expenses 4,686 9,809 20,167 27,695
---------- ---------- ---------- ----------
Income (loss) from operations 29 (3,527) 58 (7,624)
Interest and other, net 165 84 550 759
---------- ---------- ---------- ----------
Net income (loss) $ 194 $ (3,443) $ 608 $ (6,865)
========== ========== ========== ==========
Net income (loss) per share:
Basic and Diluted $ 0.01 $ (0.18) $ 0.03 $ (0.36)
========== ========== ========== ==========
Weighted average shares
outstanding:
Basic 19,147 18,986 19,073 18,955
========== ========== ========== ==========
Diluted 19,908 18,986 19,557 18,955
========== ========== ========== ==========
Stock-based compensation
expense is included in the
above as follows:
Cost of DIS revenue $ 7 $ 11 $ 27 $ 56
Cost of Product revenue 13 15 56 53
Research and development 10 11 37 47
Marketing and sales 24 29 93 115
General and administrative 91 20 393 445
Digirad Corporation
Unaudited Condensed Consolidated Balance Sheets(1)
(in thousands)
December December
31, 31,
2009 2008
----------- -----------
Assets
Cash and cash equivalents $ 13,560 $ 13,525
Securities available-for-sale 18,250 14,759
Accounts receivable, net 7,553 9,324
Inventories, net 6,402 4,978
Property and equipment held for sale -- 1,122
Other current assets 1,234 1,982
----------- -----------
Total current assets 46,999 45,690
Property and equipment, net 10,263 13,428
Intangible assets, net 1,243 1,833
Goodwill 184 184
Restricted cash -- 60
----------- -----------
Total assets $ 58,689 $ 61,195
=========== ===========
Liabilities and stockholders' equity
Accounts payable $ 1,797 $ 2,197
Accrued compensation 2,344 3,457
Accrued warranty 332 906
Other accrued liabilities 2,106 2,811
Deferred revenue 2,594 2,723
----------- -----------
Total current liabilities 9,173 12,094
Deferred rent 127 142
Total stockholders' equity 49,389 48,959
----------- -----------
Total liabilities and stockholders' equity $ 58,689 $ 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: Richard Slansky CFO 858-726-1600
Email Contact
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