Digirad Achieves Operating Profit, Second Consecutive Quarterly Net
Income and Positive Cash Flow, As Cash Rises to Over $31 Million
POWAY, Calif., July 23 /PRNewswire-FirstCall/ -- Digirad
Corporation (NASDAQ:DRAD), today reported that stronger revenue
from its Product (nuclear camera) business combined with
company-wide efficiency measures resulted in improved gross
margins, $784,000 in net profits and more than $3 million in
positive cash flow in its second quarter ended June 30, 2009.
Digirad CEO Todd Clyde said, "We saw strong performance by our DIS
personnel and equipment leasing business and a rebound in our
camera business in the second quarter. Selling more cameras,
increasing utilization, and driving other operational and overhead
efficiencies allowed us to generate profit from operations,
positive cash flow and a second consecutive quarter of net income."
Clyde continued, "Our cash position increased to more than $31
million, a solid achievement that highlights our 2009 focus and
commitment to create a consistently profitable, cash generating
company." Second Quarter Financial Highlights: -- Total revenue was
$18.6 million, compared to $19.9 million in the second-quarter of
2008, mainly due to the sale of certain DIS hubs earlier this year
and fewer nuclear camera sales. DIS revenue declined slightly to
$13.6 million compared to $14.2 million in the second-quarter of
2008 and Product revenues declined slightly to $5.0 million
compared to $5.7 million in the second-quarter 2008, but increased
from $3.9 million in the 2009 first quarter. -- Gross profit
increased to $5.9 million, or 32% of revenue, compared to $4.6
million, or 23%, in second-quarter of 2008. -- Net income was $0.8
million, or $0.04 per share, compared to net loss of $1.2 million,
or $(0.06) per share, in second-quarter of 2008. -- Cash and cash
equivalents and securities available-for-sale totaled $31.5
million, or $1.66 per share, at June 30, 2009. Cash and cash
equivalents and securities available-for-sale were $24.6 million at
June 30, 2008 and $28.3 million at December 31, 2008. -- DIS asset
utilization was 63% on 155 systems (nuclear and ultrasound),
compared to 57% on 164 systems (nuclear and ultrasound) during
second-quarter of 2008. Year-to-Date Financial Highlights: -- Total
revenue was $36.3 million, compared to $38.2 million for the first
six months of 2008 mainly due to the sale of certain DIS hubs
earlier this year and fewer nuclear camera sales. DIS revenue was
$27.4 million for the first six month of this year compared to
$28.1 million for the first six months of 2008, and Product
revenues were $8.9 million compared to $10.1 million for the first
six months of 2008. -- Gross profit was $11.0 million, or 30% of
revenue, compared to $9.0 million, or 23%, for the first six months
of 2008. -- Net income was $0.8 million, or $0.04 per share,
compared to net loss of $2.6 million, or $(0.13) per share, for the
first six months of 2008. -- DIS asset utilization was 63% on 155
systems (nuclear and ultrasound), compared to 60% on 164 systems
(nuclear and ultrasound) during the first six months of 2008. "Our
results continue to show significant progress and our focus remains
on profitability and cash generation. We have now sold or closed
all underperforming hubs, continue to refine our Centers of
Influence model, and are amid introductions of new imaging
technologies." Clyde continued, "Near-term impacts of summer
seasonality along with more global market issues such as hospital
budgets, reimbursement, and the economy will continue to challenge
our markets and us, but we are hitting our milestones as planned
and intend to continue that trend. We are experiencing a positive
response to our new Cardius X-ACT imaging system in the hospital
and larger cardiology practice market segments. We believe we will
continue to take the steps necessary to navigate through these
times and we are optimistic about our future." 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
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 is a leading provider of
diagnostic imaging products, and personnel and equipment leasing
services. For more information, please visit
http://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.
Investor Contact: Company Contact: Matt Clawson Todd Clyde, CEO
Allen & Caron 858-726-1600 949-474-4300 (Financial tables
follow) Digirad Corporation Unaudited Condensed Consolidated
Statements of Operations (In thousands, except per share amounts)
Three Months Ended Six Months Ended June 30, June 30,
-------------------- ----------------- 2009 2008 2009 2008 -------
------- ------- ------- Revenues: DIS $13,565 $14,224 $27,416
$28,078 Product 4,994 5,673 8,853 10,090 ----- ----- ----- ------
Total revenues 18,559 19,897 36,269 38,168 Cost of revenues: DIS
9,528 11,387 19,722 22,299 Product 3,143 3,955 5,550 6,901 -----
----- ----- ----- Total cost of revenues 12,671 15,342 25,272
29,200 ------ ------ ------ ------ Gross profit 5,888 4,555 10,997
8,968 Operating expenses: Research and development 854 661 1,626
1,305 Marketing and sales 2,016 2,277 3,724 4,397 General and
administrative 2,235 2,852 4,644 6,011 Amortization of intangible
assets 145 179 315 369 Restructuring loss -- -- 145 -- --- --- ---
--- Total operating expenses 5,250 5,969 10,454 12,082 ----- -----
------ ------ Income (loss) from operations 638 (1,414) 543 (3,114)
Interest and other, net 146 258 285 563 --- --- --- --- Net income
(loss) $784 $(1,156) $828 $(2,551) ==== ======= ==== ======= Net
income (loss) per share - basic and diluted $0.04 $(0.06) $0.04
$(0.13) ===== ======= ===== ======= Weighted average shares
outstanding: Basic 19,044 18,936 19,033 18,940 ====== ====== ======
====== Diluted 19,361 18,936 19,255 18,940 ====== ====== ======
====== Stock-based compensation expense is included in the above as
follows: Cost of DIS revenue $6 $15 $14 $31 Cost of Product revenue
15 14 29 25 Research and development 9 12 18 26 Marketing and sales
23 32 48 56 General and administrative 98 160 207 275 Digirad
Corporation Condensed Consolidated Balance Sheets(1) (in thousands)
June 30, December 31, -------- ------------ 2009 2008 ---- ----
(unaudited) Assets Cash and cash equivalents $15,735 $13,525
Securities available-for-sale 15,767 14,759 Accounts receivable,
net 8,716 9,324 Inventories, net 6,944 4,978 Property and equipment
held for sale -- 1,122 Other current assets 1,663 1,982 ----- -----
Total current assets 48,825 45,690 Property and equipment, net
11,587 13,428 Intangible assets, net 1,518 1,833 Goodwill 184 184
Restricted cash -- 60 --- --- Total assets $62,114 $61,195 =======
======= Liabilities and stockholders' equity Accounts payable
$2,407 $2,197 Accrued compensation 3,560 3,457 Accrued warranty 736
906 Other accrued liabilities 2,787 2,811 Deferred revenue 2,520
2,723 ----- ----- Total current liabilities 12,010 12,094 Deferred
rent 122 142 Total stockholders' equity 49,982 48,959 ------ ------
Total liabilities and stockholders' equity $62,114 $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. DATASOURCE: Digirad Corporation CONTACT: Investors,
Matt Clawson of Allen & Caron, +1-949-474-4300, for Digirad
Corporation; or Todd Clyde, CEO of Digirad Corporation,
+1-858-726-1600, Web Site: http://www.digirad.com/
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