Digirad Corporation (Nasdaq: DRAD; DRADP) (“Digirad” or the
“Company”) announced today new financing to fund the growth
strategy for its Building & Construction division for 2020.
In September 2019, Digirad completed the
acquisition of ATRM Holdings, Inc. (“ATRM”) and converted from
being a healthcare services provider into a diversified holding
company (“HoldCo”) operating with three business divisions:
Healthcare, Building & Construction, and Real Estate &
Investments. We believe this new corporate structure will allow the
Company to maximize stockholder value over the long term through
high-return investments leading to growth in revenues, earnings,
and cash flow.
We expect the Company’s 2020 growth strategy for
its Building & Construction division to expand its client and
geographic footprint for residential and multi-family real estate
construction projects and will allow the Company to expand its
commercial construction business in New England to better take
advantage of the significant market opportunities available in this
market.
KBS Builders, Inc. (“KBS”), the modular building
manufacturing business of the Company’s Building & Construction
division, is currently involved in various discussions for several
new commercial construction projects to be built in 2020 and future
years in the New England area which, if awarded to KBS, would
require a significantly higher utilization rate for KBS’s
manufacturing plant in South Paris, Maine in 2020 than in previous
years and could eventually lead to a re-opening of KBS’s idled
manufacturing plant in Oxford, Maine.
As part of the HoldCo structure, the Company
formed a Real Estate & Investments division in April 2019 which
currently owns the three manufacturing plants in Maine that are
operated by KBS. The Real Estate division has completed a financing
via commercial mortgages for these three plants with the proceeds
to be used to fund working capital requirements for the business
expansion of its Building & Construction division in 2020. In
addition, EdgeBuilder, Inc. and Glenbrook Building Supply, Inc.,
which are part the Company’s Building & Construction division
based in the Minneapolis, Minnesota area, completed a refinancing
of an existing credit facility. A Current Report on Form 8-K will
be filed by the Company with the Securities and Exchange Commission
reporting additional details of these new credit facilities.
About Digirad Corporation
Digirad Corporation is a diversified holding
company operating with three business divisions: Healthcare,
Building & Construction, and Real Estate & Investments.
Digirad: Healthcare
Division
Digirad Health designs, manufactures, and
distributes diagnostic medical imaging products. Digirad Health
operates in three businesses: Diagnostic Services, Mobile
Healthcare, and Diagnostic Imaging. The Diagnostic Services
business offers imaging and monitoring services to healthcare
providers as an alternative to purchasing the equipment or
outsourcing the job. The Mobile Healthcare business provides
contract diagnostic imaging, including computerized tomography
(“CT”), magnetic resonance imaging (“MRI”), positron emission
tomography (“PET”), PET/CT, and nuclear medicine and healthcare
expertise through a convenient mobile service. The Diagnostic
Imaging business develops, sells, and maintains solid-state gamma
cameras.
ATRM: Building & Construction
Division
ATRM manufactures modular housing units for
commercial and residential applications. 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 wholly owned subsidiaries of
ATRM.
Real Estate & Investments
Division
This business division manages real estate
assets and investments.
Forward-Looking Statements
“Safe Harbor” Statement under the Private
Securities Litigation Reform Act of 1995: This release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements in this
release that are not statements of historical fact are hereby
identified as “forward-looking statements” for the purpose of the
safe harbor provided by Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Forward-looking Statements include, without limitation,
statements regarding (i) the plans and objectives of management for
future operations, including plans or objectives relating to
acquisitions and related integration, development of commercially
viable products, novel technologies, and modern applicable
services, (ii) projections of income (including income/loss),
EBITDA, earnings (including earnings/loss) per share, free cash
flow (FCF), capital expenditures, cost reductions, capital
structure or other financial items, (iii) the future financial
performance of Digirad Corporation (“Digirad,” “DRAD” or the
“Company”) or acquisition targets and (iv) the assumptions
underlying or relating to any statement described above. Moreover,
forward-looking statements necessarily involve assumptions on the
Company’s part. These forward-looking statements generally
are identified by the words “believe”, “expect”, “anticipate”,
“estimate”, “project”, “intend”, “plan”, “should”, “may”, “will”,
“would”, “will be”, “will continue” or similar expressions. Such
forward-looking statements are not meant to predict or guarantee
actual results, performance, events or circumstances and may not be
realized because they are based upon the Company's current
projections, plans, objectives, beliefs, expectations, estimates
and assumptions and are subject to a number of risks and
uncertainties and other influences, many of which the Company has
no control over. Actual results and the timing of certain events
and circumstances may differ materially from those described above
as a result of these risks and uncertainties. Factors that may
influence or contribute to the inaccuracy of forward-looking
statements or cause actual results to differ materially from
expected or desired results may include, without limitation, the
substantial amount of debt of the Company and the Company’s ability
to repay or refinance it or incur additional debt in the future;
the Company’s need for a significant amount of cash to service and
repay the debt and to pay dividends on the Company Preferred Stock;
the restrictions contained in the debt agreements that limit the
discretion of management in operating the business; the length of
time associated with servicing customers; losses of significant
contracts; disruptions in the relationship with third party
vendors; accounts receivable turnover; insufficient cash flows and
resulting in liquidity; the Company's inability to expand the
Company's business; unfavorable changes in the extensive
governmental legislation and regulations governing healthcare
providers and the provision of healthcare services and the
competitive impact of such changes (including unfavorable changes
to reimbursement policies); high costs of regulatory compliance;
the liability and compliance costs regarding environmental
regulations; the underlying condition of the technology support
industry; the lack of product diversification; development and
introduction of new technologies and intense competition in the
healthcare industry; existing or increased competition; risks to
the price and volatility of the Company’s Common Stock and
Preferred Stock; stock volatility and in liquidity; risks to
preferred stockholders of not receiving dividends and risks to the
Company’s ability to pursue growth opportunities if the Company
continues to pay dividends according to the terms of the Company
Preferred Stock; the Company’s ability to execute on its business
strategy (including any cost reduction plans); the Company’s
failure to realize expected benefits of restructuring and
cost-cutting actions; the Company’s ability to preserve and
monetize its net operating losses; risks associated with the
Company’s possible pursuit of acquisitions; the Company’s ability
to consummate successful acquisitions and execute related
integration, including to successfully integrate ATRM’s operations
and realize the synergies from the acquisition, as well as factors
related to the Company’s business (including ATRM) including
economic and financial market conditions generally and economic
conditions in the Company’s markets; failure to keep pace with
evolving technologies and difficulties integrating technologies;
system failures; losses of key management personnel and the
inability to attract and retain highly qualified management and
personnel in the future; and the continued demand for and market
acceptance of the Company’s services. For a detailed discussion of
cautionary statements and risks that may affect the Company’s
future results of operations and financial results, please refer to
the Company’s filings with the Securities and Exchange Commission,
including, but not limited to, the risk factors in the Company’s
most recent Annual Report on Form 10-K and Quarterly Reports on
Form 10-Q. This release reflects management’s views as of the date
presented.
All forward-looking statements are necessarily
only estimates of future results, and there can be no assurance
that actual results will not differ materially from expectations,
and, therefore, you are cautioned not to place undue reliance on
such statements. Further, any forward-looking statement speaks only
as of the date on which it is made, and we undertake no obligation
to update any forward-looking statement to reflect events or
circumstances after the date on which the statement is made or to
reflect the occurrence of unanticipated events.
For more information contact: |
|
Digirad Corporation |
The Equity Group |
Jeffrey E. Eberwein |
Lena Cati |
Chairman of the Board |
Vice President |
203-489-9501 |
212-836-9611 |
ir@digirad.com |
lcati@equityny.com |
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