SOURCE: Digirad

Digirad

May 06, 2011 07:30 ET

Digirad Corporation Reports 2011 First Quarter Financial Results

Cash and Investments Hit $30.6 Million; ergo™ Portable Camera Sales Increase

POWAY, CA--(Marketwire - May 6, 2011) - Digirad Corporation (NASDAQ: DRAD) today reported first quarter revenue of $14.2 million and an ending cash and available-for-sale securities balance of $30.6 million at March 31, 2011.

Digirad CEO Todd Clyde stated, "We are off to a solid start in 2011. Our service business is now benefitting from a stable reimbursement environment and we have begun to add new customers as well as expand the service offering to a broader group of those practices. In addition, interest in our new ergo™ general purpose portable imaging system continued to grow in Q1 as we performed on-site demonstrations with potential customers. Despite the positive feedback indicating that the ergo product is addressing a portable need in hospitals, the sales cycle in that environment is longer than it is in the physician office market."

Clyde continued, "We expect to see consolidated revenue growth in 2011, especially as we enter the second half as several market initiatives gain traction -- resulting in improving margins and profitability."

First Quarter 2011 Summary

  • Total revenue for the first quarter of 2011 was $14.2 million, compared to $15.1 million in the prior year and $14.7 million in the traditionally strong fourth quarter. DIS-only revenue for the first quarter of 2011 was $9.6 million, compared to $10.7 million for the same period of the prior year and $9.4 million in the prior quarter. Product revenue for the first quarter of 2011 was $4.6 million, compared to $4.3 million for the same period of the prior year and $5.2 million in the prior quarter.
  • Gross profit for the first quarter of 2011 was $3.5 million, or 24.8 percent of revenue, compared to $3.4 million, or 22.4 percent of revenue, in the same period of the prior year and $3.6 million, or 24.6 percent of revenue, in the prior quarter.
  • Net loss for the first quarter of 2011 was $0.4 million, or $0.02 loss per share, compared to net loss of $1.2 million, or $0.07 loss per share, in the same period of the prior year and a net loss of $0.6 million, or $0.03 loss per share, in the prior quarter.
  • Cash and cash equivalents and available-for-sale securities totaled $30.6 million, or $1.64 per share as of March 31, 2011. Cash and cash equivalents and available-for-sale securities totaled $30.2 million, or $1.63 per share as of December 31, 2010.
  • During the first quarter of 2011, DIS asset utilization was 58 percent on 131 systems (nuclear and ultrasound), compared to 62 percent on 135 systems (nuclear and ultrasound) in the prior year and 58 percent on 132 systems (nuclear and ultrasound) in the prior quarter.

Richard Slansky, CFO, added, "We generated positive cash from operations of approximately $0.5 million in the first quarter and ended the 2011 first quarter with a total cash and investments position of $30.6 million. Total operating expenses continued to decline year-over-year as a function of cost reduction measures implemented in the past 2 years, and we anticipate maintaining strict controls on spending -- even as we invest in new opportunities for growth and expansion."

"To repeat our goals for 2011," Clyde concluded, "We expect to: 1) generate free cash flow for the full year 2011; 2) increase ergo sales by further driving imaging to the point of care; 3) expand margins in both our Product and DIS businesses; and 4) achieve consolidated top-line revenue growth in the second half of the year."

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 877-941-2068 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 our ability to deliver value to customers, our expanded product and service offerings, including, the addition of the first large-field-of-view, solid state portable camera to the hospital marketplace, and our ability to generate positive cash flow in 2011. 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
Consolidated Statements of Operations
(Unaudited and in thousands, except per share data)
Three Months Ended
March 31,
20112010
Revenues:
DIS$9,596$10,723
Product4,5794,346
Total revenues14,17515,069
Cost of revenues:
DIS7,7628,803
Product2,8942,894
Total cost of revenues10,65611,697
Gross profit3,5193,372
Operating expenses:
Research and development708725
Marketing and sales1,4241,630
General and administrative2,1042,262
Amortization of intangible assets94132
Restructuring (gain) loss(164)--
Total operating expenses4,1664,749
Loss from operations(647)(1,377)
Other income (expense):
Interest income208122
Interest expense(13)(2)
Other income6522
Total other income260142
Net loss$(387)$(1,235)
Net loss per common share - basic and diluted$(0.02)$(0.07)
Weighted average shares outstanding - basic and diluted18,94318,670
Stock-based compensation expense is included in the above as follows:
Cost of DIS revenue$4$7
Cost of Product revenue2911
Research and development229
Marketing and sales3619
General and administrative136130
Total stock-based compensation expense$227$176
Digirad Corporation
Consolidated Balance Sheets
(In thousands, except share amounts)
March 31,December 31,
20112010
(Unaudited)
Assets
Current assets:
Cash and cash equivalents$21,586$20,459
Securities available-for-sale8,9749,788
Accounts receivable, net8,1817,527
Inventories, net5,5295,432
Other current assets1,4261,038
Total current assets45,69644,244
Property and equipment, net6,3857,185
Intangible assets, net714808
Goodwill184184
Total assets$52,979$52,421
Liabilities and stockholders' equity
Accounts payable$2,427$1,871
Accrued compensation2,1561,600
Accrued warranty372378
Deferred revenue2,1162,379
Other accrued liabilities2,1412,096
Total current liabilities9,2128,324
Deferred rent138138
Total liabilities9,3508,462
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.0001 par value: 10,000,000 shares authorized; no shares issued or outstanding----
Common stock, $0.0001 par value: 80,000,000 shares authorized; 18,640,228 and 18,597,311 shares issued and outstanding (net of treasury shares) at March 31, 2011 and December 31, 2010, respectively22
Treasury stock, at cost; 573,218 shares at March 31, 2011 and December 31, 2010(1,039)(1,039)
Additional paid-in capital155,012154,785
Accumulated other comprehensive income(107)63
Accumulated deficit(110,239)(109,852)
Total stockholders' equity43,62943,959
Total liabilities and stockholders' equity$52,979$52,421

Contact Information

  • Investor Contact:
    Matt Clawson
    Allen & Caron
    949-474-4300
    Email Contact

    Company Contact:
    Richard Slansky
    CFO
    858-726-1600
    Email Contact