SOURCE: Digirad

Digirad

April 27, 2012 07:30 ET

Digirad Corporation Reports First Quarter 2012 Financial Results

Positive Trends in Both Product and Service Revenue and Margins Continue

POWAY, CA--(Marketwire - Apr 27, 2012) - Digirad Corporation (NASDAQ: DRAD) today reported 2012 first quarter revenue of $13.0 million and an ending cash and available-for-sale securities balance of $29.1 million at March 31, 2012.

Digirad CEO Todd Clyde commented, "Positive changes in both internal organization and external business environment continued to accelerate during the first quarter at Digirad. Both sides of the business -- Product and DIS -- trended up sequentially in the first quarter over the fourth quarter of 2011. Demand for our portable ergo camera picked up in the first quarter as we sold twice as many units as in the prior quarter. On the service side, new physician groups are signing up for DIS days as reimbursement has stabilized and the positive clinical and economic drivers become clearer."

Clyde continued, "Our commercial activities and R&D efforts are now also picking up as we explore new ways to accelerate growth in our Product business. Those activities, combined with an enhanced, shareholder-driven Board and additions to the management team, are creating excitement in the organization as we look to the coming year. In 2012, we expect to generate positive cash flow from our DIS business and increase sales of both our cardiac and ergo cameras. We also continue to explore various strategic initiatives, including examining where our core solid state camera technologies can be applied with greater success in the marketplace."

First Quarter 2012 Summary

  • Total revenue for the first quarter of 2012 was $13.0 million, compared to $14.2 million for the same period in the prior year and up from $11.9 million in the fourth quarter of 2011. DIS-only revenue for the first quarter of 2012 was $9.3 million, compared to $9.6 million for the same period of the prior year and $9.0 million in the prior sequential quarter. Product revenue for the first quarter of 2012 was $3.7 million, compared to $4.6 million for the same period of the prior year and $2.9 million in the prior quarter.

  • Gross profit for the first quarter of 2012 was $3.7 million, or 28.3 percent of revenue, up from $3.5 million, or 24.8 percent of revenue, in the same period of the prior year and $3.1 million, or 26.0 percent of revenue, in the prior quarter driven by lower radiopharmaceutical costs and due to a one-time workers' compensation insurance refund.

  • Net loss for the first quarter of 2012 was $1.3 million, or $0.07 loss per share, compared to net loss of $0.4 million, or $0.02 loss per share, in the same period of the prior year and a net loss of $2.8 million, or $0.15 loss per share, in the prior quarter.

  • Cash and cash equivalents and available-for-sale securities totaled $29.1 million, or $1.54 per share as of March 31, 2012. Cash and cash equivalents and available-for-sale securities totaled $30.4 million, or $1.61 per share as of December 31, 2011. The primary use of cash in the quarter was related to the typical first quarter slowdown of collections associated with annual changes in payor coding. That impact is expected to reverse itself in the current quarter.

  • During the first quarter of 2012, DIS asset utilization was 56.1 percent on 128 systems (nuclear and ultrasound), compared to 57.6 percent on 131 systems (nuclear and ultrasound) in the prior year first quarter and 56 percent on 130 systems (nuclear and ultrasound) in the prior quarter.

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 877-941-1427 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. Digirad also provides the ability for its physician customers to lease its qualified personnel, imaging systems and related items required to perform nuclear imaging in their own offices. For more information, please visit www.digirad.com. Digirad® 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 2012. 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
Consolidated Statements of Comprehensive Loss
(Unaudited in thousands, except per share data)
Three Months Ended
March 31,
2012 2011
Revenues:
DIS $ 9,289 $ 9,596
Product 3,680 4,579
Total revenues 12,969 14,175
Cost of revenues:
DIS 6,976 7,762
Product 2,321 2,894
Total cost of revenues 9,297 10,656
Gross profit 3,672 3,519
Operating expenses:
Research and development 897 708
Marketing and sales 1,715 1,424
General and administrative 2,265 2,104
Amortization of intangible assets 77 94
Restructuring gain -- (164 )
Total operating expenses 4,954 4,166
Loss from operations (1,282 ) (647 )
Other income (expense):
Interest income 26 195
Other (expense) income (12 ) 65
Total other income 14 260
Net loss $ (1,268 ) $ (387 )
Net loss per common share - basic and diluted $ (0.07 ) $ (0.02 )
Weighted average shares outstanding - basic & diluted 19,242 18,943
Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities 3 (107 )
Other comprehensive income (loss) 3 (107 )
Comprehensive loss $ (1,265 ) $ (494 )
Stock-based compensation expense is included in the above as follows:
Cost of DIS revenue $ 2 $ 4
Cost of Product revenue 21 29
Research and development 20 22
Marketing and sales 29 36
General and administrative 117 136
Total stock-based compensation expense $ 189 $ 227
Digirad Corporation
Consolidated Balance Sheets
(In thousands, except share amounts)
March 31,
2012
December 31,
2011
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 23,786 $ 24,039
Securities available-for-sale 5,327 6,413
Accounts receivable, net 7,167 6,320
Inventories, net 6,068 6,178
Other current assets 956 855
Restricted cash 194 194
Total current assets 43,498 43,999
Property and equipment, net 5,115 5,367
Intangible assets, net 399 477
Goodwill 184 184
Total assets $ 49,196 $ 50,027
Liabilities and stockholders' equity
Accounts payable $ 1,784 $ 1,330
Accrued compensation 2,528 2,291
Accrued warranty 282 297
Deferred revenue 1,966 2,099
Other accrued liabilities 2,188 2,397
Total current liabilities 8,748 8,414
Deferred rent 121 126
Total liabilities 8,869 8,540
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; 18,922,318 and 18,901,160 shares issued and outstanding (net of treasury shares) at March 31, 2012 and December 31, 2011, respectively 2 2
Treasury stock, at cost; 643,705 shares and 582,825 shares at March 31, 2012 and December 31, 2011, respectively (1,178 ) (1,058 )
Additional paid-in capital 155,929 155,704
Accumulated other comprehensive income 36 33
Accumulated deficit (114,462 ) (113,194 )
Total stockholders' equity 40,327 41,487
Total liabilities and stockholders' equity $ 49,196 $ 50,027

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