Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 30, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | DIGIRAD CORP | |
Entity Central Index Key | 707,388 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Outstanding (in shares) | 20,119,318 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||
Revenues: | |||||
Total revenues | $ 27,080 | $ 26,685 | $ 52,545 | $ 52,525 | |
Cost of revenues: | |||||
Cost of revenues | 21,513 | 20,997 | 42,371 | 41,235 | |
Gross profit | 5,567 | 5,688 | 10,174 | 11,290 | |
Operating expenses: | |||||
Marketing and sales | 1,461 | 1,596 | 2,928 | 3,379 | |
General and administrative | 3,522 | 5,717 | 7,914 | 10,613 | |
Amortization of intangible assets | 356 | 373 | 713 | 747 | |
Goodwill impairment | 476 | 0 | 476 | 0 | |
Total operating expenses | 5,815 | 7,686 | 12,031 | 14,739 | |
Loss from operations | (248) | (1,998) | (1,857) | (3,449) | |
Other expense: | |||||
Other expense, net | (19) | 0 | (36) | 0 | |
Interest expense, net | (189) | (227) | (363) | (420) | |
Loss on extinguishment of debt | 0 | (709) | (43) | (709) | |
Total other expense | (208) | (936) | (442) | (1,129) | |
Loss before income taxes | (456) | (2,934) | (2,299) | (4,578) | |
Income tax benefit (expense) | 106 | 88 | 561 | (519) | |
Loss from continuing operations, net of tax | (350) | (2,846) | (1,738) | (5,097) | |
Income from discontinued operations, net of tax | 0 | 74 | 5,494 | 249 | |
Net (loss) income | $ (350) | $ (2,772) | $ 3,756 | $ (4,848) | |
Net (loss) income per share - basic and diluted | |||||
Continuing operations (in usd per share) | $ (0.02) | $ (0.14) | $ (0.09) | $ (0.26) | |
Discontinued operations (in usd per share) | 0 | 0 | 0.27 | 0.01 | |
Net (loss) income per share - basic and diluted (in usd per share) | [1] | (0.02) | (0.14) | 0.19 | (0.24) |
Dividends declared per common share (in usd per share) | $ 0.055 | $ 0.05 | $ 0.11 | $ 0.10 | |
Other comprehensive (loss) income: | |||||
Unrealized loss on available-for-sale securities | $ 0 | $ (69) | $ 0 | $ (31) | |
Reclassification of unrealized gains on available-for-sale securities to retained earnings | 0 | 0 | (17) | ||
Total other comprehensive loss | 0 | (69) | (17) | (31) | |
Comprehensive (loss) income | (350) | (2,841) | 3,739 | (4,879) | |
Services | |||||
Revenues: | |||||
Total revenues | 24,324 | 23,742 | 46,947 | 46,799 | |
Cost of revenues: | |||||
Cost of revenues | 20,023 | 19,105 | 39,284 | 37,688 | |
Product and product-related | |||||
Revenues: | |||||
Total revenues | 2,756 | 2,943 | 5,598 | 5,726 | |
Cost of revenues: | |||||
Cost of revenues | $ 1,490 | $ 1,892 | $ 3,087 | $ 3,547 | |
[1] | Earnings per share may not add due to rounding. |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 1,410 | $ 1,877 |
Securities available-for-sale | 96 | |
Securities available-for-sale | 97 | |
Accounts receivable, net | 12,581 | 15,887 |
Inventories, net | 5,992 | 5,501 |
Restricted cash | 243 | 242 |
Other current assets | 2,174 | 1,972 |
Total current assets | 22,496 | 25,576 |
Property and equipment, net | 25,664 | 28,365 |
Intangible assets, net | 7,116 | 7,830 |
Goodwill | 1,916 | 2,392 |
Restricted cash | 101 | 101 |
Non-current assets held for sale | 0 | 1,736 |
Other assets | 582 | 703 |
Total assets | 57,875 | 66,703 |
Current liabilities: | ||
Accounts payable | 5,313 | 5,207 |
Accrued compensation | 4,122 | 5,507 |
Accrued warranty | 157 | 204 |
Deferred revenue | 1,646 | 2,302 |
Current liabilities held for sale | 0 | 835 |
Other current liabilities | 2,342 | 2,915 |
Total current liabilities | 13,580 | 16,970 |
Long-term debt | 12,500 | 19,500 |
Deferred tax liabilities | 372 | 254 |
Other liabilities | 1,784 | 2,180 |
Total liabilities | 28,236 | 38,904 |
Commitments and contingencies (Note 10) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value: 10,000,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, $0.0001 par value: 80,000,000 shares authorized; 20,119,318 and 20,060,311 shares issued and outstanding (net of treasury shares) at June 30, 2018 and December 31, 2017, respectively | 2 | 2 |
Treasury stock, at cost; 2,588,484 shares at June 30, 2018 and December 31, 2017 | (5,728) | (5,728) |
Additional paid-in capital | 146,247 | 148,163 |
Accumulated other comprehensive loss | (22) | (5) |
Accumulated deficit | (110,860) | (114,633) |
Total stockholders’ equity | 29,639 | 27,799 |
Total liabilities and stockholders’ equity | $ 57,875 | $ 66,703 |
CONDENSED CONSOLIDATED BALANCE4
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 80,000,000 | 80,000,000 |
Common stock, issued (in shares) | 20,119,318 | 20,060,311 |
Common stock, outstanding (in shares) | 20,119,318 | 20,060,311 |
Treasury stock (in shares) | 2,588,484 | 2,588,484 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating activities | ||
Net income (loss) | $ 3,756 | $ (4,848) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation | 3,842 | 4,011 |
Amortization of intangible assets | 727 | 1,156 |
Provision for bad debt | 82 | 24 |
Stock-based compensation | 371 | 559 |
Amortization of loan fees | 21 | 153 |
Loss on extinguishment of debt | 43 | 709 |
Gain on disposal of discontinued operation | (6,261) | 0 |
Gain on sale of assets | (238) | (70) |
Goodwill impairment | 476 | 0 |
Deferred income taxes | 120 | 676 |
Other, net | 36 | (159) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 3,219 | 827 |
Inventories | (463) | 157 |
Other assets | 339 | (84) |
Accounts payable | (73) | (860) |
Accrued compensation | (1,385) | 978 |
Deferred revenue | (844) | (301) |
Other liabilities | (727) | 566 |
Net cash provided by operating activities | 3,041 | 3,494 |
Investing activities | ||
Purchases of property and equipment | (919) | (782) |
Proceeds from sale of discontinued operations | 6,844 | 0 |
Proceeds from sale of property and equipment | 325 | 167 |
Purchases of securities available-for-sale | (14) | (17) |
Maturities of securities available-for-sale | 0 | 917 |
Net cash provided by investing activities | 6,236 | 285 |
Financing activities | ||
Proceeds from long term borrowings | 18,125 | 29,353 |
Repayments of long term debt | (25,125) | (33,838) |
Loan issuance costs and extinguishment costs | (7) | (110) |
Dividends paid | (2,212) | (1,993) |
Taxes paid related to net share settlement of equity awards | (74) | (192) |
Cash paid for contingent consideration for acquisitions | 0 | (27) |
Repayment of obligations under capital leases | (450) | (411) |
Net cash used in financing activities | (9,743) | (7,218) |
Net decrease in cash, cash equivalents and restricted cash | (466) | (3,439) |
Cash, cash equivalents and restricted cash at beginning of period | 2,220 | 5,679 |
Cash, cash equivalents and restricted cash at end of period | 1,754 | 2,240 |
Non-Cash Investing Activities | ||
Assets acquired by entering into capital leases | $ 16 | $ 1,844 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Presentation The unaudited condensed consolidated financial statements included in this Form 10-Q have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions for Quarterly Reports on Form 10-Q. Accordingly, the condensed consolidated financial statements are unaudited and do not contain all the information required by U.S. generally accepted accounting principles ("GAAP") to be included in a full set of financial statements. The unaudited condensed consolidated balance sheet at December 31, 2017 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for a complete set of financial statements. The audited consolidated financial statements for our fiscal year ended December 31, 2017 , filed with the SEC on Form 10-K on February 28, 2018 , include a summary of our significant accounting policies and should be read in conjunction with this Form 10-Q. In the opinion of management, all material adjustments necessary to present fairly the results of operations, cash flows, and balance sheets for such periods have been included in this Form 10-Q. All such adjustments are of a normal recurring nature. The results of operations for interim periods are not necessarily indicative of the results of operations for the entire year. As discussed in Note 2, the results of our Medical Device Sales and Services ("MDSS") reportable segment are presented as discontinued operations and, as such, are excluded from both continuing operations and segment results for all periods presented. Use of Estimates Preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results could differ from management’s estimates. New Accounting Pronouncements Recently Adopted Accounting Standards In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. The pronouncement is effective for fiscal years beginning after December 15, 2017, and for interim periods within those periods, using a retrospective transition method to each period presented. We adopted ASU 2016-18 effective January 1, 2018 which resulted in an increase of $3.0 million in net cash flows used in financing activities that was previously reported for the six months ended June 30, 2017 . In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which amended the existing accounting standards for the accounting for financial instruments. The amendments require equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income. The new standard is effective prospectively for fiscal years beginning after December 15, 2017. We adopted ASU 2016-01 on January 1, 2018. As a result of the adoption, we recorded an increase to retained earnings of $17 thousand to recognize the unrealized gains previously recorded within accumulated other comprehensive income. Subsequent changes in the fair value of our marketable securities will be recorded to other expense, net. See Note 8 for further details. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers which supersedes current revenue recognition guidance, including most industry-specific guidance. The guidance provides that an entity recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. We adopted Topic 606 as of January 1, 2018 using the modified retrospective transition method. Under the modified retrospective method, the Company would recognize the cumulative effect of initially applying the standard as an adjustment to opening retained earnings at the date of initial application; however, we did not have any material adjustments as of the date of the adoption. The comparative periods have not been restated and continue to be reported under the accounting standards in effect for those periods. See Note 3 for expanded revenue disclosures and updates to our revenue recognition policy. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual, or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendment should be applied on a prospective basis. The pronouncement is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We early adopted ASU 2017-04 effective April 1, 2018 in conjunction with the interim impairment test of goodwill performed during the quarter. See Note 7 for additional information on or interim goodwill impairment test performed. New Accounting Standards To Be Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which amended the existing accounting standards for the accounting for leases. The amendments are based on the principle that assets and liabilities arising from leases should be recognized within the financial statements. The Company is required to adopt the amendments beginning in 2019. Early adoption is permitted. The amendments must be applied using a modified retrospective transition approach and the FASB decided not to permit a full retrospective transition approach. We currently expect that most of our operating lease commitments will be subject to the update and recognized as operating lease liabilities and right-of-use assets upon adoption. However, we are currently evaluating the effect that implementation of this update will have upon adoption on our consolidated financial position and results of operations. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On February 1, 2018 , the Company completed the sale of its customer contracts relating to our MDSS post-warranty service business to Philips North America LLC ("Philips") pursuant to an Asset Purchase Agreement, dated as of December 22, 2017 for $8.0 million . The total cash proceeds were adjusted for deferred revenue liabilities assigned to Philips at the closing date, as well as $0.5 million of proceeds held in escrow, subject to claims for breaches of general representation and warranties. The escrow amount was recorded in other current assets as of June 30, 2018 and is expected to be released to the Company during the fourth quarter of 2018. Prior to the contemplation of the transaction entered into above, on September 28, 2017 , we received notification from Philips that our distribution agreement to sell Philips imaging systems on a commission basis would be terminated, effective December 31, 2017. As a result, our product sales activities within our MDSS reportable segment were also discontinued effective in the first quarter of 2018. The Company deemed the disposition of our MDSS reportable segment in the first quarter of 2018 to represent a strategic shift that will have a major effect on our operations and financial results, in accordance with the provisions of FASB authoritative guidance on the presentation of financial statements, we have classified the results of our MDSS segment as discontinued operations in our condensed consolidated statement of operations for all periods presented. Additionally, the related assets and liabilities associated with the discontinued operations were reclassified as held for sale in our condensed consolidated balance sheet. The Company has allocated a portion of interest expense to discontinued operations since the proceeds received from the sale were required to be used to pay down outstanding borrowings under our revolving credit facility with Comerica Bank, a Texas banking association ("Comerica"). The allocation was based on the ratio of proceeds received in the sale to total borrowings for the period. In addition, certain general and administrative costs related to corporate and shared service functions previously allocated to the MDSS reportable segment are not included in discontinued operations. The following table presents financial results of the MDSS business: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2018 (1) 2017 2018 2017 Total revenues $ 165 $ 3,101 $ 789 $ 6,341 Total cost of revenues 30 1,756 546 3,491 Gross profit 135 1,345 243 2,850 Operating expenses: Marketing and sales — 673 85 1,290 General and administrative — 220 172 428 Amortization of intangible assets — 205 13 409 Gain on sale of discontinued operations — — (6,261 ) — Total operating expenses — 1,098 (5,991 ) 2,127 Income from operations 135 247 6,234 723 Interest expense — (76 ) (26 ) (198 ) Income from discontinuing operations before income taxes 135 171 6,208 525 Income tax expense (135 ) (97 ) (714 ) (276 ) Income from discontinuing operations, net of tax $ — $ 74 $ 5,494 $ 249 (1) Income from operations for the three months ended June 30, 2018 primarily relates to the sale of inventory used in our former MDSS service business. The following table summarizes the major classes of assets and liabilities of discontinued operations that were included in the Company's balance sheet: (in thousands) June 30, December 31, Carrying amounts of assets included as part of discontinued operations: Intangible assets, net $ — $ 637 Goodwill — 1,099 Total assets classified as held for sale in the condensed consolidated balance sheet $ — $ 1,736 Carrying amounts of liabilities included as part of discontinued operations: Deferred revenue $ — $ 835 Total liabilities classified as held for sale in the condensed consolidated balance sheet $ — $ 835 The following table presents supplemental cash flow information of discontinued operations: Six Months Ended June 30, (in thousands) 2018 2017 Operating activities: Depreciation $ 2 $ 18 Amortization of intangible assets $ 13 $ 409 Gain on sale of discontinued operations $ (6,261 ) $ — Stock-based compensation $ (1 ) $ 11 Investing activities: Proceeds from the sale of discontinued operations $ 6,844 $ — Purchases of property, plant and equipment $ — $ — |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Product and Product-Related Revenues and Services Revenue Product and product-related revenue are generated from the sale of gamma cameras and post-warranty maintenance service contracts within our Diagnostic Imaging reportable segment. Services revenue are generated from providing diagnostic imaging and cardiac monitoring services to customers within our Diagnostic Services and Mobile Healthcare reportable segments. Services revenue also includes lease income generated from interim rentals of imaging systems to our customers. Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Taxes collected from customers, which are subsequently remitted to governmental authorities, are excluded from revenue. The majority of our contracts have a single performance obligation as we provide a series of distinct services that are substantially the same and are transferred with the same pattern to the customer. For contracts with multiple performance obligations, we allocate the total transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. We use an observable price to determine the stand-alone selling price for separate performance obligations or a cost plus margin approach when one is not available. Our products are generally not sold with a right of return and the Company does not provide significant credits or incentives, which may be required for as variable consideration when estimating the amount of revenue to be recognized. Disaggregation of Revenue The following table presents our revenues disaggregated by major source: Three Months Ended June 30, 2018 (in thousands) Diagnostic Services Diagnostic Imaging Mobile Healthcare Total Major Goods/Service Lines Mobile Imaging and Cardiac Monitoring $ 13,075 $ — $ 8,554 $ 21,629 Camera — 913 — 913 Camera Support — 1,809 — 1,809 Revenue from Contracts with Customers 13,075 2,722 8,554 24,351 Lease Income 192 34 2,503 2,729 Total Revenues $ 13,267 $ 2,756 $ 11,057 $ 27,080 Timing of Revenue Recognition Services and goods transferred over time $ 12,123 $ 1,630 $ 10,986 $ 24,739 Services and goods transferred at a point in time 1,144 1,126 71 2,341 Total Revenues $ 13,267 $ 2,756 $ 11,057 $ 27,080 Six Months Ended June 30, 2018 (in thousands) Diagnostic Services Diagnostic Imaging Mobile Healthcare Total Major Goods/Service Lines Mobile Imaging and Cardiac Monitoring $ 24,973 $ — $ 16,633 $ 41,606 Camera — 1,983 — 1,983 Camera Support — 3,553 — 3,553 Revenue from Contracts with Customers 24,973 5,536 16,633 47,142 Lease Income 319 62 5,022 5,403 Total Revenues $ 25,292 $ 5,598 $ 21,655 $ 52,545 Timing of Revenue Recognition Services and goods transferred over time $ 23,087 $ 3,350 $ 21,477 $ 47,914 Services and goods transferred at a point in time 2,205 2,248 178 4,631 Total Revenues $ 25,292 $ 5,598 $ 21,655 $ 52,545 Nature of Goods and Services Mobile Imaging and Cardiac Monitoring Within our Diagnostic Services and Mobile Healthcare reportable segments, our sales are derived from providing services and materials to our customers, primarily physician practices and hospitals, that allow them to perform diagnostic imaging services at their site. We typically bundle our services in providing staffing, our imaging systems, licensing, radiopharmaceuticals, and supplies depending on our customers' needs. Our contracts with customers are typically entered into annually and are billed on a fixed rate per-day or per-scan basis, depending on terms of the contract. For the majority of these contracts, the Company has the right to invoice the customer in an amount that directly corresponds with the value to the customer of the Company's performance to date. The Company uses the practical expedient to recognize revenue corresponding with amounts we have the right to invoice for services performed. Diagnostic Services also offers remote cardiac event monitoring services. These services include provision of a monitor, remote monitoring by registered nurses, and 24 hours a day, 7 days a week monitoring support for our patients and physician customers. We provide our services under contracts with our customers that typically allow for direct billing to Medicare, Medicaid, or third-party private payors once the monitoring cycle is complete. Typically, our contracts can be canceled at any time, and are generally used to define billing responsibilities amongst the parties. Our cardiac event monitoring services are provided primarily through an independent diagnostic testing facility model which allows us to bill Medicare, Medicaid, or a third-party healthcare insurer directly for services provided. We also receive reimbursement directly from patients through co-pays and self-pay arrangements. Billings for services reimbursed by third party payors, including Medicare, are recorded as revenue net of contractual allowances. Contractual allowances are estimated based on historical collections by Current Procedural Terminology (CPT) code for specific payors, or class of payors. Adjustments to the estimated receipts, based on final settlement with the third-party payors, are recorded upon settlement. Camera Within our Diagnostic Imaging segment, camera revenues are generated from the sale of internally developed solid-state gamma camera imaging systems. We recognize revenue upon transfer of control to the customer, which is generally upon delivery and acceptance. We also provide installation services and training on cameras we sell, primarily in the United States. Installation and initial training is generally performed shortly after delivery. The Company recognizes revenues for installation and training over time as the customer receives and consumes benefits provided as the Company performs the installation services. Our sale of imaging systems includes a one -year warranty which we account for as an assurance-type warranty. The expected costs associated with our standard warranties and field service actions continue to be recognized as expense when cameras are sold. Maintenance service contracts sold beyond the term of our standard warranties are accounted for as a service-type warranty and revenue is deferred and recognized ratably over the period of the obligation. Camera Support Within our Diagnostic Imaging segment, camera support revenue is derived from the sale of separately-priced extended maintenance contracts to camera owners, training, and paid service arrangements when a customer does not have an extended warranty and parts that are sold by the service department. Our separately priced service contracts range from 12 to 48 months. Service contracts are usually billed at the beginning of the contract period or at periodic intervals (e.g. monthly or quarterly) and revenue is recognized ratably over the term of the agreement. Services and training revenues are recognized in the period the services and training are performed. Revenue for sales of parts are recognized when the parts are delivered to the customer and control is transferred. Lease Income Within primarily our Mobile Healthcare segment, we also generate income from interim rentals of our imaging systems to customers that are in the midst of new construction or refurbishing their current facilities. Rental contracts are structured as either a weekly or monthly payment arrangement and are accounted for as operating leases. Revenues are recognized on a straight-line basis over the term of the rental. Deferred Revenues We record deferred revenues when cash payments are received or due in advance of our performance, including amounts which are refundable. We have determined our contracts do not include a significant financing component. The majority of our deferred revenue relates to payments received on camera support post-warranty service contracts which are billed at the beginning of the annual contract period or at periodic intervals (e.g. monthly or quarterly). At December 31, 2017, the Company deferred revenues balance was $2.4 million , of which $0.9 million and $1.8 million of this was recognized as revenue during the three and six months ended June 30, 2018 . As of June 30, 2018 , deferred revenue was $1.7 million . The decrease of $0.7 million was mainly due to the timing of when customer payments are received in relation to the service contract period. The Company has elected to use the practical expedient under ASC 606 to exclude disclosures of unsatisfied remaining performance obligations for (i) contracts having an original expected length of one year or less or (ii) contracts which the practical expedient has been applied to recognize revenue at the amount to which it has a right to invoice. Contract Costs We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less. These costs mainly include the Company's internal sales commissions; under the terms of these programs these are generally earned and the costs are recognized at the time the revenue is recognized. |
Basic and Diluted Net Income (L
Basic and Diluted Net Income (Loss) Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share, Basic and Diluted [Abstract] | |
Basic and Diluted Net Income (Loss) Per Share | Basic and Diluted Net Income (Loss) Per Share For the six months ended June 30, 2018 and 2017 , basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares and vested restricted stock units outstanding during the period. Diluted net income per common share is calculated to give effect to all dilutive securities, if applicable, using the treasury stock method. In periods for which there is a net loss, diluted loss per common share is equal to basic loss per common share, since the effect of including any common stock equivalents would be antidilutive. The following table sets forth the reconciliation of shares used to compute basic and diluted net income (loss) per share for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, (shares in thousands) 2018 2017 2018 2017 Numerator: Loss from continuing operations $ (350 ) $ (2,846 ) $ (1,738 ) $ (5,097 ) Income from discontinued operations — 74 5,494 249 Net income (loss) $ (350 ) $ (2,772 ) $ 3,756 $ (4,848 ) Denominator: Weighted average shares outstanding - basic 20,119 19,979 20,106 19,957 Dilutive potential common stock outstanding: Stock options — — — — Restricted stock units — — — — Weighted average shares outstanding - diluted 20,119 19,979 20,106 19,957 Income (loss) per common share - basic Continuing operations $ (0.02 ) $ (0.14 ) $ (0.09 ) $ (0.26 ) Discontinued operations $ — $ — $ 0.27 $ 0.01 Net income (loss) per common share - basic (1) $ (0.02 ) $ (0.14 ) $ 0.19 $ (0.24 ) Income (loss) per common share - diluted Continuing operations $ (0.02 ) $ (0.14 ) $ (0.09 ) $ (0.26 ) Discontinued operations $ — $ — $ 0.27 $ 0.01 Net income (loss) per common share - diluted (1) $ (0.02 ) $ (0.14 ) $ 0.19 $ (0.24 ) (1) Earnings per share may not add due to rounding. The following weighted average outstanding common stock equivalents were not included in the calculation of diluted net income per share because their effect was anti-dilutive: Three Months Ended June 30, Six Months Ended June 30, (shares in thousands) 2018 2017 2018 2017 Stock options 360 287 258 301 Restricted stock units 234 84 171 74 Total 594 371 429 375 |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The components of inventories are as follows: (in thousands) June 30, December 31, Inventories: Raw materials $ 2,687 $ 2,331 Work-in-process 2,014 2,094 Finished goods 1,659 1,529 Total inventories 6,360 5,954 Less reserve for excess and obsolete inventories (368 ) (453 ) Total inventories, net $ 5,992 $ 5,501 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consists of the following: (in thousands) June 30, December 31, Property and equipment: Land $ 1,170 $ 1,170 Buildings and leasehold improvements 2,946 2,946 Machinery and equipment 55,786 55,152 Computer hardware and software 4,661 4,615 Total property and equipment 64,563 63,883 Less accumulated depreciation (38,899 ) (35,518 ) Total property and equipment, net $ 25,664 $ 28,365 |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The value of our goodwill is primarily derived from the acquisition of MD Office Solutions ("MD Office") in 2015, Telerhythmics, LLC ("Telerhythmics") in 2014, and substantially all of the assets of Ultrascan, Inc. ("Ultrascan") in 2007. During the six months ended June 30, 2018 , reporting units that carried goodwill balances included Digirad Imaging Solutions and Telerhythmics. The combined Digirad Imaging Solutions and Telerhythmics reporting units make up the Diagnostic Services reportable segment. Changes in the carrying amount of goodwill from December 31, 2017 to June 30, 2018 , by reportable segment, are as follows: (in thousands) Diagnostic Services Total Balance at December 31, 2017 $ 2,392 $ 2,392 Impairment of Telerhythmics (476 ) (476 ) Balance at June 30, 2018 $ 1,916 $ 1,916 The Company tests goodwill for impairment annually during the fourth quarter of each year at the reporting unit level and on an interim basis if events or substantive changes in circumstances indicate that the carrying amount of a reporting unit may exceed its fair value. During the second quarter of 2018, the Company's ongoing and continuous efforts to explore strategic alternatives across the entire business in order to maximize shareholder value triggered an interim impairment test during the quarter. As a result of additional market data and information that became available in connection with these efforts, the Company concluded that the carrying value of its Telerhythmics reporting unit was in excess of fair value and recorded a goodwill impairment charge of $0.5 million during the three months ended June 30, 2018 . The remaining goodwill balance within this reporting unit as of June 30, 2018 was $0.2 million . |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | Financial Instruments Assets and Liabilities Measured at Fair Value on a Recurring Basis. The following table presents information about our financial assets that are measured at fair value on a recurring basis, and indicates the fair value hierarchy of the valuation techniques we utilize to determine such fair value at June 30, 2018 and December 31, 2017 . Fair Value as of June 30, 2018 (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity securities $ 96 $ 89 $ — $ 185 Total $ 96 $ 89 $ — $ 185 Fair Value as of December 31, 2017 (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity securities $ 97 $ 111 $ — $ 208 Total $ 97 $ 111 $ — $ 208 We did not reclassify any investments between levels in the fair value hierarchy during the six months ended June 30, 2018 . The investment in equity securities consists of common stock of publicly traded companies. The fair value of these securities is based on the closing prices observed on June 30, 2018 . Securities Available-for-Sale As of June 30, 2018 , securities available-for-sale consist of investments in equity securities that are publicly traded. These investments include shares held in Birner Dental Management Services ("Birner Dental"), a publicly traded company whose board of directors include a current Director of the Company. We classify a portion of equity securities as available-for-sale and as current assets, as the sale of such securities may be required prior to maturity to execute management strategies. One of our equity securities, Perma-Fix Medical S.A. ("Perma-Fix Medical"), is classified as an other asset (non-current), as the investment is strategic in nature and our current intent is to hold the investment over a several year period. Securities available-for-sale are carried at fair value, with the unrealized gains and losses presented within 'other expense, net' on our condensed consolidated statement of operations. As of December 31, 2017, the accumulated unrealized gains on these investments was $17 thousand , which was reclassified from accumulated other comprehensive income into beginning retained earnings upon adoption of ASU 2016-01. The following table sets forth the composition of securities available-for-sale as of June 30, 2018 and December 31, 2017 (in thousands). Cost Unrealized Fair Value As of June 30, 2018 Gains Losses Equity securities $ 221 $ — $ (36 ) $ 185 $ 221 $ — $ (36 ) $ 185 Cost Unrealized Fair Value As of December 31, 2017 Gains Losses Equity securities $ 191 $ 17 $ — $ 208 $ 191 $ 17 $ — $ 208 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt A summary of long-term debt is as follows: June 30, 2018 December 31, 2017 (in thousands) Amount Weighted-Average Interest Rate Amount Weighted-Average Interest Rate Long-term debt: Revolving Credit Facility $ 12,500 4.44% $ 19,500 3.90% Total borrowings $ 12,500 $ 19,500 On June 21, 2017, the Company entered into a Revolving Credit Agreement (the “Comerica Credit Agreement”) with Comerica. The Comerica Credit Agreement provides for a five -year revolving credit facility with a maximum credit amount of $25.0 million maturing in June 2022, upon which a balloon payment on the balance is due. Under the Comerica Credit Facility, the Company can request the issuance of letters of credit in an aggregate amount not to exceed $1.0 million at any one time. In connection with the sale of our post-warranty service customer contracts to Philips, the Company entered into an Amendment No. 1 to the Comerica Credit Agreement, dated January 30, 2018 (the "Amendment"). The Amendment to the Comerica Credit Agreement reduced the revolving credit commitment from $25.0 million to $20.0 million . As of June 30, 2018 , our borrowing availability under the Comerica Credit Agreement was $7.4 million . In connection with the Amendment, during the six months ended June 30, 2018 , less than $0.1 million of unamortized loan fees were written off in proportion to the decrease in our borrowing capacity. As of June 30, 2018 , the unamortized loan fees were $0.2 million , which are being amortized on a straight-line basis to interest expense over the five -year term. At the Company’s option, the Comerica Credit Facility will bear interest at either (i) the LIBOR Rate, as defined in the Comerica Credit Agreement, plus a margin of 2.35% ; or (ii) the PRR-based Rate, plus a margin of 0.5% . As further defined in the Comerica Credit Agreement, the "PRR-based Rate" means the greatest of (a) the Prime Rate in effect on such day (as defined in the Comerica Credit Agreement) plus 0.5% , or (b) the daily adjusting LIBOR Rate plus 2.50% . In addition to interest on outstanding borrowings under the Comerica Credit Facility, the revolving credit note bears an unused line fee of 0.25% , which is presented as interest expense. As of June 30, 2018 , we had outstanding borrowings under the Comerica Credit Agreement of $12.5 million at a weighted average interest rate of 4.44% . The Comerica Credit Agreement contains certain representations, warranties, events of default, as well as certain affirmative and negative covenants customary for credit agreements of this type. These covenants include restrictions on borrowings, investments and divestitures, as well as limitations on the Company’s ability to make certain restricted payments. The Comerica Credit Agreement requires us to comply with certain financial covenants, including a Fixed Charge Coverage Ratio and a Funded Debt to Adjusted EBITDA Ratio (each as defined in the Comerica Credit Agreement). The Fixed Charge Coverage Ratio is calculated based on the ratio of (a) Adjusted EBITDA, less (i) cash income taxes paid for such period, less (ii), FCCR Capital Expenditures (as defined in the Comerica Credit Agreement) made during such period, less (iii) payments, repurchases or redemptions of stock made during such period, less (iv) Distributions and Purchases (each as defined in the Comerica Credit Agreement) made during such period, to (b) (i) the Current Maturities of Long Term Debt (each as defined in the Comerica Credit Agreement) as of the last day of such period plus (ii) interest paid during such period. The Fixed Charge Coverage ratio is measured on a quarterly basis as of the most recent fiscal quarter end. Under the Comerica Credit Agreement, we must maintain a fixed charge ratio of at least 1.25 to 1.00 for each trailing twelve-month period as of the end of each fiscal quarter. The funded debt to Adjusted EBITDA ratio (as defined in the Comerica Credit Agreement) must be not more than 2.25 to 1.00 measured at each fiscal quarter. Upon the occurrence and during the continuation of an event of default under the Comerica Credit Agreement, Comerica may, among other things, declare the loans and all other obligations under the Comerica Credit Agreement immediately due and payable and increase the interest rate at which loans and obligations under the Comerica Credit Agreement bear interest. Pursuant to a separate Security Agreement dated June 21, 2017, between the Company, its subsidiaries and Comerica Bank, the Comerica Credit Facility is secured by a first-priority security interest in substantially all of the assets (excluding real estate) of the Company and its subsidiaries and a pledge of all shares and membership interests of the Company’s subsidiaries. At June 30, 2018 , the Company was in compliance with all covenants. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In addition to commitments and obligations in the ordinary course of business, we have been, and will likely continue to be, subject to litigation or administrative proceedings incidental to our business, such as claims related to customer disputes, employment practices, wage and hour disputes, product liability, professional liability, commercial disputes, licensure restrictions or denials, and warranty or patent infringement. Responding to litigation or administrative proceedings, regardless of whether they have merit, can be expensive and disruptive to normal business operations. We are not able to predict the timing or outcome of these matters. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We provide for income taxes under the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of differences between the tax basis of assets or liabilities and their carrying amounts in the financial statements. We provide a valuation allowance for deferred tax assets if it is more likely than not that these items will expire before we are able to realize their benefit. We calculate the valuation allowance in accordance with the authoritative guidance relating to income taxes, which requires an assessment of both positive and negative evidence regarding the realizability of these deferred tax assets, when measuring the need for a valuation allowance. Significant judgment is required in determining any valuation allowance against deferred tax assets. As of December 31, 2017, as a result of a three-year cumulative loss and recent events, such as the unanticipated termination of the Philips distribution agreement and its effect on our near term forecasted income, we concluded that a full valuation allowance was necessary to offset our deferred tax assets. We intend to maintain a valuation allowance until sufficient positive evidence exists to support its reversal. Intraperiod tax allocation rules require us to allocate our provision for income taxes between continuing operations and other categories of comprehensive income, such as discontinued operations. In periods in which we have a year-to-date pre-tax loss from continuing operations and pre-tax income in other categories of comprehensive income, such as discontinued operations, we must consider that income in determining the amount of tax benefit that results from a loss in continuing operations and that shall be allocated to continuing operations. For the six months ended June 30, 2018 , we recorded income of $5.5 million , net of tax, in discontinued operations related to our MDSS reportable segment and a loss of $1.7 million , net of tax, in continuing operations. As a result of the intraperiod tax allocation rules, for the six months ended June 30, 2018 , the Company recorded an income tax benefit of $0.6 million within continuing operations and $0.7 million of income tax expense within discontinued operations. For the six months ended June 30, 2017, the Company recorded an income tax expense of $0.5 million and $0.3 million within continuing operations and discontinued operations, respectively. For the six months ended June 30, 2018 , the Company expects to utilize $1.1 million of net operating losses associated with projected taxable income in discontinued operations mainly attributable to the gain on the sale of our MDSS post-warranty service contract business. The utilization of net operating losses in 2018 results in a reduction in our deferred tax asset balance, with a corresponding reduction in our valuation allowance, due to our full valuation allowance position discussed above. As of June 30, 2018 , we had unrecognized tax benefits of approximately $3.9 million related to uncertain tax positions. Included in the unrecognized tax benefits were $3.5 million of tax benefits that, if recognized, would reduce our annual effective tax rate, subject to the valuation allowance. We file income tax returns in the US and in various state jurisdictions with varying statutes of limitations. We are no longer subject to income tax examination by tax authorities for years prior to 2013; however, our net operating loss and research credit carryovers arising prior to that year are subject to adjustment. It is our policy to recognize interest expense and penalties related to uncertain income tax matters as a component of income tax expense. |
Segments
Segments | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segments | Segments Our reporting segments have been determined based on the nature of the products and/or services offered to customers or the nature of their function in the organization. We evaluate performance based on the gross profit and operating income (loss) excluding litigation reserve expense, goodwill impairment, and transaction and integration costs. The Company does not identify or allocate its assets by operating segments. During the first quarter of 2018, we have classified the results of our MDSS segment as discontinued operations in our condensed consolidated statement of operations for all periods presented. Accordingly, segment results have been recast for all periods presented to reflect MDSS as discontinued operations. As costs of shared service functions previously allocated to MDSS are not allocable to discontinued operations, prior period corporate costs have been reallocated amongst the continuing reportable segments. Segment information is as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2018 2017 2018 2017 Revenue by segment: Diagnostic Services $ 13,267 $ 12,559 $ 25,292 $ 24,761 Diagnostic Imaging 2,756 2,943 5,598 5,726 Mobile Healthcare 11,057 11,183 21,655 22,038 Condensed consolidated revenue $ 27,080 $ 26,685 $ 52,545 $ 52,525 Gross profit by segment: Diagnostic Services $ 2,969 $ 2,730 $ 5,216 $ 5,566 Diagnostic Imaging 1,266 1,051 2,511 2,179 Mobile Healthcare 1,332 1,907 2,447 3,545 Condensed consolidated gross profit $ 5,567 $ 5,688 $ 10,174 $ 11,290 Income (loss) from continuing operations by segment: Diagnostic Services $ 804 $ 139 $ 514 $ 155 Diagnostic Imaging (132 ) (471 ) (336 ) (908 ) Mobile Healthcare (444 ) (327 ) (1,559 ) (1,357 ) Segment income (loss) from continuing operations $ 228 $ (659 ) $ (1,381 ) $ (2,110 ) Goodwill impairment (1) (476 ) — (476 ) — Litigation reserve (2) — (1,339 ) — (1,339 ) Condensed consolidated loss from continuing operations $ (248 ) $ (1,998 ) $ (1,857 ) $ (3,449 ) (1) See Note 7 for further information. (2) Reflects legal settlement reserve for wage and hour litigation. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On August 2, 2018, the Company announced a cash dividend of $0.055 per share payable on August 30, 2018 to shareholders of record on August 16, 2018. |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements included in this Form 10-Q have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions for Quarterly Reports on Form 10-Q. Accordingly, the condensed consolidated financial statements are unaudited and do not contain all the information required by U.S. generally accepted accounting principles ("GAAP") to be included in a full set of financial statements. The unaudited condensed consolidated balance sheet at December 31, 2017 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for a complete set of financial statements. The audited consolidated financial statements for our fiscal year ended December 31, 2017 , filed with the SEC on Form 10-K on February 28, 2018 , include a summary of our significant accounting policies and should be read in conjunction with this Form 10-Q. In the opinion of management, all material adjustments necessary to present fairly the results of operations, cash flows, and balance sheets for such periods have been included in this Form 10-Q. All such adjustments are of a normal recurring nature. The results of operations for interim periods are not necessarily indicative of the results of operations for the entire year. As discussed in Note 2, the results of our Medical Device Sales and Services ("MDSS") reportable segment are presented as discontinued operations and, as such, are excluded from both continuing operations and segment results for all periods presented. |
Use of Estimates | Use of Estimates Preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results could differ from management’s estimates. |
Recently Adopted and Standards To Be Adopted | Recently Adopted Accounting Standards In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. The pronouncement is effective for fiscal years beginning after December 15, 2017, and for interim periods within those periods, using a retrospective transition method to each period presented. We adopted ASU 2016-18 effective January 1, 2018 which resulted in an increase of $3.0 million in net cash flows used in financing activities that was previously reported for the six months ended June 30, 2017 . In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which amended the existing accounting standards for the accounting for financial instruments. The amendments require equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income. The new standard is effective prospectively for fiscal years beginning after December 15, 2017. We adopted ASU 2016-01 on January 1, 2018. As a result of the adoption, we recorded an increase to retained earnings of $17 thousand to recognize the unrealized gains previously recorded within accumulated other comprehensive income. Subsequent changes in the fair value of our marketable securities will be recorded to other expense, net. See Note 8 for further details. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers which supersedes current revenue recognition guidance, including most industry-specific guidance. The guidance provides that an entity recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. We adopted Topic 606 as of January 1, 2018 using the modified retrospective transition method. Under the modified retrospective method, the Company would recognize the cumulative effect of initially applying the standard as an adjustment to opening retained earnings at the date of initial application; however, we did not have any material adjustments as of the date of the adoption. The comparative periods have not been restated and continue to be reported under the accounting standards in effect for those periods. See Note 3 for expanded revenue disclosures and updates to our revenue recognition policy. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual, or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendment should be applied on a prospective basis. The pronouncement is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We early adopted ASU 2017-04 effective April 1, 2018 in conjunction with the interim impairment test of goodwill performed during the quarter. See Note 7 for additional information on or interim goodwill impairment test performed. New Accounting Standards To Be Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which amended the existing accounting standards for the accounting for leases. The amendments are based on the principle that assets and liabilities arising from leases should be recognized within the financial statements. The Company is required to adopt the amendments beginning in 2019. Early adoption is permitted. The amendments must be applied using a modified retrospective transition approach and the FASB decided not to permit a full retrospective transition approach. We currently expect that most of our operating lease commitments will be subject to the update and recognized as operating lease liabilities and right-of-use assets upon adoption. However, we are currently evaluating the effect that implementation of this update will have upon adoption on our consolidated financial position and results of operations. |
Revenue | Product and Product-Related Revenues and Services Revenue Product and product-related revenue are generated from the sale of gamma cameras and post-warranty maintenance service contracts within our Diagnostic Imaging reportable segment. Services revenue are generated from providing diagnostic imaging and cardiac monitoring services to customers within our Diagnostic Services and Mobile Healthcare reportable segments. Services revenue also includes lease income generated from interim rentals of imaging systems to our customers. Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Taxes collected from customers, which are subsequently remitted to governmental authorities, are excluded from revenue. The majority of our contracts have a single performance obligation as we provide a series of distinct services that are substantially the same and are transferred with the same pattern to the customer. For contracts with multiple performance obligations, we allocate the total transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. We use an observable price to determine the stand-alone selling price for separate performance obligations or a cost plus margin approach when one is not available. Our products are generally not sold with a right of return and the Company does not provide significant credits or incentives, which may be required for as variable consideration when estimating the amount of revenue to be recognized. Nature of Goods and Services Mobile Imaging and Cardiac Monitoring Within our Diagnostic Services and Mobile Healthcare reportable segments, our sales are derived from providing services and materials to our customers, primarily physician practices and hospitals, that allow them to perform diagnostic imaging services at their site. We typically bundle our services in providing staffing, our imaging systems, licensing, radiopharmaceuticals, and supplies depending on our customers' needs. Our contracts with customers are typically entered into annually and are billed on a fixed rate per-day or per-scan basis, depending on terms of the contract. For the majority of these contracts, the Company has the right to invoice the customer in an amount that directly corresponds with the value to the customer of the Company's performance to date. The Company uses the practical expedient to recognize revenue corresponding with amounts we have the right to invoice for services performed. Diagnostic Services also offers remote cardiac event monitoring services. These services include provision of a monitor, remote monitoring by registered nurses, and 24 hours a day, 7 days a week monitoring support for our patients and physician customers. We provide our services under contracts with our customers that typically allow for direct billing to Medicare, Medicaid, or third-party private payors once the monitoring cycle is complete. Typically, our contracts can be canceled at any time, and are generally used to define billing responsibilities amongst the parties. Our cardiac event monitoring services are provided primarily through an independent diagnostic testing facility model which allows us to bill Medicare, Medicaid, or a third-party healthcare insurer directly for services provided. We also receive reimbursement directly from patients through co-pays and self-pay arrangements. Billings for services reimbursed by third party payors, including Medicare, are recorded as revenue net of contractual allowances. Contractual allowances are estimated based on historical collections by Current Procedural Terminology (CPT) code for specific payors, or class of payors. Adjustments to the estimated receipts, based on final settlement with the third-party payors, are recorded upon settlement. Camera Within our Diagnostic Imaging segment, camera revenues are generated from the sale of internally developed solid-state gamma camera imaging systems. We recognize revenue upon transfer of control to the customer, which is generally upon delivery and acceptance. We also provide installation services and training on cameras we sell, primarily in the United States. Installation and initial training is generally performed shortly after delivery. The Company recognizes revenues for installation and training over time as the customer receives and consumes benefits provided as the Company performs the installation services. Our sale of imaging systems includes a one -year warranty which we account for as an assurance-type warranty. The expected costs associated with our standard warranties and field service actions continue to be recognized as expense when cameras are sold. Maintenance service contracts sold beyond the term of our standard warranties are accounted for as a service-type warranty and revenue is deferred and recognized ratably over the period of the obligation. Camera Support Within our Diagnostic Imaging segment, camera support revenue is derived from the sale of separately-priced extended maintenance contracts to camera owners, training, and paid service arrangements when a customer does not have an extended warranty and parts that are sold by the service department. Our separately priced service contracts range from 12 to 48 months. Service contracts are usually billed at the beginning of the contract period or at periodic intervals (e.g. monthly or quarterly) and revenue is recognized ratably over the term of the agreement. Services and training revenues are recognized in the period the services and training are performed. Revenue for sales of parts are recognized when the parts are delivered to the customer and control is transferred. Lease Income Within primarily our Mobile Healthcare segment, we also generate income from interim rentals of our imaging systems to customers that are in the midst of new construction or refurbishing their current facilities. Rental contracts are structured as either a weekly or monthly payment arrangement and are accounted for as operating leases. Revenues are recognized on a straight-line basis over the term of the rental. Deferred Revenues We record deferred revenues when cash payments are received or due in advance of our performance, including amounts which are refundable. We have determined our contracts do not include a significant financing component. The majority of our deferred revenue relates to payments received on camera support post-warranty service contracts which are billed at the beginning of the annual contract period or at periodic intervals (e.g. monthly or quarterly). At December 31, 2017, the Company deferred revenues balance was $2.4 million , of which $0.9 million and $1.8 million of this was recognized as revenue during the three and six months ended June 30, 2018 . As of June 30, 2018 , deferred revenue was $1.7 million . The decrease of $0.7 million was mainly due to the timing of when customer payments are received in relation to the service contract period. The Company has elected to use the practical expedient under ASC 606 to exclude disclosures of unsatisfied remaining performance obligations for (i) contracts having an original expected length of one year or less or (ii) contracts which the practical expedient has been applied to recognize revenue at the amount to which it has a right to invoice. Contract Costs We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less. These costs mainly include the Company's internal sales commissions; under the terms of these programs these are generally earned and the costs are recognized at the time the revenue is recognized. |
Securities Available-for-sale | Securities Available-for-Sale As of June 30, 2018 , securities available-for-sale consist of investments in equity securities that are publicly traded. These investments include shares held in Birner Dental Management Services ("Birner Dental"), a publicly traded company whose board of directors include a current Director of the Company. We classify a portion of equity securities as available-for-sale and as current assets, as the sale of such securities may be required prior to maturity to execute management strategies. One of our equity securities, Perma-Fix Medical S.A. ("Perma-Fix Medical"), is classified as an other asset (non-current), as the investment is strategic in nature and our current intent is to hold the investment over a several year period. Securities available-for-sale are carried at fair value, with the unrealized gains and losses presented within 'other expense, net' on our condensed consolidated statement of operations. As of December 31, 2017, the accumulated unrealized gains on these investments was $17 thousand , which was reclassified from accumulated other comprehensive income into beginning retained earnings upon adoption of ASU 2016-01. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations Information | The following table presents financial results of the MDSS business: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2018 (1) 2017 2018 2017 Total revenues $ 165 $ 3,101 $ 789 $ 6,341 Total cost of revenues 30 1,756 546 3,491 Gross profit 135 1,345 243 2,850 Operating expenses: Marketing and sales — 673 85 1,290 General and administrative — 220 172 428 Amortization of intangible assets — 205 13 409 Gain on sale of discontinued operations — — (6,261 ) — Total operating expenses — 1,098 (5,991 ) 2,127 Income from operations 135 247 6,234 723 Interest expense — (76 ) (26 ) (198 ) Income from discontinuing operations before income taxes 135 171 6,208 525 Income tax expense (135 ) (97 ) (714 ) (276 ) Income from discontinuing operations, net of tax $ — $ 74 $ 5,494 $ 249 (1) Income from operations for the three months ended June 30, 2018 primarily relates to the sale of inventory used in our former MDSS service business. The following table summarizes the major classes of assets and liabilities of discontinued operations that were included in the Company's balance sheet: (in thousands) June 30, December 31, Carrying amounts of assets included as part of discontinued operations: Intangible assets, net $ — $ 637 Goodwill — 1,099 Total assets classified as held for sale in the condensed consolidated balance sheet $ — $ 1,736 Carrying amounts of liabilities included as part of discontinued operations: Deferred revenue $ — $ 835 Total liabilities classified as held for sale in the condensed consolidated balance sheet $ — $ 835 The following table presents supplemental cash flow information of discontinued operations: Six Months Ended June 30, (in thousands) 2018 2017 Operating activities: Depreciation $ 2 $ 18 Amortization of intangible assets $ 13 $ 409 Gain on sale of discontinued operations $ (6,261 ) $ — Stock-based compensation $ (1 ) $ 11 Investing activities: Proceeds from the sale of discontinued operations $ 6,844 $ — Purchases of property, plant and equipment $ — $ — |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents our revenues disaggregated by major source: Three Months Ended June 30, 2018 (in thousands) Diagnostic Services Diagnostic Imaging Mobile Healthcare Total Major Goods/Service Lines Mobile Imaging and Cardiac Monitoring $ 13,075 $ — $ 8,554 $ 21,629 Camera — 913 — 913 Camera Support — 1,809 — 1,809 Revenue from Contracts with Customers 13,075 2,722 8,554 24,351 Lease Income 192 34 2,503 2,729 Total Revenues $ 13,267 $ 2,756 $ 11,057 $ 27,080 Timing of Revenue Recognition Services and goods transferred over time $ 12,123 $ 1,630 $ 10,986 $ 24,739 Services and goods transferred at a point in time 1,144 1,126 71 2,341 Total Revenues $ 13,267 $ 2,756 $ 11,057 $ 27,080 Six Months Ended June 30, 2018 (in thousands) Diagnostic Services Diagnostic Imaging Mobile Healthcare Total Major Goods/Service Lines Mobile Imaging and Cardiac Monitoring $ 24,973 $ — $ 16,633 $ 41,606 Camera — 1,983 — 1,983 Camera Support — 3,553 — 3,553 Revenue from Contracts with Customers 24,973 5,536 16,633 47,142 Lease Income 319 62 5,022 5,403 Total Revenues $ 25,292 $ 5,598 $ 21,655 $ 52,545 Timing of Revenue Recognition Services and goods transferred over time $ 23,087 $ 3,350 $ 21,477 $ 47,914 Services and goods transferred at a point in time 2,205 2,248 178 4,631 Total Revenues $ 25,292 $ 5,598 $ 21,655 $ 52,545 |
Basic and Diluted Net Income 22
Basic and Diluted Net Income (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share, Basic and Diluted [Abstract] | |
Reconciliation of Shares Used to Compute Basic and Diluted Net Income (Loss) Per Share | The following table sets forth the reconciliation of shares used to compute basic and diluted net income (loss) per share for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, (shares in thousands) 2018 2017 2018 2017 Numerator: Loss from continuing operations $ (350 ) $ (2,846 ) $ (1,738 ) $ (5,097 ) Income from discontinued operations — 74 5,494 249 Net income (loss) $ (350 ) $ (2,772 ) $ 3,756 $ (4,848 ) Denominator: Weighted average shares outstanding - basic 20,119 19,979 20,106 19,957 Dilutive potential common stock outstanding: Stock options — — — — Restricted stock units — — — — Weighted average shares outstanding - diluted 20,119 19,979 20,106 19,957 Income (loss) per common share - basic Continuing operations $ (0.02 ) $ (0.14 ) $ (0.09 ) $ (0.26 ) Discontinued operations $ — $ — $ 0.27 $ 0.01 Net income (loss) per common share - basic (1) $ (0.02 ) $ (0.14 ) $ 0.19 $ (0.24 ) Income (loss) per common share - diluted Continuing operations $ (0.02 ) $ (0.14 ) $ (0.09 ) $ (0.26 ) Discontinued operations $ — $ — $ 0.27 $ 0.01 Net income (loss) per common share - diluted (1) $ (0.02 ) $ (0.14 ) $ 0.19 $ (0.24 ) (1) Earnings per share may not add due to rounding. |
Schedule of Antidilutive Securities Excluded from Computation of Net Income (Loss) Per Share | The following weighted average outstanding common stock equivalents were not included in the calculation of diluted net income per share because their effect was anti-dilutive: Three Months Ended June 30, Six Months Ended June 30, (shares in thousands) 2018 2017 2018 2017 Stock options 360 287 258 301 Restricted stock units 234 84 171 74 Total 594 371 429 375 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | The components of inventories are as follows: (in thousands) June 30, December 31, Inventories: Raw materials $ 2,687 $ 2,331 Work-in-process 2,014 2,094 Finished goods 1,659 1,529 Total inventories 6,360 5,954 Less reserve for excess and obsolete inventories (368 ) (453 ) Total inventories, net $ 5,992 $ 5,501 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consists of the following: (in thousands) June 30, December 31, Property and equipment: Land $ 1,170 $ 1,170 Buildings and leasehold improvements 2,946 2,946 Machinery and equipment 55,786 55,152 Computer hardware and software 4,661 4,615 Total property and equipment 64,563 63,883 Less accumulated depreciation (38,899 ) (35,518 ) Total property and equipment, net $ 25,664 $ 28,365 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying amount of goodwill | Changes in the carrying amount of goodwill from December 31, 2017 to June 30, 2018 , by reportable segment, are as follows: (in thousands) Diagnostic Services Total Balance at December 31, 2017 $ 2,392 $ 2,392 Impairment of Telerhythmics (476 ) (476 ) Balance at June 30, 2018 $ 1,916 $ 1,916 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Assets Measured at Fair Value on a Recurring Basis | The following table presents information about our financial assets that are measured at fair value on a recurring basis, and indicates the fair value hierarchy of the valuation techniques we utilize to determine such fair value at June 30, 2018 and December 31, 2017 . Fair Value as of June 30, 2018 (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity securities $ 96 $ 89 $ — $ 185 Total $ 96 $ 89 $ — $ 185 Fair Value as of December 31, 2017 (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity securities $ 97 $ 111 $ — $ 208 Total $ 97 $ 111 $ — $ 208 |
Available-for-sale Securities | The following table sets forth the composition of securities available-for-sale as of June 30, 2018 and December 31, 2017 (in thousands). Cost Unrealized Fair Value As of June 30, 2018 Gains Losses Equity securities $ 221 $ — $ (36 ) $ 185 $ 221 $ — $ (36 ) $ 185 Cost Unrealized Fair Value As of December 31, 2017 Gains Losses Equity securities $ 191 $ 17 $ — $ 208 $ 191 $ 17 $ — $ 208 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Summary of Long-Term Debt | A summary of long-term debt is as follows: June 30, 2018 December 31, 2017 (in thousands) Amount Weighted-Average Interest Rate Amount Weighted-Average Interest Rate Long-term debt: Revolving Credit Facility $ 12,500 4.44% $ 19,500 3.90% Total borrowings $ 12,500 $ 19,500 |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Segment information is as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2018 2017 2018 2017 Revenue by segment: Diagnostic Services $ 13,267 $ 12,559 $ 25,292 $ 24,761 Diagnostic Imaging 2,756 2,943 5,598 5,726 Mobile Healthcare 11,057 11,183 21,655 22,038 Condensed consolidated revenue $ 27,080 $ 26,685 $ 52,545 $ 52,525 Gross profit by segment: Diagnostic Services $ 2,969 $ 2,730 $ 5,216 $ 5,566 Diagnostic Imaging 1,266 1,051 2,511 2,179 Mobile Healthcare 1,332 1,907 2,447 3,545 Condensed consolidated gross profit $ 5,567 $ 5,688 $ 10,174 $ 11,290 Income (loss) from continuing operations by segment: Diagnostic Services $ 804 $ 139 $ 514 $ 155 Diagnostic Imaging (132 ) (471 ) (336 ) (908 ) Mobile Healthcare (444 ) (327 ) (1,559 ) (1,357 ) Segment income (loss) from continuing operations $ 228 $ (659 ) $ (1,381 ) $ (2,110 ) Goodwill impairment (1) (476 ) — (476 ) — Litigation reserve (2) — (1,339 ) — (1,339 ) Condensed consolidated loss from continuing operations $ (248 ) $ (1,998 ) $ (1,857 ) $ (3,449 ) (1) See Note 7 for further information. (2) Reflects legal settlement reserve for wage and hour litigation. |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jan. 01, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Net cash used in financing activities | $ (9,743) | $ (7,218) | |
Accounting Standards Update 2016-18 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Net cash used in financing activities | $ (3,000) | ||
Retained Earnings | Accounting Standards Update 2016-01 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of new accounting principle | $ 17 | ||
AOCI Attributable to Parent | Accounting Standards Update 2016-01 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of new accounting principle | $ (17) |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - MDSS post-warranty service business - Discontinued operations, disposed of by sale $ in Millions | Feb. 01, 2018USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Consideration received | $ 8 |
Held in escrow | $ 0.5 |
Discontinued Operations - Finan
Discontinued Operations - Financial Results (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Operating expenses: | ||||
Income from discontinuing operations, net of tax | $ 0 | $ 74 | $ 5,494 | $ 249 |
MDSS post-warranty service business | Discontinued operations, disposed of by sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total revenues | 165 | 3,101 | 789 | 6,341 |
Total cost of revenues | 30 | 1,756 | 546 | 3,491 |
Gross profit | 135 | 1,345 | 243 | 2,850 |
Operating expenses: | ||||
Marketing and sales | 0 | 673 | 85 | 1,290 |
General and administrative | 0 | 220 | 172 | 428 |
Amortization of intangible assets | 0 | 205 | 13 | 409 |
Gain on sale of discontinued operations | 0 | 0 | (6,261) | 0 |
Total operating expenses | 0 | 1,098 | (5,991) | 2,127 |
Income from operations | 135 | 247 | 6,234 | 723 |
Interest expense | 0 | (76) | (26) | (198) |
Income from discontinuing operations before income taxes | 135 | 171 | 6,208 | 525 |
Income tax expense | (135) | (97) | (714) | (276) |
Income from discontinuing operations, net of tax | $ 0 | $ 74 | $ 5,494 | $ 249 |
Discontinued Operations - Major
Discontinued Operations - Major Classes of Assets and Liabilities Included in Company's Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Carrying amounts of assets included as part of discontinued operations: | ||
Total assets classified as held for sale in the condensed consolidated balance sheet | $ 0 | $ 1,736 |
Carrying amounts of liabilities included as part of discontinued operations: | ||
Total liabilities classified as held for sale in the condensed consolidated balance sheet | 0 | 835 |
MDSS post-warranty service business | Discontinued operations, disposed of by sale | ||
Carrying amounts of assets included as part of discontinued operations: | ||
Intangible assets, net | 0 | 637 |
Goodwill | 0 | 1,099 |
Total assets classified as held for sale in the condensed consolidated balance sheet | 0 | 1,736 |
Carrying amounts of liabilities included as part of discontinued operations: | ||
Deferred revenue | 0 | 835 |
Total liabilities classified as held for sale in the condensed consolidated balance sheet | $ 0 | $ 835 |
Discontinued Operations - Suppl
Discontinued Operations - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from sale of discontinued operations | $ 6,844 | $ 0 | ||
MDSS post-warranty service business | Discontinued operations, disposed of by sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Depreciation | 2 | 18 | ||
Amortization of intangible assets | $ 0 | $ 205 | 13 | 409 |
Gain on sale of discontinued operations | $ 0 | $ 0 | (6,261) | 0 |
Stock-based compensation | (1) | 11 | ||
Proceeds from sale of discontinued operations | 6,844 | 0 | ||
Purchases of property, plant and equipment | $ 0 | $ 0 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | $ 24,351 | $ 47,142 | ||
Lease Income | 2,729 | 5,403 | ||
Total Revenues | 27,080 | $ 26,685 | 52,545 | $ 52,525 |
Services and goods transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 24,739 | 47,914 | ||
Services and goods transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 2,341 | 4,631 | ||
Mobile Imaging and Cardiac Monitoring | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 21,629 | 41,606 | ||
Camera | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 913 | 1,983 | ||
Camera Support | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 1,809 | 3,553 | ||
Diagnostic Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 13,075 | 24,973 | ||
Lease Income | 192 | 319 | ||
Total Revenues | 13,267 | 25,292 | ||
Diagnostic Services | Services and goods transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 12,123 | 23,087 | ||
Diagnostic Services | Services and goods transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 1,144 | 2,205 | ||
Diagnostic Services | Mobile Imaging and Cardiac Monitoring | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 13,075 | 24,973 | ||
Diagnostic Services | Camera | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 0 | 0 | ||
Diagnostic Services | Camera Support | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 0 | 0 | ||
Diagnostic Imaging | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 2,722 | 5,536 | ||
Lease Income | 34 | 62 | ||
Total Revenues | 2,756 | 5,598 | ||
Diagnostic Imaging | Services and goods transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 1,630 | 3,350 | ||
Diagnostic Imaging | Services and goods transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 1,126 | 2,248 | ||
Diagnostic Imaging | Mobile Imaging and Cardiac Monitoring | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 0 | 0 | ||
Diagnostic Imaging | Camera | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 913 | 1,983 | ||
Diagnostic Imaging | Camera Support | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 1,809 | 3,553 | ||
Mobile Healthcare | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 8,554 | 16,633 | ||
Lease Income | 2,503 | 5,022 | ||
Total Revenues | 11,057 | 21,655 | ||
Mobile Healthcare | Services and goods transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 10,986 | 21,477 | ||
Mobile Healthcare | Services and goods transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 71 | 178 | ||
Mobile Healthcare | Mobile Imaging and Cardiac Monitoring | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 8,554 | 16,633 | ||
Mobile Healthcare | Camera | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | 0 | 0 | ||
Mobile Healthcare | Camera Support | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contracts with Customers | $ 0 | $ 0 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||
Deferred revenue balance | $ 1.7 | $ 1.7 | $ 2.4 |
Revenue recognized in period | $ 0.9 | 1.8 | |
Deferred revenue | $ (0.7) | ||
Camera | |||
Disaggregation of Revenue [Line Items] | |||
Warranty term | 1 year | ||
Diagnostic Imaging | Camera Support | Minimum | |||
Disaggregation of Revenue [Line Items] | |||
Service contract term | 12 months | ||
Diagnostic Imaging | Camera Support | Maximum | |||
Disaggregation of Revenue [Line Items] | |||
Service contract term | 48 months |
Basic and Diluted Net Income 36
Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Numerator: | ||||
Loss from continuing operations | $ (350) | $ (2,846) | $ (1,738) | $ (5,097) |
Income from discontinued operations | 0 | 74 | 5,494 | 249 |
Net (loss) income | $ (350) | $ (2,772) | $ 3,756 | $ (4,848) |
Denominator: | ||||
Weighted average shares outstanding – basic (in shares) | 20,119 | 19,979 | 20,106 | 19,957 |
Dilutive potential common stock outstanding: | ||||
Weighted average shares outstanding - diluted (in shares) | 20,119 | 19,979 | 20,106 | 19,957 |
Income (loss) per common share - basic | ||||
Continuing operations (in usd per share) | $ (0.02) | $ (0.14) | $ (0.09) | $ (0.26) |
Discontinued operations (in usd per share) | 0 | 0 | 0.27 | 0.01 |
Net income (loss) per common share - basic (in usd per share) | (0.02) | (0.14) | 0.19 | (0.24) |
Income (loss) per common share - diluted | ||||
Continuing operations (in usd per share) | (0.02) | (0.14) | (0.09) | (0.26) |
Discontinued operations (in usd per share) | 0 | 0 | 0.27 | 0.01 |
Net income (loss) per common share - diluted (in usd per share) | $ (0.02) | $ (0.14) | $ 0.19 | $ (0.24) |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted average outstanding securities excluded from computation of diluted net income (loss) per share (in shares) | 594 | 371 | 429 | 375 |
Stock options | ||||
Dilutive potential common stock outstanding: | ||||
Dilutive potential common stock outstanding (in shares) | 0 | 0 | 0 | 0 |
Restricted stock units | ||||
Dilutive potential common stock outstanding: | ||||
Dilutive potential common stock outstanding (in shares) | 0 | 0 | 0 | 0 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted average outstanding securities excluded from computation of diluted net income (loss) per share (in shares) | 360 | 287 | 258 | 301 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted average outstanding securities excluded from computation of diluted net income (loss) per share (in shares) | 234 | 84 | 171 | 74 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,687 | $ 2,331 |
Work-in-process | 2,014 | 2,094 |
Finished goods | 1,659 | 1,529 |
Total inventories | 6,360 | 5,954 |
Less reserve for excess and obsolete inventories | (368) | (453) |
Total inventories, net | $ 5,992 | $ 5,501 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 64,563 | $ 63,883 |
Less accumulated depreciation | (38,899) | (35,518) |
Total property and equipment, net | 25,664 | 28,365 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,170 | 1,170 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 2,946 | 2,946 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 55,786 | 55,152 |
Computer hardware and software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 4,661 | $ 4,615 |
Goodwill - Summary of Goodwill
Goodwill - Summary of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Goodwill [Roll Forward] | ||||
Goodwill, beginning balance | $ 2,392 | |||
Impairment of Telerhythmics | $ (476) | $ 0 | (476) | $ 0 |
Goodwill, ending balance | 1,916 | 1,916 | ||
Diagnostic Services | ||||
Goodwill [Roll Forward] | ||||
Goodwill, beginning balance | 2,392 | |||
Impairment of Telerhythmics | (476) | |||
Goodwill, ending balance | $ 1,916 | $ 1,916 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Goodwill [Line Items] | |||||
Goodwill impairment | $ 476 | $ 0 | $ 476 | $ 0 | |
Goodwill | 1,916 | 1,916 | $ 2,392 | ||
Diagnostic Services | |||||
Goodwill [Line Items] | |||||
Goodwill impairment | 476 | ||||
Goodwill | 1,916 | 1,916 | $ 2,392 | ||
Telerhythmics | |||||
Goodwill [Line Items] | |||||
Goodwill | $ 200 | $ 200 |
Financial Instruments - Financi
Financial Instruments - Financial Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Assets: | ||
Equity securities | $ 185 | |
Equity securities | $ 208 | |
Fair Value, Measurements, Recurring | ||
Assets: | ||
Equity securities | 185 | |
Equity securities | 208 | |
Total | 185 | 208 |
Fair Value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Equity securities | 96 | |
Equity securities | 97 | |
Total | 96 | 97 |
Fair Value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Equity securities | 89 | |
Equity securities | 111 | |
Total | 89 | 111 |
Fair Value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Equity securities | 0 | |
Equity securities | 0 | |
Total | $ 0 | $ 0 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Fair Value Disclosures [Abstract] | |
Equity securities, unrealized gains | $ 17 |
Financial Instruments - Securit
Financial Instruments - Securities Available for Sale (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | ||
Equity securities, cost | $ 221 | |
Equity securities, unrealized gains | 0 | |
Equity securities, unrealized losses | 36 | |
Equity securities | $ 185 | |
Equity securities, cost | $ 191 | |
Equity securities, unrealized gains | 17 | |
Equity securities, unrealized loss | 0 | |
Equity securities fair value | $ 208 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Total borrowings | $ 12,500 | $ 19,500 |
Line of Credit | Revolving Credit Facility | Credit Facility Due June 2022 | ||
Debt Instrument [Line Items] | ||
Total borrowings | $ 12,500 | $ 19,500 |
Weighted-Average Interest Rate | 4.44% | 3.90% |
Debt - Narrative (Details)
Debt - Narrative (Details) | Jun. 21, 2017USD ($) | Jun. 30, 2018USD ($) | Jan. 30, 2018USD ($) | Dec. 31, 2017USD ($) |
Line of Credit Facility [Line Items] | ||||
Borrowing outstanding | $ 12,500,000 | $ 19,500,000 | ||
Line of Credit | Credit Facility Due June 2022 | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Borrowing outstanding | $ 12,500,000 | $ 19,500,000 | ||
Weighted average interest rate | 4.44% | 3.90% | ||
Fixed charge ratio | 1.25 | |||
Funded debt to adjusted EBITDA ratio | 2.25 | |||
Line of Credit | Credit Facility Due June 2022 | Comerica | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Debt term | 5 years | |||
Maximum borrowing capacity | $ 25,000,000 | $ 20,000,000 | ||
Letters of credit (not to exceed) | $ 1,000,000 | |||
Borrowing availability | $ 7,400,000 | |||
Unamortized loan fees, written off | 100,000 | |||
Unamortized loan fees | $ 200,000 | |||
Unused line fee | 0.25% | |||
Line of Credit | Credit Facility Due June 2022 | London Interbank Offered Rate (LIBOR) | Comerica | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Additional margin rate | 2.35% | |||
Basis spread | 2.50% | |||
Line of Credit | Credit Facility Due June 2022 | Prime Rate | Comerica | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread | 0.50% |
Income Tax (Details)
Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Income from discontinued operations, net of tax | $ 0 | $ 74 | $ 5,494 | $ 249 |
Loss from continuing operations, net of tax | (350) | (2,846) | (1,738) | (5,097) |
Income tax expense (benefit), continued operations | (106) | (88) | (561) | 519 |
Unrecognized tax benefits | 3,900 | 3,900 | ||
Unrecognized tax benefits that would impact effective tax rate | 3,500 | 3,500 | ||
MDSS post-warranty service business | Discontinued operations, disposed of by sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Income from discontinued operations, net of tax | 0 | 74 | 5,494 | 249 |
Income tax expense, discontinued operations | $ 135 | $ 97 | 714 | $ 276 |
Operating loss carryforward | MDSS post-warranty service business | Discontinued operations, disposed of by sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Operating losses utilized, decrease in deferred tax assets valuation allowance | $ 1,100 |
Segments (Details)
Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Condensed consolidated revenue | $ 27,080 | $ 26,685 | $ 52,545 | $ 52,525 |
Condensed consolidated gross profit | 5,567 | 5,688 | 10,174 | 11,290 |
Goodwill impairment | (476) | 0 | (476) | 0 |
Condensed consolidated income (loss) from operations | (248) | (1,998) | (1,857) | (3,449) |
Diagnostic Services | ||||
Segment Reporting Information [Line Items] | ||||
Condensed consolidated revenue | 13,267 | 25,292 | ||
Diagnostic Imaging | ||||
Segment Reporting Information [Line Items] | ||||
Condensed consolidated revenue | 2,756 | 5,598 | ||
Mobile Healthcare | ||||
Segment Reporting Information [Line Items] | ||||
Condensed consolidated revenue | 11,057 | 21,655 | ||
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Condensed consolidated income (loss) from operations | 228 | (659) | (1,381) | (2,110) |
Operating Segments | Diagnostic Services | ||||
Segment Reporting Information [Line Items] | ||||
Condensed consolidated revenue | 13,267 | 12,559 | 25,292 | 24,761 |
Condensed consolidated gross profit | 2,969 | 2,730 | 5,216 | 5,566 |
Condensed consolidated income (loss) from operations | 804 | 139 | 514 | 155 |
Operating Segments | Diagnostic Imaging | ||||
Segment Reporting Information [Line Items] | ||||
Condensed consolidated revenue | 2,756 | 2,943 | 5,598 | 5,726 |
Condensed consolidated gross profit | 1,266 | 1,051 | 2,511 | 2,179 |
Condensed consolidated income (loss) from operations | (132) | (471) | (336) | (908) |
Operating Segments | Mobile Healthcare | ||||
Segment Reporting Information [Line Items] | ||||
Condensed consolidated revenue | 11,057 | 11,183 | 21,655 | 22,038 |
Condensed consolidated gross profit | 1,332 | 1,907 | 2,447 | 3,545 |
Condensed consolidated income (loss) from operations | (444) | (327) | (1,559) | (1,357) |
Settled Litigation | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Condensed consolidated income (loss) from operations | $ 0 | $ (1,339) | $ 0 | $ (1,339) |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Aug. 02, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Subsequent Event [Line Items] | |||||
Dividends declared per common share (in usd per share) | $ 0.055 | $ 0.05 | $ 0.11 | $ 0.10 | |
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividends declared per common share (in usd per share) | $ 0.055 |