Digirad Corporation Reports Third Quarter 2011 Financial ResultsDigirad Generates Q3 Net Income; Fourth Consecutive Quarter Positive Cash
POWAY, CA -- (Marketwire - November 04, 2011) - Digirad Corporation (NASDAQ: DRAD) today reported 2011 third quarter revenue of $13.4 million, 2011 nine-month revenue of $41.9 million and an ending cash and available-for-sale securities balance of $31.6 million at September 30, 2011.
Digirad CEO Todd Clyde commented: "We continue to improve our operating margins, grow our revenue modestly and generate cash for the fourth quarter in a row. We increased camera revenue in our product business segment, which was up 12.4 percent compared to the third quarter of 2010, thanks in part to our new ergo general purpose portable imaging system. Revenue from our Digirad Imaging Solutions business, or DIS, decreased from last quarter and the third quarter of last year, which we believe is due to the seasonality of that business and the continued reimbursement pressures and uncertainty in the overall healthcare market."
Clyde continued: "In our DIS business, we have made it a priority to work closely with our current physician customers and help maximize imaging operations of our existing customers. We remain optimistic about the acceptance our portable ergo camera is having in the marketplace. While sales of ergo have not grown as quickly as we hoped, we believe that we are building a base through our marketing of ergo, which will result in better future sales, once capital expenditures in hospitals begin to increase."
Third Quarter 2011 Summary
- Total revenue for the third quarter of 2011 was $13.4 million, compared to $13.3 million for the same period in the prior year and $14.2 million in the second quarter of 2011. DIS-only revenue for the third quarter of 2011 was $9.3 million, compared to $9.6 million for the same period of the prior year and $10.0 million in the prior quarter. Product revenue for the third quarter of 2011 was $4.1 million, compared to $3.7 million for the same period of the prior year and $4.3 million in the prior quarter.
- Gross profit for the third quarter of 2011 was $4.2 million, or 30.9 percent of revenue, compared to $3.1 million, or 23.4 percent of revenue, in the same period of the prior year and $4.0 million, or 28.0 percent of revenue, in the prior quarter.
- Net income for the third quarter of 2011 was $0.1 million, or $0.01 per share, compared to net loss of $1.3 million, or $0.07 loss per share, in the same period of the prior year and a net loss of $0.2 million, or $0.01 loss per share, in the prior quarter.
- Cash and cash equivalents and available-for-sale securities totaled $31.6 million, or $1.68 per share as of September 30, 2011. Cash and cash equivalents and available-for-sale securities totaled $30.2 million, or $1.63 per share as of December 31, 2010.
- During the third quarter of 2011, DIS asset utilization was 56 percent on 130 systems (nuclear and ultrasound), compared to 62 percent on 131 systems (nuclear and ultrasound) in the prior year third quarter and 59 percent on 133 systems (nuclear and ultrasound) in the prior quarter.
Year-to-Date Financial Highlights:
- Total revenue for the first nine months of 2011 was $41.9 million, compared to $41.5 million for the prior year period. DIS revenue for the first nine months of 2011 was $28.8 million, compared to $30.1 million for the prior year period, and Product revenue for the first nine months of 2011 was $13.0 million compared to $11.4 million for the prior year period.
- Gross profit for the first nine months of 2011 was $11.7 million, or 27.9 percent of revenue, compared to $8.4 million, or 20.2 percent of revenue, for the prior year period.
- Net loss for the first nine months of 2011 was $0.5 million, or $0.03 loss per share, compared to net loss of $5.7 million, or $0.30 loss per share, for the prior year period.
- During the first nine months of 2011, DIS asset utilization was 57 percent on 131 systems (nuclear and ultrasound), compared to 62 percent on 133 systems (nuclear and ultrasound) in the prior year period.
"We remain focused on our revenue, profit and cash goals for 2011 as well as investigating several strategic opportunities," Clyde concluded. "We improved our operational performance considerably this year, as is evidenced by our expanded margins and lower operating expenses. We continue to generate cash and alter our business model to align with the variability in our business caused by the uncertain healthcare environment. Furthermore, we will increase our spending in the fourth quarter to assess several strategic opportunities to better position our business for growth and profitability, in the long-term."
Conference Call Information
A conference call is scheduled for 11:00 a.m. EDT today to discuss the results and management's outlook. The call may be accessed by dialing 877-941-1427 five minutes prior to the scheduled start time and referencing Digirad. A simultaneous webcast of the call may be accessed online from the Events & Presentations link on the Investor Relations page at www.digirad.com; an archived replay of the webcast will be available within 15 minutes of the end of the conference call.
About Digirad Corporation
Digirad is a leading provider of diagnostic imaging products, and personnel and equipment leasing services. For more information, please visit www.digirad.com. Digirad®, Digirad Imaging Solutions®, and Cardius® are registered trademarks of Digirad Corporation.
Forward-Looking Statements
This press release contains statements that are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. These include statements regarding our ability to deliver value to customers, our expanded product and service offerings, including, the addition of the first large-field-of-view, solid state portable camera to the hospital marketplace, and our ability to generate positive cash flow in 2011. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made, including the risks associated with changes in business conditions, technology, customers' business conditions, reimbursement, radiopharmaceutical shortages, economic outlook, operational policy or structure, acceptance and use of Digirad's camera systems and services, reliability, recalls, and other risks detailed in Digirad's filings with the U.S. Securities and Exchange Commission, including Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports. Readers are cautioned to not place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, and Digirad undertakes no obligation to revise or update the forward-looking statements contained herein.
Digirad Corporation
Consolidated Statements of Operations
(Unaudited and in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
2011 2010 2011 2010
--------- --------- --------- ---------
Revenues:
DIS $ 9,293 $ 9,612 $ 28,839 $ 30,121
Product 4,146 3,687 13,024 11,405
--------- --------- --------- ---------
Total revenues 13,439 13,299 41,863 41,526
Cost of revenues:
DIS 7,048 7,941 22,582 24,912
Product 2,241 2,244 7,617 8,218
--------- --------- --------- ---------
Total cost of revenues 9,289 10,185 30,199 33,130
--------- --------- --------- ---------
Gross profit 4,150 3,114 11,664 8,396
Operating expenses:
Research and development 702 683 2,124 2,278
Marketing and sales 1,575 1,389 4,616 4,569
General and administrative 1,848 2,417 5,818 6,817
Amortization of intangible
assets 77 94 253 333
Restructuring loss (gain) -- -- (164) 355
--------- --------- --------- ---------
Total operating expenses 4,202 4,583 12,647 14,352
--------- --------- --------- ---------
Loss from operations (52) (1,469) (983) (5,956)
Other income (expense):
Interest income 105 80 385 289
Interest (expense) -- (1) (20) (5)
Other income 46 54 103 17
--------- --------- --------- ---------
Total other income 151 133 468 301
--------- --------- --------- ---------
Net income (loss) $ 99 $ (1,336) $ (515) $ (5,655)
========= ========= ========= =========
Net income (loss) per common
share - basic and diluted $ 0.01 $ (0.07) $ (0.03) $ (0.30)
========= ========= ========= =========
Weighted average shares
outstanding - basic 19,086 18,811 19,005 18,740
Weighted average shares
outstanding - diluted 19,714 18,811 19,005 18,740
========= ========= ========= =========
Stock-based compensation expense
is included in the above as
follows:
Cost of DIS revenue $ 3 $ 5 $ 11 $ 22
Cost of Product revenue 23 13 76 40
Research and development 20 13 63 40
Marketing and sales 22 27 87 77
General and administrative 121 280 375 509
--------- --------- --------- ---------
Total stock-based compensation
expense $ 189 $ 338 $ 612 $ 688
--------- --------- --------- ---------
Digirad Corporation
Consolidated Balance Sheets
(In thousands, except share amounts)
September 30, December 31,
2011 2010
------------- -------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 10,258 $ 20,459
Securities available-for-sale 21,381 9,788
Accounts receivable, net 7,097 7,527
Inventories, net 5,867 5,432
Other current assets 1,011 1,038
------------- -------------
Total current assets 45,614 44,244
Property and equipment, net 5,806 7,185
Intangible assets, net 554 808
Goodwill 184 184
Other non-current assets 46 --
------------- -------------
Total assets $ 52,204 $ 52,421
============= =============
Liabilities and stockholders' equity
Accounts payable $ 1,665 $ 1,871
Accrued compensation 2,415 1,600
Accrued warranty 405 378
Deferred revenue 1,863 2,379
Other accrued liabilities 1,898 2,096
------------- -------------
Total current liabilities 8,246 8,324
Deferred rent 130 138
------------- -------------
Total liabilities 8,376 8,462
------------- -------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.0001 par value: 10,000,000
shares authorized; no shares issued or
outstanding -- --
Common stock, $0.0001 par value: 80,000,000
shares authorized; 18,868,272 and 18,597,311
shares issued and outstanding (net of
treasury shares) at September 30, 2011 and
December 31, 2010, respectively 2 2
Treasury stock, at cost; 573,218 shares at
September 30, 2011 and December 31, 2010 (1,039) (1,039)
Additional paid-in capital 155,507 154,785
Accumulated other comprehensive income (loss) (275) 63
Accumulated deficit (110,367) (109,852)
------------- -------------
Total stockholders' equity 43,828 43,959
------------- -------------
Total liabilities and stockholders' equity $ 52,204 $ 52,421
============= =============
Investor Contact:
Matt Clawson
Allen & Caron
949-474-4300
matt@allencaron.com
Company Contact:
Richard Slansky
CFO
858-726-1600
ir@digirad.com
