DRAD - Earnings call transcript Q4 2017 | Star Equity Holdings, Inc.

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Operator

Greetings and welcome to Digirad Corporation Fourth Quarter 2017 Results Conference Call. At this time, all participants are in a listen-only-mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I’d now like to turn the conference over to your host, Risa Lindsay. you. Thank

begin. may You

Risa Lindsay

and all Dana, this joining morning. thank you, for you us Thank

certain receive involve I our XXX-XXX-XXXX limited These Company’s These copy statements would you call to to meaning period, a of conference If statements based topics didn't Also statements forward-looking other one. of and in be trends, performance please be after other limited Act and on The in statements. Form the these about including this and our the well obligation Securities to, remind today are industry Hosting statements and Securities and and on Reports get and actual you revenues, undertakes Private Matt the acquisitions call being replay and a in will Form with and Litigation as to that be financial this expectations available the Reform outlook. broadcast at business not included the like Commission, Web used of notes include U.S. statements Reports including Quarterly conference related but call, uncertainties change, call. contact on Company press Form cause office live operations, made is The Internet Exchange President question-and-answer over the to update is assumptions at to, XX-Q Company’s the and during on risks information but filings and conjunction after costs this site forward-looking speak the the XX-K, those market Company’s financial results, competition. only risks Digirad's should changes not to Company's the of call available from within as strategy would and X-K, release. are laws. Web More Digirad information of forward-looking uncertainties site. the reports about margin, forward-looking securities no Reports expenses, is on Current on in and statements uncertainties accessed and XXXX current the everyone we'll the conditions, maybe CEO, happy and and the call, with one, financial differ and the via date like this and and events are and Digirad’s Annual consolidated could release www.digirad.com. that include materially. morning’s discussed press business Risks are economic today’s technological Shortly also federal Molchan. as call

question-and-answer the follow. Keyes, A full morning, the Joining call us over on will Good Matt outlook. Matt fourth comment Jeff year this on the morning would and Matt to With and the is to Matt. will and Company’s financial discuss I that, results, XXXX CFO. strategy Jeff update Molchan. Digirad’s Company’s then like quarter period turn

Matthew Molchan

you, quarter Risa. all today thank conference everyone, call. for fourth us Good our for you joining XXXX Thank and morning, results

year. with quarter our showing our year-over-year release we improvements a growth a challenges the the fourth from to for businesses in operational in mentioned earlier we today, for year healthcare mobile had and As good press services diagnostic the continuing quarter and service show the had

as potential Our we build diagnostic capital in we believe slower imaging capitalize business a seen of the XXXX recovery those and by we spend, continued to in good general We specific be don’t modest sales. spending. should position improvement things this deals to a have for show imaging. but will on diagnostic up, have continues currently timeline to ease be slower of capital impacted Though backlog

products the The effective informed last would agreement be activity XX, us they cancelling Philips sold region, revenues longer their with related sales. sold the our XXXX contracts As revenues Because of MDSS from call, an the region. XXXX. post-warranty Further, to discussed contained in service the MDSS Philips cancellation, with segment sale XX, we within with of in after our reportable product consolidated conjunction MDSS no in the Philips of service in that on and have us the components. a December to first from Philips Healthcare January from or we September MDSS branded after the quarter XX, of warranty no the is with sales, contracts on from December date Essentially Midwest the the commission Warranty reportable products sold revenue certain no general after that within contract Installation XXXX, the sale closed in region. segment same and expect will exist. longer of the we MDSS following further have region products XXXX, certain February earned installation, revenues X, where we revenue service of associated revenue. Product U.S. included from the Upper

value company relationships been discussed shareholders contracts that have to and evaluating the be outside our and close proceeds we we As down portion our call, on options best a of pay Philips. sale issues MDSS with MDSS strategic our the The to utilized sell all without did We of ultimately business service line Philips. would the of for carefully did last consider of the any credit. our the to and we service contracts determined the opportunity running

acquisitions. profit, number value core generate future. contribute will the to And continue and move revenue, our to line into the which we shareholder enhance strategy cash opportunities will and our we focus tier three will we grow our that on always, businesses, bottom continue flow look like Which from for forward, will growth for one, to are, As company.

companies that our organic Our needed Adding a within current manner. two. and our goal can healthcare when very three, existing financially disciplined acquire to and providing services provide we portfolio needed and Number as fit products. where our of needed solutions distribution to model of on is growth in basis number new portfolio that business within channels our to services

Jeff and Jeff? the his to call turn Now comments over and financial for detailed the more for I year. would quarter a like update to

Jeffry Keyes

results earnings comments not is In well a GAAP the in and both my I and do everyone. interest will taxes compensation. adjusted The depreciation, excludes adjusted are stock-based that as further and non-GAAP references morning, will non-GAAP measure today adjusted which release non-recurring make to EBITDA references I results. amortization, make to also Good charges. as include results

Finally, financial our paid thorough I and these the will along cash of and We operating make reconciliations reference believe cash measure capital non-GAAP free provide financial taking which cash subtracting a expenditures. measures presentation performance. our ongoing analysis statements is non-GAAP with GAAP a of to more flow flows for

the of a release. on reconciliations the results basis GAAP find can You our in versus non-GAAP earnings

the quarter of revenue for Total summary million million fourth was compared last $XX.X same a $XX.X the give will the quarter's year. I of for activity. period XXXX Now to

the quarter and of XXXX XX.X% last quarter. to fourth million was compared in year's Our million overall year's profit gross $XX.X in was for fourth quarter. $XX.X XX.X% In the profit gross to and quarter XX.X% XX.X% revenue fourth fourth diagnostic percentage and services, last compared in

offset in Our the prior percentage produce fourth revenue the and million of gross for increase higher the impacted with $XX.X XXXX $XX.X the price Overall XXXX of positively in was from compared and services on period from margin mobile fourth business quarter to volume some lower the XX.X% ran quarter the our the per healthcare service million diagnostic volume to business same profit of compared a year existing by both in revenues day. of with year. of XX.X% customers days average and in gross business prior higher new

mobile business For with provisional lower mobile route some impact on revenue change business, from a was our the primarily healthcare, year-over-year result of cancelation.

overall million and uncertainty type change year. in new unit, We cameras was service XXXX profit mix overall focusing to been mainly $X.X forward. revenue fourth are In timing year. on and business Care attributable $X.X sold, and and focused was of spending. XX.X% business sales has Act prior gross for work increasing and the our $X.X of the in of and and the period with Though within are to capital volume our now that of as percentage growth equipment and In XX.X% volume gross and businesses. MDSS and imaging to the Affordable The have MDSS in and capital profit due quarter of lower compared to revenue of fourth was our had and move we ended revenue diagnostic for period diagnostic XXXX, pleased MDSS, we business, same the the the continuing change profit XX.X% same the compared impacted product in the million in core from our are in we imaging contracts of services gross the our by around last a million the on utilization to service XX% in customers gross and is on initiatives softness part million business, $X.X the margin the sales. In sold. component quarter the percentage performance gross profit revenue both efficiency,

mentioned Matt earlier, December February will in of ending presented quarter XXXX, X, the the ending as MDSS product and we XXXX XX, reportable the the sales MDSS on with As effectively have first XXXX. on MDSS service after contracts the past be segment gone

modified in XX-Q QX appropriate to to presentation in update XXXX reflect our next results will and Form be this Our you. as

of to we of losses sheet statement. in XX% corporate as the know deferred Neither utilize net in income ability XX% is Based our there tax United our tax taxes updated forecast actually to of As these move of operating our the all our in had forward. as changed quarter which presentation well adjustments laws significant effect passed net the some from fourth we tax adjustments new our expense operating some XXXX. you to States as were the as on rate balance losses, to income recoverability presented

$X per fourth compared the year. to $X.XX loss on of was $X.X net fourth fourth XXXX million last $X.X share or quarter last quarter was Moving adjusted in to EBITDA the per results to adjusted in line net earnings or bottom income quarter, year. million of million Adjusted loss $X.XX of share $X.X for the in million of adjusted adjusted compared fourth quarter the

$XX.X credit outstanding debt was As of overall including $XX.X equivalents position balance December facility million. was cash XX, our all the net cash and million and under

covenants. we to XX, bank interest expense. As we Also overall all continue daily minimize excess our have compliance all in will of to our stated with were cash available sweep XXXX, we as previously, December

discussed February This of beginning being to our at agreed with million $X overall $X in on reduction for we our to a MDSS sales announced, revolver per gross regular that previously XXXX we our sense with sales the sale million, quarterly shareholders And sold by as makes on finally, that XX. expected to we availability. dividend will of service be got Philips a contract share that $XX not reduce paid February X.X February our reminder proceeds whatsoever. is from cash to Comerica conjunction As XX, cents operations impact in with the the we of to record million of price a

to Now, to like operator turn the call over the for I'd questions.

Operator

Our your the Instructions] Ramgopal question Please from question. proceed [Operator Company. & first line of from Mitra comes Sidoti with

Mitra Ramgopal

sequentially revenue on $X.X gross saw segment, of profit a on First, any decline. we time but I if the just was medical about there saw there. the wondering imaging million one occurrences was

Jeffry Keyes

make you am imaging? just sure talking about to Mitra, So, diagnostic Are clear. I

Mitra Ramgopal

Mobile healthcare.

Matthew Molchan

Mitra. morning, Good

talking I a talking standpoint or from mobile you you about -- there think about... healthcare that the is are -- unit the

Mitra Ramgopal

up Mobile gross think margin from XQ it $X.X million, was XQ came in Yes. but the million $X.X like in healthcare, little. a looks I about

Matthew Molchan

some mainly we that as overall related that had well We some challenges volume normally that There challenges in happened in we the in in fourth with of have we impacts But did was quarter. to terms Midwest. upper the run in seasonal of in our in in areas quarter. terms changes quarter the some that expenses hit of healthcare weather some fourth effected that and experience. expenses delayed all into have did a fourth these We impacts felt when margins the very that were of were healthcare come of couple that

Mitra Ramgopal

I to be And probably know segment great. obviously going biggest focus and is going biggest forward. That’s your your this Okay.

MDSS personnel it on light mind you grow could have questions terms changes have know Just alluded to you share the maybe if some to some in you a of earlier the you initiatives of made in of business And segment. right the of or in couple operational size divestiture. I this to

start give can can sense impact. to maybe us you If that we seeing a when as

Matthew Molchan

Yes.

That will that be but, quarter happen year seeing going We we Those severance will impact will start going yes, like next those as see quarter. those year-over-year, seeing throughout we obviously we implemented won't obviously that have see impacts that, everything would this till those to with first are and changes. so correlate first we changes. it within start with should some, this

that we the So impact beyond based should of right of business. see first the of sizing the on quarter removal MDSS the XXXX,

for feel like As I a now I mobile the are far belts. had have. full integrating especially guess, businesses. feel we that We, year about We mobile the have the to business had personnel our the that changes. under we within outlook as really some opportunities Digirad. healthcare good make into I segment,

year the are earlier here are to ship what's and and had move excited we in mobile focus functions had the As to quarter starting those mentioned quarter. first in to into efforts XXXX in the see of really healthcare our more in compared last we and sales first some we and we interim some XXXX benefits within happening changes to see

getting our are and business. sold signed, healthcare full, contracts positive funnels So mobile feel and about we are

and start XXXX. as imaging as well our As we DIS businesses our diagnostic

Mitra Ramgopal

No. of or new term prioritize you the line particular potentially talked That’s expanding areas into longer are you any I really point. you look if need this in some to at also etcetera. product just looking in adding wondering there know feel helpful. about I very services, terms was

Matthew Molchan

focus Yes. on we Right really is what sell. to have the now

DIS So on are segment. we our really concentrating

We And the mobile around the mobility really are portability seeing, use service. of and taking PET/CT our that arms our units. services cameras our our and within advantage MRI healthcare in getting the of of

continue are opportunity those. So to areas really is going those feel there and like on focus in to we

is infrastructure. are and to our really for continuing and look opportunistic we are things those current at fold we that maximize too really come the are be on. comment focused We could other gist our services what resources. up on this that trying though, to to But will early point current into we we as Really have

Mitra Ramgopal

anything that terms popped the couple also at in of a a how If end the a just if quick and the Jeff, year. of ARs the seemed it at can you wondering then, up end give on us And at year, much was little. in if questions it I have to I of numbers. particular Okay. of sense look as NOLs drove you like the

Jeffry Keyes

Yes.

a Mitra, you little did accounts And clear, sorry, to be bit? up say receivable went

Mitra Ramgopal

Yes.

Jeffry Keyes

from and commission went based of receivables Accounts the receivable out we the in closing sales the timing MDSS from particular Okay. up just on on the have business of those sales.

a remind question? on This And other me unusual. of So is going nothing your little cyclical timing there.

Mitra Ramgopal

in terms the NOLs of you of that? the year. Where The on end stood

Jeffry Keyes

Yes.

fully related million income. outside there are accounting prevalent those to related still our future that accounting forward, adjustments utilize our We that can are kind taxable remain recoverability for of an the so in big NOLs, on the and rules tax of or offset We NOLs $XX that. is many range some utilize we go But did that, to to our to available to adjustments related intact to standpoint, our NOLs and change. of obviously think law mid operating reported have evaluate tax as we I losses companies from

really an from standpoint. change wasn’t any there IRS So

Mitra Ramgopal

for enough cash are least the versus a you to incurring. next of, at there of be discrepancy years, in will effective have the So sort the taxes you rate terms few

Jeffry Keyes

Yes.

We are still rate, a low be going on cash absolutely. very to tax

Operator

remarks. Ladies now and over closing to to for reached have end would the like turn the Matt we Molchan question-and-answer session. of gentlemen, call back the I

Matthew Molchan

Dana. you, Thank

we always, continued and As support. appreciate shareholders all feedback your and our

to update our next We are looking forward Thank you. call.

Operator

conference. today's concludes This

your You time. you at may Thank disconnect lines your this for participation.

Star Equity (STRR) 23 Feb 182017 Q4 Earnings call transcript