DRAD - Earnings call transcript Q1 2018 | Star Equity Holdings, Inc.

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Operator

Greetings, and welcome to the Digirad Corporation First Quarter 2018 Results Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Rica Lindsey.

Rica Lindsey

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

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

Matthew Molchan

and a XXXX release do excludes nonrecurring taxes EBITDA, depreciation, amortization, is not I'll as results GAAP and interest, references today joining thank and adjusted I'll In non-GAAP references in make my adjusted The the adjusted Thank charges. both which for earnings stock-based measure include morning, you today to that you, non-GAAP everyone call. Good also our results. and are to quarter first conference for us results compensation. results make well comments, all as further Rica.

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

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

effective As Mobile Services and the some release mentioned Despite in today, within and businesses Diagnostic expectations conditions harsh have press in our Healthcare route our the convenient, quarter. businesses, on patients an performed continue the deliver Mobile on Midwest and business our country. saw the in weather our Servicing our impacted to Northeast we a negatively XX,XXX Diagnostic the quarter. efficient year-over-year basis. where-needed a Healthcare revenue as-needed, the across Also, quarter Imaging combined solutions improvement, exceeding and when-needed for basis during

services activities, As on they relationship our September their in informed effective canceling segment. date our an both December ending we discussed recent certain consolidated as that us components product of with as would calls, with agreement Healthcare our XXXX, well sales reportable of us XX, Philips MDSS under be

we This MDSS the $X As value service for and February the contracts be Philips subsequently we discussed quarter, the to closed shareholders last the determined million. would sell for XXXX. X, on to company that transaction

within and are Diagnostic on operations Healthcare. which units, business reported segment our go-forward first for MDSS These reportable result, includes a has operations. Diagnostic reported Services this our presented financial our call quarter, as discussed continuing statements this businesses been and As as discontinued Imaging, Mobile core

$XX.X quarter last million revenue same XXXX $XX.X Total was period more this year. Now, of summary here for is the million of first a to detailed activities. compared for quarter's the

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

Healthcare, Healthcare year. the percentage business during profit at at volume, stand to Services harsh period the business interim mentioned. conditions was the Overall, in a $XX.X quarter in quarter In lower in revenue our and XXXX our as was an in gross attributed Diagnostic first increase Our decrease partially to for weather Mobile sales to offset revenue million million with produced margin of and the the Mobile Mobile to Healthcare year-over-year prior due the same prior mainly XX.X% overall business previously $XX.X by XX.X% primarily revenue compared gross compared decrease the and year.

throughout adding As this of XXXX continue Healthcare in the for by to previous gross XX.X% in leadership, compared believe million performance and sales will Mobile In these improve business, first and have in to as the additional been year. the operations quarter changes our calls, successful XX.X% and $X.X evidenced discussed $X.X in we was the interim quarter efforts Imaging year. efforts. profit percentage resources million revenue our prior and by several We Diagnostic made and

support higher year to Our comparable revenue to of in the this the volume previous the during business in our compared and was improvement camera slight revenue. slightly a camera quarter sales

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

As was net our and was equivalent overall including provision facility cash $XX outstanding debt of credit $XX on all our XXXX, and million. cash balance March million the XX,

our down to we're as quarter, of $XX able were XX, our the present During million. to compliance $X.X XXXX, million its in $XX.X million debt, March with bringing our all pay from covenants. towards debt position we bank Also,

acquire where-needed on enhance future. adding flow that will And as-needed, fit to for I'll business channels. revenue, to in line which within services growth for of to and our And our a very opportunities always, are shareholder cash look solutions buy to core on portfolio existing new guidance. basis on and that will like three, two, which now we and within current contribute services when-needed our our disciplined our an Number our - of healthcare to value model comment organic goal businesses, portfolio channels. that we'll to providing generate companies number continue the financially acquisitions, distribution As our can provide growth manner. number forward, from continue the strategy three-tier profit, move continue our company, to one, we into grow we'll focus bottom and

EBITDA range estimated have we the of the to the is estimated range $XXX is revenue in cash in million the in million. As million. $X.X press be is range flow in be of $XXX announced million and million free to $X release, and be estimated of and $X.X Non-GAAP adjusted and $X million to

contributions last of announced As was quarterly XXXX. and shareholders for previously the on be previously today, wish our Jeff of XXXX as share on him new to And finally, the $X.XXX that We other we part in CFO, endeavors company went and X.X record his [ph] success XX, his per years. May announced, to over April dividend opportunities. XX truly regular Keyes of paid are on our pursue grateful cash will May XX,

for we search soon necessary drive are and comprehensive a begun CFO the with Jeff's appoint forward will attributes the replacement skills growth of new have and to Digirad. company confident we the We continued

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

Operator

[Operator Instructions].

form HMTC. Larry question Haimovitch comes of the line from first Our

Larry Haimovitch

Can So trying a you couple One, last a $XXX of $XXX here. business comparison from of year that you compare to what I'm the to Philips questions get when would've sort back store million been guidance to sold? me. same you've provide. you as that million apples-to-apples out

Matthew Molchan

year, approximately from MDSS million, million, did We $XX about Yes. $XX.X $XX what last the approximately, revenue approximately. million

Larry Haimovitch

much that smaller sold was to revenue you realize it amount. didn't a thought Philips. I I

Matthew Molchan

Well contract the remember which of we was of that them the which attributed then rep, that got the No. million of number sales service work. and to a XX as activities, sold of was our had just our manufacturers canceled you they I portion part give was combination what you is December $XX to

Larry Haimovitch

Yes.

million them, $XX it? out, what sold So was when wasn't you to you what back total, in it

Matthew Molchan

did so that as sales part the Yes, revenue... sell them canceled of the the not agreement. portion, No. they We

Larry Haimovitch

can recall, I If was roughly. was it about $X million,

Matthew Molchan

Exactly.

Larry Haimovitch

out What's comparison? So million. $XXX last the back we $X $XXX million to if million revenue, year's It's this year...

Matthew Molchan

only million. You've $XX to back the got out

last So out million. total million. the Backing year's revenue $XX was $XXX

Larry Haimovitch

Okay.

So guidance was a roughly ago? flattish the basically, year revenue

Matthew Molchan

correct. That's

Larry Haimovitch

with wonder what I dividend. share on could deliberations regarding you the it. the on board's us second then And

cash think - in just As I talked million roughly you you call flow? on $X this talked free about about

Matthew Molchan

million to million. $X $X

Larry Haimovitch

what to expert the is in range? Yes. If million million I, the $X that but again, million here roughly million. $X surprised Something numbers $X annually? me my I'm as not to dividend $X in

Matthew Molchan

correct. You're

Larry Haimovitch

would what Not shareholders? on effect for but And us you and going buyback? cut a a best the to have the board argue can to that to dividend the stock was thought board stock about that about talk did - I'm to what regard with the the dividend because here obviously for how -

Matthew Molchan

and deliberate No. the quarter allocation what items. shareholders, we capital one, went all I mean for we through we certainly those every of is number best -

what pay to we're board point, continue - was we pay use out of a the no this And the different. best quarter doing. that dividend - is and at capital that as This to that's determined - our out

Operator

Our comes the from from MAZ Partners. question next Schenker Walter of line

Walter Schenker

and one company, is both you're trying acquisitions somewhat Just the last to for question. growth. other looking scale, at up you the why looks avenues strategically lack following on which for If

make least limited as the I is to which fairly However, this an free dividend, for point largely have consequence, financial you cash at used acquisition any shareholder. the a resources flow applaud of at since

you guess and further is acquisition is further million that this revenues? a isn't realistic at And I be to that so is enhance growing overhead material? parts, profitability there two - to And what would plus business do with $XXX an accretive can costs in question in a, cut point the secondly, how

Matthew Molchan

- look I first not - that would to comes don't those to - look acquisition. be your Clearly, would continue possible. the the to market think acquisitions in we this of at be as necessary type getting - we make to acquisition those that opportunistic would obviously, when we we're it capital opportunities, So for be - as

mention, the businesses we really, really as factors is looking top our to will grow However, of those bottom on it for to ways on focus is the very to line concentrate that's immediate line. looking manage to given concentrate where our And ways the three but divisions. business for on the we constant operating important, and

And But opportunities certainly, and out our go immediate capital look So supports try right if at major across and businesses. or we run it'd more run can continuing include our overhead. It business for can raise to you Yes, is everything not some great that is looking this and at find opportunity and ways Walter that this came juncture. does to we now. our we that business. this at to I to on at a team profitably that looking focus that the focus of management include assure to focus be is immediate that what had acquire ways does

Walter Schenker

follow-up say realized you that acquisition, to company sell and flat the a a understand alternative at point on who's I does and next relatively the year shareholder go we an which just in we're both - public the can't it? And over material again, big and understand to exceed and turned I XX board your is meet everyone you find board, anything the and the what or just the decision value. enhancing slightly not to If commitment is enough and be through and targets, months that around maybe do

Matthew Molchan

and our continue to speculating how this the confident the question, work we use feel board obviously I mean generate the goals. continue Larry's continue but types at operating things. to can I quarter, what generate grow earlier and value to all we those with of divisions at of of customers as all business. And and our But the we we time, ways ways obviously, good ability on But Yes. and about and every look we shareholders but one shareholder mentioned that's we'll cash at have look point get items hundreds and to that we of together run very for yes for we look and these we is the to businesses very - funds our main their - with have? that best

Operator

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

Matthew Molchan

Dana. you, thank Well,

looking We're our feedback and all your appreciate call. we shareholders always, continued to our forward support. update As and next

Operator

This concludes today's conference.

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

Star Equity (STRR) 1 May 182018 Q1 Earnings call transcript