Digirad Corporation Reports 2012 Third Quarter and Nine-Month Financial Results

Marketwired

POWAY, CA--(Marketwire - Nov 1, 2012) - Digirad Corporation (NASDAQ: DRAD) today reported 2012 third quarter revenue of $11.8 million, 2012 nine-month revenue of $37.5 million and an ending cash, cash equivalents and available-for-sale securities balance of $27.2 million. The net use of cash during the nine months ended September 30, 2012 included approximately $1.0 million to repurchase approximately 490,000 shares of Digirad common stock under the Company's stock repurchase program.

Digirad CEO Todd Clyde commented, "The Digirad Imaging Solutions (DIS) business continued to generate cash in the 2012 third quarter, though revenues in the period lagged slightly due to a lower-than-normal number of days serviced during the summer season. In addition, hospital and cardiology practice camera sales continued to be soft, although we have seen orders and unit sales begin to rebound recently, delivering positive momentum to kick off the fourth quarter."

Clyde continued, "It has been a time of substantial change and progress within the Company following the recent restructuring of our Board of Directors. We have made positive changes to our executive team, including a new CFO and new leadership for our commercial operations team. In addition, we are nearing the end of the in-depth business assessment being undertaken by the Company, led by the Board's Strategic Advisory committee. We look forward to sharing the resulting strategy to drive growth and deliver increasing shareholder value in the near future."

Third Quarter 2012 Summary

  • Total revenue for the third quarter of 2012 was $11.8 million, compared to $13.4 million for the same period in the prior year and down from $12.7 million in the second quarter of 2012. DIS-only revenue for the third quarter of 2012 was $8.9 million, compared to $9.3 million for the same period of the prior year and $9.4 million in the prior sequential quarter. Product revenue for the third quarter of 2012 was $3.0 million, compared to $4.1 million for the same period of the prior year and $3.3 million in the prior quarter.

  • Gross profit for the third quarter of 2012 was $3.1 million, or 26.5 percent of revenue, compared to $4.2 million, or 30.9 percent of revenue, in the same period of the prior year and $3.7 million, or 29.0 percent of revenue in the prior quarter.

  • Net loss for the third quarter of 2012 was $0.9 million, or $0.05 loss per share, compared to a net income of $0.1 million, or $0.01 income per share, in the same period of the prior year and a net loss of $0.9 million, or $0.05 loss per share, in the prior quarter.

  • Cash, cash equivalents and available-for-sale securities totaled $27.2 million, or $1.42 per share, as of September 30, 2012. Cash, cash equivalents and available-for-sale securities totaled $30.5 million, or $1.61 per share, as of December 31, 2011. Beyond operations in the 2012 third quarter, the cash, cash equivalents and available-for-sale securities balance included use of $0.4 million of cash used to purchase approximately 219,000 shares of Digirad Common Stock under the Company's stock repurchase program.

  • During the third quarter of 2012, DIS asset utilization was 55 percent on 127 systems (nuclear and ultrasound), compared to 56 percent on 130 systems (nuclear and ultrasound) in the prior year third quarter and 55 percent on 128 systems (nuclear and ultrasound) in the prior quarter.

Year-to-Date Financial Highlights:

  • Total revenue for the nine months ended September 30, 2012 was $37.5 million, compared to $41.9 million for the prior year period. DIS revenue for the nine months ended September 30, 2012 was $27.5 million, compared to $28.8 million for the prior year period, and Product revenue for the nine months ended September 30, 2012, was $10.0 million compared to $13.0 million for the prior year period.

  • Gross profit for the nine months ended September 30, 2012 was $10.5 million, or 28.0 percent of revenue, compared to $11.7 million, or 27.9 percent of revenue, for the prior year period.

  • Net loss for the nine months ended September 30, 2012 was $3.1 million, or $0.16 loss per share, compared to a net loss of $0.5 million, or $0.03 loss per share, for the prior year period. Included in the net loss for the 2012 period was approximately $0.4 million in legal and administrative costs associated with shareholder negotiations that were completed during the Company's second quarter.

  • During the nine months ended September 30, 2012, DIS asset utilization was 55 percent on 127 systems (nuclear and ultrasound), compared to 57 percent on 131 systems (nuclear and ultrasound) in the prior year period.

  • In total, the Company has used $1.0 million to purchase Digirad Common Stock under the Company's stock repurchase program during the nine months ended September 30, 2012.

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 877-941-4775 five minutes prior to the scheduled start time and referencing Digirad. A simultaneous webcast of the call may be accessed online from the Events & Presentations link on the Investor Relations page at www.digirad.com; an archived replay of the webcast will be available within 15 minutes of the end of the conference call.

About Digirad Corporation
Digirad is a leading provider of diagnostic imaging products. Digirad also provides the ability for its physician customers to lease its qualified personnel, imaging systems and related items required to perform nuclear imaging in their own offices. For more information, please visit www.digirad.com. Digirad® and Cardius® are registered trademarks of Digirad Corporation.

Forward-Looking Statements
This press release contains statements that are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. These include statements regarding the Company's 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 the Company's ability to generate positive cash flow in 2012. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made, including the risks associated with changes in business conditions, technology, customers' business conditions, reimbursement, radiopharmaceutical shortages, economic outlook, operational policy or structure, acceptance and use of Digirad's camera systems and services, reliability, recalls, and other risks detailed in Digirad's filings with the U.S. Securities and Exchange Commission, including the 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  
Condensed Consolidated Statements of Comprehensive Income (Loss)  
   
(Unaudited in thousands, except per share data)  
   
  Three Months Ended     Nine Months Ended  
  September 30,     September 30,  
  2012     2011     2012     2011  
Revenues:                              
  DIS $ 8,856     $ 9,293     $ 27,522     $ 28,839  
  Product   2,961       4,146       9,975       13,024  
    Total revenues   11,817       13,439       37,497       41,863  
Cost of revenues:                              
  DIS   6,880       7,048       20,765       22,582  
  Product   1,808       2,241       6,250       7,617  
    Total cost of revenues   8,688       9,289       27,015       30,199  
                               
Gross profit   3,129       4,150       10,482       11,664  
Operating expenses:                              
  Research and development   1,055       702       2,998       2,124  
  Marketing and sales   1,348       1,575       4,735       4,616  
  General and administrative   1,744       1,848       5,820       5,818  
  Amortization of intangible assets   49       77       184       253  
  Restructuring gain   --       --       --       (164 )
    Total operating expenses   4,196       4,202       13,737       12,647  
Loss from operations   (1,067 )     (52 )     (3,255 )     (983 )
Other income (expense):                              
  Interest income   28       105       82       385  
  Interest expense   (2 )     --       (3 )     (20 )
  Other income   135       46       111       103  
    Total other income   161       151       190       468  
Net income (loss) $ (906 )   $ 99     $ (3,065 )   $ (515 )
                               
Net income (loss) per common share - basic and diluted $ (0.05 )   $ 0.01     $ (0.16 )   $ (0.03 )
Weighted average shares outstanding - basic   19,263       19,086       19,273       19,005  
Weighted average shares outstanding - diluted   19,263       19,714       19,273       19,005  
                               
Other comprehensive income (loss):                              
  Unrealized gain (loss) on marketable securities   32       (137 )     26       (338 )
Total other comprehensive income (loss)   32       (137 )     26       (338 )
Comprehensive loss $ (874 )   $ (38 )   $ (3,039 )   $ (853 )
                               
Stock-based compensation expense is included in the above as follows:                              
                               
  Cost of DIS revenue $ 2     $ 3     $ 5     $ 11  
  Cost of Product revenue   20       23       62       76  
  Research and development   20       20       59       63  
  Marketing and sales   34       22       100       87  
  General and administrative   68       121       245       375  
Total stock-based compensation expense $ 144     $ 189     $ 471     $ 612  
                               
                               
                               
Digirad Corporation  
Condensed Consolidated Balance Sheets  
(In thousands, except per share data)  
   
  September 30,     December 31,  
  2012     2011  
  (Unaudited)        
Assets              
Current assets:              
  Cash and cash equivalents $ 18,343     $ 24,039  
  Securities available-for-sale   8,826       6,413  
  Accounts receivable, net   6,864       6,320  
  Inventories, net   6,573       6,178  
  Other current assets   722       855  
  Restricted cash   244       194  
               
Total current assets   41,572       43,999  
Property and equipment, net   5,148       5,367  
Intangible assets, net   293       477  
Goodwill   184       184  
               
  Total assets $ 47,197     $ 50,027  
               
Liabilities and stockholders' equity              
Accounts payable $ 1,906     $ 1,330  
Accrued compensation   2,736       2,291  
Accrued warranty   226       297  
Deferred revenue   1,748       2,099  
Other accrued liabilities   2,263       2,397  
               
  Total current liabilities   8,879       8,414  
Deferred rent   164       126  
  Total liabilities   9,043       8,540  
               
Commitments and contingencies              
               
Stockholders' equity:              
Preferred stock, $0.0001 par value: 10,000,000 shares authorized; no shares issued or outstanding   --       --  
Common stock, $0.0001 par value: 80,000,000 shares authorized; 19,102,037 and 18,901,160 shares issued and outstanding (net of treasury shares) at September 30, 2012 and December 31, 2011, respectively   2       2  
Treasury stock, at cost; 1,073,641 shares and 582,825 shares at September 30, 2012 and December 31, 2011, respectively   (2,087 )     (1,058 )
Additional paid-in capital   156,472       155,704  
Accumulated other comprehensive income   26       33  
Accumulated deficit   (116,259 )     (113,194 )
               
  Total stockholders' equity   38,154       41,487  
               
  Total liabilities and stockholders' equity $ 47,197     $ 50,027  
               
Contact:
Investor
Matt Clawson
Allen & Caron
949-474-4300
Email Contact

Company
Jeffry Keyes
CFO
858-726-1600
Email Contact
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