Digirad Corporation
Feb 17, 2012
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Digirad Corporation Reports Fourth Quarter and Full Year 2011 Financial Results

Achieves Positive Cash From Operations; Improved Product and DIS Gross Margins for Year

POWAY, CA -- (MARKET WIRE) -- 02/17/12 -- Digirad Corporation (NASDAQ: DRAD) today reported 2011 fourth quarter revenue of $11.9 million, 2011 full-year revenue of $53.7 million and an ending cash and available-for-sale securities balance of $30.5 million at December 31, 2011.

Digirad CEO Todd Clyde commented, "We laid out four key goals at the beginning of the year: generate positive cash flow, increase ergo sales, expand margins in both our Product and DIS business units and return to year-over-year growth in the second half of the year. We achieved the first three goals, but fell short on revenue growth due to a relatively weak fourth quarter in the Product division.

Clyde continued: "Going forward, we are seeing improvements in the capital equipment environment, more activity in the sales funnel on the Product side, continued stabilization in reimbursements and new opportunities in new camera markets. In 2012, we expect to continue to generate positive cash flow from our DIS business and to increase sales of both our cardiac and ergo cameras. We invested in strategic market research in the fourth quarter -- resulting in a better understanding of where our core technologies can be applied with greater success. Management and the Board are in the final stages of determining the best strategic path toward returning to a growth platform, and we look forward to communicating the specifics of those plans in the near future."

Fourth Quarter 2011 Summary

2011 Full-Year Financial Highlights:

Conference Call Information
A conference call is scheduled for 11:00 a.m. EST 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® 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

                   (in thousands, except per share data)



                               Three Months Ended          Year Ended

                                  December 31,            December 31,

                             ----------------------  ----------------------

                                2011        2010        2011        2010

                             ----------  ----------  ----------  ----------

Revenues:

  DIS                        $    8,956  $    9,421  $   37,794  $   39,542

  Product                         2,926       5,236      15,951      16,641

                             ----------  ----------  ----------  ----------

    Total revenues               11,882      14,657      53,745      56,183

Cost of revenues:

  DIS                             7,090       7,649      29,672      32,561

  Product                         1,698       3,400       9,315      11,618

                             ----------  ----------  ----------  ----------

    Total cost of revenues        8,788      11,049      38,987      44,179

                             ----------  ----------  ----------  ----------



Gross profit                      3,094       3,608      14,758      12,004

Operating expenses:

  Research and development          613         597       2,738       2,875

  Marketing and sales             3,007       1,353       7,622       5,922

  General and administrative      2,024       2,190       7,741       9,007

  Amortization of intangible

   assets                            77         102         331         435

  Restructuring loss (gain)          --          --        (164)        355

                             ----------  ----------  ----------  ----------

    Total operating expenses      5,721       4,242      18,268      18,594

                             ----------  ----------  ----------  ----------

Loss from operations             (2,627)       (634)     (3,510)     (6,590)

Other income (expense):

  Interest income (expense)        (199)         89         165         378

  Other income (expense)             --         (14)          3          (2)

                             ----------  ----------  ----------  ----------

  Total other income               (199)         75         168         376

                             ----------  ----------  ----------  ----------

    Net loss                 $   (2,826) $     (559) $   (3,342) $   (6,214)

                             ==========  ==========  ==========  ==========





Net loss per common share

 -basic and diluted          $    (0.15) $    (0.03) $    (0.18) $    (0.33)

                             ==========  ==========  ==========  ==========

Weighted average shares

 outstanding - basic             19,193      18,876      19,052      18,774

Weighted average shares

 outstanding - diluted           19,193      18,876      19,052      18,774

                             ==========  ==========  ==========  ==========



Stock-based compensation

 expense is included in the

 above as follows:



  Cost of DIS revenue        $        2  $        4  $       13  $       26

  Cost of Product revenue            23          20          99          60

  Research and development           20          21          84          61

  Marketing and sales                24          36         110         113

  General and administrative        119         105         494         614

                             ----------  ----------  ----------  ----------

Total stock-based

 compensation expense        $      188  $      186  $      800  $      874

                             ----------  ----------  ----------  ----------









                            Digirad Corporation

                        Consolidated Balance Sheets

                    (In thousands, except share amounts)



                                                 December 31,  December 31,

                                                     2011          2010

                                                 ------------  ------------



Assets

Current assets:

  Cash and cash equivalents                      $     24,039  $     20,459

  Securities available-for-sale                         6,413         9,788

  Accounts receivable, net                              6,320         7,527

  Inventories, net                                      6,178         5,432

  Other current assets                                    855           861

  Restricted cash                                         194            --

                                                 ------------  ------------



Total current assets                                   43,999        44,067

Property and equipment, net                             5,367         7,185

Intangible assets, net                                    477           808

Goodwill                                                  184           184

                                                 ------------  ------------



  Total assets                                   $     50,027  $     52,244

                                                 ============  ============



Liabilities and stockholders' equity

Accounts payable                                 $      1,330  $      1,694

Accrued compensation                                    2,291         1,600

Accrued warranty                                          297           378

Deferred revenue                                        2,099         2,379

Other accrued liabilities                               2,397         2,096

                                                 ------------  ------------



  Total current liabilities                             8,414         8,147

Deferred rent                                             126           138

                                                 ------------  ------------

  Total liabilities                                     8,540         8,285

                                                 ------------  ------------



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; 18,901,160 and 18,597,311

 shares issued and outstanding (net of treasury

 shares) at December 31, 2011 and 2010,

 respectively                                               2             2

Treasury stock, at cost; 582,825 shares and

 573,218 shares at December 31, 2011 and 2010,

 respectively                                          (1,058)       (1,039)

Additional paid-in capital                            155,704       154,785

Accumulated other comprehensive income                     33            63

Accumulated deficit                                  (113,194)     (109,852)

                                                 ------------  ------------



  Total stockholders' equity                           41,487        43,959

                                                 ------------  ------------



  Total liabilities and stockholders' equity     $     50,027  $     52,244

                                                 ============  ============









Investor Contact:

Matt Clawson

Allen & Caron

949-474-4300

Email Contact



Company Contact:

Richard Slansky

CFO

858-726-1600

Email Contact



Source: Digirad

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