Digirad Corporation
Nov 1, 2012
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Digirad Corporation Reports 2012 Third Quarter and Nine-Month Financial Results

POWAY, CA -- (Marketwire) -- 11/01/12 -- 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

Year-to-Date Financial Highlights:

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

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



Investor Contact:

Matt Clawson

Allen & Caron

949-474-4300

Email Contact



Company Contact:

Jeffry Keyes

CFO

858-726-1600

Email Contact



Source: Digirad

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