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Digirad Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: July 26, 2012 06:13AM

Digirad Corp. (DRAD) filed Quarterly Report for the period ended 2012-06-30. Digirad Corporation has a market cap of $37.1 million; its shares were traded at around $2.03 with and P/S ratio of 0.7.



Highlight of Business Operations:

Our consolidated revenues were $25.7 million for the six months ended June 30, 2012, which represented a decrease of $2.7 million, or 9.7%, comparable to the prior year period. DIS revenue decreased $0.9 million, or 4.5%, primarily due to a reduction in the number of days we scanned for our physician customers. The number of scan days was reduced due to a consolidation in the number of scan days by our physician customers in response to reimbursement uncertainty in addition to other business factors such as physician pre-certification requirements making it more difficult for our physician customers to utilize our services. Product revenues for the six months ended June 30, 2012 decreased by $1.9 million, or 21.0%, compared to the prior year period, primarily due to a fewer number of new cameras sold to hospitals and cardiology practices. The increase in gross profit of our DIS segment was primarily attributable to lower radiopharmaceutical costs and improvement in operational performance primarily associated with the management of labor and equipment resources. The decrease in gross profit of our Product segment was primarily attributable to lower camera sales and product mix.

DIS. Cost of DIS revenue consists primarily of labor, radiopharmaceuticals, equipment depreciation, and other costs associated with the provision of services. Cost of DIS revenue was $6.9 million for the three months ended June 30, 2012, a decrease of $0.9 million, or 11.1%, compared to the prior year quarter. The decrease in cost of DIS revenue is primarily a result of decreased revenues plus lower radiopharmaceutical costs. DIS gross profit was $2.5 million for the three months ended June 30, 2012, an increase of $0.3 million, or 13.4%, from a gross profit of $2.2 million for the prior year quarter. DIS gross profit as a percentage of DIS revenue increased to 26.3% for the three months ended June 30, 2012 from 21.9% for the prior year quarter.

Product. Cost of Product revenue primarily consists of materials, labor and overhead costs associated with the manufacturing and warranty of our products. Cost of Product revenue was $2.1 million for the three months ended June 30, 2012, a decrease of $0.4 million , or 14.6%, compared to the prior year quarter. Product gross profit was $1.2 million for the three months ended June 30, 2012, a decrease of $0.6 million, or 33.3%, compared to the prior year period. Product gross profit as a percentage of Product revenue was 36.4% for the three months ended June 30, 2012, compared to 42.2% for the prior year quarter. The reduction in gross profit was primarily due to lower camera sales.

DIS. Cost of DIS revenue consists primarily of labor, radiopharmaceuticals, equipment depreciation, and other costs associated with the provision of services. Cost of DIS revenue was $13.9 million for the six months ended June 30, 2012, a decrease of $1.6 million, or 10.6%, compared to the prior year. The decrease in cost of DIS revenue is primarily a result of decreased expenses from fewer scans and also from more efficient utilization of labor and equipment. DIS gross profit was $4.8 million for the six months ended June 30, 2012, which represents an increase of $0.8 million, or 19.2%, from a gross profit of $4.0 million for the prior year. DIS gross profit as a percentage of DIS revenue increased to 25.6% for the six months ended June 30, 2012 from 20.5% for the prior year due to improvement in operational performance primarily associated with the management of labor and equipment resources.

Product. Cost of Product revenue primarily consists of materials, labor and overhead costs associated with the manufacturing and warranty of our products. Cost of revenues for the Product segment was $4.4 million for the six months ended June 30, 2012, a decrease of $0.9 million, or 17.4%, compared to the prior year. The decrease in cost of Product revenue is primarily a result of lower camera sales. Product gross profit was $2.6 million for the six months ended June 30, 2012, a decrease of $0.9 million, or 26.6%, compared to the prior year period. Product gross profit as a percentage of Product revenue decreased to 36.7% for the six months ended June 30, 2012 compared to 39.4% for the prior year, primarily due product mix.

Read the The complete Report



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