Digirad Corporation (Nasdaq: DRAD; DRADP) (“Digirad” or the
“Company”), a diversified holding company (“HoldCo”) with three
divisions: Healthcare, Building & Construction, and Real Estate
& Investments, announced today it has entered into a Stock
Purchase Agreement (the “Agreement”) to sell its DMS Health
Technologies, Inc. (“DMS Health”) business unit. The purchase price
under the Agreement is $18.75 million. The Agreement is subject to
customary closing conditions and is expected to close in January
2021.
DMS Health is the Mobile Healthcare business
unit of the Company’s Healthcare division. DMS Health provides
contract diagnostic imaging, including computerized tomography
(“CT”), magnetic resonance imaging (“MRI”), positron emission
tomography (“PET”), PET/CT, and nuclear medicine and healthcare
expertise through a convenient, mobile service. For
2019, DMS Health generated revenue of $41.3 million, approximately
40.1% of the total revenue of the Healthcare division.
Matt Molchan, Digirad’s CEO, said, “The
divestiture of DMS Health will allow us to streamline our portfolio
of healthcare services by focusing our efforts on selling and
servicing our Digirad branded solid-state imaging cameras and
providing on-site imaging services to hospitals and physicians all
over the country.”
Jeff Eberwein, Digirad’s Chairman, noted, “As
previously announced, we have been exploring the potential
divestiture of assets in addition to pursuing our HoldCo growth
strategy. The sale of DMS Health will substantially improve our
balance sheet and better position us to fund high-return organic
growth investments and to pursue acquisitions. Potential
acquisitions could be bolt-ons in Healthcare or Building &
Construction or entry into an entirely new business sector.”
About Digirad
CorporationDigirad Corporation is a diversified holding
company with three divisions: Healthcare, Building &
Construction, and Real Estate & Investments.
Healthcare Division (Digirad
Health)Digirad Health designs, manufactures, and
distributes diagnostic medical imaging products and services.
Digirad Health operates in three businesses: Diagnostic
Imaging, Diagnostic Services, and Mobile Healthcare. The
Diagnostic Imaging business designs, manufactures, and sells
proprietary solid-state gamma cameras. It also services the
installed base of these proprietary cameras. The Diagnostic
Services business offers imaging and monitoring services to
healthcare providers as an alternative to purchasing equipment or
outsourcing procedures. The Mobile Healthcare business
provides contract diagnostic imaging, including computerized
tomography (“CT”), magnetic resonance imaging (“MRI”), positron
emission tomography (“PET”), PET/CT, and nuclear medicine and
healthcare expertise through a convenient, mobile service.
Building & Construction Division
(ATRM)ATRM Holdings, Inc. (“ATRM”) manufactures modular
housing units for commercial and residential real estate projects.
ATRM operates in two businesses: (i) modular building manufacturing
and (ii) structural wall panel and wood foundation manufacturing,
including building supply retail operations. The modular building
manufacturing business is operated by KBS Builders, Inc. (“KBS”),
the structural wall panel and wood foundation manufacturing segment
is operated by EdgeBuilder, Inc. (“EdgeBuilder”), and the retail
building supplies are sold through Glenbrook Building Supply, Inc.
(“Glenbrook”). KBS, EdgeBuilder, and Glenbrook are all wholly-owned
subsidiaries of ATRM, which is a wholly-owned subsidiary of
Digirad.
Real Estate & Investments
DivisionThis business division manages the Company’s real
estate assets and investments.
Forward-Looking Statements Disclaimer
Statement“Safe Harbor” Statement under the Private
Securities Litigation Reform Act of 1995: This release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements in this
release that are not statements of historical fact are hereby
identified as “forward-looking statements” for the purpose of the
safe harbor provided by Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Forward-looking Statements include, without limitation,
statements regarding (i) the plans and objectives of management for
future operations, including plans or objectives relating to
acquisitions and related integration, development of commercially
viable products, novel technologies, and modern applicable
services, (ii) projections of income (including income/loss),
EBITDA, earnings (including earnings/loss) per share, free cash
flow (FCF), capital expenditures, cost reductions, capital
structure or other financial items, (iii) the future financial
performance of Digirad Corporation or acquisition targets and (iv)
the assumptions underlying or relating to any statement described
above. Moreover, forward-looking statements necessarily involve
assumptions on the Company’s part. These forward-looking
statements generally are identified by the words “believe”,
“expect”, “anticipate”, “estimate”, “project”, “intend”, “plan”,
“should”, “may”, “will”, “would”, “will be”, “will continue” or
similar expressions. Such forward-looking statements are not
meant to predict or guarantee actual results, performance, events
or circumstances and may not be realized because they are based
upon the Company's current projections, plans, objectives, beliefs,
expectations, estimates and assumptions and are subject to a number
of risks and uncertainties and other influences, many of which the
Company has no control over. Actual results and the timing of
certain events and circumstances may differ materially from those
described above as a result of these risks and uncertainties.
Factors that may influence or contribute to the inaccuracy of
forward-looking statements or cause actual results to differ
materially from expected or desired results may include, without
limitation, the substantial amount of debt of the Company and the
Company’s ability to repay or refinance it or incur additional debt
in the future; the Company’s need for a significant amount of cash
to service and repay the debt and to pay dividends on the Company’s
preferred stock; the restrictions contained in the debt agreements
that limit the discretion of management in operating the business;
legal, regulatory, political and economic risks in markets and
public health crises that reduce economic activity and cause
restrictions on operations (including the recent coronavirus
COVID-19 outbreak); the length of time associated with servicing
customers; losses of significant contracts or failure to get
potential contracts being discussed; disruptions in the
relationship with third party vendors; accounts receivable
turnover; insufficient cash flows and resulting lack of liquidity;
the Company's inability to expand the Company's business;
unfavorable changes in the extensive governmental legislation and
regulations governing healthcare providers and the provision of
healthcare services and the competitive impact of such changes
(including unfavorable changes to reimbursement policies); high
costs of regulatory compliance; the liability and compliance costs
regarding environmental regulations; the underlying condition of
the technology support industry; the lack of product
diversification; development and introduction of new technologies
and intense competition in the healthcare industry; existing or
increased competition; risks to the price and volatility of the
Company’s common stock and preferred stock; stock volatility and in
liquidity; risks to preferred stockholders of not receiving
dividends and risks to the Company’s ability to pursue growth
opportunities if the Company continues to pay dividends according
to the terms of the Company’s preferred stock; the Company’s
ability to execute on its business strategy (including any cost
reduction plans); the Company’s failure to realize expected
benefits of restructuring and cost-cutting actions; the Company’s
ability to preserve and monetize its net operating losses; risks
associated with the Company’s possible pursuit of acquisitions; the
Company’s ability to consummate successful acquisitions and execute
related integration, including to successfully integrate ATRM’s
operations and realize the synergies from the acquisition of ATRM,
as well as factors related to the Company’s business (including
ATRM) including economic and financial market conditions generally
and economic conditions in the Company’s markets; failure to keep
pace with evolving technologies and difficulties integrating
technologies; system failures; losses of key management personnel
and the inability to attract and retain highly qualified management
and personnel in the future; and the continued demand for and
market acceptance of the Company’s services. For a detailed
discussion of cautionary statements and risks that may affect the
Company’s future results of operations and financial results,
please refer to the Company’s filings with the Securities and
Exchange Commission, including, but not limited to, the risk
factors in the Company’s most recent Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q. This release reflects management’s
views as of the date presented.
All forward-looking statements are necessarily
only estimates of future results, and there can be no assurance
that actual results will not differ materially from expectations,
and, therefore, you are cautioned not to place undue reliance on
such statements. Further, any forward-looking statement speaks only
as of the date on which it is made, and we undertake no obligation
to update any forward-looking statement to reflect events or
circumstances after the date on which the statement is made or to
reflect the occurrence of unanticipated events.
For more information contact: |
|
Digirad Corporation |
The Equity Group |
Jeffrey E. Eberwein |
Lena Cati |
Chairman of the Board |
The Equity Group |
203-489-9501 |
212-836-9611 |
ir@digirad.com |
lcati@equityny.com |
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