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Digirad Corporation Announces Preliminary Financial Results for 2007, Initial Guidance for 2008

Wednesday, January 9, 2008 General News
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POWAY, Calif., Jan. 8 Digirad Corporation(Nasdaq: DRAD), a leading provider of medical diagnostic imaging products andservices to physicians' offices, hospitals and imaging centers, todayannounced preliminary financial results for the fourth quarter and full-yearended December 31, 2007, and initial guidance for full-year 2008.
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For full-year 2007, consolidated revenues are expected at approximately$74.0 million, consisting of imaging services revenue of approximately$52.4 million and product revenue of approximately $21.6 million. Consolidatednet loss is expected in a range of $1.3 million to $1.5 million, includingestimated stock-based compensation expense of approximately $900,000.
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For full-year 2008, the Company anticipates consolidated revenues in arange of $80 million to $84 million, consisting of imaging services revenue of$59 million to $61 million and product revenue of $21 million to $23 million;and consolidated net results for 2008 to range from net income of $500,000 toa net loss of $1 million, including estimated stock-based compensation expenseof $1 million.

Chief Executive Mark Casner commented: "Although full-year 2007 resultswere clear improvements over the prior year, they were nevertheless below ourprevious expectations. The revenue shortfall was due primarily to greater thanexpected physician cancellations during the holidays and the radioisotopeshortage experienced when the nuclear reactor in Canada was out of service foran extended period."

Casner continued: "For 2007 overall, we are pleased with having maintainedcontrol of expenses while at the same time putting the building blocks inplace for growth in 2008. We acquired Ultrascan, launched our centers ofinfluence strategy, and had almost immediate success with three large medicalcenters. During the fourth quarter we signed another large medical center, thefirst on the West Coast, and now have five centers as we begin 2008.

"As a result of ongoing discussions with an increasing number of medicalcenters, we are also making solid progress toward establishing new servicesagreements in 2008," Casner stated. "Revenues from existing centers arebeginning to ramp up, and with the addition of new centers expected during theyear, we see this strategy gaining better traction and being a primarycontributor to revenue growth in 2008."

Casner added: "Operationally, we will continue our focus on increasingutilization of our mobile imaging equipment and personnel, stronger directmarketing to primary-care physicians, and controlling expenses. Furthermore,we have launched an initiative in our product division to drive revenues,reduce costs and improve reliability. This initiative is projected to bringthe product division to full-year profitability in 2008."

Digirad management will be presenting at JPMorgan's 26th Annual HealthcareConference being held January 7-10, 2008, at the Westin St. Francis Hotel, SanFrancisco. Their presentation is scheduled to begin at 11:30 a.m. PT onThursday, January 10 and will include a discussion of Digirad's business,growth strategy and outlook for 2008. The presentation will be Webcast live athttp://www.metameetings.com/webcasts/jpmorgan/healthcare08 and archived for90 days at on the events and presentations page of the investors section ofDigirad's web site at http://drad.client.shareholder.com/events.cfm.

About Digirad Corporation

Digirad provides diagnostic medical imaging products and services tophysicians' offices, hospitals and imaging centers for cardiac, vascular, andgeneral imaging applications. Digirad's Cardius XPO line of nuclear imagingcameras use patented solid-state technology and unique multi (single, dual,triple) head design for superior performance and advanced features for sharperdigital images, faster processing, compact size, lighter weight forportability, ability to handle patients up t
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