Slide 1: Digirad Moving Forward March 2013
Digirad Moving Forward March 2013
Slide 2: Forward-looking Statements
Forward-looking Statements “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: The presentation and information contained herein present “forward-looking statements” addressing expectations, prospects, estimates and other matters that are dependent upon future events
Slide 3: New Strategic Plan: Driving Cash Flow and Shareholder Value
New Strategic Plan: Driving Cash Flow and Shareholder Value Restructuring the Business: What it means 2. Management Changes: The right team to drive cash flow and shareholder value 3. Board Changes: Highly qualified and Independent 4. New Corporate Governance: Ensuring accountability 5. Appendix: Bu
Slide 4: Restructuring the Business
Restructuring the Business
Slide 5: Restructuring the Business: What it Means
Restructuring the Business: What it Means Digirad Imaging Solutions New strategic focus; it is all about cash flow: Focus on Digirad Imaging Solutions (DIS) cash flow generation Execute financially disciplined acquisitions via attractive returns and fast payback; committed to only acquisitions that
Slide 6: Restructuring the Business: Driving Value
Restructuring the Business: Driving Value Increase Value to the Shareholder Shareholder value will be increased by: Reducing costs as we restructure / focusing on cash flow Acquiring financially disciplined, cash generating businesses Share repurchases Shareholder Value Goal is to ultimately generat
Slide 7: Management Changes
Management Changes
Slide 8: Management Changes: The Right Team to Drive Shareholder Value
Management Changes: The Right Team to Drive Shareholder Value Management team is being right-sized based on our healthcare services focus; flatten and optimize the organization for those with specific healthcare services experience Todd Clyde will step down after a transition periodSeveral other man
Slide 9: Board Changes
Board Changes
Slide 10: Board Changes: Highly Qualified and Independent
Board Changes: Highly Qualified and Independent Our newly constituted Board includes seasoned executives with a vast array of experience. Your Board is listening and has been very responsive, making a number of changes based on discussions with shareholders Board size has been reduced from 8 members
Slide 11: Jeffrey E. Eberwein – Chairman, Director since 2012
Board Changes: Highly Qualified and Independent Jeffrey E. Eberwein – Chairman, Director since 2012 Founder and Chief Executive Officer of Lone Star Value Investors, LLC Over 20 years of Wall Street experience Board experience with a variety companies Specific experience in mergers & acquisitions as
Slide 12: John M. Climaco – Director since 2012
John M. Climaco – Director since 2012 President, Chief Executive Officer and Director, Axial Biotech, Inc. Extensive executive experience with healthcare services Track record of raising capital and strategic alliances We believe that Mr. Climaco brings to our board of directors significant executiv
Slide 13: Charles M. Gillman – Director since 2012
Board Changes: Highly Qualified and Independent Charles M. Gillman – Director since 2012 Portfolio Manager, Nadel and Gussman, LLC Extensive experience with strategic capital allocation and consulting Board experience with a variety of companies We believe that Mr. Gillman brings significant experie
Slide 14: James B. Hawkins – Director since 2012
Board Changes: Highly Qualified and Independent James B. Hawkins - Director since 2012 President, Chief Executive Officer and Director, Natus Medical Incorporated Over 20 years of experience running medical device companies Completed over 20 acquisitions in his career We believe that Mr. Hawkins’ ex
Slide 15: John W. Sayward – Director since 2008
Board Changes: Highly Qualified and Independent John W. Sayward – Director since 2008 Retired Partner, Nippon Heart Hospital LLC Over 15 years experience serving as CFO of medical device and pharmaceutical companies Vast experience in financial discipline and financial oversight We believe that Mr.
Slide 16: New Corporate Governance
New Corporate Governance
Slide 17: New Corporate Governance: Ensuring Accountability
New Corporate Governance: Ensuring Accountability Your Board is committed to continued enhancements to Corporate Governance and best practices. Since the beginning of 2012, we have instituted the following changes: Established a CEO stock ownership policy that requires significant participation of t
Slide 18: Appendix: Business Overview
Appendix: Business Overview
Slide 19: Digirad Imaging Solutions
Digirad Imaging Solutions Personnel & Equipment Leasing (Services) Nuclear Medicine Ultrasound Other Mobile Services New Services Diagnostic Imaging Customer Service (Maintenance) Focused Product Sales
Slide 20: DIS: Imaging/Diagnostic Services That Meet Healthcare Needs
DIS: Imaging/Diagnostic Services That Meet Healthcare Needs Delivers licensed staffing and imaging equipment to physicians with no burden and cost of full ownership Personnel Logistics Equipment Physician Issues Benefits to Physician/Healthcare System Diagnostic need Space constraints Capital requir
Slide 21: Delivering Value in a Changing Customer Landscape
Delivering Value in a Changing Customer Landscape Evolving regulation and economics are forcing structural change in Healthcare Physician Practices Hospitals Imaging Centers Increase revenue-generating patients Improve level of care Participating in integrated networks (ACOs, acquisitions) Multi-use
Slide 22: What will Drive Cash Flow and Growth in DIS
What will Drive Cash Flow and Growth in DIS Expand Practice revenues and profits Cardiology practices Internists New revenue streams from channel New services; variety of other mobile-based services Accreditation consulting services Geographic optimization Tuck-in acquisitions Stabilizing reimbursem
Slide 23: Diagnostic Imaging: Driving Cash Flow
Diagnostic Imaging: Driving Cash flow The most profitable component of Diagnostic Imaging: Customer Service Includes over 20 Field Service Engineers located throughout the United States Flexible and nimble to address customer needs Actively managed to increase margins and to enhance cash flows Serve
Slide 24: Balance Sheet
Balance Sheet Liquid, Strong Ratios, No Long-Term Debt; Well Positioned to Deploy our Strategy Dec 31 2012 Dec 31 2011 Dec 2010 (in millions, except per share) (Audited) Cash/Equivalents & Securities Total Current Assets Total Current Liabilities Long-Term Debt Shareholders' Equity Working Capital R
Slide 25: Operating Results
Operating Results Managed well through volatile external market dynamics * 2012 results include $1.2 million of inventory reserve adjustments (included in gross profit) related to our February 28, 2013 restructuring announcement, and impact of $0.4 million estimated settlement of radiopharmaceutical