Star Equity Holdings, Inc. · NASDAQ:STRR
Star Equity — Digirad — CapStone Investments Small-Cap Investor Conference 2008
27 slides from Star Equity's conference presentation, Jun 17, 2008
Slide 1: Digirad Corporation
Digirad Corporation Nasdaq: DRAD CapStone Investments Small-Cap Investor Conference June 17, 2008
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation that are not a description of historical facts are forward-looking statements as determined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not relate strictly to historical or current facts and
Slide 3: Business Summary
Digirad Corporation provides medical diagnostic imaging products and services to physicians’ offices, hospitals and imaging centers. Business Summary Product Sales Diagnostic Imaging Services
Slide 4: Diagnostic Imaging Services
Diagnostic Imaging Services Mobile Imaging For Today’s Patient, Physician Needs Diagnostic requirements for aging population Trend to decentralized (non-hospital) services Facilitates outreach programs for academia and cardiology groups Patients prefer own primary-care physicians Flexible, scalable
Slide 5: Digirad Imaging Solutions
Digirad Imaging Solutions Mobile Nuclear Imaging Cardiac Cardiac SPECT Perfusion Imaging -Stress & Rest Gated/Non-Gated Studies Results -Cardiac Perfusion -End Diastolic / End Systolic Volumes -Ejection Fraction (EF) -Myocardial Mass -Cardiac Output Volumes (CO) -Summed Stress Scores -Myocardial Sur
Slide 6: Digirad Ultrascan Solutions
Digirad Ultrascan Solutions Mobile Ultrasound Imaging Cardiac 2D and 3D Echo (Adult and Pediatric) Stress Echo TEE Vascular Complete Carotid Imaging Upper and lower Venous and Arterial Imaging Segmental Pressures General Complete Abdominal Imaging Complete Obstetrical and Gynecological Imaging Diagn
Slide 7: U.S. Regional Presence
U.S. Regional Presence California Oregon Washington Montana Idaho Nevada Utah Colorado Arizona New Mexico Texas Oklahoma Wyoming Tennessee Kentucky Kansas Nebraska South Dakota North Dakota Minnesota Iowa Missouri Arkansas Ohio Indiana Illinois Wisconsin Michigan Florida Louisiana Georgia S. Carolin
Slide 8: Nuclear Imaging Market Trend
Source: IMV Nuclear Survey, Oct 2007 Market decline in 2006: - Greater pre-certification burdens - PET impacting oncology NM Resuming Yearly Uptrend in Nuclear Imaging Patient Visits Continuing Trend To Non-Hospital Providers Market recovery in 2007: - Secular uptrend resuming - Trend away from hosp
Slide 9: Nuclear Imaging Market: Cardiac
2007* 2006 2005 16.3M 100% 15.2M 100% 17.2M 100% Total 6.5M 40% 6.1M 41% 7.9M 46% Non-Cardiac 9.8M 60% 9.1M 59% 9.3M 54% Cardiac Nuclear Imaging Patient Visits *Estimated from 1H2007 data Source: IMV Nuclear Survey, Oct 2007 Cardiac Studies: Largest Segment of Nuclear Imaging Market, Growing as Perc
Slide 10: Ultrasound Imaging Market Trend
Ultrasound Imaging Market Trend Ultrasound Procedures (USA): 2003 – 2009 82.2M 2006 90.6M 2007 101.8M 2008 2009 2005 2004 2003 115.1M 74.8M 68.1M 62.8M Source: Medical Imaging Markets – Volume III Oct. 2006 Kalorama
Slide 11: Centers of Influence Strategy
Primary-Care Physicians Affiliation with luminary institution Expert readings by cardiologists on staff at institution Higher retention of patients Ancillary revenue Centers of Influence New revenues from reading fees improve staff retention New revenue from intervention via readings Coordination wi
Slide 12: Centers of Influence Locations
UCLA Vanderbilt Univ. Penn State Johns Hopkins Univ. of Chicago Emory University Methodist Hosp. = Existing: seven as of June 17, 2008 Centers of Influence Locations
Slide 13: Est. COI Revenue Growth - Cumulative
Est. COI Revenue Growth - Cumulative Hypothetical Example Based on COI Expansion 2008-2011 2008 2009 2010 2011 Potential Cumulative Revenue From Existing 5 COIs Potential Incremental Revenue From Addition of 15 COIs At 36 months from signing, a COI adds $3 million to $8 million per year in revenue b
Slide 14: Multiple Imaging Services Strategy
Multiple Imaging Services Strategy Add new diagnostic procedures Leverage current mobile-service infrastructure Broaden demand for Company’s imaging services Enhance physicians’ practices New capabilities to diagnose patients in-office Multiple procedures during single patient visit Better overall c
Slide 15: Multiple Imaging Services
Today $3,500 Nuclear $950 Ultrasound $3,500 Nuclear $950 Ultrasound $250 New Service 1 $450 New Service 2 $350 New Service 3 $200 New Service 4 Service Expansion Potential “Tomorrow” Multiple Imaging Services Digirad typically performs one modality per service day
Slide 16: Economics for Physicians
Today $65K incremental annual revenue, or 30% increase $40K Nuclear $25K Ultrasound $35K Nuclear $20K Ultrasound $10K New Service 1 $20K New Service 2 $15K New Service 3 $10K New Service 4 Economics for Physicians “Tomorrow” $110K incremental annual revenue, or 40% increase
Slide 17: Added Value for Patients-Example
Added Value for Patients-Example Artery Age Screening Standard, non-invasive ultrasound procedure Measures CIMT (carotid intima-media thickness): thickness of the first two layers of the carotid artery located in the neck To monitor atherosclerosis (underlying cause of heart attack and stroke) even
Slide 18: The Digirad Advantage
The Digirad Advantage Solid-State Technology Compact designs 500 lb. patient-weight capacity Portable Systems Scaleable platforms (1-2-3) Product Line ® High-Quality, High-Performance Mobile Equipment ®
Slide 19: Product Development Roadmap
Product Development Roadmap Innovation, Leadership, Clinical Superiority nSPEED (1/2 time acquisition): Released - Faster imaging, higher image quality or reduced radiation dose. STASYS (automated motion correction): Released 6/08 - Improved image quality and reduced costs (eliminates license fees)
Slide 20: Consolidated Results: Trend, Outlook
Consolidated Results : Trend, Outlook *Midpoints of guidance as of April 24, 2008 Note: Net excludes estimated stock-based compensation expense Revenue Growth in 2008 Net Loss/Income Revenue
Slide 21: Comparative Operating Results
Comparative Operating Results (In millions, except per share) Q1 2008 2007 2006 2005 Revenues $18.3 $73.9 $71.9 $68.2 Gross Profit 4.4 20.5 19.1 15.2 Operating Expenses 6.1 23.4 27.3 26.2 Operating Income (Loss) (1.7) (2.8) (8.2) (11.0) EBITDA 0.4 4.7 (1.9) (5.2) Net Income (Loss) $(1.4) $(1.4) $(6.
Slide 22: Margins: Trend, Targets
Margins: Trend, Targets Gross Margin Rising, SG&A Declining as % of Revenue 33% 22% Future Targets
Slide 23: Balance Sheet
Balance Sheet (In millions, except per share data) Liquid, Strong Ratios, No Long-Term Debt Mar 31, 2008 Dec 31, 2007 Cash/equivalents and securities $26.4 $31.7 Total current assets 41.6 47.4 Total current liabilities 12.4 13.5 Long-term debt 0.0 0.0 Shareholders’ equity 54.1 55.2 Current ratio 3.4
Slide 24: 2008 Guidance (April 24, 2008)
2008 Guidance (April 24, 2008) 2008 Guidance Revenue DIS $ 56M - $ 60M Product $ 19M - $ 21M Total Revenue $ 75M - $ 81M Net Loss ($ 2.0 M - $ 4.5M) Note: Net Loss includes stock-based comp. of $1M
Slide 25: Investment Merits
Investment Merits Demographics driving demand for diagnostic imaging services Trend to decentralized (non-hospital) facilities Expecting revenue growth in 2008: Centers of Influence New imaging services Imaging market trend Continuing control of costs/expenses Strong balance sheet (March 31, 2008) $
Slide 26: Stock Data
Stock Data Nasdaq symbol DRAD Three-year trading range $2.05 to $6.30 Close 6/9/2008 $2.36 Average daily trading volume 27,700 shares Shares outstanding 18.9 million Float (shares) 15.3 million Institutional holdings (shares) 10.5 million Market capitalization $44.6 million
Slide 27: Digirad Corporation
Digirad Corporation 13950 Stowe Drive Poway, CA 92064 858-726-1600 www.digirad.com
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