Digirad Reports 2007 Third-Quarter, Nine-Month Financi...( Net Loss Narrows on Growth of Ser...),Health

Net Loss Narrows on Growth of Services Revenues, Higher Margins for

Quarter, Nine Months; Outlook Improves for 2007 Net Results

POWAY, Calif., Oct. 25 /PRNewswire-FirstCall/ -- Digirad Corporation (Nasdaq: DRAD), a leading provider of medical diagnostic imaging systems and services to physicians' offices, hospitals and imaging centers, today reported narrowed losses for the third quarter and nine months ended September 30, 2007, on higher revenues, improving gross margins and lower operating expenses.

Net loss for the quarter was $588,000, or $(0.03), compared to a net loss of $2.1 million, or $(0.11) per share, for third-quarter 2006. The $588,000 net loss for the quarter included stock-based compensation expense of $199,000; the net loss of $2.1 million for third-quarter 2006 included stock-based compensation expense of $344,000. For nine months, the Company reported a net loss of $276,000, or $(0.01) per share, including stock-based compensation expenses of $824,000, compared to a net loss of $6.1 million, or $(0.33) per share, including stock-based compensation expenses of $1.4 million, for the same period a year ago.

Chief Executive Mark Casner commented: "We are pleased to report continuing improvement in year-over-year net results due to higher gross margins, lower operating expenses, and signs of returning to revenue growth driven by our nuclear and ultrasound mobile imaging services operations. During the past quarter, services revenues continued to benefit from a broader line of imaging modalities, ongoing upgrades and higher utilization of our mobile imaging fleet, which is also contributing to higher gross margins through higher labor efficiencies and reduced depreciation expen
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