Digirad CEO Todd Clyde said, "We are pleased to report significant financial and operational progress during the first quarter. We previously communicated our 2009 goals as:

       1) Creating greater efficiency by selling or closing underperforming          hubs;       2) improving our approach to launching and growing Centers of          Influence (COI);       3) introducing new imaging technologies;       4) developing new technology platforms; and lastly,       5) progress toward consistent profitability and positive cash flow.    

"We are ahead of plan on nearly every one of these goals. We have sold or closed all but one underperforming hub, achieved double-digit growth in our current Centers of Influence locations, launched our Cardius(R) X-ACT rapid cardiac SPECT/VCT imaging system to help open the hospital and large cardiology practice markets, recorded net income in the first quarter of 2009 and burned less cash than anticipated."

   First Quarter Financial Highlights:    --  Total revenue was $17.7 million, compared to $18.3 million in       first-quarter 2008.  DIS revenue remained stable at $13.9 million       compared to $13.9 million in first-quarter 2008 despite the sale of       several hubs during the period, and Product revenues were $3.9 million       compared to $4.4 million in first-quarter 2008.   --  Gross profit was $5.1 million, or 29% of revenue, compared to $4.4       million, or 24%, in first-quarter 2008.   --  Net income was $44,000, or $0.00 per share, including $145,000 in       restructuring charges, compared to net loss of $1.4 million, or       $(0.07) per share, in first-quarter 2008.    --  Cash and cash equivalents and securities available-for-sale totaled       $28.1 million, or $1.48 per share, on March 31, 2009.  Cash and cash       equivalents and securities available-for-sale were $26.4 million on       March 31, 2008 and $28.3 million on December 31, 2008.    

Clyde added, "Our DIS personnel and equipment leasing services segment is operating today on a stronger base-business footprint. We continue to remain focused on driving positive margins as we attract new business in the markets where we already have presence and can leverage our teams, assets and COI relationships. In this quarter, we felt the effects of the poor economy, which impacted the purchasing patterns of our camera customers. Although we have little visibility into how long the negative camera sales trend may last, we remain focused on our goal of achieving consistent profitability and cash flow."

Conference Call Information

A conference call is scheduled for 11:00 a.m. EDT today to discuss the results and management's outlook. The call may be accessed by dialing 800-762-8795 five minutes prior to the scheduled start time and referencing Digirad.