Digirad Corporation Comments on Fourth Quarter Progress

January 14, 2009

POWAY, Calif., Jan. 14 /PRNewswire-FirstCall/ — Digirad Corporation
(Nasdaq: DRAD), a leading provider of medical diagnostic imaging systems and
personnel and equipment leasing services to physicians’ offices, hospitals and
imaging centers, today announced that results for the 2008 fourth quarter will
show positive progress toward both organizational and financial turnaround
goals laid out by CEO Todd Clyde following his promotion in to that role in
October 2008. Indications of that progress include:

— The Product Division was profitable for the year and for the quarter on
the strength of double-digit unit and revenue growth in the fourth quarter
over fourth quarter 2007. The company had established the goal of
profitability for the year in the division at the beginning of 2008.

— The Centers of Influence (COI) model, which pairs leading academic
centers with a network of community practitioners to drive growth and
utilization, continues to work as the more established COI locations also
showed growth in the quarter over the prior year.

— Negotiations for the sale or closure of underperforming hub locations
began during the fourth quarter and are well underway. Those transactions
should begin to close during the next 60 days and are expected to be complete
within six months. The locations generated nearly $7 million of revenue
during 2008.

— The company’s operations generated more than $2 million in cash during
the 2008 fourth quarter, bolstering its cash, cash equivalents and securities
to more than $28 million, or approximately $1.50/share at December 31.

Digirad CEO Todd Clyde said, “The entire organization is focused on
achieving positive cash flow and profitability in the near term while driving
technology progress and improving services utilization to grow market share
over the long run. I have been pleased with the employee response to our
initiatives in the fourth quarter of 2008 and look forward to sharing our
progress in greater detail when we report our full annual results in

As previously announced, Clyde will be presenting at J.P. Morgan’s 27th
Annual Healthcare Conference being held January 12-15, at the Westin St.
Francis Hotel, San Francisco. His presentation is scheduled to begin at 11:30
a.m. PT tomorrow, Thursday, January 15.
The presentation will include a
discussion of Digirad’s business, strategic focus and outlook. The
presentation will also be webcast live on the events and presentation page of
the investors section of Digirad’s web site at www.digirad.com. An archive of
the presentation will be accessible at this site for 90 days.

About Digirad Corporation

Digirad provides medical diagnostic imaging systems and personnel and
equipment leasing services to physicians’ offices, hospitals and imaging
centers for cardiac, vascular, and general imaging applications. Digirad’s
Cardius XPO line of nuclear imaging cameras use patented solid-state
technology and unique multi (single, dual, triple) head design for superior
performance and advanced features for sharper digital images, faster
processing, compact size, lighter weight for portability, ability to handle
patients up to 500 pounds, and improved patient comfort compared to standard
nuclear cameras. Digirad’s 2020tc general-purpose nuclear imager has a small
footprint and may also be configured for fixed or mobile use to supplement
primary imaging. Digirad’s installed base of equipment exceeds 600 systems; in
addition, a mobile fleet of more than 145 nuclear and ultrasound imaging
systems is being used in 21 states, primarily in the eastern, midwestern and
southwestern United States. For more information, please visit
www.digirad.com. Digirad(R), Digirad Imaging Solutions(R), and Cardius(R) are
registered trademarks of Digirad Corporation.

Forward-Looking Statements

This press release contains statements that are forward-looking statements
as defined within the Private Securities Litigation Reform Act of 1995. These
include statements regarding the efficacy of Digirad’s centers of influence
model, the status of the negotiation of the sale or closure of underperforming
hub locations, and the ability to achieve positive cash flow and
profitability, drive technology progress and improve services utilization to
grow market share. These forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from the
statements made, including the risks associated with changes in business
conditions, technology, customers’ business conditions, work force, suppliers,
business prospects, economic outlook, operational policy or structure,
acceptance and use of Digirad’s camera systems and services, reliability,
recalls, and other risks detailed in Digirad’s filings with the U.S.
Securities and Exchange Commission, including Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports.
Readers are cautioned to not place undue reliance on these forward looking
statements, which speak only as of the date hereof. All forward looking
statements are qualified in their entirety by this cautionary statement, and
Digirad undertakes no obligation to revise or update the forward looking
statements contained herein.

     Investor Contact:            Company Contact:
     Matt Clawson                 Todd Clyde
     Allen & Caron                Chief Executive Officer
     949-474-4300                 858-726-1600

SOURCE Digirad Corporation

Source: newswire

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