Financial Data and Key Metrics Changes - Total revenue for Q4 2018 was $25.9 million, a slight decrease from $26.3 million in Q4 2017. For the full year 2018, total revenue was $104.2 million compared to $104.6 million in 2017 [15][12] - Overall gross margin for Q4 2018 was 14.4%, down from 17.2% in Q4 2017. For the full year 2018, gross margin was 17.5%, compared to 20.3% in 2017 [15][12] - Adjusted net loss for Q4 2018 was $1.2 million or $0.06 per share, an improvement from an adjusted net loss of $1.4 million or $0.07 per share in Q4 2017 [22] - Adjusted EBITDA for Q4 2018 was $800,000, consistent with Q4 2017 [23] Business Line Data and Key Metrics Changes - In Diagnostic Services, Q4 revenue was $11.6 million with a gross margin of 15.8%, compared to $12.1 million and 14.8% in Q4 2017. For 2018, revenue was $49.3 million with a gross margin of 19.2% [16] - Mobile Healthcare business revenue for Q4 was $10.8 million with a gross margin of 4.0%, unchanged from Q4 2017. For 2018, revenue was $42.9 million with a gross margin of 8.6% [19] - Diagnostic Imaging revenue for Q4 was $3.6 million with a gross margin of 41.2%, compared to $3.4 million and 45.5% in Q4 2017. For 2018, revenue was $12 million with a gross margin of 42.9% [20] Market Data and Key Metrics Changes - The company faced challenges due to weather-related issues impacting Diagnostic Services, but still managed to grow gross profit percentage [16] - The increase in Diagnostic Services revenue was attributed to a higher volume of imaging days and studies performed, despite a loss of revenue from the sale of the Telerythmics business [17] Company Strategy and Development Direction - The company is transitioning towards a HoldCo strategy, which is expected to enhance growth and maximize shareholder value over the long term [11][27] - The merger with ATRM Holdings is anticipated to close in the second half of 2019, with a focus on high-return internal investments and acquisitions [26][27] Management Comments on Operating Environment and Future Outlook - Management acknowledged challenges due to business conditions and the sale of two operating units in 2018 but noted that they met revenue and free cash flow expectations [12] - The company plans to evaluate share repurchases against organic growth investments and acquisitions as part of its HoldCo strategy [27] Other Important Information - The company paid down $10 million in debt during 2018, with $4 million paid down in Q4 alone [12] - As of December 31, 2018, the outstanding balance of the credit facility was $9.5 million, and the overall net debt position was $8 million [25] Q&A Session Summary Question: Any details on the ATRM acquisition? - Management indicated that ATRM is focused on completing its financials and SEC filings, with more information expected in Q2 [32] Question: Update on capital allocation and stock repurchase activity? - Management confirmed that the stock repurchase window has not been open yet due to specific criteria that need to be met [34][36] Question: Does the ATRM transaction affect the stock repurchase window? - Management clarified that the announced information does not close the window unless there is undisclosed material information [38]
Star Equity (STRR) - 2018 Q4 - Earnings Call Transcript