FONAR Announces Fiscal 2007
Second Quarter Financial Results
MELVILLE,
NEW YORK, February 9, 2007 - FONAR Corporation (NASDAQ-FONR),
The Inventor of MR Scanning™,
today announced its financial results for the second quarter of fiscal 2007,
which ended December 31, 2006.
Revenue for the second
quarter for fiscal 2007 was $7.7 million compared to $10.5 million for the corresponding
period of fiscal 2006. During the second fiscal 2007 quarter, product sale revenues
were $2.1 million, a decrease from $4.2 million one year earlier. The lower level
of revenue is attributable to a slow down in capital equipment purchases by customers
following robust UPRIGHT™ Multi-Position™ MRI sales in 2003, 2004
and 2005. Sales of the FONAR UPRIGHT™ Multi-Position™ MRI were negatively
affected primarily by marketing and advertising pressure from our competitors.
These competitors are motivated to minimize the unique medical benefits of the
UPRIGHT™ Multi-Position™ MRI because they are prohibited from making
a similar product because of FONAR’s patents protecting its product from
infringement.
Service and repair
revenues for the second fiscal 2007 quarter increased from $2.1 million to $2.4
million or by 16% in the fiscal second quarter of 2007 from the same quarter
of fiscal 2006. In addition, for the six month period ending December 31, 2006
service and repair fees increased to $5.0 million from $4.0 million for the corresponding
period of fiscal 2006. This 23% increase is due to the result and initiation
of service contract agreements from recent installations of FONAR UPRIGHT ™ Multi-Position™ MRI
units. During this six month period, costs related to service and repair fees
decreased from $2.8 million to $2.5 million, and subsequently, the gross margin
on service and repair fees increased from 31% to 49%. As of December 31, 2006,
there were 115 FONAR UPRIGHT™ Multi-Position™ MRI units installed
worldwide.
Net loss for the
second quarter of fiscal 2007 was $(5.5) million, or $(0.05) loss per common
share (basic and diluted), as compared to a net loss of $(5.4) million, or $(0.05)
loss per common share (basic and diluted), for the corresponding period of fiscal
2006.
At December 31, 2006,
total cash and marketable securities were approximately $8.7 million. This represented
an overall decrease of approximately 9% or $800,000 as compared to the period
ending June 30, 2006 of approximately $9.5 million. This, however, compares to
a decrease of only $64,000 as compared to September 30, 2006 which was approximately
$8.7 million.
On December 31, 2006,
total assets were $53.2 million, total current assets were $34.5 million, total
current liabilities were $28.4 million, and total long-term liabilities were
$1.4 million.
Commenting on the
financial results for the second fiscal 2007 quarter, Raymond Damadian, M.D.,
president and chairman of FONAR, said, “A very competitive atmosphere has
led to a decline in sales. Subsequently, we are planning to expand our sales
force, both in terms of hiring more sales personnel and further establishment
of a domestic network of distributors. The advantages of the FONAR UPRIGHT™ Multi-Position™ MRI
scanner are significant over our competitors’ recumbent-only, single-position-only,
static MRI systems, especially when imaging the spine. This is significant because
spine MRI scans are approximately half of all MRI scans done. There were about
13 million spine scans done in the U.S. last year and given the unique advantages,
they should all be done by the FONAR UPRIGHT™ Multi-Position™ MRI.”
“We are encouraged
by our recent sales,” said Dr. Damadian. “Recently FONAR and GE Healthcare,
a manufacturer’s representative for FONAR, sold an UPRIGHT™ Multi-Position™ MRI
to the Center for Diagnostic Imaging (CDI), of Minneapolis, Minnesota. This is
an important sale for FONAR because CDI is very prestigious in the MRI market
place. Last year, readers of Medical Imaging Magazine, a leading, national diagnostic
imaging industry publication, overwhelmingly selected CDI as the “NUMBER
ONE FREESTANDING IMAGING GROUP” in the United States. In addition, several
CDI associates and a CDI radiologist were also recognized in the top ten in their
individual categories.” For details visit: www.medicalimagingmag.com/issues/articles/2006-01_01.asp#freeimage
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| |
For the Three Months
Ended December 31, |
For the Six Months
Ended December 31, |
| |
2006 |
2005 |
2006 |
2005 |
| Revenues |
$ 7,672,000 |
$ 10,541,000 |
$ 15,455,000 |
$ 20,694,000 |
| Net Loss |
$ (5,470,000) |
$ (5,358,000) |
$ (11,575,000) |
$ (13,675,000) |
| Basic & Diluted Loss |
|
|
|
|
| per Common Share |
$(0.05) |
$(0.05) |
$(0.10) |
$(0.13) |
About FONAR
FONAR® was incorporated in 1978, making it the first, oldest and most experienced
MRI manufacturer in the industry. FONAR introduced the world's first commercial
MRI in 1980, and went public in 1981. Since its inception, FONAR has installed
hundreds of MRI scanners worldwide. Their stellar product line includes the
FONAR UPRIGHT™ Multi-Position™ MRI (also known as the UPRIGHT™ MRI
and the Stand-Up™ MRI), the only whole-body MRI that performs Multi-Position™ Imaging
(mpMRI™) and scans patients in numerous weight-bearing positions, i.e.
standing, sitting, in flexion and extension, as well as the conventional lie-down
position. The FONAR UPRIGHT™ Multi-Position™ MRI often sees the
patient's problem that other scanners cannot because they are single position,
lie-down only. With one half million patients scanned, the patient-friendly
FONAR UPRIGHT™ Multi-Position™ MRI has a near zero claustrophobic
rejection rate by patients. A radiologist said, “FONAR UPRIGHT™ MRI – No
More Claustrophobia – The Tunnel Is Gone.” As another FONAR customer
states, "If the patient is claustrophobic in this scanner, they'll be
claustrophobic in my parking lot." Approximately 85% of patients are scanned
sitting while they watch a 42" flat screen TV. FONAR’s latest MRI
scanner is the FONAR 360, a room-size recumbent scanner that optimizes openness
while facilitating physician access to the patient. FONAR is headquartered
on Long Island, New York, and has approximately 400 employees.
#
The Inventor of MR Scanning, Full Range
of Motion, STAND-UP MRI, UPRIGHT MRI, Multi-Position MRI, Pmri,
True Flow MRI, and The Proof is in the Picture are trademarks
of FONAR Corporation.
This release may include
forward-looking statements from the company that may or may not
materialize. Additional information on factors that could potentially
affect the company's financial results may be found in the company's
filings with the Securities and Exchange Commission.
###
FONAR™ Corporation
110 Marcus Drive
Melville, N.Y. 11747
Tel. 631-694-2929
Fax. 631-390-9540
Email sales@FONAR.com
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