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Fonar Press Releases

For Immediate Release

The Inventor of MR Scanning™

An ISO 9001 Company

Contact: Daniel Culver

110 Marcus Drive

Director of Communications

Melville, NY 11747-4292

Web site: www.fonar.com

Phone: (631) 694-2929

Email: investor @ fonar. com

Fax: (631) 390-1709

FONAR Announces Fiscal 2015 2nd Quarter Financial Results

  • Net Revenues for 2nd Quarter Fiscal 2015 were $17.1 million versus $17.6 million for the same period a year earlier.
  • Net Income for 2nd Quarter Fiscal 2015 increased 13% to $3.5 million versus the same period a year earlier.
  • Net Income Available to Common Stockholders for 2nd Quarter Fiscal 2015 increased 24% to $2.5 million versus the same period a year earlier.
  • Diluted Net Income Per Common Shares Available to Common Stockholders increased 21% to $0.40 per share for 2nd Quarter Fiscal 2015 versus the same period a year earlier.

MELVILLE, NEW YORK, February 9, 2015 - FONAR Corporation (NASDAQ-FONR), The Inventor of MR Scanning™, reported its second quarter fiscal 2015 results for the quarter ended December 31, 2014. FONAR is the first Company in the MRI industry to manufacture an MRI (Magnetic Resonance Imaging) scanner. FONAR’s substantial list of patents include recent patents for its technology enabling full weight-bearing MRI imaging on all the gravity sensitive regions of the human anatomy, especially the brain, extremities, spine and cerebrospinal fluid (CSF) flow.

The Company’s two industry segments are the management of Stand-Up® MRI (UPRIGHT® MRI) centers, and the development, manufacturing and servicing of the UPRIGHT® Multi-Position™ MRI. It’s premier MRI product, the FONAR UPRIGHT® Multi-Position™ MRI scanner, is the world’s only MRI scanner licensed under FONAR’s multiple UPRIGHT® MRI patents to scan all the patient’s body parts in their normal fully weight-bearing UPRIGHT® position.

Financial Highlights
Revenues increased 2% to $35.1 million for the six month period ended December 31, 2014, from $34.4 million for the corresponding six month period one year earlier. Revenues for the second fiscal 2015 quarter ended December 31, 2014 were $17.1 million versus $17.6 million for the corresponding quarter one year earlier.

Net Income was $6.7 million for the six month period ended December 31, 2014 and the corresponding six month period one year earlier.

Net Income increased 13% to $3.5 million for the second fiscal 2015 quarter ended December 31, 2014 versus $3.0 million for the corresponding quarter one year earlier.

Income from Operations was $7.0 million for the six month period ended December 31, 2014, versus $7.3 million for the corresponding six month period one year earlier.

Income from Operations for the second fiscal 2015 quarter ended December 31, 2014 increased 9% to $3.6 million, from $3.3 million for the corresponding quarter one year earlier.

Diluted net income per common share available to common shareholders for the six month period ended December 31, 2014 was $0.79 versus $0.70 for the corresponding six month period one year earlier, an increase of 13%.

Diluted net income per common share available to common shareholders for the second fiscal 2015 quarter ended December 31, 2014 was $0.40 versus $0.33 for the corresponding quarter one year earlier, an increase of 21%.

Total assets at December 31, 2014 were $79.0 million, as compared to $76.8 million at June 30, 2014. Total current assets at December 31, 2014 were $46.8 million, as compared to $42.8 million at June 30, 2014.

Total liabilities at December 31, 2014 were $28.8 million, as compared to $30.9 million at June 30, 2014. Total current liabilities at December 31, 2014 were $20.9 million, as compared to $21.2 million at June 30, 2014.

Stockholder’s equity at December 31, 2014 was $50.2 million, as compared to $45.9 million at June 30, 2014.

Cash and cash equivalents increased 17% to $11.7 million at December 31, 2014, from $10.0 million at June 30, 2014.

Management Discussion
Raymond V. Damadian, president and chairman of FONAR Corporation said, “Since acquiring Health Diagnostics in March 2013, the Company’s net profit has gone from $1.6 million (for the quarter ended Dec 31, 2012) to $3.5 million (current quarter). That is almost $2 million more per quarter. Management is proud of this achievement.”

“We are still concerned about cuts in MRI reimbursement rates brought about by the Affordable Care Act,” said Dr. Damadian. “Nevertheless, we have dealt with these cuts and we continue to grow our business. This is because of the adherence to our business strategy which has made the difference.”

“At the core of our success is that our business centers around the FONAR UPRIGHT® Multi-Position™ MRI. Our message to physicians,” said Dr. Damadian, “is that the UPRIGHT® MRI will provide a ‘BETTER PATIENT OUTCOME’ for their patient. Our physician users understand this and realize that you get the most accurate diagnosis available from the fully weight-loaded Multi-Position™ MRI provided by the FONAR UPRIGHT® versus that of the conventional weightless recumbent-only MRI. Most importantly, they don’t want to run the risk of failure to visualize structural abnormalities in the spines of their patients that could result in poor outcomes from their treatment.”

These physicians have learned from firsthand experience that the FONAR UPRIGHT® MRI has the power to ‘SEE IT ALL’ and thus it’s use has become indispensable towards their ultimate objective of optimizing the TREATMENT OUTCOMES FOR THEIR PATIENTS,” concluded Dr. Damadian.

About FONAR
FONAR (NASDAQ:FONR), Melville, NY, The Inventor of MR Scanning™, was incorporated in 1978, and is the first, oldest and most experienced MRI company in the industry. FONAR introduced the world’s first commercial MRI in 1980, and went public in 1981. Since its inception, nearly 300 recumbent-OPEN MRIs and 157 UPRIGHT® Multi-Position™ MRI scanners have been installed worldwide. FONAR’s stellar product is the UPRIGHT® MRI (also known as the Stand-Up® MRI), the only whole-body MRI that performs Position™ imaging (pMRI™) 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® MRI often sees the patient’s problem that other scanners cannot because they are lie-down and ”weightless” only scanners. The patient-friendly UPRIGHT® MRI has a near-zero claustrophobic rejection rate by patients. As a 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 is headquartered on Long Island, New York.

UPRIGHT® and STAND-UP® are registered trademarks and The Inventor of MR Scanning™, Full Range of Motion™, Multi-Position™, Upright Radiology™, The Proof is in the Picture™, True Flow™, pMRI™, Spondylography™, Dynamic™, Spondylometry™, CSP™, and Landscape™, 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.

CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts and shares in thousands, except per share amounts)
(UNAUDITED)

ASSETS

December 31,
2014
June 30,
2014 *  
Current Assets:
Cash and cash equivalents      
$ 11,674
$ 9,952
Accounts receivable – net
5,028
4,450
Accounts receivable - related party
60
Medical receivable – net
8,898
8,808
Management and other fees receivable - net
13,740
11,970
Management and other fees receivable – related medical practices – net
3,469
3,427
Costs and estimated earnings in excess of billings on uncompleted contracts
726
760
Inventories
2,363
2,444
Prepaid expenses and other current assets
823
1,011

Total Current Assets

46,781

42,822

Deferred income tax asset
5,740
5,740
Property and equipment – net
13,951
15,030
Goodwill
1,767
1,767
Other intangible assets – net
9,933
10,509
Other Assets
868
922
Total Assets
$ 79,040
================
$ 76,790
================

 

LIABILITIES

Current Liabilities:
   
Current portion of long-term debt and capital leases
$ 2,894
$ 2,891
Accounts payable
2,397
2,482
Other current liabilities
8,470
9,024
Unearned revenue on service contracts
5,052
4,731
Unearned revenue on service contracts – related party
55
Customer deposits
1,819
1,927
Billings in excess of costs and estimated earnings on uncompleted contracts
168
142

Total Current Liabilities

20,855
21,197
 
Long-Term Liabilities:
Due to related medical practices
229
234
Long-term debt and capital leases, less current portion
6,935
8,482
Deferred Income Tax Liability
584
584
Other Liabilities
217
386
Total Long-Term Liabilities
7,965
9,686

Total Liabilities

28,820
30,883

* Condensed from audited financial statements

CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts and shares in thousands, except per share amounts)
(UNAUDITED)

STOCKHOLDERS’ EQUITY

 
December 31,
2014
 June 30,
2014 *
STOCKHOLDERS' EQUITY:
   
Class A non-voting preferred stock $.0001 par value; 453 shares authorized at December 31, 2014 and June 30, 2014, 313 issued and outstanding at December 31, 2014 and June 30, 2014
$ —
$ —
Preferred stock $.001 par value; 567 shares authorized at December 31, 2014 and June 30, 2014, issued and outstanding – none
Common Stock $.0001 par value; 8,500 shares authorized at December 31, 2014 and June 30, 2014, 6,062 and 6,057 issued at December 31, 2014 and June 30, 2014, respectively; 6,051 and 6,046 outstanding at December 31, 2014 and June 30, 2014, respectively
1
1
Class B Common Stock (10 votes per share) $.0001 par value; 227 shares authorized at December 31, 2014 and June 30, 2014; .146 issued and outstanding at December 31, 2014 and June 30, 2014
Class C Common Stock (25 votes per share) $.0001 par value; 567 shares authorized at December 31, 2014 and June 30, 2014, 383 issued and outstanding at December 31, 2014 and June 30, 2014
Paid-in capital in excess of par value
175,413
175,284
Accumulated deficit
(144,066)
(149,259)
Notes receivable from employee stockholders
(35)
(39)
Treasury stock, at cost - 12 shares of common stock at September 30, 2014 and June 30, 2014
(675)
(675)
Total Fonar Corporation Stockholder Equity
30,638
25,312
Noncontrolling interests
19,582
20,595
Total Stockholders' Equity
50,220
45,907

Total Liabilities and Stockholders' Equity

$ 79,040
================
$ 76,790
================

* Condensed from audited financial statements
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts and shares in thousands, except per share amounts)
(UNAUDITED)
 
FOR THE THREE MONTHS ENDED DECEMBER 31,
REVENUES
2014  
2013    
Product sales - net
$ 375
$ 755
Service and repair fees - net
2,499
2,548
Service and repair fees - related parties - net
28
28
Patient fee revenue, net of contractual allowances and discounts
6,629
5,894
Provision for bad debts for patient fee
(2,897)
(2,223)
Management and other fees - net
8,613
8,274
Management and other fees–related medical practices – net
1,845
2,333
Total Revenues - Net
17,092
17,609
COSTS AND EXPENSES
Costs related to product sales
237
631
Costs related to service and repair fees
474
587
Costs related to service and repair fees - related parties
5
6
Costs related to patient fee revenue
1,902
2,028
Costs related to management and other fees
5,180
5,190
Costs related to management and other fees - related medical practices
1,240
1,270
Research and development
359
374
Selling, general and administrative
3,824
4,352
Provision for bad debts
273
(124)
Total Costs and Expenses
13,494
14,314
Income From Operations
3,598
3,295
Interest expense
(172)
(237)
Investment income
60
60
Other Expense
(2)
Income Before Provision for Income Taxes and noncontrolling Interests
3,484
3,118
  Provision for Income Taxes
29
70
Net Income
3,455
3,048
Net Income - Non Controlling Interests
(797)

(905)

Net Income - Controlling Interests

$ 2,658
================
$ 2,143
================
Net Income Available to Common Stockholders
$ 2,485
================
$ 2,003
================
Net Income Available to Class A Non-Voting Preferred Stockholders
$ 129
================
$ 104
================
Net Income Available to Class C Common Stockholders
$ 44
================
$ 36
================
Basic Net Income Per Common Share Available to Common Stockholders
$ 0.41
================
$ 0.33
================
Diluted Net Income Per Common Share Available to Common Stockholders
$ 0.40
================
$ 0.33
================
Basic and Diluted Income Per Share - Class C Common
$ 0.12
================
$ 0.09
================
Weighted Average Basic Shares Outstanding – Common Stockholders
6,051
================
6,006
================
Weighted Average Diluted Shares Outstanding - Common Stockholders
6,179
================
6,133
================
Weighted Average Basic Shares Outstanding – Class C Common
383
================
383
================
Weighted Average Diluted Shares Outstanding – Class C Common
383
================
383
================

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts and shares in thousands, except per share amounts)
(UNAUDITED)
 
FOR THE SIX MONTHS ENDED DECEMBER 31,
REVENUES
2014  
2013    
Product sales - net
$ 1,646
$ 783
Service and repair fees - net
4,989
5,060
Service and repair fees - related parties - net
55
55
Patient fee revenue, net of contractual allowances and discounts
13,416
11,721
Provision for bad debts for patient fee
(6,042)
(4,262)
Management and other fees - net
17,351
16,417
Management and other fees–related medical practices – net
3,662
4,666
Total Revenues - Net
35,077
34,440
COSTS AND EXPENSES
Costs related to product sales
1,322
678
Costs related to service and repair fees
981
1,131
Costs related to service and repair fees - related parties
11
12
Costs related to patient fee revenue
3,801
3,877
Costs related to management and other fees
10,379
10,264
Costs related to management and other fees - related medical practices
2,609
2,490
Research and development
756
769
Selling, general and administrative
7,403
8,089
Provision for bad debts
779
(218)
Total Costs and Expenses
28,041
27,092
Income From Operations
7,036
7,348
Interest expense
(376)
(480)
Investment income
122
121
Other Expense
(2)
(151)
Income Before Provision for Income Taxes and noncontrolling Interests
6,780
6,838
  Provision for Income Taxes
69
170
Net Income
6,711
6,668
Net Income - Non Controlling Interests
(1,518)

(2,088)

Net Income - Controlling Interests

$ 5,193
================
$ 4,580
================
Net Income Available to Common Stockholders
$ 4,856
================
$ 4,280
================
Net Income Available to Class A Non-Voting Preferred Stockholders
$ 251
================
$ 223
================
Net Income Available to Class C Common Stockholders
$ 86
================
$ 77
================
Basic Net Income Per Common Share Available to Common Stockholders
$ 0.80
================
$ 0.71
================
Diluted Net Income Per Common Share Available to Common Stockholders
$ 0.79
================
$ 0.70
================
Basic and Diluted Income Per Share - Class C Common
$ 0.22
================
$ 0.20
================
Weighted Average Basic Shares Outstanding – Common Stockholders
6,050
================
5,992
================
Weighted Average Diluted Shares Outstanding - Common Stockholders
6,178
================
6,120
================
Weighted Average Basic Shares Outstanding – Class C Common
383
================
383
================
Weighted Average Diluted Shares Outstanding – Class C Common
383
================
383
================

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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