FONAR Announces Fiscal 2015 2nd Quarter Financial Results
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 |
— |
|
|
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 |
|
|
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 |
|
|
1,767 |
1,767 |
Other intangible assets – net
|
9,933 |
10,509 |
|
|
868 |
922 |
| Total Assets |
$ 79,040
================ |
$ 76,790
================ |
|
|
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
|
|
|
$ 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 |
|
|
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 |
|
|
359 |
374 |
Selling, general and administrative
|
3,824 |
4,352 |
|
|
273 |
(124) |
|
|
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
|
|
|
$ 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 |
|
|
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 |
|
|
756 |
769 |
Selling, general and administrative
|
7,403 |
8,089 |
|
|
779 |
(218) |
|
|
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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