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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 3rd Quarter Fiscal 2014 & Nine Month Earnings Report

  • Third Quarter Fiscal 2014 Net Revenues increased 46% to $17.0 million over Third Quarter Fiscal 2013

  • Third Quarter Fiscal 2014 Diluted Net Income per common share available to common shareholders was $0.26, an increase of 53% over Third Quarter Fiscal 2013

  • Third Quarter Fiscal 2014 Net Income was $2.1 million, an increase of 36% over Third Quarter Fiscal 2013

  • Record sixteenth (16) straight quarter of positive net income and income from operations of which most recent eleven (11) were greater than $1.5 million

MELVILLE, NEW YORK, May 15, 2014 - FONAR Corporation (NASDAQ-FONR), The Inventor of MR Scanning™, reported its financial position for the period ended March 31, 2014. The Company’s two industry segments are: development, manufacturing and servicing of the UPRIGHT® Multi-Position™ MRI and management of Stand-Up® MRI (UPRIGHT® MRI) centers. The Company is known as the first Company to invent and manufacture an MRI (Magnetic Resonance) scanner. Leading the list of FONAR’s most recent patented inventions is its technology enabling full weight-bearing MRI imaging, in contrast to the conventional weightless recumbent MRI imaging. This enables, for the first time, full weight-bearing imaging of all the gravity sensitive regions of the human anatomy, e.g. the spine, brain, hip, knee, ankle, foot, shoulder, and pelvis. 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 full weight-bearing UPRIGHT® position.

Statement of Operations Items

Revenues increased 67% to $51.5 million for the nine month period ended March 31, 2014 from $30.8 million for the corresponding nine month period one year earlier. Revenues for the third fiscal quarter ended March 31, 2014 were $17.0 million versus $11.6 million for the corresponding quarter one year earlier.

Net Income increased 77% to $8.8 million for the nine month period ended March 31, 2014 from $5.0 million for the corresponding nine month period one year earlier. Net Income for the third fiscal quarter ended March 31, 2014 was $2.1 million versus $1.6 million for the corresponding nine month period one year earlier.

Income from Operations increased 85% to $9.7 million for the nine month period ended March 31, 2014 from $5.2 million for the corresponding nine month period one year earlier. Income from Operations for the third fiscal quarter ended March 31, 2014 was $2.3 million, an increase of 42% from $1.6 million for the corresponding nine month period one year earlier.

Diluted net income per common share available to common shareholders increased 60% to $0.96 for the nine month period ended March 31, 2014 from $0.60 for the corresponding nine month period one year earlier. Diluted net income per common share available to common shareholder for the third fiscal quarter ended March 31, 2014 was $0.26 versus $0.17 for the corresponding quarter one year earlier, an increase of 53%.

Balance Sheet Items

Total assets at the quarter ended March 31, 2014 were $76.1 million, as compared to $73.2 million at June 30, 2013.

Total liabilities at the quarter ended March 31, 2014 were $32.7 million, as compared to $35.4 million at June 30, 2013.

Total current assets at the quarter ended March 31, 2014 were $43.4 million, as compared to $37.9 million at June 30, 2013.

Total cash and cash equivalents March 31, 2014, were $9.6 million, as compared to $7.9 million at June 30, 2013.

Total current liabilities at the quarter ended March 31, 2014 were $22.2 million, as compared to $21.1 million at June 30, 2013.

Management Discussion

Raymond V. Damadian, president and chairman of Fonar Corporation, said, “We have had increased pressure due to cuts in MRI reimbursements brought about by the Affordable Care Act. Thanks to the uniqueness of our UPRIGHT® full weight-loaded MRI scans, the steadily increasing volumes at the Stand-Up® MRI scanning centers provide significant relief.

“In March, the scan volume at the MRI scanning centers we manage was 15% higher than that of March 2013, setting a new company record,” said Dr. Damadian. “I am very pleased.”

“We expect to facilitate growth of imaging centers through acquisitions, supporting new UPRIGHT® imaging centers, and increasing scan volume at our existing locations by continuing to educate the medical community about the unique diagnostic advantages of UPRIGHT® Multi-Position™ full weight-loaded MRI,” added Dr. Damadian.

Significant Events

The Company will hold its annual meeting on June 23, 2014. Dr. Damadian has issued his annual shareholder letter which can be seen on the Company’s Web site at www.fonar.com/shareholder_letter.htm.

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

March 31,
2014
(UNAUDITED) 
June 30,
2013 *
   
Cash and cash equivalents      
$ 9,589
$ 7,871
Accounts receivable - net
4,444
4,444
Accounts receivable - related party
30
Medical receivables – net
8,924
8,126
Management and other fees receivable - net
12,675
11,466
Management and other fees receivable - related medical practices - net
3,463
2,382
Inventories
2,510
2,077
Prepaid expenses and other current assets
1,708
1,500
Total Current Assets

43,343

37,866

Property and Equipment - net
16,045

17,524

Goodwill

1,767
1,767
Other Intangible Assets – Net
11,043
11,904
Deferred income tax asset
2,936
2,936
Other Assets
1,013
1,154
Total Assets
$ 76,147
================
73,151
================

* Condensed from audited financial statements

CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS AND SHARES IN THOUSANDS,EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)

LIABILITIES AND STOCKHOLDERS’ EQUITY


March 31,
2014

June 30,
2013 *

Current Liabilities:
   
Current portion of long-term debt and capital leases
$ 2,967
2,886
Accounts payable
2,863
2,752
Other current liabilities
9,665
8,636
Unearned revenue on service contracts
4,873
4,965
Unearned revenue on service contracts - related party
28
Customer advances
1,791
1,858
Income tax payable
20
Total Current Liabilities
22,187
21,117
 
 
Long-Term Liabilities:
 
Due to related medical practices
231
231
Long-term debt and capital leases, less current portion
9,404
12,887
Deferred income tax liability
462
462
Other liabilities
433
654
Total Long-Term Liabilities
10,530
14,234
Total Liabilities
$ 32,717
$ 35,351

* Condensed from audited financial statements

CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS AND SHARES IN THOUSANDS,EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS’ EQUITY (Continued)

 
March 31,
2014
 June 30,
2013 *
STOCKHOLDERS' EQUITY:
   
Class A non-voting preferred stock $.0001 par value; 453 shares authorized at March 31, 2014 and June 30, 2013, 313 issued and outstanding at March 31, 2014 and June 30, 2013
$ —
$ —
Preferred stock $.001 par value; 567 shares authorized at March 31, 2014 and June 30, 2013, issued and outstanding – none
Common Stock $.0001 par value; 8,500 shares authorized at March 31, 2014 and June 30, 2013, 6,037 and 5,981 issued at March 31, 2014 and June 30, 2013, respectively; 6,025 and 5,969 outstanding at March 31, 2014 and June 30, 2013, respectively
1
1
Class B Common Stock (10 votes per share) $ .0001 par value; 227 shares authorized at March 31, 2014 and June 30, 2013, .146 issued and outstanding at March 31, 2014 and June 30, 2013
Class C Common Stock (25 votes per share) $.0001 par value; 567 shares authorized at March 31, 2014 and June 30, 2013, 383 issued and outstanding at March 31, 2014 and June 30, 2013
Paid-in capital in excess of par value
175,023
174,499
Accumulated deficit
(153,336)
(159,655)
Notes receivable from employee stockholders
(41)
(55)
Treasury stock, at cost - 12 shares of common stock at March 31, 2014 and June 30, 2013

(675)
(675)
Total Fonar Corporation Stockholder Equity
20,972
14,115
Noncontrolling interests
22,458
23,685
Total Stockholders' Equity
43,430
37,800

Total Liabilities and Stockholders' Equity

$ 76,147
================
$ 73,151
================

* 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
MARCH 31,
REVENUES
2014  
2013    
Product sales - net
$ 478
$ 416
Service and repair fees - net
2,518
2,867
Service and repair fees - related parties - net
27
27
Patient fee revenue, net of contractual allowances and discounts
6,090
965
Provision for bad debts for patient fee
(2,868)
Management and other fees - net
8,538
5,402
Management and other fees–related medical practices – net
2,257
1,965
Total Revenues - Net
17,040
11,642
COSTS AND EXPENSES
Costs related to product sales
223
498
Costs related to service and repair fees
623
819
Costs related to service and repair fees - related parties
7
8
Costs related to patient fee revenue
1,947
791
Costs related to management and other fees
5,327
2,606
Costs related to management and other fees - related medical practices
1,318
900
Research and development
360
381
Selling, general and administrative
3,935
3,774
Provision for bad debts
981
235
Total Costs and Expenses
14,721
10,012
Income From Operations
2,319
1,630
Interest Expense
(203)
(79)
Investment Income
57
55

Other Income

39
Income Before Provision for Income Taxes
2,212
1,606
Provision for Income Taxes
65
25

Net Income

2,147
1,581

Net Income - Non Controlling Interests

(408)

(505)

Net Income - Controlling Interests
$ 1,739
================
$ 1,076
================
Net Income Available to Common Stockholders
$ 1,625
================
$ 1,005
================
Net Income Available to Class A Non-Voting Preferred Stockholders
$ 85
================
$ 53
================
Net Income Available to Class C Common Stockholders
$ 29
================
$ 18
================
Basic Net Income Per Common Share Available to Comm
on Stockholders
$ 0.27
================
$ 0.17
================
Diluted Net Income Per Common Share Available to Common Stockholders
$ 0.26
================
$ 0.17
================
Basic and Diluted Income Per Share - Common C
$ 0.08
================
$ 0.05
================

Weighted Average Basic Shares Outstanding – Common
Stockholders

6,022
================
5,937
================

Weighted Average Diluted Shares Outstanding

6,150
================
6,065
================
Weighted Average Basic Shares Outstanding – Class C
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 NINE MONTHS ENDED
MARCH 31,
REVENUES
2014   
2013    
Product sales - net
$ 1,261
$ 2,536
Service and repair fees - net
7,578
8,341
Service and repair fees - related parties - net
83
83
Patient fee revenue, net of contractual allowances and discounts
17,811
965
Provision for bad debts for patient fee
(7,130)
Management and other fees - net
24,955
12,946
Management and other fees–related medical practices – net
6,923
5,895
Total Revenues - Net
51,481
30,766
COSTS AND EXPENSES
Costs related to product sales
902
2,457
Costs related to service and repair fees
1,755
2,579
Costs related to service and repair fees - related parties
19
26
Costs related to patient fee revenue
5,823
791
Costs related to management and other fees
15,591
7,013
Costs related to management and other fees - related medical practices
3,808
2,568
Research and development
1,128
1,031
Selling, general and administrative
12,024
8,338
Provision for bad debts
763
735
Total Costs and Expenses
41,813
25,538
Income From Operations
9,668
5,228
Interest Expense
(682)
(258)
Investment Income
178
174

Other Expense

(113)
(13)
Income Before Provision for Income Taxes
9,051
5,131
Provision for Income Taxes
235
152

Net Income

8,816
4,979

Net Income - Non Controlling Interests

(2,497)

(1,103)

Net Income - Controlling Interests
$ 6,319
================
$ 3,876
================
Net Income Available to Common Stockholders
$ 5,907
================
$ 3,621
================
Net Income Available to Class A Non-Voting Preferred Stockholders
$ 307
================
$ 190
================
Net Income Available to Class C Common Stockholders
$ 105
================
$ 65
================
Basic Net Income Per Common Share Available to Common Stockholders
$ 0.98
================
$ 0.61
================
Diluted Net Income Per Common Share Available to Common Stockholders
$ 0.96
================
$ 0.60
================
Basic and Diluted Income Per Share - Common C
$ 0.27
================
$ 0.17
================

Weighted Average Basic Shares Outstanding

6,002
================
5,921
================

Weighted Average Diluted Shares Outstanding

6,130
================
6,049
================
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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