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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 2016 Year End Earnings

  • 22% Increase of Fiscal 2016 Diluted Net Income per Common Share available to Common Shareholders to $2.38, versus prior year
  • 22% Increase of Fiscal 2016 Net Income to $18.8 million, versus prior year
  • 11% Increase of Fiscal 2016 Income from Operations to $14.4 million, versus prior year
  • 6% Increase of Fiscal 2016 Net Revenues to $73.4 million, versus prior year
  • Diluted Net Income per Common Share available to Common Shareholders for the Fiscalyear ending June 30, 2016 was $2.38, including a $4.6 million impact of recorded income tax benefits

MELVILLE, NEW YORK, September 19, 2016 - FONAR Corporation (NASDAQ-FONR), The Inventor of MR Scanning™, reported today its fiscal 2016 results for the year ended June 30, 2016. The Company introduced the world’s first commercial MRI scanner in 1980, and is known the world over for its advancements in MRI technology. FONAR’s primary source of income is derived from the management of 24 MRI centers that feature the FONAR UPRIGHT® Multi-Position™ MRI, aka Stand-Up® MRI.

Financial Highlights

Net income increased 22% to $18.8 million for the fiscal year ended June 30, 2016. This compares to $15.4 million for the fiscal year ended June 30, 2015.

Income from operations increased 11% to $14.4 million for the fiscal year ended June 30, 2016. This compares to $12.9 million for the fiscal year ended June 30, 2015.

Basic net income per common share available to common shareholders increased 22% to $2.43 for the fiscal year ended June 30, 2016 as compared to $2.00 for the fiscal year ended June 30, 2015.

Diluted net income per common share available to common shareholders increased 22% to $2.38 for the fiscal year ended June 30, 2016 as compared to $1.95 for the fiscal year ended June 30, 2015.

Net revenues increased 6% to $73.4 million for the fiscal year ended June 30, 2016. This compares to $69.1 million for the fiscal year ended June 30, 2015.

For the year ended June 30, 2016, the revenues from the management of the diagnostic imaging center segment, consisting of patient and management and other fee revenue, and less the provision for bad debt for patient revenue, increased 9% to $62.6 million as compared to $57.6 million one year earlier.

At June 30, 2016, total assets were $84.9 million, as compared to $76.5 million one year earlier.

At June 30, 2016, total cash and cash equivalents were $8.5 million, as compared to $9.4 million one year earlier.

At June 30, 2016, total liabilities were $24.1 million, as compared to $25.7 million one year earlier.

At June 30, 2016, total current liabilities were $20.6 million, as compared to $18.8 million one year earlier.

Significant Events

On January 6, 2016, the Company reported that its subsidiary Health Management Company of America now manages Stand-Up MRI of Great Neck, located in Great Neck, New York, bringing the total number of HMCA-managed centers to 25, of which 18 are located in New York and seven (7) in Florida.

On February 11, 2016, Timothy R. Damadian, Dr. Damadian’s son, became President and Chief Executive Officer of FONAR Corporation. Raymond V. Damadian, M.D., the founder of the Company, remains Chairman of the Board.

On June 30, 2016, Health Management Company of America, of which FONAR is the majority owner, purchased 100% of the equity in Turnkey Services of New York, LLC. Turnkey Services of New York, LLC, by way of several operating leases, had provided HMCA-managed MRI facilities in Bronx, NY, and Brooklyn, NY, with ancillary diagnostic imaging equipment.

Also on June 30, 2016, Health Management Company of America, of which FONAR is the majority owner, purchased 100% of the equity in TK2 Equipment Management, LLC. TK2 Equipment Management, LLC, by way of several operating leases, had provided ancillary diagnostic imaging equipment to an HMCA-managed facility in Queens, NY, and to an HMCA-owned facility in Ft. Lauderdale, FL.

In addition, on June 30, 2016, Health Management Company of America, which had held a 50%-equity in Yonkers Diagnostic Management Services, LLC, purchased the remaining 50%, making the Yonkers entity a wholly-owned subsidiary of Health Management Company of America.

Management Discussion

President and CEO Timothy R. Damadian said, “I am pleased with our six percent (6%) growth rate in net revenue and our eleven percent (11%) increase in income from operations during fiscal 2016. The three acquisitions will add to net income, thereby contributing to the financial stability of the Company. We will continue to seek additional opportunities consistent with our growth strategy.”

Chairman of the Board Raymond V. Damadian, M.D. said, “I am grateful for the current state of the Company. Since Fiscal 2011, FONAR’s revenues have grown 121 percent and we’ve been profitable every quarter. As Timothy continues to execute his proven business strategy, I am confident of a favorable future for patients, employees and shareholders."

About FONAR
FONAR, The Inventor of MR Scanning™, is located in Melville, NY, 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. FONAR’s signature product is the FONAR UPRIGHT® Multi-Position™ 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 detects patient problems that other MRI scanners cannot because they are lie-down and ”weightless” only scanners. The patient-friendly UPRIGHT® MRI has a near-zero patient claustrophobic rejection rate. 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 watching TV.

FONAR has new works-in-progress technology for visualizing and quantifying the flow of cerebrospinal fluid (CSF) which circulates throughout the brain and vertebral column at the rate of 32 quarts per day. This imaging and quantifying of the dynamics of this vital life-sustaining physiology of the body’s neurologic system has been made possible first by FONAR’s introduction of the MRI and now by this latest works-in-progress method for quantifying CSF in all the normal positions of the body, particularly in its upright flow against gravity. Patients with whiplash or other neck injuries are among those who will benefit from this new understanding.

FONAR’s substantial list of patents includes recent patents for its technology enabling full weight-bearing MRI imaging of all the gravity sensitive regions of the human anatomy, especially the brain, extremities and spine. FONAR’s UPRIGHT® Multi-Position™ MRI is the only scanner licensed under these patents.

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.

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FONAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

ASSETS

 
June 30,
 
2016
2015
Current Assests:
   
Cash and cash equivalents      
$8,528,309
$9,448,798
Accounts receivable – net of allowances for doubtful accounts of $284,279 and $362,362 at June 30, 2016 and 2015, respectively
4,370,155
3,790,981
Medical receivables –net of allowances for doubtful accounts of $17,451,782 and $15,459,156 at June 30, 2016 and 2015, respectively
10,126,397
9,082,319
Management and other fees receivable – net of allowances for doubtful accounts of $13,069,702 and $13,271,651 at June 30, 2016 and 2015, respectively
15,637,831
14,057,962
Management and other fees receivable – related party medical practices – net of allowances for doubtful accounts of $ 393,047 and $403,047 at June 30, 2016 and 2015, respectively
4,063,539
3,507,204
Costs and estimated earnings in excess of billings on uncompleted contracts
-
681,660
Inventories
2,074,300
2,191,849
Prepaid expenses and other current assets
759,042
860,040
     
Total Current Assets

45,559,573

43,620,813

Deferred income tax asset
13,042,360
8,423,306
Property and Equipment – Net
14,512,706
12,901,195
Goodwill
3,322,158
1,767,098
Other Intangible Assets – Net
7,719,358
8,950,160
Other Assets
731,451
829,505
Total Assets
$ 84,887,606
================
$ 76,492,077
================

 

FONAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

LIABILITIES

 
June 30,
 
2016
2015
Current Liabilities:
Current portion of long-term debt and capital leases
$ 2,447,693
$ 2,490,146
Accounts payable
1,254,485
1,782,442
Other current liabilities
10,826,793
8,252,633
Unearned revenue on service contracts
4,678,914
4,187,401
Customer deposits
1,198,739
1,937,813
Billings in excess of costs and estimated earnings on uncompleted contracts
206,623
142,217
Total Current Liabilities
20,613,247
18,792,652
Long-Term Liabilities:
Deferred income tax liability
481,779
510,492
Due to related party medical practices
245,041
236,920
Long-term debt and capital leases, less current portion
2,059,236
5,699,302
Other Liabilities
711,996
469,198
Total Long-Term Liabilities
3,498,052
6,915,912
Total Liabilities
24,111,299
25,708,564

 

FONAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

STOCKHOLDERS' EQUITY

 

June 30,

 
2016
2015
Stockholders' Equity:
   
Class A non-voting preferred stock $.0001 par value; 453,000 shares authorized at June 30, 2016 and 2015, 313,438 issued and outstanding at June 30, 2016 and 2015
$ 31
$ 31
Preferred stock $.001 par value; 567,000 shares authorized at June 30, 2016 and 2015, issued and outstanding – none
Common stock $.0001 par value; 8,500,000 shares authorized at June 30, 2016 and 2015, 6,062,809 and 6,062,483 issued at June 30, 2016 and 2015, respectively; 6,051,166 and 6,050,840 outstanding at June 30, 2016 and 2015, respectively
607
607
Class B convertible common stock (10 votes per share) $.0001 par value; 227,000 shares authorized at June 30, 2016 and 2015, 146 issued and outstanding at June 30, 2016 and 2015
Class C common stock (25 votes per share) $.0001 par value; 567,000 shares authorized at June 30, 2016 and 2015, 382,513 issued and outstanding at June 30, 2016 and 2015

38

38
Paid-in capital in excess of par value
173,702,335
175,447,586
Accumulated deficit
(120,624,010)
(136,348,635)
Notes receivable from employee stockholders
(23,879)
(31,495)
Treasury stock, at cost – 11,643 shares of common stock at June 30, 2016 and 2015
(675,390)
(675,390)
Total Fonar Corporation’s Stockholders’ Equity
52,379,732
38,392,742
Noncontrolling interests
8,396,575
12,390,771
Total Stockholders' Equity
60,776,307
50,783,513

Total Liabilities and Stockholders' Equity

$ 84,887,606
================
$ 76,492,077
================

FONAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

 
For the Years Ended June 30,
 
2016
2015 
2014
Revenues
Product sales – net
$1,276,882
$1,820,979
$1,877,932
Service and repair fees – net
9,396,736
9,549,316
10,082,631
Service and repair fees – related parties – net
110,000
110,000
110,000
Patient fee revenue, net of contractual allowances and discounts
32,985,809
28,153,598
24,307,192
Provision for bad debts for patient fee
(14,539,786)
(12,770,249)
(10,333,082)
Management and other fees – net
36,633,230
34,805,627
34,839,969
Management and other fees – related party medical practices – net
7,505,339
7,381,725
7,620,835
Total Revenues - Net
73,368,210
69,050,996
68,505,477
Costs and Expenses
Costs related to product sales
1,254,328
1,882,230
1,067,120
Costs related to service and repair fees
2,148,143
2,189,373
2,496,985
Costs related to service and repair fees – related parties
25,147
25,220
27,242
Costs related to patient fee revenue
9,418,935
7,939,524
7,670,484
Costs related to management and other fees
21,949,583
20,970,116
20,851,065
Costs related to management and other fees – related party medical practices
4,074,762
5,397,818
5,134,553
Research and development
1,631,846
1,812,398
1,760,821
Selling, general and administrative, inclusive of compensatory element of stock issuances of $2,006, $53,200 and $223,000 for the years ended June 30, 2016, 2015 and 2014, respectively
18,711,799
13,459,408
15,388,239
Provision for bad debts
(201,949)
2,475,032
1,806,299
Total Costs and Expenses
59,012,594
56,151,119
56,202,808
Income from Operations
14,355,616
12,899,877
12,302,669
Other Income and (Expenses):
     
Interest expense
(262,193)
(702,095)
(884,541)
Investment income
224,263
225,270
238,928
Other income (expense) – net
190,560
394,810
(608,599)
Income before benefit for income taxes and noncontrolling interests
14,508,246
12,817,862
11,048,457
Benefit for Income Taxes
4,287,271
2,612,521
2,348,312
Net Income
$18,795,517
$15,430,383
$13,396,769
Net Income – Noncontrolling Interests
(3,070,892)
(2,519,732)
(3,000,639)
Net Income – Attributable to FONAR
$15,724,625
================
$12,910,651
===============
$10,396,130
================
Net Income Available to Common Stockholders
$14,702,834
================
$12,071,670
===============
$9,720,030
================
Net Income Available to Class A Non-Voting Preferred Stockholders
$761,561
================
$625,309
===============
$503,911
================
Net Income Available to Class C Common Stockholders
$260,230
================
$213,672
===============
$172,189
================
Basic Net Income Per Common Share Available to Common Stockholders
$2.43
================
$2.00
===============
$1.62
================
Diluted Net Income Per Common Share Available to Common Stockholders
$2.38
================
$1.95
===============
$1.58
================
Basic and Diluted Income Per Share – Common C
$0.68
================
$0.56
===============
$0.45
================
Weighted Average Basic Shares Outstanding – Common Stockholders
6,050,893
================
6,050,632
===============
6,009,822
================
Weighted Average Diluted Shares Outstanding – Common Stockholders
6,178,397
================
6,178,136
===============
6,137,326
================
Weighted Average Basic and Diluted Shares Outstanding – Class C Common
382,513
================
382,513
===============
382,513
================

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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