Daxor Corporation Announces Third Quarter 2011 Earnings

NEW YORK, NY--(Marketwire - Nov 14, 2011) - Daxor Corporation (NYSE Amex: DXR)

		Three Months Ended								Nine Months Ended
		September 30, 2011				September 30, 2010				September 30, 2011				September 30, 2010
Total Operating Revenue		$	340,907			$	453,281			$	1,076,515			$	1,217,885
Total Costs & Expenses			1,601,979				1,738,146				5,857,321				5,349,976
Loss From Operations			(1,261,072	)			(1,284,865	)			(4,780,806	)			(4,132,091	)
Total Other (Loss) Income			(5,767,733	)			5,688,781				(5,001,125	)			9,176,090
(Loss) Income Before Income Taxes			(7,028,805	)			4,403,916				(9,781,931	)			5,043,999
Income Tax (Benefit) Expense			(2,845,136	)			1,799,112				(4,087,480	)			2,343,258
Net (Loss) Income		$	(4,183,669	)		$	2,604,804			$	(5,694,451	)		$	2,700,741
Weighted Average Number of Shares Outstanding-Basic and Diluted			4,219,026				4,232,691				4,223,504				4,240,753
(Loss) Income Per Share-Basic and Diluted		$	(0.99	)		$	0.62			$	(1.35	)		$	0.64

Daxor Corporation, (NYSE Amex: DXR), a medical instrumentation and biotechnology company, today announced earnings for the third quarter of 2011. The Company had a net loss per share of $(0.99) during the current quarter versus net income of $0.62 per share for the quarter ended September 30, 2010. Other income includes realized gains on sales of securities and options and dividend income of $899,297 for the current quarter versus $3,006,188 for the same period in 2010. The Company recorded a loss during the current quarter of $(6,608,910) from the marking to market of short positions in options versus a gain of $2,735,102 for the same period in 2010. The Company continues to be dependent upon income from investments to offset losses from operations.

Income tax benefit for the three months ended September 30, 2011 consists of reductions of $498,367 for income taxes, $60,000 for personal holding company tax and $2,286,769 for deferred taxes primarily attributable to the loss from the marking to market value of short positions. Income tax expense for the three months ended September 30, 2010 consists of accruals of $782,792 for income taxes, $80,943 for personal holding company tax and $935,377 for deferred taxes.

For the three months ended September 30, 2011 total operating revenues decreased by $112,374 or 25% to $340,907 from $453,281 in 2010. This is mainly attributable to no Blood Volume Analyzers being sold during the current quarter versus one machine sold during the same period in 2010 for $65,000 and a decline of $36,469 in kit sales. The drastic reduction of 33% in Medicare reimbursement for diagnostic radiopharmaceutical products such as Daxor's Volumex Kit that became effective in 2008 continues to negatively impact the sale of Blood Volume Analyzers and Volumex Kits.

Company Management believes that this reduction in reimbursement for the Volumex Kit will ultimately prove to be self defeating because it is likely to result in the discharge of inadequately treated congestive heart failure patients from hospitals. This will in turn lead to higher rates of readmission and increased death rates in congestive heart failure patients which could otherwise be avoided.

The Company engages in short-term trial agreements to allow customers to begin utilization of the instrument and to become familiar with the clinical benefits of a measured blood volume prior to purchase of the instrument.

Total costs and operating expenses for the third quarter of 2011 decreased by $136,167 or 8% to $1,601,979 from $1,738,146 for the third quarter of 2010 primarily due to reductions of $33,412 in professional fees, $12,910 in laboratory supplies and $37,652 in payroll and related expenses. The Company incurred $22,830 of Legal Expenses during the third quarter for the SEC Administrative Proceeding.

The Company had a net loss of per share of $(1.35) during the current nine month period versus net income of $0.64 for the same period in 2010. Other income includes realized gains on sales of securities and options and dividend income of $7,996,897 for the current nine month period versus $11,659,501 for the same period in 2010. The Company recorded a loss during the nine month period of $(12,764,473) from the marking to market of short positions in options versus a loss of $(2,355,785) for the same period in 2010.

Income tax benefit for the nine months ended September 30, 2011 consists of accruals of $484,615 for income tax and $80,000 for personal holding company tax which were completely offset by a reduction of $4,652,095 for deferred taxes primarily attributable to the loss from the marking to market value of short positions. Income tax expense for the nine months ended September 30, 2010 consisted of accruals $2,755,082 of income tax and $870,496 of personal holding company tax which were partially offset by a reduction of $1,282,320 for deferred taxes.

The losses from marking short positions to market value are not deductible for tax purposes. This has caused Daxor to record a federal tax liability at September 30, 2011 of approximately $650,000 despite pretax losses for the current nine month period of $(7,028,805) and an income tax benefit of $(2,845,136). As part of our normal year end planning process, Company management will review the portfolio holdings in November and December and determine which positions should be reduced in order to rebalance the portfolio and eliminate or greatly reduce tax liability for the year ending December 31, 2011.

For the nine months ended September 30, 2011, consolidated operating revenues decreased to $1,076,515 from $1,217,885 for the same period in 2010, a decrease of $141,370 or 12% which was mainly due to reductions of $65,000 in revenue from sales of the Blood Volume Analyzer and $44,788 from Volumex Kits. There were no Blood Volume Analyzers sold during the nine months ended September 30, 2011 versus one for the same period in 2010.

Total costs and operating expenses for the nine months ended September 30, 2011 were $5,857,321 versus $5,349,976 for the same period in 2010 for an increase of $507,345 or 9%. Professional fees were $846,977 higher during the current nine month period versus the same period in 2010.There were $1,036,930 of Legal Expenses incurred during the nine months ended September 30, 2011 for the SEC Administrative Proceeding.

The Company presented over 500 exhibits during the proceeding and management feels strongly that this extensive documentation of its history of operations demonstrated that it is primarily an operating medical instrumentation and biotechnology company and not primarily an investment company.

On August 31, 2011, the Administrative Law Judge of the SEC issued his decision finding Daxor to be an Investment Company as defined by the Investment Company Act of 1940.

The SEC proceeding and the options being considered by the Board of Directors and Company management is described in greater detail in the Company's Form 10-Q for the Quarter ended September 30, 2011 which will be filed later today.

The Company has maintained and increased spending on marketing and research and development even as operating losses have increased. The Company has disclosed in previous public filings that it is dependent upon earnings from its investment portfolio in order to continue these efforts. Dr. Joseph Feldschuh, the Company's President and Chief Executive Officer has sole responsibility for investment decisions with respect to the Company's investment portfolio.

At September 30, 2011, the Company had total assets of $88,252,642 with total stockholders' equity of $37,622,052 versus total assets of $91,195,415 and $46,995,044 of stockholders' equity at December 31, 2010. The decrease in stockholders' equity is mainly due to the net loss of $(5,694,451) during the current period.

The Company is committed to continuing its research and development program as part of the ongoing effort to develop products that are complementary to its current product line. There were 60 Blood Volume Analyzers in service at September 30, 2011 versus 56 instruments at September 30, 2010.

Gains on sales of securities and options and dividend income were $7,996,897 or 24.6% of average invested capital for the nine months ended September 30, 2011 and $11,659,501 or 37.2% for the nine months ended September 30, 2010.

The Company will be paying a dividend of $0.10 per share on November 30, 2011 to shareholders of record as of November 18, 2011. The Company also paid a dividend of $0.15 per share on June 16, 2011.

In 2008, Management instituted a policy of paying dividends when funds were available.

For more detailed information on our financial results, please refer to our Form 10-Q for the quarter ended September 30, 2011 which will be filed later today.

The BVA-100 Blood Volume Analyzer produced and marketed by Daxor Corporation provides key information that can be used to diagnose and treat various medical conditions including congestive heart failure, hypertension, anemia, blood loss during surgery, trauma, and shock (collapse of blood pressure). At the present time, physicians must treat these conditions by guessing whether or not they are due to volume expansions or contractions. The Blood Volume Analyzer allows precise quantitation of patients' total blood volume and red blood cell volume, which takes the guesswork out of this process. Appropriate therapies can then be employed to correct excesses or deficits in volume, leading to better outcomes for patients.

The passage of the Patient Protection and Affordable Care Act (H.R. 3590) in March 2010 gave Centers for Medicare and Medicaid Services (CMS) the authority to penalize hospitals for excess readmission rates in heart failure, acute myocardial infarction, and pneumonia beginning in 2013. Hospitals that readmit heart failure patients within 30 days of discharge will not be reimbursed. This has important financial implications, as it effectively penalizes hospitals for not optimally treating patients during their initial visits.

This highlights a significant opportunity for the BVA-100, which may be used to identify patients at higher risk of mortality due to inadequate treatment of blood volume overload. This may help to drive increased utilization of the BVA-100: Medicare reimburses hospitals on the basis of diagnostic related guidelines (DRGs). Under the current system, when a patient is admitted for heart failure, the hospital is paid the same amount of money whether the patient is hospitalized for 2 days or for 10 days. Not surprisingly, the hospital's physicians are under great pressure to discharge the patient as quickly as possible. This has produced a situation in which between 20%-30% of heart failure patients are readmitted within 30 days or less.