SOURCE: FONAR Corporation

Fonar Corporation

May 10, 2016 08:19 ET

FONAR Announces 3rd Quarter and Nine Months Financial Results for Fiscal 2016

MELVILLE, NY--(Marketwired - May 10, 2016) - FONAR Corporation (NASDAQ: FONR)

  • Third Quarter Fiscal 2016 Net Revenues increased 9% to $18.6 million versus the same period a year earlier.
  • Third Quarter Fiscal 2016 Diluted Net Income Per Common Share Available to Common Stockholders increased 45% to $0.45 per share versus the same period a year earlier.
  • At March 31, 2016 Cash and Cash Equivalents increased 39% to $13.1 million from $9.4 million at June 30, 2015.
  • Third Quarter Fiscal 2016 Income from Operations increased 54% to $4.1 million versus the same period a year earlier.
  • Third Quarter Fiscal 2016 Net Income increased 54% to $3.9 million versus the same period a year earlier.
  • Company appoints Timothy R. Damadian as President and CEO of FONAR.
  • Company announces date of annual shareholder's meeting: June 13, 2016.

Fonar Corporation (NASDAQ: FONR), The Inventor of MR Scanning™, reported its fiscal 2016 third quarter and nine-months results for the period ended March 31, 2016. FONAR, a leader in the MRI industry, is the first to manufacture an MRI (Magnetic Resonance Imaging) scanner. FONAR's substantial list of patents includes recent patents for its technology enabling full weight-bearing MRI imaging in all the gravity-sensitive regions of the human anatomy, especially the brain, extremities, and spine.

The Company's two industry segments: HMCA, which manages 25 FONAR-equipped centers (all but one are equipped with UPRIGHT® Multi-Position™ MRIs); and the development, manufacturing and servicing of the FONAR scanners. Its premier MRI product, the FONAR UPRIGHT® Multi-Position™ MRI scanner, is the world's only MRI scanner licensed under FONAR's multiple UPRIGHT® Multi-Position™ MRI patents to scan all the patient's body parts in their normal fully weight-bearing UPRIGHT® positions.

Statement of operation items

Net Revenues for the quarter ended March 31, 2016 increased 9% to $18.6 million as compared to $17.1 million for the corresponding quarter one year earlier.

Net Revenues for the nine-month period ended March 31, 2016 increased 5% to $54.6 million as compared to $52.2 million for the corresponding nine-month period one year earlier.

Net Income for the quarter ended March 31, 2016 increased 54% to $3.9 million as compared to $2.5 million for the corresponding quarter one year earlier.

Net Income for the nine-month period ended March 31, 2016 increased 24% to $11.5 million as compared to $9.2 million for the corresponding nine-month period one year earlier.

Income from Operations for the quarter ended March 31, 2016 increased 54% to $4.1 million as compared to $2.7 million for the corresponding quarter one year earlier.

Income from Operations for the nine-month period ended March 31, 2016 increased 23% to $11.9 million as compared to $9.7 million for the corresponding nine-month period one year earlier.

Diluted net income per common share available to common shareholders for the quarter ended March 31, 2016 increased 45% to $0.45 as compared to $0.31 for the corresponding quarter one year earlier.

Diluted net income per common share available to common shareholders for the nine-month period ended March 31, 2016 increased 30% to $1.42 as compared to $1.09 for the corresponding nine-month period one year earlier.

Balance sheet items

Cash and cash equivalents increased 39% to $13.1 million at March 31, 2016, from $9.4 million at June 30, 2015.

Total current assets at March 31, 2016 were $50.9 million, as compared to $43.6 million at June 30, 2015.

Total assets at March 31, 2016 were $82.0 million, as compared to $76.5 million at June 30, 2015.

Total current liabilities at March 31, 2016 were $18.6 million, as compared to $18.8 million at June 30, 2015.

Total liabilities at March 31, 2016 were $23.9 million, as compared to $25.7 million at June 30, 2015.

Total stockholder's equity at March 31, 2016 was $58.1 million, as compared to $50.8 million at June 30, 2015.

Significant Events

On February 8, 2016, The Company announced that Timothy R. Damadian was named President and Chief Executive Officer of Fonar Corporation.

Tim Damadian joined FONAR as a consultant in 2010, at which point FONAR embraced his vision and plan for improving the performance of FONAR's management subsidiary, HMCA. Over the next five years FONAR's revenue more than doubled (from $31.8 million for the year ending June 30, 2010 to $69.1 million for the year ending June 30, 2015) -- an achievement primarily attributable to the success of HMCA. Over the same period Net (Loss) Income per Common Share went from ($0.61) to $2.00. (For more details visit: www.fonar.com/news/020816.htm)

Raymond V. Damadian, the founder of Fonar Corporation continues his role as Chairman of the Board. Dr. Damadian founded FONAR in 1978 after making the key discovery that ushered in the MRI industry. Since then, the Company made many of the inventions used today on MRI scanners as well as manufacturing approximately 400 MRI scanners.

The Company will hold its annual meeting on June 13, 2016. 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.

Management Discussion

Timothy R. Damadian, president and CEO of Fonar Corporation, said, "I am humbled by my appointment as president and CEO, and I look forward to serving the Company and its shareholders to the best of my ability.

"The financial results of this quarter are very good. Year-over-year comparisons show a 54% increase in Net Income. Also, our revenues and Net Income from our MRI management subsidiary, HMCA, show consistent, gradual growth."

Mr. Damadian continued, "Although many MRI centers across the country are having a very difficult time dealing with ever-declining reimbursement rates, our centers have endured, even thrived, by increasing scan volume, which is largely attributable to the enormous appeal of the FONAR STAND-UP® MRI.

"Our goal for the future is to continue to increase profitability while maintaining a strong cash position. This can be achieved not only by improving profitability at existing centers but also by establishing new sites and through strategic acquisitions."

Raymond V. Damadian, M.D., Chairman of Fonar Corporation, said, "I am very pleased with the seamless transition that has occurred for Timothy as he assumed the office of president and CEO. I am confident that he will guide FONAR to a sustained profitable future.

"A wonderful advantage of Timothy assuming primary management duties is my being able to focus on research into the important area of neck injury and its impact on brain health. The UPRIGHT® Multi-Position MRI is a marvelous scanner that is able to see the neck in its weight-bearing position. We often see patients' neck problems missed by the recumbent-only MRI scanners. In addition, we have developed new technology for viewing the flow of cerebral spinal fluid (CSF) as it circulates in and around the brain. We are able to see CSF leakage and CSF pooling, and can often trace these problems to neck injuries. We can do all of this on our UPRIGHT® Multi-Position™ MRI (aka STAND-UP® MRI)."

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 stellar product is the FONAR 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 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 due to this latest works-in-progress for quantifying CSF in all the normal positions of the body, particularly in its upright flow against gravity. The type of patient that will benefit from this technology includes those with various types of dementia such as former NFL quarterback Jim McMahon.

FONAR's substantial list of patents includes 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 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.

 
FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts and shares in thousands, except per share amounts)
(UNAUDITED)
 
ASSETS
 
    March 31,
2016
  June 30,
2015 *
             
Cash and cash equivalents   $ 13,147   $ 9,449
             
Accounts receivable - net     4,326     3,791
             
Accounts receivable - related party     30     -
             
Medical receivable - net     10,097     9,082
             
Management and other fees receivable - net     15,901     14,058
Management and other fees receivable - related medical practices - net     4,059     3,507
Costs and estimated earnings in excess of billing on uncompleted contracts     279     682
             
Inventories     2,234     2,192
             
Prepaid expenses and other current assets     834     860
             
Total Current Assets     50,907     43,621
             
Deferred income tax asset     8,423     8,423
             
Property and equipment - net     11,877     12,901
             
Goodwill     1,767     1,767
             
Other intangible assets - net     8,066     8,950
             
Other assets     972     830
             
Total Assets   $ 82,012   $ 76,492
*Condensed from audited financial statements.
 
 
 
 
FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts and shares in thousands, except per share amounts)
(UNAUDITED)
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
    March 31,
2016
  June 30,
2015 *
Current Liabilities:            
               
  Current portion of long-term debt and capital leases   $ 2,455   $ 2,490
               
  Accounts payable     1,345     1,783
               
  Other current liabilities     8,638     8,253
               
  Unearned revenue on service contracts     4,350     4,187
               
  Unearned revenue on service contracts - related party     28     -
               
  Customer advances     1,511     1,938
  Billings in excess of costs and estimated earnings on uncompleted contracts     255     142
                 
    Total Current Liabilities     18,582     18,793
             
Long-Term Liabilities:            
               
  Deferred income tax liability     510     510
               
  Due to related medical practices     237     237
  Long-term debt and capital leases, less current portion     3,863     5,699
               
  Other liabilities     718     469
                 
    Total Long-Term Liabilities     5,328     6,915
                 
    Total Liabilities     23,910     25,708
*Condensed from audited financial statements.
 
 
   
   
FONAR CORPORATION AND SUBSIDIARIES  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(Amounts and shares in thousands, except per share amounts)  
(UNAUDITED)  
   
LIABILITIES AND STOCKHOLDERS' EQUITY (Continued)  
    March 31, 2016     June 30, 2015 *  
STOCKHOLDERS' EQUITY:                
Class A non-voting preferred stock $.0001 par value; 453 shares authorized at March 31, 2016 and June 30, 2015, 313 issued and outstanding at March 31, 2016 and June 30, 2015   $ -     $ -  
Preferred stock $.001 par value; 567 shares authorized at March 31, 2016 and June 30, 2015, issued and outstanding - none     -       -  
Common Stock $.0001 par value; 8,500 shares authorized at March 31, 2016 and June 30, 2015, 6,062 issued at March 31, 2016 and June 30, 2015; 6,051 outstanding at March 31, 2016 and June 30, 2015     1       1  
Class B Common Stock (10 votes per share) $ .0001 par value; 227 shares authorized at March 31, 2016 and June 30, 2015, .146 issued and outstanding at March 31, 2016 and June 30, 2015     -       -  
Class C Common Stock (25 votes per share) $.0001 par value; 567 shares authorized at March 31, 2016 and June 30, 2015, 383 issued and outstanding at March 31, 2016 and June 30, 2015     -       -  
Paid-in capital in excess of par value     175,448       175,448  
Accumulated deficit     (126,989 )     (136,349 )
Notes receivable from employee stockholders     (26 )     (32 )
Treasury stock, at cost - 12 shares of common stock at March 31, 2016 and June 30, 2015    
 (675
)    
(675
)
Total Fonar Corporation Stockholder Equity     47,759       38,393  
Noncontrolling interests     10,343       12,391  
Total Stockholders' Equity     58,102       50,784  
Total Liabilities and Stockholders' Equity   $ 82,012     $ 76,492  
*Condensed from audited financial statements.
 
 
   
   
FONAR CORPORATION AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF INCOME  
(Amounts and shares in thousands, except per share amounts)  
   
(UNAUDITED)  
   
    FOR THE THREE MONTHS ENDED MARCH 31  
REVENUES   2016     2015  
  Product sales - net   $ 20     $ 160  
  Service and repair fees - net     2,406       2,299  
  Service and repair fees - related parties - net     27       27  
  Patient fee revenue, net of contractual allowances and discounts     8,695       7,284  
  Provision for bad debts for patient fee     (3,830 )     (3,201 )
  Management and other fees - net     9,394       8,653  
  Management and other fees - related medical practices - net     1,907       1,874  
    Total Revenues - Net     18,619       17,096  
COSTS AND EXPENSES                
  Costs related to product sales     263       352  
  Costs related to service and repair fees     552       630  
  Costs related to service and repair fees - related parties     6       7  
  Costs related to patient fee revenue     2,549       2,044  
  Costs related to management and other fees     5,649       5,285  
  Costs related to management and other fees - related medical practices     1,045       1,284  
  Research and development     395       360  
  Selling, general and administrative     4,533       3,706  
  Provision for bad debts     (470 )     762  
    Total Costs and Expenses     14,522       14,430  
Income From Operations     4,097       2,666  
Interest Expense     (127 )     (169 )
Investment Income     56       52  
Income Before Provision for Income Taxes and Noncontrolling Interests     4,026       2,549  
Provision for Income Taxes     145       30  
Net Income     3,881       2,519  
Net Income - Noncontrolling Interests     (876 )     (500 )
Net Income - Controlling Interests   $ 3,005     $ 2,019  
Net Income Available to Common Stockholders   $ 2,810     $ 1,888  
Net Income Available to Class A Non-Voting Preferred Stockholders   $ 145     $ 98  
Net Income Available to Class C Common Stockholders   $ 50     $ 33  
Basic Net Income Per Common Share Available to Common Stockholders   $ 0.46     $ 0.31  
Diluted Net Income Per Common Share Available to Common Stockholders   $ 0.45     $ 0.31  
Basic and Diluted Income Per Share-Class C Common   $ 0.13     $ 0.09  
Weighted Average Basic Shares Outstanding-Common Stockholders     6,050       6,050  
Weighted Average Diluted Shares Outstanding - Common Stockholders     6,178       6,178  
Weighted Average Basic Shares Outstanding - Class C Common     383       383  
Weighted Average Diluted Shares Outstanding - Class C Common     383       383  
                 
                 
   
   
FONAR CORPORATION AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF INCOME  
(Amounts and shares in thousands, except per share amounts)  
(UNAUDITED)  
    FOR THE NINE MONTHS ENDED MARCH 31,  
REVENUES   2016     2015  
  Product sales - net   $ 780     $ 1,806  
  Service and repair fees - net     6,970       7,288  
  Service and repair fees - related parties - net     83       83  
  Patient fee revenue, net of contractual allowances and discounts     24,596       20,700  
  Provision for bad debts for patient fee     (10,608 )     (9,244 )
  Management and other fees - net     27,180       26,004  
  Management and other fees - related medical practices - net     5,598       5,536  
    Total Revenues - Net     54,599       52,173  
COSTS AND EXPENSES                
  Costs related to product sales     939       1,674  
  Costs related to service and repair fees     1,542       1,611  
  Costs related to service and repair fees - related parties     18       18  
  Costs related to patient fee revenue     7,015       5,845  
  Costs related to management and other fees     16,664       15,665  
  Costs related to management and other fees - related medical practices     3,116       3,893  
  Research and development     1,243       1,116  
  Selling, general and administrative     12,425       11,108  
  Provision for bad debts     (300 )     1,540  
    Total Costs and Expenses     42,662       42,470  
Income From Operations     11,937       9,703  
Interest Expense     (416 )     (545 )
Investment Income     164       173  
Other Income (Expense)     1       (2 )
Income Before Provision for Income Taxes and Noncontrolling Interests     11,686       9,329  
Provision for Income Taxes     235       99  
Net Income     11,451       9,230  
Net Income - Noncontrolling Interests     (2,091 )     (2,018 )
Net Income - Controlling Interests   $ 9,360     $ 7,212  
Net Income Available to Common Stockholders   $ 8,752     $ 6,743  
Net Income Available to Class A Non-voting Preferred Stockholders   $ 453     $ 350  
Net Income Available to Class C Common Stockholders   $ 155     $ 119  
Basic Net Income Per Common Share Available to Common Stockholders   $ 1.45     $ 1.11  
Diluted Net Income Per Common Share Available to Common Stockholders   $ 1.42     $ 1.09  
Basic and Diluted Income Per Share-Class C Common   $ 0.40     $ 0.31  
Weighted Average Basic Shares Outstanding - Common Stockholders     6,050       6,050  
Weighted Average Diluted Shares Outstanding - Common Stockholders     6,178       6,178  
Weighted Average Basic Shares Outstanding - Class C Common     383       383  
Weighted Average Diluted Shares Outstanding - Class C Common     383       383  
                 

Contact Information

  • Contact:
    Daniel Culver
    Director of Communications
    E-mail: Email Contact
    www.fonar.com
    Melville, New York 11747
    Phone: (631) 694-2929