SOURCE: FONAR Corporation

Fonar Corporation

May 15, 2014 06:55 ET

FONAR Announces 3rd Quarter Fiscal 2014 & Nine Month Earnings Report

MELVILLE, NY--(Marketwired - May 15, 2014) - FONAR Corporation (NASDAQ: FONR)

  • 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

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 http://www.fonar.com/shareholder_letter_5_2014.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
  June 30,
2013 *
Cash and cash equivalents   $ 9,589   $ 7,871
Accounts receivable - net     4,444     4,444
Accounts receivable - related party     30     -
Medical receivable - 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)  
   
LIABILITIES AND STOCKHOLDERS' EQUITY   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  
Non controlling 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 Common 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 Basis 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  
                 
                 

Contact Information

  • Contact:
    Daniel Culver
    Director of Communications
    E-mail: Email Contact
    www.fonar.com

    The Inventor of MR Scanning™
    An ISO 9001 Company
    Melville, New York 11747
    Phone: (631) 694-2929
    Fax: (631) 390-1709