SOURCE: FONAR Corporation

Fonar Corporation

February 09, 2015 17:45 ET

FONAR Announces Fiscal 2015 2nd Quarter Financial Results

MELVILLE, NY--(Marketwired - Feb 9, 2015) - FONAR Corporation (NASDAQ: FONR)

  • Net Revenues for 2nd Quarter Fiscal 2015 were $17.1 million versus $17.6 million for the same period a year earlier.

  • Net Income for 2nd Quarter Fiscal 2015 increased 13% to $3.5 million versus the same period a year earlier.

  • Net Income Available to Common Stockholders for 2nd Quarter Fiscal 2015 increased 24% to $2.5 million versus the same period a year earlier.

  • Diluted Net Income Per Common Shares Available to Common Stockholders increased 21% to $0.40 per share for 2nd Quarter Fiscal 2015 versus the same period a year earlier.

FONAR Corporation (NASDAQ: FONR), The Inventor of MR Scanning™, reported its second quarter fiscal 2015 results for the quarter ended December 31, 2014. FONAR is the first Company in the MRI industry to manufacture an MRI (Magnetic Resonance Imaging) scanner. FONAR's substantial list of patents include 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, spine and cerebrospinal fluid (CSF) flow.

The Company's two industry segments are the management of Stand-Up® MRI (UPRIGHT® MRI) centers, and the development, manufacturing and servicing of the UPRIGHT® Multi-Position™ MRI. Its premier MRI product, 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 fully weight-bearing UPRIGHT® position.

Financial Highlights

Revenues increased 2% to $35.1 million for the six month period ended December 31, 2014, from $34.4 million for the corresponding six month period one year earlier. Revenues for the second fiscal 2015 quarter ended December 31, 2014 were $17.1 million versus $17.6 million for the corresponding quarter one year earlier.

Net Income was $6.7 million for the six month period ended December 31, 2014 and the corresponding six month period one year earlier.

Net Income increased 13% to $3.5 million for the second fiscal 2015 quarter ended December 31, 2014 versus $3.0 million for the corresponding quarter one year earlier.

Income from Operations was $7.0 million for the six month period ended December 31, 2014, versus $7.3 million for the corresponding six month period one year earlier.

Income from Operations for the second fiscal 2015 quarter ended December 31, 2014 increased 9% to $3.6 million, from $3.3 million for the corresponding quarter one year earlier.

Diluted net income per common share available to common shareholders for the six month period ended December 31, 2014 was $0.79 versus $0.70 for the corresponding six month period one year earlier, an increase of 13%.

Diluted net income per common share available to common shareholders for the second fiscal 2015 quarter ended December 31, 2014 was $0.40 versus $0.33 for the corresponding quarter one year earlier, an increase of 21%.

Total assets at December 31, 2014 were $79.0 million, as compared to $76.8 million at June 30, 2014. Total current assets at December 31, 2014 were $46.8 million, as compared to $42.8 million at June 30, 2014.

Total liabilities at December 31, 2014 were $28.8 million, as compared to $30.9 million at June 30, 2014. Total current liabilities at December 31, 2014 were $20.9 million, as compared to $21.2 million at June 30, 2014.

Stockholder's equity at December 31, 2014 was $50.2 million, as compared to $45.9 million at June 30, 2014.

Cash and cash equivalents increased 17% to $11.7 million at December 31, 2014, from $10.0 million at June 30, 2014.

Management Discussion

Raymond V. Damadian, president and chairman of FONAR Corporation said, "Since acquiring Health Diagnostics in March 2013, the Company's net profit has gone from $1.6 million (for the quarter ended Dec 31, 2012) to $3.5 million (current quarter). That is almost $2 million more per quarter. Management is proud of this achievement." 

"We are still concerned about cuts in MRI reimbursement rates brought about by the Affordable Care Act," said Dr. Damadian. "Nevertheless, we have dealt with these cuts and we continue to grow our business. This is because of the adherence to our business strategy which has made the difference."

"At the core of our success is that our business centers around the FONAR UPRIGHT® Multi-Position™ MRI. Our message to physicians," said Dr. Damadian, "is that the UPRIGHT® MRI will provide a 'BETTER PATIENT OUTCOME' for their patient. Our physician users understand this and realize that you get the most accurate diagnosis available from the fully weight-loaded Multi-Position™ MRI provided by the FONAR UPRIGHT® versus that of the conventional weightless recumbent-only MRI. Most importantly, they don't want to run the risk of failure to visualize structural abnormalities in the spines of their patients that could result in poor outcomes from their treatment." 

"These physicians have learned from firsthand experience that the FONAR UPRIGHT® MRI has the power to 'SEE IT ALL' and thus it's use has become indispensable towards their ultimate objective of optimizing the TREATMENT OUTCOMES FOR THEIR PATIENTS," concluded Dr. Damadian.

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
 
  December 31,
2014
  June 30,
2014 *
Current Assets:          
  Cash and cash equivalents $ 11,674   $ 9,952
  Accounts receivable - net   5,028     4,450
  Accounts receivable - related party   60     -
  Medical receivable - net   8,898     8,808
  Management and other fees receivable - net   13,740     11,970
  Management and other fees receivable - related medical practices - net   3,469     3,427
  Costs and estimated earnings in excess of billings on uncompleted contracts   726     760
  Inventories   2,363     2,444
  Prepaid expenses and other current assets   823     1,011
             
Total Current Assets   46,781     42,822
  Deferred income tax asset   5,740     5,740
  Property and equipment - net   13,951     15,030
  Goodwill   1,767     1,767
  Other intangible assets - net   9,933     10,509
  Other assets   868     922
Total Assets $ 79,040   $ 76,790
 
LIABILITIES
 
Current Liabilities:          
  Current portion of long-term debt and capital leases $ 2,894   $ 2,891
  Accounts payable   2,397     2,482
  Other current liabilities   8,470     9,024
  Unearned revenue on service contracts   5,052     4,731
  Unearned revenue on service contracts - related party   55     -
  Customer deposits   1,819     1,927
  Billings in excess of costs and estimated earnings on uncompleted contracts   168     142
Total Current Liabilities   20,855     21,197
Long-Term Liabilities:          
Due to related medical practices   229     234
Long-term debt and capital leases, less current portion   6,935     8,482
Deferred income tax liability   584     584
Other liabilities   217     386
Total Long-Term Liabilities   7,965     9,686
Total Liabilities   28,820     30,883
           

* Condensed from audited financial statements

   
CONDENSED CONSOLIDATED BALANCE SHEETS  
(Amounts and shares in thousands, except per share amounts)  
(UNAUDITED)  
   
STOCKHOLDERS' EQUITY  
   
STOCKHOLDERS' EQUITY: December 31,
2014
    June 30,
2014 *
 
Class A non-voting preferred stock $.0001 par value; 453 shares authorized at December 31, 2014 and June 30, 2014, 313 issued and outstanding at December 31, 2014 and June 30, 2014 $ -     $ -  
Preferred stock $.001 par value; 567 shares authorized at December 31, 2014 and June 30, 2014, issued and outstanding - none   -       -  
Common Stock $.0001 par value; 8,500 shares authorized at December 31, 2014 and June 30, 2014, 6,062 and 6,057 issued at December 31, 2014 and June 30, 2014, respectively; 6,051 and 6,046 outstanding at December 31, 2014 and June 30, 2014, respectively   1       1  
Class B Common Stock (10 votes per share) $.0001 par value; 227 shares authorized at December 31, 2014 and June 30, 2014; .146 issued and outstanding at December 31, 2014 and June 30, 2014   -       -  
Class C Common Stock (25 votes per share) $.0001 par value; 567 shares authorized at December 31, 2014 and June 30, 2014, 383 issued and outstanding at December 31, 2014 and June 30, 2014   -       -  
Paid-in capital in excess of par value   175,413       175,284  
Accumulated deficit   (144,066 )     (149,259 )
Notes receivable from employee stockholders   (35 )     (39 )
Treasury stock, at cost - 12 shares of common stock at September 30, 2014 and June 30, 2014   (675 )     (675 )
Total Fonar Corporation Stockholder Equity   30,638       25,312  
Noncontrolling interests   19,582       20,595  
Total Stockholders' Equity   50,220       45,907  
Total Liabilities and Stockholders' Equity $ 79,040     $ 76,790  
               

* 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 DECEMBER 31,
 
REVENUES   2014     2013  
  Product sales - net   $ 375     $ 755  
  Service and repair fees - net     2,499       2,548  
  Service and repair fees - related parties - net     28       28  
  Patient fee revenue, net of contractual allowances and discounts     6,629       5,894  
  Provision for bad debts for patient fee     (2,897 )     (2,223 )
  Management and other fees - net     8,613       8,274  
  Management and other fees - related medical practices - net     1,845       2,333  
    Total Revenues - Net     17,092       17,609  
COSTS AND EXPENSES                
  Costs related to product sales     237       631  
  Costs related to service and repair fees     474       587  
  Costs related to service and repair fees - related parties     5       6  
  Costs related to patient fee revenue     1,902       2,028  
  Costs related to management and other fees     5,180       5,190  
  Costs related to management and other fees - related medical practices     1,240       1,270  
  Research and development     359       374  
  Selling, general and administrative     3,824       4,352  
  Provision for bad debts     273       (124 )
    Total Costs and Expenses     13,494       14,314  
Income From Operations     3,598       3,295  
Interest Expense     (172 )     (237 )
Investment Income     60       60  
Other Expense     (2 )     -  
                 
Income Before Provision for Income Taxes and Noncontrolling Interests     3,484       3,118  
Provision for Income Taxes     29       70  
Net Income     3,455       3,048  
Net Income - Noncontrolling Interests     (797 )     (905 )
Net Income - Controlling Interests   $ 2,658     $ 2,143  
Net Income Available to Common Stockholders   $ 2,485     $ 2,003  
Net Income Available to Class A Non-Voting Preferred Stockholders   $ 129     $ 104  
Net Income Available to Class C Common Stockholders   $ 44     $ 36  
Basic Net Income Per Common Share Available to Common Stockholders   $ 0.41     $ 0.33  
Diluted Net Income Per Common Share Available to Common Stockholders   $ 0.40     $ 0.33  
Basic and Diluted Income Per Share - Class C Common   $ 0.12     $ 0.09  
Weighted Average Basic Shares Outstanding - Common Stockholders     6,051       6,006  
Weighted Average Diluted Shares Outstanding - Common Stockholders     6,179       6,133  
Weighted Average Basic Shares Outstanding - Class C Common     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 SIX MONTHS
ENDED DECEMBER 31,
 
    2014     2013  
REVENUES                
  Product sales - net   $ 1,646     $ 783  
  Service and repair fees - net     4,989       5,060  
  Service and repair fees - related parties - net     55       55  
  Patient fee revenue, net of contractual allowances and discounts     13,416       11,721  
  Provision for bad debts for patient fee     (6,042 )     (4,262 )
  Management and other fees - net     17,351       16,417  
  Management and other fees - related medical practices - net     3,662       4,666  
    Total Revenues - Net     35,077       34,440  
COSTS AND EXPENSES                
  Costs related to product sales     1,322       678  
  Costs related to service and repair fees     981       1,131  
  Costs related to service and repair fees - related parties     11       12  
  Costs related to patient fee revenue     3,801       3,877  
  Costs related to management and other fees     10,379       10,264  
  Costs related to management and other fees - related medical practices     2,609       2,490  
  Research and development     756       769  
  Selling, general and administrative     7,403       8,089  
  Provision for bad debts     779       (218 )
    Total Costs and Expenses     28,041       27,092  
Income From Operations     7,036       7,348  
Interest Expense     (376 )     (480 )
Investment Income     122       121  
Other Expense     (2 )     (151 )
                 
Income Before Provision for Income Taxes and Noncontrolling Interests     6,780       6,838  
Provision for Income Taxes     69       170  
Net Income     6,711       6,668  
Net Income - Noncontrolling Interests     (1,518 )     (2,088 )
Net Income - Controlling Interests   $ 5,193     $ 4,580  
Net Income Available to Common Stockholders   $ 4,856     $ 4,280  
Net Income Available to Class A Non-Voting Preferred Stockholders   $ 251     $ 223  
Net Income Available to Class C Common Stockholders   $ 86     $ 77  
Basic Net Income Per Common Share Available to Common Stockholders   $ 0.80     $ 0.71  
Diluted Net Income Per Common Share Available to Common Stockholders   $ 0.79     $ 0.70  
Basic and Diluted Income Per Share - Class C Common   $ 0.22     $ 0.20  
Weighted Average Basic Shares Outstanding - Common Stockholders     6,050       5,992  
Weighted Average Diluted Shares Outstanding - Common Stockholders     6,178       6,120  
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