SOURCE: FONAR Corporation

Fonar Corporation

February 09, 2016 08:00 ET

FONAR Announces Fiscal 2016 2nd Quarter and Six Months Financial Results

MELVILLE, NY--(Marketwired - Feb 9, 2016) - FONAR Corporation (NASDAQ: FONR)

  • Diluted Net Income Per Common Share Available to Common Stockholders increased 33% to $0.53 per share for Fiscal 2016 2nd Quarter versus the same period a year earlier.

  • Cash and cash equivalents increased 37% to $13.0 million at December 31, 2015, from $9.5 million at June 30, 2015.

  • Net Revenues for Fiscal 2016 2nd Quarter increased 8% to $18.4 million versus the same period a year earlier.

  • Net Income for Fiscal 2016 2nd Quarter increased 19% to $4.1 million versus the same period a year earlier.

  • Net Income From Operations for Fiscal 2016 2nd Quarter increased 17% to $4.2 million versus the same period a year earlier.

  • Net Income Available to Common Stockholders for Fiscal 2016 2nd Quarter increased 31% to $3.3 million versus the same period a year earlier.

FONAR Corporation (NASDAQ: FONR), The Inventor of MR Scanning™, reported its fiscal 2016 second quarter results for the quarter and six month period ended December 31, 2015. 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 in 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® Multi-Position™ MRI) centers, and the development, manufacturing and servicing of the UPRIGHT® 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® Multi-Position™ MRI patents to scan all the patient's body parts in their normal fully weight-bearing UPRIGHT® positions.

Financial Highlights

Net Revenues increased 8% for the fiscal 2016 second quarter ended December 31, 2015 to $18.4 million versus $17.1 million for the corresponding quarter one year earlier.

Net Revenues increased 3% to $36.0 million for the fiscal 2016 six month period ended December 31, 2015, from $35.1 million for the corresponding six month period one year earlier.

Net Income increased 19% to $4.1 million for the fiscal 2016 second quarter ended December 31, 2015 versus $3.5 million for the corresponding quarter one year earlier.

Net Income increased 13% to $7.6 million for the fiscal 2016 six month period ended December 31, 2015 versus $6.7 million for the corresponding six month period one year earlier.

Income from Operations for the fiscal 2016 second quarter ended December 31, 2015 increased 17% to $4.2 million, from $3.6 million for the corresponding quarter one year earlier.

Income from Operations increased 11% to $7.8 million for the fiscal 2016 six month period ended December 31, 2015, versus $7.0 million for the corresponding six month period one year earlier.

Diluted net income per common share available to common shareholders increased 33% to $0.53 for the fiscal 2016 second quarter ended December 31, 2015 versus $0.40 for the corresponding quarter one year earlier.

Diluted net income per common share available to common shareholders increased 22% to $0.96 for the fiscal 2016 six month period ended December 31, 2015 versus $0.79 for the corresponding six month period one year earlier.

Total assets at December 31, 2015 were $80.4 million, as compared to $76.4 million at June 30, 2015. Total current assets at December 31, 2015 were $48.7 million, as compared to $43.6 million at June 30, 2015.

Total liabilities at December 31, 2015 were $24.8 million, as compared to $25.7 million at June 30, 2015. Total current liabilities at December 31, 2015 were $19.0 million, as compared to $18.8 million at June 30, 2015.

Stockholder's equity at December 31, 2015 was $80.4 million, as compared to $76.5 million at June 30, 2015.

Cash and cash equivalents increased 37% to $13.0 million at December 31, 2015, from $9.5 million at June 30, 2015.

Management Discussion

Raymond V. Damadian, president and chairman of FONAR Corporation said, "While we are still concerned about the environment created under the Affordable Care Act, we have continued to grow our business consistently. This is because of the adherence to a business strategy that we have mastered which has made the difference."

Dr. Damadian continued: "Our business plan is to grow consistently and to always provide our customers with the most optimal service. Our FONAR UPRIGHT® Multi-Position™ MRI scanner is not only the most comfortable MRI for our customers but the results from the scanner are of the highest professional quality. In this current medical era, it doesn't get any better than this for our patients. The patient sits, watches TV comfortably and obtains a weight-bearing MRI of his problem. Physicians appreciate that it is going to be a scan that can 'SEE IT ALL' and allow the doctor to optimize the TREATMENT OUTCOMES FOR THEIR PATIENT."

Significant Events

As reported on January 6, 2016, the Company reported that its subsidiary Health Management Company of America, LLC (HMCA) had begun managing Stand-Up MRI of Great Neck, located at 600 Northern Blvd., Great Neck, New York, bringing the total number of HMCA-managed centers to 25: 18 in New York and 7 in Florida. Twenty four (24) of the centers are equipped with the FONAR UPRIGHT® Multi-Position™ MRI. Last year, the 24 HMCA-managed sites provided $57.6 million (83%) of FONAR's $69.1 million in revenue.

On February 4, 2016, the television network ESPN ran a 30 For 30 series documentary on the 1985 NFL Chicago Bears that featured Dr. Scott Rosa and Jim McMahon. During the approximately five minute segment, Jim McMahon said he was thankful to Dr. Rosa's treatment. Dr. Rosa provided his patented IGAT™ (Image Guided Atlas Treatment™) that utilized FONAR's UPRIGHT® MRI examination of Jim McMahon to determine the percussion direction and percussion angle of his IGAT™ procedure. FONAR provided the UPRIGHT® Multi-Position™ MRI that for the first time successfully detected and diagnosed Jim McMahon's health issues as originating in Jim's neck (not his brain) from malalignments of the craniocervical junction vertebra (C1 & C2) from prior football traumas. These malalignments were obstructing cerebrospinal fluid (CSF) flow into his brain and generating the increased intracranial pressure (ICP) that was adversely affecting his health. This enabled Jim's successful cervical realignment by Dr. Rosa's IGAT™ (traumaimagingfoundation.com/.com).

Dr. Damadian said: "We are proud that our FONAR UPRIGHT® MRI has made such a critical difference to NFL great Jim McMahon. We recommend our shareholders watch the 30 For 30 series documentary on the 1985 NFL Chicago Bears when it runs again on Friday, February 12, 2016 at 9 PM Eastern Time on ESPN2." Check your local listings.

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.

 
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts and shares in thousands, except per share amounts)
(UNAUDITED)
 
ASSETS
 
    December 31,
2015
  June 30,
2015 *
Cash and cash equivalents   $ 12,954   $ 9,449
Accounts receivable - net     4,557     3,791
Accounts receivable - related party     60     -
Medical receivable - net     9,567     9,082
Management and other fees receivable - net     14,656     14,058
Management and other fees receivable - related medical practices - net     3,644     3,507
Costs and estimated earnings in excess of billing on uncompleted contracts     279     682
Inventories     2,259     2,192
Prepaid expenses and other current assets     767     860
             
Total Current Assets     48,743     43,621
Deferred income tax asset     8,423     8,423
Property and equipment - net     12,277     12,901
Goodwill     1,767     1,767
Other intangible assets - net     8,348     8,950
Other assets     864     830
             
Total Assets   $ 80,422   $ 76,492
*Condensed from audited financial statements.
 
 
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts and shares in thousands, except per share amounts)
(UNAUDITED)
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
LIABILITIES
 
    December 31,
2015
  June 30,
2015 *
Current Liabilities:            
  Current portion of long-term debt and capital leases   $ 2,467   $ 2,490
  Accounts payable     1,291     1,783
  Other current liabilities     8,733     8,253
  Unearned revenue on service contracts     4,700     4,187
  Unearned revenue on service contracts - related party     55     -
  Customer advances     1,501     1,938
  Billings in excess of costs and estimated earnings on uncompleted contracts     255     142
               
    Total Current Liabilities     19,002     18,793
             
Long-Term Liabilities:            
  Deferred income tax liability     510     510
  Due to related medical practices     247     237
  Long-term debt and capital leases, less current portion     4,475     5,699
  Other liabilities     544     469
               
    Total Long-Term Liabilities     5,776     6,915
               
    Total Liabilities     24,778     25,708
*Condensed from audited financial statements.
 
 
 
CONDENSED CONSOLIDATED BALANCE SHEETS  
(Amounts and shares in thousands, except per share amounts)  
(UNAUDITED)  
   
LIABILITIES AND STOCKHOLDERS' EQUITY (Continued)  
   
    December 31,
2015
    June 30,
2015 *
 
STOCKHOLDERS' EQUITY:                
                 
Class A non-voting preferred stock $.0001 par value; 453 shares authorized at December 31, 2015 and June 30, 2015, 313 issued and outstanding at December 31, 2015 and June 30, 2015   $ -     $ -  
                 
Preferred stock $.001 par value; 567 shares authorized at December 31, 2015 and June 30, 2015, issued and outstanding - none     -       -  
                 
Common Stock $.0001 par value; 8,500 shares authorized at December 31, 2015 and June 30, 2015, 6,062 issued at December 31, 2015 and June 30, 2015; 6,051 outstanding at December 31, 2015 and June 30, 2015     1       1  
                 
Class B Common Stock (10 votes per share) $ .0001 par value; 227 shares authorized at December 31, 2015 and June 30, 2015, .146 issued and outstanding at December 31, 2015 and June 30, 2015     -       -  
                 
Class C Common Stock (25 votes per share) $.0001 par value; 567 shares authorized at December 31, 2015 and June 30, 2015, 383 issued and outstanding at December 31, 2015 and June 30, 2015     -       -  
                 
Paid-in capital in excess of par value     175,448       175,448  
Accumulated deficit     (129,994 )     (136,349 )
Notes receivable from employee stockholders     (28 )     (32 )
Treasury stock, at cost - 12 shares of common stock at December 31, 2015 and June 30, 2015     (675 )     (675 )
Total Fonar Corporation Stockholder Equity     44,752       38,393  
Non controlling interests     10,892       12,391  
                 
Total Stockholders' Equity     55,644       50,784  
                 
Total Liabilities and Stockholders' Equity   $ 80,422     $ 76,492  
*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   2015     2014  
  Product sales - net   $ 742     $ 375  
  Service and repair fees - net     2,280       2,499  
  Service and repair fees - related parties - net     28       28  
  Patient fee revenue, net of contractual allowances and discounts     7,786       6,629  
  Provision for bad debts for patient fee     (3,270 )     (2,897 )
  Management and other fees - net     8,958       8,613  
  Management and other fees - related medical practices - net     1,845       1,845  
    Total Revenues - Net     18,369       17,092  
                 
COSTS AND EXPENSES                
  Costs related to product sales     564       237  
  Costs related to service and repair fees     447       474  
  Costs related to service and repair fees - related parties     5       5  
  Costs related to patient fee revenue     2,238       1,902  
  Costs related to management and other fees     5,597       5,180  
  Costs related to management and other fees - related medical practices     1,012       1,240  
  Research and development     412       359  
  Selling, general and administrative     4,117       3,824  
  Provision for bad debts     (248 )     273  
    Total Costs and Expenses     14,144       13,494  
Income From Operations     4,225       3,598  
Interest Expense     (139 )     (172 )
Investment Income     58       60  
Other Expense     -       (2 )
                 
Income Before Provision for Income Taxes and Non Controlling Interests     4,144       3,484  
Provision for Income Taxes     40       29  
Net Income     4,104       3,455  
Net Income - Non Controlling Interests     (611 )     (797 )
Net Income - Controlling Interests   $ 3,493     $ 2,658  
Net Income Available to Common Stockholders   $ 3,266     $ 2,485  
Net Income Available to Class A Non-Voting Preferred Stockholders   $ 169     $ 129  
Net Income Available to Class C Common Stockholders   $ 58     $ 44  
Basic Net Income Per Common Share Available to Common Stockholders   $ 0.54     $ 0.41  
Diluted Net Income Per Common Share Available to Common Stockholders   $ 0.53     $ 0.40  
Basic and Diluted Income Per Share-Common C   $ 0.15     $ 0.12  
Weighted Average Basis Shares Outstanding-Common Stockholders     6,051       6,051  
Weighted Average Diluted Shares Outstanding- Common Stockholders     6,179       6,179  
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,
 
    2015     2014  
REVENUES                
  Product sales - net   $ 760     $ 1,646  
  Service and repair fees - net     4,564       4,989  
  Service and repair fees - related parties - net     55       55  
  Patient fee revenue, net of contractual allowances and discounts     15,901       13,416  
  Provision for bad debts for patient fee     (6,778 )     (6,042 )
  Management and other fees - net     17,786       17,351  
  Management and other fees - related medical practices - net     3,691       3,662  
    Total Revenues - Net     35,979       35,077  
                 
COSTS AND EXPENSES                
  Costs related to product sales     676       1,322  
  Costs related to service and repair fees     990       981  
  Costs related to service and repair fees - related parties     12       11  
  Costs related to patient fee revenue     4,466       3,801  
  Costs related to management and other fees     11,015       10,379  
  Costs related to management and other fees - related medical practices     2,070       2,609  
  Research and development     849       756  
  Selling, general and administrative     7,892       7,403  
  Provision for bad debts     169       779  
    Total Costs and Expenses     28,139       28,041  
Income From Operations     7,840       7,036  
Interest Expense     (289 )     (376 )
Investment Income     107       122  
Other Income (Expense)     1       (2 )
                 
Income Before Provision for Income Taxes and Non Controlling Interests     7,659       6,780  
Provision for Income Taxes     90       69  
Net Income     7,569       6,711  
Net Income - Non Controlling Interests     (1,214 )     (1,518 )
Net Income - Controlling Interests   $ 6,355     $ 5,193  
Net Income Available to Common Stockholders   $ 5,942     $ 4,856  
Net Income Available to Class A Non-Voting Preferred Stockholders   $ 308     $ 251  
Net Income Available to Class C Common Stockholders   $ 105     $ 86  
Basic Net Income Per Common Share Available to Common Stockholders   $ 0.98     $ 0.80  
Diluted Net Income Per Common Share Available to Common Stockholders   $ 0.96     $ 0.79  
Basic and Diluted Income Per Share-Class C Common   $ 0.27     $ 0.22  
Weighted Average Basic Shares Outstanding-Common Stockholders     6,051       6,050  
Weighted Average Diluted Shares Outstanding-Common Stockholders     6,179       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