FONAR Corporation Announces Fiscal 2016 Year End Earnings
MELVILLE, NY--(Marketwired - September 19, 2016) - FONAR Corporation (NASDAQ: FONR)
- 22% Increase of Fiscal 2016 Diluted Net Income per Common Share available to Common Shareholders to $2.38, versus prior year
- 22% Increase of Fiscal 2016 Net Income to $18.8 million, versus prior year
- 11 % Increase of Fiscal 2016 Income from Operations to $14.4 million, versus prior year
- 6% Increase of Fiscal 2016 Net Revenues to $73.4 million, versus prior year
- Diluted Net Income per Common Share available to Common Shareholders for the Fiscal year ending June 30, 2016 was $2.38, including a $4.6 million impact of recorded income tax benefits
FONAR Corporation (NASDAQ: FONR), The Inventor of MR Scanning™, reported today its fiscal 2016 results for the year ended June 30, 2016. The Company introduced the world's first commercial MRI scanner in 1980, and is known the world over for its advancements in MRI technology. FONAR's primary source of income is derived from the management of 24 MRI centers that feature the FONAR UPRIGHT® Multi-Position™ MRI, aka Stand-Up® MRI.
Financial Highlights
Net income increased 22% to $18.8 million for the fiscal year ended June 30, 2016. This compares to $15.4 million for the fiscal year ended June 30, 2015.
Income from operations increased 11% to $14.4 million for the fiscal year ended June 30, 2016. This compares to $12.9 million for the fiscal year ended June 30, 2015.
Basic net income per common share available to common shareholders increased 22% to $2.43 for the fiscal year ended June 30, 2016 as compared to $2.00 for the fiscal year ended June 30, 2015.
Diluted net income per common share available to common shareholders increased 22% to $2.38 for the fiscal year ended June 30, 2016 as compared to $1.95 for the fiscal year ended June 30, 2015.
Net revenues increased 6% to $73.4 million for the fiscal year ended June 30, 2016. This compares to $69.1 million for the fiscal year ended June 30, 2015.
For the year ended June 30, 2016, the revenues from the management of the diagnostic imaging center segment, consisting of patient and management and other fee revenue, and less the provision for bad debt for patient revenue, increased 9% to $62.6 million as compared to $57.6 million one year earlier.
At June 30, 2016, total assets were $84.9 million, as compared to $76.5 million one year earlier.
At June 30, 2016, total cash and cash equivalents were $8.5 million, as compared to $9.4 million one year earlier.
At June 30, 2016, total liabilities were $24.1 million, as compared to $25.7 million one year earlier.
At June 30, 2016, total current liabilities were $20.6 million, as compared to $18.8 million one year earlier.
Significant Events
On January 6, 2016, the Company reported that its subsidiary Health Management Company of America now manages Stand-Up MRI of Great Neck, located in Great Neck, New York, bringing the total number of HMCA-managed centers to 25, of which 18 are located in New York and seven (7) in Florida.
On February 11, 2016, Timothy R. Damadian, Dr. Damadian's son, became President and Chief Executive Officer of FONAR Corporation. Raymond V. Damadian, M.D., the founder of the Company, remains Chairman of the Board.
On June 30, 2016, Health Management Company of America, of which FONAR is the majority owner, purchased 100% of the equity in Turnkey Services of New York, LLC. Turnkey Services of New York, LLC, by way of several operating leases, had provided HMCA-managed MRI facilities in Bronx, NY, and Brooklyn, NY, with ancillary diagnostic imaging equipment.
Also on June 30, 2016, Health Management Company of America, of which FONAR is the majority owner, purchased 100% of the equity in TK2 Equipment Management, LLC. TK2 Equipment Management, LLC, by way of several operating leases, had provided ancillary diagnostic imaging equipment to an HMCA-managed facility in Queens, NY, and to an HMCA-owned facility in Ft. Lauderdale, FL.
In addition, on June 30, 2016, Health Management Company of America, which had held a 50%-equity in Yonkers Diagnostic Management Services, LLC, purchased the remaining 50%, making the Yonkers entity a wholly-owned subsidiary of Health Management Company of America.
Management Discussion
President and CEO Timothy R. Damadian said, "I am pleased with our six percent (6%) growth rate in net revenue and our eleven percent (11%) increase in income from operations during fiscal 2016. The three acquisitions will add to net income, thereby contributing to the financial stability of the Company. We will continue to seek additional opportunities consistent with our growth strategy."
Chairman of the Board Raymond V. Damadian, M.D. said, "I am grateful for the current state of the Company. Since Fiscal 2011, FONAR's revenues have grown 121 percent and we've been profitable every quarter. As Timothy continues to execute his proven business strategy, I am confident of a favorable future for patients, employees and shareholders."
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 signature product is the FONAR UPRIGHT® Multi-Position™ 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 detects patient problems that other MRI scanners cannot because they are lie-down and "weightless" only scanners. The patient-friendly UPRIGHT® MRI has a near-zero patient claustrophobic rejection rate. 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 watching 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 by this latest works-in-progress method for quantifying CSF in all the normal positions of the body, particularly in its upright flow against gravity. Patients with whiplash or other neck injuries are among those who will benefit from this new understanding.
FONAR's substantial list of patents includes recent patents for its technology enabling full weight-bearing MRI imaging of 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 CONSOLIDATED BALANCE SHEETS ASSETS June 30, --------------------------- 2016 2015 ------------- ------------- Current Assets: Cash and cash equivalents $ 8,528,309 $ 9,448,798 Accounts receivable - net of allowances for doubtful accounts of $284,279 and $362,362 at June 30, 2016 and 2015, respectively 4,370,155 3,790,981 Medical receivables - net of allowances for doubtful accounts of $17,451,782 and $15,459,156 at June 30, 2016 and 2015, respectively 10,126,397 9,082,319 Management and other fees receivable - net of allowances for doubtful accounts of $13,069,702 and $13,271,651 at June 30, 2016 and 2015, respectively 15,637,831 14,057,962 Management and other fees receivable - related party medical practices - net of allowances for doubtful accounts of $393,047 and $403,047 at June 30, 2016 and 2015, respectively 4,063,539 3,507,204 Costs and estimated earnings in excess of billings on uncompleted contracts - 681,660 Inventories 2,074,300 2,191,849 Prepaid expenses and other current assets 759,042 860,040 ------------- ------------- Total Current Assets 45,559,573 43,620,813 Deferred income tax asset 13,042,360 8,423,306 Property and Equipment - Net 14,512,706 12,901,195 Goodwill 3,322,158 1,767,098 Other Intangible Assets - Net 7,719,358 8,950,160 Other Assets 731,451 829,505 ------------- ------------- Total Assets $ 84,887,606 $ 76,492,077 ============= ============= FONAR CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES June 30, --------------------------- 2016 2015 ------------- ------------- Current Liabilities: Current portion of long-term debt and capital leases $ 2,447,693 $ 2,490,146 Accounts payable 1,254,485 1,782,442 Other current liabilities 10,826,793 8,252,633 Unearned revenue on service contracts 4,678,914 4,187,401 Customer deposits 1,198,739 1,937,813 Billings in excess of costs and estimated earnings on uncompleted contracts 206,623 142,217 ------------- ------------- Total Current Liabilities 20,613,247 18,792,652 ------------- ------------- Long-Term Liabilities: Deferred income tax liability 481,779 510,492 Due to related party medical practices 245,041 236,920 Long-term debt and capital leases, less current portion 2,059,236 5,699,302 Other liabilities 711,996 469,198 ------------- ------------- Total Long-Term Liabilities 3,498,052 6,915,912 ------------- ------------- Total Liabilities 24,111,299 25,708,564 ------------- ------------- FONAR CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS STOCKHOLDERS' EQUITY June 30, ---------------------------- 2016 2015 ------------- ------------- Stockholders' Equity: Class A non-voting preferred stock $.0001 par value; 453,000 shares authorized at June 30, 2016 and 2015, 313,438 issued and outstanding at June 30, 2016 and 2015 $ 31 $ 31 Preferred stock $.001 par value; 567,000 shares authorized at June 30, 2016 and 2015, issued and outstanding - none - - Common stock $.0001 par value; 8,500,000 shares authorized at June 30, 2016 and 2015, 6,062,809 and 6,062,483 issued at June 30, 2016 and 2015, respectively; 6,051,166 and 6,050,840 outstanding at June 30, 2016 and 2015, respectively 607 607 Class B convertible common stock (10 votes per share) $.0001 par value; 227,000 shares authorized at June 30, 2016 and 2015, 146 issued and outstanding at June 30, 2016 and 2015 - - Class C common stock (25 votes per share) $.0001 par value; 567,000 shares authorized at June 30, 2016 and 2015, 382,513 issued and outstanding at June 30, 2016 and 2015 38 38 Paid-in capital in excess of par value 173,702,335 175,447,586 Accumulated deficit (120,624,010) (136,348,635) Notes receivable from employee stockholders (23,879) (31,495) Treasury stock, at cost - 11,643 shares of common stock at June 30, 2016 and 2015 (675,390) (675,390) ------------- ------------- Total Fonar Corporation's Stockholders' Equity 52,379,732 38,392,742 Noncontrolling interests 8,396,575 12,390,771 ------------- ------------- Total Stockholders' Equity 60,776,307 50,783,513 ------------- ------------- Total Liabilities and Stockholders' Equity $ 84,887,606 $ 76,492,077 ============= ============= FONAR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME For the Years Ended June 30, ---------------------------------------- 2016 2015 2014 ------------ ------------ ------------ Revenues Product sales - net $ 1,276,882 $ 1,820,979 $ 1,877,932 Service and repair fees - net 9,396,736 9,549,316 10,082,631 Service and repair fees - related parties - net 110,000 110,000 110,000 Patient fee revenue, net of contractual allowances and discounts 32,985,809 28,153,598 24,307,192 Provision for bad debts for patient fee (14,539,786) (12,770,249) (10,333,082) Management and other fees - net 36,633,230 34,805,627 34,839,969 Management and other fees - related party medical practices - net 7,505,339 7,381,725 7,620,835 ------------ ------------ ------------ Total Revenues - Net 73,368,210 69,050,996 68,505,477 ------------ ------------ ------------ Costs and Expenses Costs related to product sales 1,254,328 1,882,230 1,067,120 Costs related to service and repair fees 2,148,143 2,189,373 2,496,985 Costs related to service and repair fees - related parties 25,147 25,220 27,242 Costs related to patient fee revenue 9,418,935 7,939,524 7,670,484 Costs related to management and other fees 21,949,583 20,970,116 20,851,065 Costs related to management and other fees - related party medical practices 4,074,762 5,397,818 5,134,553 Research and development 1,631,846 1,812,398 1,760,821 Selling, general and administrative, inclusive of compensatory element of stock issuances of $2,006, $53,200 and $223,000 for the years ended June 30, 2016, 2015 and 2014, respectively 18,711,799 13,459,408 15,388,239 Provision for bad debts (201,949) 2,475,032 1,806,299 ------------ ------------ ------------ Total Costs and Expenses 59,012,594 56,151,119 56,202,808 ------------ ------------ ------------ Income from Operations 14,355,616 12,899,877 12,302,669 Other Income and (Expenses): Interest expense (262,193) (702,095) (884,541) Investment income 224,263 225,270 238,928 Other income (expense) - net 190,560 394,810 (608,599) ------------ ------------ ------------ Income before benefit for income taxes and noncontrolling interests 14,508,246 12,817,862 11,048,457 Benefit for Income Taxes 4,287,271 2,612,521 2,348,312 ------------ ------------ ------------ Net Income $ 18,795,517 $ 15,430,383 $ 13,396,769 Net Income - Noncontrolling Interests (3,070,892) (2,519,732) (3,000,639) ------------ ------------ ------------ Net Income - Attributable to FONAR $ 15,724,625 $ 12,910,651 $ 10,396,130 ============ ============ ============ FONAR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Continued) For the Years Ended June 30, -------------------------------------- 2016 2015 2014 ------------ ------------ ------------ Net Income Available to Common Stockholders $ 14,702,834 $ 12,071,670 $ 9,720,030 ============ ============ ============ Net Income Available to Class A Non- Voting Preferred Stockholders $ 761,561 $ 625,309 $ 503,911 ============ ============ ============ Net Income Available to Class C Common Stockholders $ 260,230 $ 213,672 $ 172,189 ============ ============ ============ Basic Net Income Per Common Share Available to Common Stockholders $ 2.43 $ 2.00 $ 1.62 ============ ============ ============ Diluted Net Income Per Common Share Available to Common Stockholders $ 2.38 $ 1.95 $ 1.58 ============ ============ ============ Basic and Diluted Income Per Share - Common C $ 0.68 $ 0.56 $ 0.45 ============ ============ ============ Weighted Average Basic Shares Outstanding - Common Stockholders 6,050,893 6,050,632 6,009,822 ============ ============ ============ Weighted Average Diluted Shares Outstanding - Common Stockholders 6,178,397 6,178,136 6,137,326 ============ ============ ============ Weighted Average Basic and Diluted Shares Outstanding - Class C Common 382,513 382,513 382,513 ============ ============ ============
Contact:
Daniel Culver
Director of Communications
E-mail: Email Contact
www.fonar.com
Melville, New York 11747
Phone: (631) 694-2929