MELVILLE, NY--(Marketwired - May 11, 2015) - FONAR Corporation (NASDAQ: FONR)
- Third Quarter Fiscal 2015 Diluted Net Income Per Common Share Available to Common Shareholders increased 19% to $0.31, versus Third Quarter Fiscal 2014
- Third Quarter Fiscal 2015 Net Income increased 17% to $2.5 million verses Third Quarter Fiscal 2014
- Third Quarter Fiscal 2015 Net Revenues increased 0.3% to $17.1 million versus Third Quarter Fiscal 2014
FONAR Corporation (NASDAQ: FONR), The Inventor of MR Scanning™, reported its financial results for the period ended March 31, 2015. 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 UPRIGHT® 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 for the third fiscal quarter ended March 31, 2015 were $17.1 million as compared to $17.0 million for the corresponding quarter one year earlier. Revenues increased to $52.2 million for the nine month period ended March 31, 2015 from $51.5 million for the corresponding period one year earlier.
Net Income for the third fiscal quarter ended March 31, 2015 was $2.5 million as compared to $2.1 million for the corresponding quarter one year earlier, an increase of 17%. Net Income increased 5% to $9.2 million for the nine month period ended March 31, 2015 from $8.8 million for the corresponding period one year earlier.
Income from Operations increased 15% to $2.7 million for the third fiscal quarter ended March 31, 2015 as compared to $2.3 million for the corresponding quarter one year earlier. Income from Operations was $9.7 million for the nine month periods ended March 31, 2015 and March 31, 2014.
Diluted Net Income Per Common Share Available to Common Shareholders for the third fiscal quarter ended March 31, 2015 increased 19% to $0.31 as compared to $0.26 for the corresponding quarter one year earlier. Diluted Net Income Per Common Share Available to Common Shareholders for the nine month periods ended March 31, 2015 increased 14% to $1.09 from $0.96 for the corresponding period one year earlier.
Balance Sheet Items
Total Assets at the quarter ended March 31, 2015 were $74.5 million, as compared to $76.8 million at June 30, 2014.
Total Current Assets at the quarter ended March 31, 2015 were $43.1 million, as compared to $42.8 million at June 30, 2014.
Total Cash and Cash Equivalents March 31, 2015, were $7.8 million, as compared to $10.0 million at June 30, 2014. Five million cash was used by the Company to purchase 20% of the Class A Members ownership interest in Health Diagnostic Management on January 8, 2015.
Total Liabilities at the quarter ended March 31, 2015 were $27.5 million, as compared to $30.9 million at June 30, 2014.
Total Current Liabilities at the quarter ended March 31, 2015 were $20.3 million, as compared to $21.2 million at June 30, 2014.
Management Discussion
Raymond V. Damadian, president and chairman of Fonar Corporation, said, "The periodic cuts in MRI reimbursements brought about by the Affordable Care Act have subsided, at least for now. Because the Company has a winning strategy and strong management team we continue to make more and more profit and I am happy to report that our diluted net income per common share available to common stockholders has increased by 19% last quarter over the quarter that ended one year earlier (March 31, 2015 vs 2014). In addition, much of our success is due to the medical need met by our cutting edge UPRIGHT® full weight-loaded MRI scanner."
By continuing to educate the medical community about the unique diagnostic advantages of UPRIGHT® Multi-Position™ full weight-loaded MRI, we expect increase scan volume at our existing imaging centers. We also expect growth to come through adding UPRIGHT® imaging centers that we manage," said Dr. Damadian.
Dr. Damadian continued, "On January 8, 2015, the Company acquired 20% of the Class A members ownership interest in Health Diagnostic Management LLC for a cost of approximately $5.0 million, bringing its ownership interest in Health Diagnostic Management LLC to 60.4% from 50.5%. The corresponding impact for FONAR and thus to our shareholders is that this transaction adds to net income and to diluted net income per common share available to common stockholders.
Significant Events
The Company will hold its annual meeting on June 15, 2015. 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.
Recently a medical monograph was published by S. Karger, AG based in Basel, Switzerland (see www.karger.com/Book/Home/261956). It is titled "The Craniocervical Syndrome and MRI," and highlights the FONAR UPRIGHT® Multi-Position MRI. It also highlights the recently discovered syndrome that shows how neck injury can interfere with cerebrospinal fluid (CSF) flow in the brain, causing a variety of brain diseases. For more details and a press release visit www.fonar.com
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. 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, June 30,
2015 2014 *
--------- ---------
Cash and cash equivalents $ 7,828 $ 9,952
Accounts receivable - net 4,071 4,450
Accounts receivable - related party 30 -
Medical receivable - net 9,037 8,808
Management and other fees receivable - net 14,618 11,970
Management and other fees receivable - related medical
practices - net 3,669 3,427
Costs and estimated earnings in excess of billing on
uncompleted contracts 681 760
Inventories 2,286 2,444
Prepaid expenses and other current assets 855 1,011
--------- ---------
Total Current Assets 43,075 42,822
--------- ---------
Deferred income tax asset 5,740 5,740
Property and equipment - net 13,454 15,030
Goodwill 1,767 1,767
Other intangible assets - net 9,653 10,509
Other assets 853 922
--------- ---------
Total Assets $ 74,542 $ 76,790
========= =========
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts and shares in thousands, except per share amounts)
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, June 30,
2015 2014 *
---------- ----------
Current Liabilities:
Current portion of long-term debt and capital leases $ 2,896 $ 2,891
Accounts payable 2,304 2,482
Other current liabilities 8,994 9,024
Unearned revenue on service contracts 4,232 4,731
Unearned revenue on service contracts - related
party 28 -
Customer advances 1,668 1,927
Billings in excess of costs and estimated earnings
on uncompleted contracts 142 142
---------- ----------
Total Current Liabilities 20,264 21,197
Long-Term Liabilities:
Deferred income tax liability 584 584
Due to related medical practices 232 234
Long-term debt and capital leases, less current
portion 6,311 8,482
Other liabilities 156 386
---------- ----------
Total Long-Term Liabilities 7,283 9,686
---------- ----------
Total Liabilities 27,547 30,883
---------- ----------
STOCKHOLDERS' EQUITY:
Class A non-voting preferred stock $.0001 par value;
453 shares authorized at March 31, 2015 and June 30,
2014, 313 issued and outstanding at March 31, 2015
and June 30, 2014 - -
Preferred stock $.001 par value; 567 shares authorized
at March 31, 2015 and June 30, 2014, issued and
outstanding - none - -
Common Stock $.0001 par value; 8,500 shares authorized
at March 31, 2015 and June 30, 2014, 6,062 and 6,057
issued at March 31, 2015 and June 30, 2014,
respectively; 6,051 and 6,046 outstanding at March
31, 2015 and June 30, 2014, respectively 1 1
Class B Common Stock (10 votes per share) $ .0001 par
value; 227 shares authorized at March 31, 2015 and
June 30, 2014, .146 issued and outstanding at March
31, 2015 and June 30, 2014 - -
Class C Common Stock (25 votes per share) $.0001 par
value; 567 shares authorized at March 31, 2015 and
June 30, 2014, 383 issued and outstanding at March
31, 2015 and June 30, 2014 - -
Paid-in capital in excess of par value 175,413 175,284
Accumulated deficit (142,047) (149,259)
Notes receivable from employee stockholders (33) (39)
Treasury stock, at cost - 12 shares of common stock at
March 31, 2015 and June 30, 2014 (675) (675)
--------- ---------
Total Fonar Corporation Stockholder Equity 32,659 25,312
Noncontrolling interests 14,336 20,595
--------- ---------
Total Stockholders' Equity 46,995 45,907
--------- ---------
Total Liabilities and Stockholders' Equity $ 74,542 $ 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 MARCH 31
--------------------
REVENUES 2015 2014
--------- ---------
Product sales - net $ 160 $ 478
Service and repair fees - net 2,299 2,518
Service and repair fees - related parties - net 27 27
Patient fee revenue, net of contractual allowances
and discounts 7,284 6,090
Provision for bad debts for patient fee (3,201) (2,868)
Management and other fees - net 8,653 8,538
Management and other fees - related medical
practices - net 1,874 2,257
--------- ---------
Total Revenues - Net 17,096 17,040
--------- ---------
COSTS AND EXPENSES
Costs related to product sales 352 223
Costs related to service and repair fees 630 623
Costs related to service and repair fees - related
parties 7 7
Costs related to patient fee revenue 2,044 1,947
Costs related to management and other fees 5,285 5,327
Costs related to management and other fees - related
medical practices 1,284 1,318
Research and development 360 360
Selling, general and administrative 3,706 3,935
Provision for bad debts 762 981
--------- ---------
Total Costs and Expenses 14,430 14,721
--------- ---------
Income From Operations 2,666 2,319
Interest Expense (169) (203)
Investment Income 52 57
Other Income - 39
--------- ---------
Income Before Provision for Income Taxes and
Noncontrolling Interests 2,549 2,212
Provision for Income Taxes 30 65
--------- ---------
Net Income 2,519 2,147
Net Income - Noncontrolling Interests (500) (408)
--------- ---------
Net Income - Controlling Interests $ 2,019 $ 1,739
========= =========
Net Income Available to Common Stockholders $ 1,888 $ 1,625
========= =========
Net Income Available to Class A Non-Voting Preferred
Stockholders $ 98 $ 82
========= =========
Net Income Available to Class C Common Stockholders $ 33 $ 29
========= =========
Basic Net Income Per Common Share Available to Common
Stockholders $ 0.31 $ 0.27
========= =========
Diluted Net Income Per Common Share Available to
Common Stockholders $ 0.31 $ 0.26
========= =========
Basic and Diluted Income Per Share-Class C Common $ 0.09 $ 0.08
========= =========
Weighted Average Basic Shares Outstanding-Common
Stockholders 6,050 6,022
========= =========
Weighted Average Diluted Shares Outstanding - Common
Stockholders 6,178 6,150
========= =========
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 NINE MONTHS
ENDED MARCH 31,
--------------------
REVENUES 2015 2014
--------- ---------
Product sales - net $ 1,806 $ 1,261
Service and repair fees - net 7,288 7,578
Service and repair fees - related parties - net 83 83
Patient fee revenue, net of contractual allowances
and discounts 20,700 17,811
Provision for bad debts for patient fee (9,244) (7,130)
Management and other fees - net 26,004 24,955
Management and other fees - related medical
practices - net 5,536 6,923
--------- ---------
Total Revenues - Net 52,173 51,481
--------- ---------
COSTS AND EXPENSES
Costs related to product sales 1,674 902
Costs related to service and repair fees 1,611 1,755
Costs related to service and repair fees - related
parties 18 19
Costs related to patient fee revenue 5,845 5,823
Costs related to management and other fees 15,665 15,591
Costs related to management and other fees - related
medical practices 3,893 3,808
Research and development 1,116 1,128
Selling, general and administrative 11,108 12,024
Provision for bad debts 1,540 763
--------- ---------
Total Costs and Expenses 42,470 41,813
--------- ---------
Income From Operations 9,703 9,668
Interest Expense (545) (682)
Investment Income 173 178
Other Expense (2) (113)
--------- ---------
Income Before Provision for Income Taxes and
Noncontrolling Interests 9,329 9,051
Provision for Income Taxes 99 235
--------- ---------
Net Income 9,230 8,816
Net Income - Noncontrolling Interests (2,018) (2,497)
--------- ---------
Net Income - Controlling Interests $ 7,212 $ 6,319
========= =========
Net Income Available to Common Stockholders $ 6,743 $ 5,907
========= =========
Net Income Available to Class A Non-voting Preferred
Stockholders $ 350 $ 307
========= =========
Net Income Available to Class C Common Stockholders $ 119 $ 105
========= =========
Basic Net Income Per Common Share Available to Common
Stockholders $ 1.11 $ 0.98
========= =========
Diluted Net Income Per Common Share Available to
Common Stockholders $ 1.09 $ 0.96
========= =========
Basic and Diluted Income Per Share-Class C Common $ 0.31 $ 0.27
========= =========
Weighted Average Basic Shares Outstanding - Common
Stockholders 6,050 6,002
========= =========
Weighted Average Diluted Shares Outstanding- Common
Stockholders 6,178 6,130
========= =========
Weighted Average Basic Shares Outstanding - Class C
Common 383 383
========= =========
Weighted Average Diluted Shares Outstanding - Class C
Common 383 383
========= =========
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
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