MELVILLE, NY--(Marketwire - October 05, 2009) - FONAR Corporation (NASDAQ: FONR), The Inventor of MR Scanning™, today announced its financial results for the fiscal year ending June 30, 2009. Total net income for the fiscal year ended June 30, 2009 was $1.1 million, as compared to a net loss of $13.5 million for fiscal 2008. The net income per share (basic and diluted) for the fiscal year ended June 30, 2009 was $0.21, as compared to a net loss per share (basic and diluted) of $2.76 during fiscal 2008.
Raymond V. Damadian, Chairman and President of Fonar Corporation, said, “We are very pleased to see the Company return to profitability. We have now made a profit for three quarters straight and are hopeful to continue this trend of profitability. A very sound reason is that the FONAR UPRIGHT® Multi-Position™ MRI technology (Dynamic MRI) is the only participant in this unique market. The impact of FONAR’s patented technology on net income growth can be seen in Fig. 1.”
Total revenues increased by 12% to $39.7 million for the fiscal year ended June 30, 2009 as compared to $35.6 million for fiscal 2008.
Total costs and expenses related to operations decreased 23%, from $52.5 million in the fiscal year ended June 30, 2008, to $40.4 million in the fiscal year ended June 30, 2009. The loss from operations decreased 96% from a loss of $16.9 million in the fiscal year ended June 30, 2008, to a loss of $0.7 million in the fiscal year ended June 30, 2009. Dr. Damadian continued, “The Company has done well controlling costs while continuing to produce the FONAR UPRIGHT® Multi-Position™ MRI scanner. This is the result of a cost cutting program that we initiated over a year ago.”
Revenues from product sales of the FONAR UPRIGHT® Multi-Position™ MRI scanners increased 48% from $11.2 million in the fiscal year ended June 30, 2008 to $16.6 million one year later at fiscal 2009. At June 30, 2009 there were 137 FONAR UPRIGHT® Multi-Position™ MRI scanners installed in the United States and around the world. Included in net income for the year ended June 30, 2009 is a pre-tax gain on the sale of a subsidiary of $1.4 million.
At June 30, 2009, total assets were $28.4 million, total current assets were $18.3 million, total current liabilities were $29.1 million, and total long-term liabilities were $2.1 million. The backlog for MRI product was $25.7 million. Total cash and marketable securities were $1.2 million.
Dr. Damadian said, “FONAR’s prospects have much improved since the country’s financial difficulties last year and our customers’ uncertainties regarding the Deficit Reduction Act (DRA) have eased. Over the past few years, the medical evidence continues to grow indicating that the FONAR UPRIGHT® Multi-Position™ MRI is the best MRI for diagnosing spine problems. So as pent-up demand for MRI scanners surfaces, we can expect rising sales.”
“Unfortunately, the outcomes of spinal surgery are less than optimal, a fact underscored by the recent book titled ‘The Failed Spine,’ published by Lippincott, Williams & Wilkins, (M. Szpalski and R. Gunzburg, Editors, 2005). The high failure rate has resulted in the acronym, FBSS, which stands for Failed Back Surgery Syndrome. The authors report that the ‘major identifiable causes of FBSS’ include ‘failure to identify the structural source(s) of pain correctly,’” stated Dr. Damadian.
“Sadly, the distinguished Swedish spine surgeon, Alf Nachemson, MD, characterizes these unsatisfactory patient outcomes as the ‘high number of multiply operated surgical cripples,’ (Nachemson, A., The lumbar spine: An orthopaedic challenge. Spine, 1976:1, 59-71.).
“Since the FONAR UPRIGHT® Multi-Position™ MRI can place the patient in the exact position that generates his or her symptoms, the MRI picture can be taken in that position. This unique capability assures that the degenerative spinal change responsible for the patient’s pain is correctly identified and operated on, instead of surgery being performed on another spinal change that is not responsible for the patient’s symptoms. Unfortunately, surgery on the wrong spinal segment can generate additional symptoms post-operatively, while the patient continues to suffer with the symptoms not addressed by surgery on the wrong segment,” remarked Dr. Damadian.
“FONAR’s position in medical imaging is immeasurably enhanced by the fact that FONAR is the leader in UPRIGHT® Multi-Position™ MRI technology,” concluded Dr. Damadian.
RECENT HIGHLIGHTS AND ACCOMPLISHMENTS
On November 17, 2008, The Company held its annual shareholder meeting for the combined fiscal years ending June 30, 2009 and 2008. All proposals before the shareholders passed.
In February 2009, Dr. Damadian was the recipient of the 2009 AIMBE Honorary Fellow Award (American Institute for Medical and Biological Engineering) for his discovery of MRI. Dr. Damadian is the originator of the concept of magnetic resonance (MR) scanning of the human body (1969). The AIMBE Award was presented at the annual meeting of AIMBE, held February 11-13 in Washington, D.C.
The award says: “In 1970, Raymond Damadian, M.D., made the discovery that is the basis for magnetic resonance (MR) scanning that there is a marked difference in relaxation times between normal and abnormal tissues of the same type, as well as between different types of normal tissues. This seminal discovery, which remains the basis for the making of every MRI image ever produced, is the foundation of the MRI industry. Dr. Damadian published his discovery in his milestone 1971 paper in the journal Science (Science 171:1151, 1971) and filed the pioneer patent for the practical use of his discovery in 1972.” (www.fonar.com/news/022409.htm).
During the past fiscal year, FONAR also expanded its global reach with a sale in Libya, marking the first sale of an UPRIGHT® MRI in Africa and additional sales in the Middle East.
On February 18, 2009 the Company made an earnings announcement titled: FONAR Reports Profit and 2nd Quarter Fiscal 2009 Financial Results; FONAR’s Innovative ‘Made In America’ UPRIGHT MRI Adds Product Revenues. Within the release, Dr. Damadian said, “In this era of jobs being exported to other countries, 82% of the components that create The FONAR UPRIGHT® Multi-Position™ MRI are purchased from 26 American States. So FONAR can truly say, ‘Made in America.’”
This past June, Dr. Damadian attended grand openings for three UPRIGHT® Multi-Position™ MRI customers who spanned the world. First he attended a grand opening in Kamloops, Canada, for the installation of the first UPRIGHT® Multi-Position™ MRI in Canada. Then he participated in a grand opening in South Dakota. Finally, Dr. Damadian attended a grand opening in Munich, Germany. All of these ceremonies featured Dr. Damadian as the inventor of the MRI.
For investor and other information visit: www.fonar.com.
UPRIGHT® and STAND-UP® are registered trademarks and The Inventor of MR Scanning™, Full Range of Motion™, pMRI™, Dynamic™, Multi-Position™, True Flow™, The Proof is in the Picture™, Spondylography™ Spondylometry™ and Upright Radiology™ 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, ------------------------ 2009 2008 ----------- ----------- Current Assets: Cash and cash equivalents $ 1,225,619 $ 1,325,512 Marketable securities 22,652 1,068,168 Accounts receivable - net of allowances for doubtful accounts of $2,393,326 and $2,020,208 at June 30, 2009 and 2008, respectively 5,391,822 5,157,594 Medical receivables - net of allowances for doubtful accounts of $1,343,500 and $769,000 at June 30, 2009 and 2008, respectively 374,225 1,227,858 Management fee receivable - net of allowances for doubtful accounts of $5,093,345 and $3,958,733 at June 30, 2009 and 2008, respectively 3,273,756 5,040,523 Management fee receivable - related medical practices - net of allowances for doubtful accounts of $1,094,818 and $2,413,483 at June 30, 2009 and 2008, respectively 2,196,580 1,372,261 Costs and estimated earnings in excess of billings on uncompleted contracts 1,475,706 6,285 Inventories 3,172,397 3,255,915 Current portion of advances and notes to related medical practices 164,611 155,423 Current portion of note receivable 517,934 2,508,306 Prepaid expenses and other current assets 472,397 869,353 ----------- ----------- Total Current Assets 18,287,699 21,987,198 Property and Equipment - Net 2,892,380 3,932,533 Advances and Notes to Related Medical Practices - net of allowances for doubtful accounts of $264,791 at June 30, 2009 and at June 30, 2008 89,032 263,363 Notes Receivable - net of allowance for doubtful accounts of $65,000 at June 30, 2009 and at June 30, 2008 1,778,626 2,296,560 Other Intangible Assets - Net 4,920,241 4,809,564 Other Assets 391,237 1,936,415 ----------- ----------- Total Assets $28,359,215 $35,225,633 =========== =========== FONAR CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES June 30, ----------------------- 2009 2008 ---------- ----------- Current Liabilities: Current portion of long-term debt and capital Leases $ 277,494 $ 372,722 Current portion of long-term debt - related party 79,509 - Accounts payable 3,518,609 4,019,993 Other current liabilities 8,460,042 8,316,263 Unearned revenue on service contracts 5,526,006 5,193,645 Customer advances 9,237,921 14,276,311 Billings in excess of costs and estimated earnings on uncompleted contracts 2,026,441 5,773,286 ----------- ----------- Total Current Liabilities 29,126,022 37,952,220 ----------- ----------- Long-Term Liabilities: Accounts payable 184,168 - Due to related medical practices 643,135 97,663 Long-term debt and capital leases, less current portion 759,211 756,976 Long-term debt, less current portion - related party 160,176 - Other liabilities 363,550 496,837 ----------- ----------- Total Long-Term Liabilities 2,110,240 1,351,476 ----------- ----------- Total Liabilities 31,236,262 39,303,696 ----------- ----------- Commitments, Contingencies and Other Matters FONAR CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS STOCKHOLDERS’ DEFICIENCY June 30, ------------------------- 2009 2008 ----------- ----------- Minority Interest $ 63,815 $ 166,966 Stockholders’ Deficiency: Class A non-voting preferred stock - $.0001 par value; authorized - 1,600,000 shares; issued and outstanding - 313,451 shares at June 30, 2009 and 2008 31 31 Preferred stock - $.001 par value; authorized - 2,000,000 shares; issued and outstanding - none - - Common stock - $.0001 par value; authorized - 30,000,000 shares at June 30, 2009 and 2008, respectively; issued - 4,917,918 and 4,915,918 shares at June 30, 2009 and 2008, respectively; outstanding - 4,906,275 and 4,904,275 shares at June 30, 2009 and 2008, respectively 491 490 Class B common stock (10 votes per share) - $.0001 par value; authorized - 800,000 shares; issued and outstanding - 158 shares at June 30, 2009 and 2008 - - Class C common stock (25 votes per share) - $.0001 par value; authorized - 2,000,000 shares; issued and outstanding - 382,513 shares at June 30, 2009 and 2008 Paid-in capital in excess of par value Accumulated other comprehensive loss 38 38 Accumulated deficit 172,280,600 172,276,540 Notes receivable from employee stockholders (20,995) (72,723) Treasury stock, at cost - 11,643 shares (174,258,607) (175,379,874) of common stock at June 30, 2009 and 2008 (267,030) (394,141) Total Stockholders’ Deficiency (675,390) (675,390) ------------ ------------ Total Liabilities and Stockholders’ Deficiency (2,940,862) (4,245,029) ------------ ------------ $ 28,359,215 $ 35,225,633 ============ ============ FONAR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended June 30, ---------------------------- 2009 2008 Revenues ------------- ------------- Product sales - net $ 17,175,417 $ 11,326,388 Service and repair fees - net 10,345,091 10,930,331 Service and repair fees - related parties - net 192,500 110,000 Management and other fees 7,342,614 8,337,000 Management and other fees - related medical practices - net 2,911,318 3,706,636 License fees and royalties 1,755,493 1,158,478 ------------ ------------ Total Revenues - Net 39,722,433 35,568,833 ------------ ------------ Costs and Expenses Costs related to product sales 10,758,201 11,143,826 Costs related to service and repair fees 3,992,557 5,107,802 Costs related to service and repair fees - related parties 74,293 51,404 Costs related to management and other fees 4,507,587 5,548,605 Costs related to management and other fees - related medical practices 2,790,745 3,041,828 Research and development 3,593,470 5,006,591 Selling, general and administrative, inclusive of compensatory element of stock issuances of $4,061 and $360 for the years ended June 30, 2009 and 2008, respectively 13,423,066 20,386,748 Provision for bad debts 1,286,451 2,208,820 ------------- ------------- Total Costs and Expenses 40,426,370 52,495,624 ------------- ------------- Loss from Operations (703,937) (16,926,791) Other Income and (Expenses): Interest expense (333,229) (535,322) Investment income 325,688 694,910 Interest income - related parties 20,818 33,801 Other income - net 410,657 129,368 Minority interests in income of partnerships (10,995) (219,058) Gain on sale of investment - 571,161 Gain on sale of consolidated subsidiary 1,448,196 3,394,975 Loss on note receivable - (658,351) ------------- ------------- Income (Loss) Before Provision For (Benefit From) Income Taxes 1,157,198 (13,515,307) Provision for (Benefit from) Income Taxes 35,931 (6,940) ------------ ------------- Net Income (Loss) $ 1,121,267 $ (13,508,367) ============ ============= FONAR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended June 30, ---------------------------- 2009 2008 ------------- ------------- Net Income (Loss) Available to Common and Class C Common Stockholders $ 1,053,898 $ (13,508,367) ============= ============= Basic and Diluted Net Income (Loss) Per Common Share Available to Common Stockholders $ 0.21 $ (2.76) ============= ============= Basic Net Income Per Share - Common C $ 0.06 N/A ============= =============
Contact:
Daniel Culver
FONAR Corporation
Tel: 631-694-2929
Fax: 631-390-1709
http://www.fonar.com
Email Contact