FONAR Corporation (NASDAQ: FONR), The Inventor of MR Scanning™,
reported today its second quarter financial results of fiscal 2013.
In addition to profitability being greater than $1.5 million for
six straight quarters, the Company has had twelve straight quarters
of income from operations. In spite of Hurricane Sandy reaping
havoc in the area that four of its scanning centers are located,
revenues for FONAR's imaging management division advanced when
compared to a year ago or last quarter. FONAR's business is based
upon utilization of its UPRIGHT® Multi-Position™ MRI, also called
the STAND-UP® MRI.
Statement of Operations Items
- Income from operations for the six months and quarter ended
December 31, 2012, was $3.6 million and $1.7 million, respectively,
as compared to $3.7 million and $1.9 million respectively, for the
same period one year earlier.
- Net income for the six months and quarter ended December 31,
2012, was $3.4 million and $1.6 million, respectively, as compared
to $3.6 million and $1.8 million respectively, for the same period
one year earlier.
- The basic net income per common share available to common
stockholders, for the six months and quarter ended December 31,
2012 was $0.44 and $0.21, as compared to $0.50 and $0.25 for the
six months and quarter ended December 31, 2011.
- The diluted net income per common share available to common
stockholders, for the six months and quarter ended December 31,
2012 was $0.43 and $0.21, as compared to $0.49 and $0.24 for the
six months and quarter ended December 31, 2011.
- Total revenue for the six months and quarter ended December 31,
2012, was $19.1 million and $9.6 million, respectively, as compared
to $18.9 million and $9.3 million for the same period one year
earlier.
- Total operating costs and expenses for the six months and
quarter ended December 31, 2012, were $15.5 million and $7.9
million, respectively, as compared to $15.3 million and $7.4
million for the same period one year earlier.
- Revenue from the management and other fees segment, (HMCA
management of the eleven FONAR UPRIGHT® Multi-Position™ MRI
diagnostic imaging centers segment), for the six months and quarter
ended December 31, 2012, was $11.5 million and $5.7 million
respectively, as compared to $9.8 million and $4.9 million for the
same period one year earlier. These are increases of 17% and 17%
respectively.
- Revenue from the manufacturing and service segments for the
FONAR UPRIGHT® Multi-Position™ MRI for the six months and quarter
ended December 31, 2012, was $7.7 million and $3.9 million,
respectively, as compared to $9.2 million and $4.4 million for the
same period one year earlier.
- Research & development (R&D) and selling, general &
administrative costs (S,G&A) were $2.7 million for the quarter
ended December 31, 2012, as compared to $2.3 million for the
quarter ended December 31, 2011.
Balance Sheet Items
- As of December 31, 2012 total current assets were $29.6
million, total assets were $36.8 million, total current liabilities
were $21.4 million, and total long-term liabilities were $1.3
million.
- As of December 31, 2012, total cash and cash equivalents were
$14.8 million.
- As of December 31, 2012, the total stockholders' equity was
$14.1 million.
See the accompanying tables for more details.
Management Discussion
Raymond V. Damadian, M.D., president and chairman of FONAR said,
"I am quite pleased with the Company's consistent progress since we
redefined our corporate business strategy following the 2008
banking crisis. It is remarkable that we have had 1 1/2 years of
net income and income from operations exceeding $1.5 million. Each
quarter over the past three years we have consistently been
profitable having earned income from operations. Our total assets
have grown from $21.6 million at June 30, 2010 to $36.8 million
most recently, shareholders' equity has climbed to over $14 million
and our long-term liabilities are a low of $1.25 million."
"The eleven UPRIGHT® Multi-Position™ MRI centers that we manage
continue to add scan volume," said Dr. Damadian. "In fact, for the
three months ended December 31, 2012, the number of scans was
10,563 as compared to 10,332 scans over the same period one year
earlier. This occurred in spite of the interruption caused by
Hurricane Sandy which did cause several of our scanning centers to
temporarily stop for a short period."
"Much of our success comes from the management team assembled
that manages the imaging center management business. Key to their
success though is the marketing strength of the FONAR STAND-UP® MRI
(a.k.a. UPRIGHT® Multi-Position™ MRI)," said Dr. Damadian. "We have
a considerable number of customer patients that tell us that they
will never go and have a recumbent MRI again. Currently, we are
managing eleven centers, all in New York and Florida."
"FONAR's UPRIGHT® MRI technology has opened a new frontier in
medical imaging," said Dr. Damadian. "It is the power to make MRI
motion pictures (cinés) of the cerebrospinal fluid (CSF) in the
spinal canal as it flows into and out of the brain of the patient
while Upright. These ciné MRIs of CSF flow in and out of the brain
while the patient is Upright, are uniquely sensitive to the
visualization of any impairments of CSF flow. This often leads to a
better understanding of the problems with the cervical anatomy that
might be contributing to the patient's symptoms."
"An example of the severe need of FONAR's unique UPRIGHT®
Multi-Position™ MRI technology is FONAR's recent discovery of the
potential adverse consequences of cervical spine malalignments.
Such cervical spine degenerations or vertebral malalignments can
obstruct the flow of cerebrospinal fluid (CSF), which in turn can
generate increases of intracranial pressure (ICP) and CSF
'leakages' into the surrounding brain parenchyma. It has been
proposed that CSF 'leakages', such as those shown to be joining the
MS lesions in the MRI images of the MS patients studied, could be
etiologic in the generation of multiple sclerosis (Damadian R.V.,
Chu D., 'The Possible Role of Cranio-Cervical Trauma and Abnormal
CSF Hydrodynamics in the Genesis of Multiple Sclerosis', Physiol.
Chem. Phys. & Med. NMR, September 20, 2011, 41:1-17). The
report showed that the cervical anatomic abnormalities seen in
these MS patients and the resulting CSF flow obstructions were
significantly more severe with the patient in the vertical position
(Table 2A, col. 10 & 11, Physiol. Chem. Phys. & Med. NMR,
September 20, 2011 41:1-17) than with the patient in the recumbent
position. Consequently, it is critical that any assessment of CSF
flow impairment in the brain or spinal column must be assessed with
the patient in the vertical position in order to determine the full
extent of the CSF flow impairment, the extent of treatment needed
and, most importantly, to achieve an accurate assessment
post-treatment of the degree to which satisfactory CSF flow has
been successfully restored. Accordingly," said Dr. Damadian, "we
believe there now exists a genuine hope that if an MS patient can
have their vertical position CSF flow and intracranial pressures
(ICP) monitored and restored to normal, then there is also the
prospect that the symptoms of this MS patient can be restored to
normal."
About FONAR
FONAR (NASDAQ: FONR), Melville, NY, The Inventor of MR
Scanning™, is an AMERICAN COMPANY that 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 over 150 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 only.
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
(000's OMITTED)
ASSETS
December 31, June 30,
2012 2012
Current Assets: (UNAUDITED)
------------- -------------
Cash and cash equivalents $ 14,760 $ 12,032
Accounts receivable - net 4,920 5,095
Accounts receivable - related party 60 -
Management and other fees receivable - net 4,525 3,782
Management and other fees receivable - related
medical practices - net 1,955 1,311
Costs and estimated earnings in excess of
billings on uncompleted contracts 747 1,129
Inventories 2,239 2,195
Current portion of notes receivable - net 118 116
Prepaid expenses and other current assets 251 206
------------- -------------
Total Current Assets 29,575 25,866
------------- -------------
Property and equipment - net 2,927 3,173
Notes receivable 207 276
Other intangible assets - net 3,609 3,835
Other assets 487 465
------------- -------------
Total Assets $ 36,805 $ 33,615
============= =============
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's OMITTED, except per share data)
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31, June 30,
2012 2012
(UNAUDITED)
------------- -------------
Current Liabilities:
Current portion of long-term debt and capital
Leases $ 1,483 $ 1,854
Accounts payable 2,020 2,077
Other current liabilities 8,179 7,693
Unearned revenue on service contracts 5,536 5,475
Unearned revenue on service contracts - related
Party 55 -
Customer advances 4,138 3,881
Income tax payable - 100
------------- -------------
Total Current Liabilities 21,411 21,080
Long-Term Liabilities:
Accounts payable, non current 10 47
Due to related medical practices 229 229
Long-term debt and capital leases, less current
Portion 634 777
Other liabilities 379 401
------------- -------------
Total Long-Term Liabilities 1,252 1,454
------------- -------------
Total Liabilities 22,663 22,534
------------- -------------
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's OMITTED, except per share data)
STOCKHOLDERS' EQUITY
LIABILITIES AND STOCKHOLDERS' EQUITY December 31, June 30,
(continued) 2012 2012
STOCKHOLDERS' EQUITY: (UNAUDITED)
------------- -------------
Class A non-voting preferred stock $.0001 par
value; 453,000 shares authorized at December
31, 2012 and June 30, 2012, 313,438 issued
and outstanding at December 31, 2012 and June
30, 2012 - -
Preferred stock $.001 par value; 567,000
shares authorized at December 31, 2012 and
June 30, 2012, issued and outstanding - none - -
Common Stock $.0001 par value; 8,500,000
shares authorized at December 31, 2012 and
June 30, 2012, 5,942,905 and 5,912,905 issued
at December 31, 2012 and June 30, 2012,
respectively; 5,931,262 and 5,901,262
outstanding at December 31, 2012 and June 30,
2012, respectively 1 1
Class B Common Stock (10 votes per share)
$.0001 par value; 227,000 shares authorized
at December 31, 2012 and June 30, 2012, 158
issued and outstanding at December 31, 2012
and June 30, 2012 - -
Class C Common Stock (25 votes per share)
$.0001 par value; 567,000 shares authorized
at December 31, 2012 and June 30, 2012,
382,513 issued and outstanding at December
31, 2012 and June 30, 2012 - -
Paid-in capital in excess of par value 174,231 174,084
Accumulated other comprehensive loss (20) (20)
Accumulated deficit (165,533) (168,334)
Notes receivable from employee stockholders (59) (71)
Treasury stock, at cost - 11,643 shares of
common stock
at December 31, 2012 and June 30, 2012 (675) (675)
Non controlling interests 6,197 6,096
------------- -------------
Total Stockholders' Equity 14,142 11,081
------------- -------------
Total Liabilities and Stockholders' Equity $ 36,805 $ 33,615
============= =============
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(000's OMITTED, except per share data)
FOR THE THREE
MONTHS ENDED
DECEMBER 31,
REVENUES 2012 2011
----------- -----------
Product sales - net $ 1,080 $ 1,615
Service and repair fees - net 2,765 2,807
Service and repair fees - related parties - net 28 27
Management and other fees - net 3,775 3,308
Management and other fees - related medical
practices - net 1,965 1,571
----------- -----------
Total Revenues - Net 9,613 9,328
----------- -----------
COSTS AND EXPENSES
Costs related to product sales 904 1,171
Costs related to service and repair fees 894 868
Costs related to service and repair fees -
related parties 9 9
Costs related to management and other fees 2,235 1,887
Costs related to management and other fees -
related medical practices 852 901
Research and development 320 293
Selling, general and administrative 2,352 1,995
Provision for bad debts 325 310
----------- -----------
Total Costs and Expenses 7,891 7,434
----------- -----------
Income From Operations 1,722 1,894
Interest Expense (103) (124)
Investment Income 60 64
Other Expense (4) (1)
Income Before Provision for Income Taxes and Non
Controlling Interests 1,675 1,833
Provision for Income Taxes 55 21
----------- -----------
Net Income 1,620 1,812
Net Income - Non Controlling Interests 271 276
----------- -----------
Net Income - Controlling Interests $ 1,349 $ 1,536
=========== ===========
Net Income Available to Common Stockholders $ 1,259 $ 1,432
=========== ===========
Net Income Available to Class A Non-Voting
Preferred Stockholders $ 67 $ 78
=========== ===========
Net Income Available to Class C Common Stockholders$ 23 $ 26
=========== ===========
Basic Net Income Per Common Share Available to
Common Stockholders $ 0.21 $ 0.25
=========== ===========
Diluted Net Income Per Common Share Available to
Common Stockholders $ 0.21 $ 0.24
=========== ===========
Basic and Diluted Income Per Share-Common C $ 0.06 $ 0.07
=========== ===========
Weighted Average Basis Shares Outstanding 5,926,262 5,728,528
=========== ===========
Weighted Average Diluted Shares Outstanding 6,053,766 5,856,032
=========== ===========
Weighted Average Basic Shares Outstanding - Class C
Common 382,513 382,513
=========== ===========
Weighted Average Diluted Shares Outstanding - Class
C Common 382,513 382,513
=========== ===========
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(000's OMITTED, except per share data)
FOR THE SIX
MONTHS ENDED
DECEMBER 31,
REVENUES 2012 2011
----------- -----------
Product sales - net $ 2,121 $ 3,391
Service and repair fees - net 5,474 5,712
Service and repair fees - related parties - net 55 55
Management and other fees - net 7,544 6,637
Management and other fees - related medical
practices - net 3,930 3,141
----------- -----------
Total Revenues - Net 19,124 18,936
----------- -----------
COSTS AND EXPENSES
Costs related to product sales 1,959 2,646
Costs related to service and repair fees 1,760 1,682
Costs related to service and repair fees -
related parties 18 16
Costs related to management and other fees 4,406 4,072
Costs related to management and other fees -
related medical practices 1,669 1,720
Research and development 650 622
Selling, general and administrative 4,564 4,037
Provision for bad debts 500 485
----------- -----------
Total Costs and Expenses 15,526 15,280
----------- -----------
Income From Operations 3,598 3,656
Interest Expense (179) (231)
Investment Income 120 126
Other (Expense) Income (13) 55
Income Before Provision for Income Taxes and Non
Controlling Interests 3,526 3,606
Provision for Income Taxes 127 21
----------- -----------
Net Income 3,399 3,585
Net Income - Non Controlling Interests 598 535
----------- -----------
Net Income - Controlling Interests $ 2,801 $ 3,050
=========== ===========
Net Income Available to Common Stockholders $ 2,616 $ 2,842
=========== ===========
Net Income Available to Class A Non-voting
Preferred Stockholders $ 138 $ 155
=========== ===========
Net Income Available to Class C Common
Stockholders $ 47 $ 53
=========== ===========
Basic Net Income Per Common Share Available to
Common Stockholders $ 0.44 $ 0.50
=========== ===========
Diluted Net Income Per Common Share Available to
Common Stockholders $ 0.43 $ 0.49
=========== ===========
Basic and Diluted Income Per Share-Common C $ 0.12 $ 0.14
=========== ===========
Weighted Average Basic Shares Outstanding 5,913,762 5,698,645
=========== ===========
Weighted Average Diluted Shares Outstanding 6,041,266 5,826,149
=========== ===========
Weighted Average Basic Shares Outstanding - Class
C Common 382,513 382,513
=========== ===========
Weighted Average Diluted Shares Outstanding -
Class C Common 382,513 382,513
=========== ===========
Contact: Daniel Culver Director of Communications E-mail: Email
Contact www.fonar.com
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