FONAR Announces 3rd Quarter Fiscal 2014 & Nine Month Earnings
Report
MELVILLE, NY--(Marketwired - May 15, 2014) - FONAR Corporation
(NASDAQ: FONR)
- Third Quarter Fiscal 2014 Net Revenues increased 46% to
$17.0 million over Third Quarter Fiscal 2013
- Third Quarter Fiscal 2014 Diluted Net Income per common
share available to common shareholders was $0.26, an increase of
53% over Third Quarter Fiscal 2013
- Third Quarter Fiscal 2014 Net Income was $2.1 million, an
increase of 36% over Third Quarter Fiscal 2013
- Record sixteenth (16) straight quarter of positive net
income and income from operations of which most recent eleven (11)
were greater than $1.5 million
Fonar Corporation (NASDAQ: FONR), The Inventor of MR Scanning™,
reported its financial position for the period ended March 31,
2014. 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 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 increased 67% to $51.5 million for the nine month
period ended March 31, 2014 from $30.8 million for the
corresponding nine month period one year earlier. Revenues for the
third fiscal quarter ended March 31, 2014 were $17.0 million versus
$11.6 million for the corresponding quarter one year earlier.
Net Income increased 77% to $8.8 million for the nine month
period ended March 31, 2014 from $5.0 million for the corresponding
nine month period one year earlier. Net Income for the third fiscal
quarter ended March 31, 2014 was $2.1 million versus $1.6 million
for the corresponding nine month period one year earlier.
Income from Operations increased 85% to $9.7 million for the
nine month period ended March 31, 2014 from $5.2 million for the
corresponding nine month period one year earlier. Income from
Operations for the third fiscal quarter ended March 31, 2014 was
$2.3 million, an increase of 42% from $1.6 million for the
corresponding nine month period one year earlier.
Diluted net income per common share available to common
shareholders increased 60% to $0.96 for the nine month period ended
March 31, 2014 from $0.60 for the corresponding nine month period
one year earlier. Diluted net income per common share available to
common shareholder for the third fiscal quarter ended March 31,
2014 was $0.26 versus $0.17 for the corresponding quarter one year
earlier, an increase of 53%.
Balance Sheet
Items
Total assets at the quarter ended March 31, 2014 were $76.1
million, as compared to $73.2 million at June 30, 2013.
Total liabilities at the quarter ended March 31, 2014 were $32.7
million, as compared to $35.4 million at June 30, 2013.
Total current assets at the quarter ended March 31, 2014 were
$43.4 million, as compared to $37.9 million at June 30, 2013.
Total cash and cash equivalents March 31, 2014, were $9.6
million, as compared to $7.9 million at June 30, 2013.
Total current liabilities at the quarter ended March 31, 2014
were $22.2 million, as compared to $21.1 million at June 30,
2013.
Management
Discussion
Raymond V. Damadian, president and chairman of Fonar
Corporation, said, "We have had increased pressure due to cuts in
MRI reimbursements brought about by the Affordable Care Act. Thanks
to the uniqueness of our UPRIGHT® full weight-loaded MRI scans, the
steadily increasing volumes at the Stand-Up® MRI scanning centers
provide significant relief."
"In March, the scan volume at the MRI scanning centers we manage
was 15% higher than that of March 2013, setting a new company
record," said Dr. Damadian. "I am very pleased."
"We expect to facilitate growth of imaging centers through
acquisitions, supporting new UPRIGHT® imaging centers, and
increasing scan volume at our existing locations by continuing to
educate the medical community about the unique diagnostic
advantages of UPRIGHT® Multi-Position™ full weight-loaded MRI,"
added Dr. Damadian.
Significant
Events
The Company will hold its annual meeting on June 23, 2014. Dr.
Damadian has issued his annual shareholder letter which can be seen
on the Company's Web site at
http://www.fonar.com/shareholder_letter_5_2014.htm.
About FONAR
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.
Since its inception, nearly 300 recumbent-OPEN MRIs and 157
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 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, 2014 |
|
June 30, 2013 * |
Cash
and cash equivalents |
|
$ |
9,589 |
|
$ |
7,871 |
Accounts receivable - net |
|
|
4,444 |
|
|
4,444 |
Accounts receivable - related party |
|
|
30 |
|
|
- |
Medical receivable - net |
|
|
8,924 |
|
|
8,126 |
Management and other fees receivable - net |
|
|
12,675 |
|
|
11,466 |
Management and other fees receivable - related medical practices -
net |
|
|
3,463 |
|
|
2,382 |
Inventories |
|
|
2,510 |
|
|
2,077 |
Prepaid expenses and other current assets |
|
|
1,708 |
|
|
1,500 |
Total
Current Assets |
|
|
43,343 |
|
|
37,866 |
Property and equipment - net |
|
|
16,045 |
|
|
17,524 |
Goodwill |
|
|
1,767 |
|
|
1,767 |
Other
intangible assets - net |
|
|
11,043 |
|
|
11,904 |
Deferred income tax asset |
|
|
2,936 |
|
|
2,936 |
Other
assets |
|
|
1,013 |
|
|
1,154 |
Total
Assets |
|
$ |
76,147 |
|
$ |
73,151 |
|
|
|
|
|
|
|
*
Condensed from audited financial statements |
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
(AMOUNTS AND SHARES IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS) |
(UNAUDITED) |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
March 31, 2014 |
|
June 30, 2013 * |
Current Liabilities: |
|
|
|
|
|
|
|
Current portion of long-term debt and capital
leases |
|
$ |
2,967 |
|
$ |
2,886 |
|
Accounts payable |
|
|
2,863 |
|
|
2,752 |
|
Other current liabilities |
|
|
9,665 |
|
|
8,636 |
|
Unearned revenue on service contracts |
|
|
4,873 |
|
|
4,965 |
|
Unearned revenue on service contracts - related
party |
|
|
28 |
|
|
- |
|
Customer advances |
|
|
1,791 |
|
|
1,858 |
|
Income tax payable |
|
|
- |
|
|
20 |
|
|
Total
Current Liabilities |
|
|
22,187 |
|
|
21,117 |
Long-Term Liabilities: |
|
|
|
|
|
|
|
Due to related medical practices |
|
|
231 |
|
|
231 |
|
Long-term debt and capital leases, less current
portion |
|
|
9,404 |
|
|
12,887 |
|
Deferred income tax liability |
|
|
462 |
|
|
462 |
|
Other liabilities |
|
|
433 |
|
|
654 |
|
|
Total
Long-Term Liabilities |
|
|
10,530 |
|
|
14,234 |
|
|
Total
Liabilities |
|
$ |
32,717 |
|
$ |
35,351 |
|
|
|
|
|
|
|
|
|
*
Condensed from audited financial statements |
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
(AMOUNTS AND SHARES IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS) |
|
(UNAUDITED) |
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY (Continued) |
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
March 31, 2014 |
|
|
June 30, 2013 * |
|
STOCKHOLDERS' EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class
A non-voting preferred stock $.0001 par value; 453 shares
authorized at March 31, 2014 and June 30, 2013, 313 issued and
outstanding at March 31, 2014 and June 30, 2013 |
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
Preferred stock $.001 par value; 567 shares authorized at March 31,
2014 and June 30, 2013, issued and outstanding - none |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Common Stock $.0001 par value; 8,500 shares authorized at March 31,
2014 and June 30, 2013, 6,037 and 5,981 issued at March 31, 2014
and June 30, 2013, respectively; 6,025 and 5,969 outstanding at
March 31, 2014 and June 30, 2013, respectively |
|
|
1 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
Class
B Common Stock (10 votes per share) $ .0001 par value; 227 shares
authorized at March 31, 2014 and June 30, 2013, .146 issued and
outstanding at March 31, 2014 and June 30, 2013 |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Class
C Common Stock (25 votes per share) $.0001 par value; 567 shares
authorized at March 31, 2014 and June 30, 2013, 383 issued and
outstanding at March 31, 2014 and June 30, 2013 |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Paid-in capital in excess of par value |
|
|
175,023 |
|
|
|
174,499 |
|
Accumulated deficit |
|
|
(153,336 |
) |
|
|
(159,655 |
) |
Notes
receivable from employee stockholders |
|
|
(41 |
) |
|
|
(55 |
) |
Treasury stock, at cost - 12 shares of common stock at March 31,
2014 and June 30, 2013 |
|
|
(675 |
) |
|
|
(675 |
) |
Total
Fonar Corporation Stockholder Equity |
|
|
20,972 |
|
|
|
14,115 |
|
Non
controlling interests |
|
|
22,458 |
|
|
|
23,685 |
|
|
|
|
|
|
|
|
|
|
Total
Stockholders' Equity |
|
|
43,430 |
|
|
|
37,800 |
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Stockholders' Equity |
|
$ |
76,147 |
|
|
$ |
73,151 |
|
|
|
|
|
|
|
|
|
|
*
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 |
|
2014 |
|
|
2013 |
|
|
Product sales - net |
|
$ |
478 |
|
|
$ |
416 |
|
|
Service and repair fees - net |
|
|
2,518 |
|
|
|
2,867 |
|
|
Service and repair fees - related parties - net |
|
|
27 |
|
|
|
27 |
|
|
Patient fee revenue, net of contractual allowances and
discounts |
|
|
6,090 |
|
|
|
965 |
|
|
Provision for bad debts for patient fee |
|
|
(2,868 |
) |
|
|
- |
|
|
Management and other fees - net |
|
|
8,538 |
|
|
|
5,402 |
|
|
Management and other fees - related medical practices -
net |
|
|
2,257 |
|
|
|
1,965 |
|
|
|
Total
Revenues - Net |
|
|
17,040 |
|
|
|
11,642 |
|
|
|
|
|
|
|
|
|
|
COSTS AND EXPENSES |
|
|
|
|
|
|
|
|
|
Costs related to product sales |
|
|
223 |
|
|
|
498 |
|
|
Costs related to service and repair fees |
|
|
623 |
|
|
|
819 |
|
|
Costs related to service and repair fees - related
parties |
|
|
7 |
|
|
|
8 |
|
|
Costs related to patient fee revenue |
|
|
1,947 |
|
|
|
791 |
|
|
Costs related to management and other fees |
|
|
5,327 |
|
|
|
2,606 |
|
|
Costs related to management and other fees - related
medical practices |
|
|
1,318 |
|
|
|
900 |
|
|
Research and development |
|
|
360 |
|
|
|
381 |
|
|
Selling, general and administrative |
|
|
3,935 |
|
|
|
3,774 |
|
|
Provision for bad debts |
|
|
981 |
|
|
|
235 |
|
|
|
Total
Costs and Expenses |
|
|
14,721 |
|
|
|
10,012 |
|
Income From Operations |
|
|
2,319 |
|
|
|
1,630 |
|
Interest Expense |
|
|
(203 |
) |
|
|
(79 |
) |
Investment Income |
|
|
57 |
|
|
|
55 |
|
Other Income |
|
|
39 |
|
|
|
- |
|
Income Before Provision for Income Taxes |
|
|
2,212 |
|
|
|
1,606 |
|
|
|
|
|
|
|
|
|
|
Provision for Income Taxes |
|
|
65 |
|
|
|
25 |
|
Net Income |
|
|
2,147 |
|
|
|
1,581 |
|
Net Income - Non Controlling Interests |
|
|
(408 |
) |
|
|
(505 |
) |
Net Income - Controlling Interests |
|
$ |
1,739 |
|
|
$ |
1,076 |
|
Net Income Available to Common Stockholders |
|
$ |
1,625 |
|
|
$ |
1,005 |
|
Net Income Available to Class A Non-Voting Preferred
Stockholders |
|
$ |
85 |
|
|
$ |
53 |
|
Net Income Available to Class C Common
Stockholders |
|
$ |
29 |
|
|
$ |
18 |
|
Basic Net Income Per Common Share Available to Common
Stockholders |
|
$ |
0.27 |
|
|
$ |
0.17 |
|
Diluted Net Income Per Common Share Available to Common
Stockholders |
|
$ |
0.26 |
|
|
$ |
0.17 |
|
Basic and Diluted Income Per Share-Common C |
|
$ |
0.08 |
|
|
$ |
0.05 |
|
Weighted Average Basis Shares Outstanding-Common
Stockholders |
|
|
6,022 |
|
|
|
5,937 |
|
Weighted Average Diluted Shares Outstanding |
|
|
6,150 |
|
|
|
6,065 |
|
Weighted Average Basic Shares Outstanding - Class
C |
|
|
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 |
|
2014 |
|
|
2013 |
|
|
Product sales - net |
|
$ |
1,261 |
|
|
$ |
2,536 |
|
|
Service and repair fees - net |
|
|
7,578 |
|
|
|
8,341 |
|
|
Service and repair fees - related parties - net |
|
|
83 |
|
|
|
83 |
|
|
Patient fee revenue, net of contractual allowances and
discounts |
|
|
17,811 |
|
|
|
965 |
|
|
Provision for bad debts for patient fee |
|
|
(7,130 |
) |
|
|
- |
|
|
Management and other fees - net |
|
|
24,955 |
|
|
|
12,946 |
|
|
Management and other fees - related medical practices -
net |
|
|
6,923 |
|
|
|
5,895 |
|
|
|
Total
Revenues - Net |
|
|
51,481 |
|
|
|
30,766 |
|
|
|
|
|
|
|
|
|
|
COSTS AND EXPENSES |
|
|
|
|
|
|
|
|
|
Costs related to product sales |
|
|
902 |
|
|
|
2,457 |
|
|
Costs related to service and repair fees |
|
|
1,755 |
|
|
|
2,579 |
|
|
Costs related to service and repair fees - related
parties |
|
|
19 |
|
|
|
26 |
|
|
Costs related to patient fee revenue |
|
|
5,823 |
|
|
|
791 |
|
|
Costs related to management and other fees |
|
|
15,591 |
|
|
|
7,013 |
|
|
Costs related to management and other fees - related
medical practices |
|
|
3,808 |
|
|
|
2,568 |
|
|
Research and development |
|
|
1,128 |
|
|
|
1,031 |
|
|
Selling, general and administrative |
|
|
12,024 |
|
|
|
8,338 |
|
|
Provision for bad debts |
|
|
763 |
|
|
|
735 |
|
|
|
Total
Costs and Expenses |
|
|
41,813 |
|
|
|
25,538 |
|
Income From Operations |
|
|
9,668 |
|
|
|
5,228 |
|
Interest Expense |
|
|
(682 |
) |
|
|
(258 |
) |
Investment Income |
|
|
178 |
|
|
|
174 |
|
Other Expense |
|
|
(113 |
) |
|
|
(13 |
) |
Income Before Provision for Income Taxes |
|
|
9,051 |
|
|
|
5,131 |
|
|
|
|
|
|
|
|
|
|
Provision for Income Taxes |
|
|
235 |
|
|
|
152 |
|
Net Income |
|
|
8,816 |
|
|
|
4,979 |
|
Net Income - Non Controlling Interests |
|
|
(2,497 |
) |
|
|
(1,103 |
) |
Net Income - Controlling Interests |
|
$ |
6,319 |
|
|
$ |
3,876 |
|
Net Income Available to Common Stockholders |
|
$ |
5,907 |
|
|
$ |
3,621 |
|
Net Income Available to Class A Non-voting Preferred
Stockholders |
|
$ |
307 |
|
|
$ |
190 |
|
Net Income Available to Class C Common
Stockholders |
|
$ |
105 |
|
|
$ |
65 |
|
Basic Net Income Per Common Share Available to Common
Stockholders |
|
$ |
0.98 |
|
|
$ |
0.61 |
|
Diluted Net Income Per Common Share Available to Common
Stockholders |
|
$ |
0.96 |
|
|
$ |
0.60 |
|
Basic and Diluted Income Per Share-Common C |
|
$ |
0.27 |
|
|
$ |
0.17 |
|
Weighted Average Basic Shares Outstanding |
|
|
6,002 |
|
|
|
5,921 |
|
Weighted Average Diluted Shares Outstanding |
|
|
6,130 |
|
|
|
6,049 |
|
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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