SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Act of 1934

 

Date of Report (Date of earliest event reported): May 15, 2014

 

FONAR CORPORATION

______________________________________________________

(Exact name of registrant as specified in its charter)

 

 

Delaware   0-10248   11-2464137

(State or other jurisdiction of incorporation)

 

  (Commission File Number)   (I.R.S. Employer Identification No.)
   

110 Marcus Drive

Melville, New York 11747

(631) 694-2929

   
   

(Address, including zip code, and telephone number of registrant's principal executive office)

 

   

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

[ ] Written communications pursuant to Rule 425 under the Securities Act 17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)

 

 

Item 2.02(a) Results of Operations and Financial Condition.

 

We reported the results of operations and financial condition of the Company for the fiscal quarter ended March 31, 2014 in a press release dated May 15, 2014.

 

Exhibits

 

99.1 Press Release dated May 15, 2014

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

  FONAR CORPORATION
  (Registrant)
 

 

By: /s/ Raymond Damadian

  Raymond Damadian
  President and Chairman

 

Dated: May 15, 2014

 

 

 

 



 

NEWS    FONAR CORPORATION
For Immediate Release   The Inventor of MR Scanning™
Contact: Daniel Culver   An ISO 9001 Company
Director of Communications   Melville, New York 11747
E-mail: investor@fonar.com   Phone: (631) 694-2929
www.fonar.com   Fax: (631) 390-1709

 

FONAR Announces 3rd Quarter Fiscal 2014 & Nine Month Earnings Report

 

·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

 

 

MELVILLE, NEW YORK, May 15, 2014 – 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. Raymond Damadian, president and chairman of FONAR Corporation, has issued his annual shareholder letter which can be seen on the Company’s Web site at www.fonar.com/shareholder_letter.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.

 
 

FONAR CORPORATION AND SUBSIDIARIES

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

 

 
 

FONAR CORPORATION AND SUBSIDIARIES

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

 

 

 
 

FONAR CORPORATION AND SUBSIDIARIES

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

 

 
 

FONAR CORPORATION AND SUBSIDIARIES

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 

 

 

 
 

FONAR CORPORATION AND SUBSIDIARIES

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 

 

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