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):
February 9, 2015
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 December 31, 2014 in a press release dated February 9,
2015.
Exhibits
99.1 Press Release dated February 9,
2015
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: February 10, 2015
|
|
| 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 Fiscal 2015 2nd
Quarter Financial Results
| · | Net Revenues for 2nd Quarter Fiscal 2015
were $17.1 million versus $17.6 million for the same period a year earlier. |
| · | Net Income for 2nd Quarter Fiscal 2015
increased 13% to $3.5 million versus the same period a year earlier. |
| · | Net Income Available to Common Stockholders
for 2nd Quarter Fiscal 2015 increased 24% to $2.5 million versus the same period a year earlier. |
| · | Diluted Net Income Per Common Shares Available
to Common Stockholders increased 21% to $0.40 per share for 2nd Quarter Fiscal 2015 versus the same period a year earlier. |
MELVILLE, NEW
YORK, February 9, 2015 - FONAR Corporation (NASDAQ-FONR), The Inventor of MR Scanning™, reported its second quarter fiscal
2015 results for the quarter ended December 31, 2014. FONAR is the first Company in the MRI industry to manufacture an MRI (Magnetic
Resonance Imaging) scanner. FONAR’s substantial list of patents include recent patents for its technology enabling full weight-bearing
MRI imaging on all the gravity sensitive regions of the human anatomy, especially the brain, extremities, spine and cerebrospinal
fluid (CSF) flow.
The Company’s
two industry segments are the management of Stand-Up® MRI (UPRIGHT® MRI) centers, and the development, manufacturing and
servicing of the UPRIGHT® Multi-Position™ MRI. Its premier MRI product, 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 fully weight-bearing UPRIGHT® position.
Financial Highlights
Revenues increased
2% to $35.1 million for the six month period ended December 31, 2014, from $34.4 million for the corresponding six month period
one year earlier. Revenues for the second fiscal 2015 quarter ended December 31, 2014 were $17.1 million versus $17.6 million for
the corresponding quarter one year earlier.
Net Income was
$6.7 million for the six month period ended December 31, 2014 and the corresponding six month period one year earlier.
Net Income increased
13% to $3.5 million for the second fiscal 2015 quarter ended December 31, 2014 versus $3.0 million for the corresponding quarter
one year earlier.
Income from Operations
was $7.0 million for the six month period ended December 31, 2014, versus $7.3 million for the corresponding six month period one
year earlier.
Income from Operations
for the second fiscal 2015 quarter ended December 31, 2014 increased 9% to $3.6 million, from $3.3 million for the corresponding
quarter one year earlier.
Diluted net income
per common share available to common shareholders for the six month period ended December 31, 2014 was $0.79 versus $0.70 for the
corresponding six month period one year earlier, an increase of 13%.
Diluted net income
per common share available to common shareholders for the second fiscal 2015 quarter ended December 31, 2014 was $0.40 versus $0.33
for the corresponding quarter one year earlier, an increase of 21%.
Total assets at December 31, 2014 were
$79.0 million, as compared to $76.8 million at June 30, 2014. Total current assets at December 31, 2014 were $46.8 million, as
compared to $42.8 million at June 30, 2014.
Total liabilities at December 31, 2014
were $28.8 million, as compared to $30.9 million at June 30, 2014. Total current liabilities at December 31, 2014 were $20.9 million,
as compared to $21.2 million at June 30, 2014.
Stockholder’s equity at December
31, 2014 was $50.2 million, as compared to $45.9 million at June 30, 2014.
Cash
and cash equivalents increased 17% to $11.7 million at December 31,
2014, from $10.0 million at June 30, 2014.
Management Discussion
Raymond V. Damadian, president and
chairman of FONAR Corporation said, “Since acquiring Health Diagnostics in March 2013, the Company’s net profit has
gone from $1.6 million (for the quarter ended Dec 31, 2012) to $3.5 million (current quarter). That is almost $2 million more per
quarter. Management is proud of this achievement.”
“We are still concerned about
cuts in MRI reimbursement rates brought about by the Affordable Care Act,” said Dr. Damadian. “Nevertheless, we have
dealt with these cuts and we continue to grow our business. This is because of the adherence to our business strategy which has
made the difference.”
“At the core of our success
is that our business centers around the FONAR UPRIGHT® Multi-Position™ MRI. Our message to physicians,” said Dr.
Damadian, “is that the UPRIGHT® MRI will provide a ‘BETTER PATIENT OUTCOME’ for their patient. Our physician
users understand this and realize that you get the most accurate diagnosis available from the fully weight-loaded Multi-Position™
MRI provided by the FONAR UPRIGHT® versus that of the conventional weightless recumbent-only MRI. Most importantly,
they don’t want to run the risk of failure to visualize structural abnormalities in the spines of their patients that could
result in poor outcomes from their treatment.”
FONAR CORPORATION AND SUBSIDIARIES
“These physicians have learned
from firsthand experience that the FONAR UPRIGHT® MRI has the power to ‘SEE IT ALL’ and thus it’s use has
become indispensable towards their ultimate objective of optimizing the TREATMENT OUTCOMES FOR THEIR PATIENTS,” concluded
Dr. Damadian.
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
| | |
December 31,
2014 | |
June 30,
2014 * |
| Current Assets: | |
| | | |
| | |
| Cash and cash equivalents | |
$ | 11,674 | | |
$ | 9,952 | |
| Accounts receivable – net | |
| 5,028 | | |
| 4,450 | |
| Accounts receivable - related party | |
| 60 | | |
| — | |
| Medical receivable – net | |
| 8,898 | | |
| 8,808 | |
| Management and other fees receivable - net | |
| 13,740 | | |
| 11,970 | |
| Management and other fees receivable – related medical practices – net | |
| 3,469 | | |
| 3,427 | |
| Costs and estimated earnings in excess of billings on uncompleted contracts | |
| 726 | | |
| 760 | |
| Inventories | |
| 2,363 | | |
| 2,444 | |
| Prepaid expenses and other current assets | |
| 823 | | |
| 1,011 | |
| Total Current Assets | |
| 46,781 | | |
| 42,822 | |
| Deferred income tax asset | |
| 5,740 | | |
| 5,740 | |
| Property and equipment – net | |
| 13,951 | | |
| 15,030 | |
| Goodwill | |
| 1,767 | | |
| 1,767 | |
| Other intangible assets – net | |
| 9,933 | | |
| 10,509 | |
| Other assets | |
| 868 | | |
| 922 | |
| Total Assets | |
$ | 79,040 | | |
$ | 76,790 | |
LIABILITIES
| Current Liabilities: | |
| | | |
| | |
| Current portion of long-term debt and capital leases | |
$ | 2,894 | | |
$ | 2,891 | |
| Accounts payable | |
| 2,397 | | |
| 2,482 | |
| Other current liabilities | |
| 8,470 | | |
| 9,024 | |
| Unearned revenue on service contracts | |
| 5,052 | | |
| 4,731 | |
| Unearned revenue on service contracts – related party | |
| 55 | | |
| — | |
| Customer deposits | |
| 1,819 | | |
| 1,927 | |
| Billings in excess of costs and estimated earnings on uncompleted contracts | |
| 168 | | |
| 142 | |
| Total Current Liabilities | |
| 20,855 | | |
| 21,197 | |
| Long-Term Liabilities: | |
| | | |
| | |
| Due to related medical practices | |
| 229 | | |
| 234 | |
| Long-term debt and capital leases, less current portion | |
| 6,935 | | |
| 8,482 | |
| Deferred income tax liability | |
| 584 | | |
| 584 | |
| Other liabilities | |
| 217 | | |
| 386 | |
| Total Long-Term Liabilities | |
| 7,965 | | |
| 9,686 | |
| Total Liabilities | |
| 28,820 | | |
| 30,883 | |
* Condensed from audited financial
statements
FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts and shares in thousands,
except per share amounts)
(UNAUDITED)
STOCKHOLDERS’ EQUITY
| STOCKHOLDERS' EQUITY: | |
December 31, 2014 | |
June 30, 2014 * |
Class A non-voting preferred stock $.0001 par value; 453 shares authorized at December 31, 2014 and June 30, 2014, 313 issued and outstanding at December 31, 2014 and June 30, 2014 | |
$ | — | | |
$ | — | |
Preferred stock $.001 par value; 567 shares authorized at December 31, 2014 and June 30, 2014, issued and outstanding – none | |
| — | | |
| — | |
Common Stock $.0001 par value; 8,500 shares authorized at December 31, 2014 and June 30, 2014, 6,062 and 6,057 issued at December 31, 2014 and June 30, 2014, respectively; 6,051 and 6,046 outstanding at December 31, 2014 and June 30, 2014, respectively | |
| 1 | | |
| 1 | |
Class B Common Stock (10 votes per share) $.0001 par value; 227 shares authorized at December 31, 2014 and June 30, 2014; .146 issued and outstanding at December 31, 2014 and June 30, 2014 | |
| — | | |
| — | |
Class C Common Stock (25 votes per share) $.0001 par value; 567 shares authorized at December 31, 2014 and June 30, 2014, 383 issued and outstanding at December 31, 2014 and June 30, 2014 | |
| — | | |
| — | |
| Paid-in capital in excess of par value | |
| 175,413 | | |
| 175,284 | |
| Accumulated deficit | |
| (144,066 | ) | |
| (149,259 | ) |
| Notes receivable from employee stockholders | |
| (35 | ) | |
| (39 | ) |
| Treasury stock, at cost - 12 shares of common stock at September 30, 2014 and June 30, 2014 | |
| (675 | ) | |
| (675 | ) |
| Total Fonar Corporation Stockholder Equity | |
| 30,638 | | |
| 25,312 | |
| Noncontrolling interests | |
| 19,582 | | |
| 20,595 | |
| Total Stockholders' Equity | |
| 50,220 | | |
| 45,907 | |
| Total Liabilities and Stockholders' Equity | |
$ | 79,040 | | |
$ | 76,790 | |
* 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 DECEMBER 31, |
| REVENUES | |
2014 | |
2013 |
| Product sales – net | |
$ | 375 | | |
$ | 755 | |
| Service and repair fees – net | |
| 2,499 | | |
| 2,548 | |
| Service and repair fees – related parties - net | |
| 28 | | |
| 28 | |
| Patient fee revenue, net of contractual allowances and discounts | |
| 6,629 | | |
| 5,894 | |
| Provision for bad debts for patient fee | |
| (2,897 | ) | |
| (2,223 | ) |
| Management and other fees – net | |
| 8,613 | | |
| 8,274 | |
| Management and other fees – related medical practices – net | |
| 1,845 | | |
| 2,333 | |
| Total Revenues – Net | |
| 17,092 | | |
| 17,609 | |
COSTS AND EXPENSES | |
| | | |
| | |
| Costs related to product sales | |
| 237 | | |
| 631 | |
| Costs related to service and repair fees | |
| 474 | | |
| 587 | |
| Costs related to service and repair fees – related parties | |
| 5 | | |
| 6 | |
| Costs related to patient fee revenue | |
| 1,902 | | |
| 2,028 | |
| Costs related to management and other fees | |
| 5,180 | | |
| 5,190 | |
| Costs related to management and other fees – related medical practices | |
| 1,240 | | |
| 1,270 | |
| Research and development | |
| 359 | | |
| 374 | |
| Selling, general and administrative | |
| 3,824 | | |
| 4,352 | |
| Provision for bad debts | |
| 273 | | |
| (124 | ) |
| Total Costs and Expenses | |
| 13,494 | | |
| 14,314 | |
| Income From Operations | |
| 3,598 | | |
| 3,295 | |
| Interest Expense | |
| (172 | ) | |
| (237 | ) |
| Investment Income | |
| 60 | | |
| 60 | |
| Other Expense | |
| (2 | ) | |
| — | |
Income Before Provision for Income Taxes and Noncontrolling Interests | |
| 3,484 | | |
| 3,118 | |
| Provision for Income Taxes | |
| 29 | | |
| 70 | |
| Net Income | |
| 3,455 | | |
| 3,048 | |
| Net Income - Noncontrolling Interests | |
| (797 | ) | |
| (905 | ) |
| Net Income - Controlling Interests | |
$ | 2,658 | | |
$ | 2,143 | |
| Net Income Available to Common Stockholders | |
$ | 2,485 | | |
$ | 2,003 | |
| Net Income Available to Class A Non-Voting Preferred Stockholders | |
$ | 129 | | |
$ | 104 | |
| Net Income Available to Class C Common Stockholders | |
$ | 44 | | |
$ | 36 | |
| Basic Net Income Per Common Share Available to Common Stockholders | |
$ | 0.41 | | |
$ | 0.33 | |
| Diluted Net Income Per Common Share Available to Common Stockholders | |
$ | 0.40 | | |
$ | 0.33 | |
| Basic and Diluted Income Per Share – Class C Common | |
$ | 0.12 | | |
$ | 0.09 | |
| Weighted Average Basic Shares Outstanding – Common Stockholders | |
| 6,051 | | |
| 6,006 | |
| Weighted Average Diluted Shares Outstanding – Common Stockholders | |
| 6,179 | | |
| 6,133 | |
| Weighted Average Basic Shares Outstanding – Class C Common | |
| 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 SIX MONTHS ENDED DECEMBER 31, |
| | |
2014 | |
2013 |
| REVENUES | |
| | | |
| | |
| Product sales – net | |
$ | 1,646 | | |
$ | 783 | |
| Service and repair fees – net | |
| 4,989 | | |
| 5,060 | |
| Service and repair fees – related parties - net | |
| 55 | | |
| 55 | |
| Patient fee revenue, net of contractual allowances and discounts | |
| 13,416 | | |
| 11,721 | |
| Provision for bad debts for patient fee | |
| (6,042 | ) | |
| (4,262 | ) |
| Management and other fees – net | |
| 17,351 | | |
| 16,417 | |
| Management and other fees – related medical practices – net | |
| 3,662 | | |
| 4,666 | |
| Total Revenues – Net | |
| 35,077 | | |
| 34,440 | |
COSTS AND EXPENSES | |
| | | |
| | |
| Costs related to product sales | |
| 1,322 | | |
| 678 | |
| Costs related to service and repair fees | |
| 981 | | |
| 1,131 | |
| Costs related to service and repair fees – related parties | |
| 11 | | |
| 12 | |
| Costs related to patient fee revenue | |
| 3,801 | | |
| 3,877 | |
| Costs related to management and other fees | |
| 10,379 | | |
| 10,264 | |
| Costs related to management and other fees – related medical practices | |
| 2,609 | | |
| 2,490 | |
| Research and development | |
| 756 | | |
| 769 | |
| Selling, general and administrative | |
| 7,403 | | |
| 8,089 | |
| Provision for bad debts | |
| 779 | | |
| (218 | ) |
| Total Costs and Expenses | |
| 28,041 | | |
| 27,092 | |
| Income From Operations | |
| 7,036 | | |
| 7,348 | |
| Interest Expense | |
| (376 | ) | |
| (480 | ) |
| Investment Income | |
| 122 | | |
| 121 | |
| Other Expense | |
| (2 | ) | |
| (151 | ) |
Income Before Provision
for Income Taxes and Noncontrolling Interests | |
| 6,780 | | |
| 6,838 | |
| Provision for Income Taxes | |
| 69 | | |
| 170 | |
| Net Income | |
| 6,711 | | |
| 6,668 | |
| Net Income - Noncontrolling Interests | |
| (1,518 | ) | |
| (2,088 | ) |
| Net Income - Controlling Interests | |
$ | 5,193 | | |
$ | 4,580 | |
| Net Income Available to Common Stockholders | |
$ | 4,856 | | |
$ | 4,280 | |
| Net Income Available to Class A Non-Voting Preferred Stockholders | |
$ | 251 | | |
$ | 223 | |
| Net Income Available to Class C Common Stockholders | |
$ | 86 | | |
$ | 77 | |
| Basic Net Income Per Common Share Available to Common Stockholders | |
$ | 0.80 | | |
$ | 0.71 | |
| Diluted Net Income Per Common Share Available to Common Stockholders | |
$ | 0.79 | | |
$ | 0.70 | |
| Basic and Diluted Income Per Share – Class C Common | |
$ | 0.22 | | |
$ | 0.20 | |
| Weighted Average Basic Shares Outstanding – Common Stockholders | |
| 6,050 | | |
| 5,992 | |
| Weighted Average Diluted Shares Outstanding – Common Stockholders | |
| 6,178 | | |
| 6,120 | |
| Weighted Average Basic Shares Outstanding – Class C Common | |
| 383 | | |
| 383 | |
| Weighted Average Diluted Shares Outstanding – Class C Common | |
| 383 | | |
| 383 | |
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