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 11, 2015
FONAR CORPORATION
______________________________________________________
(Exact name of registrant
as specified in its charter)
Delaware |
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0-10248 |
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11-2464137 |
(State or other jurisdiction of incorporation)
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(Commission File Number) |
|
(I.R.S. Employer Identification No.) |
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110 Marcus Drive
Melville, New York 11747
(631) 694-2929 |
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(Address, including zip code, and telephone
number of registrant's principal executive office)
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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, 2015 in a press release dated May 11,
2015.
Exhibits:
99.1 Press Release dated May 11, 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.
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FONAR CORPORATION |
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(Registrant) |
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By: /s/ Raymond Damadian |
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Raymond Damadian |
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President and Chairman |
Dated May 11, 2015 |
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FONAR
CORPORATION
NEWS |
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For Immediate Release |
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The Inventor of MR Scanning™ |
Contact: Daniel Culver |
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An ISO 9001 Company |
Director of Communications |
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Melville, New York 11747 |
E-mail: investor@fonar.com |
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Phone: (631) 694-2929 |
www.fonar.com |
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Fax: (631) 390-1709 |
FONAR Announces Fiscal 2015 3rd
Quarter Earnings
| • | Third Quarter Fiscal 2015 Diluted Net Income Per Common Share Available to Common Shareholders
increased 19% to $0.31, versus Third Quarter Fiscal 2014 |
| • | Third Quarter Fiscal 2015 Net Income increased 17% to $2.5 million verses Third Quarter Fiscal
2014 |
| • | Third Quarter Fiscal 2015 Net Revenues increased 0.3% to $17.1 million versus Third Quarter Fiscal
2014 |
MELVILLE, NEW YORK, May 11, 2015 - FONAR
Corporation (NASDAQ-FONR), The Inventor of MR Scanning™, reported its financial results for the period ended March 31, 2015.
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
UPRIGHT® 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 for the third fiscal quarter ended
March 31, 2015 were $17.1 million as compared to $17.0 million for the corresponding quarter one year earlier. Revenues increased
to $52.2 million for the nine month period ended March 31, 2015 from $51.5 million for the corresponding period one year earlier.
Net Income for the third fiscal quarter
ended March 31, 2015 was $2.5 million as compared to $2.1 million for the corresponding quarter one year earlier, an increase of
17%. Net Income increased 5% to $9.2 million for the nine month period ended March 31, 2015 from $8.8 million for the corresponding
period one year earlier.
Income from Operations increased 15% to
$2.7 million for the third fiscal quarter ended March 31, 2015 as compared to $2.3 million for the corresponding quarter one year
earlier. Income from Operations was $9.7 million for the nine month periods ended March 31, 2015 and March 31, 2014.
Diluted Net Income Per Common Share Available
to Common Shareholders for the third fiscal quarter ended March 31, 2015 increased 19% to $0.31 as compared to $0.26 for the corresponding
quarter one year earlier. Diluted Net Income Per Common Share Available to Common Shareholders for the nine month periods ended
March 31, 2015 increased 14% to $1.09 from $0.96 for the corresponding period one year earlier.
Balance Sheet Items
Total Assets at the quarter ended March
31, 2015 were $74.5 million, as compared to $76.8 million at June 30, 2014.
Total Current Assets at the quarter ended
March 31, 2015 were $43.1 million, as compared to $42.8 million at June 30, 2014.
Total Cash and Cash Equivalents March 31,
2015, were $7.8 million, as compared to $10.0 million at June 30, 2014. Five million cash was used by the Company to purchase 20%
of the Class A Members ownership interest in Health Diagnostic Management on January 8, 2015,.
Total Liabilities at the quarter ended
March 31, 2015 were $27.5 million, as compared to $30.9 million at June 30, 2014.
Total Current Liabilities at the quarter
ended March 31, 2015 were $20.3 million, as compared to $21.2 million at June 30, 2014.
Management Discussion
Raymond V. Damadian, president and chairman
of Fonar Corporation, said, “The periodic cuts in MRI reimbursements brought about by the Affordable Care Act have subsided,
at least for now. Because the Company has a winning strategy and strong management team we continue to make more and more profit
and I am happy to report that our diluted net income per common share available to common stockholders has increased by 19% last
quarter over the quarter that ended one year earlier (March 31, 2015 vs 2014). In addition, much of our success is due to the medical
need met by our cutting edge UPRIGHT® full weight-loaded MRI scanner.”
By continuing to educate the medical community
about the unique diagnostic advantages of UPRIGHT® Multi-Position™ full weight-loaded MRI, we expect increase scan volume
at our existing imaging centers. We also expect growth to come through adding UPRIGHT® imaging centers that we manage,”
said Dr. Damadian.
Dr. Damadian continued, “On January 8,
2015, the Company acquired 20% of the Class A members ownership interest in Health Diagnostic Management LLC for a cost of approximately
$5.0 million, bringing it’s ownership interest in Health Diagnostic Management LLC to 60.4% from 50.5%. The corresponding
impact for FONAR and thus to our shareholders is that this transaction adds to net income and to diluted net income per common
share available to common stockholders.
Significant Events
The Company will hold its annual meeting on
June 15, 2015. Dr. Damadian has issued his annual shareholder letter which can be seen on the Company’s Web site at www.fonar.com/shareholder_letter.htm.
Recently a medical monograph was published by
S. Karger, AG based in Basel, Switzerland (see www.karger.com/Book/Home/261956). It is titled “The Craniocervical Syndrome
and MRI,” and highlights the FONAR UPRIGHT® Multi-Position MRI. It also highlights the recently discovered syndrome
that shows how neck injury can interfere with cerebrospinal fluid (CSF) flow in the brain, causing a variety of brain diseases.
For more details and a press release visit www.fonar.com
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. 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, 2015 | |
June 30, 2014 * |
Cash and cash equivalents | |
$ | 7,828 | | |
$ | 9,952 | |
Accounts receivable – net | |
| 4,071 | | |
| 4,450 | |
Accounts receivable - related party | |
| 30 | | |
| — | |
Medical receivable – net | |
| 9,037 | | |
| 8,808 | |
Management and other fees receivable – net | |
| 14,618 | | |
| 11,970 | |
Management and other fees receivable – related medical practices – net | |
| 3,669 | | |
| 3,427 | |
Costs and estimated earnings in excess of billing on uncompleted contracts | |
| 681 | | |
| 760 | |
Inventories | |
| 2,286 | | |
| 2,444 | |
Prepaid expenses and other current assets | |
| 855 | | |
| 1,011 | |
Total Current Assets | |
| 43,075 | | |
| 42,822 | |
Deferred income tax asset | |
| 5,740 | | |
| 5,740 | |
Property and equipment – net | |
| 13,454 | | |
| 15,030 | |
Goodwill | |
| 1,767 | | |
| 1,767 | |
Other intangible assets – net | |
| 9,653 | | |
| 10,509 | |
Other assets | |
| 853 | | |
| 922 | |
Total Assets | |
$ | 74,542 | | |
$ | 76,790 | |
FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts and shares in thousands,
except per share amounts)
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
| |
March 31, 2015 | |
June 30, 2014 * |
Current Liabilities: | |
| | | |
| | |
Current portion of long-term debt and capital leases | |
$ | 2,896 | | |
$ | 2,891 | |
Accounts payable | |
| 2,304 | | |
| 2,482 | |
Other current liabilities | |
| 8,994 | | |
| 9,024 | |
Unearned revenue on service contracts | |
| 4,232 | | |
| 4,731 | |
Unearned revenue on service contracts - related party | |
| 28 | | |
| — | |
Customer advances | |
| 1,668 | | |
| 1,927 | |
Billings in excess of costs and estimated earnings on uncompleted contracts | |
| 142 | | |
| 142 | |
Total Current Liabilities | |
| 20,264 | | |
| 21,197 | |
Long-Term Liabilities: | |
| | | |
| | |
Deferred income tax liability | |
| 584 | | |
| 584 | |
Due to related medical practices | |
| 232 | | |
| 234 | |
Long-term debt and capital leases, less current Portion | |
| 6,311 | | |
| 8,482 | |
Other liabilities | |
| 156 | | |
| 386 | |
Total Long-Term Liabilities | |
| 7,283 | | |
| 9,686 | |
Total Liabilities | |
| 27,547 | | |
| 30,883 | |
STOCKHOLDERS' EQUITY: | |
| | | |
| | |
Class A non-voting preferred stock $.0001 par value; 453 shares authorized at March 31, 2015 and June 30, 2014, 313 issued and outstanding at March 31, 2015 and June 30, 2014 | |
| — | | |
| — | |
Preferred stock $.001 par value; 567 shares authorized at March 31, 2015 and June 30, 2014, issued and outstanding – none | |
| — | | |
| — | |
Common Stock $.0001 par value; 8,500 shares authorized at March 31, 2015 and June 30, 2014, 6,062 and 6,057 issued at March 31, 2015 and June 30, 2014, respectively; 6,051 and 6,046 outstanding at March 31, 2015 and June 30, 2014, respectively | |
| 1 | | |
| 1 | |
Class B Common Stock (10 votes per share) $ .0001 par value; 227 shares authorized at March 31, 2015 and June 30, 2014, .146 issued and outstanding at March 31, 2015 and June 30, 2014 | |
| — | | |
| — | |
Class C Common Stock (25 votes per share) $.0001 par value; 567 shares authorized at March 31, 2015 and June 30, 2014, 383 issued and outstanding at March 31, 2015 and June 30, 2014 | |
| — | | |
| — | |
Paid-in capital in excess of par value | |
| 175,413 | | |
| 175,284 | |
Accumulated deficit | |
| (142,047 | ) | |
| (149,259 | ) |
Notes receivable from employee stockholders | |
| (33 | ) | |
| (39 | ) |
Treasury stock, at cost - 12 shares of common stock at March 31, 2015 and June 30, 2014 | |
| (675 | ) | |
| (675 | ) |
Total Fonar Corporation Stockholder Equity | |
| 32,659 | | |
| 25,312 | |
Noncontrolling interests | |
| 14,336 | | |
| 20,595 | |
Total Stockholders' Equity | |
| 46,995 | | |
| 45,907 | |
Total Liabilities and Stockholders' Equity | |
$ | 74,542 | | |
$ | 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 MARCH 31 |
REVENUES | |
2015 | |
2014 |
Product sales – net | |
$ | 160 | | |
$ | 478 | |
Service and repair fees – net | |
| 2,299 | | |
| 2,518 | |
Service and repair fees – related parties - net | |
| 27 | | |
| 27 | |
Patient fee revenue, net of contractual allowances and discounts | |
| 7,284 | | |
| 6,090 | |
Provision for bad debts for patient fee | |
| (3,201 | ) | |
| (2,868 | ) |
Management and other fees – net | |
| 8,653 | | |
| 8,538 | |
Management and other fees – related medical practices – net | |
| 1,874 | | |
| 2,257 | |
Total Revenues – Net | |
| 17,096 | | |
| 17,040 | |
COSTS AND EXPENSES | |
| | | |
| | |
Costs related to product sales | |
| 352 | | |
| 223 | |
Costs related to service and repair fees | |
| 630 | | |
| 623 | |
Costs related to service and repair fees – related parties | |
| 7 | | |
| 7 | |
Costs related to patient fee revenue | |
| 2,044 | | |
| 1,947 | |
Costs related to management and other fees | |
| 5,285 | | |
| 5,327 | |
Costs related to management and other fees – related medical practices | |
| 1,284 | | |
| 1,318 | |
Research and development | |
| 360 | | |
| 360 | |
Selling, general and administrative | |
| 3,706 | | |
| 3,935 | |
Provision for bad debts | |
| 762 | | |
| 981 | |
Total Costs and Expenses | |
| 14,430 | | |
| 14,721 | |
Income From Operations | |
| 2,666 | | |
| 2,319 | |
Interest Expense | |
| (169 | ) | |
| (203 | ) |
Investment Income | |
| 52 | | |
| 57 | |
Other Income | |
| — | | |
| 39 | |
Income Before Provision for Income Taxes and Noncontrolling Interests | |
| 2,549 | | |
| 2,212 | |
Provision for Income Taxes | |
| 30 | | |
| 65 | |
Net Income | |
| 2,519 | | |
| 2,147 | |
Net Income - Noncontrolling Interests | |
| (500 | ) | |
| (408 | ) |
Net Income - Controlling Interests | |
$ | 2,019 | | |
$ | 1,739 | |
Net Income Available to Common Stockholders | |
$ | 1,888 | | |
$ | 1,625 | |
Net Income Available to Class A Non-Voting Preferred Stockholders | |
$ | 98 | | |
$ | 82 | |
Net Income Available to Class C Common Stockholders | |
$ | 33 | | |
$ | 29 | |
Basic Net Income Per Common Share Available to Common Stockholders | |
$ | 0.31 | | |
$ | 0.27 | |
Diluted Net Income Per Common Share Available to Common Stockholders | |
$ | 0.31 | | |
$ | 0.26 | |
Basic and Diluted Income Per Share-Class C Common | |
$ | 0.09 | | |
$ | 0.08 | |
Weighted Average Basic Shares Outstanding-Common Stockholders | |
| 6,050 | | |
| 6,022 | |
Weighted Average Diluted Shares Outstanding – Common Stockholders | |
| 6,178 | | |
| 6,150 | |
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 NINE MONTHS ENDED MARCH 31, |
REVENUES | |
2015 | |
2014 |
Product sales – net | |
$ | 1,806 | | |
$ | 1,261 | |
Service and repair fees – net | |
| 7,288 | | |
| 7,578 | |
Service and repair fees – related parties - net | |
| 83 | | |
| 83 | |
Patient fee revenue, net of contractual allowances and discounts | |
| 20,700 | | |
| 17,811 | |
Provision for bad debts for patient fee | |
| (9,244 | ) | |
| (7,130 | ) |
Management and other fees – net | |
| 26,004 | | |
| 24,955 | |
Management and other fees – related medical practices – net | |
| 5,536 | | |
| 6,923 | |
Total Revenues – Net | |
| 52,173 | | |
| 51,481 | |
COSTS AND EXPENSES | |
| | | |
| | |
Costs related to product sales | |
| 1,674 | | |
| 902 | |
Costs related to service and repair fees | |
| 1,611 | | |
| 1,755 | |
Costs related to service and repair fees - related parties | |
| 18 | | |
| 19 | |
Costs related to patient fee revenue | |
| 5,845 | | |
| 5,823 | |
Costs related to management and other fees | |
| 15,665 | | |
| 15,591 | |
Costs related to management and other fees – related medical practices | |
| 3,893 | | |
| 3,808 | |
Research and development | |
| 1,116 | | |
| 1,128 | |
Selling, general and administrative | |
| 11,108 | | |
| 12,024 | |
Provision for bad debts | |
| 1,540 | | |
| 763 | |
Total Costs and Expenses | |
| 42,470 | | |
| 41,813 | |
Income From Operations | |
| 9,703 | | |
| 9,668 | |
Interest Expense | |
| (545 | ) | |
| (682 | ) |
Investment Income | |
| 173 | | |
| 178 | |
Other Expense | |
| (2 | ) | |
| (113 | ) |
Income Before Provision for Income Taxes and Noncontrolling Interests | |
| 9,329 | | |
| 9,051 | |
Provision for Income Taxes | |
| 99 | | |
| 235 | |
Net Income | |
| 9,230 | | |
| 8,816 | |
Net Income - Noncontrolling Interests | |
| (2,018 | ) | |
| (2,497 | ) |
Net Income - Controlling Interests | |
$ | 7,212 | | |
$ | 6,319 | |
Net Income Available to Common Stockholders | |
$ | 6,743 | | |
$ | 5,907 | |
Net Income Available to Class A Non-voting Preferred Stockholders | |
$ | 350 | | |
$ | 307 | |
Net Income Available to Class C Common Stockholders | |
$ | 119 | | |
$ | 105 | |
Basic Net Income Per Common Share Available to Common Stockholders | |
$ | 1.11 | | |
$ | 0.98 | |
Diluted Net Income Per Common Share Available to Common Stockholders | |
$ | 1.09 | | |
$ | 0.96 | |
Basic and Diluted Income Per Share-Class C Common | |
$ | 0.31 | | |
$ | 0.27 | |
Weighted Average Basic Shares Outstanding – Common Stockholders | |
| 6,050 | | |
| 6,002 | |
Weighted Average Diluted Shares Outstanding– Common Stockholders | |
| 6,178 | | |
| 6,130 | |
Weighted Average Basic Shares Outstanding – Class C Common | |
| 383 | | |
| 383 | |
Weighted Average Diluted Shares Outstanding – Class C Common | |
| 383 | | |
| 383 | |
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