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, 2016
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, 2015 in a press release dated February 9,
2016.
Exhibits
99.1 Press Release dated February 9,
2016
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 9, 2016
|
|
FONAR
Corporation
| NEWS |
|
|
| 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 2016 2nd Quarter and Six Months Financial Results
- Diluted Net Income Per Common Share
Available to Common Stockholders increased 33% to $0.53 per share for Fiscal 2016 2nd Quarter versus the same period a year earlier.
- Cash and cash equivalents increased 37%
to $13.0 million at December 31, 2015, from $9.5 million at June 30, 2015.
- Net Revenues for Fiscal 2016 2nd Quarter
increased 8% to $18.4 million versus the same period a year earlier.
- Net Income for Fiscal 2016 2nd Quarter
increased 19% to $4.1 million versus the same period a year earlier.
- Net Income From Operations for Fiscal
2016 2nd Quarter increased 17% to $4.2 million versus the same period a year earlier.
- Net Income Available to Common Stockholders
for Fiscal 2016 2nd Quarter increased 31% to $3.3 million versus the same period a year earlier.
MELVILLE, NEW YORK,
February 9, 2016 - FONAR Corporation (NASDAQ-FONR), The Inventor of MR Scanning™, reported its fiscal 2016 second quarter
results for the quarter and six month period ended December 31, 2015. 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 in 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® Multi-Position™ MRI) centers, and the development,
manufacturing and servicing of the UPRIGHT® 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® Multi-Position™ MRI patents
to scan all the patient’s body parts in their normal fully weight-bearing UPRIGHT® positions.
Financial Highlights
Net Revenues increased
8% for the fiscal 2016 second quarter ended December 31, 2015 to $18.4 million versus $17.1 million for the corresponding quarter
one year earlier.
Net Revenues increased
3% to $36.0 million for the fiscal 2016 six month period ended December 31, 2015, from $35.1 million for the corresponding six
month period one year earlier.
Net Income increased
19% to $4.1 million for the fiscal 2016 second quarter ended December 31, 2015 versus $3.5 million for the corresponding quarter
one year earlier.
FONAR
Net Income increased
13% to $7.6 million for the fiscal 2016 six month period ended December 31, 2015 versus $6.7 million for the corresponding six
month period one year earlier.
Income from Operations
for the fiscal 2016 second quarter ended December 31, 2015 increased 17% to $4.2 million, from $3.6 million for the corresponding
quarter one year earlier.
Income from Operations
increased 11% to $7.8 million for the fiscal 2016 six month period ended December 31, 2015, versus $7.0 million for the corresponding
six month period one year earlier.
Diluted net income
per common share available to common shareholders increased 33% to $0.53 for the fiscal 2016 second quarter ended December 31,
2015 versus $0.40 for the corresponding quarter one year earlier.
Diluted net income
per common share available to common shareholders increased 22% to $0.96 for the fiscal 2016 six month period ended December 31,
2015 versus $0.79 for the corresponding six month period one year earlier.
Total assets at December
31, 2015 were $80.4 million, as compared to $76.4 million at June 30, 2015. Total current assets at December 31, 2015 were $48.7
million, as compared to $43.6 million at June 30, 2015.
Total liabilities at
December 31, 2015 were $24.8 million, as compared to $25.7 million at June 30, 2015. Total current liabilities at December 31,
2015 were $19.0 million, as compared to $18.8 million at June 30, 2015.
Stockholder’s
equity at December 31, 2015 was $80.4 million, as compared to $76.5 million at June 30, 2015.
Cash and cash equivalents
increased 37% to $13.0 million at December 31, 2015, from $9.5 million at June 30, 2015.
Management Discussion
Raymond V. Damadian,
president and chairman of FONAR Corporation said, “While we are still concerned about the environment created under the Affordable
Care Act, we have continued to grow our business consistently. This is because of the adherence to a business strategy that we
have mastered which has made the difference.”
Dr. Damadian continued:
“Our business plan is to grow consistently and to always provide our customers with the most optimal service. Our FONAR UPRIGHT®
Multi-Position™ MRI scanner is not only the most comfortable MRI for our customers but the results from the scanner are of
the highest professional quality. In this current medical era, it doesn’t get any better than this for our patients. The
patient sits, watches TV comfortably and obtains a weight-bearing MRI of his problem. Physicians appreciate that it is going to
be a scan that can ‘SEE IT ALL’ and allow the doctor to optimize the TREATMENT OUTCOMES FOR THEIR PATIENT.”
FONAR
Significant
Events
As
reported on January 6, 2016, the Company reported that its subsidiary Health Management Company of America, LLC (HMCA) had begun
managing Stand-Up MRI of Great Neck, located at 600 Northern Blvd., Great Neck, New York, bringing the total number of HMCA-managed
centers to 25: 18 in New York and 7 in Florida. Twenty four (24) of the centers are equipped with the FONAR UPRIGHT® Multi-Position™
MRI (for details visit: www.fonar.com/010616.htm). Last
year, the 24 HMCA-managed sites provided $57.6 million (83%) of FONAR’s $69.1 million in revenue.
On February 4,
2016, the television network ESPN ran a 30 For 30 series documentary on the 1985 NFL Chicago Bears that featured Dr. Scott Rosa
and Jim McMahon. During the approximately five minute segment, Jim McMahon said he was thankful to Dr. Rosa's treatment. Dr. Rosa
provided his patented IGAT™ (Image Guided Atlas Treatment™) that utilized FONAR's UPRIGHT® MRI examination of Jim
McMahon to determine the percussion direction and percussion angle of his IGAT™ procedure. FONAR provided the UPRIGHT®
Multi-Position™ MRI that for the first time successfully detected and diagnosed Jim McMahon's health issues as originating
in Jim's neck (not his brain) from malalignments of the craniocervical junction vertebra (C1 & C2) from prior football traumas.
These malalignments were obstructing cerebrospinal fluid (CSF) flow into his brain and generating the increased intracranial pressure
(ICP) that was adversely affecting his health. This enabled Jim's successful cervical realignment by Dr. Rosa's IGAT™ (traumaimagingfoundation.com/).
Dr. Damadian
said: “We are proud that our FONAR UPRIGHT® MRI has made such a critical difference to NFL great Jim McMahon. We recommend
our shareholders watch the 30 For 30 series documentary on the 1985 NFL Chicago Bears when it runs again on Friday, February 12,
2016 at 9 PM Eastern Time on ESPN2.” Check your local listings.
About
FONAR
FONAR,
The Inventor of MR Scanning™, is located in Melville, NY, 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 FONAR 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
has new works-in-progress technology for visualizing and quantifying the flow of cerebrospinal fluid (CSF) which circulates throughout
the brain and vertebral column at the rate of 32 quarts per day. This imaging and quantifying of the dynamics of this vital life-sustaining
physiology of the body’s neurologic system has been made possible first by FONAR’s introduction of the MRI and now
due to this latest works-in-progress for quantifying CSF in all the normal positions of the body, particularly in its upright
flow against gravity. The type of patient that will benefit from this technology includes those with various types of dementia
such as former NFL quarterback Jim McMahon.
FONAR’s
substantial list of patents includes 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 and spine. FONAR’s UPRIGHT® Multi-Position™
MRI is the only scanner licensed under these patents.
#
FONAR
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
| | |
December 31,
2015 | |
June 30,
2015 * |
| Cash and cash equivalents | |
$ | 12,954 | | |
$ | 9,449 | |
| Accounts receivable – net | |
| 4,557 | | |
| 3,791 | |
| Accounts receivable - related party | |
| 60 | | |
| — | |
| Medical receivable – net | |
| 9,567 | | |
| 9,082 | |
| Management and other fees receivable – net | |
| 14,656 | | |
| 14,058 | |
| Management and other fees receivable – related medical practices – net | |
| 3,644 | | |
| 3,507 | |
| Costs and estimated earnings in excess of billing on uncompleted contracts | |
| 279 | | |
| 682 | |
| Inventories | |
| 2,259 | | |
| 2,192 | |
| Prepaid expenses and other current assets | |
| 767 | | |
| 860 | |
| Total Current Assets | |
| 48,743 | | |
| 43,621 | |
| Deferred income tax asset | |
| 8,423 | | |
| 8,423 | |
| Property and equipment - net | |
| 12,277 | | |
| 12,901 | |
| Goodwill | |
| 1,767 | | |
| 1,767 | |
| Other intangible assets - net | |
| 8,348 | | |
| 8,950 | |
| Other assets | |
| 864 | | |
| 830 | |
| Total Assets | |
$ | 80,422 | | |
$ | 76,492 | |
*Condensed from audited financial statements.
FONAR
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts and shares in thousands,
except per share amounts)
(UNAUDITED)
LIABILITIES AND
STOCKHOLDERS’ EQUITY
LIABILITIES
| | |
December 31, 2015 | |
June 30, 2015 * |
| Current Liabilities: | |
| | | |
| | |
| Current portion of long-term debt and capital leases | |
$ | 2,467 | | |
$ | 2,490 | |
| Accounts payable | |
| 1,291 | | |
| 1,783 | |
| Other current liabilities | |
| 8,733 | | |
| 8,253 | |
| Unearned revenue on service contracts | |
| 4,700 | | |
| 4,187 | |
| Unearned revenue on service contracts - related party | |
| 55 | | |
| — | |
| Customer advances | |
| 1,501 | | |
| 1,938 | |
| Billings in excess of costs and estimated earnings on uncompleted contracts | |
| 255 | | |
| 142 | |
| Total Current Liabilities | |
| 19,002 | | |
| 18,793 | |
| Long-Term Liabilities: | |
| | | |
| | |
| Deferred income tax liability | |
| 510 | | |
| 510 | |
| Due to related medical practices | |
| 247 | | |
| 237 | |
| Long-term debt and capital leases, less current portion | |
| 4,475 | | |
| 5,699 | |
| Other liabilities | |
| 544 | | |
| 469 | |
| Total Long-Term Liabilities | |
| 5,776 | | |
| 6,915 | |
| Total Liabilities | |
| 24,778 | | |
| 25,708 | |
*Condensed from audited financial statements.
FONAR
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts and shares in thousands,
except per share amounts)
(UNAUDITED)
LIABILITIES AND
STOCKHOLDERS' EQUITY (Continued)
| | |
December 31,
2015 | |
June 30, 2015 * |
| STOCKHOLDERS' EQUITY: | |
| | | |
| | |
| Class A non-voting preferred stock $.0001 par value; 453 shares authorized at December 31, 2015 and June 30, 2015, 313 issued and outstanding at December 31, 2015 and June 30, 2015 | |
$ | — | | |
$ | — | |
| Preferred stock $.001 par value; 567 shares authorized at December 31, 2015 and June 30, 2015, issued and outstanding – none | |
| — | | |
| — | |
| Common Stock $.0001 par value; 8,500 shares authorized at December 31, 2015 and June 30, 2015, 6,062 issued at December 31, 2015 and June 30, 2015; 6,051 outstanding at December 31, 2015 and June 30, 2015 | |
| 1 | | |
| 1 | |
| Class B Common Stock (10 votes per share) $ .0001 par value; 227 shares authorized at December 31, 2015 and June 30, 2015, .146 issued and outstanding at December 31, 2015 and June 30, 2015 | |
| — | | |
| — | |
| Class C Common Stock (25 votes per share) $.0001 par value; 567 shares authorized at December 31, 2015 and June 30, 2015, 383 issued and outstanding at December 31, 2015 and June 30, 2015 | |
| — | | |
| — | |
| Paid-in capital in excess of par value | |
| 175,448 | | |
| 175,448 | |
| Accumulated deficit | |
| (129,994 | ) | |
| (136,349 | ) |
| Notes receivable from employee stockholders | |
| (28 | ) | |
| (32 | ) |
| Treasury stock, at cost - 12 shares of common stock at December 31, 2015 and June 30, 2015 | |
| (675 | ) | |
| (675 | ) |
| Total Fonar Corporation Stockholder Equity | |
| 44,752 | | |
| 38,393 | |
| Non controlling interests | |
| 10,892 | | |
| 12,391 | |
| Total Stockholders' Equity | |
| 55,644 | | |
| 50,784 | |
| Total Liabilities and Stockholders' Equity | |
$ | 80,422 | | |
$ | 76,492 | |
*Condensed from audited financial statements.
FONAR
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts and shares in thousands,
except per share amounts)
(UNAUDITED)
| | |
FOR THE THREE MONTHS ENDED DECEMBER 31, |
| REVENUES | |
2015 | |
2014 |
| Product sales – net | |
$ | 742 | | |
$ | 375 | |
| Service and repair fees – net | |
| 2,280 | | |
| 2,499 | |
| Service and repair fees – related parties - net | |
| 28 | | |
| 28 | |
| Patient fee revenue, net of contractual allowances and discounts | |
| 7,786 | | |
| 6,629 | |
| Provision for bad debts for patient fee | |
| (3,270 | ) | |
| (2,897 | ) |
| Management and other fees – net | |
| 8,958 | | |
| 8,613 | |
| Management and other fees – related medical practices – net | |
| 1,845 | | |
| 1,845 | |
| Total Revenues – Net | |
| 18,369 | | |
| 17,092 | |
| COSTS AND EXPENSES | |
| | | |
| | |
| Costs related to product sales | |
| 564 | | |
| 237 | |
| Costs related to service and repair fees | |
| 447 | | |
| 474 | |
| Costs related to service and repair fees – related parties | |
| 5 | | |
| 5 | |
| Costs related to patient fee revenue | |
| 2,238 | | |
| 1,902 | |
| Costs related to management and other fees | |
| 5,597 | | |
| 5,180 | |
| Costs related to management and other fees – related medical practices | |
| 1,012 | | |
| 1,240 | |
| Research and development | |
| 412 | | |
| 359 | |
| Selling, general and administrative | |
| 4,117 | | |
| 3,824 | |
| Provision for bad debts | |
| (248 | ) | |
| 273 | |
| Total Costs and Expenses | |
| 14,144 | | |
| 13,494 | |
| Income From Operations | |
| 4,225 | | |
| 3,598 | |
| Interest Expense | |
| (139 | ) | |
| (172 | ) |
| Investment Income | |
| 58 | | |
| 60 | |
| Other Expense | |
| — | | |
| (2 | ) |
| Income Before Provision for Income Taxes and Non Controlling Interests | |
| 4,144 | | |
| 3,484 | |
| Provision for Income Taxes | |
| 40 | | |
| 29 | |
| Net Income | |
| 4,104 | | |
| 3,455 | |
| Net Income - Non Controlling Interests | |
| (611 | ) | |
| (797 | ) |
| Net Income - Controlling Interests | |
$ | 3,493 | | |
$ | 2,658 | |
| Net Income Available to Common Stockholders | |
$ | 3,266 | | |
$ | 2,485 | |
| Net Income Available to Class A Non-Voting Preferred Stockholders | |
$ | 169 | | |
$ | 129 | |
| Net Income Available to Class C Common Stockholders | |
$ | 58 | | |
$ | 44 | |
| Basic Net Income Per Common Share Available to Common Stockholders | |
$ | 0.54 | | |
$ | 0.41 | |
| Diluted Net Income Per Common Share Available to Common Stockholders | |
$ | 0.53 | | |
$ | 0.40 | |
| Basic and Diluted Income Per Share-Common C | |
$ | 0.15 | | |
$ | 0.12 | |
| Weighted Average Basis Shares Outstanding-Common Stockholders | |
| 6,051 | | |
| 6,051 | |
| Weighted Average Diluted Shares Outstanding- Common Stockholders | |
| 6,179 | | |
| 6,179 | |
| Weighted Average Basic Shares Outstanding – Class C Common | |
| 383 | | |
| 383 | |
| Weighted Average Diluted Shares Outstanding – Class C Common | |
| 383 | | |
| 383 | |
FONAR
CONDENSED CONSOLIDATED STATEMENTS
OF INCOME
(Amounts and shares in thousands,
except per share amounts)
(UNAUDITED)
| | |
FOR THE SIX MONTHS ENDED DECEMBER 31, |
| | |
2015 | |
2014 |
| REVENUES | |
| | | |
| | |
| Product sales – net | |
$ | 760 | | |
$ | 1.646 | |
| Service and repair fees – net | |
| 4,564 | | |
| 4,989 | |
| Service and repair fees – related parties - net | |
| 55 | | |
| 55 | |
| Patient fee revenue, net of contractual allowances and discounts | |
| 15,901 | | |
| 13,416 | |
| Provision for bad debts for patient fee | |
| (6,778 | ) | |
| (6,042 | ) |
| Management and other fees – net | |
| 17,786 | | |
| 17,351 | |
| Management and other fees – related medical practices – net | |
| 3,691 | | |
| 3,662 | |
| Total Revenues – Net | |
| 35,979 | | |
| 35,077 | |
| COSTS AND EXPENSES | |
| | | |
| | |
| Costs related to product sales | |
| 676 | | |
| 1,322 | |
| Costs related to service and repair fees | |
| 990 | | |
| 981 | |
| Costs related to service and repair fees – related parties | |
| 12 | | |
| 11 | |
| Costs related to patient fee revenue | |
| 4,466 | | |
| 3,801 | |
| Costs related to management and other fees | |
| 11,015 | | |
| 10,379 | |
| Costs related to management and other fees – related medical practices | |
| 2,070 | | |
| 2,609 | |
| Research and development | |
| 849 | | |
| 756 | |
| Selling, general and administrative | |
| 7,892 | | |
| 7,403 | |
| Provision for bad debts | |
| 169 | | |
| 779 | |
| Total Costs and Expenses | |
| 28,139 | | |
| 28,041 | |
| Income From Operations | |
| 7,840 | | |
| 7,036 | |
| Interest Expense | |
| (289 | ) | |
| (376 | ) |
| Investment Income | |
| 107 | | |
| 122 | |
| Other Income (Expense) | |
| 1 | | |
| (2 | ) |
| Income Before Provision for Income Taxes and Non Controlling Interests | |
| 7,659 | | |
| 6,780 | |
| Provision for Income Taxes | |
| 90 | | |
| 69 | |
| Net Income | |
| 7,569 | | |
| 6,711 | |
| Net Income - Non Controlling Interests | |
| (1,214 | ) | |
| (1,518 | ) |
| Net Income - Controlling Interests | |
$ | 6,355 | | |
$ | 5,193 | |
| Net Income Available to Common Stockholders | |
$ | 5,942 | | |
$ | 4,856 | |
| Net Income Available to Class A Non-Voting Preferred Stockholders | |
$ | 308 | | |
$ | 251 | |
| Net Income Available to Class C Common Stockholders | |
$ | 105 | | |
$ | 86 | |
| Basic Net Income Per Common Share Available to Common Stockholders | |
$ | 0.98 | | |
$ | 0.80 | |
| Diluted Net Income Per Common Share Available to Common Stockholders | |
$ | 0.96 | | |
$ | 0.79 | |
| Basic and Diluted Income Per Share-Class C Common | |
$ | 0.27 | | |
$ | 0.22 | |
| Weighted Average Basic Shares Outstanding-Common Stockholders | |
| 6,051 | | |
| 6,050 | |
| Weighted Average Diluted Shares Outstanding-Common Stockholders | |
| 6,179 | | |
| 6,178 | |
| Weighted Average Basic Shares Outstanding – Class C Common | |
| 383 | | |
| 383 | |
| Weighted Average Diluted Shares Outstanding – Class C Common | |
| 383 | | |
| 383 | |
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