MELVILLE, NY--(Marketwire - October 5, 2009) - FONAR Corporation (
NASDAQ:
FONR), The Inventor
of MR Scanning™, today announced its financial results for the fiscal
year ending June 30, 2009. Total net income for the fiscal year ended June
30, 2009 was $1.1 million, as compared to a net loss of $13.5 million for
fiscal 2008. The net income per share (basic and diluted) for the fiscal
year ended June 30, 2009 was $0.21, as compared to a net loss per share
(basic and diluted) of $2.76 during fiscal 2008.
Raymond V. Damadian, Chairman and President of Fonar Corporation, said, "We
are very pleased to see the Company return to profitability. We have now
made a profit for three quarters straight and are hopeful to continue this
trend of profitability. A very sound reason is that the FONAR UPRIGHT®
Multi-Position™ MRI technology (Dynamic MRI) is the only participant in
this unique market. The impact of FONAR's patented technology on net
income growth can be seen in Fig. 1."
Total revenues increased by 12% to $39.7 million for the fiscal year ended
June 30, 2009 as compared to $35.6 million for fiscal 2008.
Total costs and expenses related to operations decreased 23%, from $52.5
million in the fiscal year ended June 30, 2008, to $40.4 million in the
fiscal year ended June 30, 2009. The loss from operations decreased 96%
from a loss of $16.9 million in the fiscal year ended June 30, 2008, to a
loss of $0.7 million in the fiscal year ended June 30, 2009. Dr. Damadian
continued, "The Company has done well controlling costs while continuing to
produce the FONAR UPRIGHT® Multi-Position™ MRI scanner. This is the
result of a cost cutting program that we initiated over a year ago."
Revenues from product sales of the FONAR UPRIGHT® Multi-Position™ MRI
scanners increased 48% from $11.2 million in the fiscal year ended June 30,
2008 to $16.6 million one year later at fiscal 2009. At June 30, 2009
there were 137 FONAR UPRIGHT® Multi-Position™ MRI scanners installed
in the United States and around the world. Included in net income for the
year ended June 30, 2009 is a pre-tax gain on the sale of a subsidiary of
$1.4 million.
At June 30, 2009, total assets were $28.4 million, total current assets
were $18.3 million, total current liabilities were $29.1 million, and total
long-term liabilities were $2.1 million. The backlog for MRI product was
$25.7 million. Total cash and marketable securities were $1.2 million.
Dr. Damadian said, "FONAR's prospects have much improved since the
country's financial difficulties last year and our customers' uncertainties
regarding the Deficit Reduction Act (DRA) have eased. Over the past few
years, the medical evidence continues to grow indicating that the FONAR
UPRIGHT® Multi-Position™ MRI is the best MRI for diagnosing spine
problems. So as pent-up demand for MRI scanners surfaces, we can expect
rising sales."
"Unfortunately, the outcomes of spinal surgery are less than optimal, a
fact underscored by the recent book titled 'The Failed Spine,' published by
Lippincott, Williams & Wilkins, (M. Szpalski and R. Gunzburg, Editors,
2005). The high failure rate has resulted in the acronym, FBSS, which
stands for Failed Back Surgery Syndrome. The authors report that the
'major identifiable causes of FBSS' include 'failure to identify the
structural source(s) of pain correctly,'" stated Dr. Damadian.
"Sadly, the distinguished Swedish spine surgeon, Alf Nachemson, MD,
characterizes these unsatisfactory patient outcomes as the 'high number of
multiply operated surgical cripples,' (Nachemson, A., The lumbar spine: An
orthopaedic challenge. Spine, 1976:1, 59-71.).
"Since the FONAR UPRIGHT® Multi-Position™ MRI can place the patient in
the exact position that generates his or her symptoms, the MRI picture can
be taken in that position. This unique capability assures that the
degenerative spinal change responsible for the patient's pain is correctly
identified and operated on, instead of surgery being performed on another
spinal change that is not responsible for the patient's symptoms.
Unfortunately, surgery on the wrong spinal segment can generate additional
symptoms post-operatively, while the patient continues to suffer with the
symptoms not addressed by surgery on the wrong segment," remarked Dr.
Damadian.
"FONAR's position in medical imaging is immeasurably enhanced by the fact
that FONAR is the leader in UPRIGHT® Multi-Position™ MRI technology,"
concluded Dr. Damadian.
RECENT HIGHLIGHTS AND ACCOMPLISHMENTS
On November 17, 2008, The Company held its annual shareholder meeting for
the combined fiscal years ending June 30, 2009 and 2008. All proposals
before the shareholders passed.
In February 2009, Dr. Damadian was the recipient of the 2009 AIMBE Honorary
Fellow Award (American Institute for Medical and Biological Engineering)
for his discovery of MRI. Dr. Damadian is the originator of the concept of
magnetic resonance (MR) scanning of the human body (1969). The AIMBE Award
was presented at the annual meeting of AIMBE, held February 11-13 in
Washington, D.C.
The award says: "In 1970, Raymond Damadian, M.D., made the discovery that
is the basis for magnetic resonance (MR) scanning that there is a marked
difference in relaxation times between normal and abnormal tissues of the
same type, as well as between different types of normal tissues. This
seminal discovery, which remains the basis for the making of every MRI
image ever produced, is the foundation of the MRI industry. Dr. Damadian
published his discovery in his milestone 1971 paper in the journal Science
(Science 171:1151, 1971) and filed the pioneer patent for the practical use
of his discovery in 1972." (
www.fonar.com/news/022409.htm).
During the past fiscal year, FONAR also expanded its global reach with a
sale in Libya, marking the first sale of an UPRIGHT® MRI in Africa and
additional sales in the Middle East.
On February 18, 2009 the Company made an earnings announcement titled:
FONAR Reports Profit and 2nd Quarter Fiscal 2009 Financial Results; FONAR's
Innovative 'Made In America' UPRIGHT MRI Adds Product Revenues. Within the
release, Dr. Damadian said, "In this era of jobs being exported to other
countries, 82% of the components that create The FONAR UPRIGHT®
Multi-Position™ MRI are purchased from 26 American States. So FONAR can
truly say, 'Made in America.'"
This past June, Dr. Damadian attended grand openings for three UPRIGHT®
Multi-Position™ MRI customers who spanned the world. First he attended
a grand opening in Kamloops, Canada, for the installation of the first
UPRIGHT® Multi-Position™ MRI in Canada. Then he participated in a
grand opening in South Dakota. Finally, Dr. Damadian attended a grand
opening in Munich, Germany. All of these ceremonies featured Dr. Damadian
as the inventor of the MRI.
For investor and other information visit:
www.fonar.com.
UPRIGHT® and STAND-UP® are registered trademarks and The Inventor of MR
Scanning™, Full Range of Motion™, pMRI™, Dynamic™,
Multi-Position™, True Flow™, The Proof is in the Picture™,
Spondylography™ Spondylometry™ and Upright Radiology™ 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
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30,
------------------------
2009 2008
----------- -----------
Current Assets:
Cash and cash equivalents $ 1,225,619 $ 1,325,512
Marketable securities 22,652 1,068,168
Accounts receivable - net of allowances for
doubtful accounts of $2,393,326 and $2,020,208
at June 30, 2009 and 2008, respectively 5,391,822 5,157,594
Medical receivables - net of allowances for
doubtful accounts of $1,343,500 and $769,000
at June 30, 2009 and 2008, respectively 374,225 1,227,858
Management fee receivable - net of allowances for
doubtful accounts of $5,093,345 and $3,958,733
at June 30, 2009 and 2008, respectively 3,273,756 5,040,523
Management fee receivable - related medical
practices - net of allowances for doubtful
accounts of $1,094,818 and $2,413,483 at
June 30, 2009 and 2008, respectively 2,196,580 1,372,261
Costs and estimated earnings in excess of
billings on uncompleted contracts 1,475,706 6,285
Inventories 3,172,397 3,255,915
Current portion of advances and notes to related
medical practices 164,611 155,423
Current portion of note receivable 517,934 2,508,306
Prepaid expenses and other current assets 472,397 869,353
----------- -----------
Total Current Assets 18,287,699 21,987,198
Property and Equipment - Net 2,892,380 3,932,533
Advances and Notes to Related Medical Practices -
net of allowances for doubtful accounts of
$264,791 at June 30, 2009 and at June 30, 2008 89,032 263,363
Notes Receivable - net of allowance for doubtful
accounts of $65,000 at June 30, 2009 and at
June 30, 2008 1,778,626 2,296,560
Other Intangible Assets - Net 4,920,241 4,809,564
Other Assets 391,237 1,936,415
----------- -----------
Total Assets $28,359,215 $35,225,633
=========== ===========
FONAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES
June 30,
-----------------------
2009 2008
---------- -----------
Current Liabilities:
Current portion of long-term debt and capital
Leases $ 277,494 $ 372,722
Current portion of long-term debt - related
party 79,509 -
Accounts payable 3,518,609 4,019,993
Other current liabilities 8,460,042 8,316,263
Unearned revenue on service contracts 5,526,006 5,193,645
Customer advances 9,237,921 14,276,311
Billings in excess of costs and estimated
earnings on uncompleted contracts 2,026,441 5,773,286
----------- -----------
Total Current Liabilities 29,126,022 37,952,220
----------- -----------
Long-Term Liabilities:
Accounts payable 184,168 -
Due to related medical practices 643,135 97,663
Long-term debt and capital leases, less
current portion 759,211 756,976
Long-term debt, less current
portion - related party 160,176 -
Other liabilities 363,550 496,837
----------- -----------
Total Long-Term Liabilities 2,110,240 1,351,476
----------- -----------
Total Liabilities 31,236,262 39,303,696
----------- -----------
Commitments, Contingencies and Other Matters
FONAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
STOCKHOLDERS' DEFICIENCY
June 30,
-------------------------
2009 2008
----------- -----------
Minority Interest $ 63,815 $ 166,966
Stockholders' Deficiency:
Class A non-voting preferred stock - $.0001
par value; authorized - 1,600,000 shares;
issued and outstanding - 313,451 shares
at June 30, 2009 and 2008 31 31
Preferred stock - $.001 par value;
authorized - 2,000,000 shares; issued
and outstanding - none - -
Common stock - $.0001 par value; authorized -
30,000,000 shares at
June 30, 2009 and 2008, respectively;
issued - 4,917,918 and 4,915,918 shares
at June 30, 2009 and 2008, respectively;
outstanding - 4,906,275 and 4,904,275
shares at June 30, 2009 and 2008, respectively 491 490
Class B common stock (10 votes per share) -
$.0001 par value; authorized - 800,000
shares; issued and outstanding - 158
shares at June 30, 2009 and 2008 - -
Class C common stock (25 votes per share) -
$.0001 par value; authorized - 2,000,000
shares; issued and outstanding - 382,513
shares at June 30, 2009 and 2008
Paid-in capital in excess of par value
Accumulated other comprehensive loss 38 38
Accumulated deficit 172,280,600 172,276,540
Notes receivable from employee stockholders (20,995) (72,723)
Treasury stock, at cost - 11,643 shares (174,258,607) (175,379,874)
of common stock at June 30, 2009 and 2008 (267,030) (394,141)
Total Stockholders' Deficiency (675,390) (675,390)
------------ ------------
Total Liabilities and Stockholders'
Deficiency (2,940,862) (4,245,029)
------------ ------------
$ 28,359,215 $ 35,225,633
============ ============
FONAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended June 30,
----------------------------
2009 2008
Revenues ------------- -------------
Product sales - net $ 17,175,417 $ 11,326,388
Service and repair fees - net 10,345,091 10,930,331
Service and repair fees - related
parties - net 192,500 110,000
Management and other fees 7,342,614 8,337,000
Management and other fees - related
medical practices - net 2,911,318 3,706,636
License fees and royalties 1,755,493 1,158,478
------------ ------------
Total Revenues - Net 39,722,433 35,568,833
------------ ------------
Costs and Expenses
Costs related to product sales 10,758,201 11,143,826
Costs related to service and repair fees 3,992,557 5,107,802
Costs related to service and repair fees
- related parties 74,293 51,404
Costs related to management and other fees 4,507,587 5,548,605
Costs related to management and other fees
- related medical practices 2,790,745 3,041,828
Research and development 3,593,470 5,006,591
Selling, general and administrative, inclusive
of compensatory element of stock issuances of
$4,061 and $360 for the years ended June 30,
2009 and 2008, respectively 13,423,066 20,386,748
Provision for bad debts 1,286,451 2,208,820
------------- -------------
Total Costs and Expenses 40,426,370 52,495,624
------------- -------------
Loss from Operations (703,937) (16,926,791)
Other Income and (Expenses):
Interest expense (333,229) (535,322)
Investment income 325,688 694,910
Interest income - related parties 20,818 33,801
Other income - net 410,657 129,368
Minority interests in income of partnerships (10,995) (219,058)
Gain on sale of investment - 571,161
Gain on sale of consolidated subsidiary 1,448,196 3,394,975
Loss on note receivable - (658,351)
------------- -------------
Income (Loss) Before Provision For
(Benefit From) Income Taxes 1,157,198 (13,515,307)
Provision for (Benefit from) Income Taxes 35,931 (6,940)
------------ -------------
Net Income (Loss) $ 1,121,267 $ (13,508,367)
============ =============
FONAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended June 30,
----------------------------
2009 2008
------------- -------------
Net Income (Loss) Available to Common and
Class C Common Stockholders $ 1,053,898 $ (13,508,367)
============= =============
Basic and Diluted Net Income (Loss) Per Common
Share Available to Common Stockholders $ 0.21 $ (2.76)
============= =============
Basic Net Income Per Share - Common C $ 0.06 N/A
============= =============
Contact Information: Contact:
Daniel Culver
FONAR Corporation
Tel: 631-694-2929
Fax: 631-390-1709
http://www.fonar.com