- Published: 14 February 2012
- Written by Editor
FONAR Reports 33% Increase in Net Income to $1.8 Million for 2nd Quarter of Fiscal Year 2012
FONAR Corporation (NASDAQ: FONR - News), The Inventor of MR Scanning™, reported today its financial results for the second quarter of fiscal year 2012. For the three months ended December 31, 2011, net income increased 33% to $1.8 million, income from operations increased 31% to $1.9 million while total revenues increased 16% to $9.3 million, as compared to the corresponding fiscal quarter one year earlier.
Results from the Second Quarter Fiscal 2012 Financial Statement:
The basic income per common share increased 56% to $0.50 for the six months ended December 31, 2011 as compared to $0.32 for the same period one year earlier. For the quarter ended December 31, 2011 and 2010, the basic net income per common share was $0.25.
In addition, the diluted income per common share increased 58% to $0.49 for the six months ended December 31, 2011 as compared to $0.31 for the same period one year earlier. For the quarter ended December 31, 2011 and 2010, the diluted net income per common share was $0.24.
Net income for the six month period ended December 31, 2011 rose 105% to $3.6 million as compared to $1.7 million for the six month period ended December 31, 2010. For the quarter ended December 31, 2011, net income climbed 33% to $1.8 million as compared to $1.4 million for the quarter ended December 31, 2010.
Income from operations for the six month period ended December 31, 2011 rose 95% to $3.7 million as compared to $1.9 million for the six month period ended December 31, 2010. For the quarter ended December 31, 2011, income from operations climbed 31% to $1.9 million as compared to $1.4 million for the quarter ended December 31, 2010.
Total revenues for the six month period ended December 31, 2011 rose 13% to $18.9 million as compared to $16.7 million for the six month period ended December 31, 2010. For the quarter ended December 31, 2011, total revenue climbed 16% to $9.3 million as compared to $8.0 million for the quarter ended December 31, 2010.
Total operating costs and expenses increased 3% to $15.3 million for the six months ended December 31, 2011 from $14.8 million for the six months ended December 31, 2010. For the quarter ended December 31, 2011, total operating costs and expenses increased 13% to $7.4 million as compared to $6.6 million for the quarter ended December 31, 2011.
Revenues from product sales were $1.6 million for the fiscal quarter ended December 31, 2011 as compared to $1.8 million for the corresponding quarter ended December 31, 2010. Revenues from service and repair fees were $2.8 million for the fiscal quarter ended December 31, 2011 as compared to $2.7 million for the fiscal quarter ended December 31, 2010.
Revenues from the management and other fees segment (management of the FONAR UPRIGHT® Multi-Position™ MRI diagnostic imaging centers segment) increased 39% to $4.9 million for the fiscal quarter ended December 31, 2011, from $3.5 million for the fiscal quarter ended December 31, 2010.
As of December 31, 2011 total current assets were $25.1 million and total current liabilities were $21.9 million. Total assets were $33.5 million and total liabilities were $24.3 million. Total long-term liabilities were $2.4 million. Total stockholders' equity was $9.2 million. Total cash and cash equivalents and marketable securities were $9.9 million.
Significant Highlights during the October - December Quarter:
On October 5, 2011, the Company reported a diagnostic breakthrough in the understanding of the genesis of multiple sclerosis (MS) based on observations made possible by the company's unique FONAR UPRIGHT® Multi-Position™ MRI. The press release indicated that the cause of multiple sclerosis may be biomechanical and related to earlier trauma to the neck, which can result in the obstruction of the flow of cerebrospinal fluid (CSF), which is produced and stored in the central anatomic structures of the brain known as the ventricles. Since the ventricles produce a large volume of CSF each day (500 cc), an obstruction can result in a build-up of pressure within the ventricles, resulting in leakage of the CSF into the surrounding brain tissue. This leakage could be responsible for generating the brain lesions of multiple sclerosis.
The research was published in the journal Physiological Chemistry and Physics and Medical NMR (Sept. 20, 2011, 41: 1-17), titled "The Possible Role of Cranio-Cervical Trauma and Abnormal CSF Hydrodynamics in the Genesis of Multiple Sclerosis." It was co-authored by FONAR MRI researchers Raymond V. Damadian, M.D., president and chairman of FONAR and FONAR scientist David Chu, PhD. The complete study can be viewed at www.fonar.com/pdf/PCP41_damadian.pdf.
Dr. Damadian said, "We used the UPRIGHT® Multi-Position™ MRI to view the flow of cerebrospinal fluid in and out of the brain with the patients scanned Upright and scanned lying down. The UPRIGHT® MRI also revealed that these obstructions were the result of structural deformities of the cervical spine, induced by trauma earlier in life. The findings are based on viewing the real-time flow of cerebrospinal fluid in a series of eight randomly chosen patients with multiple sclerosis. These invaluable dual observations have only been possible since the invention by FONAR of an MRI capable of imaging the patient Upright." For more information visit: www.fonar.com.
On October 4, 2011, Dr. Damadian announced the study at a Radiology Department Grand Rounds at the University of California San Diego Medical Center. William G. Bradley, Jr., M.D., Ph.D., F.A.C.R., Chairman of the Department of Radiology, and a Professor of Radiology at UCSD School of Medicine, introduced Dr. Damadian to his colleagues at grand rounds. Dr. Bradley said, "Dr. Damadian has shown that 8 patients with MS had degenerative changes in their cervical spines which impinged on the spinal canal and limited the pulsatile, to-and-fro flow of cervical CSF over the cardiac cycle, as demonstrated on UPRIGHT® MRI. His hypothesis that increased resistance to outflow of CSF is linked to the etiology of MS has some similarities to Dr. P. Zamboni's hypothesis that MS is due to the impeded outflow of venous blood from the brain due to dural sinus stenoses. In both theories, increased resistance to outflow of either CSF or venous blood would be expected to modify the intracranial pressure wave over the cardiac cycle. While both theories need to be further tested with larger controlled studies, it is intriguing that they seem to invoke similar pathologic changes. Whether these changes are etiologic in all cases of MS remains to be tested."
On November 2, 2011, FONAR reported on a 41-year-old female patient with MS that had been one of the eight patients in the original study. The FONAR UPRIGHT® MRI had found cervical malrotations at the cranio-cervical junction and alterations of CSF flow dynamics which gave rise to CSF fluid leakages into surrounding brain tissue. The CSF leakages visualized were directly connected to the MS lesions visualized on the UPRIGHT® MRI. Dr. Damadian stated, "These new observations have uncovered biomechanical barriers that appear to lead to multiple sclerosis. It is significant that these barriers may be therapeutically addressable."
The MS patient was treated by Dr. Scott Rosa, with a proprietary protocol using an Atlas Orthogonal (AO) instrument and the FONAR UPRIGHT® Multi-Position™ MRI. The patient has experienced a significant reduction in symptoms which correlate directly to 28.6% reduction of her CSF pressure on post MRI evaluation. At this time the patient continues to be free of MS symptoms as well as vertigo and vomiting on recumbency. The patient's care continues being administered by Dr. Rosa.
On November 30, 2011, the Company reported a sale of its UPRIGHT® Multi-Position™ MRI to a radiology practice in the western USA. This becomes the 29th state to have a customer purchase the FONAR UPRIGHT® MRI. The FONAR UPRIGHT® Multi-Position™ MRI has also been sold to Puerto Rico and has been installed in eleven other nations around the world.
The board certified radiologist purchasing the FONAR UPRIGHT® Multi-Position™ MRI for his practice said he was buying the scanner in order to meet the expressed needs of his sending physicians, principally neurosurgeons and orthopedic surgeons. They are eager, he said, to achieve the best possible surgical outcomes for their spine surgery patients. Failure to see the full picture could result in the administration of a wrong or insufficient surgical procedure. They consider imaging the spine fully loaded with its normal weight, and in all the upright positions that the spine normally occupies, fundamental to a good surgical outcome for the patient.
About FONAR
FONAR (NASDAQ: FONR - News), 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 150 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 only. 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.
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FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's OMITTED)
ASSETS
December 31, June 30,
2011 2011
Current Assets: (UNAUDITED)
------------- -------------
Cash and cash equivalents $ 9,911 $ 9,251
Marketable securities 30 33
Accounts receivable - net 4,823 5,264
Accounts receivable - related party 60 -
Management and other fees receivable - net 3,635 3,309
Management and other fees receivable - related
medical practices - net 1,307 1,669
Costs and estimated earnings in excess of
billings on uncompleted contracts 1,152 169
Inventories 3,806 2,400
Current portion of notes receivable - net 115 114
Prepaid expenses and other current assets 270 352
------------- -------------
Total Current Assets 25,109 22,561
------------- -------------
Property and equipment - net 3,374 3,769
Notes receivable 315 359
Other intangible assets - net 4,120 4,318
Other assets 535 574
------------- -------------
Total Assets $ 33,453 $ 31,581
============= =============
FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's OMITTED)
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31, June 30,
2011 2011
(UNAUDITED)
------------- -------------
Current Liabilities:
Current portion of long-term debt and capital
Leases $ 1,636 $ 2,026
Accounts payable 1,959 2,187
Other current liabilities 8,956 8,236
Unearned revenue on service contracts 5,275 5,762
Unearned revenue on service contracts -
related Parties 55 -
Customer advances 3,303 4,846
Billings in excess of costs and estimated
earnings on uncompleted contracts 736 4
Income tax payable - 75
------------- -------------
Total Current Liabilities 21,920 23,136
Long-Term Liabilities:
Accounts payable 141 102
Due to related medical practices 229 228
Long-term debt and capital leases, less
current Portion 1,490 1,746
Other liabilities 494 502
------------- -------------
Total Long-Term Liabilities 2,354 2,578
------------- -------------
Total Liabilities 24,274 25,714
------------- -------------
FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's OMITTED)
LIABILITIES AND STOCKHOLDERS' EQUITY (Continued)
December 31, June 30,
2011 2011
(UNAUDITED)
------------- -------------
STOCKHOLDERS' EQUITY:
Class A non-voting preferred stock $.0001 par
value; 453,000 shares authorized at December
31, 2011 and June 30, 2011, 313,451 issued
and outstanding at December 31, 2011 and June
30, 2011 - -
Preferred stock $.001 par value; 567,000
shares authorized at December 31, 2011 and
June 30, 2011, issued and outstanding - none - -
Common Stock $.0001 par value; 8,500,000
shares authorized at December 31, 2011 and
June 30, 2011, 5,774,371 and 5,636,571 issued
at December 31, 2011 and June 30, 2011,
respectively; 5,762,728 and 5,624,928
outstanding at December 31, 2011 and June 30,
2011, respectively 1 1
Class B Common Stock (10 votes per share) $
.0001 par value; 227,000 shares authorized at
December 31, 2011 and June 30, 2011, 158
issued and outstanding at December 31, 2011
and June 30, 2011 - -
Class C Common Stock (25 votes per share)
$.0001 par value; 567,000 shares authorized
at December 31, 2011 and June 30, 2011,
382,513 issued and outstanding at December
31, 2011 and June 30, 2011 - -
Paid-in capital in excess of par value 173,729 173,476
Accumulated other comprehensive loss (20) (16)
Accumulated deficit (171,061) (174,110)
Notes receivable from employee stockholders (74) (115)
Treasury stock, at cost - 11,643 shares of
common stock at December 31, 2011 and June
30, 2011 (675) (675)
Non controlling interests 7,279 7,306
------------- -------------
Total Stockholders' Equity 9,179 5,867
------------- -------------
Total Liabilities and Stockholders' Equity $ 33,453 $ 31,581
============= =============
FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(000's OMITTED, except per share data)
FOR THE THREE MONTHS ENDED
DECEMBER 31,
----------------------------
REVENUES 2011 2010
------------- -------------
Product sales - net $ 1,615 $ 1,789
Service and repair fees - net 2,807 2,653
Service and repair fees - related parties -
net 27 55
Management and other fees - net 3,308 2,380
Management and other fees - related medical
practices - net 1,571 1,142
------------- -------------
Total Revenues - Net 9,328 8,019
------------- -------------
COSTS AND EXPENSES
Costs related to product sales 1,171 1,368
Costs related to service and repair fees 868 700
Costs related to service and repair fees -
related parties 9 15
Costs related to management and other fees 1,887 1,707
Costs related to management and other fees -
related medical practices 901 633
Research and development 293 153
Selling, general and administrative 1,995 1,745
Provision for bad debts 310 255
------------- -------------
Total Costs and Expenses 7,434 6,576
------------- -------------
Income From Operations 1,894 1,443
Interest Expense (124) (137)
Investment Income 64 58
Other Expense (1) (1)
Provision for Income Taxes (21) -
------------- -------------
Net Income 1,812 1,363
Net Income - Non Controlling Interests 276 -
------------- -------------
Net Income - Controlling Interests $ 1,536 $ 1,363
============= =============
Net Income Available to Common Stockholders $ 1,432 $ 1,262
============= =============
Net Income Available to Class A Non-Voting
Preferred Stockholders $ 78 $ 75
============= =============
Net Income Available to Class C Common
Stockholders $ 26 $ 26
============= =============
Basic Net Income Per Common Share $ 0.25 $ 0.25
============= =============
Diluted Net Income Per Common Share $ 0.24 $ 0.24
============= =============
Basic and Diluted Income Per Share-Common C $ 0.07 $ 0.07
============= =============
Weighted Average Basic Shares Outstanding 5,728,528 5,149,499
============= =============
Weighted Average Diluted Shares Outstanding 5,856,032 5,277,003
============= =============
FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(000's OMITTED, except per share data)
FOR THE SIX MONTHS ENDED
DECEMBER 31,
----------------------------
2011 2010
------------- -------------
REVENUES
Product sales - net $ 3,391 $ 4,448
Service and repair fees - net 5,712 5,342
Service and repair fees - related parties -
net 55 110
Management and other fees - net 6,637 4,469
Management and other fees - related medical
practices - net 3,141 2,335
------------- -------------
Total Revenues - Net 18,936 16,704
------------- -------------
COSTS AND EXPENSES
Costs related to product sales 2,646 3,873
Costs related to service and repair fees 1,682 1,366
Costs related to service and repair fees -
related parties 16 28
Costs related to management and other fees 4,072 3,021
Costs related to management and other fees -
related medical practices 1,720 1,372
Research and development 622 607
Selling, general and administrative 4,037 4,128
Provision for bad debts 485 431
------------- -------------
Total Costs and Expenses 15,280 14,826
------------- -------------
Income From Operations 3,656 1,878
Interest Expense (231) (231)
Interest Expense - Related Party - (4)
Investment Income 126 96
Interest Income - Related Party - 1
Other Income 55 8
Provision for Income Taxes (21) -
------------- -------------
Net Income 3,585 1,748
Net Income - Non Controlling Interests 535 -
------------- -------------
Net Income - Controlling Interests $ 3,050 $ 1,748
============= =============
Net Income Available to Common Stockholders $ 2,842 $ 1,618
============= =============
Net Income Available to Class A Non-voting
Preferred Stockholders $ 155 $ 97
============= =============
Net Income Available to Class C Common
Stockholders $ 53 $ 33
============= =============
Basic Net Income Per Common Share $ 0.50 $ 0.32
============= =============
Diluted Net Income Per Common Share $ 0.49 $ 0.31
============= =============
Basic and Diluted Income Per Share-Common C $ 0.14 $ 0.09
============= =============
Weighted Average Basic Shares Outstanding 5,698,645 5,080,872
============= =============
Weighted Average Diluted Shares Outstanding 5,826,149 5,208,376
============= =============
Contact:
Daniel Culver
Director of Communications
FONAR Corporation
Tel: 631-694-2929
Fax: 631-390-1709
http://www.fonar.com
