EXHIBIT 99.
FONAR CORPORATION
PRESS RELEASE The MRI Specialist
For Immediate Release An ISO 9001 Company
Contact: Daniel Culver, 110 Marcus Drive
Director of Communications Melville, NY 11742
David Terry, VP, Secretary Tel: 631/694-2929
FONARinvestor @ fonar. com Fax: 631/390-9540
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FONAR REPORTS THIRD FISCAL QUARTER
FONAR Stand-Up MRI Sales Continue Positive Impact On Bottom Line
MELVILLE, NEW YORK, May 15, 2003 - FONAR Corporation (NASDAQ-FONR), The MRI
Specialist(TM), reported today that during the first nine months of fiscal 2003
ending March 31, 2003, revenues climbed to $39.0 million as compared to $29.4
million for the same period one year earlier, a 33 % increase. FONAR recognizes
MRI scanner sales revenues on the "percentage of completion" basis, which means
the revenues are shown as earned as the scanner is manufactured. The net loss
was $12.0 million, or $0.16 basic and diluted net loss per share for the first
nine months of fiscal 2003, as compared to a net loss of $13.6 million, or $0.22
basic and diluted net loss per share for the first nine months of fiscal 2002,
an approximate 12% narrowing of losses.
During the first nine months of fiscal 2003 the Company received orders for 12
FONAR Stand-Up(TM) MRI scanners, as compared to orders for eight during the same
period last year.
Economies of scale continued to be advantageous as the Company recognized $6.3
million in gross profit from MRI product sales for the first nine months of
fiscal 2003. The Company improved its gross profit margin on MRI product sales
to 35% from 28% for the same period a year earlier.
At March 31, 2003 cash, cash equivalents and marketable securities were $9.8
million. This compares to $10.6 million at December 31, 2002 and $13.1 million
at June 30, 2002. A principal use of cash during the nine month period was the
repayment of long-term debt and capital lease obligations in the amount of $2.3
million.
MRI equipment sales increased dramatically by 161%, from $6.9 million for the
first nine months of fiscal 2002 to $18.0 million for the first nine months of
fiscal 2003, reflecting increased sales of the FONAR Stand-Up(TM) MRI. Service
and repair revenues increased by 13%, from $1.6 million to $1.8 million for the
same periods. Overall revenues recognized by the Company's MRI equipment
manufacturing and service business increased by 109% from $10.4 million in the
first nine months of fiscal 2002 to $21.7 million in the first nine months of
fiscal 2003.
The Company's subsidiary, Health Management Corporation of America (HMCA), which
provides physician and diagnostic management services, experienced an operating
loss of $2.4 million for the first nine months of fiscal 2003 compared to
operating income of $782,000 for the first nine months of fiscal 2002. The
decline in HMCA income was principally attributable to the closing of facilities
and reduced revenues from two sites while they were in the process of installing
FONAR Stand-Up(TM) MRI scanners.
Shortly following the end of the third fiscal quarter of 2003, HMCA sold A&A
Services, Inc., a physician practice management company. The Company expects to
recognize a gain of approximately $500,000 on the sale in the fourth quarter of
fiscal 2003.
Included in HMCA's operating loss for the first nine months of fiscal 2003 is
approximately $729,000 in operating income from the management of its first
FONAR Stand-Up(TM) MRI scanning center in Islandia, New York. During the third
and fourth quarters HMCA completed the installation of two additional FONAR
Stand-Up(TM) MRI scanners in Bensonhurst, Brooklyn and Staten Island, New York.
CONDENSED STATEMENT OF OPERATIONS
Three months ended Nine months ended
March 31, March 31,
2003 2002 2003 2002
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REVENUES $ 9,775,000 $10,451,000 $ 39,006,000 $ 29,366,000
NET LOSS $(6,326,000) $(5,050,000) $(11,952,000) $(13,607,000
BASIC AND DILUTED
NET LOSS PER SHARE $(0.08) $(0.08) $(0.16) $(0.22)
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Be sure to visit FONAR's Web site for Company product and investor information:
www.fonar.com
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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