FONAR CORPORATION
Fonar MRI news @ aol.com 110 Marcus Drive The MRI Specialist
For Immediate Release Melville, NY 11742 An ISO 9001 Company
Contact: Jordan Darrow Contact: Daniel Culver
Darrow Associates, Inc Director of Communications
darrow @ optonline. net Email: invest @ fonar. com
Tel: 631 / 367 - 1866 Tel: 631 / 694 - 2929
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FONAR ANNOUNCES RECORD REVENUES FOR FISCAL YEAR 2005 BY SURPASSING $100 MILLION
MELVILLE, NY -- September 27, 2005 -- FONAR Corporation (NASDAQ: FONR), The MRI
Specialist(TM),today announced financial results for the fourth quarter and full
year of fiscal 2005, which ended June 30, 2005.
Fiscal 2005 Financial Highlights
* Demand for the MRI industry's most important development in years, the
Upright(TM) MRI, resulted in an 80% increase in unit deliveries for fiscal
2005 as compared to the prior year
* Total revenues increased 46% to a record $104.9 million
* MRI product sales increased 70% to $73.1 million in fiscal 2005
* Service and repair revenues rose 81% to $5.8 million
* Net income was $1.0 million compared to a net loss of $9.5 million for
fiscal 2004
* International expansion gains traction
Commenting on the financial results for fiscal 2005, Raymond Damadian, M.D.,
president and chairman of FONAR, said, "Fiscal year 2005 is remarkable for FONAR
in that our revenues exceeded the $100 million amount for the first time in our
Company's 27 year history. In light of our record revenues of approximately
$105 million, which is an increase of 46% from the prior year, we believe that
our Upright(TM) MRI truly is a technology that is revolutionizing the
industry. It is with the success to date of the Upright{(TM) MRI, that we are
confident in FONAR's ability to reach new milestones in the years ahead.
"Our growth strategy calls for the continued geographic expansion of our sales
and marketing efforts. In addition to comprehensive coverage of the United
States, FONAR is increasing its marketing efforts in the European market.
Recently, we announced our entry into Germany, which is considered to be the
largest market for medical devices in Europe. During fiscal 2005, the Company's
product sales of its Upright(TM) MRIs significantly increased in Europe,
and we will continue to pursue market penetration opportunities in this region.
In the US, we have been expanding our coverage and now have scanners installed
in Alabama, Idaho, Louisiana, New Mexico, Pennsylvania and Virginia as well as
Puerto Rico. By the end of fiscal 2005, 91 Upright(TM) MRIs had been installed
in the US and abroad.
"Our marketing strategy is to continue to reach out to the doctors who are more
likely to recognize the advantages of Upright(TM) imaging. In fiscal
2005, we attended the Annual Meeting of the North American Spine Society (NASS).
We will continue to participate at trade shows of this caliber and, in fact,
will be attending NASS again this week in Philadelphia,"
"The increasing popularity of FONAR's Upright(TM) MRIs is clearly evident
in our record revenues, but there are incremental benefits that are favorable
for the Company. The increasing number of installed MRI units also delivers
additional revenue streams. We expect to see continued revenues of a recurring
nature derived from the servicing of our machines. Therefore, we believe our
growth strategy will result in an increase in revenues from products sales as
well as service and maintenance.
"Achieving positive net income in fiscal 2005 is another important milestone,
being our first profitable year since fiscal 1997," continued Dr. Damadian.
"Our efforts to provide an MRI scanner that can find pathology not seen on a
recumbent-only MRI and providing unsurpassed patient comfort are intended to
deliver long term growth. To this end, we believe the acceptance of the
Upright(TM) MRI is demonstrated by approximately 30% of our customers making
repeat purchases. With this track record, we are very encouraged for our
future prospects.
Full Year Fiscal 2005 Financial Results
Revenues for fiscal 2005 increased 46% to a record $104.9 million compared to
$71.6 million for fiscal 2004. Overall revenues attributable to the medical
equipment (MRI) segment were $81.3 million, a 67% increase over the $48.6
million medical equipment segment revenues reported in the comparable period of
last year. The growth is primarily the result of increased scanner sales
revenues for the FONAR Upright(TM) MRI, which significantly increased to $71.7
million from $42.7 million in the fiscal 2004.
Service and repair revenues increased by 81% in fiscal 2005 to $5.8 million from
$3.2 million in the prior year. This increase is the result of warranty
expirations and new service contract agreements for Upright(TM) MRI
installations. Revenues attributable to FONAR's physician and diagnostic
services management segment (HMCA) were $23.6 million, as compared to $23.0
million in fiscal 2004.
Net income for fiscal 2005 was $1.0 million, or $0.01 per share (basic and
diluted), as compared to a net loss of $9.5 million, or $0.10 loss per share
(basic and diluted), for the same period of fiscal 2004. The Company's ability
to achieve profitability for fiscal 2005 was primarily attributable to the
increase in product sales, relatively strong gross profit margins and effective
management of operating expenses.
Conference Call and Web Cast
As previously announced, FONAR invites the public to participate in a conference
call and web cast to discuss the Company's fiscal year 2005 financial results.
The simultaneous broadcasts will be held today, September 27, at 1:00 PM Eastern
time.
The conference call will be broadcast live on the Internet via the Investor
Relations section of the Company's web site at www.fonar.com. Participants
should access the web cast about 10 minutes prior to the start time. For those
unable to attend the live results broadcast, a replay will be available
beginning approximately one hour after the event. Replay information will be
posted on the FONAR web site following the conclusion of the live broadcast.
There is no charge for participants to access the live broadcast or replay.
About FONAR
FONAR was incorporated in 1978, making it the first, oldest and most experienced
MRI manufacturer in the industry. FONAR introduced the world's first commercial
MRI in 1980, and went public in 1981. Since its inception, we have installed
nearly 300 MRI scanners worldwide. FONAR's stellar product line includes the
Upright(TM) MRI (also known as the Stand-Up(TM) MRI), the only whole-body MRI
that performs Position(TM) imaging (pMRI(TM)) 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(TM) MRI often sees
the patient's problem that other scanners cannot because they are lie-down only.
With over 100,000 patients scanned, the patient-friendly Upright(TM) 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. Our latest MRI scanner is the FONAR 360(TM), a
room-size recumbent scanner that optimizes openness while facilitating physician
access to the patient. FONAR is headquartered on Long Island, New York, and has
approximately 500 employees. Additional information may be found on the FONAR
Web site at www.fonar.com.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended
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June 30, June 30, June 30,
2005 2004 2003
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Revenues $104,898,544 $ 71,609,357 $52,891,535
Net Income (Loss) $ 1,014,409 $ (9,494,383) $(15,006,416)
Basic & Diluted
Earnings (Loss)
per Share $0.01 $(0.10) $(0.20)
MRI Specialist, Stand-Up, Upright, Position, PMRI and
The Proof is in the Picture are trademarks of FONAR.
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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 filings with
the Securities and Exchange Commission.