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FONAR ANNOUNCES FISCAL 2007 FIRST QUARTER FINANCIAL RESULTS
MELVILLE, NEW YORK, November 9, 2006 - FONAR Corporation (NASDAQ-FONR), The
Inventor of MR Scanning(TM), today announced its financial results for the
first quarter of fiscal 2007, which ended September 30, 2006.
Revenues for the first quarter of fiscal 2007 were $7.8 million, compared to
$10.2 million in the corresponding period of fiscal 2006. Overall revenues
attributable to product sales were $2.5 million in the first quarter, a
decrease from $4.2 million one year earlier. The lower level of revenue is
attributable to a slow down in capital equipment purchases by customers
following robust Upright(TM) Multi-Position(TM) MRI sales in 2003, 2004 and
2005. Sales of the FONAR Upright(TM) Multi-Position(TM) MRI were negatively
affected primarily by marketing and advertising pressure from our competitors
attempting to minimize its unique medical benefits.
An important event during the first quarter of fiscal 2007 was the sale of a
FONAR Upright(TM) Multi-Position(TM) MRI to St. Maartenskliniek, the largest
orthopedic hospital in the Netherlands. At the time of the purchase, Dr. Paul
Pavlov, a Director of the St. Maartenskliniek, and Chairman of its
internationally acclaimed Spine Center, said, "We concluded that once FONAR
made available upright weight-bearing MRI imaging technology, owning one for
the St. Maartenskliniek Spine Center WAS NOT OPTIONAL, BUT MANDATORY. For our
hospital to continue to engage in spine surgery without it, once this new
technology became available, WAS UNACCEPTABLE." For details visit:
www.fonar.com/news/091306a.htm
Service and repair revenues increased from $1.9 million to $2.5 million or by
31% in the fiscal first quarter of 2007 from the same quarter of fiscal 2006.
This occurs due to the result of warranty expirations among the installed base
after the first year. As of September 30, 2006, there were 110 FONAR
Upright(TM) Multi-Position MRI units installed worldwide.
Net loss for the first three months of fiscal 2007 was $6.1 million, or $0.05
loss per common share (basic and diluted), as compared to a net loss of $8.3
million, or $0.08 loss per common share (basic and diluted), for the same
period of fiscal 2006.
Total cash and marketable securities declined 8% or $0.8 million to $8.7
million for the first fiscal quarter of 2007 as compared to the previous fourth
quarter and fiscal year-ending June 30, 2006, of $9.5 million.
On September 30, 2006, total assets were $54.0 million, total current assets
were $34.7 million, total current liabilities were $23.8 million, and total
long-term liabilities were $1.4 million.
FONAR Corporation
Commenting on the financial results for fiscal 2007, Raymond Damadian, M.D.,
president and chairman of FONAR, said, "A very competitive atmosphere has led
to a decline in sales. Subsequently, we are planning to expand our sales
force, both in terms of hiring more sales personnel and further establishment
of a domestic network of distributors."
"We have focused new efforts on the hospital segment of the market place," said
Dr. Damadian. "The FONAR Upright(TM) Multi-Position(TM) MRI serves a valuable
need to hospitals since nearly as many spine surgeries are performed each year
as are heart surgeries. Since Upright(TM) Imaging in Multiple Positions
provides DYNAMIC MRI IMAGING in contrast to the STATIC imaging by conventional
single-position recumbent-only MRI, it is self-evident that hospitals and
surgeons engaged in spine surgery must come to the same conclusion St.
Maartenskliniek did, namely that the FONAR Upright(TM) Multi-Position(TM) MRI
is "MANDATORY" and "NOT-OPTIONAL" for medical practices engaged in spine care."
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended September 30,
2006 2005
----------- ------------
Revenues $ 7,783,000 $ 10,153,000
Net Loss $(6,105,000) $ (8,317,000)
Basic & Diluted Loss
per Common Share $(0.05) $(0.08)
About FONAR
FONAR(R) 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,
FONAR has installed hundreds of MRI scanners worldwide. Their stellar product
line includes the FONAR UPRIGHT(TM) MULTI-POSITION(TM) MRI (also known as the
Stand-Up(TM) MRI), the only whole-body MRI that performs Multi-Position(TM)
imaging (mpMRI(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) MULTI-POSITION(TM) MRI often sees the
patient's problem that other scanners cannot because they are lie-down only.
With nearly one half million patients scanned, the patient-friendly FONAR
UPRIGHT(TM) MULTI-POSITION(TM) MRI has a near zero claustrophobic rejection
rate by patients. A radiologist said, "FONAR UPRIGHT(TM) MRI - No More
Claustrophobia - The Tunnel Is Gone." As another 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's 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 400 employees.
_______________________________________________________________________________
The Inventor of MR Scanning, True Flow MRI, Stand-Up MRI, FONAR UPRIGHT MRI,
Multi-Position MRI, pMRI and The Proof is in the Picture are trademarks of
FONAR Corporation.
Be sure to visit FONAR's Web site for Company product and investor information:
www.fonar.com
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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.
Contacts:
Daniel Culver
FONAR Corporation
Tel: 631-694-2929
Fax: 631-390-1709
http://www.fonar.com
invest@fonar.com