Exhibit 99.1
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FONAR CORPORATION
Fonar MRI news @ aol . com The Inventor of MRI
For Immediate Release An ISO 9001 Company
Contact: Daniel Culver, 110 Marcus Drive
Director of Communications Melville, N.Y. 11747
Web site: www.fonar.com Tel: (631) 694-2929
Email: invest2007@fonar.com Fax: (631) 390-1709
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FONAR Announces Fiscal 2007 Second Quarter Financial Results
MELVILLE, NEW YORK, February 9, 2006 - FONAR Corporation (NASDAQ-FONR), The
Inventor of MR Scanning(TM), today announced its financial results for the
second quarter of fiscal 2007, which ended December 31, 2006.
Revenue for the second quarter for fiscal 2007 was $7.7 million compared to
$10.5 million for the corresponding period of fiscal 2006. During the second
fiscal 2007 quarter, product sale revenues were $2.1 million, 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. These competitors are
motivated to minimize the unique medical benefits of the UPRIGHT(TM)
Multi-Position(TM) MRI because they are prohibited from making a similar product
because of FONAR's patents protecting its product from infringement.
Service and repair revenues for the second fiscal 2007 quarter increased from
$2.1 million to $2.4 million or by 16% in the fiscal second quarter of 2007 from
the same quarter of fiscal 2006. In addition, for the six month period ending
December 31, 2006 service and repair fees increased to $5.0 million from $4.0
million for the corresponding period of fiscal 2006. This 23% increase is due to
the result and initiation of service contract agreements from recent
installations of FONAR UPRIGHT (TM) Multi-Position(TM) MRI units. During this
six month period, costs related to service and repair fees decreased from $2.8
million to $2.5 million, and subsequently, the gross margin on service and
repair fees increased from 31% to 49%. As of December 31, 2006, there were 115
FONAR UPRIGHT(TM) Multi-Position(TM) MRI units installed worldwide.
Net loss for the second quarter of fiscal 2007 was $(5.5) million, or $(0.05)
loss per common share (basic and diluted), as compared to a net loss of $(5.4)
million, or $(0.05) loss per common share (basic and diluted), for the
corresponding period of fiscal 2006.
At December 31, 2006, total cash and marketable securities were approximately
$8.7 million. This represented an overall decrease of approximately 9% or
$800,000 as compared to the period ending June 30, 2006 of approximately $9.5
million. This, however, compares to a decrease of only $64,000 as compared to
September 30, 2006 which was approximately $8.7 million.
On December 31, 2006, total assets were $53.2 million, total current assets were
$34.5 million, total current liabilities were $28.4 million, and total long-term
liabilities were $1.4 million.
Commenting on the financial results for the second fiscal 2007 quarter, 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. The advantages of the FONAR
UPRIGHT(TM) Multi-Position(TM) MRI scanner are significant over our competitors'
recumbent-only, single-position-only, static MRI systems, especially when
imaging the spine. This is significant because spine MRI scans are approximately
half of all MRI scans done. There were about 13 million spine scans done in the
U.S. last year and given the unique advantages, they should all be done by the
FONAR UPRIGHT(TM) Multi- Position(TM) MRI."
"We are encouraged by our recent sales," said Dr. Damadian. "Recently FONAR and
GE Healthcare, a manufacturer's representative for FONAR, sold an UPRIGHT(TM)
Multi-Position(TM) MRI to the Center for Diagnostic Imaging (CDI), of
Minneapolis, Minnesota. This is an important sale for FONAR because CDI is very
prestigious in the MRI market place. Last year, readers of Medical Imaging
Magazine, a leading, national diagnostic imaging industry publication,
overwhelmingly selected CDI as the "NUMBER ONE FREESTANDING IMAGING GROUP" in
the United States. In addition, several CDI associates and a CDI radiologist
were also recognized in the top ten in their individual categories." Visit:
www.medicalimagingmag.com/issues/articles/2006-01_01.asp#freeimage
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months For the Six Months
Ended December 31, Ended December 31,
2006 2005 2006 2005
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Revenues $ 7,672,000 $ 10,541,000 $ 15,455,000 $ 20,694,000
Net Loss $(5,470,000) $ (5,358,000) $(11,575,000) $(13,675,000)
Basic & Diluted Loss
per Common Share $(0.05) $(0.05) $(0.10) $(0.13)
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
UPRIGHT(TM) MRI and 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 single position, lie-down only. With 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, 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.
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The Inventor of MR Scanning(TM), STAND-UP(TM) MRI, True Flow(TM) MRI, FONAR
UPRIGHT(TM) MRI, Position(TM) MRI, Full Range of Motion, The Proof is in the
Picture(TM), and PMRI(TM) are trademarks of FONAR.
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.
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