Exhibit 99.1
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FONAR CORPORATION
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Fonar MRI news @ aol . com Inventor of MR Scanning(TM)
For Immediate Release An ISO 9001 Company
Contact: Daniel Culver 110 Marcus Drive
Director of Communications Melville, New York 11747
Web site: www.fonar.com Telephone: (631) 694-2929
Email: investor@fonar.com Fax Number: (631) 390-1709
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FONAR ANNOUNCES FINANCIAL RESULTS FOR FIRST QUARTER OF FISCAL 2010
MELVILLE, NEW YORK, November 23, 2009 - FONAR Corporation (NASDAQ-FONR), The
Inventor of MR Scanning(TM), today announced its financial results for the first
quarter of fiscal 2010, which ended September 30, 2009. The loss from operations
improved 23% from a loss of $1.8 million, for the fiscal quarter ended September
30, 2008, to a loss of $1.4 million for the fiscal quarter ended September 30,
2009.
The net loss for the first fiscal 2010 quarter ended September 30, 2009 was $1.7
million including a charge of $0.4 million due to prepayment of a note
receivable. This compared to the fiscal quarter one year earlier, ended
September 30, 2008, which was a loss of $0.5 million but included a gain of $1.4
million from the sale of a consolidated subsidiary.
For the first three months of fiscal 2010 ended September 30, 2009, the loss per
common share (basic and diluted) was $0.35, as compared to $0.09 loss per common
share (basic and diluted) for the same period of fiscal 2009.
Total revenues for the three months ended September 30, 2009 were $7.5 million
as compared to $6.8 million for the same period one year earlier. Service and
repair revenues were $2.8 million in the first fiscal quarter of 2010 as
compared to $2.6 million in the first quarter of fiscal 2009. Total management
and other fees were at $2.5 million in the first fiscal quarter of 2010 as
compared to $2.8 million in the first quarter of fiscal 2009.
As of September 30, 2009, there were 140 FONAR UPRIGHT(R) Multi-Position(TM) MRI
units installed worldwide. During the first quarter of fiscal 2010, total
product sales were at $1.6 million.
At the end of the first fiscal quarter of fiscal 2010, total current assets were
$19.2 million, total assets were $27.5 million, total current liabilities were
$30.0 million and total long-term liabilities were $2.1 million. Total cash and
cash equivalents, and marketable securities increased 12% from $1.2 million on
June 30, 2009 to $1.4 million on September 30, 2009.
On October 9, 2009, FONAR announced that the NASDAQ Stock Market notified FONAR
that it complies with all NASDAQ Capital Market continued listing standards.
Specifically, the Company satisfies NASDAQ Listing Rule 5550(b)(3) which
requires the Company to have a minimum $500,000 of net income from continuing
operations in the latest fiscal year.
This followed the announcement on October 5, 2009 of the Company's most recent
Form 10-K, whereby net income from continuing operations was $1.1 million for
the fiscal year ended June 30, 2009 as compared to a net loss of $13.5 million
for fiscal 2008. Total revenues for the fiscal year ended June 30, 2009 were
$39.7 million as compared to $35.6 million for fiscal 2008. (Visit
www.fonar.com/news/100509.htm for details.)
"The Company is planning to expand the number of FONAR UPRIGHT(R)
Multi-Position(TM) MRI centers under management and to increase the scan volume
at its existing centers," said Raymond Damadian, M. D., president and chairman
of FONAR. "The UPRIGHT(R) MRI is a unique scanner with many advantages that
other recumbent-only, single-position MRI scanners can not perform. There are
over one million spine surgeries performed in the United States each year and I
considerate it essential from all we've learned from our installed base of
UPRIGHT(R) Multi-Position(TM) scanners that no patient proceed to surgery
without a prior, fully weight-bearing UPRIGHT(R) Multi-Position(TM) MRI
examination. FBSS, the failed back surgery syndrome, is a dramatic diagnostic
category that should be retired. It currently is responsible for a 0%-40%
failure rate in spine surgery (The Failed Spine, 2005, p.123, M. Szpalski & R.
Gunzburg, Lippincott Williams & Wilkins). The literature is now replete with
publications demonstrating key changes in spine pathology that are visible only
in UPRIGHT(R) and fully weight-bearing MRI and in the full range of positions
the patient normally occupies."
Commenting on the first fiscal quarter results, Dr. Damadian said, "We had
experienced three straight quarters of profit before the current quarter which
had a net loss that included a loss on a note receivable. Given the medical
advantages of the FONAR UPRIGHT(R) Multi-Position(TM) MRI, and its ability to
provide landscape imaging of the entire spine instead of `snap shots,' we are
confident of the benefits our scanner brings to the public and of our future."
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For investor and other information visit: www.fonar.com.
UPRIGHT(R) and STAND-UP(R) are registered trademarks and The Inventor of MR
Scanning(TM), Full Range of Motion(TM), Multi-Position(TM), True Flow(TM), The
Proof is in the Picture(TM), Spondylography(TM) Spondylometry(TM) Upright
Radiology(TM), Landscape(TM), pMRI(TM), Dynamic(TM), and CSP(TM) and 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 September 30, June 30,
2009 2009
(UNAUDITED)
Current Assets: ------------- -------------
Cash and cash equivalents $ 1,372 $ 1,226
Marketable securities 27 23
Accounts receivable - net 5,156 5,392
Accounts receivable - related parties - net 179 -
Medical receivables - net 316 374
Management fee receivable net 3,304 3,274
Management fee receivable - related
medical practices - net 2,020 2,196
Costs and estimated earnings in excess
of billings on uncompleted contracts 1,212 1,476
Inventories 3,452 3,172
Current portion of advances and notes to related
medical practices 166 165
Current portion of notes receivable 1,664 518
Prepaid expenses and other current assets 345 472
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Total Current Assets 19,213 18,288
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Property and equipment - net 2,696 2,892
Advances and notes to related medical practices - net 45 89
Notes receivable net 156 1,779
Other intangible assets - net 4,951 4,920
Other assets 391 391
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Total Assets $ 27,452 $ 28,359
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FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's OMITTED)
September 30, June 30,
LIABILITIES AND STOCKHOLDERS' DEFICIENCY 2009 2009
(UNAUDITED)
Current Liabilities: ------------- -------------
Current portion of long-term debt and
capital leases $ 267 $ 277
Current portion of long-term debt-related party 82 80
Accounts payable 3,816 3,519
Other current liabilities 8,429 8,460
Unearned revenue on service contracts 5,423 5,526
Unearned revenue on service
contracts - related parties 165 -
Customer advances 9,264 9,238
Billings in excess of costs and estimated
earnings on uncompleted contracts 2,536 2,026
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Total Current Liabilities 29,982 29,126
Long-Term Liabilities:
Accounts payable 156 184
Due to related medical practices 658 643
Long-term debt and capital leases,
less current portion 731 759
Long-term debt less current portion-related party 139 160
Other liabilities 379 364
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Total Long-Term Liabilities 2,063 2,110
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Total Liabilities 32,045 31,236
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Minority interest 64 64
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FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's OMITTED, except share data)
September 30, June 30,
LIABILITIES AND STOCKHOLDERS' DEFICIENCY 2009 2009
(continued) (UNAUDITED)
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STOCKHOLDERS' DEFICIENCY:
Class A non-voting preferred stock $.0001 par
value; 1,600,000 authorized, 313,451 issued and
outstanding at September 30, 2009 and June 30, 2009 - -
Preferred stock $.001 par value; 2,000,000 shares
authorized, issued and outstanding none - -
Common Stock $.0001 par value; 30,000,000 shares
authorized at September 30, 2009 and June 30, 2009,
4,927,918 and 4,917,918 issued at September 30, 2009
and June 30, 2009, respectively; 4,916,275 and
4,906,275 outstanding at September 30, 2009 and
June 30, 2009, respectively 1 1
Class B Common Stock $.0001 par value; 800,000
shares authorized, (10 votes per share), 158
issued and outstanding at September 30, 2009 and
June 30, 2009 - -
Class C Common Stock $.0001 par value; 2,000,000
shares authorized, (25 votes per share), 382,513
issued and outstanding at September 30, 2009 and
June 30, 2009 - -
Paid-in capital in excess of par value 172,299 172,280
Accumulated other comprehensive loss (17) (21)
Accumulated deficit (176,000) (174,259)
Notes receivable from employee stockholders (265) (267)
Treasury stock, at cost - 11,643 shares of common
stock at September 30, 2009 and June 30, 2009 (675) (675)
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Total Stockholders' Deficiency (4,657) (2,941)
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Total Liabilities and Stockholders' Deficiency $ 27,452 $ 28,359
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FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(000's OMITTED, except per share data)
FOR THE THREE MONTHS ENDED
SEPTEMBER 30,
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2009 2008
REVENUES ------------- -------------
Product sales - net $ 1,563 $ 1,413
Service and repair fees - net 2,757 2,545
Service and repair fees - related parties - net 55 55
Management and other fees - net 1,736 2,047
Management and other fees - related medical
practices - net 795 724
License fees and royalties 585 -
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Total Revenues - Net 7,491 6,784
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COSTS AND EXPENSES
Costs related to product sales 1,657 1,442
Costs related to service and repair fees 941 1,010
Costs related to service and repair fees -
related parties 19 22
Costs related to management and other fees 1,268 1,203
Costs related to management and other
fees - related medical practices 761 656
Research and development 854 880
Selling, general and administrative 3,233 3,265
Provision for bad debts 180 154
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Total Costs and Expenses 8,913 8,632
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Loss From Operations (1,422) (1,848)
Interest Expense (79) (79)
Interest Expense - Related Party (14) -
Investment Income 87 33
Interest Income - Related Party 4 6
Other Income 33 1
Minority Interest in Income of Partnerships - (11)
Gain on Sale of Consolidated Subsidiary - 1,448
Loss on Note Receivable (350) -
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NET LOSS $ (1,741) $ (450)
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Basic and Diluted Loss Per Common Share $(0.35) $(0.09)
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Weighted Average Number of Common Shares Outstanding 4,907,942 4,904,275
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