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 THIRD QUARTER OF FISCAL 2010
MELVILLE, NEW YORK, May 17, 2010 - FONAR Corporation (NASDAQ-FONR), The Inventor
of MR Scanning(TM), today announced its earnings for the third quarter of fiscal
2010, ending March 31, 2010.
Income from operations for the quarter ending March 31, 2010 was $25,000. This
compares to the same period one year earlier, ending March 31, 2009, when income
from operations was $762,000. This also compares to the preceding quarter,
ending December 31, 2009, when the loss from operations was $1.3 million.
Net loss for the three-month period ending March 31, 2010 was $8,000 as compared
to a loss of $1.3 million for the preceding quarter ending December 31, 2009,
and a net income of $730,000 for the quarter ending March 31, 2009.
Total net revenues for the three-month period ending March 31, 2010 were $7.5
million, as compared to the quarter ending one year earlier, March 31, 2009,
when net revenues were $11.3 million and compared to the preceding quarter
ending December 31, 2009, when net revenues were $8.2 million.
Within the revenue category, the management and other fees segment (management
of diagnostic imaging centers segment) increased 10% from $2.5 million for the
three- month period ending March 31, 2009, to $2.7 million for the three-month
period ending March 31, 2010. The service and repair net fees increased 8% from
$2.6 million, for the three-month period ending March 31, 2009, to $2.8 million
for the three-month period ending March 31, 2010.
For the nine-month period ending March 31, 2010, there was a net loss of $3.0
million as compared to net income of $1.1 million for the nine-month period
ending March 31, 2009. Total net revenues for the nine-month period ending March
31, 2010 were $23.2 million, as compared to $29.3 million for the nine-month
period ending March 31, 2009.
Total costs and expenses decreased 29% to $7.5 million for the quarter ending
March 31, 2010 as compared to $10.5 million for the quarter ending March 31,
2009.
As of March 31, 2010, there were 142 FONAR UPRIGHT(R) Multi-Position(TM) MRI
units installed worldwide. During the third quarter of fiscal 2010, total
product sales were at $2.0 million.
At the end of the third fiscal quarter of fiscal 2010, total current assets were
$15.7 million, total assets were $23.2 million, total current liabilities were
$26.5 million, and total long-term liabilities were $2.5 million. Total cash and
cash equivalents and marketable securities were $0.6 million.
During the quarter, FONAR expanded its world-wide presence with installations of
the FONAR UPRIGHT(R) Multi-Position(TM) MRI started in Australia and North
Africa.
In addition, Center for Diagnostic Imaging (CDI) (Minneapolis, MN) completed the
installation of its third FONAR UPRIGHT(R) Multi-Position(TM) MRI, which is the
first UPRIGHT(R) MRI in Northern Minnesota.
Raymond Damadian, president and chairman of FONAR Corporation said, "FONAR
continues to focus its efforts on `selling scans' through its UPRIGHT(R)
Multi-Position(TM) MRI, aka STAND-UP(R) MRI, managed sites. Currently, the
Company manages nine STAND-UP(R) MRIs and an earlier model FONAR QUAD(TM) MRI
through its wholly-owned subsidiary, HMCA (Health Management Corporation of
America; www.hmca.com). The centers' performance improved steadily monthly. In
fact, the nine STAND- UP(R) MRIs performed a record 3,183 scans during the month
of March, 2010, an average of 354 per scanner. This is a 35% increase as
compared to 2,354 scans done during the month of March 2009, one year earlier."
"We are delighted with the response of referring physicians to the STAND-UP(R)
MRI. It is becoming increasingly obvious to these referring physicians that
scanning patients without the forces of gravity, which is the case with all
single-position, recumbent-only MRI scanners, results in missed, critical
pathology," said Dr. Damadian. "These physicians are now referring their
patients to the scanner that makes the best diagnoses, regardless of magnet
size. In addition, patients who are claustrophobic are relieved to be scanned
comfortably in a spacious, non-claustrophobic environment."
Dr. Damadian remarked, "The ongoing recession and uncertainty with regard to
reimbursement and health care reform has required FONAR to continue to cut costs
and reduce expenses. Reductions have been made in many categories most
significantly in research and development (R&D), and selling, general and
administrative (S, G & A) areas. Overall, R&D and S, G &A expenses were reduced
over 20% to $3.2 million for the quarter ending March 31, 2010 from $4.1 million
during the quarter ending one year earlier at March 31, 2009."
FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's OMITTED)
ASSETS March 31, June 30,
2010 2009
(UNAUDITED)
Current Assets: ----------- -------
Cash and cash equivalents $ 570 $ 1,226
Marketable securities 32 23
Accounts receivable - net 5,731 5,392
Accounts receivable - related parties - net 59 -
Medical receivables - net 127 374
Management fee receivable - net 2,952 3,274
Management fee receivable - related medical
practices - net 1,814 2,196
Costs and estimated earnings in excess of
billings on uncompleted contracts 1,012 1,476
Inventories 2,931 3,172
Current portion of advances and notes to related
medical practices 130 165
Current portion of notes receivable 86 518
Prepaid expenses and other current assets 266 472
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Total Current Assets 15,710 18,288
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Property and equipment - net 2,299 2,892
Advances and notes to related medical practices - net - 89
Notes receivable - net 119 1,779
Other intangible assets - net 4,707 4,920
Other assets 392 391
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Total Assets $ 23,227 $ 28,359
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FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's OMITTED)
March 31, June 30,
LIABILITIES AND STOCKHOLDERS' DEFICIENCY 2010 2009
(UNAUDITED)
Current Liabilities: ---------- --------
Current portion of long-term debt and
capital leases $ 418 $ 277
Current portion of long-term debt - related party 86 80
Accounts payable 3,340 3,519
Other current liabilities 7,695 8,460
Unearned revenue on service contracts 5,761 5,526
Unearned revenue on service contracts - related parties 55 -
Customer advances 6,089 9,238
Billings in excess of costs and estimated
earnings on uncompleted contracts 3,047 2,026
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Total Current Liabilities 26,491 29,126
Long-Term Liabilities:
Accounts payable 124 184
Due to related medical practices 632 643
Long-term debt and capital leases,
less current portion 1,219 759
Long-term debt less current portion - related party 95 160
Other liabilities 467 428
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Total Long-Term Liabilities 2,537 2,174
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Total Liabilities 29,028 31,300
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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 March 31, 2010 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, 4,985,850 and 4,917,918 issued at
March 31, 2010 and June 30, 2009, respectively;
4,974,207 and 4,906,275 outstanding at March 31, 2010
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 March 31, 2010 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 March 31, 2010 and June 30, 2009 - -
Paid-in capital in excess of par value 172,379 172,280
Accumulated other comprehensive loss ( 13) ( 21)
Accumulated deficit (177,300) (174,259)
Notes receivable from employee stockholders ( 193) ( 267)
Treasury stock, at cost - 11,643 shares of common stock
at March 31, 2010 and June 30, 2009 ( 675) ( 675)
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Total Stockholders' Deficiency ( 5,801) ( 2,941)
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Total Liabilities and Stockholders' Deficiency $ 23,227 $ 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
MARCH 31,
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2010 2009
REVENUES -------- --------
Product sales - net $ 1,955 $ 6,156
Service and repair fees - net 2,778 2,567
Service and repair fees - related parties - net 55 55
Management and other fees - net 1,738 1,736
Management and other fees - related medical
practices - net 988 742
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Total Revenues - Net 7,514 11,256
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COSTS AND EXPENSES
Costs related to product sales 1,353 3,325
Costs related to service and repair fees 566 969
Costs related to service and repair
fees - related parties 11 21
Costs related to management and other fees 1,338 1,039
Costs related to management and other
fees - related medical practices 703 686
Research and development 528 872
Selling, general and administrative 2,708 3,219
Provision for bad debts 282 363
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Total Costs and Expenses 7,489 10,494
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Income From Operations 25 762
Interest Expense ( 66) ( 75)
Interest Expense - Related Parties ( 21) -
Investment Income 51 91
Interest Income - Related Party 2 5
Other Income (Expense) 1 ( 17)
Provision for Income Taxes - ( 36)
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NET (LOSS) INCOME $ ( 8) $ 730
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Net (Loss) Income Available to Common Stockholders $ ( 8) $ 686
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Basic Net (Loss) Income Per Common Share $ ( 0.00) $ 0.14
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Diluted Net (Loss) Income Per Common Share $ ( 0.00) $ 0.13
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Basic and Diluted Income Per Share - Common C $ N/A 0.04
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Weighted Average Basic Shares Outstanding 4,929,752 4,904,275
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Weighted Average Diluted Shares Outstanding 4,929,752 5,031,779
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FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(000's OMITTED, except per share data)
FOR THE NINE MONTHS ENDED
MARCH 31,
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2010 2009
REVENUES -------- --------
Product sales - net $ 6,479 $11,975
Service and repair fees - net 8,163 7,737
Service and repair fees - related parties - net 165 165
Management and other fees - net 5,212 5,518
Management and other fees - related medical
practices - net 2,613 2,181
License fees and royalties 585 1,755
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Total Revenues - Net 23,217 29,331
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COSTS AND EXPENSES
Costs related to product sales 5,289 7,590
Costs related to service and repair fees 2,485 3,008
Costs related to service and repair
fees - related parties 50 64
Costs related to management and other fees 3,989 3,316
Costs related to management and other
fees - related medical practices 2,208 2,040
Research and development 2,159 2,681
Selling, general and administrative 9,042 9,955
Provision for bad debts 659 1,063
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Total Costs and Expenses 25,881 29,717
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Loss From Operations ( 2,664) ( 386)
Interest Expense ( 235) ( 193)
Interest Expense - Related Parties ( 40) -
Investment Income 203 236
Interest Income - Related Party 9 17
Other Income (Expense) 35 ( 15)
Minority Interest in Income of Partnerships - ( 11)
Gain on Sale of Consolidated Subsidiary - 1,448
Loss on Note Receivable ( 350) -
Provision for Income Taxes - ( 36)
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NET (LOSS) INCOME $( 3,042) $ 1,060
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Net (Loss) Income Available to Common Stockholders $( 3,042) $ 997
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Basic Net (Loss) Income Per Common Share $ (0.62) $ 0.20
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Diluted Net (Loss) Income Per Common Share $ (0.62) $ 0.19
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Basic and Diluted Income per share - Common C $ N/A $ 0.05
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Weighted Average Basic Common Shares Outstanding 4,917,990 4,904,275
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Weighted Average Diluted Common Shares Outstanding 4,917,990 5,031,779
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Visit FONAR's Website for product and investor information:
www.fonar.com
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UPRIGHT(R) and STAND-UP(R) are registered trademarks and The Inventor of MR
Scanning(TM), Full Range of Motion(TM), pMRI(TM), Dynamic(TM),
Multi-Position(TM), True Flow(TM), The Proof is in the Picture(TM),
Spondylography(TM) Spondylometry(TM) and Upright Radiology(TM) 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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