exhibit 99
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FONAR CORPORATION
For Immediate Release FONAR Corporation NASDAQ-FONR
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 Second Quarter, Fiscal 2011, Financial Results with
Net Income of $1.4 Million and Six Months Net Income of $1.8 Million
MELVILLE, NEW YORK, February 22, 2011 - FONAR Corporation (NASDAQ-FONR), today
announced its financial results for the second quarter of fiscal 2011, which
ended December 31, 2010. During the quarter, net income and also income from
operations, was $1.4 million. This compares to the second quarter of fiscal
2010, which ended December 31, 2009 when the net loss and also the loss from
operations was $1.3 million. The Company has had three consecutive quarters of
positive net income, and four consecutive quarters of positive income from
operations. A graph of Net (Loss) Income for the past six quarters can be
found at: www.fonar.com/news/022211.htm
A graph of the Net (Loss) Income for the past six quarters can be found at:
www.fonar.com/news/022211.htm
For the first six months of fiscal 2011, which ended December 31, 2010, net
income was $1.9 million as compared to a net loss of $2.7 million, one year
earlier, for the six month period which ended December 31, 2009.
Total revenues for the second quarter of fiscal 2011 ended December 31, 2010,
were $8.0 million as compared to $8.2 million for the same period last year
which ended December 31, 2009. Total revenues for the six months ended December
31, 2010 were $16.7 million as compared to $15.7 million for the same period
last year.
During the second quarter of fiscal 2011 for the period ended December 31,
2010, total product sales were $1.8 million, versus $3.0 million for the same
period last year. Total service and repair net fees for the second fiscal
quarter of 2011 for the period ended December 31, 2010 were $2.7 million versus
$2.7 million for the same period last year. Management & other fees were at
$3.5 million during the second quarter of fiscal 2011 for the period ended
December 31, 2010 as compared to $2.6 million for the same period last year.
As of December 31, 2010, FONAR had installed 149 UPRIGHT(R) Multi-Position(TM)
MRI units worldwide.
As of December 31, 2010, total cash, cash equivalents and marketable securities
were approximately $2.0 million, an approximate 50% increase from $1.3 million
as of June 30, 2010. Total current assets were $15.2 million, total assets
were $24.1 million, total current liabilities were $24.9 million, and total
long-term liabilities were $2.8 million.
NASDAQ Continued Listing
On October 14, 2010, the Company received notice from the NASDAQ Listing
Qualifications Staff that based upon the Company's non-compliance with the $2.5
million stockholders' equity requirement set forth in NASDAQ Listing Rule
5550(b), the Company's securities were subject to delisting from The NASDAQ
Capital Market. One day earlier, on October 13, 2010, the Company had reported
its 10-K for the period ended June 30, 2010. The Company also did not meet the
alternative requirements of $35 million in market capitalization for its listed
securities (FONR), or net income from continuing operations of $500,000.
Pursuant to the Listing Rules, the Company requested and was granted an
extension, through January 7, 2011, to submit a plan of compliance.
Subsequently, on January 11, 2011, the Company received a determination letter
from the Listing Qualifications Staff of The NASDAQ Stock Market LLC (the
"Staff Determination") notifying the Company that, unless the Company requests
a hearing before the NASDAQ Listing Qualifications Panel (the "NASDAQ Panel"),
that the Company's securities would be delisted.
The Company has requested a hearing before the NASDAQ Panel, which will stay
any action with respect to the Staff Determination until the Panel renders a
decision subsequent to the hearing. The hearing will be held on February 24,
2011. There can be no assurance that the Panel will grant the Company's appeal
for continued listing.
Raymond Damadian, president and founder of FONAR, said, "Hard work, difficult
cut-backs and an outstanding product, the FONAR UPRIGHT(R) Multi-Position(TM)
MRI are behind our record-setting quarterly net income of $1,363,000. The cut-
backs have been particularly hard but have been offset by the enthusiasm in our
recently enacted business strategy, which capitalizes on the scanning center
management business. At each of the scanning centers that we manage, our
UPRIGHT(R) Multi-Position(TM) MRI scanners had more patient throughput during
the second quarter of fiscal 2011 than were scanned in the second quarter of
fiscal 2010."
FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's OMITTED)
ASSETS
December 31, June 30,
2010 2010
(UNAUDITED)
Current Assets: -------- --------
Cash and cash equivalents $ 1,961 $ 1,299
Marketable securities 33 28
Accounts receivable - net 5,390 4,821
Accounts receivable - related parties - net 118 -
Medical receivables - net 4 25
Management fee receivable - net 2,428 2,569
Management fee receivable - related medical
practices - net 1,751 1,922
Costs and estimated earnings in excess of
billings on uncompleted contracts 273 277
Inventories 2,757 2,826
Advances and notes to related
medical practices - net - 83
Current portion of notes receivable 190 272
Prepaid expenses and other current assets 294 553
-------- ---------
Total Current Assets 15,199 14,675
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Property and equipment - net 3,827 2,109
Notes receivable - net 238 -
Other intangible assets - net 4,137 4,291
Other assets 673 554
-------- --------
Total Assets $ 24,074 $ 21,629
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FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's OMITTED)
December 31, June 30,
LIABILITIES AND STOCKHOLDERS' DEFICIENCY 2010 2010
(UNAUDITED)
Current Liabilities: ----------- --------
Current portion of long-term debt and
capital leases $ 2,231 $ 579
Current portion of long-term debt-related party - 88
Accounts payable 2,425 3,192
Other current liabilities 8,683 8,065
Unearned revenue on service contracts 5,834 5,220
Unearned revenue on service contracts - related parties 110 -
Customer advances 4,450 4,813
Billings in excess of costs and estimated
earnings on uncompleted contracts 1,132 2,743
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Total Current Liabilities 24,865 24,700
Long-Term Liabilities:
Accounts payable 135 63
Due to related medical practices 231 528
Long-term debt and capital leases,
less current portion 1,906 1,567
Long-term debt less current portion-related party - 72
Other liabilities 494 475
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Total Long-Term Liabilities 2,766 2,705
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Total Liabilities 27,631 27,405
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FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's OMITTED, except share data)
December 31, June 30,
LIABILITIES AND STOCKHOLDERS' DEFICIENCY 2010 2010
(continued) (UNAUDITED)
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STOCKHOLDERS' DEFICIENCY:
Class A non-voting preferred stock $.0001 par value;
453,000 and 1,600,000 shares authorized at
December 31, 2010 and June 30, 2010, respectively;
313,451 issued and outstanding
at December 31, 2010 and June 30, 2010 - -
Preferred stock $.001 par value; 567,000 and
2,000,000 shares authorized at December 31, 2010
and June 30, 2010, respectively;
issued and outstanding - none - -
Common Stock $.0001 par value; 8,500,000 and 30,000,000
shares authorized at December 31, 2010 and June 30, 2010,
respectively; 5,241,358 and 4,985,850 issued at
December 31, 2010 and June 30, 2010, respectively;
5,229,715 and 4,974,207 outstanding at December 31, 2010
and June 30, 2010, respectively 1 1
Class B Common Stock $ .0001 par value; 227,000 and
800,000 shares authorized at December 31, 2010 and
June 30, 2010, respectively; (10 votes per share), 158 issued
and outstanding at December 31, 2010 and June 30, 2010 - -
Class C Common Stock $.0001 par value; 567,000 and 2,000,000
shares authorized at December 31, 2010 and June 30, 2010,
respectively; (25 votes per share), 382,513 issued
and outstanding at December 31, 2010 and June 30, 2010 - -
Paid-in capital in excess of par value 172,773 172,379
Accumulated other comprehensive loss (14) (19)
Accumulated deficit (175,523) (177,271)
Notes receivable from employee stockholders (119) (191)
Treasury stock, at cost - 11,643 shares of common stock
At December 31, 2010 and June 30, 2010 (675) (675)
-------- --------
Total Stockholders' Deficiency (3,557) (5,776)
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Total Liabilities and Stockholders' Deficiency $ 24,074 $ 21,629
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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
DECEMBER 31,
-------------------
2010 2009
REVENUES --------- --------
Product sales - net $ 1,789 $ 2,961
Service and repair fees - net 2,653 2,629
Service and repair fees - related parties - net 55 55
Management and other fees - net 2,380 1,738
Management and other fees - related medical
practices - net 1,142 830
--------- --------
Total Revenues - Net 8,019 8,213
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COSTS AND EXPENSES
Costs related to product sales 1,368 2,279
Costs related to service and repair fees 700 978
Costs related to service and repair
fees - related parties 15 20
Costs related to management and other fees 1,707 1,384
Costs related to management and other
fees - related medical practices 633 745
Research and development 153 777
Selling, general and administrative 1,745 3,100
Provision for bad debts 255 197
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Total Costs and Expenses 6,576 9,480
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Income (Loss) From Operations 1,443 (1,267)
Interest Expense (137) (90)
Interest Expense - Related Party - (5)
Investment Income 58 66
Interest Income - Related Party - 3
Other (Expense) Income (1) 1
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NET INCOME (LOSS) $ 1,363 $(1,292)
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Net Income Available to Class C Common Stockholders $ 25 N/A
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Net Income (Loss) Available to Common Stockholders $ 1,261 $(1,292)
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Basic Net Income (Loss) Per Common Share $ 0.25 $ (0.26)
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Diluted Net Income (Loss) Per Common Share $ 0.24 $ (0.26)
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Basic and Diluted Income Per Share-Common C $ 0.06 N/A
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Weighted Average Basis Shares Outstanding 5,149,499 4,916,275
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Weighted Average Diluted Shares Outstanding 5,277,003 4,916,275
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FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(000's OMITTED, except per share data)
FOR THE SIX MONTHS ENDED
DECEMBER 31,
-------------------
2010 2009
REVENUES --------- --------
Product sales - net $ 4,448 $ 4,524
Service and repair fees - net 5,342 5,386
Service and repair fees - related parties - net 110 110
Management and other fees - net 4,469 3,473
Management and other fees - related medical
practices - net 2,335 1,625
License fees and royalties - 585
--------- --------
Total Revenues - Net 16,704 15,703
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COSTS AND EXPENSES
Costs related to product sales 3,873 3,936
Costs related to service and repair fees 1,366 1,919
Costs related to service and repair
fees - related parties 28 39
Costs related to management and other fees 3,021 2,651
Costs related to management and other
fees - related medical practices 1,372 1,505
Research and development 607 1,631
Selling, general and administrative 4,128 6,333
Provision for bad debts 431 377
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Total Costs and Expenses 14,826 18,391
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Income (Loss) From Operations 1,878 (2,688)
Interest Expense (231) (169)
Interest Expense - Related Party (4) (19)
Investment Income 96 153
Interest Income - Related Party 1 6
Other Income 8 34
Loss on Note Receivable - (350)
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NET INCOME (LOSS) $ 1,748 $(3,033)
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Net Income Available to Class C Common Stockholders $ 32 N/A
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Net Income (Loss) Available to Common Stockholders $ 1,618 $(3,033)
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Basic Net Income (Loss) Per Common Share $ 0.32 $ (0.62)
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Diluted Net Income (Loss) Per Common Share $ 0.31 $ (0.62)
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Basic and Diluted Income Per Share-Common C $ 0.08 N/A
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Weighted Average Basic Shares Outstanding 5,080,872 4,912,108
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Weighted Average Diluted Shares Outstanding 5,208,376 4,912,108
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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), 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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