Full Press Release Details
FONAR Announces 3rd Quarter Fiscal
2012 and Nine Month Financial Results, Net Income Increases 71% and Revenues Advance 12% for Nine Month Period Year Over Year
MELVILLE, NEW YORK, May 15, 2012 - FONAR
Corporation (NASDAQ-FONR), The Inventor of MR Scanning , reported today its earnings for the third quarter of fiscal 2012,
and the nine month period ended March 31, 2012. The Company had net income for the past eight quarters and income from operations
over the past nine quarters.
Statement of Operations Items
For the nine months ended March 31, 2012, net
income was $5.1 million, a 71% increase as compared to a net income of $3.0 million for the nine-month period ended March 31, 2011.
In addition, income from operations was $5.3 million for the nine months ended March 31, 2012, a 62% increase as compared to $3.3
million for the nine months ended March 31, 2011.
For the quarter ended March 31, 2012, net income
and income from operations was $1.6 million. This is compared to the same period ended March 31, 2011, when net income was $1.3
million and income from operations was $1.4 million.
Total revenues, for the nine months ended March
31, 2012, increased 12% to $28.5 million, as compared to the nine months ended March 31, 2011, when total revenues were $25.4 million.
Total revenues, for the quarter ended March
31, 2012, increased 10% to $9.5 million, as compared to the quarter ended March 31, 2011, when total revenues were $8.7 million.
For the nine months ended March 31, 2012, basic
net income per common share was $0.71, an increase of 34% as compared to $0.53 for the nine-month period ended March 31, 2011.
For the nine months ended March 31, 2012, diluted net income per common share was $0.69, an increase of 35% as compared to $0.51
for the nine-month period ended March 31, 2011.
For the quarter ended March 31, 2012, basic
net income per common share was $0.21, as compared to $0.21 for the quarter ended March 31, 2011. For the quarter ended March 31,
2012, diluted net income per common share was $0.20, as compared to $0.20 for the quarter ended March 31, 2011.
Total operating costs and expenses increased
9% to $7.9 million for the quarter ended March 31, 2012 from $7.3 million for the quarter ended March 31, 2011.
Revenues from product sales were $1.3 million
for the fiscal quarter ended March 31, 2012 as compared to $1.9 million for the corresponding quarter ended March 31, 2011. Revenues
from service and repair fees were $3.0 million for the fiscal quarter ended March 31, 2012 and $2.8 for the fiscal quarter ended
March 31, 2011. FONAR has installed 153 UPRIGHT Multi-Position MRI scanners to date.
Significantly, revenues from the management
and other fees segment, which manages the FONAR UPRIGHT Multi-Position MRI diagnostic imaging centers, increased 30%
to $5.2 million for the three months ended March 31, 2012, from $4.0 million for the three month period ended March 31, 2011.
As of March 31, 2012 total current assets were
$26.9 million and total current liabilities were $22.3 million. Total assets were $34.8 million and total liabilities were $24.2
million. Total long-term liabilities were $1.8 million.
As of March 31, 2012, total cash and cash equivalents
and marketable securities were $11.0 million. As of March 31, 2012, the total stockholder's equity was $10.7 million.
In January 2012, The Company began managing
a new scanning center featuring the FONAR UPRIGHT Multi-Position MRI. The new center is in Yonkers, New York, just
north of New York City. It brings the number of UPRIGHT Multi-Position MRI imaging centers the Company manages to eleven.
Three are in Florida and eight are in lower New York State.
On May 10, 2012, the Company announced its annual
meeting to be held on June 25, 2012. Dr. Raymond Damadian, president and chairman of FONAR Corporation, presented his annual shareholder
letter which can be seen on the Company's Web site www.fonar.com.
Management Commentary
Raymond V. Damadian, MD, president and chairman
of FONAR said, "We are very delighted with the continued strides that the Company has made over the past two years. In fact,
net income over each of the past 8 quarters has averaged over $1.0 million per quarter or over $8.5 million. This has greatly enhanced
the balance sheet of the Company. As one can tell," remarked Dr. Damadian, "FONAR has made major headway."
"An important reason for our success is
our UPRIGHT Multi-Position MRI scanning centers. By making these scanners directly available to patients, the medical
community and their patients are experiencing personally the benefits of FONAR's new UPRIGHT MRI imaging technology. The
surgeons are appreciating that the better diagnoses available from our UPRIGHT scanners for the spine and for low back pain
(LBP) is resulting in better surgical outcomes for their patients. The exceptional value of this technology is proving itself firsthand
to patients and their doctors alike," said Dr. Damadian.
"In calendar year 2009 approximately 30,000
MRI scans were performed at our centers. In 2010 the scan volume increased 20% to 36,000. Then in 2011 the volume further increased
14% to 41,000 MRI scans. Now that the eleventh MRI center in Yonkers has began operating, we can expect much more MRI scan volume
growth," concluded Dr. Damadian.
"Our flagship scanner is the UPRIGHT
Multi-Position MRI. It is the only scanner that scans the body in the Upright, weight-bearing position. As time goes on,
we continue to establish more and more evidence of the importance of this scanner. Based on observations we made recently,"
continued Dr. Damadian, "we were able to report a diagnostic breakthrough made possible by the UPRIGHT MRI in the understanding
of the genesis of multiple sclerosis (MS) this past October."
FONAR issued a press release on October 5, 2011
which indicated that the cause of multiple sclerosis may be biomechanical and related to earlier trauma to the neck, which can
result in the obstruction of the flow of cerebrospinal fluid (CSF), which is produced and stored in the central anatomic structures
of the brain known as the ventricles. Since the ventricles produce a large volume of CSF each day (500 cc), an obstruction can
result in a build-up of pressure within the ventricles, resulting in leakage of the CSF into the surrounding brain tissue. This
leakage could be responsible for generating the brain lesions of multiple sclerosis.
Titled "The Possible Role of Cranio-Cervical
Trauma and Abnormal CSF Hydrodynamics in the Genesis of Multiple Sclerosis," The research was published in the journal Physiological
Chemistry and Physics and Medical NMR (Sept. 20, 2011, 41: 1-17). It was co-authored by FONAR MRI researchers Raymond V. Damadian,
M.D., president and chairman of FONAR and FONAR scientist David Chu, PhD. The complete study can be viewed at www.fonar.com/pdf/PCP41_damadian.pdf.
"We used the UPRIGHT
Multi-Position MRI to view the flow of cerebrospinal fluid in and out of the brain with the patients scanned UPRIGHT
and scanned lying down," said Dr. Damadian. "The UPRIGHT MRI also revealed that these obstructions were the result
of structural deformities of the cervical spine, induced by trauma earlier in life. The findings are based on viewing the real-time
flow of cerebrospinal fluid in a series of eight randomly chosen patients with multiple sclerosis. These invaluable dual observations
have only been possible since the invention by FONAR of an MRI capable of imaging the patient UPRIGHT ."
flow obstructions visualized in these MS patients can be seen by going to FONAR's home page www.fonar.com and checking on
the grey square in the upper right hand corner of the FONAR home page.
Dr. Damadian announced the study at a Radiology
Department Grand Rounds at the University of California San Diego Medical Center. William G. Bradley, Jr., M.D., Ph.D., F.A.C.R.,
Chairman of the Department of Radiology, and a Professor of Radiology at UCSD School of Medicine introduced Dr. Damadian to his
colleagues at Grand Rounds. Dr. Bradley said, "Dr. Damadian has shown that 8 patients with MS had degenerative changes in
their cervical spines which impinged on the spinal canal and limited the pulsatile, to-and-fro flow of cervical CSF over the cardiac
cycle, as demonstrated on UPRIGHT MRI. His hypothesis that increased resistance to outflow of CSF is linked to the etiology
of MS has some similarities to Dr. P. Zamboni's hypothesis that MS is due to the impeded outflow of venous blood from the
brain due to dural sinus stenoses. In both theories, increased resistance to outflow of either CSF or venous blood would be expected
to modify the intracranial pressure wave over the cardiac cycle. While both theories need to be further tested with larger controlled
studies, it is intriguing that they seem to invoke similar pathologic changes. Whether these changes are etiologic in all cases
of MS remains to be tested."
Subsequently, FONAR reported on a 41-year-old
female patient with MS that had been one of the eight patients in the original study. The FONAR UPRIGHT MRI had found cervical
malrotations at the cranio-cervical junction and alterations of CSF flow dynamics which gave rise to CSF fluid leakages into surrounding
brain tissue. The CSF leakages visualized were directly connected to the MS lesions visualized on the UPRIGHT MRI. Dr. Damadian
stated, "These new observations have uncovered biomechanical barriers that appear to lead to multiple sclerosis. It is significant