Fonar Announces Financial Results for Fiscal 2023 3rd Quarter and Nine-Month Period

May 15, 2023 4:05 PM EDT | Source: Fonar Corporation

  • Total MRI scan volume at the HMCA-managed sites increased 7% to 49,451 scans for the quarter ended March 31, 2023 versus the corresponding quarter one year earlier. For the nine-month period ended March 31, 2023, 139,339 scans were performed as compared to 140,650 for the corresponding nine-month period one year ago.
  • Net Income increased 37% to $4.5 million for the quarter ended March 31, 2023 and decreased 27% to $9.9 million for the nine-month period ended March 31, 2023.
  • Diluted Net Income Per Common Share Available to Common Stockholders increased 72% to $0.55 for the third fiscal quarter ended March 31, 2023 and decreased 19% to $1.16 for the nine-month period ended March 31, 2023.
  • Total Revenues-Net increased 3% to $25.4 million for the quarter ended March 31, 2023 as compared to the corresponding quarter one year ago. Total Revenues-Net were $72.9 million for the nine-month period ended March 31, 2023, approximately the same as the corresponding nine-month period one year ago.
  • Total Cash, Cash Equivalents and Short Term Investments increased 2% to $49.7 million at March 31, 2023 as compared to $48.8 million at June 30, 2022.
  • Net Book Value per Common Share increased 6% to $22.79 at March 31, 2023 as compared to $21.59 at March 31, 2022, one year ago.

Melville, New York--(Newsfile Corp. - May 15, 2023) - FONAR Corporation (NASDAQ: FONR), The Inventor of MR Scanning™, reported today its financial results for the 3rd fiscal 2023 quarter and nine-month period ended March 31, 2023. FONAR's primary source of income and growth is attributable to its diagnostic imaging management subsidiary, Health Management Company of America (HMCA). In 2009, HMCA managed 9 MRI scanners. Currently, HMCA manages 41 MRI scanners.

Operating Results

Total Revenues-Net for the third fiscal quarter ended March 31, 2023 increased 3% to $25.4 million as compared to $24.6 million for the third fiscal quarter ended March 31, 2022. Total Revenues-Net for the nine-month period ended March 31, 2023 was $72.9 million as compared to $72.8 million for the nine-month period ended March 31, 2022.

Income From Operations for the third fiscal quarter ended March 31, 2023 decreased 26% to $4.2 million as compared to $5.6 million for the third fiscal quarter ended March 31, 2022. Income From Operations for the nine-month period ended March 31, 2023 decreased 31% to $12.3 million as compared to $17.9 million for the nine-month period ended March 31, 2022.

Net Income for the third fiscal quarter ended March 31, 2023 decreased 37% to $4.5 million as compared to $3.3 million for the quarter ended March 31, 2022. Net Income for the nine-month period ended March 31, 2023 decreased 27% to $9.9 million as compared to $13.6 million for the nine-month period ended March 31, 2022.

Diluted Net Income Per Common Share Available to Common Stockholders increased 72% to $0.55 for the third fiscal quarter ended March 31, 2023 as compared to $0.32 for the third fiscal quarter ended March 31, 2022. Diluted Net Income Per Common Share Available to Common Stockholders for the nine-month period ended March 31, 2023 decreased 19% to $1.16 as compared to $1.43 for the nine-month period ended March 31, 2022.

Total Costs and Expenses were $21.3 million for the third fiscal quarter ended March 31, 2023 and were $18.9 million for the third fiscal quarter ended March 31, 2022. Total Costs and Expenses for the nine-month period ended March 31, 2023 were $60.6 million and for the nine-month period ended March 31, 2022 were $54.9 million.

Balance Sheet Items

Total Cash and Cash Equivalents and Short Term Investments at March 31, 2023 were $49.7 million as compared to the $48.8 million at June 30, 2022.

Total Assets at March 31, 2023 and June 30, 2022 were $199.3 million.

Total Liabilities at March 31, 2023 were $48.7 million as compared to $53.1 million at June 30, 2022.

The ratio of Total Assets / Total Liabilities increased 9% to 4.1 at March 31, 2023 as compared to 3.8 at June 30, 2022.

Total Current Assets at March 31, 2023 were $122.0 million as compared to $118.7 million at June 30, 2022.

Total Current Liabilities at March 31, 2023 were $13.9 million as compared to $16.7 million at June 30, 2022.

Total Stockholders Equity at March 31, 2023 was $150.6 million as compared to $146.2 million at June 30, 2022.

The Current Ratio (Current Assets / Current Liabilities) increased 24% to 8.8 as compared to 7.1 at June 30, 2022.

Working Capital increased 6% to $108.1 million at March 31, 2023 as compared to $101.9 million at June 30, 2022.

Net Book Value per Common Share increased 6% to $22.79 at March 31, 2023 as compared to $21.59 at March 31, 2022, one year ago.

Cash Flow Statement Item

Net Cash Provided by Operating Activities was $10.1 million for the nine-month periods ended March 31, 2023 and March 31, 2022.

Management Discussion

Timothy Damadian, Chairman, President and CEO of FONAR, said: "Scan volume at HMCA-managed sites for the nine-month period ending on March 31, 2023 was 139,339, which was down 1% in comparison to 140,650 scans in the corresponding period of the previous year. This was largely due to initial and then lingering COVID-related staffing shortages felt throughout the healthcare industry. In our case, the shortage has been especially acute among MRI technologists."

"Thanks to innovative recruitment efforts, I'm pleased to report that we have been successful in filling many of the technologist vacancies, enabling most sites to return to their usual business hours, which is clearly reflected in the third quarter: Scan volume for the 3-month period ending on March 31, 2023 was 49,451, setting a new record number for the number of scans completed in any 3-month period in the history of the Company. The third quarter scan volume was 8.9% higher than that of the previous quarter (45,412) and 7.1% higher than the scan volume of the corresponding period of the previous fiscal year (46,190)."

Mr. Damadian continued, "The COVID pandemic was certainly the most destructive business disruption in HMCA's history. We felt the worst of it in the last quarter of Fiscal 2020 and have been dealing with it ever since. So we are grateful that in spite of the pandemic, the Company has been able to maintain positive trends in both revenue and profit. SG&A and net income continue to be affected by management fee reserves, as well as tax adjustments resulting from a very detailed analysis of FONAR's tax loss carry-forwards."

"I would also like to report that pursuant to our September 13, 2022 announcement of a FONAR stock repurchase plan of up to $9 million, we have to date repurchased 79,540 shares at a cost of approximately $1.35 million."

"As of March 31, 2023, HMCA was managing 41 MRI scanners, 24 in New York and 17 in Florida. In the fourth quarter of Fiscal 2023, we expect to be managing a brand new facility in the southern part of the Bronx, New York, which will be an ideal extension of the existing site located in the central part of that borough."

"I am grateful to our management team and all the HMCA employees who have been working diligently to get our COVID-impaired sites back on track, planning, preparing and working towards growth, and keeping the Company profitable."

About FONAR

FONAR, the Inventor of MR Scanning™, is located in Melville, NY, was incorporated in 1978, and is the first, oldest and most experienced MRI Company in the industry. FONAR introduced the world's first commercial MRI in 1980, and went public in 1981. FONAR's signature product is the FONAR UPRIGHT® Multi-Position™ MRI (also known as the Stand-Up® MRI), the only whole-body MRI that performs Position™ Imaging (pMRI™) 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® MRI often detects patient problems that other MRI scanners cannot because they are lie-down and "weightless-only" scanners. The patient-friendly UPRIGHT® MRI has a near-zero patient claustrophobic rejection rate. As a 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 watching TV.

FONAR has new works-in-progress technology for visualizing and quantifying the cerebral hydraulics of the central nervous system, the flow of cerebrospinal fluid (CSF), which circulates throughout the brain and vertebral column at the rate of 32 quarts per day. This imaging and quantifying of the dynamics of this vital life-sustaining physiology of the body's neurologic system has been made possible first by FONAR's introduction of the MRI and now by this latest works-in-progress method for quantifying CSF in all the normal positions of the body, particularly in its upright flow against gravity. Patients with whiplash or other neck injuries are among those who will benefit from this new understanding.

FONAR's primary source of income and growth is attributable to its wholly-owned diagnostic imaging management subsidiary, Health Management Company of America (HMCA) www.hmca.com.

FONAR's substantial list of patents includes recent patents for its technology enabling full weight-bearing MRI imaging of all the gravity sensitive regions of the human anatomy, especially the brain, extremities and spine. It includes its newest technology for measuring the Upright cerebral hydraulics of the central nervous system. FONAR's UPRIGHT® Multi-Position™ MRI is the only scanner licensed under these patents.

UPRIGHT®, STAND-UP® and Open Sky MRI® are registered trademarks and Multi-Position™, Upright Radiology™, The Inventor of MR Scanning™, The Proof is in the Picture™, True Flow™, pMRI™, Full Range of Motion™, Spondylography™, Dynamic™, Spondylometry™, FONAR 3600™, CSP™, and Landscape™ 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.

FONAR CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED BALANCE SHEETS 
(Amounts and shares in thousands, except per share amounts) 
(UNAUDITED)

ASSETS

March 31,
2023		   June 30,
2022
Current Assets:   
Cash and cash equivalents$49,640   $48,723
Short term investments32   32
Accounts receivable - net3,720   4,336
Accounts receivable - related party30   -
Medical receivable - net20,460   20,109
Management and other fees receivable - net35,201   33,419
Management and other fees receivable - related medical practices - net9,088   8,603
Inventories2,661   2,360
Prepaid expenses and other current assets1,166   1,104
Total Current Assets121,998   118,686
     
Accounts receivable - long term1,003   1,872
Deferred income tax asset - net10,911   12,843
Property and equipment - net22,775   22,282
Right-of-use Asset - operating lease33,581   34,232
Right-of-use Asset - financing lease779   928
Goodwill4,269   4,269
Other intangible assets - net3,494   3,704
Other assets526   526
Total Assets$199,336   $199,342

 

FONAR CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED BALANCE SHEETS 
(Amounts and shares in thousands, except per share amounts) 
(UNAUDITED)

LIABILITIES AND STOCKHOLDERS' EQUITY

March 31,
2023		      June 30,
2022
Current Liabilities:      
Current portion of long-term debt$43      $40
Accounts payable1,719      1,552
Other current liabilities3,496      6,417
Unearned revenue on service contracts3,615      4,289
Unearned revenue on service contracts - related party28      -
Operating lease liability - current portion3,981      3,880
Financing lease liability - current portion217      210
Customer deposits826      361
Total Current Liabilities13,925      16,749
        
Long-Term Liabilities:        
Unearned revenue on service contracts1,015      1,857
Deferred income tax liability216      216
Due to related medical practices93      93
Operating lease liability - net of current portion32,630      33,091
Financing lease liability - net of current portion657      838
Long-term debt less current portion126      155
Other liabilities57      107
        
Total Long-Term Liabilities34,794      36,357
Total Liabilities48,719      53,106

 

FONAR CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED BALANCE SHEETS 
(Amounts and shares in thousands, except per share amounts) 
(UNAUDITED)

LIABILITIES AND STOCKHOLDERS' EQUITY (Continued)

STOCKHOLDERS' EQUITY:March 31,
2023		     June 30,
2022
Class A non-voting preferred stock $.0001 par value; 453 shares authorized at March 31, 2023 and June 30, 2022, 313 issued and outstanding at March 31, 2023 and June 30, 2022$-     $-
Preferred stock $.001 par value; 567 shares authorized at March 31, 2023 and June 30, 2022, issued and outstanding - none-     -
Common Stock $.0001 par value; 8,500 shares authorized at March 31, 2023 and June 30, 2022, 6,607 and 6,566 issued at March 31, 2023 and June 30, 2022, respectively 6,538 and 6,554 outstanding at March 31, 2023 and June 30, 2022, respectively1     1
Class B Common Stock (10 votes per share) $.0001 par value; 227 shares authorized at March 31, 2023 and June 30, 2022,146 issued and outstanding at March 31, 2023 and June 30, 2022-     -
Class C Common Stock (25 votes per share) $.0001 par value; 567 shares authorized at March 31, 2023 and June 30, 2022, 383 issued and outstanding at March 31, 2023 and June 30, 2022-     -
Paid-in capital in excess of par value184,130     184,531
Accumulated deficit(25,428)     (33,567)
Treasury stock, at cost - 69 shares of common stock at March 31, 2023 and 12 shares of common stock at June 30, 2022(1,522)     (675)
Total Fonar Corporation's Stockholders' Equity157,181     150,290
Noncontrolling interests(6,564)     (4,054)
Total Stockholders' Equity150,617     146,236
Total Liabilities and Stockholders' Equity$199,336     $199,342

 

FONAR CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts and shares in thousands, except per share amounts) 
(UNAUDITED)

FOR THE THREE MONTHS
ENDED MARCH 31,
REVENUES2023   2022
Patient fee revenue - net of contractual allowances and discounts$8,188   $7,641
Product sales - net25   135
Service and repair fees - net1,831   1,876
Service and repair fees - related parties - net28   28
Management and other fees - net12,375   11,904
Management and other fees - related medical practices - net2,975   2,987
Total Revenues - Net25,422   24,571
COSTS AND EXPENSES     
Costs related to patient fee revenue4,056   3,306
Costs related to product sales196   53
Costs related to service and repair fees801   747
Costs related to service and repair fees - related parties12   11
Costs related to management and other fees7,157   6,696
Costs related to management and other fees - related medical practices1,455   1,698
Research and development435   354
Selling, general and administrative7,143   6,068
Total Costs and Expenses21,255   18,933
Income From Operations4,167   5,638
Other Expense(6)   -
Interest (Expense) Income(15)   31
Investment Income356   58
Income Before Provision for Income Taxes and Noncontrolling Interests4,502   5,727
Provision for Income Taxes(17)   (2,465)
Net Income4,485   3,262
Net Income - Noncontrolling Interests(625)   (971)
Net Income - Attributable to FONAR$3,860   $2,291
Net Income Available to Common Stockholders$3,627   $2,153
Net Income Available to Class A Non-Voting Preferred Stockholders$174   $103
Net Income Available to Class C Common Stockholders$59   $35
Basic Net Income Per Common Share Available to Common Stockholders$0.56   $0.33
Diluted Net Income Per Common Share Available to Common Stockholders$0.55   $0.32
Basic and Diluted Income Per Share - Class C Common$0.16   $0.09
Weighted Average Basic Shares Outstanding - Common Stockholders
6,481   6,554
Weighted Average Diluted Shares Outstanding - Common Stockholders
6,609   6,682
Weighted Average Basic and Diluted Shares Outstanding - Class C Common383   383

 

FONAR CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME 
(Amounts and shares in thousands, except per share amounts) 
(UNAUDITED)

FOR THE NINE MONTHS
ENDED MARCH 31,
REVENUES2023     2022
Patient fee revenue - net of contractual allowances and discounts$21,393     $21,935
Product sales - net225     481
Service and repair fees - net5,489     5,720
Service and repair fees - related parties - net83     83
Management and other fees - net36,717     35,985
Management and other fees - related medical practices - net8,962     8,576
Total Revenues - Net72,869     72,780
COSTS AND EXPENSES       
Costs related to patient fee revenue11,879     9,785
Costs related to product sales580     352
Costs related to service and repair fees2,241     2,190
Costs related to service and repair fees - related parties34     32
Costs related to management and other fees20,281     20,497
Costs related to management and other fees - related medical practices4,345     5,024
Research and development1,126     1,109
Selling, general and administrative20,074     15,928
Total Costs and Expenses60,560     54,917
Income From Operations12,309     17,863
Other (Expense) Income(203)     858
Interest Expense(41)     (9)
Investment Income770     180
Income Before Provision for Income Taxes and Noncontrolling Interests12,835     18,892
Provision for Income Taxes(2,889     (5,311)
Net Income9,946     13,581
Net Income - Noncontrolling Interests(1,807)     (3,383)
Net Income - Attributable to FONAR$8,139     $10,198
Net Income Available to Common Stockholders$7,647     $9,583
Net Income Available to Class A Non-Voting Preferred Stockholders$367     $458
Net Income Available to Class C Common Stockholders$125     $157
Basic Net Income Per Common Share Available to Common Stockholders$1.18     $1.46
Diluted Net Income Per Common Share Available to Common Stockholders$1.16     $1.43
Basic and Diluted Income Per Share - Class C Common$0.33     $0.41
Weighted Average Basic Shares Outstanding - Common Stockholders6,487     6,554
Weighted Average Diluted Shares Outstanding - Common Stockholders6,615     6,682
Weighted Average Basic and Diluted Shares Outstanding - Class C Common383     383

 

FONAR CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
(Amounts and shares in thousands, except per share amounts) 
(UNAUDITED)

FOR THE NINE MONTHS
ENDED MARCH 31,
2023   2022
Cash Flows from Operating Activities:   
Net income$9,946   $13,581
Adjustments to reconcile net income to net cash provided by operating activities:     
Depreciation and amortization3,357   3,543
Amortization on right-of-use assets3,306   2,953
Provision for bad debts4,441   2,150
Deferred income tax - net1,931   3,484
Gain on forgiveness of PPP loan-   (701)
(Increase) decrease in operating assets, net:     
Accounts, medical and management fee receivable(s)(5,604)   (4,950)
Notes receivable11   32
Contract assets-   (15)
Inventories(301)   (705)
Prepaid expenses and other current assets(73)   112
Other assets-   132
Increase (decrease) in operating liabilities, net:     
Accounts payable168   (855)
Other current liabilities(4,409)   (5,480)
Operating lease liabilities(2,865)   (2,579)
Financing lease liabilities(175)   (151)
Customer deposits465   (370)
Contract liabilities-   (15)
Other liabilities(49)   (49)
Net cash provided by operating activities10,149   10,117
Cash Flows from Investing Activities:     
Purchases of property and equipment(3,553)   (3,807)
Purchase of noncontrolling interests-   (546)
Cost of patents(87)   (60)
Net cash used in investing activities(3,640)   (4,413)
Cash Flows from Financing Activities:     
Repayment of borrowings and capital lease obligations(26)   (23)
Purchase of treasury stock(1,249)   -
Distributions to noncontrolling interests(4,317)   (4,131)
Net cash used in financing activities(5,592)   (4,154)
Net Increase in Cash and Cash Equivalents917   1,550
Cash and Cash Equivalents - Beginning of Period48,723   44,460
Cash and Cash Equivalents - End of Period$49,640   $46,010

 

Contact: Daniel Culver
Director of Communications
E-mail: investor@fonar.com
www.fonar.com

The Inventor of MR Scanning™
An ISO 9001 Company
Melville, New York 11747
Phone: (631) 694-2929
Fax: (631) 390-1772

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/166021

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