Fonar (MM) (NASDAQ:FONRD)
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FONAR Corporation (NASDAQ-FONRD), The Inventor of MR Scanning™,
announced its financial results for the third quarter of fiscal 2007,
which ended March 31, 2007.
For the nine-month period ended March 31, 2007, we reported a net loss
of $17.0 million on revenues of $24.2 million as compared to net loss of
$21.0 million on revenues of $27.8 million for the nine-month period
ended March 31, 2006.
For the three month period ended March 31, 2007 we reported a net loss
of $5.4 million on revenues of $8.8 million as compared to net loss of
$7.4 million on revenues of $7.1 million for the three-month period
ended March 31, 2006.
Net loss and revenue for the quarter ending March 31, 2007 as compared
to the quarter ended March 31, 2006. Net losses improved by 26.6%, ($5.4
million) as compared to ($7.4 million), on a revenue increase of 23.6%
to $8.8 million from $7.1 million. Particularly noteworthy was that the
revenues for the quarter ending March 31, 2007 accounted for 36.2% of
the revenues of the nine-month period ending March 31, 2007.
There was recent increased sales activity which management believes is
attributable to a general increase in the utilization of MRI and the
increase in demand for UPRIGHT™ MRI scans, and
the reduction of uncertainty of the impact of the Deficit Reduction Act (“DRA”).
A recent survey of FONAR UPRIGHT™ MRI
customers shows the DRA has not had a substantial impact on revenues and
has been more than offset by an increase in utilization of MRI and the
UPRIGHT™ imaging technology.
During the third fiscal 2007 quarter, total product sale revenues were
$3.2 million, an increase of 91% from $1.7 million one year earlier. The
nine-month total product sales for the quarter ending March 31, 2007 was
$7.8 million as compared to $10.0 million for the same period one year
earlier.
Service and repair revenues for the third fiscal 2007 quarter increased
10% to $2.6 million from $2.3 million during the same quarter of fiscal
2006. For the nine-month period ending March 31, 2007 there was a 18%
increase to $7.5 million from $6.3 million for the same period one year
earlier. These increases are due to the result and initiation of service
contract agreements from recent installations of FONAR UPRIGHT ™
Multi-Position™ MRI units.
During the third fiscal quarter total costs related to service and
repair fees were $1.3 million as compared to $1.4 million one year
earlier. Also for the nine-month period total costs related to service
and repair fees were $3.9 million as compared to $4.2 million one year
earlier. As of March 31, 2007, there were 118 FONAR UPRIGHT™
Multi-Position™ MRI units installed worldwide.
At March 31, 2007, total assets were $48.5 million, total current assets
were $30.2 million, total cash and marketable securities were $5.8
million, total current liabilities were $29.2 million, and total
long-term liabilities were $1.3 million.
Dr. Raymond Damadian, president and chairman of FONAR, said, “the
future of UPRIGHT™ Multi-Position™
Full Range of Motion™ MRI is more exciting
than ever. Unique medical applications for UPRIGHT™
Multi-Position™ imaging arise continuously. A
very important example is FONAR’s new
development of scanning protocols for scoliosis. According to a National
Cancer Institute study published in 2000, women with scoliosis have a
90% higher incidence of developing breast cancer than non-scoliotic
women, the apparent cause being the repeated multiple chest X-rays over
many years required for scoliosis treatment and treatment monitoring.
Upright, full weight-bearing chest X-rays are mandatory to evaluate
scoliosis. UPRIGHT™ MRI meets the scoliosis
need for upright imaging without the radiation and without the risk of
engendering breast cancers. The estimated number of children in North
America with scoliosis is 1.5 million, a number which does not include
scoliosis patients above age 18, which raise the number with scoliosis
to 3.0 million.”
"MRI scans for the detection of silicone breast implant leaks is another
new application of UPRIGHT™ MRI,”
continued Dr. Damadian. “Silicon implants for
breast augmentation were only recently reinstated by the FDA in November
2006. The FDA recommends that MRI scans be performed for leakage
detection at year 1 and year 2, and alternate years thereafter for 8
more years. Cosmetic surgeons deem it important that these scans be done
upright to optimize the detection of implant leaks. Pooling of implant
material when the breast is gravity-dependent and pendant is perceived
to be the most sensitive means for image detection of leakage. There is
concern that when the breast is recumbent redistribution of leakage
material may undermine detection. There are currently in excess of 1.65
million women in the U.S. with breast implants. Under the new FDA
leakage monitoring recommendations, 1.65 million women would require MRI
examinations annually for each of the first two years and then every
other year thereafter.”
“The current installed base of FONAR UPRIGHT™
MRI scanners (118) operating at maximum capacity,”
added Dr. Damadian, “can accomplish only
614,000 of the needed 1.65 million MRI scans in each of the first two
years recommended by the FDA and of the needed 1.65 million scans on
alternate years thereafter, even if these scanners were performing MRI
breast examinations exclusively.”
“Whiplash injuries of the neck also require
UPRIGHT™ Multi-Position™
Full Range of Motion™ evaluation of the
disks, ligaments, neck musculature, vertebra and spinal cord for a
satisfactory assessment of the neck injury,”
said Dr. Damadian. “There are currently
1,000,000 motor vehicle whiplash injuries of the neck occurring annually.”
Dr. Damadian continued, “Patients with Chiari
syndrome, in which the brain, for lack of sufficient connective tissue
support, descends into the foramen magnum (opening) at the base of the
skull when the patient is upright, require UPRIGHT™
MR imaging. The “drop attacks”
that occur in this syndrome are characterized by a sudden episode of
muscular paralysis and a concurrent “falling
to the ground” when the patient is upright.
The actual pathology initiating the “drop
attack” can only therefore be visualized with
the patient in the same posture that prompts the “attack”.
Consequently, Chiari patients require examination in the FONAR UPRIGHT™
MRI to achieve the images necessary to assess the extent of Chiari
malformation. The current estimate of the number of Chiari cases in the
U.S. is 300,000. This number is believed to be underestimated by as much
as 200,000 Chiari 1 malformations now thought to occur annually,
secondary to motor vehicle whiplash injuries.”
“Such applications continue to arise without
limit. Moreover, they are in addition to the already existing extensive
musculoskeletal applications in the spine wherein 1,000,000 spine
surgeries are performed annually and where UPRIGHT™
weight-bearing Multi-Position™ imaging prior
to surgery will ultimately be mandatory to prevent incorrect surgery.
Additionally, there are 9,000,000 MRI scans of the spine performed
annually in the U.S. that are destined to become UPRIGHT™
Multi-Position™ MRI scans so that accurate
identification of the patient’s symptom
generating spine pathology can be achieved. And ultimately the extensive
cardio-vascular applications of UPRIGHT™
Multi-Position™ imaging are destined to come
into use, e.g. UPRIGHT™ imaging of cerebral
blood flow prior to surgical vascular repair, and UPRIGHT™
imaging of lower extremities varicosities prior to surgery.
Additionally, a little over 1,000,000 cardiac surgeries are performed
annually in the U.S. Such patients will benefit substantially from
UPRIGHT™ MRI imaging of coronary blood flow
prior to deciding between the various corrective alternatives, e.g.
bypass, stents, and angioplasty,” said Dr.
Damadian. “These are but a few of the
clinical conditions that are undiagnosable without upright scanning that
have been brought to FONAR’s attention since
the introduction to the medical community by FONAR of UPRIGHT™
Multi-Position™ MRI technology.”
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months
For the Nine Months
Ended March 31,
Ended March 31,
2007
2006
2007
2006
Revenues
$
8,782,000
$
7,103,000
$
24,237,000
$
27,797,000
Net Loss
$
(5,401,000)
$
(7,357,000)
$
(16,976,000)
$
(21,031,000)
Basic & Diluted Loss
per Common Share
$
(1.11)
$
(1.65)
$
(3.52)
$
(4.80)
The Inventor of MR Scanning™, Full Range of
Motion™, STAND-UP™,
UPRIGHT™, Multi-Position™,
pMRI™, True Flow™,
and The Proof is in the Picture™ are
trademarks of FONAR Corporation.
Be sure to visit FONAR’s Web site for Company
product and investor information: www.fonar.com
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 filings with the Securities and Exchange Commission.