FONAR'S SECOND QUARTER REVENUES RISE 34%;
MELVILLE, NEW YORK, February 12, 1999 - FONAR Corporation
(NASDAQ:FONR), the Open MRI Company (tm), reported revenues
of $9.1 million for the second quarter of fiscal 1999, ended
December 31, 1998, a 34 percent increase over the $6.8 million
reported for the corresponding period of a year earlier. The company
incurred a net loss for the second quarter of $2.5 million, or 4 cents
per basic share, as compared to a year earlier when there was a net
loss of $2.1 million, or 3 cents per basic share. At the end of the
second quarter, the company had cash and marketable securities
totaling $46.2 million. Total assets were $107.3 million, 1% lower
than the June 30, 1998 level of $108.4 million.
HMCA, the company's subsidiary that manages physician practices
(PPM) and MRI imaging centers, continued to grow dramatically.
Second-quarter revenues were $8.0 million, 58% over the $5.0
million for the same period of the prior year. Also in the second
quarter, operating income, excluding amortization of goodwill, was
$1.6 million as compared to $0.77 million one year earlier, a 108%
increase.
During the second quarter, HMCA added an MRI imaging center
in Georgia and began installing another in Florida. This brings the
number of HMCA-managed MRI imaging centers to 26. The MRI
equipment for these two new installations are earlier-model FONAR
scanners that have been upgraded for state-of-the-art performance.
Timothy Damadian, president and CEO of HMCA said, "During this
second fiscal quarter, HMCA focused on executing its business plan
which included improving practice operations, upgrading information
management systems and strengthening relationships with our
managed care providers. These efforts have resulted in a substantial
improvement in our operating profits. HMCA is unique in that it builds
on the synergy between our network of imaging centers and nearby
physician practices. Eventually, the synergy will be extended to
FONAR as we expect to equip every HMCA-managed MRI imaging
center with a QUAD (tm)."
FONAR attributed the loss mainly to a low level of scanner sales, higher
expenses relating to the expansion of manufacturing and other office
facilities, and higher R&D spending.
Dr. Raymond V. Damadian, president and chairman of FONAR,
said, "We're optimistic about our prospects for our QUAD (tm)
scanners. We mounted a very successful presentation at the
annual meeting of the Radiological Society of North America (RSNA)
this past December, which was attended by 60,000. It was an
excellent opportunity to showcase the company and show that
we are the only one to offer a full line of new Open MRI products."
FONAR Corporation is the originator, leading developer and
manufacturer of OPEN MRI systems. The company's ready-to-sell
product line features the QUAD (tm) 12000, the highest-field-strength
(0.6 Tesla) Open MRI in the industry. The QUAD (tm) 7000
(0.35 Tesla) is the company's lower-cost model.
FONAR's works-in-progress innovations include The Stand-Up MRI
(tm), a vertically-Open scanner that acquires MRI images of
patients positioned in any of several weight-bearing postures;
The FONAR OR-360 (tm), a room-size MRI that permits surgeons
360 degree access to patients and enables them to utilize the
exceptional sub-millimeter soft tissue detail provided by the MRI
to guide their surgeries; and now the most patient-friendly scanner
in the industry - The Open Sky MRI (tm), the decorated scanner
and suite that makes patients feel like they are in the Great Outdoors.
CONDENSED STATEMENT OF OPERATIONS
1998 1997
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(Three Months Ending December 31, 1998)
Revenues $9,136,000 $6,835,000
Net Income (Loss) $(2,478,000) $(2,057,000)
Net Income Per Share (Loss) $(.04) $(.03)
(Six Months Ending December 31, 1998)
Revenues $16,672,000 $13,564,000
Net Income (Loss) $(5,321,000) $(4,321,000)
Net Income Per Share (Loss) $(.08) $(.07)
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For FONAR Investor and Product information Visit our web site
<http://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's filings with the Securities and Exchange Commission.
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