Core Viewpoint - FONAR Corporation reported its financial results for the third quarter and nine-month period of fiscal 2025, highlighting growth in revenues but a decline in income from operations and net income for the nine-month period compared to the previous year [2][3][7]. Financial Performance - Total Revenues-Net for the quarter ended March 31, 2025, increased by 6% to $27.2 million compared to $25.7 million for the same quarter in 2024 [3][10]. - Total Revenues-Net for the nine-month period ended March 31, 2025, was $77.1 million, slightly up from $76.9 million for the same period in 2024 [3][50]. - Income From Operations for the quarter decreased by 2% to $3.66 million compared to $3.75 million for the same quarter in 2024 [6][10]. - Income From Operations for the nine-month period decreased by 30% to $10.7 million compared to $15.2 million for the same period in 2024 [6][50]. - Net Income for the quarter increased by 24% to $3.1 million compared to $2.5 million for the same quarter in 2024 [7][10]. - Net Income for the nine-month period decreased by 25% to $9.3 million compared to $12.5 million for the same period in 2024 [7][11]. Cost Analysis - Selling, general & administrative costs (SG&A) increased by 5% to $8.0 million for the quarter compared to $7.6 million in the same quarter of 2024 [4][10]. - SG&A costs increased by 11% to $20.1 million for the nine-month period compared to $18.0 million for the same period in 2024 [4][50]. - Total Costs and Expenses for the quarter were $23.5 million, up from $22.0 million in the same quarter of 2024 [5][10]. - Total Costs and Expenses for the nine-month period were $66.4 million compared to $61.7 million for the same period in 2024 [5][50]. Balance Sheet Highlights - Total Cash, Cash Equivalents, and Short-Term Investments decreased by 4% to $54.4 million as of March 31, 2025, compared to $56.5 million at June 30, 2024 [10][12]. - Total Current Assets increased to $141.1 million as of March 31, 2025, compared to $140.3 million at June 30, 2024 [12]. - Total Assets increased to $214.9 million as of March 31, 2025, compared to $214.2 million at June 30, 2024 [12][13]. - Total Current Liabilities decreased to $14.0 million as of March 31, 2025, compared to $17.9 million at June 30, 2024 [12][13]. Operational Achievements - The Health Management Company of America (HMCA) set a new record by completing 54,612 MRI scans in the third quarter of Fiscal 2025, which was 2.8% higher than the previous quarter and 3.4% higher than the same quarter in Fiscal 2024 [16]. - HMCA managed 44 MRI scanners, with plans to add more facilities to expand its network in New York and Florida [16][17]. Shareholder Actions - As of March 31, 2025, FONAR repurchased 373,942 shares at a cost of $6.07 million as part of its stock repurchase plan announced in September 2022 [17].

Core Viewpoint - FONAR Corporation has experienced a significant decline in its financial performance for the quarter ended December 31, 2024, with notable drops in revenue, income, and net income, leading to a decrease in stock value compared to the S&P 500 Index. Financial Performance - Total revenues for Q2 fiscal 2025 decreased by 1.7% to $24.9 million from $25.4 million year-over-year [2] - For the six-month period, revenues fell by 2.6% to $49.9 million from $51.2 million [2] - Income from operations dropped 50.2% to $2.4 million for the quarter from $4.9 million [3] - For the six-month period, income from operations declined 38.5% to $7 million from $11.5 million [3] - Net income decreased by 52.3% to $2.2 million for the quarter from $4.6 million [4] - Over the six-month period, net income fell 37.8% to $6.2 million from $9.9 million [4] - Diluted net income per share declined 46.3% to $0.29 for the quarter and 33.9% to $0.74 for the six-month period [4] Segment Performance - The Health Management Company of America (HMCA) remains the primary revenue driver, with MRI scan volume at HMCA-managed sites increasing by 7.4% to 79,207 scans [5] - Scan volume at HMCA-owned sites decreased by 4.4% to 26,961 scans [5] - Revenues from management and other fees were $12.2 million for the quarter, down 1% from $12.3 million year-over-year [6] - Patient fee revenues declined by 3.4% to $7.9 million from $8.2 million [6] Other Key Business Metrics - Operating expenses increased, with SG&A costs rising 23.9% to $6.9 million for the quarter [7] - Total liabilities decreased to $49 million as of December 31, 2024, from $57.5 million [8] - Total stockholders' equity rose to $158.9 million from $156.8 million [8] Management Commentary - The company reported stable scan volume at HMCA-managed MRI centers, with a 3.6% year-over-year increase [9] - Management remains optimistic about future scan volume growth due to the installation of high-field MRI scanners [10] Factors Influencing Performance - The decline in earnings and revenue was attributed to increased SG&A expenses, lower patient fee revenue, and a reserve against accounts receivables related to American Transit Insurance Company [11] - Macroeconomic conditions, including inflation and reimbursement rate reductions, continue to pose challenges [11] Other Developments - FONAR has repurchased 343,485 shares at a total cost of $5.6 million under its $9 million buyback plan [12] - The company completed the installation of a new scanner in Naples, FL, during the first quarter of fiscal 2025 [12]

Financial Performance - For the six-month period ended December 31, 2024, net income was $6.3 million on revenues of $50 million, a decrease from net income of $10.0 million on revenues of $51.2 million for the same period in 2023, representing a revenue decline of 2.6%[102][104] - Operating income decreased to $7.0 million for the first six months of fiscal 2025, down from $11.5 million for the same period in fiscal 2024, due to a 7.5% increase in costs and expenses to $42.8 million[108][114] - HMCA revenues decreased by 2.9% to $45.9 million for the first six months of fiscal 2025 from $47.3 million for the same period in fiscal 2024, with the segment contributing 92.0% of total revenues[130] - Operating income for the first six months of fiscal 2025 was $9.5 million, down from $13.2 million in the same period of fiscal 2024, attributed to increased expenses and reduced patient fee revenue[132] Revenue Sources - Revenues from MRI product sales decreased to $145,000 for the first six months of fiscal 2025 from $219,000 for the same period in fiscal 2024, reflecting economic uncertainty and lower reimbursement rates[123] - Service revenues increased to $3.8 million for the first six months of fiscal 2025 from $3.7 million for the same period in fiscal 2024, while costs related to providing service increased to $2.1 million from $1.7 million[124][125] - HMCA revenues decreased by 1.8% to $23.1 million for the three months ending December 31, 2024, compared to $23.5 million for the same period in 2023[131] Costs and Expenses - Cost of revenues increased to $27.6 million for the first six months of fiscal 2025, compared to $26.4 million for the same period in fiscal 2024[134] - Operating loss for the medical equipment segment increased to $2.3 million for the first six months of fiscal 2025 from an operating loss of $1.7 million for the same period in fiscal 2024[128] - Interest expense decreased by 63.2% to $14,000 in the first six months of fiscal 2025 from $38,000 in the same period of fiscal 2024[116] - Research and development expenses decreased by 22.7% to $683,000 for the first six months of fiscal 2025 from $883,000 for the same period in fiscal 2024[116] Operational Metrics - The aggregate number of scans performed by owned sites decreased to 26,961 from 28,214 in the first half of fiscal 2024, while scans managed increased to 79,207 from 73,776[107] - Medicare reimbursement rates for MRI scans continue to see year-over-year reductions, impacting overall patient volume and reimbursement rates from commercial insurers[119] Cash Flow and Financial Position - Cash provided by operating activities for the first six months of fiscal 2025 was $3.9 million, primarily from net income of $6.2 million[138] - Total liabilities decreased by 14.7% to $49.0 million at December 31, 2024, from $57.5 million at June 30, 2024[141] - Working capital increased to $125.4 million at December 31, 2024, from $122.5 million at June 30, 2024[143] Future Plans and Risks - FONAR plans to place an additional scanner in New York by the fourth quarter of fiscal 2025, with estimated costs of $2.0 million[148] - FONAR entered into an agreement with AIRS Medical to install the SwiftMR™ product on all FONAR Upright® scanners, aiming to improve image quality and operational efficiency[150] - The company believes its business plan has supported profitability for the past ten consecutive fiscal years and the first six months of fiscal 2025[152] - Future business operations may face adverse consequences from healthcare legislation, reimbursement rates, and economic conditions[152]

Core Viewpoint - FONAR Corporation reported a decline in financial performance for the second quarter and six-month period of fiscal 2025, with decreases in total revenues, income from operations, and net income compared to the same periods in the previous year [2][3][4][6]. Financial Results - Total Revenues-Net for the quarter ended December 31, 2024, decreased 2% to $25.0 million from $25.4 million for the same quarter in 2023 [3]. - Total Revenues-Net for the six-month period ended December 31, 2024, decreased 3% to $49.9 million from $51.2 million for the same period in 2023 [3]. - Income from Operations for the quarter ended December 31, 2024, decreased 48% to $2.6 million compared to $4.9 million for the same quarter in 2023 [4]. - Income from Operations for the six-month period ended December 31, 2024, decreased 38% to $7.2 million from $11.5 million for the same period in 2023 [4]. - Net Income for the quarter ended December 31, 2024, decreased 48% to $2.4 million compared to $4.6 million for the same quarter in 2023 [6]. - Net Income for the six-month period ended December 31, 2024, decreased 36% to $6.4 million from $10.0 million for the same period in 2023 [6]. Operational Metrics - MRI scan volume at HMCA managed sites increased 7% to 79,207 scans during the six-month period ended December 31, 2024, compared to 73,776 scans for the same period in 2023 [5]. - MRI scan volume at HMCA owned sites decreased 4% to 26,961 scans during the six-month period ended December 31, 2024, compared to 28,214 scans for the same period in 2023 [5]. Cash Flow and Balance Sheet - Cash and Cash Equivalents and Short-term Investments decreased 5% to $53.7 million at December 31, 2024, compared to $56.5 million at June 30, 2024 [5][10]. - Operating Cash Flow for the six-month period ended December 31, 2024, decreased 42% to $3.9 million compared to $6.7 million for the same period in 2023 [9]. - Total Current Assets at December 31, 2024, were $137.7 million compared to $140.3 million at June 30, 2024 [10]. - Total Liabilities at December 31, 2024, were $50.0 million compared to $57.5 million at June 30, 2024 [11]. Management Insights - The president and CEO of FONAR indicated that the scan volume for the second quarter of fiscal 2025 was slightly higher than the previous quarter and the same quarter last year, suggesting a positive trend in operational performance [13]. - The company anticipates promising scan volume for the remainder of fiscal 2025 due to the addition of high-field MRIs at existing scanning centers [14]. - FONAR has repurchased 343,485 shares at a cost of approximately $5.6 million as part of its stock repurchase plan [14].

Group 1 - The recent 'Buy' ratings for FONAR Corporation (NASDAQ: FONR), a US-based MRI company, have not met expectations as the shares have not increased in value [1] - The investment strategy focuses on acquiring undervalued profitable stocks with strong balance sheets and minimal debt, while also considering writing calls to generate additional income [1] - Risk management is emphasized through position sizing and the use of trailing stop losses over time [1]

Core Insights - FONAR Corporation's shares increased by 3.4% following the earnings report for the quarter ended September 30, 2024, outperforming the S&P 500 index, which saw a decline of 0.3% during the same period [1] Financial Performance - In the first quarter of fiscal 2025, total net revenue decreased by 3.4% to $24.9 million from $25.8 million in the same quarter of 2023, primarily due to a 14% decline in patient fee revenue, which fell to $7.5 million from $8.7 million [2] - Income from operations dropped by 29.9% to $4.6 million from $6.6 million, while net income decreased by 25.4% to $4 million compared to $5.4 million last year [3] - Diluted earnings per share declined by 22% to $0.46 from $0.59 in the prior year [3] Segment Performance - The Health Management Company of America (HMCA) segment generated the majority of revenues, with a 4% decline in revenues to $22.8 million from $23.8 million, mainly due to decreased patient fee revenues [4] - Conversely, revenues from the FONAR segment, which includes product sales and service fees, increased by 5% to $2.2 million from $2.1 million [5] - Total MRI scan volume rose by 5% year over year to 53,054 scans, attributed to operational efficiencies and upgrades in imaging technology [5] Management Insights - The CEO noted a 2.8% decrease in scan volume from the previous quarter due to Hurricane Helene, but highlighted a year-over-year increase in scan volume due to efficiency improvements [6] - Recent facility upgrades, including a high-field MRI addition in Naples, FL, are expected to drive growth through higher referral rates and reduced patient wait times [6] Cost and Expense Analysis - Total costs and expenses increased by 5.6% to $20.4 million in the first quarter of fiscal 2025 from $19.3 million a year prior, impacting profitability [7] - Selling, general, and administrative expenses rose by 5.4% to $5.1 million, largely due to a new outside billing contract [7] Shareholder Initiatives - The ongoing stock repurchase program, authorized in September 2022 with a $9 million cap, continued in the first quarter of fiscal 2025, with over 283,770 shares repurchased, valued at approximately $4.68 million [8] - The company reported a solid balance sheet with $54.2 million in cash and cash equivalents and a 1.8% increase in working capital to $124.7 million [8]

Financial Performance - For the three-month period ended September 30, 2024, Fonar Corporation reported a net income of $4.0 million on revenues of $25.0 million, compared to a net income of $5.4 million on revenues of $25.8 million for the same period in 2023, indicating a revenue decrease of 3.4%[77][94] - Operating income decreased to $4.6 million for the first three months of fiscal 2025, down from $6.6 million in the same period of fiscal 2024, due to rising costs and expenses which increased by 5.6% to $20.4 million[79][94] - Revenues from the diagnostic facilities management segment decreased by 4.1% to $22.8 million in the first three months of fiscal 2025, compared to $23.8 million in the same period of fiscal 2024[88] Revenue Sources - Patient fee revenue decreased by $1.2 million, from $8.7 million in the first three months of fiscal 2024 to $7.5 million in fiscal 2025, contributing to the overall revenue decline[78] - The company has experienced lower reimbursement rates from Medicare and private insurance, impacting revenue from its scanning center business[118] - The reduced reimbursement rates negatively affect sales of MRI scanners, leading to lower revenue projections and potential price reductions from customers[128] Operational Efficiency - The number of scans performed increased to 53,054 in the three months ended September 30, 2024, up from 50,744 in the same period of 2023, reflecting operational efficiencies[79][89] - Fonar entered into an agreement with AIRS Medical to install the SwiftMR™ product on all Fonar Upright® scanners, which is expected to improve image quality and operational efficiency[111] Expenses and Costs - Research and development expenses decreased by 34.3% to $307,000 for the first three months of fiscal 2025, down from $467,000 in the same period of fiscal 2024[95] - Inflation has increased costs for materials and labor, making it difficult to achieve organic growth and profitability[119] Cash Flow and Liquidity - Cash and cash equivalents decreased from $56.4 million at June 30, 2024, to $54.3 million at September 30, 2024[101] - Cash provided by operating activities for the first three months of fiscal 2025 was $1.6 million, primarily due to net income and depreciation[102] - Cash used in investing activities was $1.8 million, mainly for the purchase of property and equipment[103] - Cash used in financing activities totaled $2.0 million, including repayments on long-term debt and treasury stock purchases[104] Liabilities and Working Capital - Total liabilities decreased by 7.0% to $53.5 million at September 30, 2024, from $57.5 million at June 30, 2024[105] - Current liabilities decreased by 20.0% to $14.4 million at September 30, 2024, from $17.9 million at June 30, 2024[107] - Working capital increased to $124.7 million at September 30, 2024, from $122.5 million at June 30, 2024[107] Future Investments and Challenges - The company plans to invest $2.0 million to place an additional scanner in New York, expected to be completed by the fourth quarter of fiscal 2025[109] - The company faces significant competition in the diagnostic imaging market from established hospitals and independent organizations[124] - Changes in Florida insurance law may lead to higher administrative costs and lower reimbursement rates for the company's facilities[127]

Core Viewpoint - FONAR Corporation reported solid financial results for fiscal 2024, with notable increases in earnings per share and net income, driven primarily by the HMCA segment's performance and an increase in MRI scan volume [1][9][11]. Revenue Summary - FONAR's total revenues for fiscal 2024 were $102.9 million, reflecting a 4.3% increase from $98.6 million in fiscal 2023 [2]. - The HMCA segment generated revenues of $94.6 million, up 4.6% from $90.4 million in the previous year, attributed to a 13.5% rise in patient fees [5]. - Revenues from the medical equipment segment remained stable at $8.3 million, with product sales and service revenues both increasing by 0.8% [3]. Segment Performance - Total MRI scan volume at HMCA-managed sites rose by 11.1% to 209,346 scans in fiscal 2024, with new MRI centers contributing to this growth [6]. - The fourth quarter saw a 3.3% increase in scan volume at HMCA-managed MRI centers, totaling 54,556 scans [7]. Operating Expenses - Selling, general, and administrative expenses decreased by 8.6% to $26.9 million due to improved management fee reserves [8]. - Research and development expenses increased by 10.7% to $1.7 million, focusing on upgrades for the Upright MRI scanner [8]. Profitability Metrics - Operating income for fiscal 2024 was $16.5 million, an increase of 11.8% from the previous year [9]. - Net income rose to $14.1 million, reflecting a 16.3% increase compared to fiscal 2023 [9]. Liquidity and Debt Management - FONAR ended fiscal 2024 with cash and cash equivalents of $56.5 million, up from $51.3 million at the end of fiscal 2023 [9]. - Total debt decreased to $113.9 million from $158.8 million year-over-year [9]. Future Outlook - Management plans to add high-field MRI machines to HMCA-managed sites, which is expected to further enhance revenue and scan volume in fiscal 2025 [11].

Core Viewpoint - Zacks Investment Research has initiated coverage of FONAR Corporation (FONR) with an "Outperform" recommendation, highlighting the company's strategic initiatives and strong positioning in the MRI diagnostic services market [1] Company Overview - FONAR Corporation, based in Melville, NY, has established a significant presence in the MRI industry, managing 42 MRI scanners as of now, up from nine in 2009 [2] - The company is recognized for developing the first commercial MRI scanner and focuses on designing, manufacturing, selling, and servicing MRI systems, particularly through its Upright MRI technology [2] Financial Performance - For the nine months ending March 31, 2024, FONR reported total revenues increasing by 5.6% and net income rising by 25.3%, indicating effective cost management and strong revenue generation [3] - Income from operations increased by 23.5%, reflecting the company's operational efficiency [3] - As of March 31, 2024, FONAR has total assets of $209.6 million and cash, cash equivalents, and short-term investments totaling $54.1 million [4] - The current ratio improved to 9.37, demonstrating strong liquidity to meet short-term liabilities, while working capital increased by 10.3% to $121.3 million, indicating solid financial health [4] Growth Drivers - Key factors driving FONR's future growth include diversified revenue streams from product sales, service operations, and management fees [5] - The adoption of SwiftMR technology enhances MRI image quality and reduces exam times, contributing to operational efficiency [5] - Strategic expansion efforts, such as opening new Stand-Up MRI centers in Casselberry, FL, and the Bronx, NY, are aimed at meeting rising demand and enhancing service capacity [5] Market Positioning - FONAR's stock has underperformed compared to industry peers and the broader market over the past year, currently trading at low valuation multiples relative to industry standards [7] - This presents a compelling entry point for investors, especially considering FONR's strategic market positioning and potential for profitability improvements [7] Additional Insights - The company has a modest market capitalization of $97.3 million, and the research report aims to provide investors with essential information for decision-making in this promising yet risky market segment [8]

FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 2024 Commission file number 0-10248 FONAR CORPORATION (Exact name of registrant as specified in its charter) | DELAWARE | 11-2464137 | | --- | --- | | (State or other jurisdiction of | (I.R.S. Employer | | incorporation or organization) | Identification No.) | | 110 Marcus Drive Melville, New York | 11747 | | Address ...