Fonar(US:FONR)2026-02-13 22:13Financial Performance - For the six-month period ended December 31, 2025, the company reported net income of $5.2 million on revenues of $51.6 million, compared to net income of $6.2 million on revenues of $50.0 million for the same period in 2024[144]. - Operating income decreased from $7.0 million for the six months ended December 31, 2024, to $6.2 million for the same period in 2025, while costs and expenses increased by 5.9% to $45.4 million[149]. - Consolidated net revenues increased by 3.3% to $51.6 million for the first six months of fiscal 2026, compared to $50.0 million for the same period in fiscal 2025[165]. - Total costs and expenses rose by 5.9% to $45.4 million in the first six months of fiscal 2026, up from $42.9 million in the first six months of fiscal 2025[165]. - Operating income decreased to $6.2 million in the first six months of fiscal 2026, down from $7.0 million in the same period of fiscal 2025[165]. Revenue Sources - Revenues from product sales and service and repair fees increased from $4.0 million for the first six months of fiscal 2025 to $4.9 million for the first six months of fiscal 2026[146]. - HMCA revenues increased by 1.6% to $46.7 million for the first six months of fiscal 2026, while the percentage of total revenues from this segment decreased slightly to 90.5%[154]. - Revenues from MRI product sales increased to $442,000 for the first six months of fiscal 2026 from $145,000 for the same period in fiscal 2025[161]. - Service and repair fees revenue increased to $4.5 million for the six-month period ended December 31, 2025, from $3.8 million for the same period in 2024[162]. Operational Challenges - Medicare reimbursement rates for MRI scans are flat year over year for calendar year 2026, creating operational challenges due to rising costs[160]. Cash Flow and Investments - Cash provided by operating activities was $1.9 million for the first six months of fiscal 2026, primarily due to net income of $5.2 million[173]. - Cash used in investing activities totaled $2.8 million for the first six months of fiscal 2026, including $2.3 million for property and equipment purchases[174]. Liabilities and Working Capital - Total liabilities decreased by 4.3% to $54.4 million at December 31, 2025, from $56.8 million at June 30, 2025[178]. - Working capital increased to $129.4 million at December 31, 2025, up from $127.5 million at June 30, 2025[180]. Future Plans - The company plans to open an additional location on Long Island, New York, with expected costs of approximately $900,000 for a new scanner and related buildout[184]. - The company believes its existing cash balances and internal cash generating capabilities are sufficient to finance capital expenditures and operations for at least the next 12 months[188]. Merger and Acquisition - The company is subject to customary restrictions on soliciting alternative acquisition proposals as part of the proposed going-private transaction[141]. - The proposed merger agreement includes a cash consideration of $19.00 per share for Common Stock and Class B Common Stock, and $6.34 per share for Class C Common Stock[139]. Research and Development - Research and development expenses increased by 31.0% to $895,000 for the first six months of fiscal 2026, compared to $683,000 for the same period in fiscal 2025[169]. Scans Performance - The aggregate number of scans performed by the sites owned and managed by the company increased to 109,952 scans from 106,168 scans in the first half of fiscal 2025[148].