Fonar(US:FONR) ZACKSยท2025-02-21 16:40Core 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]