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FONAR Corporation announced its financial results for the second quarter of fiscal 2010

FONAR Corporation ,announced its financial results for the second quarter of fiscal 2010, which ended December 31, 2009.

Total revenues for the second quarter of fiscal 2010 ended December 31, 2009, were $8.2 million as compared to $11.3 million for the same period last year which ended December 31, 2008. Total revenues for the six months ended December 31, 2009 were $15.7 million as compared to $18.1 million for the same period last year.

During the second fiscal 2010 quarter ended December 31, 2009, the net loss was $1.3 million as compared to a profit of $800,000 during the corresponding quarter ended December 31, 2008. The net loss for the six months period ended December 31, 2009 was $3.0 million as compared to a net income of $300,000 during the same period one year earlier. The loss per common share (basic and diluted) for the second fiscal quarter of 2010 was $0.26 as compared to a profit per common share (basic and diluted) of $0.16 during the same period one year earlier.

The principal reason for the smaller net loss in the first half of fiscal 2009 as compared to the first half of fiscal 2010 was that during the first quarter of fiscal 2009, we recognized a gain of $1.4 million on the sale of a consolidated entity managing an MRI scanning facility and, $1.8 million in license fees and royalties in the first half of fiscal 2009 as compared to $0 in license fees and royalties in the first half of fiscal 2010. The license fees were paid pursuant to an agreement which has expired.

During the second fiscal 2010 quarter for the period ended December 31, 2009, product sales were $3.0 million versus $4.4 million for the same period last year. In addition, product sales for the six month period ended December 31, 2009 were $4.5 million as compared to $5.8 million for the same period last year.

Service and repair revenues for the second fiscal 2010 quarter ended December 31, 2009, were $2.7 million as compared to $2.7 million for the same period last year. Service and repair revenues for the six month period ended December 31, 2009 were $5.5 million as compared to $5.3 million during the same period during the previous year. As of December 31, 2009, there were 141 FONAR UPRIGHT MRI units installed worldwide.

As of December 31, 2009, total cash, cash equivalents and marketable securities were approximately $1.1 million, total current assets were $17.0 million, total assets were $24.9 million, total current liabilities were $28.8 million, and total long-term liabilities were $2.0 million.

Quarter Highlights

On December 7, 2009, the company finished the installation of an UPRIGHT Multi-Position MRI at the Hospital ZorgSaam Zeeuws-Vlaanderen in Terneuzen, The Netherlands. The UPRIGHT MRI was sold by Tecserena GmbH, FONAR 's European distributor since 2006. At the time of the sale, radiologists at Hospital ZorgSaam Zeeuws-Vlaanderen said they sought the advanced technology provided by the FONAR UPRIGHT Multi-Position MRI to increase the diagnostic precision of the images of weight-bearing anatomy, establishing for their hospital a new standard of excellence throughout Europe for orthopedic surgical outcomes.

Camiel Raaijmakers, M.D., Terneuzen Hospital, said, "My colleague, Frank Raat, M.D. and I as radiologists became intrigued and fascinated by the FONAR UPRIGHT MRI system during our yearly visits to the Radiological Society of North America ( RSNA ) exhibit in Chicago. We realized that UPRIGHT MR imaging could be the answer for many of our questions in spinal imaging that cannot adequately be solved with our recumbent MRI system, especially patients with degenerative instability and spinal canal stenosis, whiplash patients and postoperative patients with failed back surgery. In younger patients, in need of scoliosis imaging, it is the perfect answer to reduce the radiation exposure during yearly follow-ups."

Dr. Raaijmakers continued "In our hospital in Terneuzen, The Netherlands, there is a multidisciplinary approach to pelvic floor problems. The UPRIGHT MRI is an ideal tool for non-invasive dynamic pelvic floor imaging."

"It (The FONAR UPRIGHT Multi-Position MRI ) is a very patient and child-friendly truly open MRI system that is easily accessible for obese and claustrophobic patients. But also, cardiovascular compromised patients can be examined in an upright position, which is an added value to the existing diagnostic modalities," explained Dr. Raaijmakers.

Hospital ZorgSaam Zeeuws-Vlaanderen in Terneuzen, The Netherlands, is a 340-bed hospital. A very significant amount of orthopedic and spine surgery is done at the hospital. It is also one of the biggest centers in The Netherlands for the treatment of obese patients and especially bariatric surgery. For details visit: http://www.fonar.com/news/012808.htm

On December 17, 2009, FONAR announced that the Center for Diagnostic Imaging (CDI) (Minneapolis, MN) purchased a third FONAR UPRIGHT Multi-Position MRI. It is scheduled to be installed in early 2010 at CDI's OpenScan MRI center in Duluth, Minnesota.

"This is the first and only FONAR UPRIGHT Multi-Position MRI scanner in Northern Minnesota," said Rick Long, Regional Vice President, Minnesota. "With our high-field, recumbent MRI scanner already in the market, the replacement of our existing lower field strength open-sided MRI scanner with an Open Upright MRI was critical to providing residents access to diagnostic services that could impact their quality of care. Now patients and their doctors get the dual benefit of the open comfort and higher quality images to guide diagnosis in one scanner."

Raymond Damadian, president and founder of FONAR , commented on the second fiscal quarter ended December 31, 2009. "Nationally, this calendar year has been a challenging one for everyone. FONAR has had to further reduce its overhead. In early 2010 we began a cost-cutting plan to bring our expenditures in line with revenues. With our costs reduced, we expect to be much improved going forward."

Source: FONAR Corporation

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