Melville MRI firm says sales, profits improving
Fonar chief executive, Dr. Raymond Damadian, says his Melville company worked hard in a difficult economy. Earnings for the fiscal year ended in June were $3.16 million, versus a loss of $3 million a year earlier. Credit: Daniel Goodrich, 2008
The magnetic resonance imaging company Fonar Corp., of Melville, said its sales and profits improved following a study, co-written by the company's founder, on the use of its machines for understanding the pathology of multiple sclerosis.
Investors reacted quickly to Fonar's earnings report Tuesday, sending shares up $0.41 to $2.12.
The Nasdaq exchange saw 100,000 shares traded within the first two minutes of the stock market's opening bell, three times its average full-day volume.
The turnaround in profits comes after a tough spell for Fonar, which has repeatedly been on the edge of being delisted by the Nasdaq stock exchange.
Fonar had a profit, available to common stockholders, of $1.4 million on sales of $9.6 million for the quarter ended Sept. 30, compared to $363,000 on sales of $8.6 million in the same quarter last year. Its diluted net income per common share rose to $0.24, from $0.07.
Fonar makes MRI machines designed to take spinal and body images while the patient sits or stands, in contrast to standard machines that slide patients, prone, into a tunnel.
With more than 200 workers, Fonar had a market capitalization of about $10 million based on Monday's closing price; that closing price represented a 61 percent increase in the past year.
Dr. Raymond Damadian, the company chief executive and founder, said the quarterly results were affected by several factors, including a 5 percent reduction in operating costs for the quarter.
Revenue from ten corporate-managed MRI centers increased to $4.9 million from $3.3 million; Fonar has previously said this year that it is charging more per scan, and has performed more scans per machine.
The management fee income offset a drop in product sales to $1.8 million, from $2.7 million in the year-ago quarter
Damadian, a medical doctor and research scientist, is known for his high-profile, but unsuccessful, attempt to persuade the Nobel Prize committee to include him among its 2003 honorees for pioneering MRI work.
Photo: Fonar founder Dr. Raymond Damadian.
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