MELVILLE, NY--(Marketwire - Feb 14, 2013) - FONAR Corporation (NASDAQ: [ FONR ]), The Inventor of MR Scanning™, reported today its second quarter financial results of fiscal 2013. In addition to profitability being greater than $1.5 million for six straight quarters, the Company has had twelve straight quarters of income from operations. In spite of Hurricane Sandy reaping havoc in the area that four of its scanning centers are located, revenues for FONAR's imaging management division advanced when compared to a year ago or last quarter. FONAR's business is based upon utilization of its UPRIGHT® Multi-Position™ MRI, also called the STAND-UP® MRI.

Statement of Operations Items

• Income from operations for the six months and quarter ended December 31, 2012, was $3.6 million and $1.7 million, respectively, as compared to $3.7 million and $1.9 million respectively, for the same period one year earlier.
  
  
• Net income for the six months and quarter ended December 31, 2012, was $3.4 million and $1.6 million, respectively, as compared to $3.6 million and $1.8 million respectively, for the same period one year earlier.
  
  
• The basic net income per common share available to common stockholders, for the six months and quarter ended December 31, 2012 was $0.44 and $0.21, as compared to $0.50 and $0.25 for the six months and quarter ended December 31, 2011. 
  
  
• The diluted net income per common share available to common stockholders, for the six months and quarter ended December 31, 2012 was $0.43 and $0.21, as compared to $0.49 and $0.24 for the six months and quarter ended December 31, 2011. 
  
  
• Total revenue for the six months and quarter ended December 31, 2012, was $19.1 million and $9.6 million, respectively, as compared to $18.9 million and $9.3 million for the same period one year earlier.
  
  
• Total operating costs and expenses for the six months and quarter ended December 31, 2012, were $15.5 million and $7.9 million, respectively, as compared to $15.3 million and $7.4 million for the same period one year earlier.
  
  
• Revenue from the management and other fees segment, (HMCA management of the eleven FONAR UPRIGHT® Multi-Position™ MRI diagnostic imaging centers segment), for the six months and quarter ended December 31, 2012, was $11.5 million and $5.7 million respectively, as compared to $9.8 million and $4.9 million for the same period one year earlier. These are increases of 17% and 17% respectively.
  
  
• Revenue from the manufacturing and service segments for the FONAR UPRIGHT® Multi-Position™ MRI for the six months and quarter ended December 31, 2012, was $7.7 million and $3.9 million, respectively, as compared to $9.2 million and $4.4 million for the same period one year earlier.
  
  
• Research & development (R&D) and selling, general & administrative costs (S,G&A) were $2.7 million for the quarter ended December 31, 2012, as compared to $2.3 million for the quarter ended December 31, 2011.
  
  

Balance Sheet Items

• As of December 31, 2012 total current assets were $29.6 million, total assets were $36.8 million, total current liabilities were $21.4 million, and total long-term liabilities were $1.3 million.
  
  
• As of December 31, 2012, total cash and cash equivalents were $14.8 million.
  
  
• As of December 31, 2012, the total stockholders' equity was $14.1 million.
  
  

See the accompanying tables for more details.

Management Discussion

Raymond V. Damadian, M.D., president and chairman of FONAR said, "I am quite pleased with the Company's consistent progress since we redefined our corporate business strategy following the 2008 banking crisis. It is remarkable that we have had 1 1/2 years of net income and income from operations exceeding $1.5 million. Each quarter over the past three years we have consistently been profitable having earned income from operations. Our total assets have grown from $21.6 million at June 30, 2010 to $36.8 million most recently, shareholders' equity has climbed to over $14 million and our long-term liabilities are a low of $1.25 million."

"The eleven UPRIGHT® Multi-Position™ MRI centers that we manage continue to add scan volume," said Dr. Damadian. "In fact, for the three months ended December 31, 2012, the number of scans was 10,563 as compared to 10,332 scans over the same period one year earlier. This occurred in spite of the interruption caused by Hurricane Sandy which did cause several of our scanning centers to temporarily stop for a short period."

"Much of our success comes from the management team assembled that manages the imaging center management business. Key to their success though is the marketing strength of the FONAR STAND-UP® MRI (a.k.a. UPRIGHT® Multi-Position™ MRI)," said Dr. Damadian. "We have a considerable number of customer patients that tell us that they will never go and have a recumbent MRI again. Currently, we are managing eleven centers, all in New York and Florida."

"FONAR's UPRIGHT® MRI technology has opened a new frontier in medical imaging," said Dr. Damadian. "It is the power to make MRI motion pictures (cinés) of the cerebrospinal fluid (CSF) in the spinal canal as it flows into and out of the brain of the patient while Upright. These ciné MRIs of CSF flow in and out of the brain while the patient is Upright, are uniquely sensitive to the visualization of any impairments of CSF flow. This often leads to a better understanding of the problems with the cervical anatomy that might be contributing to the patient's symptoms."

"An example of the severe need of FONAR's unique UPRIGHT® Multi-Position™ MRI technology is FONAR's recent discovery of the potential adverse consequences of cervical spine malalignments. Such cervical spine degenerations or vertebral malalignments can obstruct the flow of cerebrospinal fluid (CSF), which in turn can generate increases of intracranial pressure (ICP) and CSF 'leakages' into the surrounding brain parenchyma. It has been proposed that CSF 'leakages', such as those shown to be joining the MS lesions in the MRI images of the MS patients studied, could be etiologic in the generation of multiple sclerosis (Damadian R.V., Chu D., '[ The Possible Role of Cranio-Cervical Trauma and Abnormal CSF Hydrodynamics in the Genesis of Multiple Sclerosis ]', Physiol. Chem. Phys. & Med. NMR, September 20, 2011, 41:1-17). The report showed that the cervical anatomic abnormalities seen in these MS patients and the resulting CSF flow obstructions were significantly more severe with the patient in the vertical position (Table 2A, col. 10 & 11, Physiol. Chem. Phys. & Med. NMR, September 20, 2011 41:1-17) than with the patient in the recumbent position. Consequently, it is critical that any assessment of CSF flow impairment in the brain or spinal column must be assessed with the patient in the vertical position in order to determine the full extent of the CSF flow impairment, the extent of treatment needed and, most importantly, to achieve an accurate assessment post-treatment of the degree to which satisfactory CSF flow has been successfully restored. Accordingly," said Dr. Damadian, "we believe there now exists a genuine hope that if an MS patient can have their vertical position CSF flow and intracranial pressures (ICP) monitored and restored to normal, then there is also the prospect that the symptoms of this MS patient can be restored to normal."

About FONAR

FONAR (NASDAQ: [ FONR ]), Melville, NY, [ The Inventor of MR Scanning™ ], is an AMERICAN COMPANY that was incorporated in 1978, and is the first, oldest and most experienced MRI company in the industry. FONAR introduced the world's first commercial MRI in 1980, and went public in 1981. Since its inception, nearly 300 recumbent-OPEN MRIs and over 150 UPRIGHT® Multi-Position™ MRI scanners have been installed worldwide. FONAR's stellar product is the UPRIGHT® MRI (also known as the STAND-UP® MRI), the only whole-body MRI that performs Position™ imaging (pMRI™) and scans patients in numerous weight-bearing positions, i.e. standing, sitting, in flexion and extension, as well as the conventional lie-down position. The FONAR UPRIGHT® MRI often sees the patient's problem that other scanners cannot because they are lie-down only. The patient-friendly UPRIGHT® MRI has a near-zero claustrophobic rejection rate by patients. As a FONAR customer states, "If the patient is claustrophobic in this scanner, they'll be claustrophobic in my parking lot." Approximately 85% of patients are scanned sitting while they watch a 42" flat screen TV. FONAR is headquartered on Long Island, New York.

[ UPRIGHT® ] and [ STAND-UP® ] are registered trademarks and [ The Inventor of MR Scanning™, ] Full Range of Motion™, [ Multi-Position™ ], Upright Radiology™, [ The Proof is in the Picture™ ], True Flow™, [ pMRI™ ], Spondylography™, [ Dynamic™ ], Spondylometry™, [ CSP™ ], and Landscape™, are trademarks of FONAR Corporation.

This release may include forward-looking statements from the company that may or may not materialize. Additional information on factors that could potentially affect the company's financial results may be found in the [ company's filings with the Securities and Exchange Commission. ]