Company records $9.4 million in ‘other income’MRI vendor Fonar last month reported a novel financial achievementfor its second quarter (end-December). The Melville, NY, company,which has struggled to reach profitability in recent years,
Company records $9.4 million in other income
MRI vendor Fonar last month reported a novel financial achievementfor its second quarter (end-December). The Melville, NY, company,which has struggled to reach profitability in recent years, reporteda $6.4 million profit on revenues of $3 million. That compareswith a net loss of $877,000 on revenues of $3.7 million in thesecond quarter of 1995.
Fonar did not state how it was able to squeeze so much profitout of so little revenue. It is highly likely, however, that thecompany last quarter enjoyed the monetary fruits of one of thepatent-infringement settlements it has signed with other MRI vendors.In the company's 10-Q filing with the Securities and Exchangecommission for the quarter, Fonar recorded "other income,net" of $9.4 million, although it did not disclose the sourceof that income.
Fonar's most recent settlement was with Siemens last Octoberfor an undisclosed amount of cash (SCAN 10/23/96). A Fonar attorneyat the time said that Siemens' payment would probably occur notlong after the settlement. Fonar has declined to reveal the dollaramount of any of the patent settlements.
Fonar has already settled patent-infringement litigation withHitachi and Philips. The company also won a major victory lastweek in its legal battle with GE (see story, page 1).
In addition to the revenue and income numbers, Fonar said itsworking capital situation improved to a positive $6.2 million,from a working capital deficiency of $2.4 million.
The company also said that it expected the reversal of a $2.3million judgment rendered against Fonar by a U.S. District Courtin Manhattan. The judgment relates to ongoing litigation betweenFonar and independent service provider Magnetic Resonance Plus(SCAN 4/10/96). A federal jury in December awarded MR Plus $2.3million, but the verdict was overturned by the appeals court inJanuary, which also reinstated Fonar's copyright-infringementand unfair-competition claims.