Increased revenue from its healthcare services business wasn’t enough to bring profitability to MRI developer Fonar. During its 1999 fiscal year (end-June), the Melville, NY-based open MRI developer posted revenues of $36.9 million, a 34% increase
Increased revenue from its healthcare services business wasnt enough to bring profitability to MRI developer Fonar. During its 1999 fiscal year (end-June), the Melville, NY-based open MRI developer posted revenues of $36.9 million, a 34% increase over last years $27.6 million, but also sustained a net loss of $14.2 million, more than double 1998s $5.7 million.
Fonar attributed its loss to low scanner sales and expenses related to the R&D of four new MRI products, but emphasized the growth of its physician practice management subsidiary, Health Management Corp. of America (HMCA). Its revenues climbed from $21.1 million in 1998 to $31.3 million in 1999, a 48% increase. In September, Fonar announced it will sell its MRI scanners to HMCA in an effort to upgrade select facilities and improve the subsidiarys operating profits and productivity (SCAN 9/29/99).
In other Fonar news, the company moved to strengthen its stock repurchase program, announcing that it will purchase its shares on an ongoing basis and will consider a stock purchase plan for its employees. The company believes that it is on the cusp of dynamic growth as it continues R&D on works-in-progress scanners such as Open Sky MRI, Fonar OR-360, and Stand-Up MRI, for which it hopes to obtain clearance from the FDA next year. In an effort to facilitate this growth, Fonar also announced Oct. 27 that it has sold the stock of its subsidiary, Medical SNI of Haifa, Israel, which designs and develops medical imaging and archiving products. The sale will free Fonar from liabilities of roughly $1.2 million, and will give Fonar a pre-tax gain of $1 million.