FONR Stock Declines After Q2 Earnings, Revenue and Net Income Fall

Shares of FONAR Corporation FONR have lost 9.5% since the company reported its earnings for the quarter ended Dec. 31, 2024. This compares to the S&P 500 Index’s 0.5% gain over the same time frame. Over the past month, the stock lost 4.5% versus the S&P 500’s 0.7% rise.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Financial PerformanceFONAR’s total revenues for the second quarter of fiscal 2025 ended Dec. 31, 2024, declined 1.7% to $24.9 million from $25.4 million in the prior-year quarter. For the six-month period ended Dec. 31, 2024, revenues decreased 2.6% to $49.9 million from $51.2 million in the year-ago period.Income from operations dropped 50.2% to $2.4 million for the quarter from $4.9 million in the prior-year period. For the six-month period, income from operations declined 38.5% to $7 million from $11.5 million.Net income also saw a significant drop, decreasing 52.3% to $2.2 million for the quarter from $4.6 million in the prior-year period. Over the six-month period, net income fell 37.8% to $6.2 million from $9.9 million. On a per-share basis, diluted net income per common share declined 46.3% to $0.29 for the quarter from $0.54 in the prior-year quarter and 33.9% to $0.74 for the six-month period from $1.12 a year ago.Fonar Corporation Price, Consensus and EPS Surprise Fonar Corporation price-consensus-eps-surprise-chart | Fonar Corporation QuoteSegment PerformanceFONAR’s diagnostic imaging management subsidiary, Health Management Company of America (HMCA), remains the company’s primary revenue driver. MRI scan volume at HMCA-managed sites increased 7.4% to 79,207 scans during the six-month period from 73,776 scans for the six-month period ended Dec. 31, 2023, while scan volume at HMCA-owned sites decreased 4.4% to 26,961 scans from 28,214 scans for the six-month period ended Dec. 31, 2023.Revenues from management and other fees, which make up the largest portion of FONAR’s revenues, were $12.2 million for the quarter, down 1% from $12.3 million a year ago. Patient fee revenues declined 3.4% year over year to $7.9 million from $8.2 million. Service and repair fees, another revenue contributor, remained nearly flat at $1.8 million.Other Key Business MetricsOperating expenses increased, with selling, general, and administrative (SG&A) costs rising 23.9% to $6.9 million for the quarter from $5.6 million in the year-ago period and 15.4% to $12.1 million over the six-month period from $10.5 million in the year-ago period. This increase was attributed to a significant reserve against accounts receivable related to American Transit Insurance Company, which is approaching insolvency, as well as costs associated with a new outside billing contract.FONAR’s cash and cash equivalents and short-term investments declined 5% to $53.7 million on Dec. 31, 2024, compared with $56.5 million as of June 30, 2024. Operating cash flow for the six-month period dropped 41.7% to $3.9 million from $6.7 million a year ago.On the liabilities side, total liabilities decreased to $49 million as of Dec. 31, 2024, from $57.5 million as of June 30, 2024, while total stockholders’ equity rose to $158.9 million from $156.8 million.Management CommentaryFONAR’s president and CEO, Timothy Damadian, highlighted the company’s stable scan volume at HMCA-managed MRI centers, which reached 53,114 in second-quarter fiscal 2025, up 3.6% year over year from 51,246 in the year-ago period. For the six-month period, scan volume increased 4.1% to 106,168 scans from 101,990 in the comparable period in 2023. However, scan volume at HMCA-owned sites decreased 4.4% during the same period.Management remains optimistic about scan volume growth for the remainder of fiscal 2025, citing the anticipated installation of high-field MRI scanners at two HMCA-managed centers in Nassau County, NY. These new scanners are expected to enhance service offerings and reduce appointment backlogs.The company also continues to seek acquisitions or new locations to expand its network and increase profitability. As of Dec. 31, 2024, it currently manages 43 MRI scanners, 25 in New York and 18 in Florida.Factors Influencing PerformanceThe decline in earnings and revenue was driven by increased SG&A expenses, lower patient fee revenue and a reserve taken against accounts receivables due to the financial instability of American Transit Insurance Company. The company also cited cost pressures associated with a new billing contract. Additionally, macroeconomic conditions, including inflation and reimbursement rate reductions, continue to pose challenges.Other DevelopmentsFONAR has been actively repurchasing its stock under its $9 million buyback plan. As of Dec. 31, 2024, the company had repurchased 343,485 shares at a total cost of $5.6 million. Additionally, the company completed the installation of a new scanner at its Naples, FL, during the first quarter of fiscal 2025.During the quarter, FONAR sold a 0.197% interest in its subsidiary, Health Diagnostics Management, to a minority shareholder for $132,000.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fonar Corporation (FONR): Get Free ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks