MRI company Fonar swings to profit

Magnetic resonance imaging company Fonar Corp., of Melville, reported it swung to a profit in its fiscal year ended June 30 as revenue from use of its existing machines rose strongly even though its sales of new machines were down sharply.

In trading Monday, Fonar's stock fell 37 cents, or 18.88 percent to $1.59. Shares of Fonar, which has 238 employees and a market capitalization of about $9 million, are up 23 percent this year.

Fonar turned the annual profit by making more money from the existing network of MRI scanners it operates and manages across the United States, the company said. In the past year it has charged more per scan and has performed more scans per machine, the company said.

Its annual sales of new machines dropped to $6.68 million for the fiscal year ended June 30, down from $9 million in MRI scanning machines the previous year, the company said.

However its revenue from management and other fees improved to $15.3 million, up from $11 million the previous year. Fonar's costs remained stable, the company said.

It earned $3.16 million on $33.1 million of total net revenues for the year ended June 30. In its fiscal 2010, the company lost $3 million on $31.8 million in net revenue. In effect, the company said, its profit rose more than $6 million year-to-year while its revenue improved by $1.3 million.

In recent years Fonar has repeatedly been on the edge of being delisted by the Nasdaq stock exchange.

Fonar makes MRI machines designed to take spinal and body images while the patient sits or stands, in contrast to standard MRIs that slide patients, prone, into a tunnel.

The company's profit turnaround was due in part to a 14 percent increase in management fees and scans per month at clinics Fonar operates nationwide, the company said.

"We have worked hard in this difficult economic environment to have five straight quarters of profitability, and we are hopeful to continue," Dr. Raymond Damadian, the founder and president, said in a release. Damadian, a medical doctor and research scientist, is known for his failed attempt to persuade the Nobel Prize committee to include him among its 2003 honorees for pioneering MRI work.