FONAR CORP

FONAR CORP Annual Report - Plain Talk for Investors
Let’s break down FONAR’s year like we’re chatting over coffee…

---

1. What does FONAR do, and how was their year?

FONAR makes unique "Upright MRI" machines that let patients sit or stand during scans—a big deal for claustrophobic folks or those with back/joint issues. This year, they installed more machines than last year but faced supply chain delays that slowed their momentum.

---

2. Money talk: Are they growing?

• Revenue: Up 8% to $118M (from $109M last year).
• Patient scan income: Dropped slightly to $33.2M (from $33.8M) due to insurance payment delays.
• Profits: Fell to $8.2M (from $9.1M) because of rising costs for parts and labor.
• Growth takeaway: Still moving forward, but slower than previous years—like easing off the gas pedal.

---

3. Big wins vs. tough spots

✅ Wins:

• Reduced risky insurance cases: Only 57% of scan revenue now comes from accident claims (down from 67%).
• Pivoted to outpatient clinics: Signed 15 new deals as hospitals cut spending.

❌ Challenges:

• $21M in unpaid bills from insurers—a cash flow headache.
• Florida dependence: Nearly all scan revenue comes from one state (hurricanes or policy changes could hurt).

---

4. Financial health check

• Cash: $32M (down from $38M last year). Enough for now, but those unpaid bills matter.
• Debt: Just $5M—they’re not overborrowed.
• Biggest worry: If insurers don’t pay the $21M owed, things could get tight.

---

5. Risks to the stock price

• Insurance battles: Over half their scan money still comes from accident claims, and insurers are pushing back harder.
• All eggs in Florida: No geographic safety net.
• Tech competition: Rivals are making cheaper, faster machines.

---

6. How do they stack up against competitors?

• vs. Giants like GE/Siemens: FONAR’s upright MRI niche keeps them unique, but they’re a minnow in a shark tank.
• vs. Smaller rivals: Their machines are known to last longer, but competitors are undercutting prices.

---

7. Leadership & strategy shifts

• New CFO joined from a medical startup—could bring fresh cost-cutting ideas.
• New focus: Less on big hospitals, more on outpatient clinics and sports medicine centers.

---

8. What’s next?

• Testing a software subscription model (like “Netflix for MRI tools”) to create steady income.
• Watching Florida closely—new insurance laws could make or break them.

---

9. Market trends to watch

• Good news: Less reliance on volatile insurance claims than before.
• Bad news: $1 of every $2 from scans still comes from accident claims—insurers are playing hardball.
• Wildcard: Will that $21M in unpaid bills turn into real cash or vanish?

---

Bottom line for investors:
FONAR is a mixed bag. Revenue grew, but profits shrank. Their upright MRI niche is clever, but Florida dependence and insurance fights are red flags. The 2.1% dividend is a nice bonus, but don’t ignore the $21M in unpaid bills—it’s the elephant in the room.

Invest if: You believe in their niche, can handle geographic risk, and think they’ll solve their insurance cash crunch.
Avoid if: You prefer predictable growth or dislike single-state exposure.

Steady but unspectacular—like a reliable sedan in a world of flashy sports cars. 🏥💡