-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UJYnneU8DArY5JGmU/r+uGQkaim0HhCPRPaLIPSCf+gjHKPzyeTh3wjOv5J/iRZt V7nrbJzWo8mx14rf2iZegQ== 0000202763-96-000011.txt : 19960812 0000202763-96-000011.hdr.sgml : 19960812 ACCESSION NUMBER: 0000202763-96-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960809 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYNCOR INTERNATIONAL CORP /DE/ CENTRAL INDEX KEY: 0000202763 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-DRUGS PROPRIETARIES & DRUGGISTS' SUNDRIES [5122] IRS NUMBER: 850229124 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-08640 FILM NUMBER: 96606628 BUSINESS ADDRESS: STREET 1: 20001 PRAIRIE ST CITY: CHATSWORTH STATE: CA ZIP: 91311 BUSINESS PHONE: 8188867400 MAIL ADDRESS: STREET 2: 20001 PRAIRIE ST CITY: CHATSWORTH STATE: CA ZIP: 91311 FORMER COMPANY: FORMER CONFORMED NAME: NUCLEAR PHARMACY INC DATE OF NAME CHANGE: 19860309 10-Q 1 =================================================================== =================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 FOR QUARTER ENDED MARCH 31, 1995 COMMISSION FILE NUMBER 0-8640 SYNCOR INTERNATIONAL CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 85-0229124 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 20001 PRAIRIE STREET, CHATSWORTH, CALIFORNIA 91311 (Address of principal executive offices) (Zip Code) (818) 886-7400 (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ___ ___ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of June 30, 1996, 10,119,826 shares of $.05 par value common stock were outstanding. =================================================================== =================================================================== SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES INDEX _____ PAGE ____ Part I. Financial Information Item 1. Consolidated Condensed Financial Statements Balance Sheets as of June 30, 1996 and December 31, 1995 . . . . . . . . . . . . . 2 Statements of Income for three months ended June 30, 1996 and 1995 . . . . . . . . . . . . . . . . . 3 Statements of Income for six months ended June 30, 1996 and 1995 . . . . . . . . . . . . . . . . . 4 Statements of Cash Flows for six months ended June 30, 1996 and 1995 . . . . . . . . . . . . . . . . . 5 Notes to Consolidated Condensed Financial Statements . . . . . . 6 Item 2. Management's Discussion and Analysis of Financial Condition . . . 7 Part II. Other Information . . . . . . . . . . . . . . . . . . . . . . . . 9 SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands, except per share data) June 30, December 31, 1996 1995 ___________ ____________ (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 24,195 $ 23,022 Short-term investments 1,924 2,296 Accounts receivable, net 53,084 50,857 Inventory 5,366 5,159 Prepaids and other current assets 4, 185 2,306 _________ _________ Total current assets 88,754 83,640 Marketable investment securities 1,241 1,241 Property and equipment, net 24,570 23,006 Excess of purchase price over net assets acquired, net 14,205 14,414 Other assets 12,470 11,379 _________ _________ $141,240 $133,680 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 33,790 $ 33,286 Accrued liabilities 2,894 2,395 Accrued wages and related costs 11,703 10,060 Federal and state taxes payable 2,599 755 Current maturities of long-term debt 2,293 2,224 _________ _________ Total current liabilities 53,279 48,720 Long-term debt, net of current maturities 6,648 5,200 Deferred compensation 864 864 Minority interest 890 634 Stockholders' equity: Common stock, $.05 par value 533 533 Additional paid-in capital 47,245 47,169 Unrealized loss on investments (26) (24) Employee stock ownership loan guarantee (2,286) (2,998) Foreign currency translation adjustment (78) (105) Retained earnings 39,608 35,598 Treasury stock, at cost; 552 shares at June 30, 1996 and 250 shares at December 31, 1995 (5,437) (1,911) _________ _________ Net stockholders' equity 79,559 78,262 _________ _________ $141,240 $133,680 ========= ========= See notes to consolidated condensed financial statements. SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (in thousands, except per share data) Three Months Ended June 30, ___________________________ 1996 1995 ___________ __________ (Unaudited) Net sales $93,667 $83,299 Cost of sales 71,915 64,688 Gross profit 21,752 18,611 Operating, selling and administrative expenses 18,202 16,624 ________ ________ Operating income 3,550 1,987 Other income, net 289 141 ________ ________ Income before taxes 3,839 2,128 Provision for income taxes 1,535 851 ________ ________ Net income $ 2,304 $ 1,277 ======== ======== Net income per share - Primary $ .22 $ .12 ======== ======== Weighted average shares outstanding - Primary 10,637 10,503 ======== ======== Net income per share - Fully Diluted $ .21 $ .12 ======== ======== Weighted average shares outstanding - Fully Diluted 10,796 10,702 ======== ======== See notes to consolidated condensed financial statements. SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (in thousands, except per share data) Six Months Ended June 30, _________________________ 1996 1995 ________ ________ (Unaudited) Net sales $185,984 $166,300 Cost of sales 144,018 129,852 _________ _________ Gross profit 41,966 36,448 Operating, selling and administrative expenses 36,303 32,837 _________ _________ Operating income 5,663 3,611 Other income, net 1,020 217 _________ _________ Income before taxes 6,683 3,828 Provision for income taxes 2,673 1,531 _________ _________ Net income $ 4,010 $ 2,297 ========= ========= Net income per share - Primary $ .38 $ .22 ========= ========= Weighted average shares outstanding - Primary 10,495 10,452 ========= ========= Net income per share - Fully Diluted $ .37 $ .21 ========= ========= Weighted average shares outstanding - Fully Diluted 10,849 10,693 ========= ========= See notes to consolidated condensed financial statements. SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES Consolidated Condensed Statements of Cash Flows (in thousands) Six Months Ended June 30, _________________________ 1996 1995 ________ ________ (Unaudited) Cash flows from operating activities: Net income $ 4,010 $2,297 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,477 5,394 Amortization of ESSOP loan guarantee 712 506 Decrease (increase) in: Accounts receivables, net (2,227) (199) Inventory (207) 1,005 Other current assets (1,879) (261) Increase (decrease) in: Accounts payable 504 (6,614) Accrued liabilities 499 199 Accrued wages and related costs 1,643 4,038 Federal and state taxes payable 1,844 687 Foreign currency translation adjustment 27 (9) Minority interest 256 113 ________ ________ Net cash provided by operating activities 10,659 7,156 ________ ________ Cash flows from investing and financing activities: Purchase of property and equipment, net (5,776) (1,683) (Decrease) increase in short-term investments 372 (1,281) (Increase) in other long-term assets (2,147) (636) New proceeds from (repayment of) short-term debt 69 (43) New proceeds from (repayment of) long-term debt 1,448 1,429 Issuance of common stock 76 603 Increase in ESSOP loan guarantee - (2,235) Reacquisition of common stock for treasury (3,526) 351 Unrealized gain on investments (2) 12 ________ ________ Net cash used in investing and financing activities (9,486) (3,483) ________ ________ Net increase in cash and cash equivalents 1,173 3, 673 Cash and cash equivalents at beginning of period 23,022 17,761 ________ ________ Cash and cash equivalents at end of period $24,195 $21,434 ======== ======== See notes to consolidated condensed financial statements. SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 1. GENERAL. The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. The results of the six months ended June 30, 1996, are not necessarily indicative of the results to be expected for the full year. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report and Form 10-K for the period ended December 31, 1995. 2. ADOPTION OF FINANCIAL ACCOUNTING STANDARDS No. 123 "ACCOUNTING FOR STOCK-BASED COMPENSATION." In October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 123, "Accounting for Stock-Based Compensation" (Statement 123). Statement 123 established a fair value based method of accounting for stock-based compensation as compared to the intrinsic value based method prescribed under APB Opinion No. 25. Companies have the option of either adopting the fair value method of Statement 123 or continuing to use the intrinsic value based method of APB No. 25 and including pro forma net income and earnings per share amounts in the footnotes as if the fair value method had been adopted. The disclosure provisions of Statement 123, including the pro forma information, are effective for fiscal years beginning after December 15, 1995. The Company will continue to use the intrinsic value of APB Opinion No. 25 and implement the disclosure provisions of Statement 123 in fiscal 1996. SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS NET SALES Consolidated net sales for the second quarter of 1996 increased 12.4 percent or $10.4 million to $93.7 million versus $83.3 million for the second quarter of 1995. For the six months ended June 30, 1996, net sales increased 11.8 percent or $19.7 million to $186.0 million compared to $166.3 million for the same period in 1995. The Company continues to achieve sales growth as a result of price increases on technetium based products. These price increases of approximately two percent to three percent, were in response to price increases from the Company's suppliers. Sales growth, during the quarter and six month period ended June 30, 1996, was also positively influenced by the opening or acquisitions of radiopharmacies during 1995. Finally, the Company continues to experience strong growth in volume across all product lines, especially cardiology. Sales from cardiology products accounted for approximately 63 percent of the Company's net sales during the second quarter of 1996. GROSS PROFIT Gross profit for the second quarter of 1996 increased $3.1 million to $21.8 million, or 23.2 percent of net sales compared to $18.6 million or 22.3 percent of net sales for the comparable quarter in 1995. For the six months ended June 30, 1996, gross profit increased $5.5 million to $42.0 million, or 22.6 percent of net sales, compared to $36.4 million or 21.9 percent of net sales for the same period in 1995. Positive contributors affecting the increase in gross margin for the second quarter and first six months of 1996 include: the Company's ability to successfully implement price increases, managing price erosion and the continued success in converting customers from thallium, a generic product, to Cardiolite(R), a proprietary higher margin product. In addition, the Company continues its on-going success in converting customers to its full service unit dose compounding services, rather than supplying those same customers with the raw materials which allow them to perform their own compounding services. OPERATING, SELLING AND ADMINISTRATIVE EXPENSES Operating, selling and administrative expenses rose 9.5 percent for the second quarter of 1996 or $1.6 million to $18.2 million, however, as a percentage of sales declined to 19.4 percent from 20.0 percent for the same period in 1995. For the six month period ended June 30, 1996, these expenses increased 10.6 percent or $3.5 million to $36.3 million, however, as a percentage of sales decreased to 19.5 percent from 19.7 percent. The Company is making significant investments in new business opportunities which are aimed at increasing its long-term competitiveness. These opportunities include, continued domestic and international expansion, the re-engineering of critical business practices and associated information systems and the entry into the positron emission tomography (PET) business. The increased operating, selling and administrative expenses for the second quarter and first six months of 1996 reflects the investments required for these opportunities. The Company expects to continue the increased level of expenditures in the operating, selling and administrative category for the next two to three years, as it accelerates its spending in PET, re-engineering opportunities and expansion. As a consequence, overall Company earnings may be reduced over the same period. LIQUIDITY AND CAPITAL RESOURCES The Company had cash, cash equivalents and short-term investments of $27.4 million at June 30, 1996, compared with $26.6 million at December 31, 1995. The Company's total debt position of $9.7 million at June 30, 1996, was $2.3 million higher than the debt position at December 31, 1995. The increase in debt is the direct result of the positron emission tomography (PET) joint venture formed on June 1, 1996. Working capital increased by $.6 million to $35.5 million at June 30, 1996, compared LIQUIDITY AND CAPITAL RESOURCES (CONTINUED) to $34.9 million at December 31, 1995. Days sales outstanding on receivable decreased to 51 days at June 30, 1996, compared to 55 days at December 31, 1995. The Company believes sufficient internal and external sources exist to fund operations and future expansion programs. At June 30, 1996, the Company had unused lines of credit of $17.9 million to fund short- term needs. SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES PART II. OTHER INFORMATION STOCK REPURCHASE PROGRAM Between May 13, 1996 and May 31, 1996, the Company purchased 301,600 shares of its common stock in the open market at an average price of $11.69 per share. The shares are classified as "Treasury Stock" on the Company's balance sheet. At the June 26, 1996 Board of Directors Meeting, the Board approved the repurchase of up to an additional 500,000 shares of common stock from time to time, in the open market. RESULTS FROM STOCKHOLDERS' MEETING At the Company's Annual Meeting of Stockholders held on June 26, 1996, two members of the Board of Directors were re-elected for a three year term: Monty Fu and Henry N. Wagner, Jr., M.D. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SYNCOR INTERNATIONAL CORPORATION (Registrant) August 9, 1996 By: /s/ Michael E. Mikity ---------------------- Michael E. Mikity Senior Vice President and Chief Financial Officer (Principal Financial / Accounting Officer) EX-27 2 ART. 5 FDS FOR 2ND QUARTER 10-Q WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 1,000 6-MOS 12/31/96 04/01/96 06/30/96 26,119 1,241 54,145 (1,061) 5,366 88,754 64,494 (39,924) 141,240 53,279 0 0 0 533 79,026 [TOTAL-LIABILITIES-AND-EQUITY] 141,240 185,984 185,984 144,018 144,018 36,303 0 (228) 6,683 2,673 4,010 0 0 0 4,010 .38 .37
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