-----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, QAIKRoavU9bWreBbjZEAB6K3Zb6QMMrfrutSQTTCqKi+ECTmSQ/wSnK8XjCKxTO5 8txMDwn5z6dr7tbOv5Pijg== /in/edgar/work/0000202763-00-000024/0000202763-00-000024.txt : 20001114 0000202763-00-000024.hdr.sgml : 20001114 ACCESSION NUMBER: 0000202763-00-000024 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYNCOR INTERNATIONAL CORP /DE/ CENTRAL INDEX KEY: 0000202763 STANDARD INDUSTRIAL CLASSIFICATION: [5122 ] IRS NUMBER: 850229124 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-08640 FILM NUMBER: 760151 BUSINESS ADDRESS: STREET 1: 6464 CANOGA AVENUE CITY: WOODLAND HILLS STATE: CA ZIP: 91367 BUSINESS PHONE: 818.737.4000 MAIL ADDRESS: STREET 1: 6464 CANOGA AVENUE STREET 2: 20001 PRAIRIE ST CITY: WOODLAND HILLS STATE: CA ZIP: 91367 FORMER COMPANY: FORMER CONFORMED NAME: NUCLEAR PHARMACY INC DATE OF NAME CHANGE: 19860309 10-Q 1 0001.txt - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ 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 September 30, 2000 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) 6464 Canoga Avenue, Woodland Hills, California 91367 (Address of principal executive offices) (Zip Code) (818) 737-4000 (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 September 30, 2000, 27,233,286 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 September 30, 2000 and December 31, 1999...........................3 Statements of Income for Three Months Ended September 30, 2000 and 1999..................................4 Statements of Income for Nine Months Ended September 30, 2000 and 1999..................................5 Statements of Cash Flows for Nine Months Ended September 30, 2000 and 1999..................................6 Notes to Consolidated Condensed Financial Statements.................7 Item 2. Management's Discussion and Analysis of Financial Condition...11 Part II. Other Information............................................ 14 SIGNATURE................................................................15 SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES Consolidated Condensed Balance Sheets (in thousands, except per share data) September 30, December 31, 2000 1999 ---- ---- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 18,043 $ 13,352 Short-term investments 11,629 8,536 Trade receivables, net 81,116 73,962 Patient receivables, net 32,323 15,924 Inventory 36,843 21,727 Prepaid and other current assets 20,936 14,446 ______________________ Total current assets 200,890 147,947 Marketable investment securities 1,184 1,185 Property and equipment, net 100,788 66,640 Excess of purchase price over net assets acquired, net 101,187 75,308 Other assets 23,350 21,562 ---------------------- $427,399 $312,642 ====================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 73,572 $ 53,205 Accrued liabilities 17,477 9,682 Accrued wages and related costs 16,459 16,997 Federal and state taxes payable 4,731 2,425 Current maturities of long-term debt 10,165 9,312 ______________________ Total current liabilities 122,404 91,621 Long-term debt, net of current maturities 128,022 76,326 Deferred taxes 3,618 4,358 Stockholders' equity: Common stock, $.05 par value 1,362 665 Additional paid-in capitaL 101,137 91,269 Notes receivable-related parties (17,351) (18,692) Employee stock ownership loan guarantee (2,107) (3,370) Accumulated other comprehensive income 74 (410) Retained earnings 107,297 84,481 Treasury stock, at cost; 3,072 shares at September 30, 2000 and 1,393 shares at December 31, 1999 (17,057) (13,606) ____________________ Net stockholders' equity 173,355 140,337 ____________________ $427,399 $312,642 ==================== 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 September 30, 2000 1999 ---- ---- (Unaudited) Net sales $155,462 $131,508 Cost of sales 100,044 88,803 ____________________________ Gross profit 55,418 42,705 Operating, selling and administrative expenses 36,191 29,649 Depreciation and amortization 6,951 4,779 _____________________________ Operating income 12,276 8,277 Other expense, net (1,857) (2,866) _____________________________ Income before taxes 10,419 5,411 Provision for income taxes 4,161 2,217 _____________________________ Net income $ 6,258 $3,194 ============================= Net income per share - Basic $ .26 $ .14 ============================= Weighted average shares outstanding - Basic 24,091 23,610 Net income per share - Diluted $ .23 $ .12 ============================= Weighted average shares outstanding - Diluted 27,374 25,874 See notes to consolidated condensed financial statements. SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES Consolidated Condensed Statements of Income (in thousands, except per share data) Nine Months Ended September 30, 2000 1999 ____ ____ (Unaudited) Net sales $458,786 $385,666 Cost of sales 296,931 261,134 __________________________ Gross profit 161,855 124,532 Operating, selling and administrative expenses 101,144 81,899 Depreciation and amortization 18,721 13,269 __________________________ Operating income 41,990 29,364 Other expense, net (3,965) (4,424) __________________________ Income before taxes 38,025 24,940 Provision for income taxes 15,209 10,330 __________________________ Net income $22,816 $14,610 ========================== Net income per share - Basic $0.96 $0.63 ========================== Weighted average shares outstanding - Basic 23,864 23,224 Net income per share - Diluted $0.86 $0.57 ========================== Weighted average shares outstanding - Diluted 26,543 25,416 See notes to consolidated condensed financial statements. SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES Consolidated Condensed Statements of Cash Flows (in thousands) Nine Months Ended September 30, 2000 1999 ____ ____ (Unaudited) Cash flows from operating activities: Net income $22,816 $14,610 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 18,721 13,269 Provision for losses on receivables 4,307 1,403 Amortization of ESSOP loan guarantee 1,263 1,264 Decrease (increase) in: Accounts receivable, trade (8,014) (9,855) Accounts receivable, patient (13,901) (1,624) Inventory (15,139) 1,480 Other current assets (5,631) (3,245) Other assets (3,443) (3,698) Increase (decrease) in: Accounts payable 20,157 (2,138) Accrued liabilities 3,257 7,190 Accrued wages and related costs (536) 2,501 Federal and state taxes payable (1,496) 2,382 Deferred compensation - 1,025 _______________________ Net cash provided by operating activities 22,361 24,564 _______________________ Cash flows from investing activities: Purchase of property and equipment, net (18,461) (13,586) Acquisitions of businesses, net of cash acquired (42,535) (18,700) Net increase in short-term investments ( 3,080) (1,940) Net decrease in long-term investments 1 4 Unrealized gain on investments 133 33 _______________________ Net cash used in financing activities (63,942) (34,189) _______________________ Cash flow from financing activities: Proceeds from long-term debt 37,279 22,678 Repayment of long-term debt (3,174) (9,955) Issuance of common stock 15,703 5,984 Reacquisition of common stock for treasury (3,451) (800) ________________________ Net cash provided by financing activities 46,357 17,907 ________________________ Net increase in cash and cash equivalents 4,776 8,282 Effect of exchange rate on cash (85) 112 Cash and cash equivalents at beginning of period 13,352 13,824 _______________________ Cash and cash equivalents at end of period $18,043 $22,218 ======================= 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 nine months ended September 30, 2000 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 on Form 10-K for the year ended December 31, 1999. Certain line items in the prior year's consolidated condensed financial statements have been reclassified to conform to the current year's presentation. 2. NEW ACCOUNTING STANDARDS. On March 31, 2000, the Financial Accounting Standards Board issued FASB Interpretation No. 44, Accounting for Certain Transactions involving Stock Compensation - an interpretation of APB Opinion No. 25 (FIN44). This interpretation provides guidance for issues that have arisen in applying APB Opinion No. 25, Accounting for Stock Issued to Employees. FIN 44 applies prospectively to new awards, exchanges of awards in a business combination, modifications to outstanding awards, and changes in grantee status that occur on or after July 1, 2000, except for the provisions related to repricings and the definition of an employee which apply to awards issued after December 15, 1998. The provisions related to modifications to fixed stock option awards to add a reload feature are effective for awards modified after January 12, 2000. The new interpretation is not expected to have a material impact upon the financial statements. In December 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin ("SAB") 101, Revenue Recognition in Financial Statements. SAB 101 provides guidance on the recognition, presentation, and disclosure of revenue in financial statements of all public registrants. Any change in the Company's revenue recognition policy resulting from the implementation of SAB 101 would be reported as a change in accounting principle. In June 2000, the SEC issued SAB 101B which delays the implementation date of SAB 101 until the fourth fiscal quarter of fiscal years beginning after December 15, 1999. 3. COMPREHENSIVE INCOME. Other comprehensive income includes foreign currency translation adjustments and net unrealized gains and losses on investments in equity securities. Such amounts are as follows:
THREE MONTHS ENDED __________________ September 30, 2000 September 30, 1999 __________________ __________________ Tax Tax Before-Tax (Expense) Net of Tax Before-Tax (Expense) Net of Tax Amount or Benefit Amount Amount or Benefit Amount __________________________________ _________________________________ Foreign currency translation adjustments $260 $ - $260 $(98) $ - $(98) Unrealized gains (losses) on investments: Unrealized holding gains (losses) arising during period 0 0 0 (218) 92 (126) ___________________________________________________________________ Other comprehensive income 260 0 260 (316) 92 (224) Net Income 10,419 (4,161) 6,258 5,411 (2,217) 3,194 ___________________________________________________________________ Total comprehensive income $10,679 ($4,161) $6,518 $5,095 ($2,125) $2,970 ===================================================================
NINE MONTHS ENDED _________________ September 30, 2000 September 30, 1999 __________________ __________________ Tax Tax Before-tax (Expense) Net of Tax Before-Tax (Expense) Net of Tax Amount or Benefit Amount Amount or Benefit Amount _________________________________ _________________________________ Foreign currency translation adjustments $351 $ - $351 $(32) $ - $(32) Unrealized gains (losses) on investments: Unrealized holding gains (losses) arising during period 222 (89) 133 (199) 84 (115) _____________________________________________________________________ Other comprehensive income 573 (89) 484 (231) 84 (147) Net Income 38,025 (15,209) 22,816 24,940 (10,330) 14,610 _____________________________________________________________________ Total comprehensive income $38,598 ($15,298) $23,300 $24,709 ($10,246) $14,463 =====================================================================
4. SEGMENT INFORMATION. Syncor has identified three primary operating segments: U.S. Pharmacy Services, U.S. Medical Imaging and International Operations. Segment selection was based upon internal organizational structures, how these operations are managed and evaluated, the availability of separate financial results, and materiality considerations. Segment detail is summarized as follows: THREE MONTHS ENDED __________________ U.S. Pharmacy Services Business September 30, 2000 September 30, 1999 _______________________________ __________________ __________________ Revenues $120,858 $110,102 Operating Income $ 12,997 $ 10,129 U.S. Medical Imaging Business _____________________________ Revenues $ 26,475 $ 14,730 Operating Income $ 3,251 $ 1,793 International Operations ________________________ Revenues $ 8,129 $ 6,676 Operating Income $ 388 $ 324 Unallocated Corporate _____________________ Operating Loss $ (4,360) $ (3,969) NINE MONTHS ENDED _________________ U.S. Pharmacy Services Business September 30, 2000 September 30, 1999 _______________________________ __________________ __________________ Revenues $ 366,791 $330,169 Operating Income $ 44,482 $ 36,386 U.S. Medical Imaging Business _____________________________ Revenues $ 66,943 $ 38,277 Operating Income $ 8,062 $ 3,792 International Operations ________________________ Revenues $ 25,052 $ 17,220 Operating Income (loss) $ 1,615 $ (132) Unallocated Corporate _____________________ Operating Loss $ (12,169) $ (10,682) 5. NET INCOME PER SHARE. Basic earnings per share (EPS) amounts are computed by dividing earnings applicable to common stockholders by the average number of shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive equivalents outstanding. Anti-dilutive outstanding stock options of 772 at September 30, 2000 and 127 at September 30, 1999 have been excluded from the diluted calculation. The reconciliation of the numerator and denominators of the basic and diluted earnings per share computations are as follows for the three and nine months ended September 30, 2000 and 1999:
THREE MONTHS ENDED __________________ September 30, 2000 September 30, 1999 __________________ __________________ Income Shares Per Share Income Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount ___________________________________________________________________________ Net income $6,258 $3,194 Basic EPS $6,258 24,091 $.26 $3,194 23,610 $.14 ____ ____ Effect of Dilutive Stock Options 3,283 2,264 _____ _____ Diluted EPS $6,258 27,374 $.23 $3,194 25,874 $.12 ____ ____
NINE MONTHS ENDED _________________ September 30, 2000 September 30, 1999 __________________ __________________ Income Shares Per Share Income Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount ___________________________________________________________________________ Net income $22,816 $14,610 Basic EPS $22,816 23,864 $.96 $14,610 23,224 $.63 ____ ____ Effect of Dilutive Stock Options 2,679 2,192 _____ _____ Diluted EPS $22,816 26,543 $.86 $14,610 25,416 $.57 ____ ____
6. NOTES RECEIVABLE - RELATED PARTIES. The Company initiated a Senior Management Stock Purchase Plan effective June 16, 1998, pursuant to which, officers and key employees of the Company purchased shares of Syncor stock. The shares were paid with a five-year interest-bearing promissory note payable to the Company. Interest on each note is payable on each anniversary date, with the entire outstanding principal and unpaid interest due on the fifth anniversary date. 7. ACQUISITIONS OF BUSINESSES. During the second quarter of 2000, the Company acquired the remaining interest in nine managed sites for a total acquisition price of $8.7 million plus the assumption of $2.4 million in debt. During the third quarter of 2000, the Company acquired 13 medical imaging centers located in California and Florida. The acquisition price was approximately $31.0 million plus the assumption of $1.3 million in debt. The Company accounted for these transactions as purchases and the purchase prices were allocated primarily to fixed assets, accounts receivable and goodwill. SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations For the Three and Nine Months Ended September 30, 2000 and 1999 NET SALES _________ Consolidated net sales for the three months ended September 30, 2000 increased 18.2% or $24.0 million to $155.5 million versus $131.5 million for the third quarter of 1999. For the nine months ended September 30, 2000 net sales increased 19.0% or $73.1 million to $458.8 million compared to $385.7 million for the same period in 1999. U.S. PHARMACY SERVICES The Pharmacy Services revenue grew 9.8% for the quarter and 11.1% for the nine months ended September 30, 2000. The Company's sales growth for the third quarter was impacted by one less sales day as compared to 1999. The sales increase for the quarter would have been 11.5% on a comparable basis to the same period of the prior year. The primary source of growth continues to be from cardiology. Within the cardiology sector, the Company's sales increased at 13.7% for the quarter, as compared to the third quarter of last year and 15.3% for the nine months compared to the nine months in 1999. Unit dose sales of Cardiolite(R), proprietary heart imaging agent to which the Company has preferential distribution rights, increased approximately 18.0% in the third quarter as compared to the third quarter of 1999, and 19.8% for the nine months ended September 30, 2000. The Company's most recent price increase, which took effect in January 2000, contributed approximately 3.5% of this increase. Despite competition from a competing cardiac agent, it is the Company's belief that Cardiolite(R) continues to gain market share among the cardiac imaging agents. The Company continues to see growth in servicing the cardiology requirements of a large portion of its managed care business despite losing the contract awards to these managed groups. The Company continues to see growth in gross profit margins associated with these groups primarily due to the absence of administrative fees and higher product pricing for these group purchases. U.S. MEDICAL IMAGING The Company continues to see excellent growth in the Medical Imaging Business as a result of both strategic acquisitions in targeted geographic regions and growth from existing sites. Sales from the Medical Imaging Business grew at 79.7% for the quarter and 74.9% for the nine months ended September 30, 2000. Same store sales growth was approximately 15.7% for the quarter and 14.7% for the nine months ended September 30, 2000. To accomplish its strategic goals, the Company has devoted additional funding for critical management positions and intends to consolidate the billing and collection functions on a single software platform. INTERNATIONAL OPERATIONS The Company's International Operations continue to grow as sales for the quarter increased 21.8% from the prior year quarter. Sales for the nine months ended September 30, 2000 increased 45.5% from the prior year. This sales growth comes from two areas. Same store sales grew 11.4% in the quarter and 31.1% year-to-date. In addition, the Company opened or acquired seven new sites since the third quarter of 1999. GROSS PROFIT ____________ Gross profit for the three months ended September 30, 2000 increased $12.7 million to $55.4 million, and as a percentage of net sales reached 35.6% for this quarter as compared to 32.5% of net sales for the third quarter of 1999. The gross profit for the nine months ended September 30, 2000 increased by $37.3 million to $161.9 million or 30.0% and as a percentage of net sales to 35.3% compared to 32.3% for the comparable period in 1999. U.S. PHARMACY SERVICES The gross profit margin for this segment increased in the quarter ended September 30, 2000 from 26.0% in 1999 to 27.7% in 2000. For the nine months ended September 30, 2000, the gross margin increased from 26.7% to 28.1%. Material costs have decreased slightly as a percentage of sales in spite of vendor price increases due to better contracted rates, product mix changes resulting in higher sales of higher margin products (primarily Cardiolite(R)) and the price increase that was instituted in January, 2000. Direct labor costs have declined as a percentage of sales due to more efficient staffing levels and additional leverage generated from these increased sales volumes. U.S. MEDICAL IMAGING The gross profit margin for this segment decreased in the quarter ended September 30, 2000 from 73.8% in 1999 to 69.6% in 2000. For the nine months ended September 30, 2000, the gross margin decreased from 74.9% to 70.5%. These declines are primarily the result of two factors. The first is the conversion of sites from managed sites to owned sites, which results in the loss of "management fee income" without a corresponding impact on the "cost of goods sold." The second is an increase in the reading fees paid to contracted radiologists. Volume continues to increase as a result of increased site growth and site acquisitions. This segment has contributed $18.6 million of the $37.3 million increase in gross profit for the nine months ended September 30, 2000. INTERNATIONAL OPERATIONS The gross profit margin for this segment decreased in the quarter ended September 30, 2000 from 41.1% in 1999 to 38.5% in 2000. For the nine months ended September 30, 2000, the gross profit margin increased from 39.1% in 1999 to 41.3% in 2000. The third quarter margin was impacted by start-up costs associated with the brachytherapy and PET isotope production businesses. Excluding these expenses, this margin would have improved to 42.6%. International Operations is expected to continue to improve margins as volume increases, which allows for better utilization of site resources. The addition of owned and managed imaging centers, which have a lower cost of materials when compared to pharmacy operations, is also expected to contribute to these margin increases. OPERATING, SELLING AND ADMINISTRATIVE EXPENSES ______________________________________________ Operating, Selling and Administrative costs for the quarter ended September 30, 2000 increased by $6.5 million or 22.1% to $36.2 million as compared to $29.6 million for the comparable quarter in 1999. For the nine months ended September 30, 2000 these expenses increased by $19.2 million or 23.5% to $101.1 million as compared to $81.9 million for the same period in 1999. The ratio of these expenses to sales increased from 22.5% in 1999 to 23.3% in 2000 for the comparable quarters and from 21.2% to 22.0% for the comparable nine-month periods. The Medical Imaging business, which traditionally has higher operating cost to sales ratio, contributed the majority of the nine months change. This business showed an increase in costs of $4.3 million for the quarter and $10.1 million for the nine-month period due primarily to acquisitions and the accompanying need for increased infrastructure. The Pharmacy Services business expenses in this area increased due to higher labor costs and certain sales incentive programs. DEPRECIATION AND AMORTIZATION _____________________________ Depreciation expense increased by $2.2 million to $7.0 million or 45.4% in the three months ended September 30, 2000 as compared to the same period in 1999. For the nine months ended September 30, 2000 depreciation expense increased by $5.5 million to $18.7 million or 41.1%. The medical imaging business contributed $1.8 million of the increase in the quarter and $4.2 million of the increase for the nine-month period. This increase is the result of goodwill, depreciation, and non-compete costs associated with the Medical Imaging business expansion. The Company expects these trends to continue as this segment is very capital intensive and further acquisitions are planned. OTHER EXPENSE, NET __________________ The change in Other Expense, Net for the quarter is the result of increased borrowings and the resultant interest expense from the Medical Imaging business acquisitions which were completed in 1999 and 2000. The third quarter of 1999 includes an operating investment write-down charge of $1.1 million, net of tax. The increase in interest expense year-to-date was partially offset by miscellaneous income from legal settlements, which have been classified as a non-recurring item. The settlements total $0.25 million after tax or approximately $.01 on a fully diluted basis. LIQUIDITY AND CAPITAL RESOURCES _______________________________ The Company had cash, cash equivalents and investments of $30.9 million at September 30, 2000 compared with $23.1 million at December 31, 1999. The Company's total debt position of $138.2 million at September 30, 2000 reflects an increase of $52.6 million when compared to the balance of $85.6 million at December 31, 1999. The increase in debt for the nine months ended September 30, 2000, results primarily from the financing of the continued expansion of the Medical Imaging business. Working capital increased by $22.2 million to $78.5 million at September 30, 2000, compared to $56.3 million at December 31, 1999. At quarter-end, the Company made a purchase of approximately two months' worth of Cardiolite(r) inventory at favorable terms. This inventory will be completely utilized by mid-December 2000. The Company believes sufficient internal and external sources exist to fund operations and future expansion plans. At September 30, 2000, $26.7 million was available on the $125 million credit line, which was subsequently replaced on October 17, 2000 by a new credit facility of $150 million, with the ability to expand the facility to $200 million. ACQUISITION OF BUSINESSES _________________________ During the second quarter of 2000, the Company acquired the remaining interest in nine managed sites for a total acquisition price of $8.7 million plus the assumption of $2.4 million in debt. During the third quarter of 2000, the Company acquired 13 medical imaging centers located in California and Florida. The acquisition price was approximately $31.0 million plus the assumption of $1.3 million in debt. SAFE HARBOR STATEMENT _____________________ Statements which are not historical facts, including statements about our confidence, strategies and expectations, opportunities, industry and market growth, demand and acceptance of new and existing products and return on investments are forward-looking statements that involve risks and uncertainties, including without limitation, the effect of general economic and market conditions, supply and demand for the Company's products, competitor pricing, maintenance of the Company's current market position and other factors. Given these uncertainties, undue reliance should not be placed on such forward-looking statements. SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 10. Material Contracts 10.1 Fifth Amendment to Executive Long-Term Performance Equity Plan, dated August 22, 2000. 11. Statement re: Computation of Per Share Earnings Computation can be clearly determined from the material contained in Part I of this Form 10-Q. 27. Financial Data Schedule (filed electronically) Exhibit 10.1 FIFTH AMENDMENT TO EXECUTIVE LONG-TERM PERFORMANCE EQUITY PLAN This Fifth Amendment to Executive Long-Term Performance Equity Plan, dated as of August 22, 2000 (this "Amendment"), hereby amends that certain Executive Long-Term Performance Equity Plan, dated as of January 1, 1998 and amended as of November 17, 1998, June 23, 1999 and June 20, 2000 (the "Plan"), for Syncor International Corporation, a Delaware corporation (the "Company"). 1. As a result of the stock split that became effective on August 9, 2000, the stock price targets will now be: $41; $52; and $65. The outside date for achievement of these stock price targets will be as follows: $41 target by December 31, 2002 $52 target by December 31, 2003 $65 target by December 31, 2004 2. Awards under the $41 target shall vest if Syncor's stock closes at $41 or higher for ten out of twenty consecutive trading days. Awards under the $52 target and $65 target shall vest if Syncor's stock closes at $52 or higher, or $65 or higher, as the case may be, for ten consecutive trading days. 3. With respect to the payment of the TSR modifier for overachievement, participants will have discretion on how they will receive the payment, whether in cash, or stock, or a combination of both. 4. This Amendment is effective as of the date first set forth above. Except as amended hereunder, all other terms and conditions of the Plan shall remain in full force and effect. 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) September 13, 2000 By: /s/ Michael E. Mikity Michael E. Mikity Senior Vice President and Chief Financial Officer (Principal Financial / Accounting Officer)
EXHIBIT 27 FINANCIAL DATA SCHEDULE PERIOD-TYPE 9 MOS FISCAL-YEAR-END DEC 31, 2000 PERIOD-START JAN 1, 2000 PERIOD-END SEPT 30, 2000 CASH 18,043 SECURITIES 11,629 RECEIVABLES 120,291 ALLOWANCES (6,852) INVENTORY 36,843 CURRENT-ASSETS 200,890 PP&E 174,352 DEPRECIATION (73,744) TOTAL-ASSETS 427,399 CURRENT-LIABILITIES 122,404 BONDS 0 PREFERRED-MANDATORY 0 PREFERRED 0 COMMON 1,362 OTHER-SE 171,993 TOTAL-LIABILITY-AND-EQUITY 427,399 SALES 458,786 TOTAL-REVENUE 458,786 CGS 296,931 TOTAL-COSTS 296,931 OTHER-EXPENSES 119,865 LOSS-PROVISION 4,307 INTEREST-EXPENSE 6,885 INCOME-PRE-TAX 38,025 INCOME-TAX 15,209 INCOME-CONTINUING 22,816 DISCONTINUED 0 EXTRAORDINARY 0 CHANGES 0 NET-INCOME 22,816 EPS-BASIC .96 EPS-DILUTED .86
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