-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, K0co4vMx80fXTsMyxAwEfsqjVTm8fRDhelS+CwBDQjWfgJpDinQtzE/DdZuwnz2w 158VFUw9mRLhL1rqMAY/yQ== 0000202763-94-000001.txt : 19940118 0000202763-94-000001.hdr.sgml : 19940118 ACCESSION NUMBER: 0000202763-94-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19931130 FILED AS OF DATE: 19940114 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: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 34 SEC FILE NUMBER: 000-08640 FILM NUMBER: 94501429 BUSINESS ADDRESS: STREET 1: 20001 PRAIRIE ST CITY: CHATSWORTH STATE: CA ZIP: 91311 BUSINESS PHONE: 8188867400 FORMER COMPANY: FORMER CONFORMED NAME: NUCLEAR PHARMACY INC DATE OF NAME CHANGE: 19860309 10-Q 1 FORM 10-Q 11/30/93 ============================================================================= _____________________________________________________________________________ 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 November 30, 1993 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 November 30, 1993 10,283,384 shares of $0.05 par value common stock were outstanding. ============================================================================== SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES INDEX Part I. Financial Information Item 1. Consolidated Condensed Financial Statements Page ____ Balance Sheets as of November 30, 1993 and May 31, 1993.............................2 Statements of Income for three months ended November 30, 1993 and 1992...............................3 Statements of Income for six months ended November 30, 1993 and 1992...............................4 Statements of Cash Flows for six months ended November 30, 1993 and 1992...............................5 Notes to Consolidated Condensed Financial Statements.............6 Item 2. Management's Discussion and Analysis of Financial Condition......7 Part II. Other Information................................................9 Item 4 Submission of Matters to a Vote of Security Holders..............9 SIGNATURE..................................................................10 SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES Consolidated Condensed Balance Sheets (in thousands)
November 30, May 31, 1993 1993 ____________ _______ (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 14,834 $ 19,093 Short-term investments 3,582 1,844 Accounts receivable, net 34,409 34,378 Inventories and other current assets 8,160 5,416 ________ ________ Total current assets 60,985 60,731 ________ ________ Property and equipment, net 25,015 23,362 Excess of purchase price over net assets acquired, net 14,534 13,256 Other 9,720 6,604 ________ ________ $110,254 $103,953 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 20,367 $ 19,858 Accrued liabilities 2,851 2,655 Accrued wages and related costs 3,422 8,472 Federal and state taxes payable - 619 Current maturities of long-term debt 3,866 1,697 ________ ________ Total current liabilities 30,506 33,301 ________ ________ Deferred income taxes 776 353 Long-term debt, net of current maturities 6,161 4,515 Stockholders' equity: Common stock, $.05 par value 516 510 Additional paid-in capital 42,425 41,553 Employee stock ownership loan guarantee (2,970) (3,430) Foreign currency translation adjustment 121 139 Retained earnings 32,719 27,012 ________ ________ Net Stockholders' Equity 72,811 65,784 ________ ________ $110,254 $103,953 ======== ======== See notes to consolidated condensed financial statements.
SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES Consolidated Statements of Income (in thousands, except per share data)
Three Months Ended November 30, _______________________________ 1993 1992 ____ ____ (Unaudited) Net sales $61,249 $56,852 Cost of sales 41,428 38,000 _______ _______ Gross profit 19,821 18,852 Operating, selling and administrative expenses 15,239 15,020 _______ _______ Operating income 4,582 3,832 Other income, net 148 6 _______ _______ Income from continuing operations before income taxes and discontinued operations 4,730 3,838 Provision for income taxes 1,882 1,515 _______ _______ Income from continuing operations before discontinued operations 2,848 2,323 Discontinued operations, net of taxes - (213) _______ _______ Net income $ 2,848 $ 2,110 Net income per share: Income from continuing operations $ .27 $ .22 Discontinued operations, net - (.02) _____ _____ Net income per share $ .27 $ .20 ===== ===== Weighted average shares outstanding 10,721 10,698 ====== ====== See notes to consolidated condensed financial statements.
SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES Consolidated Statements of Income (in thousands, except per share data)
Six Months Ended November 30, _____________________________ 1993 1992 ____ ____ (Unaudited) Net sales $121,717 $112,521 Cost of sales 82,127 74,870 ________ ________ Gross profit 39,590 37,651 Operating, selling and administrative expenses 30,445 29,810 ________ ________ Operating income 9,145 7,841 Other income, net 299 28 ________ ________ Income from continuing operations before income taxes and discontinued operations 9,444 7,869 Provision for income taxes 3,737 3,108 ________ ________ Income from continuing operations before discontinued operations 5,707 4,761 Discontinued operations, net of taxes - (411) ________ ________ Net income $ 5,707 $ 4,350 ======== ======== Net income per share: Income from continuing operations $ .53 $ .45 Discontinued operations, net - (.04) _____ _____ Net income per share $ .53 $ .41 ===== ===== Weighted average shares outstanding 10,748 10,664 ====== ====== See notes to consolidated condensed financial statements.
SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES Consolidated Condensed Statements of Cash Flows (in thousands)
Six Months Ended November 30, _____________________________ 1993 1992 ____ ____ (Unaudited) Cash flows from operating activities: Net income $ 5,707 $4,350 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,391 3,410 Amortization of ESSOP loan guarantee 460 460 Increase in net receivables (31) (514) (Increase) in inventories and other current assets (2,744) (3,427) Increase in other assets (5,512) (704) Increase (decrease) in accounts payable 509 (2,511) Increase in accrued liabilities 196 628 (Decrease) in accrued wages and related costs (5,050) (2,370) Increase in short-term borrowings - 945 Increase (decrease) in Federal and state taxes (619) 1,037 Increase (decrease) in deferred income taxes 423 (116) _______ ______ Total adjustments (7,977) (3,162) Net cash (used) provided by operating (2,270) 1,188 activities _______ ______ Cash flows from investing and financing activities: Purchase of property and equipment, net (4,944) (4,602) (Increase) decrease in short-term investments (1,738) 913 Issuance of common stock 878 583 Issuance (repayment) of long-term debt 3,815 (780) _______ ______ Net cash flows (used) in investing and financing activities (1,989) (3,886) _______ ______ Net increase in cash and cash equivalents (4,259) (2,689) Cash and cash equivalents at beginning of period 19,093 4,900 _______ ______ Cash and cash equivalents at end of period $14,834 $2,202 ======= ====== 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 November 30, 1993, 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 Form 10K for the year ended May 31, 1993. 2. DISCONTINUED OPERATIONS. On February 17, 1993, the Company announced the divestiture of a minor segment of its business, referred to as its Home Infusion business. The Company's consolidated statement of income reflects a net loss from discontinued operations of $.2 million and $.4 million for the three and six months of operations and ended November 30, 1993. This divestiture was completed on May 31, 1993. 3. SUBSEQUENT EVENTS. On December 3, 1993, the Company entered into a long- term supplier distribution agreement with its principal supplier of radiopharmaceutical products, the Radiopharmaceutical Division of the DuPont Merck Pharmaceutical Company. The agreement, which becomes effective February 1, 1994, will replace an existing supply agreement between the companies which has been in place since 1988. For administrative purposes, the Company changed its fiscal year-end to December 31 from May 31, beginning with the seven months ending December 31, 1993. Both events were reported in Form 8-K filed with the Securities and Exchange Commission on December 17, 1993. Such filing is incorporated herein by this reference. On December 31, 1993, the Company entered into an agreement to increase its line of credit financing to $20 million from $8 million. Terms and conditions were substantially the same between the new and prior agreement. SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations Net Sales _________ Net sales for the second quarter of fiscal 1994 rose 7.7% or $4.4 million to $61.2 million versus $56.9 million for the first quarter of fiscal 1993. For the six month period ended November 30, 1993, net sales climbed to $121.7 million, a $9.2 million or 8.2% increase. The Company's net sales growth continues to be fueled by the increase in the cardiology sector of nuclear medicine, the opening and acquisition of new pharmacies and increased market share, offset by net price decreases in certain segments. Gross Profit ____________ Gross profit for the second quarter and six month period ended November 30, 1993 increased 5.1% or $1 million and 5.1% or $1.9 million respectively. However, during the current quarter and six month period ended November 30, 1993, the Company experienced a continued decline in its gross profit as a percent of net sales. Gross profit declined to 32.4% from 33.2% for the second quarter and to 32.5% versus the reported 33.5% for the six month period. The decline in the gross profit percentage is attributable to a number of factors. As the cardiology marketplace expands, the Company's traditional net sales mix is changing. This changing mix delivers a higher volume of dollars to the gross profit line, but at a lesser rate as a percentage of sales when compared to the Company's traditional radiopharmaceutical margins. Additionally, the Company has experienced price increases from its suppliers which have not been entirely passed through to its customers. In response to competitive pressures, the Company has also restructured pricing for its national accounts for key cardiology products, further impacting the gross margin percentage. New pharmacy openings also negatively impact the gross margin percentage until they are able to reach maturity. In addition to those factors mentioned above, the Company continues to be challenged by the competitive marketplace and uncertainty surrounding health- care reform. Operating, Selling and Administrative Expenses ______________________________________________ Operating, selling and administrative expenses rose 1.5% for the second quarter of fiscal 1994 and declined as a percentage of sales to 24.9% from 26.4% in the same period of fiscal 1993. For the six month period ended November 30, these expenses increased 2.1% and declined as a percentage of sales to 25% from 26.5%. This decrease was primarily attributable to an increase in net sales which the Company was able to support without a proportionate increase in operating, selling and administrative expenses. The Company continues to make significant investments in infrastructure to improve overall efficiencies. The Company considers these investments to be of long- term strategic importance and will require the continued commitment of resources in order to maintain a competitive advantage. SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations Operating, Selling and Administrative Expenses (continued) ______________________________________________ The Company continues, as a part of its overall business strategy, to invest in developmental business opportunities. These opportunities require ongoing resources in the area of operating, selling and administrative expenses. Liquidity and Capital Resources _______________________________ The Company's balance sheet has been significantly strengthened with the divestiture of the Home Infusion Services Division which was completed at the end of fiscal 1993. The divestiture resulted in a cash infusion of $9.1 million. At November 30, 1993, both working capital and the current ratio rose as compared to May 31, 1993. Working capital increased $3.0 million to $30.5 million while the current ratio rose to 2.00 from 1.82. Days Sales Outstanding were 51 days at November 30, 1993 compared to 52 days at May 31, 1993, and 54 days a year ago. The Company continues expenditures for the acquisition of independent pharmacies, start-up of new pharmacies, the re-equipping of existing pharmacies and information technology for both internal and customer uses. These acquisitions and start-up programs are expected to continue through fiscal 1994 and will be funded with proceeds from operations. The nature of the Company's business is not capital intensive and, as new products become available, the capital requirement to accommodate these products will be minimal. The Company believes sufficient internal and external capital sources exist to fund operations and future expansion programs. However, on December 31, 1993, the Company's line of credit was increased to $20 million from $8 million (See Note 3). This increase in financing further positions the Company to take advantage of growth opportunities. The were no borrowings outstanding on the line of credit at November 30, 1993 and May 31, 1993. See notes to consolidated condensed financial statements. SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES Part II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders. ____________________________________________________________ (a) The Annual Meeting of Security Holders was held on November 15, 1993. (b) There was no solicitation in opposition to the management's nominees as listed in the Proxy Statement and all of such nominees were elected. (c) (i) At such meeting, Registrant proposed amendments to the 1990 Master Stock Option Plan (the "Plan") to increase the authorized number of shares of common stock issuable under the Plan, as set forth in the Proxy Statement in summary on page 16. In addition to increasing the number of shares available under the Plan by 500,000 shares, the amendments change the name of the Plan to 1990 Master Stock Incentive Plan (the "1990 MSIP"), reduce the minimum vesting period for awards from 12 months to six months, delete certain specific limits on incentive stock options in favor of applicable limits under the Internal Revenue Code (as from time to time amended), substitute applicable law instead of specific standards for determining whether future amendments to the 1990 MSIP will require shareholder approval, reflect certain cash-only awards under the 1990 MSIP, expressly articulate certain interpretations of the 1990 MSIP, permit limited exceptions to restrictions on transferability of awards, respond to certain changes in Rule 16b-3 promulgated under the Securities Exchange Act of 1934, and make certain editorial refinements. The amendments were approved with 4,759,289 shares (54.5%) voting in favor of the proposal, 3,902,743 (44.7%) voting against the proposal and 76,403 shares abstaining from voting on the proposal. The total number of votes cast with respect to the proposal was 8,738,444. (ii) Up to 8,731,835 shares were voted in the election of each of the four nominees for Director and the voting results were as follows:
Votes in Favor Nominee of Election Voted in Favor _______ ___________ ______________ Number of Shares Percent Monty Fu 8,572,657 98.2 Joseph Kleiman 8,511,804 97.5 Henry N. Wagner, Jr., M.D. 8,512,103 97.5 Dr. Gail R. Wilensky 8,509,321 97.5 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) January 14, 1994 By: /s/ Michael A. Piraino ____________________________ Michael A. Piraino Senior Vice President and Chief Financial Officer (Principal Financial/Accounting Officer)
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