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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, 1999 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, 1999,
11,832,122 shares of $.05 par value common stock were outstanding.
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SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES
INDEX
_____
Page
____
Part I. Financial Information
Item 1. Consolidated Condensed Financial Statements
Balance Sheets as of
September 30, 1999 and December 31, 1998................... 3
Statements of Income for Three Months
Ended September 30, 1999 and 1998.......................... 4
Statements of Income for Nine Months
Ended September 30, 1999 and 1998.......................... 5
Statements of Cash Flows for Nine Months
Ended September 30, 1999 and 1998.......................... 6
Notes to Consolidated Condensed Financial Statements......... 7
Item 2. Management's Discussion and Analysis of Financial
Condition................................................. 10
Part II. Other Information.......................................... 13
SIGNATURE........................................................... 14
<PAGE>
<TABLE>
<CAPTION>
SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(in thousands)
September 30, December 31,
1999 1998
____ ____
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 22,218 $ 13,824
Short-term investments 6,651 4,707
Trade receivables, net 73,825 65,055
Patient receivables, net 14,679 10,724
Inventory 10,020 11,495
Prepaids and other current assets 15,940 12,780
________ ________
Total current assets 143,333 118,585
Marketable investment securities 1,187 1,191
Property and equipment, net 64,191 49,103
Excess of purchase price over net assets
acquired, net 69,253 62,654
Other assets 28,388 25,034
________ ________
$306,352 $256,567
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 42,621 $ 44,578
Accrued liabilities 14,038 7,005
Accrued wages and related costs 15,065 12,563
Federal and state taxes payable 1,933 1,293
Current maturities of long-term debt 6,653 9,122
________ ________
Total current liabilities 80,310 74,561
Long-term debt, net of current maturities 90,413 70,322
Deferred compensation 1,337 311
Stockholders' equity:
Common stock, $.05 par value 661 626
Additional paid-in capital 90,074 72,622
Notes receivable-related parties (18,692) (9,028)
Employee savings and stock ownership loan
guarantee (3,792) (5,056)
Accumulated other comprehensive income (505) (527)
Retained earnings 79,870 65,260
Treasury stock, at cost; 1,383 shares at
September 30, 1999 and 1,356 shares
at December 31, 1998 (13,324) (12,524)
________ _______
Net stockholders' equity 134,292 111,373
________ ________
$306,352 $256,567
======== ========
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
<TABLE>
<CAPTION>
SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Income
(in thousands, except per share data)
Three Months Ended September 30,
________________________________
1999 1998
____ ____
(Unaudited)
<S> <C> <C>
Net sales $131,508 $114,102
Cost of sales 88,803 79,236
_______ _______
Gross profit 42,705 34,866
Operating, selling and administrative expenses 29,649 25,017
Depreciation and amortization 4,779 4,271
_______ _______
Operating income 8,277 5,578
Other expense, net (2,866) (889)
_______ _______
Income before taxes 5,411 4,689
Provision for income taxes 2,217 1,963
________ ________
Net income $ 3,194 $ 2,726
======== ========
Net income per share - Basic $0.27 $0.25
======== ========
Weighted average shares outstanding - Basic 11,805 10,982
======== ========
Net income per share - Diluted $0.25 $0.24
======== ========
Weighted average shares outstanding - Dilute d 12,937 11,504
======== ========
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
<TABLE>
<CAPTION>
SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Income
(in thousands, except per share data)
Nine Months Ended September 30,
_______________________________
1999 1998
____ ____
(Unaudited)
<S> <C> <C>
Net sales $385,666 $330,071
Cost of sales 261,134 233,458
________ ________
Gross profit 124,532 96,613
Operating, selling and administrative expenses 81,899 65,956
Depreciation and amortization 13,269 11,401
________ ________
Operating income 29,364 19,256
Other expense, net (4,424) (989)
________ ________
Income before taxes 24,940 18,267
Provision for income taxes 10,330 7,788
________ ________
Net income $ 14,610 $ 10,479
======== ========
Net income per share - Basic $1.26 $0.99
======== ========
Weighted average shares outstanding - Basic 11,612 10,607
======== ========
Net income per share - Diluted $1.15 $0.94
======== ========
Weighted average shares outstanding - Diluted 12,708 11,129
======== ========
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
<TABLE>
<CAPTION>
SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
(in thousands)
Nine Months Ended September 30,
_______________________________
1999 1998
____ ____
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income $14,610 $10,479
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 13,269 11,401
Provision for losses on receivables 1,403 3,545
Amortization of ESSOP loan guarantee 1,264 1,264
Decrease (increase) in:
Accounts receivable, trade (9,855) (11,393)
Accounts receivable, patient (1,624) (224)
Inventory 1,480 (1,881)
Other current assets (3,245) (5,292)
Other assets (3,698) 1,304
Increase (decrease) in:
Accounts payable (2,138) (1,303)
Accrued liabilities 7,190 2,840
Accrued wages and related costs 2,501 3,039
Federal and state taxes payable 2,382 430
Deferred compensation 1,025 -
________ ________
Net cash provided by operating activities 24,564 14,209
________ ________
Cash flows from investing activities:
Purchase of property and equipment, net (13,586) (9,800)
Acquisitions of businesses, net of cash acquired (18,700) (45,338)
Net increase in short-term investments (1,940) (1,960)
Net decrease in long-term investments 4 487
Unrealized gain on investments 33 (115)
________ _________
Net cash used in investing activities (34,189) (56,726)
________ _________
Cash flow from financing activities:
Proceeds from long-term debt 22,678 42,121
Repayment of long-term debt (9,955) (7,199)
Issuance of common stock 5,984 837
Reacquisition of common stock for treasury (800) 0
________ ________
Net cash provided by financing activities 17,907 35,759
________ ________
Net increase (decrease) in cash and cash
equivalents 8,282 (6,758)
Effect of exchange rate on cash 112 (126)
Cash and cash equivalents at beginning of period 13,824 25,538
________ ________
Cash and cash equivalents at end of period $22,218 $18,654
======== ========
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
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, 1999, 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, 1998. Certain line items in the prior year's
consolidated condensed financial statements have been reclassified to conform
to the current year's presentation.
New Accounting Standards
________________________
In June 1998, the Financial Accounting and Standards Board issued SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities," which became
effective for fiscal years beginning after June 30, 2000. SFAS 133 requires
that entities value all derivative instruments at fair value and record the
instruments on the balance sheet. The Company believes that the adoption will
not have an impact on its financial statements as the Company holds no
derivative instruments.
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:
<TABLE>
<CAPTION>
Three Months Ended
__________________
September 30, 1999 September 30, 1998
__________________ __________________
Tax Tax
Before-Tax (expense) Net of Tax Before-Tax (expense) Net of Tax
Amount or benefit Amount Amount or benefit Amount
_________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Foreign currency translation
adjustments (652) - (652) (98) - (98)
Unrealized gains (losses) on
investments:
Unrealized holding gains (losses)
arising during period 28 (11) 17 (218) 92 (126)
_________________________________________________________________________
Other comprehensive income (624) (11) (635) (316) 92 (224)
Net income 5,411 (2,217) 3,194 4,689 (1,963) 2,726
_____ _______ _____ _____ _______ _____
Total comprehensive income $4,787 $(2,228) $2,559 $4,373 $(1,871) $2,502
====== ======== ====== ====== ======== ======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended
_________________
September 30, 1999 September 30, 1998
__________________ __________________
Tax Tax
Before-Tax (expense) Net of Tax Before-Tax (expense) Net of Tax
Amount or benefit Amount Amount or benefit Amount
___________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Foreign currency translation
adjustments (11) - (11) (32) - (32)
Unrealized gains (losses) on
investments:
Unrealized holding gains (losses)
arising during period 55 (22) 33 (199) 84 (115)
___________________________________________________________________________
Other comprehensive income 44 (22) 22 (231) 84 (147)
Net income 24,940 (10,330) 14,610 18,267 (7,788) 10,479
______ ________ ______ ______ _______ ______
Total comprehensive income $24,984 $(10,352) $14,632 $18,036 $(7,704) $10,332
======= ========= ======= ======= ======== =======
</TABLE>
Segment Information
___________________
Syncor has identified two primary operating segments: Pharmacy Services and
Medical Imaging. Segment selection was based upon internal organizational
structures, the way these operations are managed and evaluated, the availability
of separate financial results, and materiality considerations. Segment detail is
summarized as follows:
<TABLE>
<CAPTION>
Three Months Ended
__________________
Pharmacy Services Business September 30, 1999 September 30, 1998
__________________________ __________________ __________________
<S> <C> <C>
Revenues $115,852 $103,137
Operating Income $ 11,420 $ 9,503
Medical Imaging Business
________________________
Revenues $ 15,656 $ 10,965
Operating Income $ 2,188 $ 829
Unallocated Corporate
_____________________
Operating Loss $ (5,331) $ (4,754)
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended
_________________
Pharmacy Services Business September 30, 1999 September 30, 1998
__________________________ __________________ __________________
<S> <C> <C>
Revenues $344,983 $304,445
Operating Income $ 39,286 $ 29,952
Medical Imaging Business
________________________
Revenues $ 40,683 $ 25,626
Operating Income $ 4,708 $ 2,112
Unallocated Corporate
_____________________
Operating Loss $(14,630) $(12,808)
</TABLE>
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 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, 1999 and 1998:
<TABLE>
<CAPTION>
Three Months Ended
__________________
September 30, 1999 September 30, 1998
_____________________________________________________________________________
Income Shares Per Share Income Shares Per Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
___________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Net income $3,194 $2,726
Basic EPS $3,194 11,805 $.27 $2,726 10,982 $.25
____ ____
Effect of Dilutive
Stock Options 1,132 522
_____ ___
Diluted EPS $3,194 12,937 $.25 $2,726 11,504 $.24
____ ____
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended
_________________
September 30, 1999 September 30, 1998
_____________________________________________________________________________
Income Shares Per Share Income Shares Per Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
___________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Net income $14,610 $10,479
Basic EPS $14,610 11,612 $1.26 $10,479 10,607 $.99
_____ ____
Effect of Dilutive
Stock Options 1,096 522
_____ ___
Diluted EPS $14,610 12,708 $1.15 $10,479 11,129 $.94
_____ ____
</TABLE>
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.
SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
For the Months Ended September 30, 1999 and 1998
Net Sales
_________
Consolidated net sales for the three months ended September 30, 1999 increased
15.3% or $17.4 million to $131.5 million versus $114.1 million for the third
quarter of 1998. Consolidated net sales for the nine months ended September 30,
1999 increased 16.8 percent or $55.6 million to $385.7 million versus $330.1
million for the comparable period of 1998.
Pharmacy Services Group
The Pharmacy Services business grew at a pace of 12.3% for the current quarter,
which is a result of continued growth in both the overall market place and the
Cardiology sector of the Company's business. The overall year-over-year growth
rate for the Cardiology sector was approximately 13% and 16% for the quarter and
for the nine months respectively. Sales of Cardiolite(Registered Trademark),
a proprietary technetium-based heart imaging agent to which the Company has
preferential distribution rights, led the growth in Cardiology with
approximately 21% and 23% growth rates for the same corresponding periods.
The growth in Cardiolite has been partially offset by declining sales of two
other generic cardiology agents, Thallium and I.V. Persantine (Registered
Trademark). Pricing within this sector has remained reasonably stable.
Competition from a competing cardiac agent continues; however it is the
Company's belief that the continuing market penetration of this agent has
been reduced substantially.
In 1998, as a result of a competitive bidding process, the Company announced the
loss of a contract to provide radiopharmaceuticals to a large hospital-buying
group. The Company announced at that time the estimated lost revenue would be
from $10 to $15 million in calendar 1999. Since the loss of the contract, the
Company has secured a substantial portion of the overall revenue associated with
this group through alternative means and has grown the remaining business. The
Company estimates that this buying group is currently purchasing from the
Company at a rate approximately 15% higher than in the preceding year. The
Company has also seen a corresponding growth in gross margins associated with
this group.
Medical Imaging
The Company's growth in medical imaging continues. Overall, sales have
increased year-over-year 42.8% and 58.8% for the third quarter and the nine
months, respectively. Growth in this segment of the business has been driven
primarily by a number of small acquisitions that have taken place over the
past nine months. The Company expects to continue to grow this business
through a combination of growth in existing sites, purchases of minority
interests in existing sites and strategic acquisitions in areas of the country
that fit within the Company's overall strategy of becoming a significant
provider in certain geographic regions. In order to accomplish these goals,
the Company has devoted additional resources for certain critical management
positions and a broad based sales force.
Gross Profit
____________
Gross profit for the third quarter and the nine months ended September 30 1999
increased $7.8 million to $42.7 million, and $27.9 million to $124.5 million,
respectively. As a percentage of net sales gross margins reached 32.5%, and
2.3% for the third quarter and the nine months ended September 30, 1999,
respectively, compared to 30.6% and 29.3% for the respective periods in 1998.
Pharmacy Services
The gross profit from this group continues to increase due to better contracting
and improved cost controls. The Company has renewed business that was
marginally profitable from hospital buying group contracts to individual
hospital agreements which provided greater margins. Material costs, as a
percentage of sales, are down due to these costs remaining constant while the
Company has implemented some strategic price increases. In addition, there
continues to be a mix shift to the cardiology sector of the business. Labor
rates as a percentage of sales have declined due to restructuring that occurred
in the prior year.
Medical Imaging
The primary reason for the substantial increase in consolidated gross profit
percentage is the addition of the Medical Imaging group. The gross margin for
this group averages about 75% of sales. This group contributed approximately
$11.6 million of the $27.9 million increase.
Operating, Selling and Administrative Expenses
______________________________________________
Operating, Selling and Administration costs showed a year-over-year increase for
the three and nine month period ended September 30, 1999 of approximately
18.5% or $4.6 million for the three month period and 24.2% or $15.9 million
for the nine months. In addition, the ratio of these expenses to sales
increased to 22.5% from 21.9% for the quarter and to 21.2% from 20.0% for the
nine months. The increase and change in percentage relationships are the
result of the addition of the Medical Imaging business. Traditionally the
Medical Imaging business has a much higher relationship of these costs to sales
than the company experienced with the Pharmacy Services group. Year to date
the Medical Imaging business ratio of expense to sales is 47.7% compared to
20.5% for the Pharmacy Services business. The Medical Imaging business
contributed $7.3 million of the overall increase of $15.9 million for the
nine month period. In addition, the amounts for the 1998 periods do not
include a full nine months of these types of costs as the acquisitions
associated with the Medical Imaging group were basically completed at the end
of the first quarter in 1998. The Pharmacy Services business expenses in
this area were affected by increased labor and consulting costs associated
with expanded systems applications and certain sales bonuses associated with
higher sales levels. In addition, the Company accrued bonuses which are
linked to reaching certain stock price levels, at a higher rate during the third
quarter of 1999. This additional accrual amounted to approximately $1.6
million.
Depreciation and Amortization
_____________________________
Depreciation and amortization increased by $0.5 million and $1.9 million for the
quarter and nine months ended September 30, 1999, respectively. The increase is
result of increased depreciation, amortization of goodwill, and non-compete
costs associated with the Medical Imaging business acquisitions. In addition,
the company has invested in information systems as a result of both Year 2000
issues and other infrastructure changes that also contributed to the increases.
Other Expense, Net
__________________
Included in the quarter is a non-operating investment write-down charge of $1.8
million. The Company wrote-down its investment of $4.5 million in a
biotechnology company in light of a proposed restructuring which would dilute
the Company's preferred stock holdings. Based upon this restructuring proposal,
the Company's share would be diluted approximately 40%, and the Company
estimated that its value declined accordingly. Accordingly, the Company
recorded this write-down charge of $1.8 million ($1.1 million net of tax),
which affected earnings per diluted share by $0.08 for the third quarter.
Acquisition of Businesses
_________________________
During September 1999, the Company acquired six imaging center sites as part of
the expansion of its Medical Imaging business. The first of these was the
acquisition of a three site operation in the Victorville, California vicinity
for a price of $3.7 million plus the assumption of $0.7 million in debt. In
addition, the Company completed the purchase of the remaining interest that the
Company does not already own in two sites for $2.7 million. The last site
acquisition was in Santa Maria, California for a total purchase price of $2.8
million.
Liquidity and Capital Resources
_______________________________
The Company had cash, cash equivalents and investments of $28.9 million at
September 30, 1999 compared with $18.5 million at December 31, 1998. The
Company's total debt of $97.1 million at September 30, 1999 reflects an increase
of $17.7 million when compared to the balance of $79.4 million at December 31,
1998. The increase for the nine months ended September 30, 1999 results
primarily from the financing of the continued expansion of the Medical Imaging
business. Working capital increased by $19.0 million to $63.0 million at
September 30, 1999, compared to $44.0 million at December 31, 1998.
The Company believes that sufficient internal and external sources exist to fund
operations and future expansion plans. Of the $75 million credit line facility
initiated on January 5, 1998, $11.2 million is available at September 30, 1999.
Year 2000
_________
Like many other companies, the Year 2000 computer issue creates risk for the
Company. If the Company's computer systems do not correctly recognize date
information when the year changes to 2000, there could be an adverse impact on
the Company's operations. The Company has therefore initiated a comprehensive
project to prepare its computer systems for the year 2000.
Corporate Systems: Migration & Legacy Systems
The Company's financial information systems include an SAP system implemented in
1997. This system has been vendor certified to be "Year 2000" compliant. The
Company has conducted and continues to conduct periodic tests of this system.
The Company analyzed its remaining computer systems to identify any potential
Year 2000 issues, and took appropriate corrective action based on the results
of such analysis. This effort was completed as of February 1999.
Pharmacy Services Field-Based IT Systems and Related Company-Supplied Customer
IT Systems
The Company's domestic field based pharmacy system has been modified, tested,
and fully deployed as of late February 1999. This system is believed to be Year
2000 compliant. The Company's international field-based system is being
replaced by a newer Year 2000 compliant system. Installation for the new system
is underway and is expected to be completed by December 1999. All IT systems
supplied by the Company for use by customers in their locations were either
designed as year 2000 compliant, or customers have been converted to a Year 2000
compliant system. The customer system conversion effort was completed in July
1999. The estimated cost of such modifications to field and customer-installed
systems, including amounts spent to date, is $250,000.
Residual Systems & Medical Imaging Business
The effort to determine the Year 2000 compliance of residual systems (i.e.
software supplied by external vendors and other "embedded" systems), including
medical imaging equipment and systems, is estimated to be completed prior to
year-end 1999. The imaging systems are critical to the Medical Imaging
business and may require replacement of certain equipment or systems or
hardware upgrades, in addition to those scheduled and budgeted for
upgrade/replacement in the ordinary course of business.
Many of the vendor-supplied residual systems are small (e.g., alarm systems,
postage meters, etc.), while some are more sophisticated (e.g., desktops,
desktop applications, and LAN applications). The estimated cost of such Year
2000 driven modifications/replacements to residual systems and the Medical
Imaging business's systems, including amounts spent to date, is not expected to
exceed $750,000. This effort is scheduled to be completed by mid fourth quarter
of 1999.
Risk Assessment; Contingency Planning
The Company is also in contact with suppliers, customers, other vendors and
fiscal payers, including federal and state governments, Medicare fiscal
intermediaries, insurance companies and managed care companies to determine the
state of their Year 2000 compliance and to assess the potential impact on the
Company's operations if key third parties are not successful in converting
their systems in a timely manner. Risk assessment, readiness evaluation,
action plans, testing with major suppliers, and contingency plans were
completed in September 1999. Notwithstanding the foregoing, there can be no
assurance that another entity's failure to ensure Year 2000 capability would
not have an adverse effect on the Company.
The Company's risk management program includes emergency backup and recovery
procedures to be followed in event of failure of a business-critical system.
These procedures include specific plans in the event of a Year 2000-related
interruption. These plans have been finalized.
The costs of the Company's Year 2000 readiness and the dates on which the
Company believes it will complete the Year 2000 modifications are based on
management's best estimates, which were derived utilizing numerous assumptions
of future events, including the continued availability of certain resources and
other factors. However, there can be no guarantee that these estimates will be
achieved and actual results could differ materially from those anticipated.
Specific factors that might cause such material differences include, but are
not limited to, the availability and cost of personnel trained in this area,
the ability to locate and correct all relevant computer codes, unforeseen
circumstances causing the Company to allocate its resources elsewhere, and
similar uncertainties. Additionally, as testing of Year 2000 functionality
of the Company's systems must occur in a simulated environment, the Company
will not be able to test full system Year 2000 interfaces and capabilities
prior to Year 2000. The Company believes that the cost of its Year 2000
compliance projects over the next two years will not have a material effect
on the Company's financial position or overall trends of operations.
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.
<PAGE>
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 Rights Agreement, dated September 28, 1999, between Syncor
International Corporation and American Stock Transfer & Trust
Company, filed as Exhibit 4 to the Form 8-K, dated September 28,
1999 and incorporated herein by reference.
(b) A report on Form 8-K, dated September 28, 1999, was filed disclosing
the Rights Agreement between Syncor International Corporation and American Stock
Transfer & Trust Company.
<PAGE>
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)
November 12, 1999 By: /s/Michael E. Mikity
____________________
Michael E. Mikity
Senior Vice President and
Chief Financial Officer
(Principal Financial/
Accounting Officer)
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
EXHIBIT 27
Financial Data Schedule
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
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0
0
<COMMON> 661
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</TABLE>
